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No-Fault Espionage
December 31, 2009 by TMO · Leave a Comment
By Philip Giraldi
It is interesting to note what happens to espionage cases in the United States. If you spy for China, or Cuba, or Iran you will be exposed, excoriated in the media, locked up and denied bail, convicted, and sentenced to many years in a federal prison. Spying is serious business and the harsh punishment most often fits the crime because when spies steal highly sensitive defense and policy information they are not only betraying their fellow citizens, they are also making all Americans less secure. And the spying is only slightly less serious when American technology is being targeted. When spies acting for a foreign country steal sensitive technology with commercial applications that is developed at great cost either by the US government or private companies, their betrayal is also taking away the livelihoods of thousands of American workers who rely on the competitive edge of US technology to keep their jobs.
Spies are traitors in every sense of the word, unless, of course, if one is spying for Israel. Israel aggressively spies on the US both to influence policy and steal high technology, but getting caught only very rarely has any consequences. Leading neoconservatives like Richard Perle, Douglas Feith, and Stephen Bryen have all been detected in flagrante providing classified information to Israel but the investigations were halted and their security clearances were godfathered so they could continue to hold high office. FBI counter intelligence officer John Cole has reported on the frustration of his colleagues over the many cases of Israeli espionage that are dropped under orders from the Justice Department. He provides a "conservative estimate" of 125 worthwhile investigations into Israeli espionage in the US involving both American citizens and Israelis stopped due to political pressure from above. Israeli citizens and diplomats who are caught in the act spying are routinely freed without criminal charges and allowed to return home.
If you are an American who spies for Israel, a separate and unequal criminal justice system kicks in and the media quickly excuses your actions and then makes the story go away just as fast as it can. Most readers of Antiwar.com are familiar with the recent case of AIPAC officials Steve Rosen and Keith Weissman. The two men were given information that they knew to be classified by Pentagon employee Larry Franklin, who perhaps not coincidentally worked for Doug Feith. They passed the information on to an intelligence officer at the Israeli Embassy with whom they were also in contact. The FBI set up a sting using Franklin and arrested all three of the men under the Espionage Act of 1917. The arrest was followed by a nearly three year long trial in which the AIPAC duo finally escaped any punishment after presiding Judge Thomas Ellis obligingly set conditions that made it impossible for the prosecution to proceed. Franklin, who pleaded guilty and was sentenced to 151 months in prison, was subsequently freed of his obligation to do any jail time by the same Judge Ellis. While the trial was going on, it was conspicuously underreported by the media.
Predictably, many in the media and in the neocon establishment criticized the arrests of Rosen and Weissman, commenting that exchanges of classified "information" were routine in Washington and that Israel is a good friend requiring the classified intelligence for its own security. The argument might not have convinced the American public, but it certainly convinced the barking dogs in the media and Judge Ellis, particularly as there might have been a little nudging from important politicians taking place. Congresswoman Jane Harman, who was caught on the phone trading favors with an agent working for Israeli intelligence promised to use her influence in the Rosen-Weissman case in return for Israel helping her obtain the position of chairman of the House Intelligence Committee, a devil's bargain if there ever was one.
The case of Ben-Ami Kadish is in some ways even more intriguing than that of the two AIPAC staffers. Kadish was arrested in New Jersey in December 2008 for "conspiracy to disclose to the government of Israel documents related to the national defense of the United States and… that he participated in a conspiracy to act as an agent of the government of Israel." Kadish gave the same Israeli intelligence officer who ran convicted spy Jonathan Pollard classified documents that he had obtained while working at the US Army Armament Research, Development, and Engineering Center at Picatinny Arsenal in Dover, New Jersey. Some of the documents were related to nuclear weapons development while others described highly classified aspects of the Patriot anti-missile defense system. Israel subsequently developed its own Arrow anti-missile system, possibly using classified information relating to the Patriot, thereby reducing its own costs and enabling it to market the Arrow internationally at a lower price than its US competitors, eliminating American jobs.
Ben-Ami Kadish was arrested in December but released on bail. He was supposed to reappear before Judge Douglas Eaton at the US District Court for the Southern District of New York in Manhattan two months later in February, but did not actually reappear until June. He was fined and given a suspended sentence, a slap on the wrist considerably less painful than a local businessman cheating on his income tax might have received in the same courtroom.
And there is a current spy case involving Israel which clearly is being swept under the rug. Stewart Nozette, a scientist working for the US government, was arrested on October 19th and charged with conspiring to commit espionage. Nozette was caught in an FBI sting operation in which the Bureau officer pretended to be an Israeli Mossad spy. Nozette enthusiastically embraced the offer to cooperate, demanding in return an Israeli passport and money for the information that he would provide. The US media quickly went into damage mode, the New York Times headlining its coverage "The Scientist Who Mistook Himself for a Spy." Many in the media quickly noted that the FBI agent was not actually Mossad, meaning that Israel was not directly involved. The convenient spin ignored the fact the Nozette told the agent that he had already "communicated classified information" to Israel for many years through contacts in the Israel Aerospace Industries, for which he received $225,000. Nozette stated that he believed he had already been spying for Israel, telling the pretend Mossad but really FBI officer "I thought I was working for you already."
So what has happened to Nozette, who, according to the court papers, "had regular, frequent access to classified information and documents related to the US national defense"? Well, as in the case of Ben-Ami Kadish, he seems to have disappeared. The media has dropped the story and Nozette did not appear again in court on November 10th as scheduled. He may have been consigned to that limbo where those who spy for Israel seem to wind up prior to being released. The Federal District Court for the District of Columbia's website is giving nothing away. Nozette's name does not appear anywhere and if one calls the court clerk and requests information on his status, the call will not be returned.
The point is that if Congress and the Justice Department think that when Americans are caught spying for Israel it is constitutionally protected activity, like free speech, perhaps they should say so publicly. A two-tier system relating to national security issues and rule of law is just not in the US national interest, no matter how one twists the facts. If you spy for Israel the consequences should be the same as if you spy for China or Cuba – arrest, conviction, and hard jail time. No exceptions, no excuses.
U.S., Turkey Launch New Trade, Investment Forum
December 24, 2009 by TMO · Leave a Comment
WASHINGTON (Reuters) – The United States and NATO ally Turkey launched an initiative Monday aimed at boosting trade and investment ties, but said there were no plans for the two countries to negotiate a free trade agreement.
"We can … build on what is a good trade and commercial relationship and make it a much more robust one," U.S. Trade Representative Ron Kirk said at a press conference with Turkish Deputy Prime Minister Ali Babacan.
The initiative creates a new Cabinet-level forum to discuss ways to expand bilateral trade and investment flows and to try to resolve disputes when they arise, similar to one the United States has with China.
"This framework … will be an important vehicle for expanding trade and investment and creating new jobs for the workers and the people" of both countries, said U.S. Commerce Secretary Gary Locke.
The announcement followed a White House meeting between President Barack Obama and Turkish Prime Minister Tayyip Erdogan to discuss Iran's nuclear program and U.S. plans to send more troops to Afghanistan.
Obama told reporters he believed Turkey, a predominantly Muslim country and long-time U.S. ally, could be an 'important player' in moving Iran toward resolving its dispute with the West over its nuclear program.
Erdogan said Turkey stands ready to do whatever it can to achieve a diplomatic solution on the nuclear issue.
Turkey, which has applied for membership of the European Union, is the United States' fourth-largest trading partner in the Muslim world and 27th overall.
U.S-Turkey trade has dropped from a record of nearly $15 billion in 2008, but there is every reason to expect the two countries can surpass that "when the world economy gets back on its feet,'' Locke said.
Babacan said the two countries would seek suggestions from business on how to increase trade in areas ranging from energy to agriculture to military equipment.
He downplayed the chances of Ankara using the forum to press Washington to reduce high U.S. tariffs that Turkey faces on textiles and some other exports.
Kirk said the initiative was not intended as a stepping stone to talks with Turkey on a free trade agreement. (Reporting by Doug Palmer; Editing by Chris Wilson)
Exploring China's Wild West
December 17, 2009 by TMO · Leave a Comment
The Jakarta Globe
There is a smell of goats, fresh bread and melons. A cacophony of bleating animals rises, mixed with conversations full of hard-edged Turkic gutturals. A small boy clambers deftly onto the back of an unbroken, barrel-bellied pony, and reining it back sharply he somehow stays in place as it gallops wildly over the stony ground. Horse-trading elders with beards and skull caps look on with approval and begin to count wads of tattered money. Above everything arches a vast Central Asian sky.
I am in China, but here, at the Sunday livestock bazaar on the outskirts of Kashgar, an ancient city in the southwest corner of Xinjiang, I have to keep reminding myself of that fact.
Xinjiang is China's Wild West, a state of deserts and mountains peopled by Muslim Uighurs, and leaning more to Bokhara than Beijing. It has long had a troubled relationship with the rest of the country, slipping in and out of effective Chinese control as imperial power waxed and waned over the centuries. Today the tensions continue. In July, protests by Uighurs in Urumqi, the state capital, turned violent and a government crackdown followed. But unlike in neighboring Tibet, the government has kept Xinjiang open to tourists. When I arrive in Kashgar on a long-distance train, rolling though vineyards and pomegranate orchards, there has been a state-wide telecommunications shutdown for over four months and army trucks bearing antiseparatist slogans were rolling down the streets. But I am free to go wherever I like, and the first place I head is Kashgar's famous Sunday Market.
Kashgar stands astride the ancient Silk Road, the much-mythologized trade route that once linked China with Europe. From here trails led east along the fringes of the desert, and west over mountain passes. For centuries, people, religions and ideas passed along the caravan routes. The Uighurs' Turkic ancestors dropped out of the mountains in the sixth century. Before them, Buddhism, Manichaeism and Nestorian Christianity had traveled west. A few centuries later, Islam arrived.
Today a hint of this old romance survives — the borders of Pakistan, Afghanistan, Tajikistan and Kyrgyzstan lie within 150 kilometers of Kashgar, and trade goes on in weekly markets across the region. In the Kashgar Sunday Market I see carpets, fruits and embroidered cloth, mixed in with everyday metals and plastics. Women in sparkling headscarves jostle with old men in embroidered pillbox hats.
