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Iran, Russia and the Real World Obama Cannot Change
I have a frequent nightmare: In the year 2011, with the full support and complicity of their shadow ally, Russia, the Islamofascist regime in Tehran announces that they have developed a deliverable nuclear weapon(s). That any attempt by any nation to dismantle their program through military force or draconian economic sanctions will be viewed as an overt act of war. That they will view any such act of war as justification enough to deploy a nuclear weapon against Israel…regardless of what nation is behind the initial response.
They will cite classic anti-Semitic mantra, such as the myth that international Jewry controls the Western powers, etc. as their reasoning for labeling Israel the chief culprit by default. More to the point, when push comes to shove they know that President Obama harbors no love of the Jewish state (as his harsh treatment of Netanyahu shows) and will have no stomach for a war to protect it.
[Meanwhile the Russians let it be known through diplomatic back-channels that relations between Tehran and Moscow have recently thawed and any retaliatory military strike against Iran for its actions against Israel could be viewed as an attack on Russia.]
The West, assuming it is even motivated to respond at all, is now put in a precarious position for a now-nuclear Iran looms over the Strait of Hormuz like a Colussus. This narrow sea lane is by far the world’s most important oil chokepoint due to its daily flow of 16.5-17 million barrels, or roughly 40 percent of all seaborne oils (20 th percent of oil traded worldwide). At its narrowest point the channel is only 21 miles wide.
Now Obama will have a choice to make. Will he commit the US Navy to keep the strait open, call the Russian bluff and risk a world war? Or will he back down and seek a “diplomatic” solution. Regardless, even temporarily closing off the Persian Gulf would cause an economically devastating spike in the price of oil and a sympathy rally in all commodities.
This would be just fine for the commodity-rich Russia. With 79 billion barrels of proven reserves they hover above a vast reservoir of untapped crude oil. And let us not overlook natural gas. In fact, according to the EIA, Russia holds the world’s largest natural gas reserves, with 1,680 trillion cubic feet (Tcf), which is nearly twice the reserves in the next largest country which is, guess who, Iran. In 2006 Russia was not only the world’s largest natural gas producer (23.2 Tcf), but also the world’s largest exporter (6.6 Tcf). Russian government forecasts expect gas production to total 31.1 Tcf by 2030. Europe is highly dependent on Russian natural gas through the state-controlled Transneft pipelines they could close with the turn of a nozzle. The EU imports almost half of its natural gas and 30 percent of its oil from Russia. Eastern Europe consumes even higher percentages of Russian gas.
[As my dream moves along, I envision too that as a precursor to Iran’s announcement we see a sustained rally in oil futures before the eventual spike as Tehran will have given their new friends an ample heads-up allowing the barons of Moscow to go long futures as a hedge against what is coming and even profit from the appreciation should their cash business be temporarily dislocated from supply disruptions.]
The fact is the Russians have a vested interest in a nuclear Iran. It is good for business and certainly will greatly diminish the power and influence of the already hard-pressed USA. So even as Russian president Dmitry Medvedev offers lip-service to “limited” sanctions to an ever more bewildered Obama foreign policy team, the true powers in Russia—Putin and the band of hybrid statist/capitalist billionaire oligarchs—will never support effective economic measures that will hurt Iran enough to curb its nuclear ambitions. “The enemy of my enemy is my friend” is the old saying. And the Russians certainly do not look to as us partners…at best competitors, at worst impediments to their desires for expansion that date back into the dimmest past of the ancient tsars. Self-interest is the guiding principle among European nation-states. It always has been and always will be—“rock star” president notwithstanding.
[Meanwhile, as my nightmare unfolds, in another sea channel, the Chinese—who already have strong economic ties with Iran—coincidentally decide to launch a repeat of their bellicose 1996 naval exercises in the Formosa Strait almost within sight of the Taiwanese coast. What will the USA do? How will we treat this act of aggression half way across the world committed by the nation whose military might is formidable and even more prickly, holds much of our national debt and the value of our currency in a death grip?]
