Almost every day in almost any currency your purchasing power in terms of gold is less and less. Thus, these currencies in which you save the fruits of your labor are cheating you out of your savings.

The US dollar is particularly vulnerable because of its staggering debt even though it is the world reserve currency. In fact the debt is so onerous that we believe the quality rating of the dollar could be lowered by the end of the year. Many other currencies face the same dilemma and in the final analysis only gold will be worth what it is today or in the future.

Unless the US government expropriates Americans’ retirement plans they won’t be able to fund their sovereign debt. This situation is exacerbated by continued fiscal deficits of some $1.8 trillion. The administration and the Democratic Party are bound and determined to destroy America financially. Between government, Wall Street and banking America is being destroyed. This did not just happen that way; it was planned that way. When people discover what has been done to them there will probably be a revolution.

Government spends excessively, as free trade and globalization keeps America under a staggering load of unemployment in what has become a corporatist fascist nation controlled by Wall Street and banking and run by Marxists, who for years have operated in the shadows as bureaucrats.

Many American states are on the edge of bankruptcy. Their only hope is massive layoffs and reduced services adding to the already massive unemployment that plagues our nation. The situation is close presently to resembling the 1930s and that is after trillions of dollars created out of thin air permeated the economy. Worse yet, nothing has been done deliberately to solve the problems. One might think the antics of government; banking and Wall Street were deliberate-unfortunately they are. It won’t be long before everything will be nationalized and corporatist fascism will be in full flower.

We now have medical health care reform that will cost hundreds of billions of dollars annually adding to a wildly growing deficit, which becomes more un-fundable every day. As you all know this legislation was passed illegally. As you all know this legislation was passed illegally and will be challenged in the Supreme Court. Can you imagine 2,700 pages that no one in Congress read, that was passed, so we could see what was in it. Every Democrat deserves to be thrown out of office for this piece of criminality. Corruption in government, Wall Street and banking knows no end. This in addition to the looting of funds for Social Security and Medicare, that the Treasury now must fund, when they cannot even fund current debt without having the Fed buy it with money created out of thin air. Talk about inflation – it is surely on the way. If we use GAAP accounting, not the US government’s cash figures, the deficit is really in the vicinity of $4.5 to $5 trillion, not $1.8 trillion. This, of course, is nothing new and the same lying and secrecy is in force worldwide. All that people have saved worldwide has been stolen from them – they just do not know it yet.

The phenomenon of government workers making far more than workers in industry has to end. Unionized workers make double private industry. Is it no wonder there is deficit spending to hold up this terrible financial burden. There is no end to the demands of these parasites that are sucking the public dry.

The situation in Europe is so bad that all of Europe is attacking Germany because they save and do not spend enough and their balance of payments surplus is obscene to other spenders not only in the euro zone, but in the entire EU as well. Their thought is Germany should be losers like we are. Then there are the PIIGS who care about little or nothing. We know we lived for years in all of these countries and fully understand where they are coming from. They all wanted socialism and it has doomed them, as has the euro zone and the European Union. They are about to discover socialism and debt are about to destroy them. You have made yourselves into economic and financial zombies. There is no one left to bail you out. Subsidizing everything doesn’t work as they are soon to find out. When Europe and America fail unfortunately they are going to in part take the entire world down with them – no one is going to be spared.

What a world we now live in. Under the “healthcare” legislation everyone can now be “chipped,” so that government can soon catalog everything about you, so on demand they can control you. Hitler and Stalin didn’t have the technology, but had they had it they would have used it, just as our Illuminist masters are about to do. Government wants to totally control your lives.

We have an economy in a state of collapse and part of the reason for that is free trade, globalization, offshoring and outsourcing, which since 2000 has cost America some 8 million good quality jobs. Where are you Smoot-Hawley now that we need you? There are many reasons why the American economy is collapsing and free trade, British mercantilism, is one of them.

As we have said for months there is a multilateral change coming in currencies. A massive devaluation of all currencies and a debt settlement between countries. When that happens consumers worldwide will lose 2/3’s of their purchasing power on the final leg down into deflationary depression, which is probably 1-1/2 to 2 years away. Your only protection against such events is holding gold and silver related assets.

Those who have opted for general stock investments since 1998 have come out even if they were lucky and that includes massive market manipulation by our government. Not just failed policies. The creation in August 1988 of the President’s Working Group on Financial Markets” has been a disaster for free markets and a gift to dictators and would be tyrants. The markets are a giant scam and their underpinnings are about to collapse. There has been little or no growth over those years. Real estate bubbles in residential and commercial markets have collapsed and the stock market will soon follow. Hitting you right in the forehead is almost a 4% yield on 10-year T-notes that could well become 5% by yearend, which we predicted late last year. That will put the 30-year fixed rate mortgage at 6-1/4% to 6-1/2%. What do you think that will do to real estate, markets and profits? This is mainly because of sovereign debt that grows exponentially every minute of every day. These pyromaniacs in the White House and Congress add to the conflagration all day every day. The result has been a 25% loss in the S&P since March of 2000, and a loss versus gold of 75%. Gold has risen from $252 to $1,224 and silver from $3.50 to $20.00 with massive government and Fed suppression. Where do you think your money should have been and where your money should be? In gold and silver bullion, coins and shares. Yes, as usual we were crazy and we were right and we are going to continue to be right, because we understand what the Illuminists are up too.

You live in a bankrupt country, along with 18 other major bankrupts, and you will soon learn how you are going to lose everything you have worked a lifetime for. A rise in interest rates of 5% adds $620 billion annually to the US debt in interest alone and that is rising exponentially. The US, nor any government, can survive such debt service.

We are calling inflation, real inflation, not the official variety of 3%, but at 8%. John Williams says on the things you buy every day it is 10%. We should easily see 14-5/8% inflation by the end of the year just as we did 2-1/2 years ago.

The Fed has ended its $1.25 trillion program of buying toxic debt from lenders. We do not know if that is the correct figure, we do not know from whom they were purchased and we do not know what was paid for the MBS, because it is a secret. This purchase has put downward pressure on interest rates for the past 15 months. This is an abnormal procedure and it can be expected that interest rates would move higher. It also means that the fed will now be a seller in the market as the FDIC is attempting to be. If sold these securities will put downward pressure on these bonds and force higher rates in a market that is already subject to crowding out by the treasury. In addition, quantitative easing is being phased out, putting further upward pressure on rates. The Fed if it continues these policies may stem hyperinflation but they run the distinct risk of having deflation run out of control, which could easily drive the economy into deflationary depression. This is a super human feat we do not see being accomplished without major damage, at the least.

Rate volatility is going to increase dramatically, as the Fed works to hold the 10-year T-bill rate below 4%. This is what they did previously at great cost to savers and taxpayers.

As rates climb the dollar carry trade becomes much less attractive and as it is unwound borrowed money is pulled from other investments, such as bonds putting more upward pressure on rates and at the same time downward pressure on stocks, which have been purchased with borrowed money. If the Fed tightens, as they might on Wednesday, yields will move even higher. If that happens those in the carry trade and bonds and shares will see gains evaporate and sales of both bonds and stock will ensue, as the carry trade is unwound. This is what markets are now facing.

This takes us to municipal bonds and particularly California, which has $85 billion in debt, that has to be paid by its citizens, of which about 40% do not pay any taxes. In addition it officially has 12.4% unemployment, which is really about 25% and getting worse daily. This is a state with $1 trillion to $3.5 trillion in unfunded pensions and the world’s 8th largest economy. This is a state that, via federal subsidy, sold “Build America Bonds”, bonds yielding 6.3%, or 2.4%, higher rates than Treasuries. California is on the edge of bankruptcy and their municipal bonds should be sold, as many from other states should be sold as well. States won’t work out of their problems for years.

Last week the Dow rose 0.7%; S&P 1%, the Russell 2000 0.7% and the Nasdaq was unchanged. Banks rose 0.3%; broker/dealers 0.8%; cyclicals 0.8%; transports 1.2%; consumers 1.2%, as utilities fell 1.8%. High tech fell 0.3% as semis gained 1.1% and Internets fell 0.2%. Biotechs fell 0.2%; gold gained $12.00; the HUI rose 6.2% and the USDX fell 0.6% to 81.17.

Two-year Treasury bills rose 6 bps to 1.02%; the 10-year T-notes rose 10 bps to 3.95% and the 10-year German bund fell 7 bps to 3.08%.

The Freddie Mac 30-year fixed rate mortgage rose 9 bps to 5.08%; the 15’s rose 5 bps to 4.39%; one-year ARMs fell 15 bps to 4.05% and jumbos rose 1 bps to 5.83%.

Fed credit declined $7.4 billion. Fed foreign holdings of Treasury, Agency debt rose $7.2 billion to a record of $3.020 trillion. Custody holdings for foreign central banks increased $64.5 billion just year-to-date, and year-on-year 15.7%.

M2 narrow money supply fell $10 billion.

Total money market fund assets fell $30 billion to $2.983 trillion, the first time below $3 trillion since 10/07. Year-to-date it is off $311 billion and year-on-year it is off 22.2%.

Commercial paper fell $5.2 billion, or 20.8% ytd and 24.9% yoy.

America’s debt is now $31 trillion, or 2-1/2 times US GDP. Americans on average only own 11% of their home the remainder is debt. Home prices are headed lower until 2013, so 20% lower prices are a certainty. In some areas homes have already fallen 60% to 75%. This situation will feed on itself for years and bankruptcies and inventory for sale will flourish for years. About 45% of homes have mortgages. We wrote five years ago that the government wants to own and nationalize those homes, so they can control the public.

As we wrote earlier we expect another large stimulus plan soon and the Fed to reverse gears and flood the world with money sometime soon. This should be the last rescue and the result will be hyperinflation followed by collapse and a deflationary depression. This is the last chance to buy gold and silver inexpensively.

If you do not think there was inflation in 2007 and 2008 homeowners insurance rose 24%, in 2008 it rose 31% and again in 2009-10 it rose 31%.

Treasury debt is on the ropes and is about to cause the Illuminists real trouble, along with higher interest rates. Later this year or early next year debt as a percentage will reach 95%. From there on its collapse. How can anyone conceive deficits of more than $10 trillion over the next ten years?

With the Pentagon and the North Atlantic Treaty Organization planning the largest military campaign of the Afghan war this summer in the south, Kandahar province, a complementary offensive in the north, Kunduz province, and increased troop strength of 150,000 in preparation for the assaults, a war that will enter its tenth calendar year this October 7 is reaching the apex of its intensity.

The length of the war if not the amount of troops deployed for it inevitably conjures up a comparison with the U.S. war in Vietnam, before now the longest in America’s history. Not only protracted but intractable, with its escalation in earnest beginning in early 1965 and the end of U.S. combat operations not occurring until 1973.

Another analogy is with the Korean War, far shorter in duration – three years – and with fewer U.S. troops and deaths than in Vietnam.

In at least two manners the Korean War more closely resembles the current armed conflict in South Asia. First, foreign intervention was formally authorized by the United Nations although in effect it was a U.S.-led and -dominated military operation on the Asian mainland.

Second, Washington then, as now, recruited troops from allied nations, particularly from members of post-World War II military blocs it had formed or was in the process of establishing. In addition to South Korea, soldiers from fifteen other countries fought under U.S. (and nominal UN) command.

From NATO, formed the year before the Korean War began in 1950: Britain, Canada, France, Belgium, the Netherlands, Luxembourg and then candidate members Greece and Turkey.

From the Australia, New Zealand, United States Security Treaty (ANZUS), formed during the Korean War in September of 1951: All three members.

From what in 1955 would be formalized as the Southeast Asia Treaty Organization (SEATO), envisioned at the time as an Asian parallel to NATO: The Philippines, Thailand, Australia and New Zealand, along with the U.S., Britain and France which were also founding members.

Washington additionally dragooned between 1,800-3,000 troops each from Colombia, Ethiopia and apartheid South Africa for the war effort.

SEATO was dissolved in 1977 and ANZUS remains an active alliance, although for the expanding war in Afghanistan (and neighboring Pakistan) all foreign troops, including in the near future “virtually all American forces,” [1] are or will be under NATO command, including the first contingent of troops from Colombia. Australia and New Zealand, with 1,550 and 200 troops respectively, are now identified as NATO Contact Countries.

