The Real Scandal Is the Voting Machines Themselves

by Jonathan Vankin

Published on Thursday, December 14, 2000 in the New
York Press

http://commondreams.org/views/121400-108.htm

The ongoing electoral insanity has confirmed something
that I and a small number of people who have
occasionally thought about these things have known for
a while: Over the past three-and-a-half decades we in
the United States have sold out our election
process–which, unless I’m very much mistaken, is the
foundation of our democracy (such as it is)–to a small
but lucrative cadre of for-profit businesses and their
wildly defective products. Which they manufactured, in
some cases, many years ago, but which are still used
to tally votes today.

The real scandal of this election is that most of the
problems in the voting and vote-counting systems have
been well-known for years, and no one has done a damn
thing about them.  More than 11 years ago, I wrote a
detailed article titled "Vote of No Confidence" for
the Silicon Valley weekly, Metro.

In the article, I discussed how "The next president of
the United States may not be chosen by the voters.
Instead, he may be the choice of whoever controls or
manipulates the computer systems that tally the
votes." The now famous "hanging chad" was but one
small aspect of this story. (Until last month, I was
one of the few citizens of the United States who had
actually heard, much less uttered, the words "hanging
chad.")

A deeper problem lay in the security and integrity of
the software used to run the vote count. The software
for most of the machines, I learned, was
incomprehensible–what computer scientists described as
"spaghetti code" and "a bucket of worms," prone to
error and vulnerable to deliberate manipulation in a
way that would be, for all purposes, undetectable.

An ethically challenged software engineer could write
a little program to make the count come out however he
wanted it to, and no one would ever know. Even if a
fraudulent program were detectable, someone would have
to look at it first to detect it. And that was
impossible, because the private companies that owned
the software considered the code a protected trade
secret.

In fact, there are today two companies that dominate
the industry. Election Systems & Software, whose
machines count about 60 percent of the votes
nationwide, and Sequoia Pacific Voting Equipment of
Jamestown, NY. In 1993, Sequoia Pacific won a $60
million contract from New York City to take the city
into the electronic voting age–only to have the
contract ditched this year.

No one is saying that those companies, or any of their
much smaller would-be competitors, don’t try their
best–and certainly not that they’re dishonest. The
flaws are inherent to computerized voting systems. I
found, 11 years ago, that there was no particular
reason to trust the outcome of any election in the
United States anymore. At least not those counted by
computer, which is most of them.

Since 1989 there has been no reason to update that
opinion. Despite having authored that retroactively
prescient article, filled with startling facts about
the iffy nature of American elections, I have not,
over the past decade, spent an undue amount of time
waiting by the mailbox for my Pulitzer Prize. Why not?
Because I was hardly the first person to make note of
these facts. No less a source than The New York Times
ran a series about the vulnerability of elections in
1985, by reporter David Burnham, who also wrote the
book The Rise of the Computer State.

As early as 1974, the U.S. General Accounting Office
commissioned a study that found significant accuracy
and security problems in the methods used to count
votes by computer.

In 1986, the California Attorney General’s office
released a report criticizing computerized
vote-counting systems for "lacking a reliable audit
trail and having a program structure that is very
difficult even for computer professionals to
understand."

In 1988, the National Institute of Standards and
Technology (then called the National Bureau of
Standards) released a study by computer scientist Roy.
G. Saltman that concluded, in the typically
understated language of government documents, that "it
has been clearly shown that audit trails that document
election results, as well as general practices to
assure accuracy, integrity and security, can be
considerably improved."

Somewhat more bluntly, Computer Professionals for
Social Responsibility followed up on Saltman’s report
in their fall 1988 newsletter, declaring: "America’s
fundamental democratic institution is ripe for
abuse... It is ridiculous for our country to run such
a haphazard, easily violated election system. If we
are to retain confidence in our election results, we
must institute adequate security procedures in
computerized vote tallying, and return election
control to the citizenry."

Also in 1988 (something of a watershed year for
computer-voting exposes), the journalist Ronnie
Dugger, founder of The Texas Observer, authored a
staggeringly long and meticulously researched essay
for The New Yorker (when The New Yorker was still
publishing staggeringly long and meticulously
researched essays) in which he singled out the
"Vote-o-Matic" system in particular–still a popular
computer voting system, and the very one used in those
disputed Florida counties–as possibly
"disenfranchising hundreds of thousands of voters."

Dugger explained how computer systems that tabulate
elections are shot through with error and wide open to
what, more recently, James Baker might call
"mischief." I talked to Dugger back in 1989, when I
was writing my own article. Freed from the genteel
strictures of New Yorker house style, he told me, "The
whole damn thing is mind-boggling. They could steal
the presidency."

•

Computerized vote-counting is a terrible system. This
is only news to those who haven’t been paying
attention. Every problem that’s arisen in the 2000
election has been on the public record for more than a
decade. Yet here we are. Why?

My first thought was that less-wealthy counties can’t
afford the latest technology. They’re stuck with
outdated systems like the Vote-o-Matic, for reasons of
pure economics. But David Lublin doesn’t think so. He
teaches in the American University School of Public
Affairs Dept. of Government, and is now on his second
grant from the National Science Foundation to collect
election data from around the country.

"I wouldn’t say the wealthier places always have
better or well-conducted elections," he says. "Often
that is the case, but there are surprising exceptions.
It depends on the willingness of the local county
authority to spend the money, or the state to require
them to do it."

Nor, for that matter, is increasingly sophisticated
computer technology the answer. In fact, it may only
make the problems even worse. For example, the next
generation of voting computers what are what’s known
as DREs ("Direct Recording Electronic"), kind of
voting ATMs that allow voters to cast ballot-free
votes on a video monitor by pressing buttons, or even
on a touch screen.

"DREs are even worse," says Rebecca Mercuri, a
computer scientist at Bryn Mawr who’s studied
computerized elections for more than 10 years and
recently finished her doctoral dissertation on that
exact topic at the University of Pennsylvania. DREs
leave no "audit trail" (paper trail) whatsoever, she
points out. Votes are recorded directly onto a memory
cartridge. There is absolutely nothing to ensure that
the vote that registers on the screen is the vote that
gets recorded on the cartridge, or that the vote that
is recorded on the cartridge is the vote that prints
out on paper.

"Unless the voter sees that paper trail, how do they
know?" she says. "I could teach a 12-year-old to write
a program that shows one thing on the screen and
another thing on the printout."

While some newer election computing companies say
they’ve figured out how to create a foolproof
electronic audit trail, Mercuri dismisses such claims
as "preposterous." There’s no way to make sure that
software is 100 percent pure. "If we could do that in
computer science, we’d have the virus problem solved,"
she says.

Since computers were first used to count votes in the
early 1960s, there have been dozens of instances of
computer error in elections. And that’s counting only
the known errors. There have been no verified frauds,
but that may be only because computer fraud is nearly
impossible to verify. Former Florida Gov. Kenneth
"Buddy" MacKay suggested last week to Carl Bernstein
(in an article on the website Voter.com) that computer
fraud may have been behind his highly suspicious 1988
Senate loss to Connie Mack. MacKay lost by 33,000
votes out of four million. In a development that
foreshadowed what happened this year, the tv networks
had "called" a MacKay victory only to later tell their
viewers "never mind."

Funny thing was, in four large counties–Miami-Dade,
Broward, Palm Beach and Hillsborough–200,000 fewer
voters registered votes in the Senate race than in the
presidential race. That’s a 20 percent drop-off. In
other counties, and in earlier elections, the drop-off
was around 1 percent. Computer error or tampering
remains the most likely explanation for the alarming
discrepancy, though none was ever proved. MacKay tried
to get a look at the source code for the vote-counting
software but was rebuffed by the election equipment
companies who declared it proprietary.

"What could have happened in 1988," MacKay told
Bernstein last week, "was that the machines could have
been programmed so that in my big precincts every
tenth vote got counted wrong."

Another "Sore Loserman," perhaps? Maybe–but MacKay was
echoing what Peter Neumann, principal scientist at SRI
International’s Menlo Park, CA, computer lab (and
author of the 1995 book Computer-Related Risks), said
back then. Writing about the MacKay-Mack election in
Risks Digest, Neumann noted, "Remembering that these
computer systems reportedly permit operators to turn
off the audit trails and to change arbitrary memory
locations on the fly, it seems natural to wonder
whether anything fishy went on."

Here are a few other amusing anecdotes from the annals
of wacky election computing:

In Middlesex County, NJ, this year, a DRE
vote-counting computer went on the fritz. It recorded
votes for both the Republican and Democratic
candidates in the county freeholder’s race, but simply
wiped out all votes for their respective runningmates.

In the 1985 Dallas, TX, mayor’s race, Starke Taylor
defeated Max Goldblatt in an election so controversial
that it led the Texas legislature to investigate the
flaws in the state’s computerized vote-tabulation
process. Allegedly, according to the Dallas Morning
News, a computer had been shut off and given "new
instructions" after it showed Goldblatt leading by 400
votes.

During the Democratic presidential primary of 1980, in
Orange County, CA, a "programmer’s error" gave about
15,000 votes cast for Jimmy Carter and Ted Kennedy to
Jerry Brown–and, of all people, Lyndon LaRouche.

There are many more such tales. Computers in Oklahoma
skipped 10 percent of the ballots in a 1986 election.
A power surge in San Francisco switched votes from one
candidate to another. A Moline, IL, city alderman
actually took office in 1985 only to step down three
months later when someone figured out that a machine
had misread hundreds of ballots due to a bad "timing
belt."

You get the picture. The Dallas case prompted the
Texas Secretary of State to direct that, in future
elections, a "manual recount" could be ordered to
"ensure the accuracy of the count." The actual
ballots, the computer punch cards themselves, are the
only existing "audit trail," to document how people
actually voted.

•

I don’t want to appear "partisan," but with all of
these well-documented facts, it seemed to me that the
Republican idea that machine counts are better than
human counts is patently absurd. So I called up Bob
Swartz, founder of Pennsylvania-based Cardamation, one
of the nation’s largest makers and sellers of computer
punch cards and card-reading machines. (Not many
companies are in that field anymore.) Swartz has been
in the punch-card business for 40 years, though he
doesn’t do election business anymore. I thought that
made him a good person to ask.

Turns out, in his line of work, looking at computer
cards with your own eyes is standard procedure. "We
didn’t call it a ‘hand count.’ We just called it
‘looking at the cards,’" he says. "We read the cards
through the machine twice, and if there are
differences we look at the cards. If our goal is to
get 100 percent accuracy, there’s no question that’s
the way to achieve it."

Swartz fully expects card-reading machines to make
mistakes. It’s when they do not make mistakes that he
gets suspicious. "If you recount 400,000 votes and
there’s no difference," he says, "someone fudged the
figures."

No election system can ever be fraudproof or
error-free. That doesn’t mean we shouldn’t try to
improve on the dismal systems we’re using today. It
just seems that casting votes on paper ballots, then
counting and recounting them by hand, is the surest
way to figure out who really won an election. Assuming
mostly honest personnel, and barring breathtaking acts
of ineptitude, human vote-counters will not, generally
speaking, discard ballots by the thousands on a mere
whim. Nor will they, unless they are severely
reading-deficient or insane, record votes cast for one
candidate as votes cast for another candidate.

Further, it is much more conspicuous for a dishonest
election official to issue new instructions to a group
of human beings midway through a counting session than
it is for a dishonest computer programmer to type a
few new lines of code into a machine. Perhaps most
importantly, there is nothing "proprietary" about a
person picking up pieces of paper and going "one for
this guy, one for that guy."

If Americans, or at least the television networks
Americans like to watch, weren’t so damned impatient,
conducting elections completely on paper ballots would
be the most sensible solution. Noncomputerized
elections take a lot longer to produce results,
there’s no denying that. But we don’t hold elections
all that often in this country. We wait four years to
vote for president. We can’t wait another week or two
to find out who won?

If the never-ending election of 2000 (and I have to
admit, it is taking a long time) teaches us anything,
it’s that we can indeed wait it out for a while
without untoward consequences.

If America returned to the paper ballot system, fraud
and error in elections definitely would not end. They
would, however, be much easier to detect and correct.
Elections would be run by people, not corporations.
There are enough vested interests trying to influence
every election. Why do we need the extraneous interest
of profit-making companies?



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Has the Sun Set on Solar Stocks?

Solar stocks are regrouping for the next phase of the
industry's development.

by Peter Lynch, Independent Wall Street Analyst

http://renewableenergyaccess.com/rea/news/reinsider/story?id=46238

Without question, 2005 could have been called "The
Year of Solar Stocks." Solar stocks outperformed the
average NASDAQ stock by an amazingly wide margin --
almost 100 times. Certainly the solar sector of the
market was the place to be in 2005.

-- Average Gain for US solar stocks in 2005 = +134%
-- NASDAQ Gain in 2005 = +1.37%

It is the 4th quarter of 2006 and the future is every
bit as bright for renewable energy as it was in early
2005. In fact, you could make a case that it is indeed
brighter now than it was 18 months ago.

California has passed major legislation and state
after state are following suit. In addition, national
feeder laws are spreading throughout Europe, following
Germany's lead. It appears to me that people, states
and countries are finally getting the message that
renewable energy is here to stay -- and will play a
critical role in the battles against foreign oil
dependence and global warming.

With all this progress and good news, how are solar
stocks doing so far this year?

http://renewableenergyaccess.com/rea/news/reinsider/story?id=46238

As you can see from the table above, the solar stock
sector, as of the end of the 3rd quarter, has not been
a very profitable place to be. In fact, it was one of
the worst market sectors to be invested in.

-- Average Loss for US solar stocks in 2006 = -11.98%
-- Average Gain for Leading US Indexes in 2006 =
+6.13%

To make matters worse, if you take out the only stock
that was positive, MEMC Electronic Materials, which is
a major beneficiary of the current silicon shortage,
the average loss is closer to 21% than to 11.98%. So
the "average" damage is much worse than it appears.

What is happening? If everything is so good with
renewables, how come everything is so bad with solar
stocks? I am asked this question time and time again
and the answer is both simple and somewhat complex.

The simple part of the answer is that solar stocks ran
up so far and so fast in 2005 that they could
literally do nothing except come down. After all, the
Law of Gravity was not suspended for Internet stocks
in the late 1990s or for home prices in the early
2000s, why should it not apply to renewables and solar
stocks?

The answer is -- it applies to every fad, bubble or
stock market craze. No matter how many times you see
in the press the age-old and always-wrong statement,
"I know that (fill-in-the-blank) stocks have gone up
tremendously, but this is a new age, this time it will
be different." The fact is that it is always the same
and always will be: What goes up (too fast) must come
down.

The complex part of the answer is the understanding of
what moves stocks in the short term and in the long
term.

The Short Term

In the short term, the newspapers will tell you that
stocks are up or down for a whole host of mostly
unrelated reasons. The real basic underlying reason
for stocks movement in the short term is emotions, the
primary ones being greed and fear.

Greed is what moved the solar stocks so far up, so
fast. People did not want to "miss out" on the bright
solar future, so they "chased" solar stocks higher and
higher until there were no more buyers.

And fear is what has caused this current correction in
the solar sector. Fear that oil is going back down to
$30.00 a barrel, fear that natural gas will stay at
$4.00 Mcf, fear concerning the current silicon
shortage and a resulting industry slowdown that is
dropping growth rates far below expectations. As a
result, the short term only periodically reflects
reality, so an investor must understand this and act
appropriately.

The Long Term

In the long term, stocks are moved by fundamental
financial developments within each company. If a
company performs well and follows its business plan,
its stock will accurately reflect its true worth.

In the long run, a good company will always have a
good stock, but in the short term you can (because of
short term emotions in the market) have a good company
and a bad stock. Consequently, the long term mostly
always reflects reality and, in this realm, patience
is the key quality investors must possess.

The Sun has not set on solar stocks -- they are just
regrouping for the next phase of the industry's
development.

I believe that the solar sector is currently oversold
and is certainly due for at least a technical "bounce"
up. But it is still suffering from short-term emotions
and fears. There is no doubt in my mind that the
future of the solar industry is brighter than ever. As
with any new industry, there will initially be greater
volatility and will more than likely be more losers
than winners.

Exercise caution at this point in the cycle and only
invest a smaller portion of your investment portfolio
that you consider your higher risk money.

If you consider yourself an aggressive investor, I
would put together a "watch" list of the strongest
stocks and wait a little longer for the general market
to work itself out -- and the solar sector to
stabilize.

If you consider yourself a conservative investor, I
would stay away from individual stocks and diversify
your investment in renewables by placing higher risk
funds in a clean energy mutual fund or ETF. You may
make less money but you will experience far less
volatility and sleep a lot better at night.


J. Peter Lynch has worked for 29 years as a Wall
Street analyst, an independent equity analyst and
private investor, and a merchant banker in small
emerging technology companies. He has been actively
involved in following developments in the renewable
energy sector since 1977 and is regarded as an expert
in this area. He is currently a financial and
technology consultant to a number of companies. He can
be reached via e-mail at Solarjpl@....

» Earlier RE Insider by Peter Lynch:

http://renewableenergyaccess.com/rea/news/reinsider/story?id=45637



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The Washington Report on Middle East Affairs urges all
its readers to vote. We can never endorse candidates
but we can provide information to help our readers
make informed choices.

Remember to check candidates’ voting records in the
“Halls of Fame and Shame,” September/October 2006
issue, pages 40-53.

http://www.wrmea.com/archives/Sept_Oct_2006/0609040.html

and

“Pro-Israel PAC (Political Action Committee)
Contributions to 2006 Congressional Candidates” in the
May/June 2006 issue beginning on page 31.

http://www.wrmea.com/archives/May-June_2006/0605031.html
and

http://www.wrmea.com/archives/May-June_2006/0605031b.html

You can also look up PAC and other campaign
contributions at:

http://www.opensecrets.org/

The PoliticalMoneyline Web site from Congressional
Quarterly also lists PAC contributions reported to the
Federal Election Commission (FEC) at:
http://www.fecinfo.com/

Don’t forget: few pro-Israel PACS are named
accordingly. (Names like Women's Pro-Israel National
Political Action Committee; Women’s Alliance for
Israel; Friends of Israel PAC; Democrats for Israel
Committee; and Brown Rudnick Berlack Israel’s LLP
Federal PAC are rare. Most have deceptive names like
the Delaware Valley Good Government Association in
Philadelphia.)

Some candidates are using information they’ve read in
the Washington Report on the campaign trail. Jim
Russell, an independent Republican running as a
write-in candidate in New York’s 18th Congressional
District, heads a press release:

Over $2B for Israel Each Year?

Does over $2 Billion in U.S. military funding for
Israel each year benefit or endanger America’s future?

Find out WHY a US congressional candidate is opposed
to US military aid to Israel (see his cable TV ad):

http://www.russellforcongress.com/flash swf 1.swf

Are candidates finally discussing U.S. aid for Israel?
Not if they can help it… But at least the war in Iraq
has become a campaign issue.

Don’t forget to vote!



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German solar turns stateside

By Leah Krauss  Oct 19, 2006, 5:59 GMT

http://news.monstersandcritics.com/energywatch/features/article_1212483.php/Germ\
an_solar_turns_stateside

SAN JOSE, CA, United States (UPI) -- The Germans are
coming -- to the United States solar energy market.

'(German) companies like Q-Cells and Solar World are
coming to the U.S. ... they see the U.S. as the next
big thing,' Rhone Resch, the president of the American
Solar Energy Industries Association, told United Press
International this week at the Solar Power 2006
conference in San Jose, Calif.

A fairly large German delegation is present at the
conference this year -- in addition to Q-Cells and
Solar World, SCHOTT and Steca have individual booths,
and Aeroline Tube Systems, Baumann GmbH, IMO
Antriebseinheit GmbH and Wurth Solar GmbH & Co. KG are
represented at a German Pavilion at the confab.

According to Resch, whose organization is one of the
conference co-sponsors, the booming solar energy
market in Germany will go flat in the coming year, and
may even decrease.

Germany and Japan are the world leaders in solar
energy.

'The German parliament is decreasing incentives' for
homeowners who install photovoltaic panels on their
rooftops, Resch said. This is part of the reason he
sees the growth there leveling out.

Thus the attention on the United States, a market that
Australian solar energy expert Martin A. Green from
the University of New South Wales on Wednesday called
'a sleeping giant that is waking up.'

'The frustrating thing is that the policy is not as
clear (as compared to German solar incentive policy)
-- it`s on a state-by-state basis, or even a
utility-by-utility basis,' Resch said, meaning the
German companies have more homework to do before they
can thrive here.

But the good news, he continued, is that an increasing
number of German interests are showing up in the
United States.

Michael Voigtsberger, the director of the solar
department at German electronics firm Steca, agrees
that the U.S. market has potential, but he doesn`t see
the German market slowing down any time soon.

Steca had originally focused mostly on rural, off-grid
solar projects in Africa and Asia, with only minimal
activity on the German electrical grid, Voigtsberger
told UPI.

After missing some big on-grid opportunities in the
late 1990s and early 2000s, the company began
searching for a way to return to the on-grid market,
and took over Philips` solar concerns in the
Netherlands and Germany two years ago.

The feed-in tariff -- the amount a homeowner is paid
for the extra solar energy he produces on the grid --
does decrease every year, Voigtsberger said, but only
by 5 percent.

The incentives are still so good, he added, that even
homeowners who have to take out loans to finance the
solar energy systems would profit from installing
them.

Module prices may be up, 'but in general, the market
is huge,' Voigtsberger said.

Michael Geissler, the managing director of Berliner
Energieagentur GmbH, serves as a consultant for the
German Federal Ministry of Economics and Technology,
and he says that it is true that the German solar
market`s growth is slowing.

'I would say we had an explosive market in the last 3
to 4 years because of a new (feed-in tariff) law given
by the government, and now we`re on a high level in
the market,' Geissler told UPI on Wednesday.

'It`s absolutely clear that we can`t have this strong
(a level of) development year by year,' he continued.

For the photovoltaic market -- the solar panels most
often seen on rooftops -- Geissler predicted a stable
market with 'small growth.'

For solar thermal technologies, however, he predicts
much more room for growth in Germany.

German success in the United States 'depends on
political support, for example in California. If the
framework will be set like in Germany -- not exactly
the same, but the same stable framework -- there`s a
huge potential because of the geography,' he said,
referring to the southwestern United States` position
in the world`s Sun Belt.

The U.S. solar market is definitely poised for growth:
it already shows 'extensive growth,' along with the
Asian market, according to Riaz Ladhabhoy, the vice
president of technology investment banking at Deutsche
Bank.

The American market is also known to be the most
liquid, which will be attractive for solar businesses
and investors, Ladhabhoy said.

The European market, by contrast, is showing much less
growth - 'the very low single digits,' Ladhabhoy said.



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Scotland Starts Work on 140-Turbine Onshore Windfarm

Whitelee, Scotland [RenewableEnergyAccess.com]

http://renewableenergyaccess.com/rea/news/story?id=46222

Construction began this week on the 322-megawatt (MW)
Whitelee windfarm project in Scotland. The onshore
windfarm -- with its planned 140 wind turbines -- is
part of the country's aggressive goal to have 18
percent of electricity generated in Scotland come from
renewable sources by 2010 and 40 percent by 2020.

"If we are to deliver more clean energy to people's
homes, we have really got to keep up the momentum on
the other big onshore wind farms in Scotland, which
are currently in planning."

-- Philip Bowman, ScottishPower, Chief Executive

Situated south of Glasgow on 55 sq. km of open
moorland, the GPB 300 million [US$560 million]
windfarm will be operated by Scottish Power. The
project is expected to become operational in 2008 and,
when completed in summer 2009, produce more than two
percent of the country's annual electricity needs.

"Within three years, 140 turbines will rise above
Eaglesham Moor, harnessing enough wind energy to power
200,000 homes, that's most of Glasgow. It will be the
largest onshore windfarm in Europe and make a major
contribution to our twin aims of securing energy
supplies and tackling climate change," said Alistair
Darling, UK Secretary of State for the Department of
Trade and Industry (DTI), at the official
groundbreaking ceremony on October 9.

"Scotland has long been the UK's powerhouse and is now
establishing itself in the vanguard on renewables. 16%
of Scotland's electricity already comes from these
sources, compared to 4% for the UK as a whole, and
Whitelee will save a further 250,000 tons of harmful
CO2 every year," added Darling.

Before getting the official green light earlier this
year, the proposed development had to overcome a
number of issues including concern about its impact on
air traffic control radars at Glasgow Airport. Working
with the British Airports Authority, National Air
Traffic Services, and the Civil Aviation Authority,
ScottishPower agreed to build a new radar tower in a
nearby city to ensure there would be no adverse effect
on equipment.

"As Europe's largest onshore wind farm, Whitelee
represents a great step forward for the UK in tackling
climate change, and is crucial to meeting the
Government's targets for green energy," said Philip
Bowman, ScottishPower Chief Executive.

"Of course, Whitelee is not the end of the story. If
we are to deliver more clean energy to people's homes,
we have really got to keep up the momentum on the
other big onshore wind farms in Scotland, which are
currently in planning," added Bowman.

In conjunction with the groundbreaking, government
officials announced they would send out proposals and
consult with industry, investors and other
stakeholders on how to reach the aim set out in the
DTI Energy Review of getting 20 percent of the UK's
electricity from renewable energy by 2020.

"The Energy Review found that if we want to tackle
climate change and ensure the security of our future
supplies there has to be a significant increase in the
amount of clean, green electricity we produce from
renewable sources," said Darling.

"There is no doubt that reaching 20 percent will be
tough. It means we must get more power from offshore
wind farms and other emerging technologies like
biomass and wave and tidal, while maximizing the
contribution from those technologies that are already
being deployed," Darling continued.

As well as expanding the large-scale renewables
sector, the government is also seeking to increase the
amount of smaller-scale, localized electricity
production.



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Lowered Oil and Gas Prices: Stage Three of the Bush
October Surprise

By Hassan El-Najjar

Al-Jazeerah, September 17, 2006

http://aljazeerah.info/Editorials/2006%20Editorials/September/Lowered%20Oil%20an\
d%20Gas%20Prices%20Stage%20Three%20of%20the%20Bush%20October%20Surprise%20By%20H\
assan%20El-Najjar.htm

Oil prices have been lowered in the New York
Merchandise Exchange (NYME) to $63 per barrel from the
$78 July highest.

As we are approaching the mid-term US Congressional
elections during the first week of November, the NYME
has demonstrated an amazing discipline and cooperation
with the Bush administration.

However, it is absolutely certain that oil prices will
rally directly after the US mid-term Congressional
elections. The current lower prices represent a
service from the NYME merchants and brokers to the
Bush administration in return for the huge wealth they
have accumulated during the Bush terms in office.

Right now, crude oil big buyers are buying future
contracts with low prices. The cycle of huge profits
will be completed when an event of "uncertainty" takes
place, such as a terrorist plot or a terrorist act.
Then prices rally and sky rocket to reach the previous
hike of the $78 July level or higher, then the big
merchants start selling making more and more profits.

For a background about how the crude oil riches are
made in cycles, read my article: The Sean Hewitt
Testimony of How Powerful People Have Been Making
Fortunes in Crude Oil Trading

http://aljazeerah.info/Editorials/2005%20Editorials/August/The%20Sean%20Hewitt%2\
0Testimony%20of%20How%20Powerful%20People%20Have%20Been%20Making%20Fortunes%20in\
%20Crude%20Oil%20Trading%20By%20Hassan%20El-Najjar.htm

President Bush's falling ratings and the widespread
anger among American voters because of the failure of
the US occupation of Iraq have been projected to
produce an astounding defeat for the War Party of
Republicans supporting Bush and his "Permanent War"
policy.

Attempting to avoid this expected defeat, the Bush
strategists have embarked on a multi-stage plan to
influence voters and keep them in the Republican fold.

The pre-planned Bush-backed Israeli war on Lebanon was
the first stage of this plan of the "October
Surprise." The purported Blair's "Terrorist Plot" was
the second stage of the plan. Both stages have aimed
at scaring voters by reminding them yet again that the
world is still unsafe. They need to vote for the War
Party, which is purported to be more efficient in
handling "terrorism."

Readers can read a previous article of mine for a
background about the subject at:

The British Terrorist Plot: Stage Two of the October
Surprise

http://aljazeerah.info/Editorials/2006%20Editorials/August/The%20British%20Terro\
rist%20Plot%20Stage%20Two%20of%20the%20October%20Surprise%20By%20Hassan%20El-Naj\
jar.htm

Stage three of the Bush October Surprise is different
in that it lowers the gas prices by 15% (so far) and
is expected to lower them more until the elections.
The assumption here is that people forget about
everything quickly, including the negative
consequences of the Bush policies. They will be happy
for the lowered gas prices, which will convince them
also to vote for Republican candidates.

Are these three dimensions of the Bush October
Surprise going to distract American voters away from
the horrendous consequences of the Bush policies?

Unlikely so.

Majority of Americans have by now been knowledgeable
about these Bush administration attempts to control
their voting behavior.

Are we going to see the fourth decisive stage of the
October Surprise?

Likely so.

Actually, I'll be devastatingly surprised if October
passes without any more Bush  surprises!

***

AP Headline: Oil Prices Up Despite Cut in OPEC Output

Sep 15, 2006, 4:28 PM EDT

WASHINGTON (AP) --

Oil prices edged higher Friday but finished lower for
the week after OPEC lowered its oil-demand forecast
for the rest of the year.

Oil prices lost more than 4 percent for the week, and
analysts said there has been a definite shift in
energy-market psychology, as traders focus on the
relatively comfortable balance between supply and
demand as opposed to hypothetical supply threats.

However, Fimat USA analyst John Kilduff said in a
research note that geopolitical uncertainty, which
helped push prices to an all-time high of $78.40 in
July, could eventually re-ignite energy markets.

"In the end, our bias still has to remain with the
upside," said Kilduff. "It is only for the moment that
psychology has shifted more to an economic track, and
even there, we don't see the global economy breaking
down, only a softening at the margins."

The Federal Reserve said Friday that the nation's
industrial output unexpectedly fell by 0.1 percent in
August, reflecting weakness in manufacturing and
declines in mining and utility production. Analysts
had been looking for a small increase.

Some worldwide economic softening was acknowledged on
Friday by the Organization of Petroleum Exporting
Countries, which said fourth-quarter demand for its
oil would be 320,000 barrels a day lower than
previously forecast, or 28.86 million barrels per day.

In 2007, OPEC expects demand for its crude to average
28.1 million barrels per day, or 800,000 barrels per
day less than the 2006 average, in part because
non-OPEC supplies are rising. As a result, some
analysts believe the Vienna-based cartel, which is
pumping close to 30 million barrels a day, may end up
cutting its output by 1.5 million barrels a day or
more.

"It looks for 2007 that OPEC revenues are going to be
under pressure, from both price and volume," said
Citigroup analyst Tim Evans.

After falling as low as $62.03 a barrel, light sweet
crude for October settled at $63.33, a gain of 11
cents on the New York Mercantile Exchange. Still, oil
prices remain about 20 percent below the July peak.

"It's been going straight down. We can't be surprised
by a rally," said Man Financial broker Andrew Lebow.

Retail gasoline prices, now averaging $2.55 a gallon
nationwide, have fallen about 15 percent in the past
month and analysts say further declines are likely.

Nymex natural gas futures, which plunged 10 percent
Thursday to a two-year low after government data
revealed surging inventories, rebounded slightly.
October natural gas rose 9 cents to settle at $4.982
per 1,000 cubic feet.

In other Nymex trading, gasoline futures rose by 2.28
cents to settle at $1.575 a gallon, while heating oil
futures fell less than a penny to settle at $1.7023 a
gallon.



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Dear Friends of the American Monetary Institute,

http://monetary.org

FIRST: We are going to have an election on Tuesday
that should allow us to express our thoughts and
desires on the direction we want our nation to move. I
WANT TO URGE ALL OF YOU TO CAST YOUR VOTES. That
represents real action and we need a culture of such
action to be developed and strengthened in America. A
lot is riding on it, not just for our citizens but for
the whole world.