But the Chinese government is determinedly dragging Xinjiang into the mainstream. The market has now been corralled into a modern complex, and beyond it new high-rises tower over the remnants of the old mud-walled city. In recent years, swathes of the Uighur old town have been bulldozed, and immigration from other parts of China has been encouraged. These moves — and the dominance of immigrant Han Chinese in the job market — have only increased tensions. English-speaking Uighurs I meet on my journey whisper their disquiet in hushed, paranoid tones. A man at the Sunday Market explains the resentment at the destruction of old Kashgar.
"There is no privacy in a Chinese apartment," he says. "Our traditional houses are built around a courtyard so we all live together, but with privacy. We don't want to live in apartments."
Looking for something a little more authentic, I head to the livestock bazaar. It is a glorious chaos of goats, donkeys, horses and sheep and haggling men in fabulous hats. I am hoping to see a camel or two — real evidence that I am on the Silk Road — but to my disappointment there are none. I console myself with a plate of greasy kebabs and plot my onward journey.
From Kashgar I head east. Human habitation in Xinjiang has long been squeezed into the narrow margin between the mountains and the desert. A string of oases runs along what was once the southern branch of the Silk Road. My first stop is Yarkand — a place once as fabled as Samarkand or Xanadu. During Xinjiang's periods of independence from Chinese rule, Yarkand was usually the capital city. It was also the terminus of skeleton-strewn caravan trails over the mountains from India.
Today, it is a backwater. A Uighur old town of mud alleyways remains, and a dusty graveyard of royal tombs studded with the faded flags of mystic Sufi cults sprawls behind a medieval mosque with a vine-shaded courtyard. A modern Chinese town of arrow-straight boulevards dominates, but away to the south I can pick out the faint white line of the Kun Lun mountains, the back wall of the entire Himalayan range.
From the next oasis, Karghilik, I take a taxi into those hills along a road that leads, eventually, to Tibet. An army check-point by the chilly banks of the Tiznaf River is as far as I can go, but I scramble up a steep brown slope to take in the view. A mass of brown mountains, ribbed and scored with dark shadow, spreads east and west. Behind them, rising in a glittering white line, is the backbone of the Kun Lun. This was the barrier that Silk Road traders from India once had to cross en route to Kashgar, Yarkand, and my own final destination — Hotan.
The road to Hotan blazes across the stony desert, the mountains floating to the south. The vast void that surrounds it makes arrival in Hotan a strange experience, for here, at the very limit of China's vastness, is another large, modern town. As a Uighur heartland, the Chinese government has been particularly keen to integrate Hotan with the rest of the country. Roads from the north now plough straight across the Taklamakan Desert, and from next year a railway line will link it to Kashgar. A Uighur man I meet at a kebab stall hisses, "When the railway is ready we will be finished — Hotan will be all Chinese."
But something remains here: a week has passed and it is time for Hotan's own Sunday Market. Nothing has been regimented here; the bazaar sprawls over a vast area, filling all the lanes and alleys of the old quarter with a mass of color and commerce. There are sections given over to cloth and carpets, to the jade mined from the banks of nearby rivers, to animals and even tractors. Donkey carts clatter through the crowds, the drivers calling out " Bosh! Bosh! " ("Coming through!"). When I am tired of wandering I feast on laghman (Uighur noodles) and slices of fresh watermelon.
And as I leave the market I spot something — what I had hoped to see in Kashgar. A boy is leading a pair of shaggy, twin-humped Bactrian camels through the crowd. They are enormous beasts and they pass through the chaos unperturbed and disappear among the trucks. I stare after them as they go, now sure, despite the political tensions and the heavy-handed Chinese modernization, that I am in Central Asia, and on the Silk Road.
Obama, the Anti-Churchill?
December 10, 2009 by TMO · Leave a Comment
By Fareed Zakaria
If you take out just one sentence, Barack Obama's speech on Afghanistan last week was all about focusing and limiting the scope of the U.S. mission in that country. The objectives he detailed were exclusively military: to deny al-Qaeda a haven, reverse the Taliban's momentum and strengthen the Kabul government's security forces. The nation that he was interested in building, he explained, was this one.
And then there was that one line: "I have determined that it is in our vital national interest to send 30,000 U.S. troops to Afghanistan." Here lies the tension in Obama's policy. He wants a clearer, more discriminating foreign policy, one that pares the vast commitments and open-ended interventions of the Bush era, perhaps one that is more disciplined than Bill Clinton's approach to the world. (On the campaign trail, Obama repeatedly invoked George H.W. Bush as the president whose foreign policy he admired most.) But America is in a war that is not going well, and scaling back now would look like cutting and running. Obama is searching for a post-imperial policy in the midst of an imperial crisis. The qualified surge — send in troops to regain the momentum but then draw down — is his answer to this dilemma.
This first year of his presidency has been a window into Obama's worldview. Once most presidents get hold of the bully pulpit, they cannot resist the temptation to become Winston Churchill. They gravitate toward grand rhetoric about freedom and tyranny and embrace the moral drama of their role as leaders of the free world. Not Obama. He has been cool and calculating, whether dealing with Russia, Iran, Iraq or Afghanistan. Obama is a realist by temperament, learning and instinct. More than any president since Richard Nixon, he has focused on defining American interests carefully, providing resources to achieve them and keeping his eyes on the prize.
"In the end," the president said last Tuesday, "our security and leadership does not come solely from the strength of our arms." He explained that America's economic and technological vigor underpinned its ability to play a world role. At a small lunch with a group of columnists before his speech last week, he made clear to us that he did not want to run two wars. He seemed to be implying that the struggles in Iraq and Afghanistan were not the crucial path to America's long-term security. He explained that challenges at home — economic growth, technological innovation, education reform — were at the heart of maintaining America's status as a superpower. In fact, throughout history great nations have lost their way by getting bogged down in imperial missions far from home that crippled their will, strength and focus. (Sometimes even when they won they lost: Britain prevailed in the Boer War, but it broke the back of the empire.)
It is clear that Obama is attempting something quite ambitious — to reorient U.S. foreign policy toward something less extravagant and adversarial. That begins with narrowing the "war on terrorism"; scaling back the conflict with the Islamic world to those groups and countries that pose serious, direct threats to the United States; and reaching out to the rest. He has also tried to develop a better working relationship with major powers such as Russia and China, setting aside smaller issues in hopes of cooperation on bigger ones. This means departing from a bipartisan approach in which Washington's role was to direct and hector the rest of the world, pushing regimes large and small to accept American ideas, and publicly chastising them when they refused. Obama is trying to break the dynamic that says that when an American president negotiates with the Chinese or Russians, he must return with rewards or concessions — or else he is guilty of appeasement.
For his policy to succeed, Obama will need to maintain his focus come July 2011. Afghanistan will not be transformed by that date. It will not look like France, with a strong and effective central government. The gains that will have been made will be fragile. The situation will still be somewhat unstable. But that should still be the moment to begin the transition to Afghan rule. We can find ways to secure American interests in that region more manageably. By the end of 2011, the United States will have spent 10 years, thousands of lives and $2 trillion trying to create stable, democratic governments in Iraq and Afghanistan, two of the most difficult, divided countries in the world. It will be time to move on.
Fareed Zakaria is editor of Newsweek International. His e-mail address is email@example.com.
U.S., Turkey Launch New Trade, Investment Forum
December 10, 2009 by TMO · Leave a Comment
WASHINGTON (Reuters) – The United States and NATO ally Turkey launched an initiative Monday aimed at boosting trade and investment ties, but said there were no plans for the two countries to negotiate a free trade agreement.
"We can … build on what is a good trade and commercial relationship and make it a much more robust one,'' U.S. Trade Representative Ron Kirk said at a press conference with Turkish Deputy Prime Minister Ali Babacan.
The initiative creates a new Cabinet-level forum to discuss ways to expand bilateral trade and investment flows and to try to resolve disputes when they arise, similar to one the United States has with China.
"This framework … will be an important vehicle for expanding trade and investment and creating new jobs for the workers and the people'' of both countries, said U.S. Commerce Secretary Gary Locke.
The announcement followed a White House meeting between President Barack Obama and Turkish Prime Minister Tayyip Erdogan to discuss Iran's nuclear program and U.S. plans to send more troops to Afghanistan.
Obama told reporters he believed Turkey, a predominantly Muslim country and long-time U.S. ally, could be an "important player'' in moving Iran toward resolving its dispute with the West over its nuclear program.
Erdogan said Turkey stands ready to do whatever it can to achieve a diplomatic solution on the nuclear issue.
Turkey, which has applied for membership of the European Union, is the United States' fourth-largest trading partner in the Muslim world and 27th overall.
U.S-Turkey trade has dropped from a record of nearly $15 billion in 2008, but there is every reason to expect the two countries can surpass that "when the world economy gets back on its feet,'' Locke said.
Babacan said the two countries would seek suggestions from business on how to increase trade in areas ranging from energy to agriculture to military equipment.
He downplayed the chances of Ankara using the forum to press Washington to reduce high U.S. tariffs that Turkey faces on textiles and some other exports.
Kirk said the initiative was not intended as a stepping stone to talks with Turkey on a free trade agreement. (Reporting by Doug Palmer; Editing by Chris Wilson)
Surprising Results of CFR Survey
December 10, 2009 by TMO · Leave a Comment
What the U.S. Elite Really Thinks About Israel
By Jeffrey Blankfort, Counterpunch
The Council on Foreign Relations is always near the top of the Left's list of bogeymen that stand accused of pulling the strings of US foreign policy. It is right up there with the Bilderberg Group and the Trilateral Commission, right? Wrong. If that was the case, those arguing that US support for Israel is based on it being a "strategic asset" will have a hard time explaining a Pew Research Center survey on America's Place in the World, taken of 642 CFR members between October 2 and November 16. The Pew poll not only reveals that the overwhelming majority, two-thirds of the members of this elite foreign policy institution, believes that the United States has gone overboard in favoring Israel, it doesn't consider Israel to have much importance to the US in the first place.