To return to the Vietnam precedent, on July 2, 2009 the U.S. launched its largest military offensive anywhere since the second attack on Fallujah in Iraq in 2004, Operation Phantom Fury, which included a total of 10,000-15,000 American troops.

In Operation Khanjar (Strike of the Sword) conducted in Afghanistan’s Helmand province, 4,000 U.S. forces and fifty aircraft participated in an assault that included “the biggest offensive airlift by the Marines since Vietnam.” [2]

In February 15,000 U.S., NATO and Afghan government troops launched the largest joint military attack of the war against the town of Marjah in Helmand province, with an estimated population of 75,000-80,000 and by one account as few as 400 suspected insurgents. [3] A more than 27-1 ratio of armed belligerents. The insurgents were not only outnumbered but outgunned and unlike their opponents didn’t have warplanes for air cover and bombing and strafing runs. Western troops were ferried in by helicopters and rockets were fired from a High Mobility Artillery Rocket System, in one case killing ten members of an Afghan family when their house was hit.

Nevertheless a U.S. officer described the fighting being as tough as that in Fallujah six years earlier. “In Fallujah, it was just as intense. But there, we started from the north and worked down to the south. In Marjah, we’re coming in from different locations and working toward the centre, so we’re taking fire from all angles.” [4]

The offensive was initiated on February 13th and six weeks later it was reported that U.S. and NATO troops were “still coming under fire and being targeted by bomb attacks despite efforts to restore Afghan government control.” [5]

The Russian ambassador to NATO, Dmitry Rogozin, “said he was puzzled by allied claims that the offensive was a success,” according to the Associated Press, which moreover attributed a further statement of Rogozin’s – “So the result (of the Marjah offensive) was that the mountain shook, but only a mouse was born” – to a “Russian proverb.” [6]

What the Russian envoy no doubt knew if the U.S. news agency’s writer and editors didn’t was that Rogozin’s line was a quote from the Roman poet Horace: Parturiunt montes; nascetur ridiculus mus. The mountains are in labor; a ridiculous mouse will be born.

While the mountain was writhing with a stillborn victory, U.S. President Barack Obama paid an unannounced one-day visit to the Afghan capital of Kabul to, as it can be safely assumed, remind his Afghan counterpart Hamid Karzai who was in charge of the country.

The following day the U.S.’s top military commander, Chairman of the Joint Chiefs of Staff Admiral Michael Mullen, visited Marjah forty days after the offensive was unleashed there and in a news report entitled “Mullen in Afghan war zone as US gears up for Kandahar” it was disclosed that “The United States and allies have boosted their troop numbers to 126,000, with the number set to peak at 150,000 by August as the fight expands into neighbouring Kandahar province, the heartland of the insurgency.” [7]

If the U.S. and its NATO allies faced 400-2,000 armed fighters in Marjah (the most common figure cited in the Western press was 600), a town of no more than 80,000 inhabitants, and still confronted snipers and improvised explosive devices a month and a half into the operation, Kandahar presents a challenge several orders of magnitude greater. The province has a population of almost one million with half that number in the capital. It is also, in the copy and paste style of the American establishment news media, routinely referred to as the “heartland of the insurgency” and the “birthplace of Taliban.”

The assault on Marjah was intended and presented as a warm-up exercise for the campaign in Kandahar province and city scheduled to begin as early as June, and the public relations blitz before the February attack on Marjah was of a scope customarily reserved for high-budget Hollywood releases and professional sports events. The self-celebratory propaganda in advance of the offensive in Kandahar can be expected to exceed it in bravado and extravagance. To be proportionate to the scale of the fighting. The “battle for Kandahar” is intended to be the decisive victory in what will then be a nearly nine-year war, one that permits Washington and its Western allies to “retreat in dignity” from the Afghan imbroglio.

In preparation for the offensive the U.S. is increasing the transfer of troops and military equipment to the war zone. In early April the Pentagon’s Under Secretary of Defense for Acquisition, Technology, and Logistics Ashton B. Carter affirmed that a “massive amount of equipment and supplies being sent to support troops in Afghanistan is a historic logistical effort,” and stated:

“I think it’s fair to say that there’s never been, like in these months that we’re witnessing right now, as dramatic a logistics effort as we see in Afghanistan.” [8]

He was further cited as saying “From the ramp up of airlifts, sealifts and ground supply lines, to the building of forward operating bases, runways and tent cities…the effort to build up and supply the plus up of troops in Afghanistan is critical to NATO’s success there.” [9]

In 2008 NATO established its first multinational Strategic Airlift Capability operation at the Papa Air Base in Hungary, intended for supplying war efforts around the world in future but for the conflict in Afghanistan most immediately. The “first-of-its-kind mobility unit comprising airmen from 12 nations” [10] is staffed by U.S. military personnel, who are also now permanently stationed at bases in Bulgaria and Romania and later this month will be in Poland as well. Late last July the “first-ever multinational strategic airlift unit was officially activated…at a ceremony at Papa Air Base, Hungary, according to a U.S. Air Forces in Europe release.” [11]

A Pentagon website disclosed this April 2nd that the Hungarian-based “Heavy Airlift Wing, comprised of 12 nations, recently moved 2.1 million pounds of equipment essential to surge operations supporting the International Security Assistance Force in Afghanistan.

“The international wing has been part of the operation to move more than 6 million pounds of basic expeditionary airfield resources, or BEAR materiel, to build six forward operating bases supporting 3,500 people….” [12]

At a press conference at the same time the new commander of the U.S. Third – “Patton’s Own” – Army (United States Army Central), Lieutenant General William G. Webster, informed reporters in Kuwait that “The military is scrambling to finish what it calls the largest movement of troops and equipment since the buildup of World War II as it draws down in Iraq and ramps up in Afghanistan.”

He added that “the military is moving as fast as it can on the massive and complex job. There are roughly 3 million pieces of equipment in Iraq, including 41,000 vehicles and trailers,” and said “officials expect to be able to move the more than 5,000 vehicles needed for the Afghanistan buildup into that country by the end of the summer.

“Besides air deliveries to Afghanistan, the military is moving goods through neighboring Pakistan and is using a system of roads, rail and sea routes through Uzbekistan and other points to the north in Central Asia.” [13]

His was not the only recent reference to World War II in regards to the Afghan war. There is no literal comparison between the ongoing fighting in Afghanistan and the most deadly and destructive armed conflict in human history. The Second World War included all the world’s major industrial powers as belligerents (Sweden alone possibly excepted), which collectively mobilized up to 100 million troops.

The war cost the lives of as many as 70 million people, soldiers and civilians alike.

In the nuclear age the world would not survive any attempt at a similar conflagration.

But that war is increasingly becoming the frame of reference for the fighting in the Afghanistan-Pakistan theater.

In the April 1st edition of Toronto’s Global and Mail Michael O’Hanlon, director of research and senior fellow on foreign policy issues at the Brookings Institution, wrote in an opinion piece called “Kandahar is what the Canada-U.S. alliance is all about” that “Americans need to feel unabashed about asking Canada to stay on in Afghanistan past 2011,” as the two nations “are beginning the most important combined wartime operation since the Second World War.” [14]

Canada has lost 141 soldiers in Afghanistan, most all of them in Kandahar. That death toll is Canada’s highest since the Korean War, which ended 57 years ago. Australia, which has not suffered combat casualties since the wars in Korea and Vietnam, has acknowledged that twenty of its soldiers have been wounded in Afghanistan so far this year.

The carnage against Afghan civilians perpetrated by the U.S. and NATO from the sky and on the ground is steadily mounting (as deaths from U.S. drone missile attacks in adjoining Pakistan near the 800 mark). From Kunduz last autumn and Marjah the last two months to the unconscionable murder of two pregnant women (one a mother of ten, the other of six), a teenage girl and others in the village of Khataba in Paktia province in February, the counterinsurgency strategy of General McChrystal, commander of all U.S. and NATO forces in Afghanistan, is having its lethal effect.

The war is also costing NATO a rising number of casualties in the military bloc’s first ground war. As of April 3rd Western nations had lost 144 soldiers this year. In the first three months of 2010 the NATO-led International Security and Assistance Force (ISAF) acknowledged at least 138 deaths as compared to 78 during the same quarter in 2009, which itself was the deadliest year for U.S. and NATO forces – 520 losses – since the invasion of Afghanistan in 2001. “Military planners have said they expect an escalation of deaths and injuries among foreign troops as deployments surge to a peak of 150,000 by August….” [15]

American combat deaths also “roughly doubled in the first three months of 2010 compared to the same period last year,” and “have been accompanied by a dramatic spike in the number of wounded, with injuries more than tripling in the first two months of the year and trending in the same direction based on the latest available data for March.”

“U.S. officials have warned that casualties are likely to rise even further as the Pentagon completes its deployment of 30,000 additional troops to Afghanistan and sets its sights on the Taliban’s home base of Kandahar province, where a major operation is expected in the coming months.” [16]

On April 2nd three German soldiers were killed and five seriously wounded in a firefight with an estimated 200 insurgents in the northern Afghan province of Kunduz. According to Deutsche Presse-Agentur, “It was the highest number of casualties the postwar German armed forces, the Bundeswehr, have suffered in battle and brought to 39 the number of German soldiers killed in Afghanistan.” [17] That is, the three soldiers killed represented the most German combat fatalities in a single exchange since the defeat of the Third Reich in 1945. The 39 deaths in total are also the first since the end of World War II.

German NATO troops responded by killing six Afghan government soldiers in the same province on the same day.

In mid-March German General Bruno Kasdorf, chief of staff of the International Security and Assistance Force in the Afghan capital, informed German public radio that “There will definitely be an operation up there in Kunduz (province),” and that the offensive would be “similar” in scale “to the offensive currently underway in the southern province of Helmand involving 15,000 US, NATO and Afghan troops.” [18]

Germany currently has approximately 4,300 troops in Afghanistan, the third largest contingent after the U.S. and Britain and the most deployed abroad in the post-World War II period since 8,500 troops were assigned to the NATO force in Kosovo in 1999. [19]

In Afghanistan, as evidenced above, they are in an active war zone for the first time in 65 years. Last September 5th German troops called in NATO air strikes against villages near their base in Kunduz which resulted in the deaths of over 150 Afghan civilians. [20]

German Federal Minister of Economic Cooperation and Development Dirk Niebel, who was in Afghanistan on the day of the deadly fighting that cost the lives of five of his own country’s soldiers and six from the government of Afghanistan, the protection of which is the pretext for German military involvement in the nation, in speaking of his nation’s combat troops at a ceremony for those killed on April 2nd stated “They want people to understand that they have to defend themselves – sometimes also preventatively. And they don’t understand why they have to explain themselves to the German public, or why they could even be prosecuted.” [21]

Another report of the same day quoted German Defense Minister Karl-Theodor zu Guttenberg asseverating, “We will stay in Afghanistan” although the mission is being conducted under “war-like” circumstances and the situation confronting German troops could be categorized as a war.

“The remarks reflect calls by Foreign Minister Guido Westerwelle and some others to reclassify the German mission in Afghanistan as ‘armed conflict.’ So far, German military forces have been subjected to the civil penal code, given their participation in training Afghan police and soldiers and in reconstruction activities.” [22]

Reclassifying Germany’s – overt and incontrovertible – combat mission in Afghanistan as war in place of the previous designations of peacekeeping and reconstruction would allow for a relaxation of legal and other constraints on its troops, so-called combat caveats, so that massacres like that in Kunduz last September will be more likely to be repeated and less likely to be prosecuted.

Germany’s military role in NATO’s first Asian war is of special significance as the May 8th (May 9th in much of Eastern Europe) 65th anniversary of the end of World War II in Europe approaches.

When the leaders of the Big Three allied powers – Britain, the Soviet Union and the U.S. – met in Yalta and Potsdam in 1945 to discuss what a post-war Europe would look like, particular emphasis was placed on building a new legal and security structure that would prevent the possibility of the horrors of the Second World War ever again being inflicted on the continent and the world.