Don't fall into the trap of hating and dismissing your
own government. As you read in Chapter 12 of The Lost
Science of Money (see
http://monetary.org/lostscienceofmoney.html ) that
attack on government was begun by Adam Smith himself
in his attempts to keep England's MONEY POWER within
the privately owned Bank of England, when others were
proposing replacing it within the British Government
(some of my speeches at our website describe this).

The fact is that our government, properly monitored,
is the only thing that can stand between us and the
thieving Enrons/Citibanks/Merrill Lynches of the
world. You know about Enron, but probably did not hear
that Citibank and Merrill lynch paid over a $ billion
dollars to settle a lawsuit by the Enron Pension Fund,
for their complicity in the Enron fraud. The one thing
these crooks fear is an aroused citizenry.

SECOND - SOME MORE GOOD NEWS: The audio  CD's  from
the AMI 2006 Monetary Reform Conference are ready and
shipping. The sound quality is excellent; they are
easy to listen to on your computer while you are doing
working on papers or email. The whole conference -
about 22 hours of talks by men and women on the
cutting edge of monetary reform - are on 4 CD's, one
for each day of the conference. The entire set is only
$35 (Please add $5 for domestic shipping, $15 for
foreign airmail).

We will send them to you as a gift, if you take this
opportunity to become a Supporting Member of the
American Monetary Institute, at the $48 or $75 (or
higher level). Simply write Supporting Member on the
CD order form, which is at
http://monetary.org/2006schedule.html along with a
list and description of the speakers on the CD's.

We have scheduled the next Monetary Reform Conference
for September 27 - 30th, 2007 at Roosevelt University
in Chicago. Make your plans to attend now. A notice
goes out shortly. Details and costs are very similar
to the 06 conference announcement still on our
website. Theres an early registration discount form
under the CD order form. $195 instead of the full $295
registration donation if postmarked by December 31.

Warm election day greetings to all of you. Be sure to
vote, and make sure your vote gets counted.

Sincerely,
Stephen Zarlenga
AMI

P.S. I've attached the latest pamphlet, now in color,
describing the American Monetary Act.



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The Dollar's Full-System Meltdown

by Mike Whitney

October 31, 2006
AlJazeerah.info

http://globalresearch.ca/index.php?context=viewArticle&code=WHI20061031&articleI\
d=3651

The U.S. Dollar is kaput. Confidence in the currency
is eroding by the day.

A report in The Sydney Morning Herald stated,
“Australia’s Treasurer Peter Costello has called on
East Asia’s central bankers to ‘telegraph’ their
intentions to diversify out of American investments
and ensure an ‘orderly adjustment’….Central banks in
China, Japan, Taiwan, South Korea, and Hong Kong have
channeled immense foreign reserves into American
government bonds, helping to prop up the US dollar and
hold down interest rates,’ said Costello, but ‘the
strategy has changed.’”

Indeed, the strategy has changed. The world has come
to its senses and is moving away from the green slip
of paper that is currently mired in $8.7 trillion of
debt.

The central banks now want to reduce their USD
reserves while trying to do as little damage to their
own economies as possible. That’ll be difficult. If a
sell-off ensues, it will start a stampede for the
exits.

There’s little hope of an “orderly adjustment” as
Costello opines; that’s just false optimism. When the
greenback begins listing; things will turn
helter-skelter quickly.

In September, we saw early signs that the dollar was
in trouble. The trade deficit registered at $70
billion but the Net Foreign Security Purchases (NFSP)
came in at a paltry $33 billion. That means that our
main trading partners are no longer buying back our
debt which puts downward pressure on the greenback.
The Fed had two choices; either raise interest rates
substantially or let the currency fall. Given the
tenuous condition of the housing bubble and the
proximity of the midterm elections, the Fed did
neither.

A month later, in October, the trade deficit hit $69.9
billion but, then, without warning, a miracle
occurred. The Net Foreign Security Purchases
skyrocketed to a “historic high” of $116.8 billion;
covering both months’ shortfalls almost to the penny.

Coincidence?

Not likely. Either the skittish central banks decided
to “stock up” on their dollar-denominated investments
or the Federal Reserve (and their banking-buddies) is
buying back its own debt to float us through the
elections.

This is exactly the kind of hanky-panky that people
expected when Greenspan stopped publishing the M-3
last March keeping the rest of us in the dark about
what was really going on with the money supply.

Are we supposed to believe that the skeptical central
banks suddenly doubled up on their T-Bills while
they’re (publicly) moaning about the dollar’s weakness
and threatening to diversify?

That’s a stretch.

According to the Wall Street Journal the Chinese
Central-bank governor Zhou Xiaochuan stated
unequivocally that “We think we’ve got enough.” The
Chinese presently have nearly $1 trillion in USD and
US Treasuries.

“Enough”?

The United States runs a $200 billion per year trade
deficit with China. If they’ve “got enough” we’re
dead-ducks. After all, it doesn’t take a sell-off to
kill the dollar, just unwillingness on the part of the
main players to stop purchasing at the same rate.

Of course, everyone in Washington already knew that
doomsday was approaching. That’s the way the system
was designed from the very beginning. It’s all part of
the madcap scheme to “starve the beast” and transfer
the nation’s wealth to a handful of western
plutocrats. That’s explains why the Fed and the White
House whirred along like two spokes on the same wheel;
every policy calculated to thrust the country headlong
toward disaster.

The administration never created a funding mechanism
for the $400 million tax cuts or for the 35% expansion
of the Federal government. Defense spending increased
by leaps and bounds as did the “no-bid” contracts for
friends of the Bush clan. At the same time, interest
rates were lowered to rock-bottom to put as much money
as possible into the hands of people who couldn’t meet
the traditional criteria for a mortgage. And, if
gluttonous waste, reckless overspending and “Mickey
Mouse” loans were not enough; the Fed capped it off by
doubling the money supply in 7 years; a surefire
prescription for hyper-inflation.

So, which one of these policies was not deliberate?

The financial crisis that we now face was created by
design. It is intended to destroy the labor movement,
crush the middle class, quash Medicare, Medicaid and
Social Security, reduce our foreign debt by 50 or 60%,
force a restructuring of America’s debt, privatize all
public assets and resources, and create a new regime
of austerity measures which will divert more wealth to
the banking and corporate establishments.

The avatars of neoliberalism invariably use crooked
politicians to spawn enormous “unsustainable” debt so
that the nations’ riches can be transferred to ruling
elites. It works the same everywhere. It’s a form of
corporate colonization, only this time the victim is
the good old USA.

“The Phase of Impact”

According to Richard Daughty in his prescient article
“The Phase of Impact” the Federal Reserve and the
Treasury Dept have already manned the battle-stations.
Here’s an excerpt:

“Mr. Paulson, the Secretary of the Treasury, is, by
virtue of his ascension to the throne, now the head of
the shadowy President’s Working Group of Financial
Markets (which was created by Presidential Order
12631) and he is insisting that they meet more often,
namely every 6 weeks!

This whole Working Group thing was originally set up
as a fallback, ad-hoc, if-then defense to deal with
possible economic emergencies, but now they are
routinely meeting every 6 weeks. He has even ordered
Jim Wilkinson, his chief of staff, to ‘oversee the
creation of a Treasury Command Center to track markets
world-wide and serve as an operations base in a
crisis”! (Wall Street Journal) World-wide!! The
American government is moving to take control of the
world-wide economy as the result of an anticipated
crisis? Yikes!”

Daughty goes on to say: “So a lot of the hubbub is
obviously being caused by some approaching upheaval,
perhaps reflected in something sent to me by Phil S.,
which is the Global Europe Anticipation Bulletin No8
which reminded us that last May they predicted that
the economy would have a ‘phase of acceleration’ that
would begin in June, and it “would be spread out over
a period of a maximum of 6 months’, which it
subsequently did. They said then, and are saying again
now, that a ‘phase of impact will begin in November
2006’, and that this impact phase would be the
‘explosive phase of the crisis’.

This ‘phase of impact’ that is due to begin
momentarily is, they explain, ‘a period when a series
of brutal crises starts affecting by contamination the
total system. This explosive phase of the crisis,
which will last 6 months to one year, will affect
directly and very strongly financial players and
markets, the owners of investment schemes with fixed
incomes in dollars, pension funds and the strategic
relations between the United States on the one side,
and Europe and Asia on the other.” (Richard Daughty;
“The Phase of Impact” Kitco.com)

Predictions, of course, are rarely reliable and
Daughty’s scenario may be a bit too apocalyptic for
many. But if we accept the premise that the tax cuts,
the expansion of the federal government, the doubling
of the money supply, and the $10 trillion that was
sluiced into the housing bubble were not merely
“honest mistakes” made by “supply side” enthusiasts;
then we must assume that this is all part of a loony
plan to demolish the economic foundation-blocks of the
current system and remake society from the ground up.

Domestically, that plan appears to involve the
activation of the police state.

In the last few weeks the Bush administration has
passed the Military Commissions Act of 2006 which
allows the president to arrest and torture whomever he
chooses without charging him with a crime. Also,
unbeknownst to most Americans, Bush signed into law a
provision which, according to Senator Patrick Leahy,
will allow the president to unilaterally declare
martial law. By changing The Insurrection Act, Bush
has essentially overturned the Posse Comitatus Act
which bars the president from deploying troops with
the United States. The John Warner Defense
Authorization Act of 2007 (as it is called) also
allows Bush to take control of the National Guard
which has always been under the purview of the state
governors. Bush now has absolute power over all armed
troops within the country, a state of affairs which
the constitution purposely tried to prevent. The
administration’s dream of militarizing the country
under the sole authority of the executive has now been
achieved although the public still has no idea that a
coup that has taken place.

Internationally, the falling dollar means that
America’s debt will be reduced proportionate to the
percentage-loss of the dollar in relation to other
currencies. This is a great deal for the U.S. First
the Fed prints fiat money to buy valuable resources
and manufactured goods and then it nabs a discount by
depreciating its currency. It’s a “win-win” situation
for Washington, although it will undoubtedly cheat
unwitting foreign-creditors out of their hard-earned
profits. It’s doubtful that their interests will weigh
very heavily on the money-lenders at the US Treasury
or the Federal Reserve.

The dollar faces a second crisis at home which is
bound to play out throughout 2007. The $10 trillion
dollar housing bubble is quickly losing air causing a
precipitous drop in GDP. The housing industry is
seeing its steepest decline in 30 years and home
equity is beginning to shrivel. Housing has been the
one bright spot in an otherwise bleak economic
landscape. With the housing market slowing down and
prices decreasing, the $600 billion of consumer
spending which was extracted in 2005 from home equity
will quickly evaporate triggering an overall slowdown
in the economy. (Consumer spending is 70% of GDP)

By the Fed’s own calculations; “The total amount of
residential housing wealth in the US just about
doubled between 1999 and 2006 up from $10.4 trillion
to $20.4 trillion. (“Times Online”) If these figures
are accurate than we can assume that much of America’s
“perceived” growth has been nothing more than the
expansion of debt. In fact, that seems to be the case.
Wages have been stagnant since the 1970s, 3 million
manufacturing jobs have been outsourced, savings have
shrunk to below 0%, and personal debt is soaring. We
have become an “asset-based” society and when the
principle asset begins to loose its value, we are in
deep trouble. As housing prices continue to decline
through 2007 we can expect a full-blown recession. If
energy prices rear their ugly head again, (were they
lowered for the elections?) it will just be that much
worse.

So, how will recession affect the dollar?

Capital has no loyalties. It follows the markets. When
America’s bustling consumer market stalls, we’ll
undergo capital flight just like everywhere else. The
3 million lost manufacturing jobs, the 200,000 lost
high-paying high-tech jobs, the tax incentives for
major corporations doing business outside the country;
all signal that corporate America has already loaded
the boats and is headed for more promising markets in
Asia and Europe. A sluggish consumer market could
further weaken the dollar and force Americans to begin
saving again but, (and here’s the surprising part) the
decision-makers at the Federal Reserve and the
Treasury Dept don’t really care if the face-value of
the greenback goes down anyway.

What really matters is that the dollar retains its
position as the world’s reserve currency. That allows
the Federal Reserve to continue to print the money,
set the interest rates, and control the global
economic system. The dollar presently accounts for 66%
of foreign currency reserves in central banks across
the globe, an increase of nearly 10% in one decade
alone. The dollar has become the international
currency, a de-facto monopoly. This is the goal of the
globalists and the American ruling elite who dream of
one system, the dollar-system; with us running it.

So, how will this cadre of plutocrats coerce the other
nations to continue to use the dollar while it
plummets from its perch?

Oil.

As long as oil is denominated in dollars, the central
banks will be forced to stockpile American scrip
regardless of its value. It’s no different than
holding a gun to someone’s head. They will use our
debt-plagued greenbacks or their cars and trucks will
sputter, their tractors and factories will wheeze, and
their economies will grind to a halt. It’s just that
simple.

America cannot maintain its superpower status unless
it continues to control the global economic system.
That means the linkage between the dollar and oil must
be preserved. The Bush troupe sees this as an
existential issue upon which the future of America’s
ruling class depends. By 2020, 60% of the world’s oil
will come from the Middle East. Bush will do
everything in his power to control the resources of
the Caspian Basin, thereby expanding US
dollar-hegemony and paving the way for a new American
century

Disclaimer: The views expressed in this article are
the sole responsibility of the author and do not
necessarily reflect those of the Centre for Research
on Globalization.

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651



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"Weapons of Mass Destruction": Building a Pretext for
Waging War on Iran?

by Michel Chossudovsky

November 1, 2006
GlobalResearch.ca

http://globalresearch.ca/index.php?context=viewArticle&code=20061101&articleId=3\
657

The US navy has conducted military exercises (30th of
October) 20 miles outside Iranian territorial waters
in the Persian Gulf. The war games were perceived by
Tehran as an act of provocation. Iranian patrol boats
came very close to US and coalition warships in the
Persian Gulf.

The large scale naval display of US military hardware
consisted in intercepting and searching vessels
"suspected of trafficking" in "weapons of mass
destruction". The exercise was conducted under the
Proliferation Security Initiative (PSI). It consisted
in developing "procedures for intercepting smugglers
of unconventional weapons". (NYT, 30 October 2006).

According to William T. Munroe, US ambassador to
Bahrain, the objective was to send "a clear message"
to so-called WMD "proliferators". More specifically,
it was allegedly designed to "block North Korean
missile and nuclear shipments to such clients as Iran
and Syria".

Australia, Britain, France, Italy deployed war vessels
as part of the US led PSI operation. Bahrain, which
hosts the US Fifth Fleet, contributed three warships
to the exercise. Qatar, the United Arab Emirates and
South Korea sent military observers.

Ironically, the only real visible WMD activity in the
Persian Gulf and the Arabian sea was marked by the
massive display of US and coalition naval power
including aircraft carriers, submarines, guided
missile destroyers and frigates (for further details
see Chossudovsky, Oct 2006, Nazemroaya, Oct 2006)

The Iranian Foreign Ministry spokesman underscored its
concern in a statement released a day prior to the PSI
exercises (29 October):

"We do not consider this exercise appropriate....  [US
actions] go in the direction of more adventurism, not
of stability and security,”

Iran's military officials have "declared their
vigilance and total control over any moves in the
southern waters of the country and warned against any
threats by US warships." (Statement of Iran's Navy
Commander, 31  October, 2006)

The legality of the PSI "interdictions" has also been
questioned. The evidence would suggest that the US
sponsored "interdictions" carried out in internaional
waters constitute a violation of international law::

"International law forbids the interdiction of vessels
on the high seas and in international airspace, and
interdiction generally only takes place when vessels
are unflagged and deemed pirates, according to Foreign
Policy in Focus (FPIF). However, Washington believes
that UNSC Resolution 1718, which was passed earlier
this month to control suspect shipments to North
Korea, makes PSI interdictions legal. But, as always,
it is a matter of interpretation. (ISN Security Watch,
op cit)

US Central Asian PSI War Games

According to the Swiss based ISN Security Watch (31
Oct), the PSI  games are also slated to be conducted
at a subsequent date in Central Asia with several
members of the Shanghai Cooperation Organization
(SCO):

"[T]he Bush administration has successfully courted
Kazakhstan, Tajikistan, Uzbekistan and Turkmenistan [
to participate in the games], though Kyrgyzstan has
remained non-committal. The US believes that these
territories could be used by Iran and North Korea as
refueling stops for air shipments of nuclear or other
weapons materials."

If these war games with China and Russia's Central
Asian allies were to proceed, this would contribute to
creating divisions within the SCO.  Iran is an
observer member of the SCO together with India. (See
below)

Indian Ocean War Games

In parallel with the PSI exercises in the Persian
Gulf,  US-India naval exercises are also being
conducted off the Malabar coast of India. They involve
several US war ships including the USS Boxer carrier,
the USS Bunker Hill guided missile battle cruiser, the
guided missile destroyer USS Howard and the USS
Benfold, the nuclear attack submarine Providence and
the Canadian guided missile frigate HMCS
Ottawa."(Debka, op cit). The Indian contingent
includes a fleet of destroyers, frigates and a
submarine. (Hindustan Times, 30 Oct 2006)

"India-Defence reported Oct. 27 that Indian and U.S.
warships and submarines are participating in joint
drills, which include a "simulated war at sea," off
the country's western coast. Exercises slated for
Malabar-'06 include anti-submarine operations, search
and boarding drills and search and rescue operations.

An Indian Navy statement stated that the exercise ...
[also] includes air operations, sea control missions
to prevent piracy and terrorism at sea and a
"simulated war at sea."

The 10-day exercise includes over 6,500 U.S. Navy
personnel from the USS Boxer Expeditionary Strike
Group operating in tandem with warships of the Indian
Navy's Western Fleet.

In the capital New Delhi the U.S. Embassy said in a
statement: "The purpose of the multi-national
exercise, which focuses on a number of naval mission
areas, is to strengthen ties between American,
Canadian and Indian forces as well as enhance the
cooperative security relationship between the nations
involved." (UPI, 31 Oct 2006)

Several of the US warships involved in Malabar 06,
together with Canadian frigate HMCS Ottawa, were also
involved in the Persian Gulf PSI exercises, which
overlapped with the US-India war games.

While India is not an ally of the US led coalition
directed against Iran, these war games are,
nonetheless, of utmost significance. They confirm the
tacit acceptance of the US led military initiative on
the part of the Congress government of Prime Minister
Manmohan Singh.

India is an observer member of the Shanghai
Cooperation Organization (SCO) together with Iran.
India's participation in these war games at this
particular juncture suggests that there are major
divisions within the Indian government and military
pertaining to Washington's military agenda in the
Middle East.

The timing of the exercises is crucial. They were
carried out concurrently with the "Leading Edge" PSI
exercise in the Persian Gulf.

Pretext for Waging War on Iran

Naval deployment under the "global war on terrorism"
is occurring on several fronts: in the Eastern
Mediterranean (NATO and Israel) along the
Syrian-Lebanese coast, the Persian Gulf, the Arabian
Sea and the Indian Ocean (US and allies) and Red Sea
(Saudi Arabia).

"These armadas are being built-up concurrently. The
Eastern Mediterranean build-up is essentially
characterized by Israeli and NATO naval and ground
forces. In the Persian Gulf, the naval armada is
largely American with the participation of the
British, Australia, and Canada. In this extensive land
mass between the Eastern Mediterranean and the Persian
Gulf, various military movements on the ground are
occurring, including Northern Iraq and Georgia.

The broader war theater would extend far beyond,
northwards to the Caspian Sea Basin and eastwards to
Pakistan and China's Western frontier. What we are
dealing with is a chessboard for another Middle
Eastern war, which could potentially engulf a much
broader region." (Nazemroaya, Oct 2006)

These ongoing naval deployments under the "global war
on terrorism" seek to create a legitimacy for waging
war on Iran and Syria, which are the alleged "state
sponsors" of al Qaeda.

According to Debka, the Israeli intelligence think
tank, the objective of the deployment of  US warships
is "to prepare for a US-led military strike against
Iran .... [as well as implement] measures to fend off
palpable al Qaeda threats to oil targets."

According to Debka, there have been warnings of
"impending al Qaeda attacks on the oil fields, oil
ports, oil tankers and oil fields of Saudi Arabia and
the Arabian oil emirates."  These alleged Al Qaeda
attacks on oil facilities in the Persian Gulf are part
of the disinformation process. Known and documented,
Al  Qaeda is a US intelligence asset. What the Debka
report suggests is that if such a terrorist attack
were to occur, this would provide a pretext to the US
to wage war on Iran, on the grounds that the Tehran
government is allegedly protecting the Al Qaeda
network.

Cheney's Contigency Plan

The ongoing naval deployments under the "global war on
terrorism" are part of a far-reaching military plan
"to fight terrorism around the World".

In the month following last year's 7/7 London
bombings, Vice President Dick Cheney is reported to
have instructed USSTRATCOM to draw up a contingency
plan "to be employed in response to another 9/11-type
terrorist attack on the United States". Implied in the
contingency plan is the certainty that Iran would be
behind these terrorist attacks.

Leaked military documents to the Washington Post
suggest that these Pentagon plans are predicated on
the possibility of  "a  major terrorist attack" and
the need to retaliate in self-defense if and when the
US or its allies are attacked:

"A third plan sets out how the military can both
disrupt and respond to another major terrorist strike
on the United States. It includes lengthy annexes that
offer a menu of options for the military to retaliate
quickly against specific terrorist groups, individuals
or state sponsors depending on who is believed to be
behind an attack. , WP 23 April 2006)

This "contingency plan" uses the pretext of a "another
9/11-type terrorist attack on the United States" to
prepare for a major military operation against Iran,
while pressure is also exerted on Tehran in relation
to its (non-existent) nuclear weapons program.

What is diabolical in this decision of the US Vice
President is that the justification presented by
Cheney to wage war on Iran rests on Iran's presumed
involvement in a hypothetical terrorist attack on
America, which has not yet occurred:.

The plan includes a large-scale air assault on Iran
employing both conventional and tactical nuclear
weapons. ... Within Iran there are more than 450 major
strategic targets, including numerous suspected
nuclear-weapons-program development sites. Many of the
targets are hardened or are deep underground and could
not be taken out by conventional weapons, hence the
nuclear option. As in the case of Iraq, the response
is not conditional on Iran actually being involved in
the act of terrorism directed against the United
States. Several senior Air Force officers involved in
the planning are reportedly appalled at the
implications of what they are doing—that Iran is being
set up for an unprovoked nuclear attack—but no one is
prepared to damage his career by posing any
objections. (Philip Giraldi, Attack on Iran:
Pre-emptive Nuclear War , The American Conservative, 2
August 2005)

Are we to understand that US, British and Israeli
military planners are waiting in limbo for "the
opportunity" of a terrorist attack, which would then
provide  "the justification" for the launching of a
military operation directed against Syria and Iran? In
the words of the Pentagon, quoted verbatim in the
Washington Post (23 April 2006):

"Another [terrorist] attack could create both a
justification and an opportunity that is lacking today
to retaliate against some known targets, according to
current and former defense officials familiar with the
plan."  (quoted in the Washington Post, 23 April,
2006, emphasis added)



Michel Chossudovsky is the author of the international
best America’s "War on Terrorism"  Second Edition,
Global Research, 2005. He is Professor of Economics at
the University of Ottawa and Director of the Center
for Research on Globalization.

To order Chossudovsky's book  America's "War on
Terrorism", click here:

http://globalresearch.ca/globaloutlook/truth911.html

Note: Readers are welcome to cross-post this article
with a view to spreading the word and warning people
of the dangers of a broader Middle East war. Please
indicate the source and copyright note.

media inquiries crgeditor@...

Disclaimer: The views expressed in this article are
the sole responsibility of the author and do not
necessarily reflect those of the Centre for Research
on Globalization.

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© Copyright Michel Chossudovsky, GlobalResearch.ca,
2006

The url address of this article is:
www.globalresearch.ca/index.php?context=viewArticle&code=20061101&articleId=3657



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THE MONEY MASTERS is a 3 1/2 hour non-fiction,
historical  documentary that traces the origins of the
political power structure that rules our nation and
the world today.

http://video.google.com/videoplay?docid=-8753934454816686947&q=%22The+Money+Mast\
ers%22&hl=en

http://TheMoneyMasters.Com

The modern political power structure has its roots in
the hidden  manipulation and accumulation of gold and
other forms of money. The development of fractional
reserve banking practices in the 17th century brought
to a cunning sophistication the secret techniques
initially used by goldsmiths fraudulently to
accumulate wealth.

With the formation of the privately-owned Bank of
England in 1694, the yoke of economic slavery to a
privately-owned "central" bank was first forced upon
the backs of an entire nation, not removed but only
made heavier with the passing of the three centuries
to our day. Nation after nation, including America,
has fallen prey to this cabal of international central
bankers.

The success of the central banking scheme developed
into a far-reaching plan described by President
Clinton's mentor, Georgetown Professor Carroll
Quigley, "to create a world system of financial
control in private hands able to dominate the
political system of each country and the economy of
the world as a whole.

This system was to be controlled in a feudalist
fashion by the central banks of the world acting in
concert, by secret agreements arrived at in frequent
meetings and conferences. The apex of  the system was
to be the Bank for International Settlements in Basel,
Switzerland, a private bank owned and controlled by
the world's central banks which were themselves
private corporations. Each central bank....sought to
dominate its government by its ability to control
Treasury loans, to manipulate foreign exchanges, to
influence the levels of economic activity in the
country, and to influence cooperative politicians by
subsequent economic rewards in the business world."

Several  short-lived attempts to impose the central
banking scheme on the United States were defeated by
the patriotic efforts of Presidents Madison,
Jefferson, Jackson, Van Buren and Lincoln. But with
the passage of the Federal Reserve Act of 1913,
America was firmly lashed to the same yoke, so that a
small number of very rich men have been able to lay
upon the masses a yoke little better than slavery
itself. That yoke inevitably grows heavier with
ever-compounding interest, and totals over $20
trillion of debt owed by the American people today
($80,000 per American) ultimately to these bankers.

This vast accumulation of wealth concentrates immense
power and despotic economic domination in the hands of
the few central bankers "who are able to govern credit
and its allotment, for this reason supplying, so to
speak, the life-blood to the entire economic body, and
grasping, as it were, in their hands the very soul of
the  economy so that no one dare breathe against their
will." A worldwide tyranny is  gradually being
imposed, hidden to most, by THE MONEY MASTERS.

Segments: The Problem; The Money Changers; Roman
Empire; The  Goldsmiths of Medieval England; Tally
Sticks; The Bank of England; The Rise of the
Rothschilds; The American Revolution; The Bank of
North America; The Constitutional Convention; First
Bank of the U.S.; Napoleon's Rise to Power; Death of
the First Bank of the U.S. / War of 1812; Waterloo;
Second Bank of the U.S.; Andrew Jackson; Abe Lincoln
and the Civil War; The Return of the Gold Standard;
Free Silver; J.P. Morgan / 1907 Crash;  Jekyll Island;
Fed Act of 1913; J.P. Morgan / WWI; Roaring 20s /
Great Depression; FDR /  WWII / Fort Knox; World
Central Bank; Conclusions.



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Pentagon Video in the Nick of Time for Midterms?

Thursday November 02nd 2006, 7:18 pm

http://kurtnimmo.com/?p=637

“The much anticipated release of the Doubletree Hotel
security video that has been speculated it will show a
Boeing 757 hitting the Pentagon is due to be released
by one week from today,” writes the blogger Killtown.
“So how much do you want to bet that this Doubletree
Hotel security video will be released before this
Tuesday (election day) to ’shock & awe’ the voters in
hopes to sway the elections, especially if this video
finally shows a plane hitting the Pentagon?”

If I was a betting man, I’d bet the farm on it.

However, simply releasing a five plus year old video
with a predictable corporate media broadside taking
“conspiracy nuts” to task, thus questioning their
patriotism and even sanity, and suggesting Republicans
were right all along about those cave-dwelling Muslims
with their boxcutters, may not be enough to flip the
election and keep the House and Senate in neocon
hands.

As Killtown points out, “four days before the [2004]
elections, the first video of bin Laden publicly
taking credit for 9/11 which boosted Bush’s poll
ratings in Ohio which lead to him being re-elected.”
Indeed, after the video was aired, according to the
Telegraph, Bush “opened a six-point lead over John
Kerry…. If the trend is confirmed by other polls, Mr
Bush may have his greatest enemy to thank for helping
him secure another four years in the White House after
the appearance of the video sparked a sharp final
round of argument over which candidate can best defeat
terrorism.” Of course, a little vote fraud in Ohio
sure the heck didn’t hurt.

It would seem, as well, the Osama in the “October
Surprise” video had plastic surgery, specifically to
make sure he did not resemble the real Osama, who died
nearly three years before the fake Osama went before
the camera. Compare the Osamas on this page and decide
for yourself.

A blurry security camera video shot from atop the
Doubletree Hotel will be a shade better than the
ludicrous video frames released in May, a pathetic
effort lauded by the corporate media as a bold finale
putting to rest once and all conspiracy theories about
what hit the Pentagon. No doubt, as well, this latest
effort, promised by the FBI and the suspicious
Judicial Watch to be released no later than November
9th, will be heralded as conclusive evidence the
aerobatic Hani Hanjour, who had trouble controlling
and landing the Cessna 172, executed a flawless, 500
miles per hour maneuver of a Boeing 757 into the
Pentagon.



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The Underlying Politics of 9/11 (Part II)

http://youtube.com/watch?v=f7HdbU5KXwY

An excerpt of a speech delivered by Ralph Schoenman.
Directed and edited by Kurt Nimmo.

More info at http://kurtnimmo.com



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The real “state of denial”: 9/11 red herrings as
bipartisan election-year volleyball

By Larry Chin

Online Journal Associate Editor

http://onlinejournal.com/artman/publish/article_1287.shtml

Oct 6, 2006, 01:17

With US mid-term elections one month away, it is not
surprising to find Washington’s elite criminal
factions (neocon and neoliberal) engaged in a new game
of political chicken over 9/11 red herrings. The
appearance of bickering hides the fact that operatives
of both factions are lying. Both sides are cynically
continuing the massive bipartisan cover-up of 9/11 and
the “war on terrorism."

Undeniable fact: all of Washington “knew” about 9/11

It is an amply documented fact -- no news whatsoever
-- that the Bush administration had absolute
foreknowledge of 9/11, and deliberately ignored
warnings received within the US and from officials and
intelligence agencies outside the US.

As written by Michel Chossudovsky, “the foreknowledge
issue itself is a red herring, a fallacy in which an
irrelevant topic is presented in order to divert
attention from the original issue . . . Of course the
Bush administration knew." Of course Washington “knew”
about its own false flag operation. Of course
Washington “knew” about using its own covert
intelligence network. Of course Washington “knows”
that 9/11 was an intelligence “success," not an
intelligence “failure."

The media’s spotlight on “foreknowledge” and “lapses”
serve to distract public attention from the deliberate
cover-up of these facts:

9/11 and the “war on terrorism” was and is a
long-planned US operation carried out and sponsored by
Washington consensus; official US geostrategic policy,
carried out by the Bush administration, with unanimous
bipartisan involvement from the US Congress, and with
support from Wall Street.

“Islamic terrorism," including Osama bin Laden and
Al-Qaeda, is a creation of Anglo-American military
intelligence. These networks have functioned in this
role for the past two decades, and continue to carry
out this role today.

Al-Qaeda is an apparatus that is supported by
Pakistan’s ISI, which is itself is connected to the
CIA.

Pakistan’s ISI chief, General Mahmoud Ahmad, who wired
funds for the 9/11 operation to alleged 9/11
ringleader Mohammed Atta, met and dined with members
of the Bush administration, the CIA (George Tenet),
and key members of the US Congress, Republicans as
well as Democrats. In other words, Washington in its
entirety is implicated in 9/11.

And this is just the bare tip of the iceberg of
evidence.

Michel Chossudovsky’s America’s ‘War on Terrorism’ and
Michael C. Ruppert’s Crossing the Rubicon: The Decline
of the American Empire At The End of The Age Of Oil
exhaustively detail why 9/11 happened, how the Bush
administration carried it out, who has benefited, and
what has happened to the world since. The case
material contained in these two books alone, and at
their related web sites (Center for Research on
Globalization and From The Wilderness), leave no doubt
that Washington is engaged in a massive and ever-more
sophisticated cover-up, designed to smash remaining
criminal evidence, destroy investigations and
criticism, selectively eradicate history, and dispel
and manipulate public discourse.