What can be concluded from the answers to questions that dealt with the Israel-Palestine conflict is that the general public forms its opinions from what it hears and reads in the mainstream media which are largely biased towards Israel while CFR members have greater access to as well as interest in obtaining more accurate information and are less susceptible to pro-Israel propaganda. That apparently not a single US newspaper saw fit to report on the opinions of CFR members, under those circumstances, is not surprising. The evidence:
(1) That on a list of countries that will be the "more important as Americas allies and partners" in the future, just 4 per cent included Israel which placed it in a tie with South Korea and far behind China, 58 per cent, India, 55 per cent, Brazil, 37 per cent, the EU, 19 per cent, Russia, 17 per cent, Japan, 16 per cent, the UK and Turkey, 10 per cent, Germany, 9 per cent, Mexico, 8 per cent, Canada, Indonesia, Australia and France at 5 per cent. CFR voters were allowed to make up to seven selections.(Q19)
(2) When asked which countries would be less important to the US, Israel, at 9 per cent was behind 22 countries including Canada and Mexico and in the region Turkey, Egypt and Saudi Arabia.(Q20)
(3) What was particularly revealing is that "in the dispute between Israelis and Palestinians," only 26 per cent of the CFR sided with Israel, compared with 51 per cent of 2000 members of the general public who were polled over the same period. While but 16 per cent of CFR members sided with the Palestinians compared to 12 per cent of the public, 41 per cent of the CFRers sided with "both equally" as opposed to 4 per cent of the public. Supporting neither was 12 per cent of the CFR and 14 per cent of the public. (Q33)
(4) That the CFR has not had a major hand in making US Israel-Palestine policy nor is it in agreement with those who did is strikingly revealed by the response of its members when asked their opinion of US Middle East policies. The problem, according to 67 per cent of CFR members (as compared to 30 per cent of the public) is that the US favored Israeli too much, while only 2 per cent (as opposed to 15 per cent of the public) believed that US policy overly favored the Palestinians.. Twenty-four percent of the CFR believed US policy "struck the right balance" as did 29 per cent of the public. (Q34)
(5) The overwhelming majority of CFR members, 69 per cent, think that Pres.Obama is "striking the right balance" between the Israelis and Palestinians as compared with a slim majority, 51 per cent of the public. Thirteen percent of the CFR believes that Obama is "favoring Israel too much," as compared with 7 per cent of the public, while 12 per cent thinks he is siding with the Palestinians, a position taken by 16 per cent of the public. (Q35)
Regarding Iran, one detects the same gap between the CFR and the public. Whereas a 64 per cent-34 per cent majority of the polled CFR members see Iran as a major threat to US interests, compared with a 72-20 per cent per cent majority of the public, only 33 per cent of the CFR would support an attack on Iran should it get a nuclear weapon as contrasted with 63 per cent of the public. (Q7)
The percentages are almost reversed when it comes to Pakistan with 63 per cent of the CFR supporting US military action were "extremists…poised to take over Pakistan," whereas only 51 per cent of the public would approve such a move. (Q24). This is another indication of the success of Israel's porte-paroles in the mainstream media in building up the Iran threat while downplaying the potential threats to the stabilty of nuclear-armed Pakistan. The entire Pew survey can be viewed here: http://people-press.org/reports/questionnaires/569.pdf
[Jeffrey Blankfort is a long-time pro-Palestinian activist and a contributor to The Politics of Anti-Semitism. He an be contacted at firstname.lastname@example.com]
An Open Letter to President Obama from Michael Moore
December 3, 2009 by TMO · Leave a Comment
Before Pres. Obama's Afghanistan Speech of December 2009
Dear President Obama,
Do you really want to be the new "war president"? If you go to West Point tomorrow night (Tuesday, 8pm) and announce that you are increasing, rather than withdrawing, the troops in Afghanistan, you are the new war president. Pure and simple. And with that you will do the worst possible thing you could do — destroy the hopes and dreams so many millions have placed in you. With just one speech tomorrow night you will turn a multitude of young people who were the backbone of your campaign into disillusioned cynics. You will teach them what they've always heard is true — that all politicians are alike. I simply can't believe you're about to do what they say you are going to do. Please say it isn't so. It is not your job to do what the generals tell you to do. We are a civilian-run government. WE tell the Joint Chiefs what to do, not the other way around. That's the way General Washington insisted it must be. That's what President Truman told General MacArthur when MacArthur wanted to invade China. "You're fired!," said Truman, and that was that. And you should have fired Gen. McChrystal when he went to the press to preempt you, telling the press what YOU had to do. Let me be blunt: We love our kids in the armed services, but we hate these generals, from Westmoreland in Vietnam to, yes, even Colin Powell for lying to the UN with his made-up drawings of WMD (he has since sought redemption). So now you feel backed into a corner. 30 years ago this past Thursday (Thanksgiving) the Soviet generals had a cool idea — "Let's invade Afghanistan! " Well, that turned out to be the final nail in the USSR coffin.
There's a reason they don't call Afghanistan the "Garden State" (though they probably should, seeing how the corrupt President Karzai, whom we back, has his brother in the heroin trade raising poppies). Afghanistan' s nickname is the "Graveyard of Empires." If you don't believe it, give the British a call. I'd have you call Genghis Khan but I lost his number. I do have Gorbachev's number though. It's + 41 22 789 1662. I'm sure he could give you an earful about the historic blunder you're about to commit.
With our economic collapse still in full swing and our precious young men and women being sacrificed on the altar of arrogance and greed, the breakdown of this great civilization we call America will head, full throttle, into oblivion if you become the "war president." Empires never think the end is near, until the end is here. Empires think that more evil will force the heathens to toe the line — and yet it never works. The heathens usually tear them to shreds. Choose carefully, President Obama. You of all people know that it doesn't have to be this way. You still have a few hours to listen to your heart, and your own clear thinking. You know that nothing good can come from sending more troops halfway around the world to a place neither you nor they understand, to achieve an objective that neither you nor they understand, in a country that does not want us there. You can feel it in your bones.
I know you know that there are LESS than a hundred al-Qaeda left in Afghanistan! A hundred thousand troops trying to crush a hundred guys living in caves? Are you serious? Have you drunk Bush's Kool-Aid? I refuse to believe it. Your potential decision to expand the war (while saying that you're doing it so you can "end the war") will do more to set your legacy in stone than any of the great things you've said and done in your first year. One more throwing a bone from you to the Republicans and the coalition of the hopeful and the hopeless may be gone — and this nation will be back in the hands of the haters quicker than you can shout "tea bag!"
Choose carefully, Mr. President. Your corporate backers are going to abandon you as soon as it is clear you are a one-term president and that the nation will be safely back in the hands of the usual idiots who do their bidding. That could be Wednesday morning. We the people still love you. We the people still have a sliver of hope. But we the people can't take it anymore. We can't take your caving in, over and over, when we elected you by a big, wide margin of millions to get in there and get the job done. What part of "landslide victory" don't you understand?
Don't be deceived into thinking that sending a few more troops into Afghanistan will make a difference, or earn you the respect of the haters. They will not stop until this country is torn asunder and every last dollar is extracted from the poor and soon-to-be poor. You could send a million troops over there and the crazy Right still wouldn't be happy. You would still be the victim of their incessant venom on hate radio and television because no matter what you do, you can't change the one thing about yourself that sends them over the edge. The haters were not the ones who elected you, and they can't be won over by abandoning the rest of us.
President Obama, it's time to come home. Ask your neighbors in Chicago and the parents of the young men and women doing the fighting and dying if they want more billions and more troops sent to Afghanistan. Do you think they will say, "No, we don't need health care, we don't need jobs, we don't need homes. You go on ahead, Mr. President, and send our wealth and our sons and daughters overseas, 'cause we don't need them, either." What would Martin Luther King, Jr. do? What would your grandmother do? Not send more poor people to kill other poor people who pose no threat to them, that's what they'd do. Not spend billions and trillions to wage war while American children are sleeping on the streets and standing in bread lines.
All of us that voted and prayed for you and cried the night of your victory have endured an Orwellian hell of eight years of crimes committed in our name: torture, rendition, suspension of the bill of rights, invading nations who had not attacked us, blowing up neighborhoods that Saddam "might" be in (but never was), slaughtering wedding parties in Afghanistan. We watched as hundreds of thousands of Iraqi civilians were slaughtered and tens of thousands of our brave young men and women were killed, maimed, or endured mental anguish — the full terror of which we scarcely know. When we elected you we didn't expect miracles. We didn't even expect much change. But we expected some. We thought you would stop the madness. Stop the killing. Stop the insane idea that men with guns can reorganize a nation that doesn't even function as a nation and never, ever has.
Stop, stop, stop! For the sake of the lives of young Americans and Afghan civilians, stop. For the sake of your presidency, hope, and the future of our nation, stop. For God's sake, stop. Tonight we still have hope.
Tomorrow, we shall see. The ball is in your court. You DON'T have to do this. You can be a profile in courage. You can be your mother's son.
We're counting on you.
Michael Moore
MMFlint@aol. com
Mideast Firms Ramp Up in Iraq, Western Firms Trail
December 3, 2009 by TMO · Leave a Comment
By Deepa Babington
BAGHDAD, Nov 30 (Reuters) – While Western firms notch up high-profile energy deals in Iraq, smaller regional firms from Iran to Turkey are quietly building a broader Iraqi presence by pumping billions of dollars into housing and other projects.
Pledges by companies to invest in Iraq are suddenly taking off as violence falls sharply and the government seeks help to rebuild after years of war, sanctions and bloodshed.
Investors have announced $156.7 billion worth of projects in Iraq this year, not all of which are likely to bear fruit, Dunia Frontier Consultants said in a report.
Much of the spotlight has fallen on mega-deals by Big Oil firms like Exxon Mobil <XOM.N> and BP <BP.L> for oilfields, but high security costs — 26 percent of total costs according to one estimate — have deterred Westerners from other sectors.
Meanwhile, Iranian investors have been piling into the Shi'ite Muslim tourism business, Turkish companies have cornered the market in the Kurdish north and Gulf companies, some run by Iraqi expatriates, are nailing construction deals.
Middle East firms are perhaps more accustomed to operating in difficult environments, and have an easier time navigating Iraqi red tape and corruption, analysts said.
"It is easier for Gulf and regional companies to operate here because they know the mentality here," said Munther al Fattal, director of investment promotion at the U.S. agency for international development's Tijara project.
"Security has greatly improved but there still are a lot of impediments such as bureaucracy and lack of transparency."
While most investment projects announced in Iraq never seem to get off the ground, the growing business clout of regional firms is increasingly obvious.