The nation that had ignited the deadliest war in human history – Germany with its invasions of Poland, Denmark, Norway, Belgium, the Netherlands, France, Yugoslavia, Greece and the Soviet Union between 1939 and 1941 – was to be demilitarized. At the time many in the world hoped the model might be extended to all of Europe and even to the rest of the world.

That wish was dashed with the creation of the North Atlantic Treaty Organization in 1949 and the inclusion of the Federal Republic of Germany (West Germany) into the military bloc six years afterward.

Germany itself would violate the post-World War II prohibition against engaging in armed conflicts by supplying Luftwaffe warplanes for NATO’s 78-day air war against Yugoslavia in 1999 and then by deploying troops for what has now become a full-fledged combat role in Afghanistan. German forces have been appointed to lead fellow NATO nations’ troops in the upcoming large-scale military offensive in Kunduz province.

On May 9th troops from the other Second World War allied powers in the European theater – the U.S., Britain and France – are for the first time to March in the Victory Day parade in the Russian capital.

There are different ways to commemorate the end of the world’s bloodiest war.

Britain’s Sunday Telegraph ran a feature on April 4th titled “Luftwaffe and RAF join forces in Afghanistan,” which celebrated the fact that “Sixty-five years after the end of the Second World War” a “Luftwaffe navigator has flown into combat in the same plane as an RAF pilot for the very first time.”

That the British Royal Air Force and its German opposite number would not only forget dogfights over the English channel and bombing raids over the continent in the early 1940s but join ranks in combat missions over an unoffending nation and its people in faraway South Asia seemed a cause for approbation to the major British daily, which detailed that “the [German] navigator climbed into a Tornado GR4 ground attack aircraft at Kandahar airbase in southern Afghanistan to provide air support for troops in Helmand province.” The British Tornado GR4 multirole fighter, equipped for Storm Shadow and Brimstone missiles, earlier saw action in Iraq.

In fact the Tornado combat plane jointly flown by a German and a British pilot in Afghanistan “was armed with 500lb Paveway air-to-ground bombs, Brimstone missiles and a 27mm cannon.” [23]

On May 8th and 9th when the world remembers the end of a conflict that accounted for the largest-ever loss of human life, two distinct, exclusive and even opposite interpretations will be offered on the events of 65 years ago.

One is that humanity must never allow the use of war to achieve political, territorial and economic objectives or in the name of redressing past grievances, which all too often is reduced to motives of revenge.

The other is that the majority of the world’s major military powers must intensify plans for international armed intervention based on global rapid deployment forces able to confront and attack any nation accused of posing a threat outside or inside its borders. “Preventatively.”

The West’s war in Afghanistan – with an ever-widening network of military bases and transit infrastructure in Eastern Europe, the South Caucasus, the Middle East, and Central and South Asia servicing it – is the era’s most egregious example of the second strategy.


1) Associated Press, March 16, 2010
2) Associated Press, July 1, 2009
3) Associated Press, February 14, 2010
4) Christian Science Monitor, February 14, 2010
5) Agence France-Presse, March 31, 2010
6) Associated Press, March 15, 2010
7) Agence France-Presse, March 31, 2010
8) U.S. Department of Defense
American Forces Press Service
April 2, 2010
9) Ibid
10) U.S. Air Forces in Europe, June 2, 2009
11) Stars and Stripes, July 29, 2009
12) United States European Command, April 2, 2010
13) Associated Press, April 2, 2010
14) Globe and Mail, April 1, 2010
15) Daily Jang/The News, March 31, 2010
16) Associated Press, March 28, 2010
17) Deutsche Presse-Agentur, April 2, 2010
18) Agence France-Presse, March 18, 2010
19) New NATO: Germany Returns To World Military Stage
Stop NATO, July 12, 2009
20) Pajhwok Afghan News, September 5, 2009
Following Afghan Election, NATO Intensifies Deployments, Carnage
Stop NATO, September 6, 2009 
21) Deutsche Welle, April 4, 2010
22) Deutsche Welle, April 4, 2010
23) Sunday Telegraph, April 4, 2010

Do implanted microchips cause cancer in dogs and cats?

That’s the question owners are asking after highly aggressive tumors developed around the microchip implants of two dogs, killing one and leaving the other terminally ill.

The owners – and pathology and autopsy reports – suggest a link between the chips and formation of fast-growing cancers.

‘I could see it taking his life’

A 5-year-old bullmastiff named Seamus died last month after developing a hemangio-sarcoma – a malignant form of cancer that can kill even humans in three to six months, explains privacy expert, syndicated radio host and best-selling author Dr. Katherine Albrecht.

Albrecht, an outspoken opponent of implantable microchips, has been contacted by pet owners after their animals experienced what they believe to be side effects from the procedure.

According to a pathology report, Seamus’ tumor appeared between his shoulder blades last year, and by September a “large mass” had grown with the potential to spread to his lungs, liver and spleen.

Seamus underwent emergency surgery, and doctors extracted a 4-pound, 3-ounce tumor from the dog. They used four drains to remove fluid from the area in which the tumor had developed. The veterinarian informed the dog’s owner, Howard Gillis, that there had been two microchips embedded in Seamus – one presumably inserted by the dog’s breeder when Seamus was only 9 months old. The chips were both located in and around the tumor.

In just three months, the cancer returned. Seamus, a once energetic dog, struggled to walk.

Seamus “was 150 pounds of heart,” Howard Gillis, the dog’s owner, said in a recent interview. “He wanted to live.”

Read the whole story: Get “Spychips: How Major Corporations and Government plan to Track your every Move”

Gillis explained that he “got the microchip because I didn’t want him stolen. I thought I was doing right. There were never any warnings about what a microchip could do, but I saw it first-hand. That cancer was something I could see growing every day, and I could see it taking his life … It just ate him up.”

To end the suffering, Seamus was put to sleep in February.

Microchip embedded inside tumor

Albrecht told the story of another dog, a 5-year-old Yorkshire terrier named Scotty that was diagnosed with cancer in Memphis, Tenn. Scotty developed a tumor between his shoulder blades, in the same location where the microchip had been implanted. The tumor the size of a small balloon – described as malignant lymphoma – was removed. Scotty’s microchip was embedded inside the tumor.

Scotty was given only a year to live. His owner, Linda Hawkins, said the veterinarian was skeptical that a chip implant could cause cancer.

In Scotty’s December pathology report, the doctor wrote: “I was previously suspicious of a prior unrelated injection site reaction” beneath the tumor. “However, it is possible that this inflammation is associated with other foreign debris, possibly from the microchip.”

The doctor said the chip was coated with a translucent material to keep the microchips from moving around the body. “This coating could be the material inciting the inflammatory response,” he wrote.

A national pet recovery and identification network, asked a vet to review the pathology report, according to Hawkins. The company reported that the chip was not the cause of the tumor. However, Hawkins said the company sent her a $300 check to pay for medical expenses.

“I find it hard to believe that a company will just give away $300 to somebody who calls in, unless there is something bad going on,” Hawkins said.

Hawkins reported spending $4,000 on medical treatment for Scotty since December.

“Scotty is just a baby,” she said. “He won’t live the 15 years he’s supposed to … I did something I thought a responsible pet owner should – microchip your pet – and to think that it killed him … It just breaks your heart.”

Albrecht cited other reports of animals who suffered adverse reactions following implantation of microchips. Two other dogs experienced malignant tumors.

A French bulldog named Léon developed a lump at the microchip site only eight months after implantation. A biopsy indicated that Léon had a fibrosarcoma, an aggressive form of cancer.

As WND reported just last year, a Chihuahua named Charlie Brown experienced another outcome from the chipping procedure. He bled to death.

“I wasn’t in favor of getting Charlie chipped, but it was the law,” said Lori Ginsberg, the Chihuahua’s owner, citing an ordinance that requires all dogs over the age of four months in unincorporated Los Angeles County be microchipped. Dog owners who refuse to comply face a $250 fine for the first offense and up to six months in jail and $1,000 fine for continued non-compliance.

“This technology is supposedly so great until it’s your animal that dies,” she said. “I can’t believe Charlie is gone.”

Malignant tumors in lab mice, rats

Likewise, in 2007, the Associated Press reported, “A series of veterinary and toxicology studies, dating to the mid-1990s, stated that chip implants had ‘induced’ malignant tumors in some lab mice and rats.” They developed subcutaneous “sarcomas” – most of them encasing the implants.

Keith Johnson, a retired toxicologic pathologist, led a 1996 study at the Dow Chemical Co. in Midland, Mich.

“The transponders were the cause of the tumors,” he told the AP.

Albrecht has authored a 52-page peer-reviewed article, titled “Microchip-Induced Tumors in Laboratory Rodents and Dogs: A Review of the Literature,” in which she discusses literature published in oncology and toxicology journals between 1990 and 2006 that address the effects of implanted radio-frequency microchips on laboratory rodents and dogs.

Albrecht has been invited to present her findings at a June conference for the Institute for Electronic and Electrical Engineers, the world’s leading professional association for the advancement of technology.

She said it is important that the public be made aware of the potential hazards of microchipping because some governments are seeking to make dog chipping mandatory. For example, the British government recently announced its proposal to impose penalties on pet owners who do not comply with chipping requirements. Ireland, New Zealand, Malta, Norway, Switzerland, Austria, Croatia, Italy and Portugal and even some places in the United States require mandatory microchipping. Likewise, USA Today reported Colorado requires implanting microchips in dogs that injure someone. Minnesota enacted a similar law in 2001, and in Virginia, dangerous dogs are required to have either a microchip or an identifying tattoo on the inner thigh.

Asked how prevalent the problem of pets developing cancerous growths following chip implantation really is, Albrecht told WND, “That’s what we don’t know, and that’s why we are hoping the veterinary community will at least start to acknowledge these problems and start to report on these cases as they turn up. It seems there’s a widespread lack of awareness in the veterinary community about this problem.”

FDA: No studies linking chip implantation to cancer

In 2004, after investigating microchipping, the Food and Drug Administration found the process to be safe enough for use in humans and animals. In 2007, the New York Times reported federal regulators said animal data had been considered in the review of chip implantation in humans and that there were no controlled scientific studies linking chip implantation to cancer in dogs and cats. Lab rodents were said to be more prone than other animals to develop tumors from all types of injections.

“If there are any cancers from the chips, they are so rare that losing pets is far more serious,” Dr. Lawrence D. McGill, a veterinary pathologist at Animal Reference Pathology, a veterinary laboratory in Salt Lake City, told the Times.

Likewise, the American Veterinary Medical Association website states, “Tumors associated with microchips in two dogs were reported, but in at least one of these dogs the tumor could not be directly linked to the microchip itself (and may have been caused by something else). … the risk that your animal will develop cancer due to its microchip is very, very low, and is far outweighed by the improved likelihood that you will get your animal back if it becomes lost.”

However, Albrecht noted that side effects resulting from FDA-approved devices for human use are required to be reported, while those resulting from use of animal devices are not.

“If it’s for animal use, there’s no requirement,” she said. “We suspect this is happening quite frequently, and it’s simply not being reported.”

‘Pet owners should be clearly advised’

Neither Albrecht nor the American Veterinary Medical Association recommend having microchips removed from pets that exhibit no reactions after the chips have been implanted because doing so would require invasive surgery. However, in her research paper, Albrecht recommends that policymakers “reverse all policies that mandate the microchipping of animals under their jurisdiction or control,” including reversal of state and local ordinances and chipping policies at animal shelters.

She advocates a voluntary system of microchipping at the discretion of pet owners and asks that veterinarians familiarize themselves with research findings regarding adverse reactions before recommending implants for animals.

Albrecht also states, “Pet owners should be clearly advised of the research linking the microchip to cancer in rodents and dogs when seeking advice about the chipping procedure or choosing to have it done to their pets.”

According to the paper, pet owners should routinely inspect the microchip site on their animals for unusual lumps or swelling and immediately report abnormalities.

Albrecht argues that it is far more efficient to fit dogs and cats with tags that contain owner contact information rather than chipping an animal and expecting the person who finds him to take him to a clinic or shelter to read the microchip.