Against these undeniable proven facts, the current
Washington disinformation circus is all the more
cynical and contemptible.

Foreknowledge: irrelevance, regurgitated

The new book, State of Denial, written by infamous
Washington insider, opportunist and disinformation
asset Bob Woodward of the Washington Post, has set off
a new media circus over 9/11 foreknowledge and
“ignored and missed warnings” on the part of key
members of the Bush administration. The “Bush
incompetence” lie is the centerpiece of the neoliberal
faction’s “war on terrorism” agenda, the central
deception favored by the Democrats and “progressives."

The latest “fire storm” merely underscores the
long-proven fact that the malignant Condoleezza Rice
committed perjury about 9/11, and that Rice, Donald
Rumsfeld and then-Attorney General John Ashcroft knew
of the coming attacks in the summer of 2001. (CIA
Director George Tenet, of course, “knew," and has
lately done his best to recast himself as one of the
“good guys.")

In turn, this is sending members of the 9/11
Commission cover-up, such as Richard Ben-Veniste and
Jamie Gorelick, scrambling to defend their own
malfeasance with their own set of conflicting lies.

The new stories simple prove what is already known:
the consensus is engaged in an obvious political
cover-up, with players from both neocon and neoliberal
factions reading from the same script, dancing to the
same tune, taking turns playing “good cop/bad cop” --
lying every step of the way.

Clinton vs. Bush redux

The opportunistic Woodward book comes in the wake of a
new attempt by the Clinton and Bush camps to reinvent
a “rivalry." Clinton’s “blistering” TV tirade against
the Republicans, and the Bush administration’s
counterattack adds to the false debate -- the red
herring -- over who could have “stopped Osama bin
Laden."

This is public posturing to fool the American people
into perceiving one side or the other of being
stronger “anti-terrorists" and which side is more
capable of “making us safe."

In addition to hiding the historical fact that the
Bushes and Clintons have deep and long-standing
criminal ties (taking turns heading criminal
Washington for decades), this campaign deliberately
clouds the fact that “Islamic terrorism” is an
intelligence apparatus fully supported by Washington
consensus for over two decades. Both wings of the
American Empire are intent on expanding the “war on
terrorism," and making America itself an overt police
state.

New level of cover-up of Pakistan-US connection

Bob Woodward is not the only insider with a 9/11 book.
Pakistan’s Pervez Musharraf has come out with his own
book, a cynical manipulation accusing former US Deputy
Secretary of State Richard Armitage of threatening
Pakistan with a “bomb you back into the stone age”
threat that “forced” Pakistan’s cooperation with the
“war on terrorism."

As exposed by Mike Ruppert of From the Wilderness,
this bombshell of cooked half-truths and lies is a
massive deception and sheer political smoke and
mirrors that provide political cover for “adjusted”
American Middle East geostrategy, recasting Pakistan
(and its CIA-affiliated ISI) as a “reluctant” ally of
the US, while hanging out Armitage (as the bully and
war criminal that Washington already knows he is) --
in full knowledge that the American public doesn’t
know and doesn’t care anyway.

The Bush administration is so threatened about this
“bombshell book," that the giddy George W. Bush stood
at the podium with Musharraf and encouraged people to
buy the book. Peals of laughter are surely echoing
through the halls of Langley, and Capitol Hill.

Denial and cover-up by consensus

While the players of one faction or the other tell
bald-faced out in the open, one brands the other
incompetent or inattentive in the “war on terrorism,"
the Washington/Wall Street consensus has been
unshakeable and ironclad: Lie about 9/11, a fully
bipartisan atrocity. Cover it up permanently, adding
new layers, and limited hangout versions to suit
political expediency. Continue and strengthen the “war
on terrorism” in any way that expands Anglo-American
geopolitical resource interests. Cook the American
populace slowly and surely.

As pointed out by Michael Kane of From The Wilderness,
“the American Republic is long dead, and fascism is no
longer creeping in this country -- it is solidified
and documented as the law of the land."

Both factions of the American elite hold the American
populace, and the world, in contempt.

The true “state of denial” is one that fails to
recognize this, five years and a world war later.

Copyright © 1998-2006 Online Journal



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The Underlying Politics of 9/11 (Part 1)

http://youtube.com/watch?v=TArbhaU7LDc

An excerpt of a speech delivered by Ralph Schoenman.
Directed and edited by Kurt Nimmo.

More info at http://kurtnimmo.com



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The Pentagon and Mossad have been planning and
executing false-flag terrorism such as the 9/11 attack
and WTC bombing of 1993 since at least 1964.  The
so-called "War on Terror" is an ironic Zionist lie.

"The Category of Terror" by Ralph Shoenman

http://youtube.com/watch?v=02FAf_j6lo4



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US Outflanked in Eurasia Energy Politics

F. William Engdahl, June 3, 2006

http://engdahl.oilgeopolitics.net/Geopolitics___Eurasia/Ouflanked/ouflanked.html

The United States' global energy-control strategy,
it's now clear to most, was the actual reason for the
highly costly regime change in Iraq, euphemistically
dubbed "democracy" by Washington. But while it is
preoccupied with implanting democracy in the Middle
East, the United States is quietly being outflanked in
the rush to secure and control major energy sources of
the Persian Gulf, the Central Asian Caspian Basin,
Africa and beyond.

The quest for energy control has informed Washington's
support for high-risk "color revolutions" in Georgia,
Ukraine, Uzbekistan, Belarus and Kyrgyzstan in recent
months. It lies behind US activity in West Africa, as
well as in Sudan, source of 7% of China's oil imports.
It lies behind US policy vis-a-vis President Hugo
Chavez' Venezuela and President Evo Morales' Bolivia.

In recent months, however, this strategy of global
energy dominance has shown signs of producing just the
opposite: a kind of "coalition of the unwilling",
states that increasingly see no other prospect,
despite traditional animosities, but to cooperate to
oppose what they see as a US push to control the
future security of their energy.

If the trend of recent events continues, it won't be
US-style democracy that is spreading, but rather
Russian and Chinese influence over major oil and gas
supplies.

Some in Washington are beginning to realize that
important figures might have been too clumsy in recent
public statements about both China and Russia, two
nations whose cooperation in some form is essential to
the success of the global US energy project.

Ripping into China and Russia

Contrary to advice from older China hands, including
former secretary of state Henry Kissinger, architect
of president Richard Nixon's 1972 opening to China,
the White House denied visiting Chinese President Hu
Jintao the honor of a full state dinner when he
visited in April, serving instead a short "state
lunch". Hu was publicly humiliated by a well-known
Falungong heckler at the White House press conference.


A few weeks later, Vice President Dick Cheney slapped
Russian President Vladimir Putin with the most open
attack on Russia's internal human-rights policy as
well as its energy policy in a speech in the Baltic
state of Lithuania. There, Cheney declared of Russia,
"The government has unfairly and improperly restricted
the rights of her people." He accused Russia of energy
"intimidation and blackmail". Some days later,
Secretary of State Condoleezza Rice reiterated that
Russia should be "pressed" on democratic reforms. Rice
also slapped China in the face in March during a trip
to Southeast Asia, calling China a "negative force" in
Asia.

Curiously, Washington has repeatedly accused China of
"not playing by the rules", in terms of its oil
politics, declaring that China is guilty of "seeking
to control energy at the source", as though that had
not been US energy policy for the past century.

The significance of taking aim simultaneously at both
Russia and China, the two Eurasian giants, the one the
largest investor in US Treasury bonds, the other the
world's second-most-developed military nuclear power,
reflects the realization in Washington that all may
not be as seamless in the quest for global domination
as originally promised by various strategists in and
around the administration of President George W Bush.

Next Thursday, member nations of the Shanghai
Cooperation Organization (SCO), led by China and
Russia, will reportedly invite Iran, currently an
observer, into full membership. Even if full
membership is postponed, as has been mooted, the fact
remains that Russia and China both want to seal closer
cooperation with Iran in Eurasian energy cooperation.

The SCO was founded in June 2001 by China, Russia,
Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Its
stated goal was to facilitate "cooperation in
political affairs, economy and trade,
scientific-technical, cultural, and educational
spheres as well as in energy, transportation, tourism,
and environment protection fields". Recently, however,
the SCO is beginning to look like an energy-financial
bloc in Central Asia consciously being developed to
serve as a counter-pole to US hegemony.

Russia's energy geopolitics

In recent months SCO members have taken several
potentially strategic steps to distance themselves
from energy and monetary dependence on the US. In his
recent State of the Union speech, President Putin
announced that Russia is planning to make the ruble
convertible into other major currencies and to use it
in its oil and gas transactions.

A convertible ruble is to be introduced, according to
latest Russian statements, on July 1, six months
earlier than originally planned. Russia also has
stated it plans to shift a share of its now
considerable dollar reserves away from the US currency
and that it will use 40 billion US dollars to purchase
gold reserves.

Russia's state-owned natural-gas transport company,
Transneft, has consolidated its pipeline control to
become the sole exporter of Russian natural gas.
Russia has by far the world's largest natural-gas
reserves and Iran the second-largest. With Iran
inside, the SCO would control the vast majority of the
world's natural -gas reserves, as well as a
significant portion of its oil reserves, not to
mention the Strait of Hormuz, the narrow corridor for
a majority of Persian Gulf oil-tanker shipment to
Japan and the West.

Late last month Russia and Algeria, the two largest
gas suppliers to Europe, agreed to increase energy
cooperation. Algeria has given Russian companies
exclusive access to Algerian oil and gas fields, and
Gazprom and Sonatrach will cooperate in delivery to
France. Putin has canceled Algeria's US$4.7 billion
debt to Russia and, for its part, Algeria will buy
$7.5 billion worth of Russian advanced jet fighters,
air defense systems and other weapons.

On May 26 Russian Defense Minister Sergei Ivanov also
announced that his country would definitely supply
Iran with sophisticated Tor-M1 anti-aircraft missiles,
reportedly as a prelude to supplying even more
sophisticated weapons.

Then, in one of the more fascinating examples of
geopolitical chutzpah, the Kremlin-controlled Gazprom
gas monopoly entered quiet negotiations with Israeli
Prime Minister Ehud Olmert through his billionaire
friend, Benny Steinmetz, to secure Russian natural
-gas supplies to Israel via an undersea pipeline from
Turkey to Israel.

According to the Israeli paper Yediot Ahronot,
Olmert's office has said it will support the Gazprom
proposal. In several years Israel faces a shortage of
gas from Tethys Sea drilling and soon from Egypt.
Tethys Sea gas is projected to run dry in a few years.
British Gas is in talks to supply gas from Gaza but
Israel disputes BG's right to drill.

But even with Egypt and Gaza, gas shortages are
expected by 2010 unless Israel is able to find new
sources. Enter Gazprom and Putin. The gas would be
diverted from the under-used Russia -Turkey Bluestream
Pipeline, which Russia built to increase its influence
over Turkey two years ago. Putin clearly seeks to gain
a lever inside Israel over the one-sided US influence
on Israeli policy.

China energy geopolitics also in high gear

For its part, Beijing is also moving to "secure energy
at the sources". China's booming economy, with 10%
growth, requires massive natural resources. China
became a net importer of oil in 1993. By 2045, China
will depend on imported oil for 45% of its energy
needs.

On May 26, crude oil began to flow into China through
a newly completed pipeline from Atasu, Kazakhstan, to
the Alataw Pass in China's far-western region of
Xinjiang, a 1,000-kilometer route announced only last
year. It marked the first time oil is being pumped
directly into China. Kazakhstan is also a member of
the SCO, but had been regarded by Washington since the
collapse of the Soviet Union as in its sphere of
influence, with ChevronTexaco, Rice's former oil
company, the major oil developer.

By 2011 the pipeline with extend some 3,000km to
Dushanzi, where the Chinese are building their largest
oil refinery, due to completed by 2008. China financed
the entire $700 million pipeline and will buy the oil.
Last year the China National Petroleum Corp bought
PetroKazakhstan for $4.2 billion and will use it to
develop oilfields in Kazakhstan.

China is also in negotiations with Russia for a
pipeline to deliver Siberian oil to northeastern
China, a project that could be completed by 2008, and
a natural-gas pipeline from Russia to Heilongjiang
province in China's northeast. China just passed Japan
to rank as world's second-largest oil importer behind
the United States.

Beijing and Moscow are also integrating their
electricity grids. Late last month the China State
Grid Corp announced plans to increase imports of
Russian electricity fivefold by 2010.

In its relentless quest to secure future oil supplies
"at the source", China has also moved into traditional
US, British and French oil domains in Africa. In
addition to being the major developer of Sudan's oil
pipeline, which ships some 7% of total China oil
imports , Beijing has been more than active in West
Africa, the source of vast fields of highly prized
low-sulfur oil.

Since the creation of the China-Africa Forum in 2000,
China has scrapped tariffs on 190 imported goods from
28 of the least developed African countries, and
canceled $1.2 billion in debt.

Indicative of the way China is doing an end-run around
the Western-controlled International Monetary Fund
among African states, China's Export-Import Bank
recently gave a $2 billion soft loan to Angola. In
return, the Luanda government gave China a stake in
oil exploration in shallow waters off the coast. The
loan is to be used for infrastructure projects. In
contrast, US interest in war-torn Angola has rarely
gone beyond the well-fortified oil enclave of Cabinda,
which ExxonMobil along with Shell Oil have dominated
until recently. That is apparently about to change
with the growing Chinese interest.

Chinese infrastructure projects under way in Angola
include railways, roads, a fiber-optic network,
schools, hospitals, offices and 5,000 units of housing
developments. A new airport with direct flights from
Luanda to Beijing is also planned.

Indirectly, through its support of the Sudanese
government, China is also a contender in a high-stakes
game of potential regime change in neighboring,
oil-rich Chad. This year, World Bank president Paul
Wolfowitz was forced to back down from plans to cut
off World Bank aid because of the threat of an
oil-export cutoff by Chad. ExxonMobil is currently the
major oil company active in Chad. But Sudan backs
Chadian rebels, who were only prevented from toppling
the notoriously corrupt and unpopular regime of
President Idriss Deby by the 1,500 French soldiers
propping up the regime. Washington has joined with
Paris in backing Deby.

Sudan has involved Chinese, rather than Western,
corporations in exploiting its oilfields, largely as a
result of misconceived US sanctions imposed in 1997,
which blocked US oil companies from doing business in
Sudan. A new Sudan-backed regime in Chad would
jeopardize the Chad-Cameroon pipeline and Western oil
firms. One can imagine China just might be willing to
step into such a vacuum and help Chad develop its oil,
especially if the lion's share went to China.

Immediately after his humiliating diplomatic visit to
Washington in April, President Hu went on to Nigeria,
Africa's largest oil producer and long regarded by
Washington as in its "oil sphere of interest". In
Nigeria, Hu signed a deal whereby the African country
will give China four oil-drilling licenses in exchange
for a commitment to invest $4 billion in
infrastructure.

China will buy a controlling stake in Nigeria's
110,000-barrel-per -day Kaduna oil refinery and build
railway and power stations, as well as take a 45%
stake in developing Nigeria's OML-130 offshore oil and
gas field, referred to by the chairman of China
National Overseas Oil Corp as "an oil and gas field of
huge interest ... located in one of the world's
largest oil and gas basins".

Almost all of Nigeria's current oil production is
controlled by Western multinationals. But the
situation there will also soon change in China's
favor. Similar soft infrastructure loans or energy
investment offers are being made to Gabon, Ivory
Coast, Liberia and Equatorial Guinea. The curious
charge against China of "not playing by the rules" and
"trying to secure energy at the source" begins to
assume real dimension when these and Russia's recent
energy moves are taken as a totality.

Whither Washington?

It's little wonder that some Washington hawks are
getting alarmed. Suddenly, the world of potential
"enemies" is no longer restricted to the
Islam-centered "war on terror". Leading
neo-conservative ideologue Robert Kagan wrote a
prominent opinion article recently in the Washington
Post. Kagan is privy to pretty high-level thinking in
Washington, presumably. His wife, Victoria Nuland,
worked as Vice President Richard Cheney's deputy
national security adviser until being named US
ambassador to the North Atlantic Treaty Organization.

Kagan declared, in reference to Russia and China,
"Until now the liberal West's strategy has been to try
to integrate these two powers into the international
liberal order, to tame them and make them safe for
liberalism. If, instead, China and Russia are going to
be sturdy pillars of autocracy over the coming
decades, enduring and perhaps even prospering, then
they cannot be expected to embrace the West's vision
of humanity's inexorable evolution toward democracy
and the end of autocratic rule."

Kagan charged that China and Russia have emerged as
the protectors of "an informal league of dictators"
that, according to Kagan, currently includes the
leaders of Belarus, Uzbekistan, Myanmar, Zimbabwe,
Sudan, Venezuela, Iran and Angola, among others around
the world, who, like the leaders of Russia and China
themselves, resist any efforts by the West to
interfere in their domestic affairs, either through
sanctions or other means. "The question is what the
United States and Europe decide to do in response,"
wrote Kagan.

The mainstream US foreign-policy organization, the New
York-based Council on Foreign Relations, has also
recently weighed in on the question of Chinese energy
pursuits. In a recent report, the CFR accuses the Bush
administration of lacking any comprehensive long-term
strategy for Africa. It criticizes US focus on
humanitarian issues such as in Darfur southern Sudan,
demanding instead that the US "act on its rising
national interests on the continent". Those interests?
The CFR lists oil and gas as No 1; growing competition
with China (closely related to No 1) as No 2.



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WIND ENERGY: AN UNTAPPED RESOURCE

The total amount of electricity that could potentially
be generated from wind in the United States has been
estimated at 10,777 billion kWh annually - three times
the electricity generated in the U.S. today.

http://awea.org/pubs/factsheets/Wind_Energy_An_Untapped_Resource.pdf

The United States has tremendous wind energy
resources.  Although California gave birth to the
modern U.S. wind industry, 16 states have greater wind
potential.

Installed wind energy generating capacity now totals
9,149 MW, and is expected to generate about 24.8
billion kWh of electricity in 2006.  However, that is
still less than 1% of U.S. electricity generation.
By contrast, the total amount of electricity that
could potentially be generated from wind in the United
States has been estimated at 10,777 billion kWh
annually - three times the electricity generated in
the U.S. today.

These new wind farms demonstrate how wind energy can
help meet the nation's growing need for affordable,
reliable power. With continued government
encouragement to accelerate its development, this
increasingly competitive source of energy will provide
at least six percent of the nation’s electricity by
2020 and revitalize farms and rural communities –
without consuming any natural resource or emitting any
pollution or greenhouse gases.



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Historically, military spending has been the single
largest portion of Federal Funds budget. Since World
War II, the percentage that goes to the military —
current and past spending — has varied from 45 to 90
percent.

http://warresisters.org/US_military_spending.htm

U.S. Federal Funds Budget

Income tax money goes only into the Federal Funds part
of the budget. The percentages are federal funds,
which do not include trust funds such as Social
Security that are raised and spent separately from
income taxes. What you pay (or don’t pay) with your
income tax return by April 15 goes only to the federal
funds portion of the budget. “Current military”
spending ($643 billion for FY 2006 including estimates
for the Iraq/Afghanistan supplemental spending that
was not included in the President’s budget request)
adds together money allocated for the Dept. of Defense
plus the military portion from other parts of the
budget (e.g., Dept. of Energy maintains nuclear
weapons). “Past military” ($384 billion for FY 2006)
represents veterans’ benefits plus much of the
interest on the debt (largely created by past wars and
enormous military budgets).

This chart shows the amount of your tax dollar
actually devoted to the military:

http://warresisters.org/piechart.htm

(For the latest budget breakdowns, see “Where Your
Income Tax Money Really Goes”)

What About the “Good” Parts of the Budget?

Often people are concerned that by not paying federal
taxes they will also be withdrawing their support from
human services programs like food stamps, housing,
education and public transportation. Therefore, some
people withhold only the percentage of their tax money
that goes to the military. But the government does not
allow you to designate the purpose for which your tax
money is used. A percentage of whatever you pay will
be used for military expenditures.

One way to gain control of your tax money is not to
voluntarily submit it to the government. Most war tax
resisters redirect their tax money (both the military
and non-military portions) to programs that meet human
needs. By doing so, more money goes directly to
socially useful programs than by paying through the
tax system.

How Is Federal Income Tax Collected?

During every payroll period, workers have a portion of
their salary removed and sent to the Federal
government. This procedure, called “withholding,” is
meant to add up to the worker’s total tax due for one
calendar year. Thus when income tax forms are filed on
April 15 taxpayers should owe or be refunded only a
small amount. What you pay in withholding throughout
the year and any additional amount on April 15 goes to
the Federal Funds part of the budget. Other sources of
Federal Funds income include federal taxes on tobacco,
alcohol, telephone service, corporations, customs,
estates, etc.

Each year when the government announces the budget,
they mix Federal Funds with Trust Funds (such as
Social Security), to create a “Unified Budget.” But in
reality, Trust Funds are completely separated from
Federal Funds. Trust Funds are collected separately,
held in trust by the government and are not part of
the Congressional spending authority (although
Congress will occasionally authorize borrowing from
these funds). The presentation of a Unified Budget
began during the Vietnam War and is misleading,
because it makes the human needs part of the Budget
seem larger and the military portion seem smaller
(recent fiscal year sample):

How Could Our Tax Money Be Used?

You can only spend money once. If our tax dollars are
spent on the military, they cannot be used to meet
basic human needs. At a time when people in the U.S.
suffer — from hunger, poor health care, insufficient
day care, substandard housing, inadequate mass
transportation, deficient education, meager pollution
control, and an inefficient profit-oriented energy
program — it is easy to see how money could be better
spent.

Many argue that military spending creates jobs, but
dollar-for-dollar the same amount of money creates
nearly twice as many jobs in education or health care
as in the military. Additionally, military-related
jobs do not result in socially useful goods. Millions
of people are underfed, unemployed and homeless while
billions of dollars are spent to fuel, house and store
weapons, tanks, planes and ships, and to recruit and
train our youth in the ways of war. Skilled scientists
and engineers are perfecting methods of destruction
rather than developing products that improve the
quality of life. In addition, tax payers end up paying
again to clean up after the military — one of the
worst polluters on the planet.

We cannot know all the ways that military spending
negatively affects our economy, but we know that it
fuels inflation and is the biggest contributor to the
deficit.

Perhaps the most disastrous effect of military
spending is that countries around the world are
encouraged to buy more weapons. Increased
militarization contributes to the escalation of
international tensions resulting in numerous
conflicts. Each day thousands die of  hunger as scarce
resources are diverted to arms. Who knows which
violent conflict might lead to the next major war?



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Terrorists in High Places

by Charles Sullivan

January 2, 2006
Information Clearing House

http://globalresearch.ca/index.php?context=viewArticle&code=SUL20060102&articleI\
d=1702

Wars are not waged by those who have to fight them.
Those who fight wars know too well their terrible
costs. Wars are waged by those who profit from them
with minimal or no risk to themselves. War is big
business and it is immensely profitable for a select
few who are insulated from the effects of war’s
environmental impacts and social costs. War never
serves the interest of working class people. They are
the result of menacing forces of greed and power
masquerading as benevolent government, insulating us
from contrived acts of terror. They are in fact
anything but munificent.

Never is the trait of deceit more treacherous than
when it leads to the loss of precious innocent life.
It was obvious from the outset that George Bush lied
about the pretext for war with Iraq. His man servant,
Colin Powell, sold the idea to the world in his
infamous speech before the United Nations. It was
widely known that Saddam Hussein had little war making
capabilities; and he certainly did not pose a credible
threat to the United States, Israel, or any Middle
Eastern Country. U.N. weapons inspectors such as Scott
Ritter made this fact known long before the invasion
began.

Saddam Hussein was the creation of the Central
Intelligence Agency and the Boogey Man necessary to
sell the American people on Bush’s illegitimate
invasion and occupation of Iraq.

Likewise, Osama Bin Laden was on the C.I.A. payroll.
And like Saddam Hussein, he was another Boogey Man
created to sell the American people on the invasion of
Afghanistan. Based upon the evidence, it is unlikely
that Bin Laden or any other Muslim had anything to do
with the events of September 11. That, too, was in all
probability another cruel hoax perpetrated on the
American people by those who stood to make billions of
dollars by plundering Afghanistan and Iraq. It also
explains why so little effort has been spent finding
Bin Laden, the supposed mastermind of the 9/11
attacks.

The events of 9/11 were, I contend, an inside job. The
findings of the 9/11 truth commission defy the laws of
physics and ignore the most relevant physical
evidence. They are a work of phantasmagoric fiction
that requires us to believe the fantastic—that tall
buildings can fall at free fall speed within their own
footprint, for example. Or that small fires can melt
steel pillars and cause massive sky scrapers to
collapse. But that is another story.

What is beyond dispute, however, is that the events of
9/11 set off a chain reaction of cause and effect in
the Middle East. Soon after the U.S. bombing and
invasion of Afghanistan, Unocal (recently merged with
Chevron) had established a major oil pipeline through
Afghanistan—a territory ruled by war lords hostile to
U.S. imperialism. Soon the money from the plunder of
Afghanistan was filling the corporate coffers with
black gold. What is the loss of a few thousand
innocent civilians when there is money to be made? Let
them live in the Stone Age we have created for them.

I fully understand what a profound and potentially
shocking statement that is to those who have been
deceived by the ‘official’ history of the United
States. It would require that members of the Bush
regime were knowingly complicit in the murder of
thousands of innocent U.S. citizens. It might even
require that they actually orchestrated those events
as a pretext to war with Afghanistan and Iraq, even
though neither country had anything to do with 9/11.

As testimony to the commercial media’s proficiency at
deception, forty-two percent of Americans still
believe that Saddam Hussein was responsible for 9/11.
Never mind that there isn’t a shred of evidence to
substantiate that claim. It is a matter of faith. When
Bush and his minions repeat those stale lies over and
over and the media repeatedly broadcasts them, the ill
informed can be made to believe anything. The bigger
the lie, the more readily it is believed. The official
version of the events of 9/11 could not take root in
the public conscience without the complicity of the
corporate media. Make no mistake: the commercial media
is a vital and potent component of the Pentagon’s
superb propaganda machine.

In reality, the neocon agenda of global domination is
the blueprint for the events of 9/11, as revealed in
the ‘Project for the New American Century’ and
‘Rebuilding America’s Defenses’. Both of these
revealing documents are online for public perusal.
Reading them is imperative to understanding not only
America’s veiled history, but also current events.
They offer considerable insight into future military
interventions. It is no irony that these documents,
which call for regime change in Iraq and a host of
other countries was authored by the very same people
who are serving in the current Bush regime. They are
the same people who stand to benefit financially and
politically from the plunder and occupation of Iraq,
as well as the rest of the world.

Subsequent to the events of 9/11, the neocon brain
trust declared that a catalyzing event was needed to
galvanize the American people to back a plan of U.S.
global domination—a New Pearl Harbor. On the morning
of September 12, 2001, Secretary of Defense, Donald
Rumsfeld, called for an immediate attack on Iraq, and
Condoleezza Rice and Dick Cheney repeatedly referred
to the events of 9/11 as “an opportunity.” George Bush
declared that he “hit the trifecta.” The Bush people
could hardly contain their glee. These statements of
fact reveal much about the kind of people who are
running the country. It should also make clear that in
America there is no separation of commercial media and
state—the two are as inseparable as newlyweds on a
honeymoon.

As unthinkable as it be to some, the wanton murder of
American citizens by the government is not without
precedent. America’s dark history is brimming with
examples. Two well documented cases illustrate my
point. In 2000 Robert Stinnett published a book
entitled ‘Day of Deceit: the Truth about FDR and Pearl
Harbor.’ In his book Stinnett paints an ugly picture
that lead up to the American entrance into World War
Two. Citing extensively from thousands of previously
classified documents, Stinnett demonstrates that
Franklin Delano Roosevelt knew about the invasion of
Pearl Harbor a year before it happened. The newly
declassified Pentagon documents reveal that U.S. naval
ships and air craft were ordered to stand by and allow
the attack to happen.

The Japanese attack on Pearl Harbor was provoked by a
popular American president who allowed American
military personnel to be slaughtered by foreign
invaders. Roosevelt’s tactic was wildly successful.
The day before the attack only sixteen percent of
Americans polled favored entry into the war. The
following day, more than a million men signed up for
the military. In effect, as commander-in chief,
Roosevelt presided over a treasonous act of murder
against his own military. But, like so many other
events in American history, none of this is revealed
in the ‘official’ version of written history. These
events bear an uncanny similarity to the events of
9/11.

More recently, in the prelude to the U.S. entrance
into the Viet Nam war, a phantom attack on two U.S.
destroyers cruising the Gulf of Tonkin was staged by
the Pentagon and the C.I.A. The bogus attack occurred
early in August, 1964. That evening President Lyndon
Johnson went on television giving the grim details of
the non-attack. Later, however, it was revealed that
navy commander James Stockdale flew cover over the
Gulf of Tonkin that night. Stockdale disclosed that
U.S. ships were firing at phantom targets—targets that
didn’t exist. The Gulf of Tonkin Incident that drew
the U.S. into the quagmire of Viet Nam simply didn’t
happen. Johnson, as presidents so often do, lied to
the American people. The result was the rapid passage
of the Gulf of Tonkin Resolution, which was the sole
legal basis for the Viet Nam War. As a result of
Johnson’s lie, three million Vietnamese people and
fifty eight thousand U.S. soldiers died.

The neocons, with their corporate handlers and their
equally complicit counterparts, the neoliberals, are
in fact a shadow government that runs America. They
have names like Bush, Cheney, Perle, Wolfowitz,
Rumsfeld, Rice, Kristol, Dulles, Kennedy and
Rockefeller; Lockheed Martin, Halliburton, General
Electric, Unocal, Shell Oil and Boeing. Democracy,
freedom, liberty, organized labor, peace, and social
justice are their avowed enemies. Their crooked,
talonous fingers dig deep into the profits of war,
while simultaneously clutching the broken spines of
the moldering corpses they produce. They are the grim
reapers of unrepentant capitalism run amok.

George Bush got his anxiously awaited war on Iraq.
Halliburton, Bechtel, and other corporations are
raking in billions. It is easy money for the war
profiteers who risk nothing and gain everything. It is
our tax money that is subsidizing their obscene
profits. Layers of our civil liberties were quietly
repealed. It is our sons and daughters who die for the
likes of Bush, Cheney, Rumsfeld, Halliburton and
Bechtel. They are America’s shadow government—the
unseen hands pulling the strings of atrocity. Someone
has to tell our children what they are dying for. This
is George Bush’s noble cause.

Unless we stop them, their grim work is not done. It
will never be done until there is nothing left to
defile. There will be countless millions more corpses,
broken lives and torn families to follow. Even more
ghastly attacks on unwitting American citizens will be
fabricated; and fools will play along with them. The
flags will come out and Nationalism will spread like a
lethal virus across the land. Dissenters will be
denounced and imprisoned. These acts of contrived
terrorism will be the pretext for the invasion and
occupation of other sovereign nations. They will be
the pretext for feeding the war machine the blood and
the bones of our babies.

You see, there are terrorists lurking in high places.
They are in the Whitehouse. They are the enablers in
Congress who serve the corporate interest, rather than
justice. They are hidden behind the beckoning smiles
of news anchor men and anchor women. They operate in
the dark smoky recesses of corporate board rooms, out
of public view. Their tentacles reach into every
aspect of our lives. They lie concealed in the
stinking breath of the Rush Limbaughs of this world in
their awful ability to persuade. They are not on our
side.

We must resist them at all cost. We must inform
ourselves. Speak truth to power. Let them know that we
see through their masks. Do not accept this. Organize.
Organize. Organize.

Charles Sullivan is a furniture maker, photographer,
and free lance writer residing in the eastern
panhandle of West Virgina. He welcomes your comments
at earthdog@...