Turkish firms have been investing in projects in the north and plan an $8 billion mixed development project in the south, while Iranian firms have catered to tourism supporting Shi'ite pilgrimages to the holy cities of Najaf and Kerbala as well as industrial projects in Basra in the south, Dunia says.
Lebanese investors have opened up a bank and plan to set up a $500 million residential city and dairy factory in Diwaniya, while investors from the United Arab Emirates have been eyeing residential complexes and infrastructure projects.
US is Small Fry Outside Energy
The United Arab Emirates has emerged as the top foreign investor in Iraq this year with pledges of $37.7 billion, followed by South Korea and the United States, Dunia said.
But South Korea owes its number two spot almost entirely to a planned $20 billion investment in a new industrial city in Anbar province's untapped gas fields, which appears to be little more than a pipedream or at the very least, aspirational.
The U.S. position in the rankings is almost entirely due to Exxon's $25 billion contract for the West Qurna oilfield, which has yet to be ratified by the Iraqi cabinet. U.S. investment into Iraq accounts for less than 1 percent of the total if government contracts and oil are excluded.
A look at smaller deals offers a more revealing picture of the players with a wider presence in Iraq.
Lebanon tops the list of investment deals below $1 billion, followed by South Korea, Iran, the UAE and Turkey, Dunia said.
Once again, South Korea's position in the list is misleading, exaggerated due to a single energy project.
"Once the major energy deals are stripped away, it is largely regional players that dominate," the Dunia report said.
Some analysts say the dominance of Middle East players is likely to continue.
"Most of the investment will come from Gulf States and Jordan — with a significant contribution from Iran," said Gavin Jones of Upper Quartile, an Edinburgh-based research firm.
He said repatriation of wealth by Iraqis living in Jordan or the Gulf could account for a sizeable chunk.
(Editing by Michael Christie; Editing by Victoria Main) ((firstname.lastname@example.com, Baghdad newsroom, +964 7901 917 023, email@example.com))
Gold in the Limelight
November 25, 2009 by TMO · Leave a Comment
Gold is soaring, hitting new record highs almost daily. This C rise is going strong. Our initial $1200 target level for this year's rise has nearly been reached, but gold could go higher.
This is good news for all of us who have been invested in gold for the past eight years. But even for those of you who invested in more recent times, gold has been a good and profitable investment.
We feel strongly that this will continue in the months and years ahead. And there are many valid reasons why.
Most important, the unprecedented monetary policy currently in force is inflationary. The same is true of the weak U.S. dollar, negative interest rates, rising oil and commodities. Gold buying by central banks is also boosting the gold price higher.
Even though gold is still relatively unknown in mainstream investment circles, it's starting to attract some attention. As this interest grows, momentum buying will pick up and the exchange traded funds are another big positive, simply because they make it easy to buy gold. The improving economy is another positive factor.
Yes, there are problems…. serious problems. But that doesn't mean the world is going to fall apart next month or next year.
Pessimists are always going to paint the worst case scenario. Optimists will forever present the best case scenario. The reality is usually somewhere in between. But the markets and the facts always tell the story and that's what we try to focus on. So what are they currently telling us?
First, despite all that's happening, it's important to put things into perspective… and looking back, the overall situation was a lot worse last year compared to how it is now.
Remember, the entire financial world was on the verge of collapse last year as one huge company after another failed, or came close to it. Economies worldwide were dropping and so were all of the global stock markets. Fear and panic were rampant, and with reason. The crisis wiped out a greater chunk of household wealth than during the Great Depression. No one knew what to do…
Now fast forward to today…
For starters, nearly every economy in the world is growing, some obviously more than others. But the point is, they're all up. Stocks around the globe have also been rising this year and confidence is returning.
In the U.S., for instance, the economy grew 3½% in the third quarter. The leading economic indicator has been up for seven consecutive months and stocks, which lead the economy, have been rising for eight months. Manufacturing is on the mend, along with other important economic signs, all showing that the recession ended in June and the economy is now on its way up, albeit slowly.
In other countries, growth has been far more robust. In China, for example, the economy is growing at a 9% rate. So Korea is growing at the fastest pace in seven years. India is going strong, the same is true in most of Asia, Brazil, and to a lesser extent, Europe is improving too.
2009: Great gains
So far, based on 18 of the world's major stock markets, the gains this year have ranged between 11% and 92%. The average has been 31%. So even though the Dow Industrials is only up about 14%, the global stock markets are all telling us that ongoing growth lies ahead.
Since the markets look to the future, if that were not the case, these markets would be falling, not rising.
Okay, but what about commodities? The CRB commodity index has gained 24% this year. More impressive, copper has soared 101% and it's known as the global economic market barometer.
Oil has also surged. It's gained 75%. Very simply, if these two key commodities were not in big demand due to improving world economies, they wouldn't be rising the way they are. Instead, they too would be falling.
The main point is… these are not signs of recession and they're certainly not signaling a depression. In fact, they're telling us that deflation is not currently a concern.
On the contrary, these rising prices are more indicative of inflation downstream. That's especially true considering the weak dollar.
Again and very simply, in a healthy economy annual deficits shouldn't be more than 3% of GDP. Once this percentage exceeds 5-6%, the currency of the country involved historically falls sharply.
Currently, this percentage has soared to about 10% in the U.S. and unfortunately, that pretty much puts the nails in the dollar's coffin. This alone will propel gold much higher.
These are the key reasons why we continue to recommend buying and holding gold. Whatever the ultimate, longer-term outcome, it's pretty clear that the situation is going to intensify and as it does, gold is going to be the main beneficiary and its bull market will endure well into the years ahead. That's been the case for thousands of years during times of economic uncertainty and gross imbalances, and it's now happening again.
Note that gold rose 56% and 58%, respectively, in the last two C rises (see Chart). So far, gold has risen 32% in the current C rise. Plus, its leading indicator still has room to rise further before it reaches the temporarily "too high" area. Since this rise is powerful, the gains this time around could be similar to those in 2006 and 2008. And if they are, gold could continue up to near the $1350 level before this C rise is over.
We'll be watching closely but for now, hold on to all of your metals related investments. Silver and gold shares are also surging, and so are most of the other metals. Silver is at a new 16 month high and it too is approaching our first target area. Gold and silver will both remain super strong above $1070 and $17.20.
Democrat Joins Gubernatorial race, Says He'll Spend $10 Million in Primary
November 19, 2009 by TMO · Leave a Comment
Houston hair executive Farouk Shami says his focus is stimulating economy.
By Corrie MacLaggan, American Statesman
Houston hair care executive Farouk Shami said Tuesday that he's definitely running for governor and that he'll put in $10 million for the Democratic primary alone.
"I am in," said Shami, 66, a political novice whose company sells CHI hair-straightening irons and BioSilk hair products. "I am 100 percent sure I will be the next governor of Texas."
Democrat Farouk Shami says he'll put in $10 million.
For Capitol watchers who weren't paying close attention to Shami's declarations in recent months that he was thinking of running, his promise of $10 million of his own money might make them listen.
"Nobody else can begin to say that," said Chuck Herring, president of the Central Texas Democratic Forum, which hosted Shami at a lunch meeting Tuesday.
As of July, the leading fundraiser in the Democratic primary for governor, former U.S. Ambassador Tom Schieffer, had $454,000 on hand. In the GOP race, Gov. Rick Perry and U.S. Sen. Kay Bailey Hutchison had $9.3 million and $12.5 million, respectively.
Shami, a native of Palestine who arrived in the United States in 1965 and likes to say he's "living the American dream," said he's planning a formal campaign announcement Nov. 19 at CHI USA in Houston.
Shami, founder and chairman of Farouk Systems Inc., said he's not looking for fame or money and that he'd accept a salary of $1 as governor. (Gov. Rick Perry earns $150,000 a year and accepts about $115,000 of that, a spokeswoman said.)
"The people of Texas are really tired of career politicians who talk and work for special interest groups," Shami said.
Shami, who recently announced that his company is bringing 1,200 manufacturing jobs from South Korea and China to Texas, said his campaign's top priority is stimulating the economy, particularly with green jobs. He said that, as governor, he would create about 150,000 jobs by opening factories that would hire Texans to produce solar panels.
Shami "has a sincerity and a genuineness that are very attractive," Herring said. "He's untrained politically — that's clear as well."
Andy Brown, chairman of the Travis County Democratic Party, said an Austin reception for Shami on Monday evening drew people Brown hadn't seen at party functions, particularly members of Austin's Arab American community. "If his candidacy brings new communities to the active Democratic party structure, I think that's a great thing," Brown said.
Feras Mousilli, president of the Austin chapter of the American-Arab Anti-Discrimination Committee, was also at the reception and called Shami refreshing.
"Obviously, he's got a tremendous uphill battle ahead of him—he doesn't have a typical name, the look, the background of most career politicians," Mousilli said. But he said he found it appealing that Shami is not indebted to PACs or lobbyists.
"It's rare to find somebody without those kind of ghosts in their closet."
Why Are They Afraid?
October 22, 2009 by TMO · Leave a Comment
By Dr. Aslam Abdullah, TMO Editor-in-chief
It is now well known that four Republican Congressman did not hide their feelings against Islam and Muslims when they expressed their deep concern about Muslim interns and staffers in Congress.
They were obviously targeting CAIR, suggesting that anyone close to this mainstream Muslim organization is not worthy of trust. this is an irony that those who are elected to protect Americans are calling fellow Americans suspects based on their religion and race.
This is contrary to constitutional law. But who is going to challenge them openly when they know they are safe in their districts and they would win no matter how do they treat their others?
What is interesting to note is that all four congressmen happen to have reportedly strong support of Christian right and Pro-Israeli lobbyists. What else one can expect from such office bearers?
We believe that everyone who works in the federal government goes through a background check.
Their credentials are verified and their past history is minutely studied. They get to their position after close scrutiny. To say that people who have endured such scrutiny are still suspect because of their religious identity and closeness to CAIR is nothing but political bigotry.
Such people are still living in the Bush era that was famous for its anti-Islamic rhetoric.
But why are they afraid? The reason is very simple. they have yet to adjust to the changes that have taken place in America in the last two decades.
Young Muslims through their educational credentials and hard political work have proven that they are no different in their commitment to their country from blue-eyed, white protestant Americans.