“Then, if your neighbor finds your dog, rather than having to turn your dog in to the animal shelter where it might be put to sleep, your neighbor can call you and tell you they have him,” she said.

As for pet owners who have not sought the procedure for their animals and are unsure of whether they should, Albrecht noted, “If a pet’s not currently microchipped, it may be best to keep them that way.”

Editor’s note: Dr. Albrecht encourages pet owners who have similar experiences with implantable microchips to contact her and share their stories.

In Iraq, Obama has chosen the continuation of criminal social engineering. Only a rupture from the political process can save Iraq and its people

While all observers, the UN, international institutions and organisations, Arab and international parties and movements, and Iraqis outside the alliance in power in Iraq, pointed to and alerted the international community, the UN and Arab League members, and international and Arab movements to the tragic situation and condition of Iraqis under occupation, and the collapse of the means of having any normal life or hope of having one in the future if conditions created by the US invasion continued, the Maliki government, supported by the US, the Kurdish leaderships and the pro-Iranian sectarian parties, maintained its policies of generalised repression, generalised corruption, generalised falsification of facts and generalised lies as justifications.

The initial plan of destroying Iraq and dividing it into three entities by depending on an alliance between separatist Kurds, Iranian religious fascists, and behind-the-scenes Israeli secret service activities was in its own right criminal social engineering, contrary to all obligations of the occupation under international law. As the Iraqi army, and with it the Iraqi people, resisted the occupation, the occupation and its allies engaged in genocidal actions that were disastrous not only for Iraqis but for the US, Iraq’s neighbouring countries, the international economy and international relations, norms and standards.

What is called the “political process” was designed to achieve this division of Iraq. But all those who know the politics in the region have understood from the beginning that destroying the Arab-Muslim identity of Iraq and dividing it into Shia, Sunni and Kurd was a mirage towards which the US has been running, and that the outcome would be US failure. Running towards this mirage led to seven years of perpetual death, destruction and terror for Iraq, and seven years of failure of the US in battling the Iraqi people and its resistance. A haemorrhage for Iraq in blood, and for the US in money. The US won nothing but shame, a financial crisis, the unjustifiable death of its sons, unpardonable aggression and the collapse of its image, and a general distrust of its values and policies.

Yes, the US succeeded in destroying Iraq, but succeeding in building a new Iraq based on three semi-independent entities is an impossible task that US think tanks created for themselves and for Israel. Iraq is unbreakable. The Iraqi people, identity, interest and will, and the geopolitical reality of the region do not permit the division of Iraq. After seven years of failure, instead of negotiating with the resistance and the anti-occupation forces that stood outside the US-instigated political process to establish peace and conditions for withdrawal, and to render Iraq to its people so that Iraqis rebuild their country and their society and life, the Obama administration decided to revive the failed political process via faux elections.

With Obama, the US — the first responsible for the tragic situation in Iraq — presented Iraqi elections as the remedy to problems it created and has sustained. In reality, the rules governing the political process, the repression and the marginalisation of all opponents to it, in addition to the forced deportation of most of the middle class outside the country, made the elections a mere drama whose aim is for the political process to reproduce itself so the US can prolong its control of Iraq while exculpating the US from its responsibility for the tragic situation in Iraq. One day of elections has nothing to do with the tormented everyday life of Iraqis.

For the US, the Maliki government’s signature on the Status of Forces Agreement and oil contracts freed them from caring about who is in power in Iraq, how they govern, and what for, so long as they continue to fulfil their own plan. As all such agreements are legally null and void, despite rhetorical declarations of the withdrawal of combat forces the US plans to keep up to 50,000 troops stationed in Iraq along with thousands of special forces and more than 100,000 mercenaries operating under their command. The US will also have at its disposal forces inside the political process, guided by thieves, warlords, and stooges, insuring that no force against the US can exist without being immediately eliminated by others or directly by the remaining US units or its special forces. The forces in the political process are, for the US, welcome to fight each other freely, but all are and must be against building a real unified state for Iraqis or being opposed to the occupation.

There is nothing clearer regarding this strategy than the speech of Ambassador Hill in Washington. All candidates in the last elections, including Allawi, are in agreement. If they differ it is on their share of the cake of power: Iran and its agents refuse to integrate Sunnis in the political process; the Kurds do not want Arabs to unite and want to integrate Kirkuk in their hegemony in the north; Allawi and many with him are fed up of sectarianism and religious fascism but he is with the invasion and with a softer deBaathification; and Maliki wants to be prime minister by election or by force. Apparently the result of the falsified election serves the US plan. The parliament is as divided as before and the future government is and will be as weak as before.

There are two aspects that would endanger and disturb the self-satisfied US plans. While the US did nothing to change the tragic situation in Iraq, giving the dirty job of repression, corruption and lies to its local allies, its allies refuse any change. They use all legal and illegal means and tricks, including assassinations, arrests, deportations and terror, so that power remains in the hands of an alliance of the two Kurdish parties and two Shia parties. The Kurd’s “standby”, Iran’s interventions, renewed sectarian violence, Maliki’s threats of not recognising the results, go in this direction.

The second danger to US plans is the position of the popular resistance and the anti-occupation forces towards the elections. As movements, none presented a list or official candidates, thereby de-legitimising the elections. Neither the Baath Party, nor the Taa’sisee, nor the Association of Muslim Scholars in Iraq, nor the anti-occupation leftists participated. But they afforded to their supporters full freedom to boycott or to vote according to the local situation. If we analyse the number of votes for each list, and on which theme they won, we can see that the anti-occupation project of a unified Iraq has succeeded to prove it is the first political force in Iraq.

The vote in Kirkuk, Mosul, Diyala, Salaheddin proved that Kurdish expansionist plans don’t have the support of the population concerned. The purely religious parties who yearn for a religious state, despite seven years of using power for their own benefit with the aid of the US, secured less than 2.5 million of 12 million votes. Those who support dividing Iraq into Shia, Sunni and Kurdish entities, meaning the Iraqi National Accord (INA) and the Kurdish Alliance, did not exceed a fifth of the eligible voters. We should mention that the Sadrists — who are part of the INA — present themselves as refusing the division of Iraq.

The number of voters who accept Iranian hegemony over Iraq is very weak. The INA, which is the principal ally of the US, won two million and ninety five thousand votes of the 18 million eligible voters and the 12 million who voted. We could maybe add half of Maliki’s list to them, if Maliki’s list disintegrates. But Maliki, an American creation, presented himself as someone who refuses Iran’s diktat. We will see what will happen to his list now he has lost power.

The situation puts Iraq before a crucial juncture. One possibility is that the Iraqi people experience another four bloody years after the seven last blood-soaked ones. The second possibility is that by respecting the Iraqi will, Iraqis will get some rest and enough security to start building a secular and unified state again. The vote proved that no salvation will come from inside the political process and that the armed resistance, which is the legal Iraqi army, in addition to those who boycotted, those who voted for Allawi and other lists who desire change and a secular state, the refugees, mostly middle class professionals, the non-separatist Kurds outside the governing parties, the Turkmen, the poor who voted for Sadrists, the Christians, the Yazidis, all honest intellectuals of Iraq, represent a public for a government of salvation that can rebuild a democratic independent and unified Iraq. It is the duty of the UN, the Arab League, Iraq’s neighbours and Iraqi progressists to facilitate its birth.

When Iraqis struggle for peace, stability and democracy by resisting and searching for a way to rebuild their sovereign state based on equal citizenship, they defend the interests of Iraq’s neighbours, including Iran, all the Arab world, all peoples, countries and forces that wish to end wars and violence, and end Western hegemony in international affairs, whose first victim is always the Third World, and end relations based on force and exploitation. Iraq is the forefront battle for a better world.

Abdul Ilah Albayaty is an Iraqi political analyst and member of the Executive Committee of the BRussells Tribunal.

The Global Economic Crisis: Riots, Rebellion and Revolution

April 7th, 2010 by Andrew Gavin Marshall

This is Part 3 of the series, “When Empire Hits Home.”

Part 1: War, Racism and the Empire of Poverty
Part 2: Western Civilization and the Economic Crisis: The Impoverishment of the Middle Class

As nations of the world are thrown into a debt crisis, the likes of which have never been seen before, harsh fiscal ‘austerity’ measures will be undertaken in a flawed attempt to service the debts. The result will be the elimination of the middle class. When the middle class is absorbed into the labour class – the lower class – and lose their social, political, and economic foundations, they will riot, rebel, and revolt.

Ratings Agency Predicts Civil Unrest

Moody’s is a major ratings agency, which performs financial research and analysis on governments and commercial entities and ranks the credit-worthiness of borrowers. On March 15, Moody’s warned that the US, the UK, Germany, France, and Spain “are all at risk of soaring debt costs and will have to implement austerity plans that threaten ‘social cohesion’.” Further, Moody’s warned that such ‘austerity’ measures increase the potential for ‘social unrest’:

“Growth alone will not resolve an increasingly complicated debt equation. Preserving debt affordability at levels consistent with AAA ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion,” said Pierre Cailleteau, the chief author.

“We are not talking about revolution, but the severity of the crisis will force governments to make painful choices that expose weaknesses in society,” he said.[1]

In other words, due to the massive debt levels of western nations taken on to save the banks from the crisis they caused, the people must now pay through a reduction of their standards of living. Naturally, social unrest would follow.

This has not been the first or only warning of “social unrest” in the west, and it certainly won’t be the last.

The Economic Crisis and Civil Unrest

At the onset of the economic crisis, these warnings were numerous. While many will claim that since we have moved on since the fall of 2008, these warnings are no longer valid. However, considering that the western world is on the verge of a far greater economic crisis that will spread over the next few years, from Greece to America, a great global debt depression, these warnings should be reviewed with an eye on the near future.

In December of 2008, in the midst of the worst period of the crisis of 2008, the IMF issued a warning to government’s of the west to “step up action to stem the global economic crisis or risk delaying a recovery and sparking violent unrest on the streets.”[2] However, governments did not stem or stop the economic crisis, they simply delayed the eventual and inevitable crisis to come, the debt crisis. In fact, the actions governments took to “stem” the economic crisis, or delay it, more accurately, have, in actuality, exacerbated the compound effects that the crisis will ultimately have. In short, bailing out the banks has created a condition in which an inevitable debt crisis will become far greater in scope and devastation than had they simply allowed the banks to fail.

Even the Bank for International Settlements (BIS), the most prestigious financial institution in the world – the central bank to the world’s central banks – has warned that the bailouts have put the global economy in potentially far greater peril. The BIS warned that, “The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets.”[3]

The head of the IMF warned that, “violent protests could break out in countries worldwide if the financial system was not restructured to benefit everyone rather than a small elite.”[4] However, he is disingenuous in his statements, as he and the institution he represents are key players in that “small elite” that benefit from the global financial system; this is the very system he serves.

In late December of 2008, “A U.S. Army War College report warn[ed] an economic crisis in the United States could lead to massive civil unrest and the need to call on the military to restore order.” The report stated:

Widespread civil violence inside the United States would force the defense establishment to reorient priorities … to defend basic domestic order and human security.[5]

Further revealed in the news release was the information that, “Pentagon officials said as many as 20,000 Soldiers under the U.S. Northern Command (NORTHCOM) will be trained within the next three years to work with civilian law enforcement in homeland security.”[6]

Europe in Social Crisis

In January of 2009, it was reported that Eastern Europe was expected to experience a “dangerous popular backlash on the streets” over the spring in response to the economic crisis:

Hit increasingly hard by the financial crisis, countries such as Bulgaria, Romania and the Baltic states face deep political destabilisation and social strife, as well as an increase in racial tension.