US naval war games off the Iranian coastline: A
provocation which could lead to War?

http://globalresearch.ca/index.php?context=viewArticle&code=20061024&articleId=3\
593

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[Mainstream media with its thirty-second attention
span would have us believe that the only thing of
significance that happened at the U.N. last week was
Hugo Chavez Frias’ denouncement of George W. Bush as
“Diablo”, when in fact, Iran, North Korea, Bolivia,
and others took unprecedented shots at the U.S. Below,
Mike Ruppert analyzes the significance of those and
why, among other things, Hugo Chavez received a much
longer applause than George Bush when addressing the
General Assembly.—CB]

UN SESSION MARKS RAPIDLY CHANGING, UNSTABLE WORLD

BY MICHAEL C. RUPPERT

http://fromthewilderness.com/members/092906_changing_world.shtml

© Copyright 2006, From The Wilderness Publications,
www.fromthewilderness.com.  All Rights Reserved. This
story may NOT be posted on any Internet web site
without express written permission. Contact
admin@.... May be circulated, distributed or
transmitted for non-profit purposes only.

September 29th 2006, 2:12PM [PST] - CARACAS – The
impassioned addresses by Venezuela’s Hugo Chavez and
Iran’s Mahmud Ahmadinejad still reverberate through
the ethers. Make no mistake, if there is a
civilization playing videos of historical moments
forty-five years from now, a whole generation will
have grown up with the image of Hugo Chavez crossing
himself the same way that mine grew up with the image
of Nikita Khrushchev pounding his shoe on the table
and telling the US, “We will bury you!”

There are two major differences between the Cold War
bluster of the early 1960s and today. First, there was
a whole lot more moving under the carpet and on the
stage last week than a bilateral super power
confrontation. Secondly, 45 years from now the US
Empire will most certainly not have outlasted its
enemies.

There were many shots taken at the US during the 2006
annual General Assembly meeting. But for my money, the
biggest and the one that most revealed the weakness of
the US Empire was taken by North Korea. It’s also the
one that got the least global airplay. Basically,
North Korean Deputy Foreign Minister Cho Su Hon told
the US that North Korea had nuclear weapons to protect
itself from US imperialism, an applauded position
widely supported by many member states.

On the same day, September 27, multiple press stories
disclosed that the US negotiator on North Korea’s
nuclear program, Chris Hill, was willing to lift
unilateral US financial sanctions against North Korea
as an incentive for North Korea’s return to stalled
six-party talks. That development will hardly make
Iran quake in its boots. It has also become very clear
that the US is not going to get sanctions against
Iran. That was never going to happen over Russian,
Chinese and possibly even French vetoes. Those nations
desperately need Iranian oil.

North Korea is, after all, a country which actually
has nuclear weapons, and it has barely even noticed
anything the Empire has done to block it. There are
great, almost tectonic shifts that appear to be
occurring in the non-aligned and third worlds as US
hegemony is showing more cracks and wrinkles than
Great Grandma’s face.

Japan’s new Prime Minister Abe will likely lead Japan
away, in slow steps, from US influence, recognizing
the inevitable regional dominance of China. That is
the real meaning of re-emerging Japanese nationalism
because Japan has been a virtual US colony since 1945.

This is exactly what FTW has been predicting for
years. Geography is the prime influence as we move to
a post-petroleum paradigm.

IRAN

As I wrote in Rapprochement, not only is the US not
going to attack Iran (we’ve been saying that for two
years also), it actually looks like reconciliation
with the US is in the works almost as soon as Bush
leaves office. Looking closely at Ahmadinejad’s words
he came to the United States and said that Iran is not
building a bomb and has no intention of building a
bomb. As he was making his media tour, he emphasized
that it would be against Iran’s religious and
spiritual beliefs to build one. There is nothing but
very weak (and unsubstantiated) evidence that Iran is
even trying to do so. They don’t have to. Later in the
week Condi Rice left the door open for bilateral
talks, apparently without sanctions.

But the telling event for me was the fact that
Ahmadinejad was invited to speak at the Council on
Foreign Relations while he was in New York. After
that, also on September 27, CFR’s President Richard N.
Haas, former State Department Director of Policy
Planning, wrote a widely published editorial in which
he described the meat of that very important meeting.

Did we learn anything? I heard three things of
considerable interest. Ahmadinejad said that Iran was
open to cooperating to stabilize Iraq; that Iran
believed it had a right to enrich uranium but that,
for religious reasons, it was prohibited from having
nuclear weapons; and that Iran is open to having
relations with the United States if Washington is
prepared to take the initiative.

The last statement in particular is worth considering…

With respect to the “stabilization” of Iraq, let’s get
something very, very clear. Here, “stabilization”
means “balkanization”, and Iran is very willing to
cooperate in carving up Iran if it gets control over
the Shia southeast. One could now call the region that
was once Yugoslavia stable. But at what ungodly cost?
How many lives? How many lives are being consumed in
Iraq? I saw a press story yesterday that says that
50,000 civilians are dead since 2003. That’s just the
beginning.

What the US wants is Iraq’s oil which is in only a
very small part of the country. That’s why it is
building huge permanent military bases in those
regions.

There are other chips in play with Iran. What the US
has long wanted is a way to get Caspian oil to western
markets. FTW wrote long and hard in 2001 and 2002
about a multitude of plans to build pipelines out of
the Caspian Basin, especially through Afghanistan and
Pakistan. By now it’s pretty clear that this is never
going to happen. Zbigniew Brzezinski’s Grand
Chessboard strategy has failed miserably.

Yet Iran has an existing well-maintained pipeline
system much closer to Caspian oil, and that system
flows directly to the Persian Gulf. Shipping Caspian
oil through Iran to the west has actually been done at
least once before, albeit illegally. In 1997, one
James Giffen, working with Mobil and Italian companies
conducted a Caspian “oil swap” through Iran. The CIA,
and indirectly Dick Cheney who then sat on
Kazakhstan’s oil advisory board, were all over the
deal. FTW told you about it in The Elephant in the
Living Room.

If the US and Iran were to normalize relations, money
from transfer fees would flow into Iran (already well
past its peak of production) to offset rapidly
declining oil revenues. It’s a win-win scenario.

Remember that Bush and Ahmadinejad both get lots of
votes because of their stated enmity for each other.
They can’t walk away from their constituencies and
are, in a sense, both prisoners of religious,
right-wing extremists. Bush will be gone on January
21st, 2009 and – for my money at the moment – Hillary
Clinton will be in. Former Goldman Sachs Chair and
Treasury Secretary Robert Rubin almost anointed her in
a Bloomberg interview recently.

And here’s a clue that all of this Iraqi carving and
deal making is already in the works. My position had
clearly been that the current Iraqi civil war is
exactly what the US has intended all along.

There’s a great English language newspaper here in
Caracas called The Daily Journal. On page 15 of the
September 27th edition there appears the following
unsourced news brief:

Already the moves to Balkanize Iraq are underway and
Iran wants to jointly broker this with the US. The US
won’t be able to pull it off any other way. It may be
that the US is surrendering control of Iraq’s southern
oil as a way of retaining control over the remaining
large fields in the north, near Kurdish Mosul.

A Sunni Arab lawmaker said Tuesday it was akin to
“treason” to support legislation submitted by Shiites
that they hope will one day create their own state in
southern Iraq [where about half of Iraq’s oil is
located]. The sectarian differences spilled over into
the streets of Baghdad, as gunmen opened fire on two
Sunni mosques and sprayed bullets into Sunni homes in
a mixed western neighborhood of the capital.

The Sunnis will be the biggest losers of all when Iraq
breaks up. What they will get mostly is an arid,
oil-free desert. The only way they can have even a
part of the oil pie is if Iraq stays united; a most
unlikely outcome at this point.

ANOTHER HERO

Bolivia’s Evo Morales landed another body blow to US
hegemony by proudly displaying a coca leaf from the
podium. Coca is an intrinsic part of Andean culture
and life. He made a point that FTW has been making
since 1999; there is nothing wrong with the coca leaf,
a plant placed on this planet by nature and by God
just like the hemp plant. What is wrong is what is
done with that coca leaf to make cocaine
hydrochloride, a manmade drug that was ultimately made
by humans into crack cocaine, Freeway Rickie Ross, and
the devastation of entire cities. How dare the US
punish a plant and something that is as useful to the
economy in Andean cultures as coffee is in the US?

Is the real enemy the coca plant or a healthy Latin
American economy? Morales’s position is a threat to
the CIA’s and US’s domination of the laundering of an
estimated $600 billion a year in illegal drug profits
that the CIA tries to steer through Wall Street.

SIDESHOWS

In the meantime, Pakistan’s Pervez Musharraf and
Afghanistan’s Hamid Karzai, both US toadies, role play
the parts of enemies so that George W. Bush can be
seen as a peacemaker in the run up to the November
elections. This is theater that both the world and an
increasingly awake American public have grown tired
of; just as more than 40% of the American public
believe that the current drop in oil prices has been
manufactured as an election ploy. (We’ll be writing
more about that soon).

VENEZUELA

Here in Venezuela, admittedly from a non-scientific
viewpoint taken from observations in a part of the
city which is home to the opposition movement, a half-
dozen people I asked were a bit shocked by Chavez’s
dramatic crossing of himself as he labeled George Bush
the devil. But now, just a few days after Venezuelan
Foreign Minister Nicolas Maduro was roughed up and
detained at JFK, attitudes have changed perceptibly.

Hugo Chavez is nobody’s fool. He knew exactly what he
was doing. In the coming months and years US influence
can and will only wane. It is said that nature abhors
a vacuum. Certainly world politics does. Vacuums there
tend to create chaos and bloodshed. No single nation
can – or is intended to – replace the United States.
For some time now Chavez has been looking ahead to a
post-US imperial global paradigm. Wisely, and
apparently with a deep sense of ethics, he has been
working with other key nations (irrespective of
political and religious philosophy) to assure that the
vacuum is filled equitably, taking great pains to
protect his beloved Latin America.

He is dealing not with the world as he might shape it.
He is dealing fairly with the world as it is, with the
very clear recognition that in the age of peak oil,
global warming, vanishing resources, and looming
economic collapse, the future of mankind lies in the
balance.

It is for that reason that I am pretty well convinced
that next month’s secret ballot to fill a vacancy on
the Security Council will see Venezuela victorious.
The US has pulled out all stops to prevent it, and who
knows what kind of intrigue is taking place. But
around the world Hugo Chavez is seen as a broadly
cooperative leader of a nation capable and willing to
stand up to an Empire in decline.

Forget what all the eggheads and analysts have said,
CNN’s columnist, and very-funny woman, Jeanne Moos,
gave the best analysis of the whole General Assembly
session. “George Bush’s speech got 15 seconds of
applause and Hugo Chavez’s got 40. Go figure!”

It’s not difficult if you have the map.



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Treasury System vs. Federal Reserve System

http://landru.myhome.net/monques/Taxes2.html#Treasury

Arthur J. Ramous
575 Redding Road
West Redding, CT 06896

Zero income tax

How would you like to receive a letter from the
Internal Revenue Service stating that your tax due
from last years' income is zero? And that your future
income will not be taxed by the federal government.

Many people believe that taxes are a necessary evil.
It's a patriotic duty to pay taxes. The idea that the
federal government needs revenue, from taxes, to keep
it operating is totally false. State and local
governments do need revenue to pay for their expenses,
however, the federal government falls into a different
category.

Increase money in circulation

To show how federal taxes can be eliminated it is
first necessary to discuss the role of money in our
economy. To be able to transfer goods and services
from the producer to the purchaser requires money.
There must be an adequate amount of money, either
instantly available or can be easily borrowed that
will allow for an easy flow of trading. Because our
economy is continuously growing there is a continuous
need to add money to the nations money supply.

If there is not enough money available, much of the
goods and services will not be produced or sold, the
economy will contract. If the shortage of money
continues for a long time there would be a severe
downturn in the economy resulting in increases in
bankruptcies, company down sizing and job layoffs,
what economists call a recession.

Simply, because of national growth and anticipated
growth we need brand new money coming into the
economy.

Paying government obligations with treasury money

The best way to increase the money supply is have the
government, specifically the Treasury, to create money
and issue currency and/or checks to people,
organizations and companies who are doing business
with the government, such as, suppliers, contractors
and employees. The government will be paying its
obligations through treasury money. The people and
companies receiving this money would deposit it into
local banks, where the money will become part of our
money supply. Thus increasing the money in
circulation.

There would be no need for the government to borrow
money. This treasury money is created into existence
without treasury bonds, without taxes, and without
interest charges. This money is not added to the
national debt. Eventually, through this system the
present national debt could be reduced to zero.

Treasury System

This type of money system, where the Congress controls
our money, can be called a Treasury System. Congress
sets the monetary policy and the Treasury would be
responsible for creating and extinguishing our money.
Our Constitution provides Congress the legal right to
operate a Treasury System (Article 1, Section 8,
Clause 5). Only the Treasury would be authorized to
create money. The Federal Reserve banks would become
part of the Treasury. Privately owned banks and
companies would not be allowed to create money. Loans
made by the banks would be based on actual dollars the
banks have on their books. Banks would be allowed to
charge a small amount of interest on loaned money.
Fractional reserve banking and federal bank reserves
are out. All checks would clear through the Treasury.

Our country has never operated on a Treasury System
model.

Overspending

Even with this system, Congress or the Treasury cannot
go crazy and issue enormous amounts of money beyond
the growth of the economy. If the Treasury System is
operated properly we could avoid the pitfalls of our
present yo-yo or roller-coaster economy.

Tax money, over $1 trillion, which is now collected
yearly by the government would be available to the
people for investment into our economy. If your
federal taxes are zero, you can spend more into the
economy. The economy will flourish. Inflation and
unemployment would be practically eliminated.

The argument often made against the Treasury System is
that the government will be producing worthless money
because it is not backed by real money. This is pure
propaganda. The truth of the matter is that our
present money system, which is controlled by the
private bankers, creates money out of thin air. Who is
backing the bankers? You are. When the bankers get
into big financial trouble, who do they run to for
help? The government. And, of course, the government
then goes to the people, the producers of real wealth.

Occasionally, because of unanticipated circumstances,
a need may arise to reduce (extinguish) the amount of
money in circulation. To bring the money supply into
balance with the economy the government can reduce
spending or a federal tax can be placed on a widely
used commodity, such as gasoline. In an extreme
situation a one time federal income tax may be
necessary to calm down an inflationary binge. In any
event, all these measures are only a temporary
inconvenience. The Treasury System is not prone to
create inflation, unlike the present Federal Reserve
System.

The Treasury System, which is proposed here, is
controlled by the people through their elected
representatives in Congress and is backed by the
productivity of our society.

Federal Reserve System

Our present money system, the Federal Reserve System,
was established in 1913. Congress gave total control
of money creation to privately owned local banks and
privately owned regional Federal Reserve banks. In the
belief that they could solve the nations monetary
problems, which has been plaguing this country since
its inception.

The word Federal in Federal Reserve does not mean a
government operated program. In fact, the Reserve
banks are regular business enterprises seeking a
profit. Practically all the people who are employed by
the Federal Reserve banks are paid their salary by the
banks, not by the government.

Federal Reserve game

The Federal Reserve banks and local banks have been
given a special privilege to create and control money
by our Congress. For example, under the Monetary
Control Act of 1980, the Federal Reserve Bank of New
York can purchase through its open market operation
$10 million worth of Microsoft stock. The bank pays
for this stock with its own check, a Fed check or its
electronic equivalent. [The Fed check is created from
thin air, there are no funds backing this check. No
funds!]

The Fed check is deposited, by the stock seller, into
a local bank. It is then returned to the Federal
Reserve Bank of New York, where the check is cleared
and the local bank is given full credit for this
deposit. This is all a bookkeeping procedure. Local
banks, through their bank deposit / loan cycle can
create $90 million from this $10 million initial
deposit.

Again, realize that the local banks are creating money
from thin air, just as the Federal Reserve Bank of New
York created the Fed check from thin air. Obviously,
the banks can get fabulously rich under this grand
scheme.

It is interesting to note that the 12 privately owned
Federal Reserve banks have zero debt. These banks
started in 1914 with a worth of $143 million, their
present worth is estimated to be half a trillion
dollars. Quite a gain.

Now consider our government, it has an astronomical
debt of approximately $6 trillion ($6,000,000,000,000)
and growing. We, the taxpayers are responsible to
payoff this debt.

World domination

The bankers and their paid economists, media people
and politicians are moving us into a world monetary
system which resembles our Federal Reserve banking
system. This is a move away from democracy and toward
a system where large global banks and large
transnational corporations will dominate the economies
and peoples of the world.

Our Congress must start to dismantle the Federal
Reserve System and move toward a more workable, stable
and equitable money system, like the Treasury System.

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"America: Freedom to Fascism"

http://freedomtofascism.com

http://video.google.com/videoplay?docid=-4312730277175242198&q=%22Freedom+to+Fas\
cism%22

By Mike Rivero, http://WhatReallyHappened.com :

AMERICA: FREEDOM TO FASCISM

I finally received a DVD of the full length movie, and
watched it last night.

The short review is that if Fahrenheit 9-11 won the
"Palm D-Or", then "AMERICA: FREEDOM TO FASCISM"
deserves the whole tree! This is the film that F/9-11
aspired to but failed to be.

Far from the extremist screed that its attackers
portray it to be, "America" starts out as a genuinely
objective search to find out the reality behind the
claims of the Tax Honesty movement. In scene after
scene, Aaron Russo tries to get the answer to one
simple question; what is the law that requires
American workers to pay income tax on their wages and
salaries. At every turn, he is rebuffed by IRS
officials, with one notable exception. Aaron did
secure an interview with former IRS Commissioner
Sheldon Cohen who makes the amazing statement that US
Supreme Court rulings are irrelevant when it comes to
interpretation and enforcement of the IRS code, and
moreover chides Aaron for refusing to "believe" that
he owes taxes. By this time, Aaron and the audience
are convinced that the Tax Honesty people are onto
something!

Numerous examples are given of cases against
non-filers collapsing in court when the prosecutions
are unable to produce the law they supposedly are in
violation of. These are juxtaposed against successful
prosecutions in which the judges clearly browbeat the
juries into accepting at face value what the
prosecutors claim. In one frightening case, a Federal
Judge rules from the bench that the government is not
under any legal obligation to show any laws it claims
are being broken during a trial.

Russo them moves into the police state tactics used by
the IRS in enforcement actions, detailing how
accusation alone (in this case, false) can trigger the
complete ruin of the victims' homes and businesses.

Having laid the foundation that the income tax on
wages may be as big a hoax as Iraq's 'nookular' bombs,
Russo takes his film into the reality of life in
America, where far from the freedom we are told we
enjoy, one must get the government's permission to do
just about anything these days, while the government
watches our every move. With the planned national ID
card, things are likely to get worse.

This is a film that will probably give nightmares to
those who have not been following the nation's
devolution here on the internet for the last several
years. The film is a convincer, and Russo has
carefully laid out the path for his audience, who will
be reluctant to see what Russo sees, to follow.

This is a movie you MUST see. This is a movie the
government MUST keep you from seeing. Call your local
theaters and ask when it will be showing. When enough
people call, the film will be booked, because after
all, in America, money rules all. - M. R.

http://video.google.com/videoplay?docid=-4312730277175242198&q=%22Freedom+to+Fas\
cism%22



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THE BALANCED BUDGET SCAM

http://landru.myhome.net/monques/balbud2.html#SCAM

Common sense tells us that the United States federal
budget can be balanced by an infinite variation of
taxes and spending. So, why does the Congress and
President not balance the budget? Do they know
something that we do not know?

Two ways of balancing the budget are to cut spending
to match taxes or raising taxes to match spending.

One, cuts in government spending, whether by reduction
of purchases or reduction of personnel, result in
unemployment. Reduced purchasing would force
government suppliers to lay off people. Lay-off of
government workers likewise increases unemployment,
obviously. More unemployment means less incomes to tax
and more demands for government services such as
unemployment compensation, food stamps, medicaid, etc.
Cutting welfare spending likewise reduces sales for
food, medical service, rent, etc. Politicians risk
re-election by visiting such hurt on the people.

Two, the political unpopularity of raising taxes is
self-evident. However,the economic effects of raising
taxes may be less evident. Increased taxation,
particularly federal taxes, takes money from local
communities. Government economists may argue that the
government spends the money back into the economy so
there is not a net loss in the general economy.

At least two things mitigate against economists'
theories. One is that money spent to maintain the huge
federal establishment in Washington, D. C. does not
circulate back to local communities. Another is that
the theory contains no time factor for how long it
takes for the money to return, if, indeed, it can be
shown to return at all. Sending taxes to Washington
and expecting them back is like giving oneself a blood
transfusion from the right arm to the left and
spilling half of it on the floor. No credible argument
can be made that federal taxes are not a burden on
individuals and local communities.

The two extremes of budget balancing strategy covers
the whole range of possibilities. Balancing the budget
by either method, or any combination, would result in
hardship on the people. The endless, mind numbing
arguments about what to tax and what to cut do not
address the simple, demonstrated reasons for neither
method or combination being satisfactory alternatives.

How can this be?

Is it possible that unbalanced budgets are a symptom
of a more insidious problem that is not being
addressed? Yes, as will be shown.

Let us be clear that this tract is not intended to
advocate either a balanced or unbalanced federal
budget. It is intended to show that neither are
acceptable alternatives.

The first government of the United States under the
Articles of Confederation did not have full monetary
and taxation authority. The government found it
difficult to sustain itself. A convention called to
rectify the situation turned into the Constitutional
Convention which drastically re-organized the federal
government. The new Constitution bestowed full
monetary power and somewhat limited taxation power on
the Congress.

Two Constitutional clauses relevant to money are
Article I, Section 8, clauses 2 and 5. Clause two
endows Congress with the power to borrow money. Clause
5 endows Congress with the power to coin money. The
two clauses seem somewhat contradictory. Why would the
Congress need the power to borrow money when it has
the power to coin money? Or why would Congress need to
tax to raise money as endowed by other Constitutional
sections?

The Constitution is unequivocal in its content whether
the cited clauses appear to mitigate against each
other. Congress has all three powers. The power to
borrow, the power to coin money, and the power to tax.
The Congress has complete monetary power to serve the
needs of all the people.

The new Constitutional government inherited a debt of
about $75 million. The Congress chartered a bank in
1791 to monetize the debt. Monetizing debt is modern
vernacular, but that is what they did. They did not
coin money to pay the debt. They did not tax to pay
the debt. They sold the debt to rich investors and
taxed to pay the interest. This specious policy has
been maintained to the present day with some minor
exceptions such as greenbacks and some nearly
insignificant coinage.

Today the debt accumulated by the Treasury is more
than $5 trillion. Additional debt issued by other
federal government agencies increases the total
federal debt to more than $6 trillion.

Consistently, the federal government defaulted to
banks the de facto power to create the nations money
supply until 1913. In 1913 the Federal Reserve Banking
System was created and assigned monetary policy
authority de jure. Since 1913, the Congress has
continued to give more authority and control of the
money supply to a private banking monopoly which it
mislabeled Federal Reserve. This is why private
bankers have power over and control of the economy.

The major problem with giving monetary policy
authority to private bankers is that banks create
money as debt at interest. Banks do not create money
to pay interest, so banks create more debt than money.
Since there is never enough money to pay the debt,
money is chronically scarce. The result is
exponentially increasing debt throughout the entire U.
S. economy caused by necessary additional borrowing to
pay interest.

One measure of economy-wide debt is Total Credit
Market Debt that exceeds $20 trillion through the
first quarter of 1997. Historical research of Credit
Market Debt will show the exponential growth of debt.
Historical research of Flow of Funds Liabilities will
show exponential growth, also. As will historical
research of the money supply. These statistics are
available in various governmental publications
including Statistical Abstract of the United States.
Files are in pdf format.

The major fallacy of conventional economic belief is
that the economy can be expanded to compensate for the
exponential growth of debt. The fallacy is best shown
by the fact that there is no limit to numbers while
there is a finite limit to the planet and its
resources.

Politicians keep promising more jobs, a balanced
budget, and more welfare. All three are mutually
exclusive in a debt money system.

The economy during the administration of Ronald Reagan
is a good lesson in the practical effects of the
fallacy applied. Credit Market Debt expanded at nearly
15% annually at the height of the Reagan folly. The
rich got richer, the poor got poorer. None of the
social pathologies such as poverty, crime,
homelessness, illegal drug business, family
disintegration, etc.,were improved.

When Alan Greenspan took over as Chairman of the
Federal Reserve Board of Governors, he announced he
was going to slow down the economy. He called it a
"soft landing." Alan Greenspan's soft landing was the
1990 recession. He slowed Credit Market Debt growth to
under 6%. Social pathologies were not improved by that
action, either; and debt continued to grow.

As shown, neither rapid debt expansion by deficit
spending nor slowing growth of debt are acceptable
alternatives.

The Federal Reserve creates money by buying federal
debt. If the government stopped selling debt by
balancing the budget, the Federal Reserve would be
severely restricted in creating money. If the
government tried to pay off debt, the money supply
would be destroyed. As we saw above, rapid increase in
debt during the Reagan administration did not solve
social, financial, political and environmental
problems. When Alan Greenspan reduced debt growth, the
economy went into recession.

Since WWII there have been eight balanced budgets in
five time periods. A recession accompanied each of
those balanced budget periods.

Because of the exponential increase of debt in a debt
money system, an increase in deficits, which is
another way of saying that debt must increase, is
necessary. The possibility of a balanced budget
becomes more and more remote as the consequences to
the economy become more and more severe.

Beyond the intellectual fallacy can be seen the
social, financial, political, and environmental chaos
created by a system in which the rich get richer and
the poor get poorer.

At the present time there is technology and energy
available to serve human needs with minimum human
labor. At the same time both mothers and fathers are
abandoning their children to daycare and public
schools so they can spend their time and energy
"working" to get money. Exhausted by their efforts
outside the home, they have no time, opportunity, or
energy to properly raise their own children. So they
"work harder" to get money to afford daycare and
education which results in further isolation and
depletion of energy. Since most of their earnings will
be spent on taxes and interest, they attempt to "work
harder" yet.

The chronic shortage of money and competition for
scarce money is a major contributor to careless
plundering of natural resources and pollution.

The stress of poverty is a known contributor to crime
rates.

The chronic shortage of money prevents medical
research for cancer and AIDS. It also prevents
universal medical care.

The chronic shortage of money prevents other
scientific research and construction of a linear
accelerator.

Economic competition is a root cause of war.

What's wrong with the above picture? The answer is so
short it is banal. It is the debt money system.

It is the debt money system of bankers that is the
problem.

The vacuous confrontational arguments of liberals
versus conservatives do not address the problem.
Throughout history humans have tended to argue
obsolete ideas. Liberals and conservatives are not
different. Both are trying to back into the future.

Politicians who promise to balance the budget within
the debt money system as a way out of social,
financial, political, and environmental chaos are
uninformed, misinformed, self-deceived, or lying.

Part of the disengenuity of current political rhetoric
is the misuse of the word deficit. Deficit as used in
current political rhetoric is a fictional number
created by smoke and mirror bookkeeping. Deficit by
strict definition would be the difference between
expense and revenue when expense exceeds revenue. It
should represent the annual increase in government
debt, but the current rhetorical claim that the budget
is balanced is contradicted by the growth of debt.

The Clinton administration has not only continued the
plundering of so-called trust funds such as Social
Security as practiced by previous administrations, but
the Secretary of the Treasury has changed capital
accounting procedures. Based on smoke and mirror
bookkeeping the budget will not be balanced as it is
now, October 1998, claimed to be balanced.

The growth of debt has been slowed; and as in other
periods when government growth of debt was reduced,
the economy is going into recession. As of October of
1998, the Fed has already made two symbolic reductions
in interest rates.

The debt money system must be reformed before there is
a possibility of solving money dependent problems.

Perhaps money is an obsolete idea.



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Zionism and Anti-Semitism

http://jewsagainstzionism.com/zionism/zanda.cfm

We implore and beseech our Jewish brethren to realize
that the Zionists are not the saviors of the Jewish
People and guarantors of their safety, but rather the
instigators and original cause of Jewish suffering in
the Holy Land and worldwide. The idea that Zionism and
the State of “Israel” is the protector of Jews is
probably the greatest hoax ever perpetrated on the
Jewish People. Indeed, where else since 1945 have Jews
been in such physical danger as in the Zionist state?!

Jews are enjoined by their religious laws to be loyal
to the country of which they are citizens.   Ever
since the destruction of the holy Temple in Jerusalem
and the exile of the Jewish People some two thousand
years ago, we have been enjoined to be scrupulously
loyal to the countries we reside in. One of the great
biblical prophets, Jeremiah, in chapter 29 of his book
proclaimed G-d's message to all the exiled; verse
seven reads, "Seek out the welfare of the city to
which I have exiled you and pray for it to the
Almighty, for through its welfare will you have
welfare."   This has been a cornerstone of Jewish
morality throughout our history to this very day.

Torah-true Jews wish to live in peace and harmony with
their neighbors in every country among the community
of nations, including in historic Palestine.  They
deplore acts and policies of violence carried out by
those who, misusing the name of Israel our forefather,
have substituted the ideal of chauvinist nationalism
for the eternal values of the Torah, the eternal
divinely bestowed inheritance of the Jewish people.

It has been the age-old intention of Zionism to
intentionally stir up anti-Semitism anywhere possible,
and even more commonly, to take advantage of any
Jewish suffering anywhere in order to enhance its
cause Indeed, hatred of Jews and Jewish suffering is
the oxygen of the Zionist movement, and from the very
beginning has been to deliberately incite hatred of
the Jew and then, in feigned horror, use it to justify
the existence of the Zionist state – this is, of
course, Machiavellianism raised to the highest degree.
Thus, the Zionists thrive on hatred and suffering of
Jews, and seek to benefit thereby through keeping Jews
in perpetual fear, causing them to ignore the true
nature of Zionism, and instead to consider the Zionist
state is their salvation.

ANTI-SEMITISM BY POLITICAL ZIONISM

Although Zionists and others dispute it, the
undeniable fact is that revolutionary secular and
apostate elements in the Jewish community in Europe
contributed greatly to hostility towards Jews after
World War I. This aroused hatred of Jews in general
among many non-Jews. While a prisoner in 1924 in the
fortress of Lansberg on the River Lech, Hitler wrote
his Mein Kampf.  When he became Chancellor of Germany
in 1933, he was assisted by Goebbels, Roseberg and
Streicher.  From them came the declarations, “The Jews
of Germany caused the defeat of Germany in the
1914-1918 war; the Jews of Germany were responsible
for the terrible conditions in Germany that followed
the war; the Jews of Germany are foreigners and they
wish to remain foreigners; they have no loyalty to the
country of their birth; they are not human; they are
filthy dogs; they have no right to intrude into
Germany’s affairs; there are too many Jews in Germany.

As far as Zionism is concerned, the founder of Zionism
and apostate, Theodor Herzl,  sought to intensify
hatred of the Jew in order to enhance the cause of
political Zionism. Here are some of his “pearls”:

“It is essential that the sufferings of Jews. . .
become worse. . . this will assist in realization of
our plans. . .I have an excellent idea. . . I shall
induce anti-semites to liquidate Jewish wealth. . .
The anti-semites will assist us thereby in that they
will strengthen the persecution and oppression of
Jews.  The anti-semites shall be our best friends”.
(From his Diary, Part I, pp. 16)

Additional words from the vivid imagination of this
dreamer, from p. 68 of Part I of his Diary.

"So anti-Semitism, which is a deeply imbedded force in
the subconscious mind of the masses, will not harm the
Jews. I actually find it to be advantageous to
building the Jewish character, education by the masses
that will lead to assimilation. This education can
only happen through suffering, and the Jews will
adapt."

Hateful views of Jews as being subhuman did not have
to be invented by Nazi theorists such as Hitler,
Goebbels, Rosenberg and Streicher. This ideology was
simply adapted from statements of political Zionists
such as those found in the writings of the Zionist
Yehezkel Kaufman in 1933.