They have proven their worth to the country. The four Republican Congressmen (and who knows how many more are hiding behind them), have refused to acknowledge their existence and see their worth, simply because they have a political agenda that relies on Islamophobia.
They try to view Islam as a religion at war against America, and Muslims as enemies. They view their presence in the country's highest political institutions as dangerous to the interests of the country.
Interestingly, they have not been able to point a single example in defense of their argument. When did you hear last the name of a Muslim selling country's secrets to a Muslim country, unlike the regular drumbeat of souls either caught spying or caught attempting to spy for China, Russia, or Israel.
We would like to suggest something positive to these four congressmen. Give placement to a few Muslims in your office and see how efficient and useful they to your work.
You will surely be able to change your perspectives about young Muslim interns.
As far as CAIR is concerned, they can certainly hold a one to one meeting with CAIR officials to clarify issues.
In civil societies, the only way to overcome one's doubts and apprehensions about the other is to develop a dialogue with the opponent.
Seemingly, Republicans are so immersed in their partisan politics that they are not willing to acknowledge that they also need to critically examine their own policies and agenda.
But, if Republicans can say Nancy Pelosi is working for the nation's enemies, and call President Obama an ineligible President, they are certainly capable of accusing Muslims of any number of crimes or sins.
It is unfortunate to see some of our politicians going so low in their eagerness to get re-elected that they are willing to sacrifice the constitution and the long standing American tradition of being fair and balanced.
Official: Iran to "Blow up Heart" of Israel if Attacked
October 22, 2009 by TMO · Leave a Comment
TEHRAN (Reuters) – Iran would "blow up the heart" of Israel if it was attacked by the Jewish state or the United States, a Revolutionary Guards official was quoted Friday as saying.
"Even if one American or Zionist missile hits our country, before the dust settles, Iranian missiles will blow up the heart of Israel," Mojtaba Zolnour said, according to IRNA news agency.
Zolnour is a deputy representative of Supreme Leader Ayatollah Ali Khamenei in the elite Guards force. Iranian officials have previously said Tehran would retaliate in event of an Israeli or U.S. attack.
Earlier this year, a senior commander said Iranian missiles could reach Israeli nuclear sites. Israel is believed to be the only nuclear-armed Middle East state.
Israel has not ruled out military action if diplomacy fails to end a dispute over Iran's nuclear ambitions, echoing U.S. policy, although Washington is engaged in a drive to resolve the issue through direct talks with Tehran.
The West suspects the Islamic state is covertly seeking to develop nuclear weapons, which Iran denies.
"The Zionist regime and the United States cannot risk attacking Iran," Zolnour said in the holy Shi'ite city of Qom on Thursday, citing Iranian military and technological advances, IRNA reported. Iran refers to Israel as the "Zionist regime."
At talks in Geneva on October 1, Iran agreed with six world powers — the United States, Russia, China, Britain, France and Germany — to give U.N. experts access to a newly-disclosed uranium enrichment plant south of Tehran.
Iran and Western powers described talks as constructive and a step forward. However, underlying tension was highlighted before the meeting when Iran test-fired missiles with ranges that could put Israel and regional U.S. bases within reach.
The Geneva talks are expected to win Iran a reprieve from tougher U.N. sanctions, although Western powers are likely to be wary of any attempt by Tehran to buy time to develop its nuclear program.
Senior cleric Ahmad Khatami, leading Friday prayers in Tehran, said the meeting represented a "victory" for Iran.
"The Geneva conference was a very successful one and amounted to a victory for the Islamic Republic," he told worshippers.
"Up until the conference they were constantly talking about sanctions and suspension, but when the conference was held there was no talk of either sanctions or suspension," he said.
Wood Burning Stoves
October 22, 2009 by TMO · Leave a Comment
As early as Roman times stoves made of clay, tile, or earthenware were in use in central and N Europe. Early Swiss stoves of clay or brick, without chimneys, were built against the outer house wall, with an opening to the outside through which they were fueled and through which the smoke could escape. Scarcity of fuel made an economical heat-retaining device necessary, and these primitive stoves, built of clay, brick, tile, or plastered masonry, became common in the Scandinavian countries, Holland, Germany, and N France. Some exquisitely colored and glazed tile stoves, dating from the 16th and 17th cent., show traces of Moorish influence. In Russia large brick stoves formed a partition between two rooms. Because of the very long flue, which wound back and forth inside the structure, these could be heated for some hours with a small amount of light fuel.
The Franklin stove, invented in 1743 and used for heating, was the lineal descendant of the fireplace, being at first only a portable down-draft iron fireplace that could be set into, or before, the chimney.
It was soon elaborated into what was known as the Pennsylvania fireplace, with a grate and sliding doors. In common use for a period after the Revolution, it was followed by a variety of heaters burning wood and coal. The base burner, or magazine coal heater, was widely used before the general adoption of central heating.
Heating devices that we would call stoves had long been in existence, going back to Roman times. However, the stove as the chief cooking device, taking the place of the fireplace, dates only to around the mid-19th century with the widespread use of wood-burning or coal-burning cooking stoves stove, device used for heating or for cooking food. The stove was long regarded as a cooking device supplementary to the fireplace, near which it stood; its stovepipe led into the fireplace chimney. It was not until about the middle of the 19th cent., when the coal-burning range with removable lids came into general use, that the fireplace was finally supplanted as the chief cooking agency.
A cast-iron stove made in China before A.D. 200 has been found, but it was not until late in the 15th cent. that cast-iron stoves were first made in Europe. These consisted of plates that were grooved to fit together in the shape of a box. Probably the earliest of this type were earthenware stoves enclosed in iron castings decorated with biblical scenes and armorial and arabesque designs. They often bore inscriptions in Norse, German, Dutch, French, or sometimes Latin, and some were dated. Many were highly artistic specimens of handicraft. A typical early iron stove is the wall-jamb, or five-plate, stove, which was fueled from an adjoining room.
Dutch, Swedish, and German settlers of the American colonies, especially those of Delaware, Pennsylvania, and New Jersey, brought with them five-plate stoves or molds for casting them. Iron founding began c.1724 in America, and old forges or foundries have left records of five-plate stoves sold in 1728 as Dutch stoves or, less commonly, carved stoves. These continued to be made until Revolutionary times, when they were superseded by the English, or 10-plate, stove, which stood free of the wall and had a draft or fuel door. These 10-plate devices could cook and warm at the same time and replaced, in part, the large masonry baking oven, usually built outside the house.
The Shoe Thrown 'Round the World
September 24, 2009 by TMO · Leave a Comment
By Sumayyah Meehan, Muslim Media News Service (MMNS) Middle East Correspondent
In one single gesture, Iraqi journalist Muntazer al-Zaidi summed up the sentiments that had been swelling in the hearts of Iraqi's and Muslims from all over the world ever since former President George W. Bush indulged in his own 'Axis of Evil' and went to war with Iraq. With the throw of a pair of size 10 loafers, al-Zaidi unleashed a wave of discontent that Iraqi's had grappled with ever since their country was unlawfully invaded.
Many Muslims from all over the world cheered, as scenes of adults and children alike rejoicing in the streets of Baghdad waving their own shoes in the air played out on TV. Copycat shoe throwers also emerged in the days following the incident, most notably in India and China where at least two diplomats found themselves also dodging footwear.
However, news about the man behind the shoes was hard to come by. Following the incident, he was rushed away by Iraqi security personnel and imprisoned. Family members later revealed that al-Zaidi was severely beaten and tortured in prison. He was originally sentenced to spend three years in prison, but served only nine months of that sentence as he was recently released.
Finally, al-Zaidi is able to speak for himself and tell the world the reasons behind his actions. In a column recently appearing in the British-based 'The Guardian' newspaper, al-Zaidi writes, "When I threw the shoe in the face of the criminal, George Bush, I wanted to express my rejection of his lies, his occupation of my country, my rejection of his killing my people. My rejection of his plundering the wealth of my country, and destroying its infrastructure. And casting out its sons into a diasporas."
Further al-Zaidi denies that he is a hero and writes, "It humiliated me to see my country humiliated; and to see my Baghdad burned, my people killed. Thousands of tragic pictures remained in my head, pushing me towards the path of confrontation. The scandal of Abu Ghraib, the massacres of Falluja, Najaf, Haditha, Sadr City, Basra, Diyala, Mosul, Tal Afar, and every inch of our wounded land. I traveled through my burning land and saw with my own eyes the pain of the victims, and heard with my own ears the screams of the orphans and the bereaved. And a feeling of shame haunted me like an ugly name because I was powerless."
After his release, al-Zaidi was reunited with his family in a tearful and long-awaited reunion. According to his employer Al-Baghdadia TV, al-Zaidi has left Iraq and will travel to Syria and later Greece to receive medical care. Al-Zaidi suffered greatly at the hands of Iraqi security personnel who beat him with melt bars, electrocuted him with live wires and engaged in 'water boarding' to make him feel like he was drowning. The state of al-Zaidi's health is unknown at the present time.
In a recent development, al-Zaidi also revealed his future plans in a TV interview conducted by TSR television. He hopes to rally Iraqis together to lodge a complaint against former President Bush and put him on trial in The Hague for crimes against humanity. "I really want to go to Switzerland because it is a neutral country and because it is a country that did not support the occupation of Iraq," al-Zaidi said, "Switzerland hosts many international organizations, including some that fight for children, and Switzerland is a country that has a great democratic tradition. It is an example for the world,"
While the man himself may resist being touted as a hero for his actions. At least one artist has forever immortalized the shoes that were 'thrown' around the world. Based in London, artist P Waniewski has created a pair of size 10 shoes identical to the ones al-Zaidi threw, since U.S. security personnel purportedly destroyed the original pair following the incident. So named, 'Proud Shoes' the tribute is made of 21 kilograms of bronze and dipped in 24 KT. gold. The artist recently revealed in an interview his reasons for creating the tribute to al-Zaidi, "When I heard this story I was moved by the passion and fearlessness of Mr al-Zaidi's actions. The shoe that he threw was destroyed by the US authorities, so I felt it was a fitting way of marking this emotive event."