The America of my dream is thus weak and quite vulnerable. But this premonition need not come to pass. The first step towards thwarting this one potential future is for the Obama administration to do a re-“reset” in foreign relations and get a grip on who are our friends, who are our enemies, and start treating each accordingly. If Obama truly believes his own rhetoric that a nuclear Iran is “unacceptable” then he must see that we have with Israel a common and imperative goal to prevent Iran from obtaining nuclear weapons. If that means that he must give Israel tacit approval for a military strike with a quiet assurance that we will have their back regardless of what inevitable “condemnation” resolution come downs the UN pipeline then so be it. This is real world stuff here and the future of millions could be at stake. Hyperbole? Part of being a leader is having the capacity to imagine the unimaginable. 9/11 gave us a clue what a few hard-core Islamic zealots with box-cutters and no scruples can do. Just imagine this crowd with a nuke. Again, “unacceptable” means just that: we cannot accept it.
What Obama must accept is that our interests and those of much of the world are not aligned on this matter…either economically or politically. And thus must he find in himself the same “courage” that he conjured up to push through an unpopular healthcare bill at home because he, ahem, knew best, and this time do what is best for the world, whether that world knows it or not.
The fact is that the notion of a “global community” is a myth. Nations are what nations are. And a clue as to how they will conduct their affairs can usually be discerned by picking up a history book and thumbing through a page or two.
Iran is the geopolitical illustration of Newton’s first law of motion which offers that an object in motion will stay in motion on the same course until acted upon. It seems that in his desire to turn inward and create an economic utopia within our borders, Barack Obama is unwilling to accept that the world outside remains a very hazardous place. And there are many in that world who view the imminent decline of American power not as a symbol of a newfound global harmony, but rather an opportunity for mischief. If he stays on his relentless course of statism at home and post-American dogma abroad, Mr. Obama will end up irrevocably weakening this nation with unsustainable domestic activism and an utter misapprehension about the rough and tumble neighborhood in which his happy-faced diplomats are trying to navigate. He may very well get a new world order, that “change” of which he spoke so forcefully in his campaign. But I think the reality will not be so pleasant as his fantasy optimism would have him “hope.”
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"Heritage Foundation wet dream drivel."
+1000 Sarge.
Theres been a whole lot of lunacy chafeing and precious few intellectual pearls lately. All free speech aurgments have their limitations.
Taking a pass on these jackoffs musings would certainly not make ZH anti free speech at all.
These extremely lower teir writers would still be free to send their bipolar prose to more appropiate blogs that the flying saucer/bigfoot crowd like to frequent.
Fazzie
"Theres been a whole lot of lunacy chafeing and precious few intellectual pearls lately."
Each individual decides what is meaningful to them.
Cognitive Dissonance posts self aggrandizing semi-fake-hip intellectualisms which some find " enlightening".
Some blame the Zionists or Illuminati for the woes of the world.
A few have a non-local perspective which allows them to remain as neutral as possible.
Some just make me laugh.
You're right, two extremely belligerant countries would certainly never go to war with each other. That would be barbaric!
And further, to imply that OTHER NATIONS would use such a conflict as a proxy war has certainly never happened not even once in history, and certainly didn't happen in every major war since World War II.
Anyone who would even suggest such a think is a crazy person!
I'm still grappling with the question of how how a world led by huge cities, Washington, New York, London, Shanghai, Moscow, Tehran, etc, can function in a world of lose nukes? Inevitably, some group or another with a grudge gets a loose nuke and sets it off in a big city. Inevitably countries have to decentralize and deurbanize to survive. The Iran situation highlights the dilemma.
IK-Robert Heinlein's story "Friday" has this decentralization as a part of the back-story. Loose nukes, corporate entities/non-state-actors vs. fixed entities.
Things were much simpler with MAD.
- Ned
Indeed, we should pre-emptively decentralize the United States, modify the Constitution to have it read as a federal system where all but essentially national, regal powers are reserved to the states, or the people..... Oh, wait...
Simple. Big cities, and the nations they lead, must MUST adhere to the principles of non-aggression. Humans are rational, even within irrational systems like religion and governments. So long as you do not violate their natural rights (life, liberty, and property), you will never be on the receiving end of so much as a terrorist attack, much less a nuclear one. This is why Switzerland has never been attacked, even as they have a large and growing Arab population. Of course, they have opened themselves up to attacks now because they are starting to remove the liberties of their Arab population--ie no scarves, no minarets, etc.
Tmosley, terrorist apologist. Because if you did what the muslims in your country wanted, they wouldn't have to kill your civilians.
tm-
...er...mountains? everyone is in the reserves? loaded out in their safes at home?, holding the financial secrets (lately not so much)?