In 1920 there were statements hostile to Jews
expressed at Heidelberg University. These statements,
arguing that Jews of Germany had caused the turmoil
that followed the war; that the Jews of Germany had
nothing in common with Germans, and that Germans had
the right to prevent the Jews of Germany from
intruding into the affairs of their volk were not made
by Adolf Hitler in Mein Kampf, but by Nahum Goldmann,
who went in to become the President of the World
Zionist Organization and head of the World Jewish
Congress, and, indisputably, the most influential
political Zionist in the world, second only to the
Prime Minister of the State of Israel.

In 1921, Germans in Germany were told that:

“We Jews are aliens… a foreign people in your midst
and we… wish to stay that way.  A Jew can never be a
loyal German; whoever calls the foreign land his
Fatherland is a traitor to the Jewish people“.
Who spoke these vile words? It was Jacob Klatzkin, the
second of two political Zionist ideologists in Germany
at the time, where the Jews of Germany were enjoying
full political and civil rights.  It was he who had
advocated undermining Jewish communities as the one
certain way of acquiring a state.  “They had no qualms
concerning tearing down the existing Jewish
communities.”

Who spoke in a public address at a political Zionist
meeting in Berlin and declared that “Germany… has too
many Jews”?  Was it Hitler or Goebbels? No, it was
Chaim Weizman, later to become the first President of
the State of Israel.  This address was published in
1920, and, thus, four years before Hitler had even
written Mein Kampf.

How many Zionist Jews know of this vicious treachery
uttered by these senior political Zionist leaders,
these apostates from the Jewish People?  At the
Nuremberg Trials of Major War Criminals, Nazi
propagandist, Julius Streicher testified:  “I did no
more than echo what the leading Zionists had been
saying”, it is clear that he had told the truth.

In addition to Hitler, Rosenberg, Goebbels and
Streicher, many other Nazi leaders used statements
from Zionists to validate their charges against the
Jews of Germany.  Such are the efforts of Zionist
leaders to this very day to maintain a high degree of
anti-semitism in order to enable them, in feigned
horror, to then point to anti-semitism to support
their idolatrous and anti-Jewish cause. In 1963, Moshe
Sharett, then Chairman of the Jewish Agency, told the
38th Annual Congress of the Scandinavian Youth
Federation that the freedom enjoyed by the majority of
Jews imperiled Zionism, and at the 26th World Zionist
Congress, the delegates were told that the Jew is
endangered by the easing of anti-Semitism in the
United States  “We are endangered by freedom” he
declared.

Ben Gurion's Scandals

Available in our bookstore

As we stated earlier, Zionism thrives on
anti-Semitism.  Ben Gurion declared, “…not always and
not everywhere do I opposed anti-Semitism”.  Zionists
regularly pull out their handy “anti-Semite” race card
against anyone, Jew or non-Jew, who dares to speak out
against the wickedness of Zionism.

During World War II, the Lehi organization, an
offshoot of Begin’s Irgun that was headed by Yitzchak
Shamir sought an alliance with Nazis! The following is
a quote from the writings of the Lehi in their contact
with the Nazis:

"The establishment of the historical Jewish state on a
national and totalitarian basis and bound by a treaty
with the German Reich would be in the interests of
strengthening the future German position of power in
the Near East ... The NMO in Palestine offers to take
an active part in the war on Germany's side ... The
cooperation of the Israeli freedom movement would also
be in line with one of the recent speeches of the
German Reich Chancellor, in which Herr Hitler stressed
that any combination and any alliance would be entered
into in order to isolate England and defeat it."

To those who assume that Zionists have been on the
side of freedom and equality, these words seem
strange. However, to those who understand the root of
Zionism, which is the transformation and eradication
of the concept of the traditional Jew and Judaism,
these statements are not strange at all. They are to
be expected.

The Zionists agreed with Nazism in general, even prior
to the advent of Nazism. They believed that Jews could
not, and should not, live in harmony in any other
society in the world, and that should be removed from
those societies for the benefit of those societies.
They believed that the new Jewish existence in its own
State would remake the image of Jews as “useless” and
“parasites.” These ideas existed long before Adolf
Hitler!

There is a huge amount of literature describing how
the Zionists made it very difficult to save Jews
during and after World War II. As various individuals
and organizations were trying to arrange departures of
Jews to western countries, the Zionists worked
overtime to prevent this from happening. They
expressed the opinion that building up the Jewish
population of Palestine was more important than
enabling Jews to go to third countries, and they
insisted to western powers that Jews should not be
accepted anywhere other than Palestine. Indeed,
Yitzchak Greenbaum, a famous Zionist, proclaimed that
“one cow in Palestine was worth more than all the Jews
in Poland.” The infamous David Ben-Gurion said in
1938:

"If I knew it was possible to save all the children in
Germany by taking them to England, and only half of
the children by taking them to Eretz Israel, I would
choose the second solution. For we must take into
account not only the lives of these children but also
the history of the people of Israel."

Read about the brutal Zionist role in the Holocaust.

After the war, a Zionist “religious” leader, Rabbi
Klaussner, who was in charge of displaced persons
presented a report before the Jewish American
Conference on May 2nd, 1948 :

"I am convinced people must be forced to go to
Palestine...For them, an American dollar appears as
the highest of goals. By the word "force", I am
suggesting a programme. It served for the evacuation
of the Jews in Poland, and in the history of the
'Exodus'... To apply this programme we must, instead
of providing 'displaced persons' with comfort, create
the greatest possible discomfort for them...At a
second stage, a procedure calling upon the Haganah to
harass the Jews."

It is ironic that the Zionists proclaim their State as
the safe haven for the Jewish People, when since World
War II no place on earth has been as dangerous for
Jews, both spiritually and physically, as the Zionist
state.

The Zionists worked relentlessly to create fear among
Jews in the Arab countries after the Zionist state was
established. Their tactic work most successfully in
Yemen, Morocco, Iraq, Algeria, Libya, Tunisia.

It is common knowledge among Iraqi Jews that during
1949-1950 the famous Zionist, Mordechai ben Porat, who
had the nickname of Morad Abu al-Knabel (Mordechai
Bomber), was instrumental in seeking to bribe Iraqi
officials after the creation of the Zionist state to
pass laws to encourage Jews to leave Iraq. This was
enhanced by the Zionists planting bombs in synagogues
in Baghdad in March 1950. Information about this is
readily available on the internet.

Read "The Jews of Iraq" by Naim Giladi, a first hand
account of violence and intimidation of Iraqi Jews to
leave their homeland.

The writings of Mr. Naim Giladi document in detail
what the Zionists did in Baghdad in 1950 to provoke
the departure of the Jews to the Zionist state. The
Zionists do not care what effect their policies have
on the Jewish communities of any country. When they
accuse European nations of every sin under the sun, do
the Zionists care that this will produce hostility
towards Jews? No! Not a bit. On the contrary, as we
have discussed, they thrive on such circumstances,
clinging to the vain hope that these Jewish
communities will rush for the “salvation” of the “safe
haven” of the Zionist Paradise where Jews are in
constant danger as the Zionist regime undertakes every
form of cruel provocation against non-Jews.

Horrifying Accusations of Violence and Intimidation

Read More

In more recent times the Zionists have sought every
opportunity to encourage Jews to leave their home
countries. Anytime there is even the smallest event of
hostility toward Jews on the heels of Zionist policy,
or if there are signs of economic distress and
dislocation, the Zionists magnify it a thousand times,
seek to ruthlessly humiliate the nations involved, and
agitate for Jews to go to the Zionist state, the
so-called “natural home” of the Jewish People.  This
has been the case in countries such as France,
Argentina, Uruguay, the former Soviet Union and Egypt.

The promises of the Torah are always to be realized.
This verse from the Torah demonstrates that those who
are his enemies will pay a price when The kingdom of
G-D will prevail.

Deuteronomy 32:43: Praise his People, O Nations: For
he will avenge the blood of his servants. He will
render vengeance against his adversaries and make
expiation for his land and his People.

Sources:

Guardian Volume two Issue 7
Satmar Grand Rebbe Joel Teitelbaum
The Jews of Batna, Aleria:  A Study of Identity and
Colonialism by Elizabeth Friedman.
The Jewish Communities of Morocco and the AIU by M.
Laskier, State University, Albany, N.Y.
The Impact of Western European Education on the Jewish
Millet of Baghdad by Maurice Sawdayee.
Outcaste Jewish Life in Southern Iran by Laurence D.
Loeb.  Gordon and Breach.
The Last Arab Jews.  The Communities of Jerba, Tunisia
by Abraham Udovitch and Lucette Valensi.  Harwood
Academic Publishers.
The GENOCIDE IN THE HOLY LAND (available for purchase
on the site)
Ben Gurion's Scandals by Naeim Giladi (available for
purchase on the site)



* * * * * * * * * * * * *

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FOOLS' GOLD

by Robert Carroll

http://landru.i-link-2.net/monques/goldx2.html

By monopolizing this commodity the moneyed classes
have got Nature by the throat and the community under
their heels... Compared with this process, usury is
mere child's play. -Alexander Del Mar in The Science
of Money.

Advocacy of gold or gold "backed" money rests on
dubious foundations. The discussion that follows will
reveal some of the semantic deception, half-truths,
doublespeak, self-interest pleading, and historical
errors employed in gold advocacy polemics.

The Pope admitted in 1992 that Galileo had been right.
This has nothing to do with gold money, but it is
offered to show that neither antiquity nor authority
makes a phony idea anything but phony.

There is a strong belief among gold money advocates
that little bits of gold, especially if they are
stamped with the image of some authority and numbers
make better price counters than numbered pieces of
paper or computer bytes. The belief involves a
perception of what money is. The person who holds that
belief perceives money to be something real and
apparently needs to see and hold in his hand a
physical manifestation of it. Gold is heavy, and
refined gold is bright and shiny. It satisfies an
emotional need however meaningless it is to the
function of money. Money is a product of human mental
fabrication. It always has been; it always will be. It
is a tool that facilitates exchange. Modern society
could not run without it or some equivalent accounting
system.

A rational business decision would require that
monetary symbols cost the least possible to
manufacture. Presently, (1998), it costs around $280
to mine and refine an ounce of gold. Mining decades of
tons of ore per ounce of gold has left holes in the
ground measured by cubic miles. The ore is leached by
toxic chemicals that have produced environmental
pollution. Banks create money in any amount with the
touching of computer buttons.

Abstract numbers, meaningless in and of themselves,
that count quantities of amperes, wheat, gasoline,
volume, distance, area, force, or any measurable,
quantifiable thing, suffice in commerce, science, and
technics without the clumsy inconvenience of metal
counters. Why should it be different with money?

A pseudo-legal argument is sometimes advanced by
advocates of gold money that a debt cannot be paid
with another debt. This is semantic deception. A debt
can be paid with anything that is acceptable to the
payee. In addition, as long as debt in the form of
deposit entries in bank accounts or Federal Reserve
Notes can be exchanged for real goods and services,
the payee is just as well off as if he had received
little lumps of metal. Further, the multi-trillion
dollar world economy runs almost exclusively on
exchange of debt-money which only consists of numbers
in deposit accounts at banks.

A common argument for gold money that accompanies the
pseudo-legal sophistry is that gold has "intrinsic
value," another semantic deception. Gold has
interesting intrinsic properties such as chemical
stability and excellent electrical conductivity, but
"intrinsic value" is a semantic error if not outright
doublespeak. Value(1) is a subjective judgment and
cannot be rationally thought of as intrinsic.
Subjectivity is exclusively a product of human minds.
"Intrinsic value" is a deceptive euphemism for price.

If people were stranded in some remote location
without food, water, and shelter, a mountain of gold
would serve no more purpose than so much sand. It
would have no price. Gold has no intrinsic value. It
merely has a price which is the result of complex
factors associated with its subjective price value
compared to other commodities. Industrial usefulness
of gold as well as human subjectivity that desires
gold for personal adornment, etc., does assure that
gold will fetch a price in a modern market. But what
price?

Gold pricing in the United States, today, 1998, is
denominated in Federal Reserve Accounting Unit
Dollars.(2) The commodity price of gold has fluctuated
wildly in the last half of the 20th Century, mostly
remaining in the $300 to $400 per ounce range in the
last decade. Price fluctuation was not due to
variations of the Federal Reserve Dollar. The U. S.
monetary price of gold is $42.22 per ounce. Artifact
(jewelry, etc.) and numismatic prices of gold are what
the market will pay. The value of gold as denominated
by price is highly variable.

Historically, the commodity price of gold has been
subject to fluctuation caused by normal supply and
demand influences. Supply and demand infuences are in
turn affected by the vagaries of mining and shipping,
speculation, hoarding, political action, industrial
demand, wars, central bank manipulations, and fads.

When governments or private banks have attempted to
use gold as money, or for the last yea many centuries
the fraud perpetrated as gold "backing" or reserves,
it has been necessary to establish a monetary price of
gold by fiat in an attempt to isolate money from
inevitable price fluctuations of commodity gold.

The U. S. Constitution writers anticipated the
instability of commodity prices and included the
phrase, regulate the value, in the coinage clause.(3)
In 1792 after the ratification of the Constitution,
the Congress, consistent with the Constitutional
mandate, defined specific amounts of gold, silver, and
copper as representing dollars. They regulated the
value and established a monetary price by fiat.(4)

Historically, monetary prices have been set higher
than market prices, the ludicrous present U. S.
monetary price notwithstanding. It would make no sense
to issue money that had an equal or lower monetary
value than the price of acquiring the metal. This
mark-up is known as seignorage. It is profit that
accrued to goldsmiths, kings, banks, and governments
that issued gold money. When the monetary price of
gold was too low, coins were melted and turned into
artifacts that could be sold for more money than the
original coins. When the monetary price was too high,
artifacts were melted and turned into counterfeit
coins. This was another cause of monetary and price
instability when gold was used as money.

The relative scarcity of gold and the demand for gold
for other uses than money should raise questions about
the efficacy of trying to use consumable and losable
gold as money or as monetary reserves.

The inherent instability of a scarce commodity subject
to all the influences enumerated above have inevitably
led to financial instability which instigates human
suffering, social unrest, political instability,
totalitarianism, fraud, counterfeiting, theft, war,
and abandonment of gold monetary policy.

A mantra of gold money advocates is that alternative
money systems, particularly "paper money," always
fail. Historically, it is true; but it is also a case
of selective historical facts, half-truth, and errant
semantics. There is archaeological evidence that
accounting systems existed before paper was invented.
For example, clay tablets written in cuneiform that
show evidence of debt accounting. Paper, per se,
merely represented another more economical way of
accounting. What is never admitted is that all money
systems including gold money systems have failed.
Today, "paper money" as bank notes is substantially
irrelevant. Overwhelmingly, transactions are carried
on via computer accounting where money is nothing more
than numbers transferred from account to account by
computers.

Arguments about the substance of money will never
address the problem of why all monetary systems have
failed .

In fact, historically, not only has no money system
survived indefinitely; but also, no civilization,
empire, or political system has survived indefinitely.
Systematic monetary manipulation has played a part in
their demise. It is not a question of gold or paper;
it is a question of human culture. Is it possible to
maintain a political system or nation that is founded
in myth, intellectual error, and financial fraud?

The Gold "Backing" Fraud

A sacrosanct dogma of modern economic superstition is
that money derives its value from scarcity. It is
nowhere scientifically proven or successfully argued.
It is accepted dogma; and, once again, the semantic
trick of substituting value for price is used.

Scarcity does play a role in prices of goods and
services, but it is only one factor; there are many
other factors in price.

What is provable is that the scarcity of gold provided
an opportunity for fraud that has become modern
banking custom and practice.

Exactly how the fraud started is not matters of facts,
but that it started is not in question.

Legend with perhaps more than a little truth in it has
been related many times, including Congressional
testimony.(5)

In brief, goldsmiths built vaults to secure their gold
which was used in artifact manufacture and lending.
The security of the vault attracted others who
deposited their gold with the goldsmith for safe
keeping. The goldsmith noticed that depositors never
claimed all their gold at once. This provided him the
opportunity to lend their gold at interest for his
profit.

The custom developed that depositors would write notes
which could be redeemed by the goldsmith to pay their
bills. Eventually, the security of the goldsmith’s
vault and convenience of the notes induced more and
more people to leave gold with the goldsmith and pay
their bills with notes.

The common use of notes provided the goldsmith with
the opportunity to write notes for making loans. In
fact, it enabled him to write notes for more gold than
there was gold in his vault. He created money!
Eventually, it was found that as much as ten times the
value of gold in the vault could be circulated as
notes. He only needed enough gold in "reserves" to
redeem the few notes that were presented for
redemption.

This fraudulent practice has become modern banking
custom and practice. Today, it is called fractional
reserve banking.(6) Of course, gold is not presently
used as reserves; banks just create money out of
nothing without any pretense of gold reserves.

Gold advocates lament that money is no longer
"redeemable." This is doublespeak that is tantamount
to a lie. Since the initiation of the goldsmith’s
trick in banking, bank notes or "paper money" have
never been fully redeemable in gold money. It must
also be remembered most money created by banks by
checks and deposit entry was never printed as
banknotes. While deposit money, Federal Reserve Bank
Notes, and U. S. coins cannot be exchanged for any
form of gold money at the U. S. Treasury or Federal
Reserve Banks, anyone is free to spend as much current
money purchasing gold as they please; and the gold can
be sold for current money. Furthermore, current money
is exchangeable, fully redeemable, for all necessary
and desirable goods and services which is the only
real purpose gold money could serve. Satisfaction of
superstitious beliefs and greed of investors are not
considered real purposes.

The growth of national and world economies has
rendered even the gold "backing" pretense of using
gold as money absurd, but the greedy wishful thinking
is that gold will be re-monetized at some astronomical
price that will provide a windfall to gold investors.
It is more likely that gold will be confiscated, as
happened in the United States in 1933, before central
banks attempt to re-monetize gold.

Attempts to re-monetize gold in the early 20th Century
were accompanied by disaster in national economies and
were quickly abandoned.

The Gold (un)Standard

"... the disastrous inefficiency which the
international gold standard has worked since its
restoration five years ago (fulfilling the worst fears
and gloomiest prognostications of its opponents) and
the economic losses, second only to those of a great
war, which it has brought upon the world..."--J. M.
Keynes(7)

What is generally referred to as "the gold standard"
is a set of variable monetary and economic goals that
involve manipulation of currency, balance of trade,
internal commerce, and prices by use of variable gold
policies. Different countries have tried different
gold policies depending upon the desired goal. Whether
it was to achieve balance of international trade,
stable currency, stable internal commerce, or stable
prices determined the policy. Balancing international
trade may, and usually does, interfere with internal
commerce. Stable prices may require juggling currency.
Different countries with different goals pursuing
different policies may conflict. What is called "the"
gold standard is not a unique and well defined system.

There is a common conception of "the" gold standard
that ties the value of the currency unit to a legally
determined amount of gold. It is believed that such a
policy would stabilize currency. It may be possible to
stabilize currency using gold in monetary policy
decisions but with disastrous other results.

For example, five methods used to manage a gold
standard by the Bank of England from 1925 to 1931
follow:(8)

i. The bank rate.

ii. Open market operations (that is purchase and sale
of securities) undertaken to influence the amount of
reserves of the commercial banks, and their power of
creating bankers’ money.

iii. Open market operations, undertaken to influence
the London Money Market.

iv. Gold exchange methods—dealings in foreign
exchanges and in forward exchange, and variations in
the price of gold within the narrow limits permitted.

v. Personal influence or advice—such as the so-called
embargo on foreign loans.

Anyone familiar with Federal Reserve operations will
note amazing similarity. Just as the present Federal
Reserve Open Market Committee engages in a variety of
open market transactions to control the dollar, the
Bank of England tried to manage the pound ostensibly
based on gold. The results also have an amazing
similarity to the Federal Reserve’s policies,
particularly the "soft landing" announced by Alan
Greenspan that was the 1990 recession.

... the operations of currency management conferred
upon the Bank of England the power to restrict credit,
to postpone new enterprises, to lessen the demand for
constructional materials, and other capital goods, to
create unemployment, to diminish the demand for
consumable goods, to cause difficulty in renewing
loans, to confront manufacturers with the prospect of
falling prices, to force dealers to press their goods
on a weak market, and to cause a decline in general
prices on the home market. In brief, the stability of
the international exchanges was accomplished by a
process which deliberately caused universal depression
in industry, created unemployment, and forced
manufacturers to produce, and merchants to sell, at a
loss.(9)

The operations of the Bank of England under the
administration of Montagu Norman critiqued above is a
classical example of what happens when monetary policy
is carried out in the abstract. Human needs and human
suffering be damned, trade will be balanced to control
the outflow of gold or silver or inflation will be
controlled to maintain prices regardless of how it
affects employment, hunger, or any other form of human
stress.

The errant buzz-word of monetary policy administered
by Federal Reserve gurus personified by Alan Greenspan
is inflation. Low unemployment motivates the gurus to
"slow down an overheating economy." In other words,
needful humans must be made to suffer to accomplish
abstract monetary goals.

The above critique of Bank of England policies
exposes, more than anything else, the fallacious
thinking that gold will automatically regulate
currency and prices. Not only the above critiqued
policies, but also, other history confirms the
fallacies.

One extreme anecdote from Roman history is the case of
a man who had his own image placed on a gold nugget
which he presented to a lover. So extreme were Roman
concerns with controlling money that it was a death
penalty offense under Roman law at that time to affix
any image on gold except for official purposes. The
law-breaker was executed.

This Roman anecdote is an example of two things: 1. An
absurd, extreme policy used in an attempt to make an
inherently unstable commodity suitable for monetary
use by legal means. 2. The arrogant stupidity of legal
absolutism.

Some factions of gold advocates argue that attempted
regulation is the problem and that "market forces"
should be allowed to follow their course with gold.
Aside from the obvious superstitious belief in a
fiction in support of a belief, histories of fraud,
manipulation, monopolization, gambling, and
speculation of commodities(10) left to market forces
should overcome the tunnel-vision and doublethink of
such an argument as market forces should determine the
value of common currency while believing the
implausible, self-defeating belief that gold left to
speculation and monopolization will, by magic, lend
stability to currency in the same market.

One of the sophistries used by gold money advocates is
the non sequitur. Byzantium has been offered as an
example of how a culture or empire was stabilized by a
stable gold currency.(11) In the first place, stable
Byzantium can be dismissed with the question: Where is
Byzantium now? In the second place, the longevity of
Byzantium was not extraordinary for its day. Nor did
Byzantium ever achieve extraordinary wealth. The
Italian city states built on bankers’ credit lasted
longer and achieved more wealth.(12) Byzantium existed
during the "dark ages" of Europe as a near singularity
in the Euro-Asian area. It was founded in autocratic
theocracy. The annual trade of Byzantium was less than
a week of world trade today, perhaps less than a day’s
trade. Byzantium’s relatively stable coinage was a
function of its relatively stable society maintained
by a severe autocracy. Its relatively stable society
was not a function of its coinage; its relatively
stable coinage was a function of its relatively stable
society.

After the ascendancy of the Italian city states, it
could just as well be argued that Byzantium failed to
achieve great wealth and eventually succumbed because
of the superiority of credit money or Byzantium’s
stupid, limiting, and inflexible reliance on gold
coinage, but that is not the argument presented here.
The argument here is that money is a function of
culture, not culture is a function of money although
selective facts may make it appear so. Certainly, the
pathological kleptomania and greed of Capitalism make
it seem U. S. culture is a function of money.

The coup de grace of gold standard is that a gold
standard applied in recent centuries has not altered
the custom and practice of bank issued debt-money.
Bankers, such as Alan Greenspan who has advocated a
return to a gold standard, are well aware that gold
standard is not only no threat to their power and
ability to create money out of nothing; but also, it
enhances their confiscatory power and control over
both the public and private economy. It helps banks
realize their superstitious mantra that money derives
its value from scarcity. The more scarce the more
value, i.e., the more interest banks can charge for
the money they create out of nothing.

Ordinary gold standard advocates are either ignorant
or disingenuous about bank created money. They usually
blame government for the abuses of credit money, but
it is banks that create money nearly exclusively.
Paranoid, near hysterical arguments such as inflation
is caused by "governments printing too much money" are
absurd when it is banks that create money. What a
silly argument it is to say governments print too much
money when, for example, the U. S. government has
borrowed more than $5 trillion from banks and other
investors in government securities! Every cent of it
originally issued by banks! But just as any paranoiac
can have real enemies, there is plenty of blame to lay
on government. It is government that has given the
power to create money to banks(13) then relies on
borrowing money from banks and private investors at
the additional expense of interest when taxes are
inadequate to meet expenses.

A Federal Reserve bankers’ dogma is that monetary
policy must be separated from politics because
politicians can’t be trusted with it. This dogma has
some truth in it; but like any half truth, it obscures
a lie. Monetary policy can never be separated from
politics, and bankers would loose their golden goose
if the government excercised its Constitutional power
to issue its own money.

Ostensibly, the people have the power to control
politicians with the political process. People have no
power to control bankers for whom they cannot vote and
do not know.

Criticism of bank created money and how(14) it is done
is left to other vehicles. This discussion is about
the fallacies of gold money arguments.

Conclusion

What is usually referred to as "the" gold standard or
gold backed money is an intellectual and financial
fraud. Under gold standard policies, Central banks
wrote checks creating money to buy gold to use as
reserves, just as Federal Reserve Banks create
deposits to buy U. S. Treasury securities, now. A gold
standard does not prevent commercial banks from
creating money on the basis of fictional reserves and
lending it at interest. What has passed as a gold
standard in the last few centuries is not
theoretically or functionally different than the
present bank created credit/debt money system. In both
cases, banks create and issue money as debt. Both
systems are often properly labeled debt-money systems.
Money is nearly exclusively issued by banks as debt at
interest in both systems.

A plausible argument can be made that if banks were
required to maintain an invariable level of gold
reserves, it would limit how much money they could
create. It would, but it would also limit how an
economy functions as in the disastrous British case
cited above.

The Federal Reserve Act was passed in 1913
establishing the Federal Reserve System as the U. S.
Central bank. It required 40% gold reserves behind
issuance of Federal Reserve Notes. World War I soon
followed. It would have been impossible for the United
States to finance it’s participation in that war with
Federal Reserve Banks and commercial banks required to
maintain 40% gold reserves. (The argument that it may
have forced the U. S. to stay out of the war had the
reserve requirement been maintained is irrelevant; the
U. S. participated in the war.) Reserve requirements
were lowered, and the war was financed with debt-money
created by banks.

The first central bank of the U. S. was charted in
1791, and the Coinage Act of 1792 which limited
coinage to the haphazard appearance of gold and silver
owners at the mint forced seekers of money to use bank
credit or debt financing. It is a speculation whether
the two cited acts were intended to force money
seekers into banks. The central bank has been
attributed to the efforts of Alexander Hamilton. There
is no doubt of Hamilton’s banking connections.

The United States has become the most powerful nation
ever in history. It did so mostly on bank credit;
nearly exclusively so in the 20th Century.

Winning two world wars, once having the highest now
reputed third or fourth average standard of living in
the world, and development of spectacular technology
including space exploration were all accomplished
under bankers’ debt-money schemes, but this is not a
defense of bankers’ debt-money. It must be repeated
that criticism of bankers’ debt-money is found
elsewhere. This is to suggest that the U. S. could not
have developed as it did under the restrictions that a
gold money system would have imposed.

A credit money system operated for the purpose of
serving human needs instead of serving the profit
interests of bankers could educate everyone to any
desired level, provide medical care for all, end
poverty, and finance any socially acceptable and
physically possible activity.

The substance of money used for counters whether lumps
of yellow metal or computer bytes is unimportant, per
se. What is important is monetary policy. Good or bad
policy can be made with credit money that makes good
or bad results. It is hardly possible to have a good
policy under the restrictions and inflexibility that a
one hundred percent gold money system would impose.
Gold "backing" known as fractional reserves has
already been revealed as a banking fraud that differs
from the present bankers’ debt-money system in
cosmetics only.

If there is anything that can be classified as a
public utility, it is money. Yet, the supposedly
democratic U. S. Government has seen fit to endow a
select group of greedy bankers with all the power of
issuing and regulating the money supply for their own
profit. The banking system that issues money as debt
holds the government and people hostage to the system.
Until the power to issue money is taken from the hands
of greedy corporate profiteers, megalomaniac kings,
and plundering politicians, there is little hope for a
socially kind and peaceful society or a safe and
sustainable environment.

The science of how to do it is well known.

They [bankers] viewed national interests from the
windows of the bank parlour. From their point of view,
industry, commerce, agriculture, wages, employment,
were but counters in the skilled game of international
finance. They must be regulated to fit in with the
monetary scheme. The monetary scheme must not be
regulated to fit in with the needs and necessities of
the world.(15)

Whose interests are served by "the monetary scheme"?

Until the "cart before the horse" philosophy of
financiers revealed in the above quote is righted, no
monetary system will serve public interests. A gold
monetary system will be just

FOOLS' GOLD!

Notes:

1. See Theoretical Essay on the Nature of Money for a
fuller explication of value.return

2. Contrary to popular opinion, the "U.S." dollar in
the form of bank notes and commercial bank credit is
not issued by the United States Government. It is
issued by Federal Reserve Banks and commercial banks
mostly in the form of deposits or numbers in deposit
accounts. return

3. Article I, Section 8, clause 5. return

4. An Act establishing a Mint and regulating the Coins
of the United States, April 2, 1792, specified 24.75
grains of pure gold and 27 grains of standard alloy
per dollar. return

5. Robert Hemphill, credit manager in the Federal
Reserve Bank of Atlanta, before the Committee on
Banking and Currency, House of Representatives, March
22, 1935, re Banking Act of 1935. return

6. See Modern Money Mechanics, published by the
Federal Reserve Bank of Chicago for a detailed
explanation of how the central bank creates reserves
and regulates the money supply and commercial banks
create money by fractional reserve lending. return

7. Quoted by Sir Charles Morgan-Webb in The Money
Revolution. return

8. Ibid. return

9. Ibid. return

10. See "The Tulipomania" chapter of Extraordinary
Popular Delusions and the Madness of Crowds for a
charming example of kleptomania, gambling, and greed
in an unregulated market. Of course, a free market in
tulips is one thing; a free market in common currency
is another. The whole book is an entertaining read of
collective "delusions" and "madnesses." return

11. See The War on Gold by Antony C. Sutton. return

12. See An Inquiry into the Permanent Causes of the
Decline and Fall of Powerful and Wealthy Nations by
William Playfair. return

13. See The Federal Reserve Act in the United States
Statutes at Large and Title 12 USC for complete texts
of current banking law. return

14. For how, see Modern Money Mechanics published by
Federal Reserve Bank of Chicago. return

15. The Money Revolution by Sir Charles Morgan-Webb.
return

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The War in Afghanistan: Drugs, Money Laundering and
the Banking System

by Mahdi Darius Nazemroaya

October 17, 2006
GlobalResearch.ca

http://globalresearch.ca/index.php?context=viewArticle&code=NAZ20061017&articleI\
d=3516

"The iron law of the market is that demand breeds
supply." -The Economist

The landlocked state of Afghanistan sits at the
crossroads of Central Asia, the Indian sub-continent,
and the Middle East. It is geo-strategically and
economically important for a number of reasons.

Firstly, Afghanistan is a major geo-strategic hub that
conveniently flanks Iran, the former Soviet Union, and
China. Afghanistan’s location has always been
significant. For most of its history, the geographic
area has been a frontier between Iran, India, and
China. Later, since its Independence from Iran, it has
acted as a buffer state between Iran, Tsarist Russia
succeeded by the Soviet Union, and India under British
colonial rule—later succeeded by the Republic of India
and Pakistan. Afghanistan is an ideal place to create
a wedge between the major Eurasian powers and to
establish a permanent military presence for future
operations in Eurasia.


click to enlarge


Secondly, Afghanistan also constitutes a doorstep into
energy-rich Central Asia, which bypasses the
territories of Iran, the Russian Federation, and
China. This is an important factor because external
forces from outside the region such as the United
States or Britain can use Afghanistan to circumvent
these rival regional powers. A pipeline corridor
running through Pakistan and Afghanistan from the oil
and gas fields of Turkmenistan and Central Asia has
been a major project for the United States and its oil
corporations for years.