Last week protesters were tear-gassed as they threw rocks at police outside parliament in Vilnius, capital of Lithuania, in a protest against an austerity package including tax rises and benefit cuts.[7]

In January of 2009, Latvia experienced the largest protests since the mass rallies against Soviet rule in the late 1980s, with the protests eventually turning into riots. Similar “outbursts of civil unrest” spread across the “periphery of Europe.”[8]

This should be taken as a much larger warning, as the nations of Eastern Europe are forced into fiscal ‘austerity’ measures before they spread through the western world. Just as throughout the 1980s and the 1990s, countries of the ‘global south’, which signed Structural Adjustment Programs (SAPs) with the IMF and World Bank, were forced to undertake neoliberal reforms and harsh fiscal austerity measures. The people of these nations rioted and rebelled, in what was cynically referred to as “IMF riots”. What our nations have done abroad, in the name of ‘aid’ but in the intent of empire, is now coming home. The west will undergo its very own “IMF riots”.

The fears of civil unrest, however, were not confined simply to the periphery of Europe. In January of 2009, a massive French strike was taking place, as “teachers, television employees, postal workers, students and masses of other public-sector workers” were expressing discontent with the handling of the economic crisis; as “A depression triggered in America is being played out in Europe with increasing violence, and other forms of social unrest are spreading.”[9]

By late January, France was “paralysed by a wave of strike action, the boulevards of Paris resembling a debris-strewn battlefield.” Yet, the ‘credit crunch’ had hit harder in Eastern Europe and the civil unrest was greater, as these countries had abandoned Communism some twenty years prior only to be crushed under the “free market” of Capitalism, leading many to feel betrayed: “Europe’s time of troubles is gathering depth and scale. Governments are trembling. Revolt is in the air.”[10]

Olivier Besancenot, the leader of France’s extreme left “is hoping the strike will be the first step towards another French revolution as the recession bites and protests multiply across Europe’s second largest economy.” He told the Financial Times that, “We want the established powers to be blown apart,” and that, “We are going to reinvent and re-establish the anticapitalist project.”[11]

In January of 2009, Iceland’s government collapsed due to the pressures from the economic crisis, and amidst a storm of Icelanders protesting in anger against the political class. As the Times reported, “it is a sign of things to come: a new age of rebellion.” An economist at the London School of Economics warned that we could expect large-scale civil unrest beginning in March to May of 2009:

It will be caused by the rise of general awareness throughout Europe, America and Asia that hundreds of millions of people in rich and poor countries are experiencing rapidly falling consumption standards; that the crisis is getting worse not better; and that it has escaped the control of public authorities, national and international.[12]

In February of 2009, the Guardian reported that police in Britain were preparing for a “summer of rage” as “victims of the economic downturn take to the streets to demonstrate against financial institutions.” Police officials warned “that middle-class individuals who would never have considered joining demonstrations may now seek to vent their anger through protests this year.”[13]

In March, it was reported that “top secret contingency plans” had been drawn up to counter the threat posed by a possible “summer of discontent,” which “has led to the ­extraordinary step of the Army being put on ­standby.” The report revealed that, “What worries emergency planners most is that the middle classes, now struggling to cope with unemployment and repossessions, may take to the streets with the disenfranchised.”[14]

As the G20 met in London in early April 2009, mass protests took place, resulting in violence, “with a band of demonstrators close to the Bank of England storming a Royal Bank of Scotland branch, and baton-wielding police charging a sit-down protest by students.” While the majority of protests were peaceful, “some bloody skirmishes broke out as police tried to keep thousands of people in containment pens surrounding the Bank of England.”[15] Protests further broke out into riots as a Royal Bank of Scotland office was looted.[16] The following day, a man collapsed and died in central London during the protests shortly after having been assaulted by riot police.[17]

On May 1, 2009, major protests and riots broke out in Germany, Greece, Turkey, France and Austria, fuelled by economic tensions:

Police in Berlin arrested 57 people while around 50 officers were hurt as young demonstrators threw bottles and rocks and set fire to cars and rubbish bins. There were also clashes in Hamburg, where anti-capitalist protesters attacked a bank.

In Turkey, masked protesters threw stones and petrol bombs at police, smashing banks and supermarket windows in its biggest city, Istanbul. Security forces fired tear gas and water cannon at hundreds of rioters and more than a hundred were arrested with dozens more hurt. There were also scattered skirmishes with police in the capital, Ankara, where 150,000 people marched.[18]

There were further protests and riots that broke out in Russia, Italy, Spain, and some politicians were even discussing the threat of revolution.[19]

As a debt crisis began spreading throughout Europe in Greece, Portugal, and Spain, social unrest followed suit. Riots and protests increasingly took place in Greece, showing signs of things to come to all other western nations, which will sooner or later have to face the harsh reality of their odious debts.[20]

Is Civil Unrest Coming to America?

In February of 2009, Obama’s intelligence chief, Dennis Blair, the Director of National Intelligence, told the Senate Intelligence Committee that the economic crisis has become the greatest threat to U.S. national security:

I’d like to begin with the global economic crisis, because it already looms as the most serious one in decades, if not in centuries … Economic crises increase the risk of regime-threatening instability if they are prolonged for a one- or two-year period… And instability can loosen the fragile hold that many developing countries have on law and order, which can spill out in dangerous ways into the international community.[21]

What this means, is that economic crises (“if they are prolonged for a one or two year period”) pose a major threat to the established powers – the governing and economic powers – in the form of social unrest and rebellion (“regime-threatening instability”). The colonial possessions – Africa, South America, and Asia – will experience the worst of the economic conditions, which “can loosen the fragile hold that many developing countries have.” This can then come back to the western nations and imperial powers themselves, as the riots and rebellion will spread home, but also as they may lose control of their colonial possessions – eliminating western elites from a position of power internationally, and acquiescence domestically: The rebellion and discontent in the ‘Third World’ “can spill out in dangerous ways into the international community.”

In the same month, the highest-ranking general in the United States, “Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, ranks the financial crisis as a higher priority and greater risk to security than current wars in Iraq and Afghanistan.” He explained, “It’s a global crisis. And as that impacts security issues, or feeds greater instability, I think it will impact on our national security in ways that we quite haven’t figured out yet.”[22] Rest assured, they’ve figured it out, but they don’t want to tell you.

Again, in the same month, the head of the World Trade Organization (WTO) warned that, “The global economic crisis could trigger political unrest equal to that seen during the 1930s.” He elaborated, “The crisis today is spreading even faster (than the Great Depression) and affects more countries at the same time.”[23]

In February of 2009, renowned economic historian and Harvard professor, Niall Ferguson, predicted a “prolonged financial hardship, even civil war, before the ‘Great Recession’ ends,” and that, “The global crisis is far from over, [it] has only just begun, and Canada is no exception,” he said while at a speaking event in Canada. He explained, “Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence,” while, “the crisis will eventually provoke political conflict.” He further explained:

There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable.[24]

Even in May of 2009, the head of the World Bank warned that, “the global economic crisis could lead to serious social upheaval,” as “there is a risk of a serious human and social crisis with very serious political implications.”[25]

Zbigniew Brzezinski, former National Security Adviser, co-founder of the Trilateral Commission and a key architect of ‘globalization’ warned in February of 2009 that, “There’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots!”[26]

In early May 2009, the New York Times reported on the results of a major poll, suggesting, “A solid majority of people in the major Western democracies expect a rise in political extremism in their countries as a result of the economic crisis.” Of those surveyed, 53% in Italy and the United States said they expected extremism is “certain to happen” or “probable” in the next three years. That percentage increases to 65% in Britain and Germany, and is at 60% in France and Spain.[27]

Over the summer of 2009, the major nations of the west and their corporate media machines promoted and propagandized the notion of an ‘economic recovery’, allowing dissent to quell, spending to increase, stock market speculation to accelerate, and people’s fears and concerns to subside. It was a massive organized propaganda effort, and it had major successes for a while. However, in the New Year, this illusion is largely being derided for what it is, a fantasy. With the slow but steady erosion of this economic illusion, fears of riots, rebellion and revolution return.

On March 1, 2010, Nation of Islam leader Louis Farrakhan warned President Obama about civil unrest, saying:

When we can’t feed our families what do you tell us? Thou shalt not steal? When survival is the first law of nature? What are you going to do when black people and poor people erupt in the streets of America? It’s coming! Will you use the federal troops, Mr. President, against the poor?[28]

A March 8 article in the Wall Street Journal speculated about the discontent among the American people in regards to the economy, suggesting that it is “likely” that the economy has “bottomed” and that it will simply “trudge along” until November. However, the author suggested that given all the growing discontent in a variety of areas, it wouldn’t be surprising to see some civil unrest:

Now, contrary to what you may read in the New York Times or the Huffington Post, the ugliness could come from anywhere – the Left, the Center or the Right. Almost everyone in America thinks they’ve been betrayed.[29]

Clearly, the possibility and inevitability of riots in the United States, and in fact in many western nations becomes increasingly apparent. The middle classes will likely become the most angered and mobilized populace, having their social foundations pulled out from under them, and with that, they are overcome with a ‘failure of expectations’ for their political and economic clout. With no social foundations on which to stand, a class cannot reach high in the political and economic ladder, nationally or internationally.

As documented in Part 2 of this series, the middle class, for the past few decades, has been a class living on debt, consuming on debt, surviving on debt and existing only in theory. As nations collapse into a global debt crisis, the middle classes and the college students will be plunged into a world which they have seldom known: poverty. As documented in Part 1 of this series, the global social systems of poverty, race and war are inextricably interrelated and dependent on one another. As the middle class is absorbed into the global poverty class – the labour class – our nations in the west vastly expand their hegemony over the world’s resources and key strategic points, rapidly accelerating military involvement in every region of the world. As war expands, poverty grows, and racial issues are exacerbated; thus, the government asserts a totalitarian system of control.

Will the Middle Class Become Revolutionary?

In 2007, a British Defence Ministry report was released assessing global trends in the world over the next 30 years. The report stated assuredly that, “During the next 30 years, every aspect of human life will change at an unprecedented rate, throwing up new features, challenges and opportunities.”[30] In regards to ‘globalization,’ the report states:

A key feature of globalization will be the continuing internationalization of markets for goods, services and labour, which will integrate geographically dispersed sets of customers and suppliers.  This will be an engine for accelerating economic growth, but will also be a source of risk, as local markets become increasingly exposed to destabilizing fluctuations in the wider global economy… Also, there will continue to be winners and losers in a global economy led by market forces, especially so in the field of labour, which will be subject to particularly ruthless laws of supply and demand.[31]

Another major focus of the report is in the area of “Global Inequality,” of which the report states, over the next 30 years:

[T]he gap between rich and poor will probably increase and absolute poverty will remain a global challenge… Disparities in wealth and advantage will therefore become more obvious, with their associated grievances and resentments, even among the growing numbers of people who are likely to be materially more prosperous than their parents and grandparents.  Absolute poverty and comparative disadvantage will fuel perceptions of injustice among those whose expectations are not met, increasing tension and instability, both within and between societies and resulting in expressions of violence such as disorder, criminality, terrorism and insurgency. They may also lead to the resurgence of not only anti-capitalist ideologies, possibly linked to religious, anarchist or nihilist movements, but also to populism and the revival of Marxism.[32]

The report states quite emphatically that there is a great potential for a revolution coming from the middle class:

The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx.  The globalization of labour markets and reducing levels of national welfare provision and employment could reduce peoples’ attachment to particular states.  The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat to social order and stability, as the burden of acquired debt and the failure of pension provision begins to bite.  Faced by these twin challenges, the world’s middle-classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest.[33]

Is Revolution the Right Way Forward?

As the world has already experienced the greatest transfer of wealth in human history, the greatest social transformation in world history is soon to follow. The middle classes of the west, long the foundations upon which the consumer capitalist system was based, are about to be radically reorganized and integrated into the global labour class. As this process commences and accelerates, the middle classes will begin to protest, riot, rebel, and possibly revolt.

We must ask ourselves: Is this the right way forward?