Houstonian Corner (V11-I40)
September 24, 2009 by TMO · Leave a Comment
Astounding 'Eid-ul-Fitr Celebrations as ISGH Organized Eid Prayers at GRBCC
As per last week's prediction by Pakistan Publications Inc., hundreds and thousands of Muslims thronged George R. Brown Convention Center (GRBCC). According to an estimate, more than 30,000 Muslims of all faces and facets of life responded this last Sunday, September 20, 2009, to the call of the Islamic Society of Greater Houston (ISGH) and attended 'Eid-ul-Fitr prayers at the GRBCC. The prayer hall overflowed, and thousands had to stay outside due to fire-code regulations' and were accommodated in a subsequent prayer.
Pakistan Publications Inc. extends Heartiest Congratulations and Kudos to the ISGH for organizing such a mammoth gathering in the most efficient and effective manner.
The Special Supplications and Presence Slogans (called the Takbeerats of Eid-ul-Fitr Prayers) by the attendees thundered in the hall since before 8:00am., while thousands of impressively dressed people in traditional dresses of almost the whole world, like the Far-East Australasia; South Asia India – Bangladesh – Sri Lanka – Pakistan; Middle East; Africa; Europe; and the Americas; made their ways through every door and into the Hall.
The meaning of these is Takbeerats is as follows : "Allah is Great, Allah is Great: There is no one worthy of prayer but Allah, and Allah is Great; Allah is Great, All praise be to Allah, It is He Who Guides."
These Takbeerats continued for about one-hour, when around 9:00am. Shaikh Omar Inshanally, Imam at the ISGH Main Center Masjid, stood up to lead the prayers, which includes Seven Extra Calls of Allah is Great (Allahu-Akbar in Arabic) during the First Phase (called Rakat) and Five Extra Calls of Allah is Great (Allahu-Akbar in Arabic) during the Second Phase (called Rakat) of the Prayers.
During these Two Phased Eid-ul-Fitr Prayers, Shaikh Omar Inshanally recited from the passages of Quran that convey Allah's unfathomable love for believers; remind believers of the inevitability of an end of everyone's earthly life & the ultimate destination in front of Allah; and that Allah forgives all sins of those who sincerely repent and uplift their morality. Without exception, those interviewed after the prayer said that they felt deeply moved, and complimented the Imam's Recitation (called Qiraa'at in Arabic) – The choice of passages, fluency, voice control, and mellifluousness.
After the prayers, ISGH President Dr. Aziz Ahmad Siddiqi provided in a positive fashion the State of Affairs of ISGH and the Muslim Community in the Greater Houston Region. He cited several major developments that whoever will seek, will benefit many, regardless of ethnic background or country of origin. President also mentioned that this year the ISGH membership has experienced an unprecedented growth of more than 25 percent. It was nice that Dr. Siddiqi's presentation was not long and contained linguistic beauty.
Houston Mayor Bill White also addressed the audience, noting the size and importance of the local Muslim community. Mr. White is seeking higher state office, and a positive impression on him could be to the advantage of Muslims. The Chairman of the ISGH 'Ulema Committee, Shaikh Abdul 'Aziz of the Brand Lane Masjid also graced the occasion.
After the prayers and addresses the crowd filled the air with mutual bright smiles, cordial 'Eid greetings, and warm expressions of love and unity. This all made for a truly awe-inspiring 'Eid-ul-Fitr celebration organized by the ISGH. For more information, one can visit www.isgh.org.
Farouk Shami to Run For Texas Governor
He is the famous Houston hair-care millionaire Farouk Shami (originally from Palestine), seriously considering a run for Governor as a Democrat. He has already appointed a Treasurer, but has not yet filed papers.
At his Annual Ramadan Dinner at the Arab Cultural Center (ACC) Houston, the 66 year old Shami asked hundreds gathered if he should run or not and he got a tremendous "Yes," with everyone standing and clapping.
One may recall that Farouk Shami first got some attention in the political arena during 2006 governor's race, when as his business partner; he supported the independent gubernatorial candidate Kinky Friedman.
Farouk Shami got much appreciation last month for his decision to move 5,000 jobs from Asian manufacturing plants in China to Texas over the next five years to manufacture his famous hair-care products of BioSilk and CHI brands. He invented ammonia-free hair color products, was the official hair care sponsor of the Miss Universe, Miss USA and Miss Teen USA pageants and has sales that top $1 billion a year.
Farouk Shami in an inspiring speech said that Texas needs a change and he through his entrepreneurial spirit will bring fresh ideas to increase the tax base, create new jobs of the future, brings dignified healthcare for all, and make Texas the best place to live in the USA.
Chinese Train to Mecca?
September 10, 2009 by TMO · Leave a Comment
By Keith Barry Email Author / Wired Magazine
The Saudi government is building a $1.8 billion monorail to ferry pilgrims among the holy sites of Mecca, Mina, Arafat and Muzdalifah. Once complete, the Saudis estimate 53,000 buses will disappear from the city's crowded roads, promising a safer, more comfortable pilgrimage.
The monorail will be built over the next four years, with the first segment — roughly 35 percent of the project, by one estimate — opening in time for this year's Hajj between November 25 and 29. Hajj, the annual pilgrimage to Mecca that all Muslims must complete if they have the means and ability to do so, is the fifth Pillar of Islam and as such attracts a staggering number of pilgrims.
Controlled access to the monorail is intended to avoid accidents such as the tragedy at Mina in 2006, when more than 350 people died in a stampede after two busloads of pilgrims disembarked at the entrance to the Jamarat Bridge holy site. Trains on four elevated tracks will carry as many as 20,000 pilgrims an hour in an orderly fashion, with parking available at all stops.
The monorail appears to be a good way of controlling human and vehicular traffic to holy sites. The author of the Mujahideen Ryder blog says the monorail is a "pretty cool idea to make Hajj safer and efficient. I can't wait to see it."
According to Straits Times, the Chinese Railway Corp. is building the monorail. It is one of two rail projects the Chinese are building in Saudi Arabia — the other being China Railway Engineering's 275-mile high-speed rail system linking Mecca and Medina through Jeddah. China's involvement in both projects reportedly was clinched during Chinese Prime Minister Hu Jintao's visit to Saudi Arabia in February, during which representatives of Chinese Railway Corp. met with Saudi Prince Miteb bin Abdulaziz, chairman of the commission for developing the holy cities of Mecca and Medina.
Should the project succeed, it certainly will see a lot of use. Hajj is the world's largest pilgrimage, and the number of foreign pilgrims nearly doubled between 2000 and 2008, when more than two million pilgrims reportedly attended.
Fasting Good for Brain?
By Andrea Useem
Ramadan is in its third week now, and the required dawn-to-dusk fasting often feels like a daily mini–marathon. By late afternoon, hunger and thirst have sucked me dry, leaving me sleepy, slow-minded, and sometimes short-tempered.
I know that the purpose of fasting is spiritual—God will reward us in the next life—but in this lifetime, fasting sometimes makes me an ineffective, irritable person. So I was excited to learn that Harvard psychiatrist John Ratey, MD, had spoken at a recent Renaissance Weekend event about how caloric restriction can improve brain function.
I emailed Dr. Ratey to find out if those benefits might extend to religious fasting, and he sent me a 2006 paper on the brain functioning of men during the Ramadan fast. The researchers studied a small group of healthy men during and after the holy month, looking at their brain activity via functional magnetic resonance imaging (fMRI). They concluded that "all individual results showed consistent and significant increase of activity in the motor cortex during fasting."
That research builds on the work of other scientists, including Mark Mattson, PhD, who heads a neuroscience lab at the NIH's National Institute on Aging. Mattson has done important research on how dietary restrictions can significantly protect the brain from degenerative diseases like Alzheimer's or Parkinson's.
In 2003, Mattson and others reported that rats deprived of food every other day, or restricted to a diet at 30% to 50% of normal calorie levels, showed not only decreased heart rates and blood pressure, but also "younger" brains, with "numerous age-related changes in gene expression."
Mattson and his colleagues also shared data from research on humans, which shows that populations with higher caloric intakes—such as the United States and Europe—have a greater prevalence of Alzheimer's than do populations that eat less—such as China and Japan. The authors speculate that humans may have adapted to conditions of feast and famine; the stress of having little food, they write, "may induce changes in gene expression that result in adaptive changes in cellular metabolism and the increased ability of the organism to reduce stress."
Although this research is relatively new, with many questions left unanswered, the authors conclude that "it seems a safe bet that if people would incorporate a spartan approach to food intake into their lifestyles, this would greatly reduce the incidence of Alzheimer's, Parkinson's and stroke." (Of course, how this recommendation translates for individual people remains almost a complete unknown; consult with your own doctor before restricting your diet in dramatic ways.)
But here's the hard part: Although we know eating too much leads to all sorts of health problems, "it has proven very difficult to successfully implement prolonged dietary-restriction regimens," reports Mattson and his team. Information and doctor's orders are rarely enough motivation.
This last observation gave me hope, because it seemed the authors were overlooking the role of religion; it can inspire people in ways information or experts don't. Would I be undergoing this rigorous month of fasting unless I believed strongly it was the right thing for me to do? Probably not. And the same goes for millions of Muslims around the world.
And many other religions include fasting or dietary restrictions as part of their religious observances. Members of the Church of Jesus Christ of Latter-Day Saints, or Mormons, for example, fast one Sunday a month. The Orthodox Church in America notes five separate fasting seasons on its website, in addition to individual fast days; during some of these fasts, all food is restricted, and during other fasts, only certain foods are off-limits. Some Roman Catholics abstain from meat on Fridays, and all do during Lent. Many types of Buddhist monks abide by a code that prohibits eating after noon each day.
Science may only now be discovering that some of these religious practices, both ancient and modern, offer nourishment not just for the soul, but for the body as well.
Offbeat Investment
September 3, 2009 by TMO · Leave a Comment
By Martin de Sa'Pinto
ZURICH, August 24 (Reuters) – Few investors would be happy to see their assets turn sour, but an alternative investment launched recently offers them the chance to make a healthy return from just such a development.
Vinegar may be a unorthodox investment but Stefan Marti, managing director of vinegar maker Baerg Marti, said it has captured the imagination of many investors, especially from Russia and Asia.
"I was showing my bottled vinegar to some Japanese clients, and they asked me to sell them a barrel rather than bottles. They wanted their own barrel personalised with their logo so they could be identified with the product," Marti told Reuters.
He said the clients were excited by the product and by its production process — it is matured in the Swiss mountains at an altitude of 3,000 metres for five years or longer in Limousin or cherry oak — which gave it a strong appeal as an investment.