NATO combat missions, under the auspices of the
International Security Assistance Force (ISAF) are
concentrated in Southwest and Northwest Afghanistan
where the strategic oil and gaz pipeline corridor from
Central Asia to the Indian Ocean is to be located.

Prior to September 11, 2001, Washington had been
involved in negotiations with the Taliban government
with a view to securing this oil and gas route.

U.S. oil and gas interests in Afghanistan have a
direct incidence on the post-Taliban political setup.
The Afghan President Hamid Karzai was initially
selected (December 22, 2001) by the U.S. government
and the "international community". This choice,
however, was the result of the lobbying by Union Oil
Company of California (UNOCAL). Karzai was not only a
former employee of UNOCAL, he had also been
collaborating with the Taliban government, in
negotiations pertaining to the construction and
royalties of the prprosed trans-Afghan pipeline. In
fact, several UNOCAL officials, such as Zalmay
Khalilzad1, were appointed as U.S. special envoys in
both Afghanistan and Anglo-American occupied Iraq.

The NATO offensives in the western half of Afghanistan
can be seen as a means to securing the territory
needed for the building of a geo-strategic pipeline
from Central Asia to Pakistan through Afghanistan.

There even seem to be plans in reconfiguring both the
boundaries of Afghanistan and Pakistan to facilitate
the flow of oil and gas from Central Asia to the
shores of the Indian Ocean. Once built, the pipeline
corridor and the terminal on the Indian Ocean
coastline would be a major victory over competing
Russian, Chinese, and Iranian energy interests in the
Caspian Basin and Central Asia. This would be the
United States’ second geo-strategic victory after the
opening of the Baku-Tbilisi-Ceyhan (BTC) Oil Terminal,
another terminal that circumvents around Russia, Iran,
and China.

Control of Afghanistan is vital in deciding the future
balance of power in Central Asia and Eurasia, thus
whosoever controls Afghanistan has great leverage in
the resource-rich Eurasian landmass.

Thirdly, Afghanistan constitutes a major area of
production of opium, which feeds the illicit narcotics
trade out of Afghanistan. This is significant since
illicit trade in narcotics is classified third in
terms of World trade turnover, after oil and the trade
in weapons.

The Half-forgotten Opium Wars

Opium and illicit narcotics have played a relatively
unknown, yet historic and central, role in world
economics and international relations. There were
major wars launched because of opium. Britain and
British companies had shared interests in the trade
and trafficking of narcotics. One of these companies
was the British East India Company (BEIC). India was
administered and governed by the British East India
Company. Essentially corporate interests and
government interests in British-ruled India and
British colonies were unified and overlapping.

Whole cultures and nations have historically been
warped and changed to appease latent or unseen
economic interests. British commercial interests have
coerced change in many societies and places. For
example, the British coerced Iran into replacing
coffee with British tea. Iranian society gave up their
national drink, coffee, for tea from India simply
because of British commercial interests and demands.
To this day, Iranian bistros are called "coffee
houses," but they primarily serve tea.

In the Far East and Southeast Asia, opium was an
integral part of European trade. At its peak in the
mid 1880s, opium was one of the most valuable
commodities circulating in international trade.2
British exports of opium out of India had
systematically helped weaken Chinese resistance to
foreign or colonial powers and also helped balance the
enormous trade deficit Britain had with China.

The British corporations managing India not only
coerced the Chinese government into letting
drug-addiction run rampant for mere economic
interests, but also coerced Indian farmers into
growing opium. In fact growing opium was an irregular
practice amongst farmers in India. The British
effectively forced many Indian farmers into becoming
dependent on opium cultivation for a living. The local
economies of many communities of India were
systematically driven away from food farming into the
cultivation of cash crops for British merchants.
Subsistence crops gave farmers some form of autonomy
from market forces and guaranteed survival while cash
crops made farmers dependent on the British and the
opium market for survival. Thus India was also
entrenched deeper into British control and
exploitation from British companies.3

One of the causes of the collapse of Imperial China or
the Chinese Empire was the British-sponsored
drug-addiction in Asia. Drug addiction was
skyrocketing in China and soon the Chinese were forced
to ban opium consumption by their population due to
its damaging and destructive effects on their society,
health, productivity, economy, and culture.

Opium was very important to Britain. Opium addiction
was also used to exploit Asian nations, populations,
and economies. The profits of opium were so
significant and lucrative that the British went so far
as to declare war on China for encraoching upon the
trade in opium. Basically an unjust war was declared
by Britain on China.4

The Chinese Empire reaffirmed its ban on opium imports
in 1799, but British companies and merchants merely
ignored the ban and continued to import opium into
China. The criminalization of opium in China helped
raise the market price of opium.

The situation in China was comparable to the
prohibition of alcohol in the United States from
1920-1933, except that opium had a deep impact on
Chinese society and was draining capital from the
Chinese economy. By the 1830s, the value of opium
exports had outstripped that of international tea
exports for the British. In 1838 the death penalty was
legally imposed on all drug dealers, traffickers, or
smugglers of Chinese citizenship by the Chinese
authorities. Even then, the British were exempted from
the penalties of the law because the Chinese
government did not want to create problems with
Britain. By 1838-1839 the Chinese authorities had no
choice, but to enforce the law prohibiting opium
imports spearheaded by British companies and merchants
with the full support of the British government. China
was slipping towards economic disaster as China's gold
and silver reserves were being used to pay for opium
imports, leading to a massive outflow of capital from
China to Britain. The Chinese could no longer afford
to tolerate the British narcotics industry in Asia.
The Chinese refused to allow anymore illicit imports
of narcotics into China which the British government
and European companies had blatantly ignoring and
violated.5

The British declared war in 1839 on China and sent a
naval force and British troops from India into China.
China was defeated and forced to sign an unjust
treaty, the Treaty of Nanjing (1842). This led to
further economic exploitation of the Chinese and
another war. The Second Opium War was fought with the
Treaty of Nanjing as its justification and led to
further subjection of China by foreign and colonial
powers, including the stationing of foreign troops in
the Chinese capital, the ceding of Hong Kong and
Macau, and the loss of Chinese territory.

Lord Palmerston, the British Prime Minister, made an
important statement in reference to the signing of the
Treaty of Nanjing to end the First Opium War that
confirms the importance of the narco-economy for
Britain:

"There is no doubt that this event [the ending of the
Opium Wars with the Treaty of Nanjing], which will
form an epoch in the progress of the civilization of
the human races, must be attended with the most
important advantages to the commercial interests of
England [meaning Britain]"6

The Legacy of the Opium Wars on Modern Afghanistan

Historically, the lucrative opium trade sponsored by
the British in the 19th Century created the
foundations for the opium and heroin industry in
modern-day Afghanistan, which today produces 92
percent of the World's supply of heroin.7

Opium cultivation was introduced in the Golden
Triangle Region (Laos, Myanmar, and Thailand) in
Southeast Asia as well as in other areas. The legacy
of opium in Afghanistan is a  result of the both the
historic drug trade sponsored by the British and the
devastation of Afghanistan during the
American-Pakistani initiated Soviet-Afghan War.8 It is
during the Soviet-Afghan war that the large scale
commercial cultivation of opium was launch in
Afghanistan, supported and protected by Pakistani and
U.S. intelligence. This supply was directed towards
the Western heroin market.

The International Drug Trade: The Narcotics Market

If, in the course of their past history, Britain, the
Netherlands and Portugal had been actively supporting
the drug trade, what is preventing it from occurring
today, especially with the mammoth profit yields and
hard currency earnings that the illegal drug industry
generates.

The economic principles guarded by the British
government during the Opium Wars are still the same in
modern times. Illicit drugs or narcotics are still a
major commodity and an important component of
international trade. Opium from Afghanistan
constitutes a large portion of the world’s narcotics
market, which was estimated by the U.N. to be
approximately $400-500 billion.9

Narcotics are an instrument of U.S. foreign policy,
which also support Western financial interests. The
CIA in collaboration with other intelligence agencies,
such as the Pakistani ISI working in Afghanistan, has
set up covert operations which support the drug trade:


"Our conclusion remains that the first target of an
effective drug strategy should be Washington itself,
and specifically its own connections with corrupt,
drug-linked forces in other parts of the world. We
argued that Washington’s covert operations overseas
had been a major factor in generating changes in the
overall pattern of drug flows into the United States,
and cited the Vietnam-generated heroin epidemic of the
1960s and the Afghan-generated heroin epidemic of the
1980s as analogues of the central concern of this
book: the explosion of cocaine trafficking through
Central America in the Reagan years, made possible by
the administration’s covert operation to overthrow the
Nicaraguan Sandinistas [vis-à-vis
Iran-Contra].(Cocaine Politics: Drugs, Armies, and the
CIA in Central America, Jonathan Marshall and Peter
Dale Scott, April 1998)

Michel Chossudovsky has also clarified the economic
mechanisms behind the illicit narcotics trade:

Based on 2003 figures, drug trafficking constitutes
‘the third biggest global commodity in cash terms
after oil and the arms trade.’

(…)

Afghanistan and Colombia are the largest drug
producing economies in the world, which feed a
flourishing criminal economy. These countries are
heavily militarized. The drug trade is protected.
Amply documented the CIA has played a central role in
the development of both the Latin American and Asian
drug triangles.

The IMF estimated global money laundering to be
between 590 billion and 1.5 trillion dollars a year,
representing 2-5 percent of global GDP. (Asian Banker,
15 August 2003). A large share of global money
laundering as estimated by the IMF is linked to the
trade in narcotics.

(Who benefits from the Afghan Opium Trade?, Global
Research September 21, 2006)

The Rise of Opium under the presence of NATO in
Afghanistan

In economic terms, demand is what creates supply. The
supply of opium and heroin has been rising. This is
happening right under NATO’s nose. NATO claims that it
has been tolerating some growth of opium so as not to
incite violence against NATO troops.

Afghanistan must be demilitarized. To do so does not
take a standing army but the rooting out of weapons
and an end to the flow of illicit narcotics. It is
this outward flow of narcotics that creates an
inverse, inward flow of weapons into Afghanistan.

The multi-billion dollar (U.S.) heroin industry of
Afghanistan must be addressed. Instead of eliminating
the drug trade, foreign military presence has assisted
in restoring it.

NATO, as an entity, has become an accessory to major
narcotics proliferation and criminal activity. Opium
is not truly being reduced: in fact all the figures
show that it is on the rise. This is happening under
the eyes of NATO as confirmed by several media
reports.

Pledges to Eliminate Opium and Heroin not kept, but
"Grossly Violated"

Afghanistan is central to the international narcotics
market and the production of heroin. According to the
U.K. Guardian (October 3, 2001) Tony Blair, the
British Prime Minister, presented the Anglo-American
invasion of Taliban-controlled Afghanistan as a means
to erradicate the illicit durg trade. "The arms the
Taliban are buying today are paid for with the lives
of young British people buying their [Afghan] drugs on
British streets," said Tony Blair. "That is another
part of their [the Taliban’s] regime that we should
seek to destroy."

The British Prime Minister’s justifications for war as
a matter of public record have proven to be rhetoric,
in an attempt to gain public support. Tony Blair’s
statement is ironic because British and NATO troops
have allowed the cultivation of opium to go unchecked
in NATO-garrisoned Afghanistan.

By the virtue of the British Prime Minister’s own
statements and pledges, he is guilty of negligence and
the sacrificing of British lives. Stopping the
cultivation of opium to save British lives was used as
a justification in 2001 for the invasion of
Taliban-controlled Afghanistan. The invasion did not
contribute to curtailing the cultivation of opium,
quite the opposite.

Money Laundering and International Banks

The International Monetary Fund (IMF) has report that
"the aggregate size of money laundering in the world
could be somewhere between 2-5% of the world’s Gross
Domestic Product (GDP). Using 1996 statistics, these
percentages would indicate that money laundering
ranged between U.S. $ 590 billion and U.S. $ 1.5
trillion [in 2003]."10

American money laundering in the United States and
internationally is a key issue. Ninety-one percent
(91%) of the billions of U.S. dollars spent on cocaine
in the United States stays in the United States. It is
deposited in the US and Canadian banking system. The
narcotics trade helps accumulate hard currency into
the American and Canadian economies.11

The extent of money laundering in the United States
can be grasped when it is realized that practically
every American dollar in circulation in the United
States contains "microscopic traces" of cocaine. This
is no mere urban legend, but a verified fact supported
by scientists, forensics experts and the FBI. Traces
of cocaine on American paper money signifies the
extensive use of cash as a means of payment in drug
deals.12

Most money laundering is done through the
international commercial banking system. American
domestic banks launder an estimated $100 billion
(U.S.) of drug money annually. This includes several
of America's largest financial institutions. 13

The banking systems in North America and Western
Europe seem to be serving as points of currency
accumulation from the rest of the world that are
siphoning hard capital or currency (cash).

César Gaviria Trujillo, the former President of
Colombia and the former Secretary-General of the
Organization of American States (OAS), has said, "If
Colombians are the big fish of the drug trade then
Americans are the whale," and demanded that the United
States stop money laundering activities inside U.S.
borders and devote more resources to lowering domestic
drug consumption in the United States.

The Pakistani military and its military oligarchs also
benefit from the international narcotics economy.
According to journalist Rahul Bedi, "Other than ruling
Pakistan directly and indirectly since [Pakistani]
independence [from India] and controlling its
[Pakistan’s] nuclear, defense and foreign policies,
the military remains the country’s largest and most
profitable business conglomerate."14

Raoolf Ali Khan, the Pakistani representative to the
U.N. Commission on Narcotics had said in 1993 that
"there is no branch of government [in Pakistan] where
drug corruption does not pervade," and the CIA, itself
a notorious force behind international narcotics
proliferation, reported to the U.S. Congress in 1994
that heroin had become "the life-blood of the
Pakistani economy and political system."15

The Link between Kosovo and NATO-garrisoned
Afghanistan

Money laundering, drug trafficking, and illegal
weapons purchases are closely aligned and form an
international trinity. In the Balkans this started
with the criminalization of the Albanian Republic
(Republika e Shqipërisë) and later Kosovo (Kosovo i
Metohija in Serbo-Croatian /Kosovë in Albanian).

Kosovo and Albania play an important role in the
Eurasian Drug Corridor. The virtually independent
Serbian province of Kosovo, primarily inhabited by
ethnic Albanians, has a strong link with
NATO-garrisoned Afghanistan.  Kosovo is where part of
the opium and heroin is forwarded from Afghanistan for
entry into European markets and North America. Both
Afghanistan and Kosovo are under Anglo-American
domination, "democratization," undergoing "the process
of nation-building," with U.S. military bases on their
respective territories and in the orbit of NATO.

The Former Yugoslavian Republic of Macedonia and
Albania which are saturated with illicit drugs and
weapons are also part of the Eurasian Drug Corridor.
The Eurasian Drug Corridor is also where the flow of
drugs and arms are facilitated.

The drug and weapons streams also run in opposite
directions. Weapons flow inwards into the Eurasian
Drug Corridor, while illicit drugs or narcotics flow
outwards.

The Kosovo-centred illicit narcotics industry is worth
billions of dollars a year in transport and exchange
fees.

The Kosovo Liberation Army (KLA) and its affiliates or
extensions in Macedonia and Albania, and to some
extent in Italy, Greece, and Turkey, play an important
role in drug trafficking and smuggling. The KLA are
middlemen in the narcotics industry.  They in turn use
part of the proceeds of the illegal narco-economy to
arm themselves and to cement their control over
numerous aspects of commerce and life in Kosovo, the
Albanian-inhabited areas of western Macedonia, and
Albania.

Criminalization in the Balkans: How the Narcotics
Economy was Launched

According to Chossudovsky (The Globalization of
Poverty and the New World Order), Albania and Kosovo
became, as of the early 1990s, an important staging
point for Afghan opium and heroin trade into Western
Europe.

A triangular trade in oil arms and narcotics had
developed largely as a result of the embargo imposed
by the international community [namely the United
States, the E.U., and NATO members] on Serbia and
Montenegro [the last two states of the Yugoslav
Federation] and the blockade enforced by Greece
against Macedonia. In turn, the collapse of industry
and agriculture had created a vacuum in the economic
system which boosted the further expansion of illicit
trade. The latter [illicit trade, i.e. smuggling and
drug trafficking] had become a "leading sector," an
important source of foreign exchange and a fertile
ground for the criminal mafias.

(…)

The trade in narcotics and weapons was allowed to
[deliberately] prosper despite the presence, since
1993, of more than 800 American troops at the
Albanian-Macedonian border with a mandate to enforce
the embargo. (…) The revenues from oil and narcotics
were used to finance the purchase of arms (often in
terms of direct barter): "Deliveries of oil to
Macedonia (skirting the Greek embargo [in 1993-1994])
can be used to cover heroin, as do deliveries of
kalashnikov rifles (…) in Kosovo."

These extensive deliveries of weapons were tacitly
accepted by the Western powers on geo-political
grounds; both Washington and Bonn [Germany] had
favoured the idea of a "Greater Albania" [controlled
by the Anglo-American alliance and Franco-German
interests] encompassing Albania, Kosovo, and parts of
[western] Macedonia. Not surprisingly, there was a
"deafening silence" of the international media
regarding Kosovo arms-drugs trade: "the trafficking
[of drugs and arms] is basically being judged on its
geo-political implications (…) In Kosovo, drugs and
weapons trafficking is fuelling geo-political hopes
and fears."

Disinformation from NATO-garrisoned Afghanistan

Eric Margolis, a self-professed conservative
journalist has said:

"Do not believe what OUR media and politicians are
telling us about Afghanistan. Nearly all the
information we get about the five-year-old war in
Afghanistan comes from U.S. and NATO public relations
officers or ‘embedded’ journalists who merely parrot
military handouts. Ask yourself, when did you last
read a report from a journalist covering Taliban and
other Afghan resistance forces?" (September 19,
2006)16

The Canadian government, amongst others, has started a
program of training military personnel to become
journalists—something that goes beyond the controlled
information of embedded reporting.17

It must also be recognized that the insurgency is also
in part a resistance movement in many regions of
Afghanistan. The media "erroneously" calls this
movement the "Taliban". On the ground in Afghanistan,
however, NATO troops identify the Afghan insurgents as
Anti-Coalition Militias (ACMs). This title reflects
the fact that NATO is fighting a diverse multi-ethnic
movement in Afghanistan that sees NATO as an
occupation forces. The issue of human rights abuses by
NATO troops and security contractors (mercenaries) has
also incited violence amongst the inhabitants of
Afghanistan.

In addition to media misinformation there are many
misleading or distorted reports. There are also
individuals claiming to represent the Afghan people
and championing human rights such as the Afghani
President and members of the unelected Loya Jirga
(Afghani pseudo-Parliament). Many in the international
ant-war movement have been deceived by members of the
Loya Jirga who have pretended to champion human rights
and women’s rights against the United States and the
warlords, while in fact they are also supported being
by the US.

This is a form of "manufactured dissent", an
opposition ("counter-discourse") which creates the
illusion that there is a real political opposition
within Afghanistan> it is also used to mislead the
anti-war movement.

The Taliban: Creation of the U.S. Intelligence
Apparatus

The Taliban are a creation of the CIA and Pakistan's
Inter Service Intelligence (ISI). The Taliban
government was set up in 1996 as an Anglo-American
client state.

A fallacy is the premise that the Soviet invasion of
Afghanistan was the antecedent of extremism and
militarism in Afghanistan. In reality, the creation of
extremism in Afghanistan was the joint collaboration
of U.S. intelligence and the Pakistani ISI, in the
largest CIA operation in history. The construction of
a war in Afghanistan was engineered by the United
States, which gave birth to the Afghan Mujahideen and
eventually the Taliban. According to Zbigniew
Brezinski, the United States started operations to
create a civil war in Afghanistan vis-à-vis Pakistani
links before Soviet intervention on December 24, 1979.

Former U.S. National Security Advisor Zbigniew
Brezinski, during an interview with the Nouvel
Observateur  disclosed, that the official directive
for the covert support of creating a civil war and
opposition to the pro-Soviet Afghan government by the
United States started on July 3, 1979.18 This was six
months before Soviet troops even entered Afghanistan.
There are indications that U.S. intelligence
operations in Afghanistan in support of the Mujahideen
and other groups predate 1979.

The Return of the Taliban, the manipulation of the
Anti-War Movement, and the Demonization of the
Northern Alliance

The United States and NATO appear to be preparing for
the reinstatement of the Taliban into the Afghan
political arena, to the detriment of the Northern
alliance.

U.S. Senator Bill Frist of Tennessee (Republican) has
called for the inclusion of the Taliban into the
Afghan government.19 This is significant because
Pakistan has made agreements with the Pakistani based
proxies of the Taliban in Waziristan,20 Bill Frist is
both Majority Leader in the U.S. Senate and a leading
Republican. NATO is also involved in dialogues with
the Taliban, most probably through Pakistani channels
and President Hamid Karzai.

The Taliban did serve U.S. interests and there seems
to be a new role emerging for the Taliban as the
potential stewards of U.S. interests in Afghanistan
once again. The Taliban for the most part were
reliable allies of the United States—more so than the
present groups in NATO-garrisoned Afghanistan who were
allies of Moscow, Tehran, and Beijing and could still
return to their old camps. The Taliban could also
prove more cooperative in relation to the United
States, as in the past.

The Northern Alliance, although not angelic, has been
heavily discredited and demonized. This seems to be
the ground work for further operations and duplicity
in Afghanistan.

There are also attempts to manipulate the anti-war
movement(s) into facilitating these objectives. The
United States and the mainstream media have portrayed
the Northern Alliance as an ally of the US, when in
fact the Northern Alliance leadership prior to 9/11
was opposed to US interventionism.  In this regard,
there are indications that Pakistani intelligence
(ISI) in collaboration with individuals within the
Northern Alliance, was involved in the assassination
of the leader of the Northern alliance Ahmad Shah
Massoud. Shah Massoud was the object of a kamikaze
assassination two days before the tragic events of
9/11.

Ironically, the United States is using anti-U.S.
foreign policy feelings emanating from the ant-war
movement(s) and the general public to actually further
U.S. foreign policy objectives.



Global Research Contributing Editor Mahdi Darius
Nazemroaya is an independent writer and analyst of the
Middle East, based in Ottawa. Readers are welcome to
cross-post this article with a view to spreading the
word and warning people of the dangers of further
conflict in NATO-garrisoned Afghanistan and further
militarization of foreign policy in North America.
Please indicate the source and copyright note.


Notes

1 Zalmay Khalilzhad is the Afghan-born U.S. Ambassador
to Iraq and both a member of the PNAC (Project for the
New American Century); he also attended the American
University of Beirut in Lebanon and helped created
sectarian tensions and division between Muslims, the
Druze, and Christians during the Lebanese Civil War.
Zalmay Khalilzhad was also one of the middle men
between militias who killed Palestinian civilians in
Lebanon and the Israeli government.

2 Professor John F. Richards; Opium and the British
Indian Empire: The Royal Commission of 1895 Lecture,
the University of Cambridge, United Kingdom, May 23
2001

http://www.drugpolicy.org/library/opium_india.cfm

http://fds.duke.edu/db/aas/history/faculty/richards

3 Professor Peter Ward Fay; The Opium War, 1840-1843,
Chapel Hill, University of North Carolina Press, 1975.

4 Ibid

5 Ibid

6 Thomas Roy; China: The Awakening Giant, Chapter 2:
Opening to the West, pages 15-28, Toronto, McGraw-Hill
Ryerson Ltd., 1981

Note: Pages 27-28 have a detailed and reader friendly
directory of suggested readings, research material,
and sources in regards to the Opium Wars and the
British involvement in the narcotics (opium) industry
in regards to the exploitation of China.

7 UNODC Statement on The Opium Economy in Afghanistan

8 Professor Michel Chossudovsky America’s "War on
Terrorism," Chapter 2: Who is Osama bin Laden?, pages
26-27, Global Research, Centre for Research on
Globalization (CRG), Pincourt (Québec), 2005

9 Professor Michel Chossudovsky, Who benefits from the
Afghan Opium Trade?, Centre for Research on
Globalization (CRG), September 21, 2006

http://www.globalresearch.ca/index.php?context=viewArticle&code=CHO20060921&arti\
cleId=3294

10 The Economic Impact of the Illicit Drug Industry,
Transnational Institute (TNI)

http://www.tni.org/crime-docs/impact.pdf

11 Professor Asad Ismi, Drugs and Corruption in North
and South America

12 Ibid

13 Ibid

14 Rahul Bedi, Pakistan’s military is country’s
largest business conglomerate, Indo-Asian News Service
(IANS), October 12, 2006

15 Professor Asad  Ismi, A U.S.-financed Military
Dictatorship: Pakistan has Long, Bloody History as the
Terrorist Arm of U.S., CCPA Monitor, Canadian Centre
for Policy Alternatives (CCPA), June 2002

16 Eric Margolis, Afghanistan: Time for Truth,
September 18, 2006

http://www.ericmargolis.com/archives/2006/09/afghanistan_tim.php

17 Military wants to turn soldiers into 'journalists'
to win minds overseas, Brandon Sun, September 21, 2006

http://www.brandonsun.com/story.php?story_id=29952

Bergen, Bob; Military Censorship Hiding in Plain
Sight, The Hamilton Spectator, October 13, 2006

  18 The CIA’s Intervention in Afghanistan, Interview
with Zbigniew Brezinski, Le Nouvel Observateur,
January 15-21 Issue, 1998, page 76.Also analyzed in
Michel Chossudovsky, America’s "War on Terrorism", op
cit.

19 Jackie Dent, Is it time to negotiate with the
Taliban?, Cable News Network (CNN), October 5, 2006


http://edition.cnn.com/2006/WORLD/asiapcf/10/05/taliban.talks

Include Taliban in government, says U.S. senator, The
Associated Press, October 3, 2006

Featured by the Canadian Broadcasting Corporation
(CBC),

http://www.cbc.ca/world/story/2006/10/03/taliban-frist.html

20 Musharraf’s Waziristan deal a sell off to the
Taliban, India Defence, October 14, 2006

http://www.india-defence.com/reports/2607


Related articles on Afghanistan and/or Kosovo and the
International Narcotics Trade from the Centre for
Research on Globalization (CRG):

Who benefits from the Afghan Opium Trade?
http://www.globalresearch.ca/index.php?context=viewArticle&code=CHO20060921&arti\
cleId=3294





The U.S.-NATO Military Intervention in Kosovo
http://www.globalresearch.ca/index.php?context=viewArticle&code=STO20051229&arti\
cleId=1666


The Spoils of War: Afghanistan's Multibillion Dollar
Heroin Trade
http://www.globalresearch.ca/index.php?context=viewArticle&code=CHO20050614&arti\
cleId=91

Drugs, the CIA and Faustian Alliances
http://www.globalresearch.ca/index.php?context=viewArticle&code=STA20040628&arti\
cleId=777

Washington Behind Terrorist Assaults In Macedonia
2001-09-10
http://www.globalresearch.ca/index.php?context=viewArticle&code=CHO20010910&arti\
cleId=367

CIA- MI6 Interference in Domestic Politics in the
Balkans
http://www.globalresearch.ca/index.php?context=viewArticle&code=BOZ20050322&arti\
cleId=462

Disclaimer: The views expressed in this article are
the sole responsibility of the author and do not
necessarily reflect those of the Centre for Research
on Globalization.

To become a Member of Global Research

The Centre for Research on Globalization (CRG) at
www.globalresearch.ca grants permission to cross-post
original Global Research articles in their entirety,
or any portions thereof, on community internet sites,
as long as the text & title are not modified. The
source must be acknowledged and an active URL
hyperlink address to the original CRG article must be
indicated. The author's copyright note must be
displayed. For publication of Global Research articles
in print or other forms including commercial internet
sites, contact: crgeditor@...

www.globalresearch.ca contains copyrighted material
the use of which has not always been specifically
authorized by the copyright owner. We are making such
material available to our readers under the provisions
of "fair use" in an effort to advance a better
understanding of political, economic and social
issues. The material on this site is distributed
without profit to those who have expressed a prior
interest in receiving it for research and educational
purposes. If you wish to use copyrighted material for
purposes other than "fair use" you must request
permission from the copyright owner.

To express your opinion on this article, join the
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Forum

For media inquiries: crgeditor@...

© Copyright Mahdi Darius Nazemroaya,
GlobalResearch.ca, 2006



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Headwinds for the US Economy

by Rodrigue Tremblay

October 15, 2006
TheNew AmericanEmpire.com

http://globalresearch.ca/index.php?context=viewArticle&code=TRE20061015&articleI\
d=3495

"In the long run, we are all dead." John M. Keynes
(1883-1946)

Fourth sorrow: "There is bankruptcy, as the United
States pours its economic resources into ever more
grandiose military projects and shortchanges the
education, health, and safety of its
citizens."Chalmers Johnson, (Sorrows of Empire)

"The moral and constitutional obligations of our
representatives in Washington are to protect our
liberty, not coddle the world, precipitating no-win
wars, while bringing bankruptcy and economic turmoil
to our people." Ron Paul, U.S. Representative (R - TX)

In 2004, it was revealed that Saudi Prince Bandar had
promised President George W. Bush that Saudi Arabia
would increase oil production and lower oil prices in
the months before the 2004 presidential election—to
ensure that the U.S. economy was strong on election
day. This was exposed in Washington journalist Bob
Woodward's 2004 book “Plan of Attack.”. In the weeks
leading up to the November 7 (2006) midterm elections,
there is renewed optimism that falling oil and
commodities prices, coupled with a soft housing
market, will persuade the Federal Reserve to lower
interest rates next year, and not raise them further.
The bond market, while also sending messages that
inflation is not an immediate threat, seems to
forecast slower economic growth in the coming years,
and possibly negative growth for one quarter, while
the risk of a recession (two consecutive quarters with
negative growth) is not negligible. The downturn in
the housing market alone would account for a big chunk
of this decline in economic growth, as capital
spending slows down and as banks see their mortgage
business contract.

Because of the aggressive low interest rate policy
that the Fed pursued after 2001 and because of such
financial innovations as interest-only mortgages,
construction and its related industries are one of the
three economic sectors which have created new
employment since 2002, the other two being the health
and military sectors. —However, as a consequence, many
over-leveraged homeowners risk being caught in a
'negative equity' trap in the coming months, when the
value of their mortgaged assets is not sufficient to
cover the amounts borrowed. In the past, such
squeezing has resulted in increased foreclosures and
banking difficulties.

A downturn in construction would have the negative
impact of removing one of the three pillars of
employment growth in the U.S. —Therefore, we can
understand why the Fed is weary of raising interest
rates further. The Fed, in fact, is caught in a
dilemma: it cannot raise interest rates much higher
for fear of creating an unmanageable collapse in the
housing market. However, the U.S. is running large
current account external deficits ($-791,5 billion in
2005). And, because the American economy needs to draw
a large amount of capital from abroad to finance its
deficit spending, American interest rates must remain
competitive.

Indeed, under the Bush administration, a combination
of large tax cuts and large increases in military
outlays to wage costly wars abroad have stimulated the
economy, in a Keynesian way. However, this has also
pushed the U.S. budget deficit to record
current-dollar levels. In five years, from 2002 to
2006, the cumulative federal budget deficit has
exceeded one and a half trillion (1.5 trillion)
dollars. —Since the rest of the U.S. economy was also
in deficit, the only exit was to borrow abroad the
necessary cash. The United States is still borrowing
abroad more than $2 billion a day just to keep this
binge of expenses going. From whom? Mainly from China,
Japan and some oil-rich Middle East countries which
hold tons of U.S. dollars.

As a consequence, foreigners own an increasing share
of the federal public debt, that share presently being
estimated at $2.1 trillion or about 42 percent of all
the public debt held outside the government (about
$5.0 trillion in a total debt of $8.6 trillion). These
foreign holdings represent an amount that is 17
percent of GDP ($12.3 trillion), a share that is
increasing fast toward 20 percent of GDP. Keep in mind
that this percentage was less than 1.5 percent in 1970
and less than 1 percent in 1946.