Nothing to do with their "natural rights" per se. They are in position to enforce their "natural rights."
- Ned
Maybe they don't want to turn into a freaking, foreign country.
So, If we just do what the arabs say, there will be no terrorism!? I think Bin Laden said the same thing a while back - I also think that the arabs should bring it - We kicked their camel-humping, thieving arses out of Europe many times before so, maybe, if we do it one more time eventually they may learn?
faj,
too late for the U.K., and France..............who's next up?.
Large populations of muslims, and refuse to assimilate, riot almost nightly..........(not carried on the news, for sure in the US).
Aussie leaders are only one's with the NADS to keep the disease from, spreading.(like it used to be here, OUR contry, Our laws, and traditions.........)
And no, you do not get your OWN set of rules/law, that set you apart.
Instant Karma
"some group or another with a grudge gets a loose nuke and sets it off in a big city"
Really not that easy to explode a nuke.
Dirty bombs are regular bombs with radioactive materials attached. The explosion spreads the materials. Limited range and effectiveness, but more realistic.
The real problem is we have been sold so much fiction regarding terrorist attacks we confuse reality with the movies.
Gully--Dirty bomb tougher (if it is to be "dirty") because if activated pre-detonation to be effective then it is too hot fo handle. If it is just radioactive material and not activated, then effect much less (great initial psycological effect granted, cleanup is well understood).
But as commented above, put it into a CONEX box and it doesn't even need to reach port, harbor good enough and mud in the fireball will get activated. CONEX means it doesn't need to be "weaponized" to fit into a delivery system.
Edgerton, Grier, and Germeshausen figured out the technology in '44, widely known today.
- Ned
Fission bombs are very easy to explode. Critical mass of fissile material is separated on two ends of bomb. Small conventional explosion brings them together to form critical mass. Then you have full blown nuclear explosion. Not state of the art, but enough to take out a city. All you really need is the material. Delivery could be as easy as putting in a seatainer, and blow up in a port. A little more could get it to the top of a building. Either way, it is a matter of "when" not "if". It is a frightening scenario that I am actually surprised has not already played out.
Rebel,
Ditto's............unless somethings changed, I believe close to 100 suitcase Soviet nukes are still AT LARGE.
If memory serves.
We had (have?) them too. I heard that the teams used to discuss amongst themsevles whether the time delay was for real or BS. Very germaine if they were to consider you expendable. No way you could tell ahead of time, kind of a morale problem. Trust us just place it & push the button (yeah, sure).
What nonsense! If you think its so easy to design a functioning device why did it take the greatest scientific talent ever assembled (the Manhatten project) to design the first one. It not just critical mass-its the ability to get an autocatalytic neutron chain reaction where more neutrons are produced than lost via radiation. So you need a neutron reflection shield around your critical mass or all that happens is dispersion of the fissile material when the conventional explosive detonates (the so called-dirty bomb). Comments like this one are why we need better science education in America. By the way, every nation who acquired nuclear capability got it by stealing it from the US-not by original design and engineering-they didn't have the talent for that.
The Manhatten project was hard because it had never been done. First of anything is hard. A fusion bomb is extremely complex, a fission bomb is extremely simple.
On the attack on my scientific credentials . . . I would be happy to compare credentials if you wish.
A colleague of mine was the A team nuclear weapons design team leader at Livermore. He tells me that building a fission device is trivial. (creating the fissile material is the hard part) . Or, as Edward Teller wrote: "The Uranium bomb dropped on japan, little boy, was so simple that it didn't need testing." Also note that there was not enough refined uranium for testing.The first Uranium fissile device ever exploded was Little Boy. Fat man was a plutonium device and this is the one that was tested prior to dropping on Japan.
You know I think they set off a bomb in New Mexico in a tower first. Turned the desert into cool radioactive green glass. Now it's a tourist attraction.
It was the trinity site near Alamogordo NM. The sand was turned to glass, and the glass was given the name "Trinitite". The site is closed to the public, but I believe opens once a year. You are not allowed to take Trinitite, as it is still somewhat radioactive.