Turmoil in the financial markets in 2008 and the first quarter of 2009 has boosted the attractiveness of unusual asset classes like fine wines, art, rare coins and violins, which investors hoped could perform through the crisis.
Although rallying equities and corporate bonds are pulling investors in once again, interest from around the world in Baerg Marti's vinegar has been growing, Marti said.
Investors could see returns that outstrip those of many more conventional funds and expected average returns of 200 to 300 percent over five years, he said. However, as the project is new there are no past performance figures.
Baerg Marti is offering 5-year contracts on the vinegars, which use Swiss produce, including apples, strawberries and blueberries, at a cost of 11,500 Swiss francs ($10,850) per barrel, plus a yearly storage fee of 150 francs.
There will be no performance fee, although Marti said one may be introduced for high volume buyers.
When mature, the best balsamic vinegars can cost 3,000 francs and more for just 1 litre, Marti said. A barrel contains some 30 litres.
Investors would be tied in to the five year contract, after which they could hold the investment, resell the vinegar or use it.
The vinegar benefits from temperature changes high in the Swiss mountains, however, one risk is from earth tremors, which can damage the quality.
Marti, who said the main interest in the investment so far has come from Japan, China and Russia. He said the barrels were insured for 11,500 francs for the investment period.
The market is liquid enough to give investors an exit, with demand from buyers in many parts of the world, Marti said, although he was unable to say what sort of bid-offer spread investors could expect if they needed to sell quickly.
He said the initial number of investors would be restricted as the first site, on the Mutthorn mountain in Switzerland's Bernese Alps, can hold a maximum of 500 barrels. Another site was in preparation, and would be ready in seven or eight months. ($1=1.060 Swiss francs)
China House Hunting to Rev up Economy
August 27, 2009 by TMO · Leave a Comment
By Simon Rabinovitch
BEIJING, Aug 18 (Reuters) – The Chinese government is attempting to pass the baton of growth from state-funded infrastructure investment to the private housing sector, a risky but necessary move to sustain the economic recovery.
Construction cranes sprouting in big cities, busy furniture shops and soaring property sales all show that the transition is going smoothly so far, though officials are wary that house prices may rise too high, too quickly.
China's biggest listed property developer, Vanke <000002.SZ>, lifted its housing starts target for this year by 45 percent, while its rival Poly Real Estate <600048.SS> said sales in January-July rose 143 percent from a year earlier.
On the ground, construction firms, big and small, are trying to meet the demand, last years' downturn now a distant memory.
"It's been a long time since we've had a day off. Several months, I think, though I can't remember exactly," said Zhang Minghui, owner of a small building company in Beijing.
"From late last year to early this year, we basically had nothing to do. Everybody was careful with their money because of the crisis and so projects got delayed."
Zhang cut his staff to three in November but is now back up to a crew of 14.
The economic importance of the property sector in China is hard to overstate. Investment in residential housing accounted for about 10 percent of gross domestic product before a property boom turned to bust in 2008, roughly the same as the contribution from the country's vaunted export factories.
The government's first steps last year to revive the stalling Chinese economy were to offer tax cuts to encourage home purchases, followed by rules to ease access to mortgages.
These are bearing fruit.
With housing investment up an annual 11.6 percent in the first seven months, Chinese growth momentum is broadening out and the central government has been able to slow the pace of its stimulus spending on infrastructure.
But Beijing must strike a fine balance in its bid to kick-start the housing market.
On the one hand, it wants rising prices to persuade house hunters to stop putting off purchases and to get developers to invest in new projects. On the other hand, it is wary of prices rising too quickly, luring speculators into the market and turning it into an asset bubble, not an economic driver.
"Because it is closely linked to so many industries, volatility in the real estate market will inevitably lead to macroeconomic volatility," the government-run China Economic Times warned on Monday.
The housing market rebound in Beijing, Shenzhen, Guangzhou and other big cities means that prices are already back to their 2007 peak, the report noted.
While prices are high, a surge in sales has depleted housing inventories and developers need to break ground to catch up, Ken Peng, an economist at Citigroup in Beijing, said.
That the Chinese property sector is at a turning point, just getting back on its feet, is seen in the differing fortunes of shops at the Shilihe hardware market in east Beijing.
Those selling goods for early stages of construction, such as tiles, say business is strong. Vendors of lights, among the final purchases for a new home, say it is only now perking up.
"We have done some sales to attract shoppers. But we have actually started scaling these back," said Chen Yu, a saleswoman at Jushang Lights.
The government can take heart in how most of the real estate money has been spent to date.
Investment in property construction was up a fifth in western China — the part of the country with the biggest need for new housing — in June compared with a year earlier. Wealthier coastal areas in the east, which are already heavily built up, saw a 4.4 percent rise.
But officials are wary of another boom in housing prices paving the way for yet another bust. A handful of Chinese cities have made mortgage lending terms on second homes stiffer to try to keep speculators at bay.
Several real estate agents said the market seemed to have cooled over the past few weeks.
Shanghai Xinyi, a real estate agency in China's financial centre, said transactions in August fell by half from July.
A salesman surnamed Luo at a Shenzhen branch of Centaline China confirmed that business has slowed down from its brisk pace in the first half.
"It was not rare for house sellers to cancel their original contracts and lift their asking price, even if it meant paying a penalty," he said by phone. "But the momentum has weakened in August. We could feel the effect of the government's tightening-up of loans for second homes."
However, Dong Tao, an economist with Credit Suisse in Hong Kong, offered another explanation of the drop in transactions.
Soaring demand gobbled up whatever homes were on the market and so developers simply must build more, he said in a research note. But it takes time to buy land and obtain approvals.
"After many sites have passed the paperwork phase, we expect housing construction to rise significantly over the summer time."
(Additional reporting by Ben Blanchard; Graphics by Catherine Trevethan; Editing by Tomasz Janowski)
The Dark Years Are Here
August 6, 2009 by TMO · Leave a Comment
By Egon von Greyerz – Matterhorn Asset Management, www.mamag.org.
In this newsletter we will outline what is likely to be the devastating effect of the credit bubbles, government money printing and of the disastrous actions that governments are taking. Starting in the next 6 months and culminating in 2011-12 the world will experience a series of tumultuous events which will be life changing for most people in the world. But 2011-12 will not be the beginning of an upturn in the world economy but instead the start of a long period of economic, political and social upheaval that could last for a couple of decades.
We will discuss the three areas that we for some time have argued will determine the fate of the world for the foreseeable future, namely the coming unemployment explosion, the next and much more serious phase in the credit markets and finally the likely hyperinflationary or just inflationary effect this will have on the world economy and investments.
Let us first go back in history and analyze what creates an empire and the prosperity that comes with it.
The British Empire started in the 17th century and reached its peak in the 19th century during Queen Victoria's reign. By the end of the 19th century The British Empire included nearly 20% of the land surface of the world and 25% of the world's population. So Britain which is less than 0.5% of the world's land surface area controlled an empire which was more than 50 times greater. So by using slave labour and by stealing the resources of 20% of the world, it is no wonder that Britain was the wealthiest nation for several centuries. But like all empires, Britain carried the seeds of its own destruction. All empires – e.g. Mongolian, Roman, Ottoman or British etc. – eventually overstretch their resources both militarily and financially. This combined with decadence and illusions of grandeur eventually leads to the collapse of an empire.
The US empire was slightly different from the point of view that it never conquered the world although the US was itself a colony conquered from its original inhabitants. But the US has intervened in many areas (e.g. Korea, Vietnam, Afghanistan, Iraq etc.). Also, there are US military bases in 120 countries. Initially the US was an economic superpower based on an entrepreneurial spirit and a very strong production machine backed by fierce military power. But after the Vietnam war the US had overstretched its resources and by 1971 Richard Nixon abolished the gold standard in order to be able to start money printing in earnest. The money printing phase is normally the last stage of an empire before it collapses and this is where the US is now. The US dollar became the reserve currency of the world when the US was strong economically. But as the US economy started to weaken in the 1960-70's the US government found a much better method for maintaining a strong economy. It started to print paper that it sold to other nations or exchanged for goods and services. For almost 50 years this has been the most clever way ever devised of maintaining the living standards of an economically deteriorating nation without even having to spend any resources on building an empire. It is a Ponzi scheme which has worked for several decades but slowly the world is now waking up to the fact that they are holding worthless paper printed by the US Government. (We realise this is a much simplified version of empire building and destruction but it is nevertheless an accurate analysis).
The US is haemorrhaging financially and economically. It has lent or committed almost $13 trillion in the last 18 months to prop up the financial system. The estimated government deficit in the current year is almost $2 trillion or 50% of the budget. All the money committed so far has only achieved two things: Firstly it has created some short term hope which together with totally illusionary sightings of green shoots have generated a small stock market correction (which we forecast in our January Newsletter) and some belief that the crisis is ending. Secondly, all the funds printed so far to save the system have gone to Wall Street but has done nothing whatsoever for the real economy. Every single sector of the real economy is deteriorating whether it is production, unemployment, corporate profits, real estate, credit defaults, construction, federal deficits, local government and state deficits etc.
And what is the government doing about it. They are doing the only thing they know which is to print more money.
This is total lunacy! How can any intelligent person believe that printed pieces of paper can solve an economic catastrophe?
If that were the case we could all go home and write out pieces of paper or use Monopoly money to spend in the shops or repay our debts.
How can the US government, the UK government and most other governments not understand that the only way to run an economy is to cut your coat according to your cloth. This is why the emperor had no clothes because the country had run out of gold thread to make the cloth. Until now the US as well as other countries have been able to buy the cloth because the world has been foolish enough to accept worthless pieces of paper as payment. But this is coming to an end very soon and many countries will be without both coats and cloth.
What governments are doing with people's money is to totally destroy its value. Purchasing power in the US and many other countries has declined more than 95% in the last 100 years. While it might buy votes short term it will only generate massive misery long term. And this is what many countries are starting to experience now. But sadly it will get a lot worse. We are still only in the first phase of this tragic saga. The second phase is likely to start in the next 6 months.
The real unemployment in the US is 20% or 30 million. These are the real unadjusted figures calculated on the same basis as the official figures before the method of the calculation was changed in the 1990's. Reported government figures, especially in the US, are continually manipulated in order to suit the political aims of the government. Therefore, one should not give any credence to the published figures. Most governments mislead the people most of the time.