History is nothing but an example that when revolution takes place, it can quickly and effectively be hijacked by militant and extremist elements, often resulting in a situation worse than that prior to the revolution. Often, these elements themselves are co-opted by the ruling elite, ensuring that whatever regime rises in the ashes of the old, no matter how militant or radical, it will continue to serve and expand the entrenched interests of elites. This is the worst-case scenario of revolution, and with history as a guide, it is also a common occurrence. To understand the nature of co-opted revolutions and entrenched elites, one need only look at the revolutions in France and Russia.[34]

While the righteous indignation and anger of the western middle class population, and in fact, the global population as a whole, is entirely justified, there is an extreme danger in the possibilities of how such a revolutionary class may act. It is imperative to not take violent action, as it would merely be playing directly into the hands of states and global institutions that have been preparing for this eventuality for some time. Nations are becoming ‘Homeland Security States’, setting up surveillance societies, increasing the role of the military in domestic issues and policing, expanding the police state apparatus and militarizing society in general. Democracy is in decline; it is a dying idea. Nation states are increasingly tossing aside even the remaining vestiges of a democratic façade and preparing for a new totalitarianism to arise, in conjunction with the rise of a ‘new capitalism’.

Violent action and riots by the people of these nations will only result in a harsh and brutal closing of society, as the state clamps down on the people and installs an oppressive form of governance. This is a trend and process of which the people should not help speed along. Violent acts will result in violent oppression. While peaceful opposition may itself be oppressed and even violently repressed by the state apparatus, the notion of a clamp down on peaceful protesters is likely to increase dissatisfaction with the ruling powers, increase support for the protesters, and may ultimately speed up the process of a truly new change in governance. It’s difficult to demonize peaceful action.

While people will surely be in the streets, seeking to expand their social, political, and economic rights, we must undertake as a global society, a rapid and extensive expansion of our mental and intellectual rights and responsibilities. We cannot take to the streets without taking on the challenges of our minds. This cannot alone be a physical change in governance that people seek – not simply a political revolution – this must be coupled and driven by an intellectual revolution. What is required is a new Enlightenment, a new Renaissance. While the Enlightenment and Renaissance were western movements of thinking and social change, the new global Enlightenment must be a truly transnational and worldwide revolution in thinking.

Western Civilization has failed. It will continue to insist upon its own dominance, but it is a failure in regards to addressing the interests of all human civilization. Elites like to think that they are in absolute control and are all-powerful; this is not the case. For every action, there is an equal and opposite reaction. Take, for example, the integration of North America into a regional bloc like that of the European Union, an entirely elite-driven project of which the people largely know little or nothing about. Elites seek to force the people of this region to increasingly identify themselves as ‘North American’, just as elites in Europe increasingly push for a ‘European’ identity as opposed to a national identity. While the intended purpose of this social reorganization is to more easily control people, it has the effect of uniting some of these people in opposition to these elite-driven projects. Thus, those they seek to unite in order to control, are then united in opposition to their very control.

As the ‘globalization project’ of constructing a ‘new world order’ expands, built upon the concepts of global governance, elites will inadvertently unite the people of the world in opposition to their power-project. This is the intellectual well that must be tapped as soon as possible. Ideas for a truly new world, a true human ‘civilization’ – a “Humane Civilization” – must be constructed from ideas originating in all regions of the world, from all peoples, of all religions, races, ethnicities, social groups and standings. If we are to make human civilization work, it must work for all of humanity.

This will require a global “revolution in thinking”, which must precede any direct political action. The global social, political, and economic system must be deconstructed and built anew. The people of the world do not want war, it is the leaders – the powerful – who decide to go to war, and they are never the ones to fight them. War is a crime against humanity, a crime of poverty, of discrimination, of hate. The social, political and economic foundations of war must be dismantled. Socially constructed divides between people – such as race and ethnicity – must be dismantled and done away with. All people must be treated as people; racial and gender inequality is a crime against humanity itself.

Poverty is the greatest crime against humanity the world has ever known. Any society that permits such gross inequalities and absolute poverty, which calls itself ‘civilized’, is only an aberration of the word, itself. As Dr. Martin Luther King, Jr. stated:

I am convinced that if we are to get on the right side of the world revolution, we as a nation must undergo a radical revolution of values. We must rapidly begin the shift from a “thing-oriented” society to a “person-oriented” society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.[35]


[1]        Ambrose Evans-Pritchard, Moody’s fears social unrest as AAA states implement austerity plans. The Telegraph: March 15, 2010:

[2]        Angela Balakrishnan, IMF chief issues stark warning on economic crisis. The Guardian: December 18, 2008:

[3]        BIS, International banking and financial market developments. BIS Quarterly Review: December 2008: page 20

[4]        Angela Balakrishnan, IMF chief issues stark warning on economic crisis. The Guardian: December 18, 2008:

[5], Study: DoD May Act On US Civil Unrest. McClatchy-Tribune Information Services: December 29, 2008:

[6]        Ibid.

[7]        Jason Burke, Eastern Europe braced for a violent ‘spring of discontent’. The Observer: January 18, 2009:

[8]        Philip P. Pan, Economic Crisis Fuels Unrest in E. Europe. The Washington Post: January 26, 2009:

[9]        Adrian Michaels, Europe’s winter of discontent. The Telegraph: January 27, 2009:

[10]      Ian Traynor, Governments across Europe tremble as angry people take to the streets. The Guardian: January 31, 2009:

[11]      Ben Hall, French workers stage strike in protest at job losses and reforms. The Financial Times: January 29, 2009:

[12]      Roger Boyes, World Agenda: riots in Iceland, Latvia and Bulgaria are a sign of things to come. The Times: January 21, 2009:

[13]      Paul Lewis, Britain faces summer of rage – police. The Guardian: February 23, 2009:

[14]      Geraint Jones, MI5 Alert On Bank Riots. The Express: March 1, 2009:

[15]      Sam Jones, Jenny Percival and Paul Lewis, G20 protests: riot police clash with demonstrators. The Guardian: April 1, 2009:

[16]      Telegraph TV, G20 protests: Rioters loot RBS as demonstrations turn violent. The Telegraph: April 1, 2009:

[17]      ITN, Police ‘admit contact’ with man killed at G20 protest. In The News: April 6, 2009:$1285968.htm

[18]      Henry Samuel, Riots across Europe fuelled by economic crisis. The Telegraph: May 1, 2009:

[19]      Ibid.

[20]      David Oakley, et. al., Europe fears rock global markets. The Financial Times: February 4, 2010:

[21]      Stephen C. Webster, US intel chief: Economic crisis a greater threat than terrorism. Raw Story: February 13, 2009:

[22]      Tom Philpott, MILITARY UPDATE: Official: Financial crisis a bigger security risk than wars. Colorado Springs Gazette: February 1, 2009:

[23]      AFP, WTO chief warns of looming political unrest. AFP: February 7, 2009:

[24]      Heather Scoffield, ‘There will be blood’. The Globe and Mail: February 23, 2009:

[25]      BBC, World Bank warns of social unrest. BBC News: May 24, 2009:

[26]      Press TV, Economic Crisis: Brzezinski warns of riots in US. Global Research: February 21, 2009:

[27]      John C. Freed, Economic Crisis Raises Fears of Extremism in Western Countries. The New York Times: May 6, 2009:

[28]      WBEZ, Farrakhan Warns Obama of Civil Unrest. Chicago Public Radio: March 1, 2010:

[29]      Evan Newmark, Mean Street: America’s Coming Civil Unrest? The Wall Street Journal: March 8, 2010:

[30]      DCDC, The DCDC Global Strategic Trends Programme, 2007-2036, 3rd ed. The Ministry of Defence, January 2007: page 1

[31]      Ibid, page 3.

[32]      Ibid.

[33]      Ibid, page 81.

[34]      For a look at the co-opting of the French Revolution by elites, see: Andrew Gavin Marshall, Global Power and Global Government: Evolution and Revolution of the Central Banking System. Global Research: July 21, 2009:; For a look at the relationship between the Russian Revolution and powerful banking and corporate interests in America and Europe, see: Andrew Gavin Marshall, Origins of the American Empire: Revolution, World Wars and World Order. Global Research: July 28, 2009:

[35]      Rev. Martin Luther King, Beyond Vietnam: A Time to Break Silence. Speech delivered by Dr. Martin Luther King, Jr., on April 4, 1967, at a meeting of Clergy and Laity Concerned at Riverside Church in New York City:

Andrew Gavin Marshall is a Research Associate with the Centre for Research on Globalization (CRG). He is currently studying Political Economy and History at Simon Fraser University.

Editor’s Note

This article is phrased as  ”a letter written to a colleague from the Sorbonne.  F.” 

The film on  Lord Dowling, the Supremo  of Fighter  Command during what prosaically has been  labeled the Battle of Britain,  stimulated you to  make some perceptive comments. You asked for some clarifications and  amplifications and I shall take  some time off to do so. To achieve this I consulted my Archives.  I also happened to be a member of the Royal Air Force which I joined in the year of the Battle of Stalingrad.  It was an essential part of my experience and the greatest of educations.

It was more than the transition from an adolescent to an adult. It was far more than a world of flying.  A span of time that included not merely flying and doing what I was trained to do but also  a world  of books and study and thinking and reflecting and in talking to others and learning from them. If you wish to call that a University you may be free to do.  In that world diplomas and degrees  were of utter irrelevance. They would come later.

Let me say at once that there is considerable misunderstanding and swirling myths  of what is meant by the Battle of Britain which began after the collapse of France in June 1940. The mass bombings of South England began  in August. They were called off in November and we shall see why.  There was in the first place no such thing as the Battle of France. France was defeated and capitulated in June 1940. The nostrum of The Battle  of Britain was  concocted  by Winston Churchill. who used it  as a promotional battering ram to give colour and charisma to his leadership.  In sum, he used  it effectively as a public relations stunt.

The Nazis did not ‘lose’  the so called  BoB because while they launched an attack it was called off by Hitler in November for reasons we shall nowelucidate.  From this was drawn the conclusion that  the BoB was won by Britain under Churchill’s leadership.  That is a fallacy.Having said that we do not wish to diminish  the fighting spirit  of the British military and steadfastness and tenacity  of its peoples during those critical weeks. Nor do I intend to disparage the Royal Air Force  Fighter Command  that operated under  an embattled leadership tarnished by personal  squabbles and personal ambition. What we are saying is let us try to see things in perspective.

You’ve no doubt seen the earlier film starring  Sir Lawrence  Olivier.It gave a romanticized version of events portraying Air Marshal Dowling as a hero and the RAF Fighter Command as a band  of young all-white  indomitable brothers  that rescued  the UK from  the clutches  of  the Nazi invasion thus ensuring the victory of the BoB. This is mythology of a supine  order. There was an onslaught on Britain from the middle of August to be sure  that  lasted until the middle November.

I shall sketch  briefly some of the factors leading up to the BoB.  Certainly, the  discovery of Radar in 1936 and its  deployment played a  role in  confrontingthe Luftwaffe. But it  was never busted. It was not the only factor in play and in the  strides of history no single event or personality is of primordial  importance. It is mandatory  study the ensemble of inter-locking events and their causative relationships.

In the course of my military service I  became  acquainted  with many of these  fighter pilots many of whom had  later  shifted to Bomber Command.  True, the Luftwaffe  pilots,  not least of all,  such aces as Oberst Adolf Galland  had brought with them enormous experience  culled from earlier air campaigns.

These were the indispensable  testing  grounds of the Luftwaffe which the RCAF and the RAF did not have but were soon to acquire. I refer to the Condor  Air Squadrons and the use  of the Stukas as a devastating  destructive force in Spain and you will recall Guernica.  The embryonic  Luftwaffe was baptized  as  our ‘flying  artillery’ by Goering.  Incidentally, he  was  never referred to in the R A F/ RCAAFby his  name but  by the sobriquet  ‘the Fat Boy’, a name  that he took with him to the Nuremberg  Tribunal.

Many of the  RAF  fighter  crews members  were sub-standard but of course there were exceptions. Many  were greenhorns and their training in many cases wholly inadequate.  But that too was not immutable.The importance of Radar was that it directed from the ground via radio signals to the air crews the direction and altitude of the attacking aircraft. That was no mean feat and Galland as he said after the war  was struck by the fact that  they zoomed in  unerringly on their targets.  But the Luftwaffe interceptor aircraft had already surmised  that  somethingradically new in aerial warfare had  emerged.  The so-called  BoB began  inDunkirk and the collapse of the French armies.