What does it all mean for the U.S. dollar? As a
reserve currency, there is a built-in demand for the
dollar from central banks and from worldwide
operators, such as oil traders, who deal in dollars
and who are big buyers of U.S. securities.  These
purchases have the double benefit of shoring up the
dollar and of keeping U.S. interest rates low. That is
why the foreign demand for U.S. dollars is not going
to collapse overnight, even if relative American
interest rates were to stay flat for a while. In this
sense, it can be said that the U.S dollar has some
resilience. This is one of the "seigniorage" benefits
that accrue to the United States because its currency
is held abroad as a reserve currency. —In the short
run, measured in months, the U.S. dollar should
continue its rebound against other major currencies,
as long as oil and commodities prices are soft and as
long as U.S. interest rates remain firm. However, in
the longer run, measured in years, the dire external
financial situation of the United States should begin
to weigh more heavily on the dollar.

One currency against which the U.S. dollar is expected
to decline is the Chinese yuan. Since July 2005, the
yuan tracks a basket of currencies that includes the
yen, the euro, the Hong Kong dollar and the South
Korean won. Previously “pegged” to the dollar at the
rate of about eight yuans for one dollar, the yuan has
begun a slow appreciation toward the dollar and stands
at a value of 7.9 yuans for one dollar, or at a price
of about 12.6 US¢.

But, at this rate, the yuan is way undervalued and
should be revalued substantially more to reflect
China's huge external trade surpluses. Indeed, China
has accumulated foreign exchange reserves in excess of
$950 billion, which are invested roughly
three-quarters in U.S. Treasury bills and other
dollar-denominated assets, the rest being invested in
other currencies. However, the Chinese government has
expressed a wish to diversify somewhat its pool of
foreign exchange reserves toward the euro or the yen
and even increase its strategic stocks of oil.

In 2005, China attempted to spend some of its U.S.
dollars to buy an American oil company, Unocal, for
about $18.5 billion. However, the Chinese offer was
unceremoniously rebuffed by the U.S. Congress.

A similar fate was met by Dubai-owned Dubai Ports
World in early 2006, when it bought a British company
(Peninsular and Oriental Steam Navigation Co or P&O
for $6.8 billion) that happened to manage six U.S.
ports. The company was forced to disinvest itself from
its American interests by the U.S. Congress. —The
message sent to foreign lenders was loud and clear: if
you accumulate American dollars, deposit the money in
our banks or buy U.S. government securities (Treasury
bills), but do not attempt to invest them in
income-generating real American industrial assets. How
long will that scam last? Nobody knows. But, it most
likely won't last forever.

The central question is how long will confidence in
the U.S. dollar hold in the face of all these factors.
If you add the widespread unpopularity that the Bush
administration has bestowed upon the United States
around the world, it is more likely than not that the
value of the U.S. dollar, after the current show of
strength, will continue eroding in the coming years. A
lower currency translates into more imported inflation
and makes it difficult to maintain low interest rates.
The stage would then be set for a bout of stagflation,
that is to say creeping higher inflation and slower
economic growth..



Rodrigue Tremblay is professor emeritus of economics
at the University of Montreal and can be reached at
tremblay.rodrigue@.... He is the author of the
book The New American Empire.

Visit his blog site at:
www.thenewamericanempire.com/blog
Author's Website:  www.thenewamericanempire.com



Disclaimer: The views expressed in this article are
the sole responsibility of the author and do not
necessarily reflect those of the Centre for Research
on Globalization.

To become a Member of Global Research

The Centre for Research on Globalization (CRG) at
www.globalresearch.ca grants permission to cross-post
original Global Research articles in their entirety,
or any portions thereof, on community internet sites,
as long as the text & title are not modified. The
source must be acknowledged and an active URL
hyperlink address to the original CRG article must be
indicated. The author's copyright note must be
displayed. For publication of Global Research articles
in print or other forms including commercial internet
sites, contact: crgeditor@...

www.globalresearch.ca contains copyrighted material
the use of which has not always been specifically
authorized by the copyright owner. We are making such
material available to our readers under the provisions
of "fair use" in an effort to advance a better
understanding of political, economic and social
issues. The material on this site is distributed
without profit to those who have expressed a prior
interest in receiving it for research and educational
purposes. If you wish to use copyrighted material for
purposes other than "fair use" you must request
permission from the copyright owner.

To express your opinion on this article, join the
discussion at Global Research's News and Discussion
Forum

For media inquiries: crgeditor@...

© Copyright Rodrigue Tremblay, TheNew
AmericanEmpire.com, 2006



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Death & Resurrection of the US [Federal Reserve]
Dollar

A Review Article

by Adrian Salbuchi

October 15, 2006
GlobalResearch.ca

http://globalresearch.ca/index.php?context=viewArticle&code=SAL20061015&articleI\
d=3490

Analysts the world over are starting to recognize the
early warning signs of a gathering storm regarding the
strength of the international financial system in
general, and the stability of the United States
Dollar, in particular.

This essay provides an alternative view on this
impending crisis, written from the viewpoint of an
Argentine analyst whose country has undergone
recurrent monetary and financial crises over the past
forty years, albeit on a domestic rather than an
international scale.

Argentina experienced banking system collapses,
inflation, hyperinflation, public debt defaults, stock
market crashes and just about anything else you may
care to imagine in terms of financial and monetary
crises. Chronic inflation was so bad that since 1970
the Argentine currency – the Peso – was revamped four
times and had a total of 13 zeroes knocked off in
order to cope with inflation, the result being that
One Peso which today will just barely buy you a bus
ride in Buenos Aires City, is equivalent to
10.000.000.000.000 pesos from 1970, which at that time
would have allowed you to purchase the entire country
and left some change in your pocket.

In this country, we therefore have a lot of practical
first-hand experience on these matters and we believe
that we have much added value to contribute if we
apply our practical knowledge and experience to what
seems to be a cross-roads situation afflicting the
global financial and monetary systems.

Today’s financial turmoil rings a lot of familiar
bells to us and the sickly US Dollar is certainly
looking a whole lot like the old Argentine Pesos and
“Australes” of yore. Perhaps too, some lessons can
still be learned and the damage from these enormous
risks can be somewhat mitigated.

Adrian Salbuchi, June 2005[1]

Getting the Job Done

Last January, US President George W. Bush began his
second term in office by declaring foreign policy
objectives with clear imperial overtones that seem to
promise increasing violence and disruption on a
worldwide scale. Aside from the on-going illegal
military occupations of Iraq and Afghanistan, we can
most certainly expect other major crises and
convulsions of a military, political, economic and
financial character. One of these has specifically to
do with the use and abuse of the US Dollar as an
instrument of Imperial World Power by the Bush
Administration.

In today’s “globalized” and “interdependent” world,
hi-tech applied to geopolitics, economy and finance
have transformed all of us into potential victims of a
vast number of virtual tsunamis which do not involve
oceanic waves but rather waves of technology-driven
social catastrophes, financial collapse and artificial
crises resulting in civil wars, external invasions,
genocides and collective disruption on a scale never
seen before. And even though these may be virtual
tsunami, the harm and suffering they cause are very
real.

The world is on the verge of experiencing the
controlled destabilization and collapse of the US
Dollar, which will be replaced by a “New Dollar”
backed by Official “Good Gold.” The primary driving
forces behind this global process are the Bush
Administration allied to major private
financial-industrial interests in the United States
and elsewhere, focused on private Overworld
geopolitical planning emanating from a network of
think tanks, primarily the New York-based Council on
Foreign Relations.

The Controlled Destabilizing and Collapse of the US
Dollar.

“The King is dead! Long Live the King!”  Such has been
since Medieval times, the cry announcing the demise of
an English Monarch and the immediate enthroning of the
chosen Royal Successor. If the US Dollar is the “king
of world currencies” and governs today’s usury-based
international financial system, it is no doubt an old,
decrepit, tired and sickly sovereign. Since the Empire
will never allow his throne to remain empty and
subject to unpredictable forces, we can be sure that
old and sickly King Dollar already has an appointed
blue-blooded royal successor, with rosy cheeks, golden
locks and solid health.

In a short while, the world shall hear loud and clear
an announcement declaring that “The Dollar is dead!
Long live the New Dollar!” Then, the Throne of Usury
in the temple of the god in whom the multitudes seem
to trust, shall usher in a new sovereign who will
enforce that centuries old creed, “business as
usual...”.

In recent years, the United States has driven and
presently maintains a gigantic and massive printing of
Dollar bank notes. No one seems to know for sure just
how excessive such currency printing really is, but
estimates put it somewhere between four to eight times
the monetary circulation that tallies with the size of
the US Economy (with a 2004 Gross Domestic Product of
almost u$s 13.000 billion).

The reader may ask how come we do not know what the
amount of Dollars in circulation really is? Well, this
is highly confidential information almost impossible
to discover mainly because, contrary to what most
people believe, the US Federal Reserve Bank (Fed) is a
private entity, even though the US Government may
exert some influence over it.2 --i.e., the public
institutions of Government cannot require the Fed to
render this information, especially when you consider
that the Chairman of the Federal Reserve Board, Alan
Greenspan need only inform Congress on a quarterly
basis what his monetary policy shall look like. We
would emphasize that he need only inform what his
policies will be, not seek instructions or consensus
or agreement from Congress or the Executive branch.

If we add to this the gigantic aggregates of
Dollar-denominated banking instruments and stocks &
shares which are spread throughout all world markets,
then this amount becomes almost incalculable. However,
it is quite clear that the sum total of Dollar bills,
Treasury bonds and bills, financial instruments of all
types, stocks and shares, and all kinds of public and
private financial instruments must equal a sum several
times more than the total sum of physical assets and
services available in the entire planet.3

In 2004, the US Budget Deficit was more than u$s
450.billion, while the Current Account Deficit
(foreign trade) was of around u$s 670.billion (i.e.,
more than twice and thrice, respectively, the size of
Argentina’s foreign public debt). Additionally, the
Bush Administration announced that both Deficits will
increase in 2005 and there are no indications that
this situation will improve in 2006, 2007 or 2008.
Quite the contrary, in November 2004 president Bush
asked Congress for authorization to increase the limit
of the US Public Debt from u$s 7.600.billion to almost
u$s 8.300.billion, which will be achieved by issuing
US Treasury Bills and Bonds, and printing more and
more Dollar bills by the US Mint.

The invasion and occupation in Iraq is estimated to
cost more than u$s 120.billion annually, to which must
be added the occupation cost of Afghanistan, the
direct financing by the US of the State of Israel’s
war machine, and the costs of preparing other future
war theatres, notably in Iran, Syria, North Korea,
Venezuela and other “axis of evil” countries. And we
better not even start thinking about the US’s
“greatest enemy” for the long term, i.e., China… Only
a few months back, president Bush got Congress to
support him with a further u$s 80.billion to cover
military costs in Afghanistan and Iraq and all
indications are that these military contingencies will
necessarily increase in both of these war theatres.

The sheer enormity of these figures can help us
understand why the US Federal Budget for 2004 of u$s
2.400.billion, suffered a shortfall of more than u$s
400 billion. There is, however, no indication
whatsoever that this shortfall will force the United
States to limit its war efforts in Iraq or
Afghanistan, or curb domestic social policies, or
freeze other war expenditures. Quite the contrary,
these are increasing them more and more. So, the
obvious question then is:

Where does the United States get the financial
resources it lacks to pay for all of this?

The answer to this question is quite simple: it raises
this money by printing US Dollar Notes and US Treasury
Bills and Bonds (5 and 30 year maturities,
respectively), taking advantage of the high “export”
factor the Dollar enjoys, which enables the US
Government to issue money and immediately push it out
of its domestic economy and primary industrialized
country financial circuits, thus avoiding what would
otherwise be severe inflation of the Dollar. If we
look at the gigantic figures involved, we can quite
properly see this whole phenomenon as covert
(hyper)inflation which remains hidden from public
view….for now.

Fed Chairman Alan Greenspan recently warned that the
increase in the Budget Deficit could lead to an
economic crisis. He also pointed out that the Deficit
is unsustainable and warned that “this could lead to a
stagnant economy or worse”. Only in February 2005 the
Deficit reached a record monthly figure of u$s 113.940
millions.4

The US Dollar: that un-backed currency…

“Who needs Dollars?” – Juan Perón

In 1971, President Richard Nixon withdrew the legal
foundations of the US Dollar’s convertibility into
metallic gold or silver, or anything else for that
matter. Since then, the Dollar is no longer
convertible into anything having any intrinsic value
whatsoever. Today, the cornerstone of the Dollar is US
economic and industrial strength which, in turn, is
based on the military might the US, consolidated after
the Second World War which left Europe and Japan
conveniently devastated. Additionally, military
victory brought with it the looting of hundreds of
thousands of German, Japanese and other national
patents and inventions, and highly sensitive
technological and military secrets were stolen
outright. All of this enabled the US to consolidate
its superpower status and global prestige5

Thanks to the fact that the Dollar has virtually
become the world’s key currency – albeit, imposed by
the combined actions of the Federal Reserve Bank
(Fed), the International Monetary Fund (IMF), the
World Bank (WB), the Bank of International Settlements
(BIS) and, in our own region, the Inter-American
Development Bank (IDB) – the United States has been
able to finance its Budget Deficits by exporting US
Dollars to the entire planet through various complex
mechanisms and channels that guarantee that those
Dollars and Dollar-denominated financial instruments
will flow in an orderly and balanced manner, all in
favour of US National Interests and that of its key
allies. This process could be kept more or less in
place until 2001 when the European Union launched its
own currency bringing the Euro on the scene. The Euro
is a far more solid and stable currency than the US
Dollar and represents a major challenge to the Dollar
which could very well unseat it as the preferred
global currency.

Over the past two years, the US Treasury Dept. and the
IMF have succeeded in suggesting/imposing on around
thirty national central banks in different countries –
Argentina’s Central Bank included – that they must
“soak up” US dollars from their domestic economies and
hoard these in their vaults as “reserves” for their
own local currencies and for foreign debt payment. In
other words, these countries invest in US Dollars
which implicitly means that they are financing for
free a chunk of (uncontrolled) US public spending
which is done by printing Dollar bills. This process
is headed by Japan which today has Dollar denominated
instruments in its central bank reserves to the tune
of over u$s 670.000.000.000; strangely, followed by
the “Marxist” Peoples Republic of China with u$s 470
billion, then by South Korea with u$s 220 billion plus
a long list of other countries which suddenly awoke to
the “need” to “soak up” US Dollars and hoard them
silently in their central banks whilst they issue, as
a counterpart, their own local currencies to fuel
their respective domestic economies (something, by the
way, which China has been doing fiercely, maintaining
an undervalued Yuan much to the displeasure of the
Bush Administration).

In the case of Argentina, this phenomenon helps shed
some light as to the true origins of our false
“economic recovery” which is basically due to the fact
that the Argentine Central Bank has issued important
amounts of local currency based on its Dollar
Reserves, which has suitably fueled economic growth.
This will work nicely until such time as Argentine
monetary authorities receive the suggestion /
counter-order from the US Federal Reserve Bank or the
Treasury Dept. to stop doing this. At present the
Central Bank has reserves for over u$s 22.billion and
rising fast, which is Argentine President Nestor
Kirchner’s pride, because with those dollars he can
pay our country’s basically fraudulent public debt
to…..the IMF, WB, IDB and other international
creditors, thus helping to keep the global usury ball
rolling!

You want money? OK…. just print all you need!

Let me give a simple example of how the system
actually works. The Federal Reserve Bank issues a 100
Dollar bill which is given to the Bush Administration
so that the Dept. of Defense can give it to the US
Army who buy some ammunition for their soldiers’
rifles, who can then use it to kill iraquis in their
invaded land. Now, the last thing that the Bush
Administration wants is for that 100 Dollar bill to
flow back into the US financial system as that would
be potentially inflationary. Because the process we
described is repeated over and over again, millions
upon millions of times and allows the Bush
Administration to purchase not just ammunition, but,
more importantly, barrels of oil, tanks, F16
fighter-bombers, Apache helicopters, guided missiles
of all sorts, sizes and shapes, napalm, aircraft
carriers, cluster bombs and all those other much
needed instruments to promote “freedom and democracy”
throughout the world, the secret is to ensure that
these zillions of Dollar bills do not flow back into
the US economy uncontrollably. Otherwise, that would
have an inflationary – even a hyper-inflationary –
effect.

What the US Government needs and gets is that, once
each 100 Dollar bill the US Mint prints has been used
to buy war material (or whatever), that it then
gradually flows out of US domestic and primary
financial circuits and that it stays out for as long
as possible. I.e., that those Dollar bills eventually
get “soaked up” by somebody somewhere far away: in
Japan, Malaysia, China, India, Brunei, Saudi Arabia,
Brazil, Indonesia or Argentina. Anything, as long as
they make sure that those Dollars do not come back (at
least not anytime soon), into US financial circuits
and those of the primary supranational banking system.

From this point-of-view, we can well understand the
huge pressure exerted by the United States on foreign
central banks – especially those of subordinated
countries – so that they permanently “soak up” US
Dollars, which is equivalent to saying that they take
them out of circulation. That gives the US some
urgently needed respite and breathing space. Why does
the US need to do this, you may ask? Simple: so that
they can continue issuing as many 100 Dollar bills
they need, in order to give them to the Dept of
Defense who give it to the Army to buy some
ammunition….well, you know the story…. And the cycle
goes on and on and on….

By now you might be thinking that if you can get
others to pay for your expenses and costs like this,
then anybody can play at being a superpower. Well,
that’s precisely how the system works. If George W.
Bush needs money to finance his imperial appetite
(which has grown voraciously in recent years,
generating pathological and potentially catastrophic
Deficits), then, no problem: he need only ask Alan
Greenspan to issue all the Dollar bills he can spend;
in this way he gets literally “all the money in the
world”.

The key factor is to make sure that the spiraling
wheel keeps turning and churning and turning and
churning; printing, circulating, and then “soaking up”
those dollars through the channels and at the speed
which fit the Imperial need of ensuring they are
dispatched far, far away. The real danger is if the
wheel were to suddenly stop turning and churning
because then all this vast and complex global
financial engineering would simply collapse under a
huge load of worthless paper with the ensuing dire
consequences for our 21st Century Wizards of Oz.

For the United States to maintain global superpower
status, there must always be somebody somewhere as far
away as possible, on whom to dump vast quantities of
unbacked US Dollars, continually and uncontrollably
printed by the Fed so that once the US War machine has
consumed that money, it can be silently and discretely
removed from further circulation (i.e., “soaked up”
and hoarded in foreign central banks, private savings,
etc.).  They need to make sure that these Dollars
“disappear” after they have been consumed; at least
for a while. And it really doesn’t matter whether they
“disappear” into central bank vaults abroad or into
individual investors’ safes and mattresses in Mexico,
Indonesia, Argentina, Nigeria or Brazil. That’s not
really the issue.

In short, every time one of us “foreigners” (or
“Aliens” as the US government sweetly calls us), buys
Dollars as savings, or our national central bank
“soaks them up” from domestic markets in order to
maintain whatever rate of exchange the IMF requires in
order to maintain a “sustainable economy” (Anne
Kruger, dixit) - i.e., so as to ensure that we can pay
back foreign debt loans - what we are really doing is
helping finance the US Budget Deficit. In the worst
case scenario, we are helping to pay for the cost of
killing iraquis and afghanis, preparing invasions
against Iran, Syria, North Korea or Venezuela, or
torturing POW’s in Guantanamo and Abu Ghraib.

This will enable us to better understand why in
countries like Argentina, successive caretaker
governments presided by the likes of former presidents
Carlos Menem, Fernando de la Rúa, Eduardo Duhalde and
Néstor Kirchner always bow down to help the US in this
way, through successive Argentine Central Bank
governors, notably in recent years, Messrs. Mario
Blejer, Alfonso Prat-Gay and, today, Hernán Martin
Péres Redrado6. Over the past three years, these
gentlemen have all implemented policies of “soaking
up” US dollars from the market in order to maintain
the rate of exchange of the Peso to the Dollar.

As a counterpart, these market-economy puppet central
bankers have had no problem in issuing Argentine Pesos
to buy Dollars in the local market and the IMF and US
Treasury Dept suitably applaud them for doing so.
However, if the Central Bank were to issue Argentine
Pesos to finance the building of our much needed
national social and strategic infrastructure, then all
“experts” and “media analysts” would go haywire to the
scream of “Inflation!” Why is it that these “experts”
insist that a 600 km four-lane highway is not proper
“collateral” for issuing local currency, whilst neat
piles of Dollars sleeping in the Central Bank is. Ah,
the mysteries of global finance…

May we once again stress that the real backing which
the US Dollar has nowadays is US economic strength, US
prestige and, above all, the immensely powerful and
apparently invincible armada of US military might
which, since 11th September 2001 is permanently
perched ready to attack, bomb and invade anybody
anywhere for any reason. Not bad as a “convertibility”
scheme: today, the US Dollar is convertible into
bullets, bombs and tanks, not to mention covert CIA
actions which could even include highly complex and
costly domestic terrorist attacks like 911 which
served as a casus belli for pro-israeli neocons in the
Bush Administration to declare war on the entire
world. Maybe someday we may know what really happened
on that clear morning of September 11th, though that
wont happen anytime soon…

In short and as a crude example of what we are saying,
every time the Argentine people need to buy a barrel
of oil, we must, as a community, work and toil to earn
u$s 57 to buy it. However, every time the US
government needs to buy a barrel of oil, it just has
to ask the Fed to print u$s 57. Clearly, there is a
great difference…

Again: like that, it’s easy be a global superpower.

Mafia + Usury = “Market Economy”

But, as the old adagio goes, “all good things must
come to an end”.  And it would seem that with George
W. Bush the era of printing all the money you want is
fast coming to an end. In Argentina, we know only too
well what happens when you print “all the money in the
world” to pay for uncontrolled government spending.
Former president Raúl Alfonsín did just that and
collapsed the economy into 5000% hyperinflation in
1989 with the ensuing hunger, street riots, violence,
unemployment and suffering among the population.

Long before George W. made it to the White House, the
perverse process had begun whereby Finance and Money
which should always be subordinated to the Real
Economy of Work and Production went out of control and
– like a virtual tsunami – grew and grew into the
monster which is today. Swamping and drowning out the
Real Economy, destroying the forces of Labour,
deconstructing Production and generating mass poverty
and unemployment on a worldwide scale.

Indications of the geometrical swelling of this
tsunami are everywhere to be seen, even though local
and international so-called “analysts”, academics and
the specialized media do not seem to notice it. An
indicator of what we say can be found in the Dow Jones
Industrial Average (DJIA) Index. Right after the
collapse of the former Soviet Union, when George “It’s
the economy, stupid!” Bush Sr. lost the 1992 elections
to the young and upcoming Bill Clinton7, the Dow sat
placidly at 3.700 points. Eight years later, however,
when Clinton ended his second term in office in 2000
the Dow was at 10.900 points and had a short time
earlier peaked at 11.700 points; that’s 300% growth
over eight years!

The obvious question is: did the US economy also grow
300% between 1992 and 2000 as the DJIA did? The answer
is clearly, no. Economic growth in the nineties in the
US was very good but only averaged 3 to 4 percent per
annum, so that during the entire Clinton era aggregate
economic growth was not more than 40%.

Now, if the Real Economy only grew by 40% in eight
years, how is it that the “Virtual Economy” of Finance
and Speculation grew by 300%? Something is clearly
rotten and not exactly in the State of Denmark. The
key to all of this can be found in factors like Usury,
printing of Fiat money, and rampant speculation which
are embedded into the very fabric out of which today’s
global financial system is made of. Money is created
out of thin air by the Federal Reserve Bank and by the
private mega-banking system by the billions of
Dollars.

This all clearly carries with it a deep moral and
ethical problem as the real force behind the
“miraculous growth” of the US economy is “unlimited
greed” (Greenspan, dixit), soulless egotism and
homicidal profit-grabbing. In recent years, the stench
could no longer be contained nor checked. The criminal
frauds and inhumanities perpetrated by “world-class”
Fortune 500 Corporations and Banks hit the headlines
daily: Enron, WorldCom, Tyco, Nike, Marsh & McLennan,
American International Group, Wal-Mart, K-Mart, Arthur
Andersen, Halliburton (Dick Cheney), Harken Energy
(George W Bush), Pacific Gas & Electricity, Adelphi,
Qwest Communications, Global Crossing, amongst so many
others. Huge fines for money-laundering and corporate
misbehaviour were paid by top banks as CitiGroup
(money-launderers’ favourite bank), JPMorganChase,
Franklin National Bank of NY, Credit Suisse First
Boston, Morgan Stanley, Merrill Lynch, Goldman Sachs,
BCCI Bank of Commerce & Credit International (closed
down – linked to CIA), Brown Brothers Harriman (Bush),
HSBC (originally born out of the British imperial
Opium Wars fought against China in the mid-nineteenth
century which gives this bank great drug
money-laundering expertise)…

The list goes on and on, and this spirit of Usury and
Immorality spans the entire world: A-Hold in Holland,
Parmalat in Italy, The Maxwell Group in the UK, Yukos
in Russia, Vivendi in France… Their top corporate
bosses are investigated and even jailed: Kenneth Lay
(Enron), Bernhard Ebbers (WorldCom), Jeffrey Greenberg
(Marsh & McLennan), Maurice Greenberg (AIG)…

Again, we Argentines know what this is all about!!
We’ve had our share of corporate crooks in such
scandals as Yabrán, Beraja/Banco Mayo, Yoma, IBM,
CitiBank, Moneta, ENTEL, YPF, Southern Winds, not to
mention one billion dollars plus in Public Funds
belonging to Santa Cruz Province in southern Argentina
which mysteriously “disappeared” since 1993 when
president Nestor Kirchner was governor of that
province…

The problem is that this whole process seems to have
been taken several steps too far, so now the whole
edifice is on the brink of collapse. The international
financial system resembles a planetary Las Vegas
managed by the Shylocks and Al Capones of this age,
who sit in corporate boardrooms in Wall Street, the
City of London, Paris and Zurich. They are starting to
realize, however, that their luck is definitely about
to run out. For decades they have danced themselves to
a dizzy frenzy around the Golden Calf, stuffing their
pockets whilst generating hunger, war, social turmoil,
sickness and suffering for untold millions around the
world. However, the “Game Over” sign is about to go
on.

When Fed governor Alan Greenspan was asked in 1996 how
he explained the fact that the DJIA had reached the
unheard of level of 11.700 points, whilst the NASDAQ
index had peaked at 6.000 points (today it has slumped
to 1.600 points), his most eloquent reply was that
this whole complex phenomenon was caused by
“irrational exuberance”...  You got it?

Just do it…

The truth of the matter is that the United States will
stay in Iraq and Afghanistan all the time it wants,
and will continue financing Israel limitlessly so that
it can continue repressing and persecuting the
Palestinian people in their own land, and new attacks
will be made against today’s expanded “Axis of Evil”
which - Condoleeza Rice, dixit8 - now includes North
Korea, Syria, Myanmar, Zimbabwe, Venezuela….

President Bush recently declared that he will continue
promoting “freedom and democracy” throughout the
world, thus honoring a shrewd recommendation contained
in an old book which is a true blueprint for world
domination, which recommends that Imperial Sovereigns
impose their will by exerting “Force and Hypocrisy”
Brute force we have plenty of just about everywhere.
Hypocrisy is constantly voiced by our presidents,
prime ministers, ministers, secretaries, government
spokesmen, media and corporate leaders. This gigantic
planetary machine needs oil to operate properly; lot’s
of oil. And not just the Iraqui, Venezuelan and Saudi
hydrocarbon variety, but also virtual “oil” which
today is the US Dollar which allows this infernal
machine to run, grow and spin out of control.

But, alas! The US cannot continue printing Dollar
bills indefinitely. Today’s global financial system is
bursting at the seams, and growing concern is marked
on the brow and voice of the Alan Greenspans of this
world. How much longer until there is a final crash?
One year? Two years? Nobody knows for sure. We do,
however, know that the US Dollar can collapse
virtually at any moment if an unforeseen /
unmanageable crisis were to arise.

This was one of the reasons why the plan to oust
Saddam Hussein had to be speeded up in 2003. Since
2001, Saddam had been selling oil in Euros to the
European Union under the Oil for Food Program,
implicitly inviting other OPEC (Organization of Oil
Exporting Countries) to do the same. Had this led to
the world oil market quickly switching over from
trading in US Dollars to trading in Euros as its base
currency, this would have had the effect of generating
an enormous, sudden and uncontrolled influx of US
Dollars from the whole world back into the United
States economy with immediate inflationary effects
which would have probably evolved into a
hyperinflationary catastrophe for the US. The invasion
of Iraq in March 2003 quickly dealt with that and
stopped Saddam dead in his tracks, at the same time
sending a clear message to all other oil producing
countries who may have been playing with the idea of
abandoning the “Dollar Area” in their oil tradings for
the Euro. “If you do that, you’ll end up like Iraq…”,
was the message, and nobody else did do that.

But the US also naively thought that invading Iraq
would be like a joyride, that the proud Iraqui people
would welcome the US invaders as liberators, and that
a quickly subdued Iraq would speed up massive cheap
oil flows from their oil fields to US gas stations at
a cost of not more than u$s 15 per barrel, which would
have certainly eased the pressure on the US economy.
But things did not quite turn out that way and the
“cheap oil” objective was never reached. Today, Iraq
is looking more and more like Vietnam whilst world oil
prices have reached u$s 57.60 a barrel and rising.
This forced the Bush Administration to take such
emergency actions as, for example, opening up vast
virgin natural reserves in Alaska to the contaminating
oil industry. The US economy’s voracious addiction to
oil is very much out of control.

Today, excessive printing of US dollars has passed the
point of no return. Monetary collapse can no longer be
avoided. At best, it needs to be managed. Naturally,
the US elite power Establishment and its key allies in
the United Kingdom and the State of Israel are not
stupid and they will not allow a hyperinflationary
crisis to collapse their economies. There are various,
creative and innovative ways of re-directing and
detouring monetary catastrophes so that they hit
somebody else somewhere else, and there are ways of
ensuring that damage control at home and at our
friends’ homes is kept at acceptable levels. It is
precisely this “Plan B” which is presently on the
drawing boards in the key think tanks headed by the
New York-based Council on Foreign Relations, the
London-based Royal Institute of International Affairs,
and the Trilateral Commission.

It even appears as though “Plan B” consists of letting
the present mass of US Dollars continue growing for a
bit longer, all the way up to the brink of collapse,
taking advantage as much as possible of the fact that
this serves to ensure that the rest of the world
finances the US Budget and Trading Deficits. The first
part of Plan B, then, consists of making sure that the
party lasts as long as possible, fueling all on-going
military adventures.

We would even say that just a George W. Bush’s main
purpose during his first term was to serve as a
suitable figurehead for the “War on Terrorism”, his
primary purpose during his second term in office will
be to lead a highly professional team which is taking
advantage, promoting and managing the very complex
monetary and financial engineering necessary for the
demise of the Dollar, then ensuring its orderly
replacement by a New Gold-backed Dollar.

Let us consider a possible scenario of this sort.

The “New Dollar” is coming!

“Plan B” has a second part. Sometime during the next
12 to 24 months, our TV screens will tune in to CNN,
CBS, BBC, CNBC, Fox and other world media as they
announce urgent “Breaking News” involving important
financial developments amid growing panic and dark
rumours. Such news will come on a Friday afternoon,
after 4 or 5 PM when the New York Stock Exchange and
banks in New York City have closed. We will learn that
Alan Greenspan – probably accompanied by Treasury
Secretary John Show – have a very important
announcement to make to the people of the United
States and the world. His speech will be short, terse
and filled with carefully selected banking jargon.

Greenspan will state something along the lines that
“in an effort to uphold and reinforce the US economy
and that of its key allies; to protect consumer
interests and those of major corporations; to preserve
the international financial system and to thwart a
potential financial meltdown; to balance the Budget
and avoid a stock market collapse, the United States
will effective immediately implement a far-reaching
Economic Reform and Financial overhaul, declaring an
extended banking and exchange holiday”. In Argentina,
we have lot’s of experience on this!.

He will then inform that President George W. Bush,
with the full support of Congress, will sign a series
of emergency executive orders whereby the US Dollar
will be placed on a Gold Standard. Correspondingly,
this will necessitate introducing a New Dollar
convertible into metallic gold and this new currency
shall replace all the “old dollars” in circulation
which, as we have seen, are only backed by worthless
paper, i.e., Fiat money. What’s going to happen with
those “old” dollars? They will have to exchanged for
New Dollars, of course.