Hey hulk, good to hear from you. Teller was an intriguing man. He worked way on up into his very old age. He had a brilliant mind, and was well versed on any topic imaginable. Most of the Manhatten guys were all gone by the time I came along, but I did get to meet a lot of the people from the early h-bomb days . . . guys who watched the open air testing. I talked to several who were at the original trinity explosion, and I was able to meet with the Enola Gay crew. Not trying to glorify nukes . . . we definitely let the genie out of the bottle when we went down that path, but there are some incredibly interesting stories behind the nuke program.
Uh, what makes you think it won't be some nut job christian American doing the bomb?
It hasn't "played out" because "the terrorists" are morons, snot-rollers and navel-defluffers to a man! Everytime they recruit someone remotely competent, the first priority is for the sucker to blow himself up - thus removing any skills and any learning from the operation.
The Myth of the Suicide Bomber:
http://www.rense.com/general67/suicc.htm
I tend to agree. Our greatest protection so far has been the lack of competence of the would be terrorist. Luckily, for the most part they are small thinkers. Lets hope it remains so.
"Inevitably countries have to decentralize and deurbanize to survive."
So we all move to the exurbs and drive 140 round trip miles to work every day untill a nuke goes off in our urban/near urban work place, taking out the entire financial system and supply lines of food, fuel, medicine, etc? Really rational! I would rather be at ground zero than slowly starve to death!
How about this for an idea: Let Israel and Iran settle their differences and the US, et al, can butt out? 'Beware of foreign entanglements'...Ben Franklin...
Forget about Israel or Iran. With the technological revolution it's getting easier and easier to manufacture nuclear material and devices, and their delivery systems. Nuclear programs are proliferating world wide. Russia isn't quite sure it can account for its thousands of nukes. 60 Minutes did a story.
I'm taking a bigger view. With more countries making more nukes, and hatred still a prominent part of the human psyche, some group will end up getting a nuke and using it to settle a grudge. It only takes one.
If good intelligence, treaties, and international cooperation are not enough, and every city becomes a potential target of some group with a grudge, then the only viable strategy I can see is to deurbanize the population. Or take your chances.
Any other ideas?
"Any other ideas?"
I feel your anxiety about this situation but I have been in this home 21 years and do not want to move. So, I will go for 'Or take your chances'... and, good luck to you whatever course you choose.
BTW, back in the '50s/60s cold war hysteria was much greater than now. Many small tract homes had bomb shelters in their back yards. Kids in the schools were taught 'duck and cover' at first sight of a nuclear explosion. It was a scary time for kids.
Snidley Whipsnae
I stop by Automatic Earth every day. They have been preaching Deflation leading to Hyperinflation for quite a while now.
Go there and read through the primers and archives.
http://theautomaticearth.blogspot.com/2010/07/july-3-2010-dollar-denomin...
Stoneleigh: Since we at The Automatic Earth generally tell people to hold cash or cash equivalents, it makes sense to expand on that a little, and to point out some of the location-specific risks of doing so. We tell people to hold cash because that is what they will need access to in order to make debt payments and to purchase the essentials of life in a society with little or no remaining credit. The value of cash domestically - in terms of goods and services in your own local area - is what matters most.
Domestic currency value relative to other currencies internationally will be very much a secondary concern for most people, as the ability to exchange one currency for another is not likely to last far into the coming era of capital controls. Currency risk is likely to become very large, and almost everyone will be better off holding whatever passes for cash wherever they happen to be.
As the price of goods and services fall, thanks to the destruction of purchasing power brought about by collapsing money supply, what cash you still have will go a lot further in terms of, say, milk and bread. Capital preserved as liquidity will go a long way. However, there are no no-risk scenarios. Apart from the obvious risks of fire, flood and theft, other risks to holding cash will grow over time. Liquidity can be as hard to hold on to as it sounds.
One particular risk is the reissuing of currency. Russia did this during the economic collapse of the Soviet Union, and made it so difficult for ordinary people to convert old currency into new that much of the middle class lost their life-savings. In Russia trust in relation to banks was not particularly high, hence there was a lot of money under the beds of the nation that the powers-that-be were attempting to flush out. That is not the case in present day industrialized countries, where people generally believe that banks are safe and deposits are publicly guaranteed in any case.
On top of that, few people have savings, having become dependent on access to cheap credit for their rainy-day funds. There is virtually nothing under the beds of the Western nation, and so essentially nothing to flush out.