“The  final Wehrmacht  victory over England is now only a question of time”, noted General Jodl, chief of operations  at OKW on June 30, 1940.  This is illustrativeofWehrmacht arrogance, understandable enough in the light of the  conquests of the Nazi Blitzkrieg;  and such  imbecile triumphalism  was to be repeated again and again. in the early stages of  the invasion of the Soviet Union. And he went on: “Enemy offensive operations  on a large scale are no longer possible.”What he had in mind was that for the first time Hitler’s Germany  had control of  the North Sea with the defeat of  Norway and Denmark. Nazi  military might was therefore  unstoppable or appreared to be so.  Itwas the herald of the  great victories of the Uebermensch.

The German fleet was no longer bottled up as it was  in 1914-18 by British  mines and sea power that  blocked  the Kaiser’sU-boats from breaking out  into the North Atlantic on a large scale, and shoved  the German Merchant Marine  from the high  seas. In  so doing,the Royal Navy’s blockade  strangledImperial Germany. Or rather was one of the central factors. The massive German High Sea  Kriegs Marine  built  up byAdmiral von Tirpitz since 1897  at an astronomic financial  cost was  a formidable  naval fighting  force.  Its power remained, however, purely ‘potential’.

By May-June 1940 the configuration had changed with the conquest of Denmark and Norway. To this was added the entire French Atlantic coast which bestowed more than 3,000 kms of additional coast to the Third Reich’s ballooning empire. All the  pre-conditions for  the successful  launching  of  the Atlantic war were now present. But other considerations  would  blunt its full materialization. That  major condition – the looming presence of  the Soviet Union – which was permanently in the cross-hairs of the yet-to-be conquerors of the USSR would  ultimately weaken and deflectthe full impact of its offensive  naval capability. The Fuehrer’s psycho-neurotic  obsession was his Eastern frontier – Germany ’s India. The clubbing of England, a land that was never his ideological or ethnic enemy, would now  be pushed “into the cupboard” as Goering jokingly noted.

On May 20, the Panzers of Heinz Guderian  smashed through the British and French lines at Abbevile. The final day of reckoning had  struck.  Nine British  divisions and ten French divisions  were trapped.And so was the more than 300,000 British expeditionary  force (BEF). What  followed  was to be one of the major turning points of the war. And in the view of many one of Hitler’s major mis-calculations.The trap was never sprung. On 24 May, the order coming from the High Command, acting on Hitler’s personal order, was that the enveloping movementand the encirclement of the trapped forces  was  halted.

What now happened revealed not merely his lack of strategic thinking but his wider avaricious ambitions that puzzled many of his cronies.  Heinz Guderian, the Panzer  commander,  was indignant and so was Oberst Adolf Galland – the Luftwaffe’s  incomparable ace -  but what they failed to realize was that the decision proclaimed unilaterally as was his style  to halt  the attack was politically  and ideologically motivated. England to be sure was an enemy but it was not  to be  the primordial enemy.

Hitler as Halder  sedulously  believed  that the defeat of France would have brought peace and the British ruling class in the manner of Chamberlainwould have capitulated.. Personalities in history  as I have always stressed in these lectures  invariably  play a crucial role  never ultimately the decisive role; they cannot however  be abstracted from the historical process.  Churchill was  certainly a Tory reactionary but he was not a Lloyd George or a Chamberlain who cherished the delusion that the Empire’s  white man’s rule  would best be perpetuatedby a deal;  with  the Nazi warlords.

In this Churchill  was acting like shrewd  real estate agent  whounderstoodthat Hitler and Mussolini’s had expropriatory designs on the vastness of Empire.Of course it could be speculated  that there were those in England (such as Lloyd George who Churchill branded  a Petainist) who would have cut a  capitulationist  deal with Hitler if those 360,000  Anglo-French  troops had been captured in the Dunkirk salient. In comparison, Paulus’sSixth Army that surrendered at Stalingrad numbered 250,000.

The 360,000 escapees became the  core of a reborn military phalanx to be entirely modernized in very short order and deployed shortly in North Africa, and the conquest of Italian Somaliland. The evacuation  that was an extraordinary feat owed nothing to ”miracles”; it changed the play of things; it reinforced  Churchill’s prowess for deal and wheeling. And thus  British resistance.  Hitler had  had placed his  bet on  the erroneous  belief  thatChurchill and the British ruling class would grovel for peace rendering an invasion superfluous. As the unfolding years of the twenties and thirties dramatized so cruelly  (Spain and Ethiopia were  sordid case histories) the British ruling class was never opposed to the ideals  of Nazidom with its with its cold-blooded  quest  to knife the October Revolution in its cradle.

I know the weather in the Channel very well.  And its savagery and capriciousness, And of course the course of events after August owed much not only to the Spitfires and the Hurricanes but to meteorological conditions which made a channel crossing  a physical impossibility. That was the reason why June was the last date for our invasion in 1944. And that was why the capture of the portof Cherbourg was so vital following D-Day.In  September,  the weather had already turned nasty with storms and heavy waves. But apart from the vicissitudes of nature’s caprices Hitler and his gang had no grasp of the technical complexities of amphibious warfare.

The Amphibious landing craft were built in Glasgow and the engines in Detroit and elsewhere.What Hitler had were wooden barges which were not artifacts of war. That was what Napoleon’s  had. Obviously, that too was a non-starter Amphibious operations  was perfected between 1942 and 1943. McArthur’s island hopping expeditions in the Pacific were more  than test benches. The Wehrmacht had nothing of the sort but then their vision was directed  to what they regarded as greener and more exploitable pastures.

I witnessed and participated in the intense preparation for the  invasion of June 1944. From Scotland, I did aerial  reconnaissance work on the entire Norwegian coast whichas in the case of Denmark I came to  be familiar with.  But that was not all. I saw the amphibious  training  exercise that  was taking place  from Margate in the West to Lands End  at the  western extremity of the British Isles.  I also had the possibility of talking to the  highly skilled crewsthat were operating those landing craft.  By the end of November 1943, the RAF and the RCAAF  was  transferred from Bomber Command  of  Air Marshal  Sir Arthur Harris to  the supremo of  the Allied forces:  General  Ike  Eisenhower.The air  assaults on German cities were called off.

The missions of the Avro Lancasters was to photograph every centimeter of the French coast from Calais to the southern most tip of the  Bay of Biscay . We straddled  not merely the coasts  but  plunged deep into the  great  river estuaries in which many of the  big cities were located.  Throughout the winter air reconnaissance  was exhaustive  and the intelligence gleaned of incomparable value. The Wehrmacht’s  Intelligence  in 1940 was  poor or better still poverty-stricken. But then  they did not have the materiel and  their  hearts and minds were not on the job. From Cap Gris Nez to Dover is a  very small stretch of water. The inhabitants of  both places could gaze , as the expression went,  intoeach others backyard  on a sunny day.  And from the air that visibility was  magnified a thousand times.

The Air Operations

On 15 August the first massive  air attacks  (baptized Adlersangriffe) were launched.  This was Directive No. 21.  Within the ranks of the  German High  Command there were  doubts.  Grand Admirals Raeder and Doenitz  summed it up by saying  that the German Navy could not  undertake  the enterprise of an invasion before  May 1941. They were juggling with time. That was to be Hitler’s crucial date in another part of the world. And  they would soon know why the invasion had been shoved into the cupboard.. The Fuhrer cradled  other plans. It could not give protection to the ports that were being  attacked such as Ostend, Cherbourg, le Havre and many others.  They had become systematic targets of the R A F and the Royal Navy.

On 7 September, hundreds of bombers came over. Here again there was  a major miscalculation perhaps one of the greatest  in  World War 2. The  Luftwaffe had resorted to  mass ‘terror bombings’ – the words are those of  Goebbels -in London ’s East End. The Luftwaffe  shifted from  bombing  the airfields of  South Eastern England where Fighter Command Airfields were located  and directed their  attacks  against London ’s East End . That was the working class area as you know that contained  many people of East European and Russian descent. It was also one of the great bastions of Progressivism and the Communist Party. It was that part  of London where Eleanor Marx, barely 20 years old,  began  her tireless and successful  militancy  amongst the East End workers.

From the  spires of St Paul ’s Cathedral the future  supremo  of Bomber Command  Air Marshal Arthur Harris (born in India ) and  his adjutant  Air Marshall Tedder (born in Burma that was then part  of India)  scrutinized and analyzed the bombing patterns. Harris remarked in his cold analytical way: “This is the height of folly. I shall burn them and make them pay for it.”They were terrible words by a determined strategist  but they were impotent because  he was powerless to strike back at German cities. His aspiration would become a cataclysmic reality.In  less thantwo years with the advent of the  four-engined Avro Lancaster  powered by  Merlin Rolls Royce  engines another mighty Nemesis  would  begin – night and day, summer and winter -  their relentless onslaughts.

The  masters of the Third Reich  – and tragically the urban dwellers  of the Third Reich  - would grasp  in their flesh the torrid  promises of Harris or Bomber Harris  as he was baptized..The Fat Boy  had earlier boasted: “If a single bomb drops on German cities  my name is Meyer”. Indeed the ‘Meyers’ would  attain exponential growth levels. Ironically, it was one of the  most ironic , and foolish morsels  of  babbling  in the  annals  of warfare.The  call-off in November  had given theRA F a reprieve. Goering, backed by Hitler, went on the assumption that mass terror bombings of  civilian areas would demoralize the population and hence contribute tothe nation’s capitulation.  The mistakes and miscalculations were now being compounded at  staggering rates.

The extensive bombings of London extended from  September 7 to  November3..Arms  production did not decrease  in that span of time.It made  rapid strides not least because of the  organizing brilliance of  Lord Beaverbrook  and others.  At that point, Hitlerhalted  the  offensive. The  Hitlerian leadership continued to believe the world of fantasies.  One month after the high-point of the bombings, the chief of the operational staff General  Hans Jeschonnek stated that  England ’s  destruction would require an air fleet  four times as large  as  the Third Reich  possesses.  A statement of that  kind reveals  once again  the sheer foolishness of  these estimations. Why 4 and not 6 or  10 or 12? This was babbling  and nothing more.  Jeschonnek and Richtofen Stukas  blasted Stalingrad day after day in August 1942 but we know  where that led to. It  transformed a rubble-ruined  industrial city into an impregnable  fortress.

The  Nazi military machine  was the greatest  and mightiest  military force that the world  had  seen by theend May 1940. And here I would  concur  with William Schirer  when he stated that,  in truth, neither Hitler , the High Command  nor the general staffs of the  Wehrmacht, Kriegsmarine and the Luftwaffe had even seriously considered how a war with  Britain could  be fought and won . They were clueless.  Now with the dazzling success  in the midsummer of 1940  they stood stark naked in their  victories; they had no projects and elan  for exploiting  the greatest  military  victories  that the Third  Reich would ever know.

But Hitler did have a master plan. Hitler’s horizon was never  confined  to the Cliffs of Dover.  Hitler and Churchill to be sure were enemies. But their  shared a common enemy  that came to loom larger and more menacing  as the thirties  moved on.  Their obsession was  the Soviet Union.

The Spectre of the Soviet Union

Hitler was not only  a reactionary but the embodiment of the  greatest counter-revolution our world has ever known  one  thatGerman Big Capital  readily recognized and lavishly bankrolled. He was revered by the masters of property who tried to conceal the rationale of his entire being by his quasi-mystical  totemism and  perverted  folklore. His  vision was not of recent  vintage evidenced  in  the Nazi bible Mein Kampf.  It was the proclamation of the war against  Bolshevism.  Let us look at  the crux of his thinking to understand why Britain was not  the major enemy. And why at this moment it was to be shoved into the cupboard.

“And so we national socialists  turn our gaze towards the lands of the East…When we speak of new territory in Europe today we must  think principally of Russia and her border vassalstates. Destiny itself illuminates our way.the colossal empire in the East is ripe for dissolution, and the end of the Jewish domination in Russia will also be the end of Russiaas a state.”