All persons holding US Dollar Notes and Treasury
instruments who are citizens of the US or are
domiciled in the US, together with US corporations,
and persons, corporations and organizations domiciled
in countries allied to the US (most notably, the
United Kingdom and State of Israel) shall have their
“old” Dollars exchanged for New Dollars on a 1-to-1
parity.

In the rest of the world – i.e., Asia-Pacific, Central
and South America, Africa, Russia, the Muslim World –
changing “old” Dollars for New ones will depend on the
local “exchange markets” which will fix the “proper”
rate of exchange between the extremely plentiful “old”
Dollars and the extremely scarce New Dollars. And what
will that rate of exchange be? One-to-one? I doubt it,
because supply and demand will set in almost as fast
as panic. Two “old” Dollars for One New Dollar, then?
Or, maybe, 3-to-1? Or 5-to-1? Or 10-to-1? Who knows?
“Let the laws of the free-market economy – supply and
demand – do their bidding”. And whatever happens
elsewhere will certainly not be the concern of the US.

We will then see millions upon millions of desperate
and panicky people, companies, banks, operators,
players of all sorts throughout the planet running
amok all at the same time trying to unload their “old”
Dollars and exchange them for New Dollars. Again, in
Argentina we have a huge amount of experience on this…

Alan Greenspan is definitely the man to micromanage
this whole process, with the political support and
backing of president George W, Bush, because he has
always been a Gold Standard buff, since a long, long
time ago. One of his first key academic articles
dating back to 1967 proposed just that: placing the US
Dollar on a Gold Standard.

And then along came the Euro…

Another key factor which helped trigger and speed up
this impending crisis was the launching in 2001 of the
greatest challenge to the Dollar so far: the Euro. As
the monetary unit of the European Union (EU), the Euro
carries the economic might of an entire continent with
a combined GDP which is almost the same as that of the
United States. Powerful stuff, indeed.

If we project future growth of both economies over the
next twenty years, we find that the EU economy has
greater potential than the US economy simply because
the countries surrounding the UE are anxiously asking
to be allowed into this vast and sophisticated
economic and monetary system which in the long run
will probably end up including even Russia itself.
Each of the countries still outside the UE – Ukraine,
Belorussia, Lithuania, Estonia, Latvia, Hungary and
others – have great added value to contribute to the
UE economy, both in terms of the economy, as well as
geopolitically.

By comparison, the US can only expand its regional
economy into Central and South America, where the
countries in that region resist aggressive US
penetration and, for more than a century, resent
arbitrary US military interventions, invasions and
repeated humiliations.

Quite a difference! Whilst the countries still to join
the UE wish to do so voluntarily and anxiously await
their turn, the US has no choice but to impose AFTA
(American Free Trade Agreement) on unwilling
neighbours that will permanently resist the regional
hegemon. More importantly in the short term, there are
a series of symmetries and asymmetries between the
present Dollar and the Euro worth pointing out:

Comparison between the US Dollar and the Euro

Structural Strength (Technical Factor)

Low: The Dollar is over-issued by a factor of 4 to 8
times (there being no trustworthy information
available), because over the past years successive US
administrations have abused the Dollar’s high prestige
and printing has gone out of control; Growing evidence
of this structural weakness generates inflationary -
even hyper-inflationary - risks which can be triggered
by some internal or external political or financial
crisis

High: The Euro has only been just launched (2001). The
European Central Bank in Frankfurt Germany issues
clear public information showing that the amount of
currency placed in circulation since 2001 is
consistent with the size and productive capacity of
the UE economy. No doubt, the Euro runs no
inflationary risks at the present moment.

Cultural and Psychological Strength

Very High: Intelligently, the US has kept the same
format (i.e., the same national leaders, monuments and
mottos) on its Dollar bill for more than a century.
This gives the Dollar a feeling of unmovable
stability: the effigies of Washington, Lincoln,
Hamilton, Jackson, Grant and Franklin appear on 1, 5,
10, 20, 50 and 100 Dollar bills together with symbols
of US power: the White House, the Treasury Department,
Congress, the Lincoln Memorial, the Great Seal of the
US (with its esoteric, Masonic and millenarian
symbolism including the pyramid topped by the
all-seeing Eye of the Great Architect of the Universe
ushering the Illuminati New World Order announced
since 1776).
Each Dollar bill bears the credo “In God we Trust”,
although people increasingly wonder what “God” the US
government is really talking about…

Low (still): The design chosen by European monetary
authorities for the Euro is rather unfortunate. No
doubt, finding consensus amongst fifteen countries was
not an easy task. The Euro is bland, insipid and
uninspiring, bears the sole word “Euro” and shows
gates and bridges which rather than depicting real
monuments merely reflect abstract architectural
styles. Clearly, the Euro is an oxymoron designed by a
committee, which brings to mind what our former
president Juan Perón once said to the effect that “a
camel is a horse designed by a committee…”.  And a
camel is what the Europeans got… The Euro contains no
compelling symbols, which is something almost
incredible coming from a continent having some of the
most beautiful monuments in the world which could
easily serve as very powerful symbols: the Roman
Coleseum, the splendid cathedrals of Rheims or
Cologne, the Parthenon of Athens, the Alcazar in
Toledo…

In short, the Dollar is a structurally weak currency
with enormous psychological strength and prestige,
whilst the Euro is a structurally strong currency with
substantial cultural weakness.  Today, the US Dollar
resembles those high-class families of yore which,
having lost all their wealth, nevertheless maintain
their noble appearances and pride. So much so, that
people continue respecting them as if they still were
powerful and rich lords. When reality finally catches
up with the Dollar, its collapse could come quickly
and violently. Meanwhile, the Euro can continue to
mature solidly as long as the monetary, financial and
geopolitical structures of the EU move forward.
Clearly, in monetary affairs time runs against the US
and in favour of the EU.

And then there’s China.  In a few years more, the most
powerful economy in the world will be the Chinese
economy and on top of that they are a nuclear power.
With its two-currency and capitalist-socialist system,
China has succeeded in implementing some of the
fundamental concepts involving the use of Sovereign
Currency – by way of the Yuan – to promote enormous
internal development and growth. No doubt, in the long
run, what really gives the US-UK-Israeli Empire
leadership sleepless nights, is China.

One last comment for this section: in the Table above,
we describe the great cultural strength of the US
Dollar which has hardly been altered over the past
century. Significantly, in recent years – and for
reasons not yet clearly explained – the Federal
Reserve Bank decided to begin slightly altering the
physical appearance of the Dollar. The effigies of
Franklin, Grant, Jackson, Hamilton and Lincoln were
slightly displaced to the left and enlargened,
security factors were introduced and, most notably,
various color experiments changing the traditional
green and black colors were also introduced. It began
some years back with a new series of blue-coloured 20
Dollar bills, then came later red-coloured u$s 50
Dollar bills, thus breaking the traditional “green”
tradition for which the dollar is known the world
over.

Might this be a way to prepare the collective psyche
for the “great change” that will take place when the
New Dollar is finally and suddenly introduced at the
same time that the old dollars are withdrawn from
circulation? It is hardly necessary to remind readers
that general acceptance of any currency is basically a
social convention which thus carries a decisive
psychological factor. All Nation-states know that
acceptance of its currency – inside and outside of the
country – depends on factors which need to be properly
linked and tuned to the collective psyche, and which
have to do with the Trust and Prestige emanating from
the issuing agency. And this Trust and Prestige is not
so much geared on a particular government
(Administrations come and go), but rather on the
strength of the issuing Sovereign Nation-State (which
should permanently consolidate and increase its
Power). Very possibly, the New Dollar shall have a
totally different design than today’s Dollars. It may
even be of different colours and sizes.

Bases for a New Dollar.

These are relatively simple and can be described as
follows:

A Monetary Unit convertible into Gold at an official
and mandatory rate of exchange fixed by the US Federal
Reserve Bank, in coordination with the Bank of England
and key supranational public and private financial
players.

The Gold backing the New Dollar will not be just any
gold. Only special “officially approved New Dollar
Gold Bullion” will be used and accepted, which will be
specially minted and proof. It will no doubt carry an
embedded chip or bar code or some other foolproof and
failsafe anti-counterfeit element, ensuring total
control by the monetary authorities.
“Common” gold – i.e., non-officially approved and
treated gold, will be worth maybe three, five or ten
times less than the Special Approved Gold Bullion.
This “Good Gold” is in all likelihood already being
minted and amassed in the vaults of the Federal
Reserve Bank in New York, the Bank of England in
London and elsewhere.

You may be thinking that this will trigger a gigantic
worldwide financial crisis. No doubt, it will. That
this will place the better part of the international
financial system on its head. Of course it will. That
there will be even more hunger, hardship, poverty,
sickness, wars, epidemics and catastrophes of all
sorts. Certainly… However, those who are “in the know”
beforehand – i.e., the Empire’s most trustworthy
allies and friends (both in terms of countries as well
as financial, economic and industrial groups and even
a Mafia here and there) in the US, the UK and Israel –
will receive all the necessary foreknowledge enabling
them to mitigate the impact of this crisis and make
ready.

In Argentina we remember only too well own domestic
monetary and financial meltdown in December 2001. The
private banks and certain key individuals who were
“well informed” got their money out of the system in a
timely manner and when the crisis came, it was the
populace at large that bore the brunt. The banks and
major corporations came out surprisingly unscathed and
today they are for the most part back to “business as
usual”, whilst more than 50% of the population sank
below poverty levels.

China, Japan, India with their vast reserves will feel
the blow. They will loose vast amounts of money. Japan
will see its economic recovery delayed for years to
come. China will see it huge growth slowed down, the
aggregated effect of the global financial collapse
will greatly harm exports from India, Taiwan, South
Korea, Brazil…

China herself seems to be making ready for this, as
they are already transforming great chunks of their
Dollar-denominated reserves of more than u$s
470.000.000.000 – in “old” Dollars, of course– into
physical assets (i.e., investments in South East Asia
and in South America, and they are shedding dollars
and buying Euros). Japan and South Korea cannot budge
as swiftly and easily because they are military
underdogs and politically subservient to the United
States. To a great extent, their lots have been cast
unless…. Unless, as Samuel Huntington insinuated in
his 1997 classic “The Clash of Civilizations”, Japan
and China were to forge an alliance similar to the one
which Germany and France were able to reach over half
a century ago.

Imagine Japanese technology allied to the Chinese
powerhouse and its military clout… Then South Korea
might even be able to move forward towards
reunification with the North under the aegis of China
which wields the necessary influence over the North
Koreans and can soften up their outmoded authoritarian
style. This latter scenario most definitely keeps the
US-UK-Israeli imperial leaders wide awake at night…

The “controlled collapse of the international
financial and monetary system” is the next “Great
Crisis” which the Real Power Structures of the New
World Order have entrusted to George W. Bush and his
team, knowing that they have the necessary
psychological profile to promote this virtual fraud
and robbery on an unprecedented planetary scale. The
whole world has witnessed speechlessly at the
incredible audacity with which George W. Bush and his
team look into the TV cameras and blatantly lie
without a blink in their eyes.

In this brief essay, we have described a possible
future scenario, resulting from a series of technical
factors (the extreme over-printing of US Dollar bank
notes and Treasury bills and bonds), economic
interests (mainly the Empire’s wish and need to have
free access to major oil fields around the world), and
long term US-UK-Israeli geopolitical objectives (in
the Middle East, in the short/medium terms; in South
America, in the medium term; and in the Far East, in
the long term). If we add to this the Empire’s hunger
for conquest, triggered and “justified” by the strange
events of September 11, 2001 then we feel that the
scenario described herein is not only possible but
also probable.

Implications for countries like Argentina are
enormous, for this will entail great threats of all
sorts, but also unexpected opportunities as well. For
example, why does the present Argentine government
make such unsustainable and unrealistic efforts to
“renegotiate” our huge Dollar-denominated foreign
debt, when a collapse of the “old” Dollar could very
well carry with it the virtual liquidation or, at
least, vast reduction of that public debt?

Clearly, there is much food for thought in all of
this, and many lessons to be learned from the past.
Whatever may happen, if you have a large part of your
assets in US Dollars – whether in bank notes, Treasury
Bills, stocks and shares, investment funds, banking
accounts or whatever - perhaps you would be wise to
reconsider. In the coming collapse of the
international monetary system, the safest thing to do
will be to invest in the Real Economy and not in the
unreal financial economy. In other words, consider
buying tangible goods: real estate, companies,
machinery, land, equipment, precious metals and
stones, and the like. No matter how bad an economic
crisis may be, tangible goods will not disappear
whilst the balance on your bank account appearing on
an ATM screen can quickly vanish into nowhere. Oh, and
don’t forget: paper money is just that: paper.

Think about it..

Notes

1 Adrian Salbuchi is an Argentine writer, researcher
and journalist. Member of CREAR, Consejo Regional
Estratégico Argentino, the Project for a Second
Argentine Republic and the Centro de Estudios
Económicos Mariano Fragueiro, Buenos Aires. Author of
various books on geopolitics and economics, amongst
them, “El Cerebro del Mundo: la cara oculta de la
globalización” (Ediciones del Copista, Córdoba,
Argentina, 4th Edition, 2003, 470 pages).

2 More than 95% of the Federal Reserve Bank’s share
capital is owned by the private member banks, which
can, in turn, be traced back to key traditional
finance dynasties, both in Europe and in the US:
Rothschild, Warburg, Schroeder, Mellon, Bleichroeder,
Montefiori, Montagu, Rockefeller, and Harriman,
amongst others. Cfr. The Federal Reserve Bank,
Purposes & Functions, Washington DC.

3 The sum of all international financial operations
(exchange, stocks and shares, investment funds, etc)
is of almost u$s 2.000.000.000.000 daily (yes, daily).
If this is projected annually, we find that the
internacional financial system (i.e, the Virtual
Economy) has a turnover of around u$s
700.000.000.000.000 (seven hundred trillion Dollars),
however, the aggregate sum of the GDP’s of all
countries in the world (i.e., the Real Economy) does
not exceed u$s 45.000.000.000.000, i.e., an amount
fifteen times smaller.  We can thus conclude that
Internacional Finance – the world of speculation,
usury and fiat money – is fifteen times larger than
the Real Economy of Labour and Production. If finance
is to be considered as the “oil” which makes the
Economic “engine” run, then we can see that that
“engine” is overstuffed with a veritable oil glut
which will grind it to a halt.

4 See “Clarín” newspaper, Buenos Aires, 15-Mar-05,
article “Greenspan encendió una luz de alerta por el
déficit de EE.UU”.

5 Regarding the nature of Power, I would refer readers
to my essay “El Poder: ¿de dónde viene?, ¿quién lo
tiene?, ¿adónde va?” (“Power: where does it come from?
Who has it? Whither is it going?” soon to be
translated into English), available in
www.eltraductorradial.com.ar

6 Before being named president of the Argentine
Central Bank under the De la Rúa and Duhalde
Administrations, Mario Blejer was for 18 years
director of the Institute for Monetary Affaire at the
IMF in Washington DC and today he is Director of the
Bank of England in London. Alfonso Prat-Gay, president
of the Central Bank during the last part of the
Duhalde administration and first part of the Kirchner
administration was a director at J P Morgan
Investments, London and he was “recommended” to the
Argentine government by the Bank of England based on
Blejer’s suggestion. Hernán Martín Péres Redrado, the
present Central Bank president comes from the
Fundación Capital, idelogically linked to the extreme
liberal policies of former president Carlos Menem.
7 Member of the Council on Foreign Relations and the
Trilateral Commission.

8 Secretary of State and member of the Council on
Foreign Relations.

Note: This article was translated from the Spanish
original.

© Adrian Salbuchi, Buenos Aires, 05 June 2005
Reproduction allowed if the source is clearly named.
www.eltraductorradial.com.ar
asalbuchi@...

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The [Federal Reserve] Dollar System & US Economic
Reality Post-Iraq War

F. William Engdahl, Remarks in Feldkirch, Austria,
September 2003

http://engdahl.oilgeopolitics.net/1973_Oil_Shock/Dollar_System/dollar_system.htm\
l

It's accepted wisdom that the United States, despite
recent problems, is still the strongest growth
locomotive for the world economy, the pillar of the
global system. What if we were to discover that,
instead of being the pillar, that the United States
was, in fact, the heart of a dysfunctional economic
system, which is spreading instability, unemployment,
and depression globally?

No other nation on earth comes near to the commanding
US military superiority in smart bombs, military IT,
or in sheer force capabilities. The US position in the
world since 1945, and especially since 1971, has
rested on two pillars, however: The superiority of the
US military over all, and, the role of the dollar as
world reserve currency. That dollar is the Achilles
heel of American hegemony today.

In my view, the world has entered a new, highly
dangerous phase since the collapse of the US stock
market bubble in 2001. I am speaking about the
unsustainable basis of the very Dollar System itself.
What is that Dollar System?


How the Dollar System works

After 1945, the US emerged from war with the world's
gold reserves, the largest industrial base, and a
surplus of dollars backed by gold. In the 1950's into
the 1960's Cold War, the US could afford to be
generous to key allies such as Germany and Japan, to
allow the economies of Asia and Western Europe to
flourish as a counter to communism. By opening the US
to imports from Japan and West Germany, a stability
was reached. More importantly, from pure US
self-interest, a tight trade area was built which
worked also to the advantage of the US.

That held until the late 1960's, when the costly
Vietnam war led to a drain of US gold reserves. By
1968 the drain had reached crisis levels, as foreign
central banks holding dollars feared the US deficits
would make their dollars worthless, and preferred real
gold instead.

In August 1971, Nixon finally broke the Bretton Woods
agreement, and refused to redeem dollars for gold. He
had not enough gold to give. That turn opened a most
remarkable phase of world economic history. After 1971
the dollar was fixed not to an ounce of gold,
something measurable. It was fixed only to the
printing press of the Treasury and Federal Reserve.

The dollar became a political currency—do you have
"confidence" in the US as the defender of the Free
World? At first Washington did not appreciate what a
weapon it had created after it broke from gold. It
acted out of necessity, as its gold reserves had got
dangerously low. It used its role as the pillar of
NATO and free world security to demand allies continue
to accept its dollars as before.

Currencies floated up and down against the dollar.
Financial markets were slowly deregulated. Controls
were lifted. Offshore banking was allowed, with
unregulated hedge funds and financial derivatives. All
these changes originated from Washington, in
coordination with New York banks.


The dollar debt paradox

What soon became clear to US Treasury and Federal
Reserve circles after 1971, was that they could exert
more global influence via debt, US Treasury debt, than
they ever did by running trade surpluses. One man's
debt is the other's credit. Because all key
commodities, above all, oil, were traded globally in
dollars, demand for dollars would continue, even if
the US created more dollars than its own economy
justified.

Soon, its trade partners held so many dollars that
they feared to create a dollar crisis. Instead, they
systematically inflated, and actually weakened their
own economies to support the Dollar System, fearing a
global collapse. The first shock came with the 1973
increase in oil by 400%. Germany, Japan and the world
was devastated, unemployment soared. The dollar
gained.

This Dollar System is the real source of a global
inflation which we have witnessed in Europe and
worldwide since 1971. In the years between 1945 and
1965, total supply of dollars grew a total of only
some 55%. Those were the golden years of low inflation
and stable growth. After Nixon's break with gold,
dollars expanded by more than 2,000% between 1970 and
2001!

The dollar is still the only global reserve currency.
This means other central banks must hold dollars as
reserve to guarantee against currency crises, to back
their export trade, to finance oil imports and such.
Today, some 67% of all central bank reserves are
dollars. Gold is but a tiny share now, and Euros only
about 15%. Until creation of the Euro, there was not
even a theoretical rival to the dollar reserve
currency role.

What is little understood, is how the role of US trade
deficits and the Dollar System are connected. The
United States has followed a deliberate policy of
trade deficits and budget deficits for most of the
past two decades, so-called benign neglect, in effect,
to lock the rest of the world into dependence on a US
money system. So long as the world accepts US dollars
as money value, the US enjoys unique advantage as the
sole printer of those dollars. The trick is to get the
world to accept. The history of the past 30 years is
about how this was done, using WTO, IMF, World Bank
and George Soros to name a few.

What has evolved is a mechanism more effective than
any the British Empire had with India and its colonies
under the Gold Standard. So long as the US is the sole
military superpower, the world will continue to accept
inflated US dollars as payment for its goods.
Developing countries like Argentina or Congo or Zambia
are forced to get dollars to get the IMF seal of
approval. Industrial trading nations are forced to
earn dollars to defend their own currencies. The total
effect of US financial and political and trade policy
has been to maintain the unique role of the dollar in
the world economy.  It is no accident that the
greatest financial center in the world is New York.
It's the core of the global Dollar System.

It works so: A German company, say BMW, gets dollars
for its car sales in the USA. It turns the dollars
over to the Bundesbank or ECB in exchange for Marks or
Euros it can use.

The German central bank thus builds up its dollar
currency reserves. Since the oil shocks of the 1970's,
the need to have dollars to import oil became national
security policy for most countries, Germany included.
Boosting dollar exports was a national goal. But since
the Bundesbank no longer could get gold for their
dollars, the issue became what to do with the mountain
of dollars their trade earned. They decided to at
least earn an interest rate by buying safe, secure US
Treasury bonds. So long as the US had a large Budget
deficit, there were plenty of bonds to buy.

Today, most foreign central banks hold US Treasury
bonds or similar US government assets as their
"currency reserves." They in fact hold an estimated $1
trillion to $1.5 trillion of US Government debt. Here
is the devil of the system. In effect, the US economy
is addicted to foreign borrowing, like a drug addict.
It is able to enjoy a far higher living standard than
were it to have to use its own savings to finance its
consumption. America lives off the borrowed money of
the rest of the world in the Dollar System. In effect,
the German workers at BMW build the cars and give it
away to Americans for free, when the central bank uses
the dollars to buy US bonds.

Today, the US trade deficit runs at an unbelievable
$500 billion, and the dollar does not collapse. Why?
In May and June alone, the Bank of China and Bank of
Japan bought $100 billion of US Treasury and other
government debt! Even when the value of those bonds
was falling. They did it to save their exports by
manipulating the Yen to dollar to prevent a rising
yen.

Because the world payments system, and most
importantly, the world capital markets---stocks,
bonds, derivatives—are dollar markets, the dollar
overwhelms all others. The European Central Bank could
offer an alternative. So far it does not. It only
reacts to a dollar world. German banks destroy the
German economy as they rush to imitate US banks. The
Dollar System is destroying the German industrial base
. German national economic policy as well as
Bundesbank and now ECB policy is oriented on the far
smaller export sector, to maximize trade surplus
dollars, or to the big banks, to attract as many
dollars as possible.


China plays a key role today

The biggest dollar surplus country today is China.
Globalization is in fact just a code word for
dollarization. The Chinese Yuan is fixed to the
dollar. The US is being flooded with cheap Chinese
goods, often outsourced by US multinationals. China
today has the largest trade surplus with the US, more
than $100 billion a year. Japan is second with $70
billion. Canada with $48 bn, Mexico with $37 bn and
Germany with $36 bn make the top 5 trade deficit
countries, a total deficit of almost $300 billion of
the colossal $480 deficit in 2002. This gives a clue
to US foreign policy priorities.

What is perverse about this system is the fact that
Washington has succeeded in getting foreign surplus
countries to invest their own savings, to be a
creditor to the US, buying Treasury bonds. Asian
countries like Indonesia export capital to the US
instead of the reverse!

The US Treasury and Greenspan are certain that its
trade partners will be forced to always buy more US
debt to prevent the global monetary system from
collapsing, as nearly happened in 1998 with the Russia
default and the LTCM hedge fund crisis.

Washington Treasury officials have learned to be
masters at the psychology of "monetary chicken."
Treasury Secretary Snow used an implied threat of
letting the dollar collapse, after the Iraq war, to
warn Germany about the risk of trying to be too close
to France with the Euro. Some weeks after the dollar
had fallen sharply, and German export industry was
screaming pain, Snow reversed his stand and the dollar
stabilized. Now the dollar again rises as foreign
money flows back in.

But debt must be repaid you say? Does it ever? The
central banks just keep buying new debt, rolling the
old debts over. The debts of the USA are the assets of
the rest of the world, the basis of their credit
systems!

The second key to the Dollar System  deals with poorer
debtor countries. Here the US influence is strategic
in the key multilateral institutions of finance—World
Bank and IMF, WTO. Entire countries like Argentina or
Brazil or Indonesia are forced to devalue currencies
relative to the dollar, privatize key state
industries, cut subsidies, all to repay dollar debt,
most often to private US banks. When they resist
selling off their best assets, tehy are charged with
being corrupt. The growth of offshore money centers in
the Caribbean, a key part of the drug money cycle, is
also a direct consequence of the decisions in
Washington in the 1970's and after, to deregulate
financial markets and banks. As long as the dollar is
the global currency, the US gains, or at least its big
banks.

This is a kind of Dollar Imperialism more slick than
anything the British Empire even dreamed of. It is a
part of  the current America "Empire" debate no one
mentions. Instead of the US investing in colonies like
England to earn profits on the trade, the money comes
from the client states into the US economy. The
problem is that Washington has allowed this perverse
system to get out of all control to the point today it
threatens to bring the entire world to the point of
collapse. Had the US instead promoted long-term policy
of investing in the economic growth and
self-sufficiency of countries like Argentina or Congo,
rather than bleeding them in repayment of unpayable
dollar debts, the world would look far less unstable
today.


The internal debt bomb in the USA

The question is if the Dollar System is reaching its
real limits? The Dollar System for the past 30 years
has been built on growing dollar debt. What if the
rest of the world decides it no longer wants to give
its savings to the US Treasury to finance its deficits
or its wars? What if China decides that it should
diversify its risk by buying Euro debt? Or Japan or
Russia? That day may come sooner than we think.

In addition to colossal debts to the rest of the
world, the US internal debt burdens have reached
alarming levels in the past three decades, especially
the past decade.

The total US debt—public and private—has more than
doubled since 1995. It is now officially over $34
trillion. It was just over $16 trillion in 1995, and
"only" $7 trillion in 1985. Most alarming it has grown
faster than income to service it, or GDP.

Since the Asia crisis in 1998, the US debt situation
has exploded. The heart of the debt explosion is in US
private consumer debt. And the heart of consumer debt
is the home mortgage debt growth, helped by two
semi-government agencies—Fannie Mae and Freddie Mac.
Since 2001 and the collapse of the stock market
wealth, the Federal Reserve has cut interest rates 13
times to a 45 year low.

US Households took on new home mortgage debt in the
first six months this year at an annual rate of $700
billion, double the debt growth in 2000.  Total
mortgage debt in the US totals just under $5 trillion,
double the debt in 1996. It has grown far faster than
personal income per capita. That is larger than the
GDP of most nations.

The aim has been to inflate a housing speculation
market in order to keep the economy rolling. The cost
has been staggering new debt levels. Because it was
created with record low interest rates, when rates
again rise, millions of Americans will suddenly find
the burden impossible, especially as unemployment
rises. Fannie Mae and Freddie Mac combined guarantee
$3 trillion in US home mortgages. The US banking
system holds much of their bonds. When the housing
bubble collapses, a new banking crisis is
pre-programmed as well, with JP Morgan/Chase, Wells
Fargo and BankAmerica the worst.

The US economy has only managed to avoid a severe
recession since the collapse of the stock market three
years ago, by a record amount of consumer borrowing.
"Shop until you drop" is a popular American
expression. The Federal Reserve has pushed interest
rates down to 1%, the lowest in 45 years. The aim is
to keep the cost of the debt low such that families
continue to borrow, in order to spend! Some 76% of the
US economy GDP today is consumer spending. And most of
that is tied to a record boom in home buying.

But the rate of new debt growth among families is
rapidly reaching alarm levels, while the overall
manufacturing economy continues to stagnate or
decline. Today US factories only operate at 74% of
capacity, near historic lows. With so much unused
capacity, there is little chance companies will soon
invest in new factories or jobs. They are going to
China.

So Greenspan continues to rely on foreign money to
prop up his consumer debt bubble, at low interest
rates. Were foreign money to stop propping the US
economy, now at some $2.5 billion daily, the Federal
Reserve would be forced to raise its interest rates to
make dollar investments more attractive. Higher rates
would trigger a crisis in consumer debt, mortgage
defaults, credit card and car loan failures. Higher
rates would plunge the US economy into a depression.
This may be about to happen, despite poor George
Bush's desires to get reelected.

There is a limit how much debt US families can pay to
keep the economy afloat.

There is no US recovery, merely a debt spending boom
based on this home buying explosion.

Total US household debt reached a high in June of $8.7
trillion, double that of 1994. Families are agreeing
to longer debt payments for basics like homes or cars.
The length of new car loans now averages 60.7 months,
and the amount of car debt financed increased to
$27,920, and the average new home costs $243,000.

With rapidly rising unemployment and a real economy
that is not growing, at some point there will come a
violent reality clash, as the market for home lending
reaches its limit. At that point the danger is the
consumer will stop buying, and the manufacturing
economy will not be able to create new jobs and a real
recovery. The jobs have gone to China!

We might already be at or very close to that point. In
the past six weeks, US interest rates have risen
sharply, as owners of  US bonds have started to sell
in panic levels, fearing the bonanza in real estate
may be over, and trying to get out with some profit
before bond prices collapse. The European Central Bank
is advising member banks to not buy any more US
Freddie Mac or government agency debts.

The problem is this process of creating debt, domestic
and foreign, to keep the US economy going, has
gathered so much momentum it risks destroying what
remains of the US manufacturing and technology base.
Henry Kissinger warned in a conference of Computer
Associates in June, that the US risked destroying its
own middle class, and its key strategic industries via
outsourcing to China, India and other cheap areas.
Today only 11% of the total workforce is in
manufacturing. In 1970, it was 30%. Post-industrial
America is a bubble economy about to pop.

Fed chief Greenspan even warned China about the rate
of its trade increase with the US, pressuring China to
upvalue the Renminbi to make its goods less
competitive in dollar markets, and slow the job loss.
But this is dangerous. China holds $340 billion in US
Treasury bonds and other reserve assets. The US needs
the Chinese dollar savings to finance its soaring
deficits.

It is caught in its own web: American jobs, hi-tech
jobs as well as factory jobs, are vanishing
permanently as US factories source to China, India or
other cheap areas. If Washington pressures China and
others to cut back exports they risk to kill the goose
that lays golden dollar eggs. Who will buy that
growing Government dollar debt? Private bond traders
are desperately trying to sell their US bonds. Germany
can only buy so much dollar debt, also Japan.

The US waged war in Iraq not out of fundamental
strength but fundamental weakness. It is economic
weakness however, not military.


Oil and food, and money as strategic weapon

The fundamental reason for the Iraq war, beyond
agendas of Richard Perle or other hawks, is hence,
strategic in my view. US economic hegemony in this
distorted Dollar System increasingly depends on a
rising rate of support from the rest of the world to
sustain US debt levels. Like the old Sorcerers'
Apprentice. But the point is past where this can be
gotten easily. That is the real significance of the US
shift to unilateralism and military threats as foreign
policy. Europe can no longer be given a piece of the
Third World debt pie as in the 1980's. Japan has to
cough up even more, as does China now.

Even ordinary Americans have to give up their pension
promises. If the Dollar System is to remain hegemonic,
it must find major new sources of support. That spells
likely destabilization and wars for the rest of the
world.

Could it be that in this context, some long-term
thinkers in Washington and elsewhere have devised a
strategy of establishing US military control of all
strategic sources of oil for the one potential power
rival, Eurasia, from Brussels to Berlin to Moscow and
Beijing? The dollar vulnerability and debt problems
are well known in leading policy circles.

As Henry Kissinger once noted, "Who controls the food
supply controls the people; who controls the energy
can control whole continents; who controls money can
control the world."



* * * * * * * * * * * * *

Expose the Truths - http://911Review.Com

Wind Not War - http://AWEA.org

Debt-Money Virus & Cures - http://landru.myhome.net/monques

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