Although that particular rationale for currency reissue does not really exist (the flushing out of hidden wealth), there may be other reasons for doing so, and these will be locational. The risk of currency reissue in the US is likely to be low for some time. The US is likely to benefit from capital flight from other places, on a knee-jerk flight to safety.
In addition, dollar-denominated debt deflation will increase demand for dollars, and hence increase their value. This should reduce pressure for any kind of radical currency reform for a while. If the US does eventually reissue its currency, I would imagine them doing so in order to deprive foreign holders of dollars of purchasing power. There are very large numbers of dollars held overseas, and these would not be able to be exchanged in a currency reissue. At some point this may serve the interests of the US, but not soon.
The situation in Europe is far more complex, and the risk is likely to vary between European countries. The reason is that the euro is less of a single currency than it is a strong currency peg. Whereas in the US the primary loyalty is to the political unit that issues the currency, in Europe the primary loyalty is to a lower level political unit. Currency values are grounded in relationships of trust, and the disparity between primary loyalty and currency control suggests that this essential component is weak in Europe. Where trust is weak, common currencies are also weak and my have a limited lifespan.
I think it very likely that the eurozone will decrease in size over the next few years, as the countries of the periphery find the austerity measures they are forced to live with increasingly intolerable. The social divisions that will widen as austerity measures are applied locationally will have greater and greater effects. Europe has a long history of conflict, with each country feeling that the natural extent of its own sphere of influence is whatever is was at its maximum past extent. This means that they all overlap on a continent with a long history of imperial rise and fall.
Emotional responses to past events still run very deep in Europe, even where those events were hundreds of years ago. This is a recipe for balkanization once there is no longer enough to go around. Witness for instance the ridiculous marching season in Northern Ireland, which exists to rub the noses of the catholic population in a defeat (the Battle of the Boyne) from several centuries past. That sort of behaviour is grotesque and should be an outright anachronism in a modern Europe, yet it persists, and there are other comparable examples (see for instance the reaction of Serbian people to the anniversary of the Battle of Kosovo Polye).
All common currency zones define zones of predation, that is: define the regions that feed an imperial centre. The current European periphery includes such nations as Greece, Spain, Portugal, Ireland and all of Eastern Europe. It may also include Italy and the Netherlands, as both of these areas have major debt issues (housing bubbles and national debt). It would also include the UK in a sense, despite the fact that the UK is not part of the single currency. The UK is an international financial centre of considerable stature, but has an enormous debt problem and very few visible means of support going forward, once North Sea oil and gas cease to provide revenues and the City of London takes an inevitable knock-out blow.
I would expect the eurozone to be composed of a much smaller number of countries in the future than it is now, as peripheral countries are driven to the brink and beyond. The risk of currency reissue in these countries is therefore significantly elevated in comparison with the US, for instance. Where that risk is higher, there will be greater impetus for moving from cash to hard goods sooner rather than later. In places where that risk is smaller, one may wait longer for the price of hard goods to fall and therefore spend less on them. Where that risk is larger, the wait should be shorter, even though that would mean paying more, so long as debt is still not part of the equation.
Short term bonds (the primary cash equivalent) are not really an option in Europe the way they are in the US. The shortest term available is measured in years rather than months, which could easily be too long. This means that Europeans will face harder choices on this front as well. I would suggest that Europeans afraid of facing a currency reissue should consider the value of hard goods sooner rather than later. As always, pooling resources can get you further own the list of recommended priorities than you could possibly hope to achieve on your own (ie hold no debt, hold cash and cash equivalents and gain control over the essentials of your own existence).
Everyone will need to make the transition from cash to hard goods at some point. Cash is what you need to navigate the great deleveraging, but over the time the risks to cash will rise and you will need to think of the next phase, which is addressing the risk of the kind of economic upheaval that breaks supply lines. That will come first, and inflation (ie actual currency printing) will come much later. Inflation is only a risk once the power of the bond market has been broken, and that is not today's risk, nor tomorrow's.
That is something to consider much further down the line. Deflation and depression are mutually reinforcing in a spiral of positive feedback. That is not a dynamic that will end quickly, but end it will some day. At that point, or well before depending on where you live, you will want to be fully invested in hard goods.
Gulley,
Some valid points made,
but........."One particular risk is the reissuing of currency. Russia did this during the economic collapse of the Soviet Union, and made it so difficult for ordinary people to convert old currency into new that much of the middle class lost their life-savings"
As did Korea...............