With 20% unemployment in the US we are already approaching the levels in the 1930's when peak total unemployment reached 25%. The 20% current level is the non-farm unemployed and is still a lot lower than the non-farm peak figure in the 1930's which was 35% unemployed.
Since we are still in the early stages of this crisis, it is our firm opinion that non-farm unemployment levels will reach 35% at least in the US in the next few years.
But even the current figure of 30 million unemployed is a catastrophe. Adding dependants to every unemployed person there are currently 100 million people affected by unemployment in the US. In the next three months 3 million unemployed will fall out of the social security safety-net. These are the people who were laid off in the second half of 2008. Including their families this means that around 10 million people will become destitute between now and September with no social security and no savings. If we then add the 4 million that were made redundant in the first half of 2009 that will result in an additional 13 million people including families will become destitute around Christmas. This is a disaster of unimaginable consequences that will affect the whole fabric of American society.
The consequences will be social, political, financial and the effects on the US economy will be of a magnitude which is substantially greater than during the Depression of the 1930's. We must remember that none of the problems in the financial system have been resolved but only put on a very temporary hold. The rise in unemployment combined with the reduction in consumption will lead to the next and much more severe banking crisis.
Unemployment in Europe is also rising fast and shows no signs of abatement. Many countries are reaching 10% with for example Spain at 19% and Latvia at 16%. But as we have said for quite some time, of the larger European nations, the country with the biggest problems is the UK. Unemployment in the UK is currently "only" 2.5 million or 7% but it is estimated to reach over 3 million by the end of 2009. The combination of government deficits, a banking system which is extremely fragile and too big for the country, very high personal credit that will not be repaid and a housing bubble which still has a long way to fall makes the UK very vulnerable to a major financial shock.
During the next 6-9 months unemployment will severely affect most parts of the world including China, Asia and Africa. Never before has there been a global unemployment crisis affecting the world simultaneously. This will not only mean a massive decline in consumption and world trade leading to a recession or depression worldwide but also poverty, famine and social unrest.
The masters of the financial circus are the bankers. Not only did they reap the benefits from manufacturing toxic financial products to the extent of receiving bonuses and stocks in the $trillions during the last 15-20 years. But they are also the only beneficiaries of the trillions of dollars that have been printed by governments to rescue the financial system. Why are the bankers benefiting from the rescue of their own banks? Because they are the ones controlling the government, advising the government and making major contributions to the politicians.
Bonuses are back–Yes, many banks are paying higher bonuses in 2009 than 2008. Goldman Sachs is on course to pay bonuses of $20 billion or $700,00 per employee and Morgan Stanley a 30% increase from average per employee of $262,000 last year to $340,000 this year. JP Morgan's bonus pool for the first quarter of 2009 is up 175% to $3.3 billion and the new chief executive of RBS, the nationalized UK bank is getting an incentive package worth £10 million! Similar bonuses are being paid by many other banks. Barclays Capital for example is on a massive spending spree recruiting executives with golden hellos and guaranteed bonuses of millions per employee.
Central banks and governments worldwide have spent trillions of dollars temporarily propping up a totally bankrupt financial system and now a few months later the bankers are back earning absurd money within a banking system which hasn't been mended and is still bankrupt. This is scandalous.
Toxic Structures are back–But not only that, they are also back to creating new securitisation programmes in order to reduce capital requirements and increase leverage. Goldman Sachs, and Barclays Capital are doing this already and many other banks will follow. It is exactly these types of programmes that created the financial crisis in the first place and now the bankers are back at it again. This is totally disgraceful and irresponsible behaviour by bankers who have learnt nothing from their disastrous freewheeling actions except how to milk the system to the maximum again.
As we have pointed out before, none of the problems in the banking system have been resolved. The system still has a leverage of 25-50 times, it is still full of toxic debt and derivatives, loan books are deteriorating daily, it still has worthless paper assets valued at fantasy prices and most banks are run by the same bankers who created the problems in the first place. For a typical bank, a 4% drop in asset value wipes out the equity. This is what we call a recipe for disaster.
In the meantime governments are making feeble attempts at preventing a future crisis by planning new regulations. But these regulations will only deal with known and historic problems. The bankers will again run rings around the authorities in creating new structures to circumvent the new rules.
The next phase of this tragic saga will soon start.
Compared to the of the 1930's we are already in a worse position today than at the same stage of the Great Depression. Industrial production is worse in many countries. World trade is worse and the stock market fall is greater than at the same stage in the corresponding period of the Depression and both government and private debt is a lot worse.
So what is likely to happen next?
* Unemployment will increase government deficits
First unemployment will rise substantially as outlined above and the effects of the unemployed masses will have major repercussions on the economy. This will lead to government deficits growing substantially. Tax revenue is already falling at alarming rates in the US and UK and most other countries but it will get a lot worse. Government expenditure will rise rapidly due to the mass unemployment. Taxes will rise but this will be like getting water out of a stone – there won't be much revenue to tax. And if Vat or sales taxes are increased this will kill consumption even more. In addition governments will have to implement more programmes to help the poor, hungry and homeless. This will lead to more money printing.
* Next phase of bank problems
Secondly the next phase of problems in the financial system will start by the autumn of 2009 at the latest. Since this will come as a total shock to everyone the effect will be much worse than in 2008. So far US banks have taken losses of $1.1 trillion. Conservative estimates put total losses at $2.2 trillion but realistic estimates are around $4 trillion and this excludes any problems in the $600 trillion to $1 quadrillion derivatives market a big part of which is worthless. In the next round of capital raising for banks there will only be one investor – the government. Thus there will be more money printing.
* Government paper will collapse – first in the US and UK
With the escalation of money printing markets will be flooded with government paper which nobody wants, leaving governments to buy its own junk. The two countries with the worst problems are the UK and the US and their precarious situation will emerge first. Within the next few months rating agencies are likely to downgrade both countries' debt. This will lead to the value of the treasury bonds and gilts collapsing and interest rates quickly moving up into the teens. The higher rates will make the financing costs of the debt to up exponentially leading to more money printing and higher interest rates. This is the "perfect" vicious circle that will end in a hyperinflationary depression.
* Hyperinflation is a currency driven event
For many years we have been saying that this crisis will by hyperinflationary. The issuing of unlimited government paper will lead to the rest of the world selling their holdings of US/UK treasuries as well as selling the dollar and the pound. Most so called financial experts have been predicting a deflationary recession/depression since they don't see the demand pull that they think is the cause of hyperinflation. We have been one of the very few (together with the very wise Jim Sinclair) to understand that hyperinflation is a currency driven event. The issuing of unlimited government paper outlined above will lead to the US dollar as well as the pound collapsing. It is the collapse of the currency which leads to hyperinflation. Without fail in history every hyperinflationary event has been caused by a collapsing currency not by demand pull.
Many other nations will also experience hyperinflation such as the Baltic States, certain Eastern European and Asian Countries. Many more countries will have high inflation.
In the next few months we will see the start of the Dark Years. For the first time in the history of the world there will be a synchronised downturn affecting all nations (although some a lot worse than others).This is the culmination of the world and especially the Western world, living above its means for decades in a mania of credit bubbles, asset bubbles, real estate bubbles as well as excesses leading to decadence and a society with very weak moral and ethical values. (Of course no society recognises this as it is happening but only afterwards). Governments have fuelled this process by printing unlimited amounts of paper thus destroying the money and purchasing power of most nations.
The Dark Years will be extremely severe for most countries both financially and socially. In many countries in the Western world there will be a severe depression and it will be the end of the welfare state. Most private and state pension schemes are also likely to collapse. It will be a worldwide depression but some countries may only have a deep recession. There will be famine, homelessness and misery resulting in social as well as political unrest. Different type of government leaders and regimes are likely to result from this.
How long will the Dark Years last? There is a book called The Fourth Turning written by Neil Howe. He has identified a pattern that repeats itself every 80 years. The pattern has been extremely accurate in the Anglophile world. We have recently entered the Fourth Turning which is the final 20 years of the cycle. According to Howe we are in the early stages of a 20 year period of economic and institutional upheaval. This is a period of Crisis when the fabric of society will change dramatically. Previous Fourth Turnings have been the American Revolution, Great Depression and World War II. According to Howe the Crisis will be substantially worse before it is over and it will last for another circa 20 years.
All of this is not good news and we hope that we and Howe are wrong regarding the severity and length of this crisis. But we fear that we are both right. We must stress again that never previously has the the whole world entered a downturn simultaneously in such a fragile state both financially and economically which is why the Dark Years are likely to be so devastating and long lasting.
The correction up in stockmarkets has probably finished but there is a possibility that it will continue for another couple of months.
Matterhorn Asset Management AG based in Zurich Switzerland specialises in wealth management and wealth preservation with particular emphasis on gold and silver bullion stored safely outside the banking system.
What is important is that it is a correction (we predicted it already back in January) and it will soon lead to a strong resumption of the downtrend. In the Dow Jones, a break of the trend line at 6400 would lead to a projected decline of at least 90% from the top. Almost all major world markets point to similar declines. This sounds incredible but bearing in mind that the Dow Jones fell 90% in the 1930's and bearing in mind our discussion in the Dark Years paragraph above, this kind of target is not impossible.
Some commodity stocks as well as gold and silver mining shares will be major beneficiaries from the Crisis.
Dow Jones H & S 13.7.09
We forecast at the beginning of the year that US long rates would go up and they have almost doubled since. But this is only the beginning since we expect US and UK long rates to reach at least the mid teens in the next 2-3 years. Interest rates in all countries will go up substantially in the next few years.
The dollar and the pound will have very substantial falls in the autumn of 2009. At some later stage the Euro will also weaken as a result of certain countries breaking away from the Euro area.
The currency which will be the major beneficiary from the Crisis is Gold. We have invested in gold since 2002 when we saw the Crisis coming. Gold has trebled since then. But this is just the beginning. The next major move will take place in the coming 4-5 months and it will be major. Gold for wealth preservation purposes should be held directly by the investor and stored outside the banking system in his name. Holding gold in ETF form, futures or owning part of gold bars that you don't have personal access to is not wealth preservation.
There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
Ludwig von Mises