Now can you think of a better reason for holding some PM's, than this?,in a JIC scenario.............I can't.
Plus your assuming, that in this case, cash would HAVE value.Maybe,maybe not............
Also,most of the sheeples are asleep at the wheel.
Just STOP, and think about it,what IF, the Fed decided to do the above now.
And you got (30 days) to turn in 10-1/50-1/100/1000, or lose ALL value?.............can you think of a better way to bring the population to it's knees?.
I can't............
Gully Foyle...Thanks, I have followed Illagri and Stoneleigh since back when they posted on The Oil Drum. I read that one yesterday but appreciate your pointing it out. I almost always agree with Stonleigh... I am Austrian School. Gold/silver IS money.
Gold is too scarce and skewed in distribution to be used as money for 7 billlion humans.
Gold standard won't ensure fiscal prudency on its own
All we need is a disciplined credit system for a single currency/currencies too
I know they will howl away at the sight of those words but currency arbitrage is one thing that we can do without in this credit crazy world
Maybe G-20 can act as curerncy issuer instead of Fed
It is not meant to be perfect but should be better than the present one where one nation sits and prints money for living.
Instant Karma
http://img164.imageshack.us/img164/1029/strangeadventures14125jl4.jpg
https://secure.wikimedia.org/wikipedia/en/wiki/Atomic_Knight
Original Atomic Knights
The only Atomic Knights cover appearance in Strange Adventures #144. Note the giant Dalmatians.
The Atomic Knights appeared off and on in issues of Strange Adventures in the early 1960s, beginning with #117 (June 1960). Created by John Broome and Murphy Anderson, they were a band of heroes living in the post-apocalyptic future of 1992.
Following the catastrophic Hydrogen War of 1986, a petty tyrant named the Black Baron ruled a small section of the Midwest with an iron fist. He was opposed by Sgt. Gardner Grayle and the Atomic Knights, who wore medieval suits of armor that were impervious to the Baron's energy weapons, having been irradiated in the war. The other Knights were twins Wayne and Hollis Hobard, Bryndon Smith, the last scientist left on Earth, and brother and sister Douglas and Marene Herald.
The Atomic Knights, mid-'70s incarnation.
The fifteen Atomic Knights stories in Strange Adventures generally dealt with post-holocaust recovery, as the Knights would fend off menaces and attempt to rebuild the area around their homebase of Durvale, though they also managed to travel to Los Angeles, Detroit, New Orleans, New York, and Washington, D.C. In all, there were fifteen early-1960s Atomic Knights stories; their last appearance in Strange Adventures came in issue #160 (January 1964).
http://www.toonopedia.com/atomic_k.htm
The series opened in Strange Adventures #117 (June, 1960). World War III had occurred in 1986, more than a quarter-century in the readers' future. A few years later, the area around Durvale, a Midwest American town, was ruled by The Black Baron, who hoarded the few remaining food stocks in his fortress, and enforced his will with ruthless strong-arms wielding high-tech energy weapons. Sgt. Gardner Grayle, formerly of the U.S. Army, discovered the key to the Baron's defeat — a half-dozen suits of medieval armor that stood in a local museum, and had, partly through the passage of time and partly because of wartime irradiation, become impervious to energy blasts from the Baron's weapons. He took one suit for himself, and recruited four local men — Douglas Herald, a scientist identified only as "Bryndon", and twin brothers Wayne and Hollis Hobard, to wear others. The final suit, too small for for a man, was worn by Herald's sister, Marene. Together, The Atomic Knights stormed the Baron's fortress and distributed food to the hungry populace.
You are EXACTLY right, which is why I de-urbanized myself and family 2 years ago.
De-urbanize is fine...just make sure you aren't downwind!
The fallout dust is not too hard to counter. Worst is internal contamination (lungs). Get a dose that way & you're toast. Serious housekeeping, washdowns for about 2 weeks constant checks with geiger counter, no problemo. Just don't breathe in any.
I think that is a classic case of fear based manufacturing of consent. Talk about scaring a population into yet another act of aggression!!
Did you think that about Afghanistan?
Did you think that about Iraq?
Will you think that about Pakistan?
I'd like to add that in the very beginning, the Pan-Arabism was conceived, born, developed, tough to the masses and was paid for from Moscow. The university that the russin spy cick attended (University of International Friendship, known in the 60s and 70s as the Patrice Lumumba University) was it's "incubator." Just look at its alumni: Ayatolla Khamenei, Carlos the Jackal, Mahmoud Abbass, etc.
I, however, unlike with the Taliban, seen no credible info that USA knowingly supported Hamas.
Eh? Maybe Modern Pan-Arabism. Pan-Arabism was present from the start of the great Muslim conquest in the 6 and 700's.
b_thunder
"I, however, unlike with the Taliban, seen no credible info that USA knowingly supported Hamas."
One could say the same thing about Hal Turner working for the FBI, but now we know differently.
Do you have the proof? Where can I see it?
I'm surprised no one shared this yet. One more evil nail in the Goldman coffin.
http://www.independent.co.uk/opinion/commentators/johann-hari/johann-har...
How Goldman Sachs Gambled On Starving the Poor - And Won
by Johann Hari
By now, you probably think your opinion of Goldman Sachs and its swarm of Wall Street allies has rock-bottomed at raw loathing. You're wrong. There's more. It turns out the most destructive of all their recent acts has barely been discussed at all. Here's the rest. This is the story of how some of the richest people in the world - Goldman, Deutsche Bank, the traders at Merrill Lynch, and more - have caused the starvation of some of the poorest people in the world, just so they could make a fatter profit.
It starts with an apparent mystery. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 percent, maize by 90 percent, and rice by 320 percent. In a global jolt of hunger, 200 million people - mostly children - couldn't afford to get food any more, and sank into malnutrition or starvation. There were riots in over 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, called it "a silent mass murder", entirely due to "man-made actions."
Earlier this year I was in Ethiopia, one of the worst-hit countries, and people there remember the food crisis like they were hit by a tsunami. "It was very painful," a woman my age called Abeba Getaneh, told me. "My children stopped growing. I felt like battery acid had been poured into my stomach as I starved. I took my two daughters out of school and got into debt. If it had gone on much longer, I think my baby would have died."
Most of the explanations we were given at the time have turned out to be false. It didn't happen because supply fell: the International Grain Council says global production of wheat actually increased during that period, for example. It isn't because demand grew either. We were told the swelling Chinese and Indian middle classes were pushing it up, but as Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi has shown, demand from those countries for them actually fell by 3 percent over this period.
There are some smaller explanations that account for some of the price rise, but not all. It's true the growing demand for biofuels was gobbling up much-needed agricultural land - but that was a gradual process that wouldn't explain a violent spike. It's true that oil prices increased, driving up the cost of growing and distributing food - but the evidence increasingly shows that wasn't the biggest factor.
To understand the biggest cause, you have to plough through some concepts that will make your head ache - but not half as much as they made the poor world's stomachs ache.
For over a century, farmers in wealthy countries have been able to engage in a process where they protect themselves against risk. Farmer Giles can agree in January to sell his crop to a trader in August at a fixed price. If he has a great summer and the global price is high, he'll lose some cash, but if there's a lousy summer or the price collapses, he'll do well from the deal. When this process was tightly regulated and only companies with a direct interest in the field could get involved, it worked well.
Then, through the 1990s, Goldman Sachs and others lobbied hard and the regulations were abolished. Suddenly, these contracts were turned into 'derivatives' that could be bought and sold among traders who had nothing to do with agriculture. A market in "food speculation" was born.
So Farmer Giles still agrees to sell his crop in advance to a trader for £10,000. But now, that contract can be sold on to financial speculators, who treat the contract itself as an object of potential wealth. Goldman Sachs can buy it and sell it on for £20,000 to Deutschebank, who sell it on for £30,000 to Merryl Lynch - and on, and on, provided they think the price can be jacked up, until it seems to bear almost no relationship to Farmer Giles' crop at all.
If this seems mystifying, it is. John Lanchester, in his superb guide to the world of finance, 'Whoops! Why Everybody Owes Everyone and No One Can Pay', explains: "Finance, like other forms of human behaviour, underwent a change in the twentieth century, a shift equivalent to the emergence of modernism in the arts - a break with common sense, a turn towards self-referentiality and abstraction and notions that couldn't be explained in workaday English."
Poetry found its break broke with straightforward representation of reality when T.S. Eliot wrote 'The Wasteland.' Finance found its Wasteland moment in the 1970s, when it began to be dominated by complex financial instruments that even the people selling them didn't fully understand. As Lanchester puts it: "With derivatives... there is a profound break between the language of finance and that of common sense."
So what has this got to do with the bread on Abiba's plate? How could this parallel universe of speculation affect her? Until deregulation, the price for food was set by the forces of supply and demand for food itself. (This was itself deeply imperfect: it left a billion people hungry.) But after deregulation, it was no longer just a market in food. It became, at the same time, a market in contracts that were speculating on theoretical food that would be grown in the future - and the speculators drove the price through the roof.
Here's how it happened. In 2006, financial speculators like Goldman's pulled out of the collapsing US real estate market, and they were looking for somewhere else to make their stash of cash swell. They started to buy massive amounts of derivatives based on food: they reckoned that food prices would stay steady or rise while the rest of the economy tanked. Suddenly, the world's frightened investors stampeded onto this ground and decided to buy, buy, buy.
So while the supply and demand of food stayed pretty much the same, the supply and demand for contracts based on food massively rose - which meant the all-rolled-into-one price for food on people's plates massively rose. The starvation began.
The food price was now being set by speculation, rather than by real food. The hedge fund manager Michael Masters estimated that even on the regulated exchanges in the US - which take up a small part of the business - 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely to inflate the price and sell it on. Even George Soros said this was "just like secretly hoarding food during a hunger crisis in order to make profits from increasing prices." The bubble only burst in March 2008 when the situation got so bad in the US that the speculators had to slash their spending to cover their losses back home.
When I asked them to comment on the charge of causing mass hunger, Merrill Lynch's spokesman said: "Huh. I didn't know about that." He later emailed to say: "I am going to decline comment." Deutsche Bank also refused to comment. Goldman Sachs were a little more detailed in their response: they said "serious analyses... have concluded index funds did not cause a bubble in commodity futures prices", offering as evidence a single statement by the OECD.
How do we know this is wrong? As Professor Ghosh points out, some vital crops are not traded on the futures markets, including millet, cassava, and potatoes. Their price rose a little during this period - but only a fraction as much as the ones affected by speculation. Her research shows this speculation was "the main cause" of the rise.
So it has come to this. The world's wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won. This is what happens when you follow the claim that unregulated markets know best to the end of the line. The finance sector's Wasteland moment created a real wasteland. What does it say about our political and economic system that we can so casually inflict such misery, and barely even notice?
If we don't re-regulate, it is only a matter of time before this all happens again. How long would it last then? How many people would it kill next time? The moves to restore the pre-1990s rules on commodities trading have been stunningly sluggish. In the US, the House has passed some regulation, but there are fears the Senate - drenched in speculator-donations - may dilute it into meaninglessness. The EU is lagging far behind even this, while in Britain, where most of this "trade" takes place, advocacy groups are worried David Cameron's government will block reform entirely to please his own friends and donors in the City.
Only one force can stop another speculation-starvation-bubble from swelling, probably soon. The decent people in developed countries need to shout louder than the lobbyists from Goldman Sachs. In the UK, the World Development Movement is launching a week of action this summer as crucial decisions on this are taken: text WDM to 82055 for your marching orders. In the US, click here to find out what you can do. The last time I spoke to her, Abiba said: "We can't go through that another time. Please - do anything you can to make sure they never, never do that to us again."
That is truly disgusting. Not exactly an old time market corner; A sort of ferocious feeding frenzy. I'm not buying 'Unintended Consequences' if there is a God these people will PAY.
Thanks, Gully. Some excellent insight in there.
+1 trillion, Gully, my main man!
Yup, and to repeat as many before me have already explained, Goldman Sachs and Morgan Stanley using a simple FpML script, make nth degree of trades back and forth, over their InterContinental Exchange (ICE), ICE Futures, ICE Clear, ICE Europe, etc., while shorting those soft commodity futures, and voila, their vile and dastardly deed is done!
My only piddling exception is that I don't consider any of this to involve casinos or gambling, it is too obviously rigged.
(Which is EXACTLY why the entertainment industry lobbied for, and received, an exemption on that so-called financial reform legislation recently passed so their industry couldn't be turned into the next derivatives speculation market.)
Interesting, but off topic. There are plenty of other places to post this material. Just a suggestion....Peace.