In one of his musings to Rundstedt, Hitler  noted  that “once England is finished we would not be able to rouse  the German people to a fight against Russia. Thus, “ Russia would have to be disposed of first”The fact is that the blueprint  for the annihilation of  the  Soviet Union  was  iniated in  May 1940  and Halder was one of its prime architects. Directive  21 was signed by Hitler on 18 December given the pompous name of  Operation Barbarossa. The  Directive is clear. Its reading is chilling. Its ruling ideawas  that the USSR was not  only to be militarily squashed  but also obliterated as a political force.  “A war against  the USSR would be child’s play”, Hitler ranted. That was  his  credo and it was the credo also of the political universe of Big Capital and its political hirelings.  As to the child’s play  history  would soon give another verdict.

With  Directive 21  Operation Sea Lion was scrapped.  The grand panorama  now envisioned was more than a war of imperial conquest;  it was to be metamorphosed  intoa war of  genocide, a Rassenkampf or Race War the scale of which the world had never seen. An event whose consummation would begin on the 22 June, the same date that the Grande Armee traversed the Niemen.  I was an adolescent and I was finishing my apprenticeship  as a welder and a machinist.

The Vision of India

Churchill and Hitler share a common  ideal. Churchill loved  Indiaso much that he did not want to leave it. “ I did not become the King’s  first  Minister to preside over the liquidation of the British Empire.”  This  was his inimitable  rejoinder, his greatest truth,  to someone who questioned his obduracy on India ’s  freedom. For Hitler , India was a model  of a predatory colonial empire.“The Soviet Union will be our India .”  he  jubilantly declaimed.  A thought that has long weighed on  me and which encapsulates  the energizing drive wheelsof Hitlerian  genocide.  A proclamation which has not ceased to  numb  our brains  even after  more than six decades. Such utterances  put  both British imperialism and the rapacity of Hitlerian imperialism into much clearer focus.

As Churchill  confessed:  the ‘loss’ of India was one of  “my greatest personal losses” And no doubt his lugubrious  whine must be grasped in this context when  he saidthat it  was not only an irreparable‘loss’  for the British Empire but for humanity as a whole and  “ a personal loss that will  never cease to gnaw at my  soul.”Abstracted from  the bogus rhetorical outburst it simply meant  that  the lush pickings of empire flowed in his blood stream.And as you know he was a subaltern in the  Indian imperial army.  He was also a major  shareholder in British tea plantations in Assam and the  the South African gold mines of his friend Cecil Rhodes.

On his father’s side (his Mother was  American industrial  heiress) his  family’s  extensive pickings harked back to the East India Company to  be  vastly compounded in his own lifetime. These investments embraced large land holdings in the Punjab, commodity trading,  mines, shipping and insuranceand a wide variety of  other assets. Here was the assemblage of  the  personification  of capital wedded to Big Politics.  The two moved in easy consonance. Plunder  is seldom faceless and in the case of India  and the Empire  Churchill,  like members ofhis social caste, personified  the scale of  its parasitism.

What  Hitler and Churchill’s mutual  “love” of India  boils down to  was that India was a  a source of pillage  and exploitation. In the latter it enshrined a reality;  in the former an aspiration.  This was  their  common  denominator. They were kindred spirits each in his own  way. As I said  in my  other lectures on Colonialism  it was not  fortuitous that Churchillwas the guiding  butcher of the  incipient October Revolution. In so doing he rose  to  the defense of his class and its profits.

Churchill and his Wars of Intervention  (1918-1921) which the British government  bankrolled  escalated him and  Woodrow Wilson and Clemenceau to the  highest summits of State Terrorism. What  was more shocking as  the historical record  now discloseswas  that  a sizeable chunk of  the money  for the ‘wars of intervention’ in Russia (resulting in the death and massacre of millions by death and starvation) was  borne by  the ‘Indian’ government. Or if  you prefer, the  oppressed  peoples of colonial India  with the taxes imposed by their oppressors  bankrolled  the counter-revolution in Russia .

His love of empire  and his anti-communist  credo were the guiding lights – he had no others – of his  diseased social class from  which he never departed.  In the  United States he saw  as the major historical  agency for the perpetuation of  the values of his  visibly defunct empire. It  was not surprising that he resurfaced again  with his Fulton Speech ( March 1946) with his familiar baggage. Note the volte face and hypocrisy. Barely one year  earlier he was referring glibly to  the leader of the Soviet  Union “as my good friend Marshal Stalin”. It exposed  the nakedness of his bankruptcy and  his sanctification of the  Cold War. A war for which the coloured  peoples of the world starting from China would exact a human toll of tens of millions of  dead. A blood letting thatshows  no signs of ending.

The Fulton declaration of war  was the product of a blood-drenched  colonial regime in its  death throes. And it was not surprising that he made that declaration in a land  whose leaders,  more akin to political Gauleiters,  exalted  their crimes of bestiality in glaring  contrast to that  of Hitler and his acolytes, in  the mantle  of  human freedom. The Fulton fulminations  was a Manifesto  of genocide  as the subsequent decades revealed.

Let me say if  I had not said so before,  that my loathing for his persona and his policies during  the war  years  and after  were incommensurable . That was one measure of my polarization or my growing up if you prefer a more nuanced  tone. I regarded him like many of my own class as a class enemy. A corollary of this  is thatI would never have  shed a tear if  his ancestral  residence in Marlborough had been obliterated. I refused to visit it  even  when the occasion presented itself.

Rather, I spared  my tears for the proletarians of the East End whose degutted homes and  smashed streets  and broken lives I personally visited with certain Comrades. I refer here specifically to the  vestiges  of the 1940 Blitz and the V2 bombings. For me, and  I was not alone, this was not merely the artifact of war, but the deadly iniquitous face of  the counter-revolution.  This was my education or a very  important part of it.

Hence to  speak of Churchill as a Democrat and Hitler as a tyrant is to obscure as I have stressed their commonalities.Churchill the aristocrat  was the gang  leader of the coalition bent on the annihilation  of the emerging October Revolution. His celebrated words  were the rallying cry  of the dispossessed exploiters:  “Either we nip  it in the bud now  or they  shall devour us.”  That as we saw  was also Hitler’s  template. You will recall what I said in my lectures on Versailles and the counter revolution.  Nor  should  we  forget what Thorsten Veblen said in his polemic with the young Keynes. On that score  he  was unique  among American intellectuals in his prescience and wisdom.

Hitler never dissimulated  his colonial ambitions. It is not surprising  that he was one of the greatest admirers of the British Empire.  Being a rabid racialist - Gypsies, Negroes, Jews – was  only one of his facets;.  Hitler wasirrevocably wedded to the  old order  and its propertied class relations. They rocketed  him into power. He was their anointed creation.He  correctly saw the British Empire for  what it was:  a Plunderbund in that  exquisitely succinct German expression for imperial parasitism. He wanted to be a part of it.

This was precisely the  British empire that  the legendary Paul Robeson, who in the presence of  Harry Truman,  excoriated it as ‘the  world’s  biggest  prison of the peoples.’ An outburst  that was anathema  to  Truman that had now embarked on the path ofglobal military, political and  economic hegemony, unwaveringly  followed by  his successors.

Understandably so for he himself was the butcher of  Hiroshima and Nagasaki. One of the vilest war crimes of all  times perpetrated as a warning  signal to the Soviet Union  (as was Dresden  too which was  Churchill’s greatest of war crimes in February 45). It was not by chancethat the Fulton  speech  was  hurled at the worldin the State  of  Missouri – the fiefdom  of  that pedestrian war criminal that  was Harry Truman : the first ofall Presidents  – and the rest followed suite  – to incarnate  genocide, torture and State Terrorism as instruments of  war and diplomacy. Truman had set the  clock.. There would be no Presidents of the United States that would not be guilty of  the most heinous of war crimes.

As one of Hitler’s  recent biographers have  noted his ‘model’ for  domination, pillaging and exploitation was the British Empire with its inexhaustible  raw materials,  and its gargantuan  mass  of undifferentiated subsistence work-force. The British Empirewas thus a model to which  The Third Reich must aspire. The Master race (Das Herrenvolk)  was the British  Raj. Let us stress  once again  that The Third Reich and the British Empire were anchored  in the nostrum of  racial  supremacy. Racial supremacy was not an aberration but  an organic  part of the system.

No doubt this was what David Lloyd George meant when he said:“scratch a Tory and you will always find a Fascist”. And in Hitler’s case slave labour.  Hitler had voiced on many occasions his amazement that  a tiny islandthat lay off the coast of the  Euro-Asian land mass  had been able  to achieve such a prodigious scale of self-enrichment  thanks to the pillage  of its Empire.

This was a pointer of what the  Third Reich could achieve.  The British showed that it was possible  to occupy  the colossus of India Hitler admiringly arguedwith merely 250,000 men of which  white men were  less  than 50,000.  In his morbid psyche this was  his grand vision: “The Soviet Union will be turned into our India .”  Before I  proceed I should like  to interject a personal note. My thinking  of the nature of British imperialism in Indiawas moulded  by that very great work:  India Today by Rajani Palme Dutt and  of course  Labour Monthly.

And as you know from my own writings  onthe exploitation of India  it was to become  the focal point of my own teachings and writing. It was at that moment that  I read and studied  RPD’s  Fascism and the Social Revolution. I had become not only an anti-fascist combatant  but an ideologically armed one. I had ceased to be unarmed. As my Maltese comrade would have said.

A Personal Note

I should  like  to  interject a personal note. Before I came to the UK in the  autumn  of 1943 I had never heard of the  racist nostrum  of Untermensch. Getting to understand the meaning of that  word and its  terrible implications  was one of the scintillating  educational  and creative leaps in my life.  I asked  a Maltese  comrade  who was a bombardier.  He was  much older than I was. And  immensely educated. A man of very words. His taciturn nature concealed the  white hot anger that  bubbled  within him.  And which he shared with few.I being one of them. His entire family of  more than 10 people  were wiped in a Luftwaffe raid on Valetta.  He escaped their fate because he was staying  that night  with his grandmother who lived in the countryside.

He  fleshed out the intricacies  of its  vile multi-faceted  meanings. He told me that  it meant a sub-human species. Reaching into the entrails of the word I  asked: does that mean  that Joe  Louis( who was one of my childhood  heroes) who smashed  Max Schmeling in the first round was  a sub-human being? He  laughed but not contemptuously  at my assimilation. I retortedthat this was a load of  rubbish.

I agree with you,  he  said but  that is not the point. Those who used that word are beasts with human faces. And he was one of the first to remind  that colonialism is incompatible  with human dignity. The colonial subject  is an untermensch.  It is not limited to Germans. Look at America . Look at the Rhodesians  and the South Africans. They brandish the word wogs, niggers and  yids  unflinchingly.

We  are not  dealing with a system based  on science and logic he argued. Its Fascism he went on and that spells the devaluation of  human beings  starting from the ‘lower breeds’ and moving up and up.He was a great teacher . Its like the word ‘Aryan’ he went on. Don’t look for definitions. They  don’t  and cannot exist. They have their  own meaning and their logic. Their logic is punitive deployed to kill and maim.. He elaborated hisexplanation on that day  and in days to come. He was more than a beloved and irreplaceable  brother. He was an inspired  teacher that guided my reading..  He was also, or rather  had become,by the force of things  a cold blooded killer.  He killed with no remorse. In the spring of  45, his Avro Lancaster  was hit  by enemy fire but they limped  on  to the English coast where  it crashed.

Operation Barbarossa

The aborted Operation  Sea  Lion  was  important no doubt  but it was a side  show to Hitler’s  greatest counter-revolutionary ambition: the annihilation  of  the Soviet Union.  It was the grand climacteric of his life; the raison  d’être of  his capitalist  paymasters.  At least he was honest. There was no beating around the bush.  “We are fighting to save the world from  Bolshevik  Asiatic barbarism.”How could that scum speak of civilization? In that sense he was a true internationalist.

The butchered victims  of Guernica, Coventry, Warsaw, East London, Antwerp and Rotterdam  indubitably  would  have had  a divergent understanding  of that word. That would  of course not be the end of the Luftwaffe’s ‘civilizing mission.’There was muchmore to come, the thousands of Soviet villages and towns that would be razed. For the onslaught against the Soviet Union was conceived as early as May l940; a blueprint given its final imprimatur in December 1940 by Halder.  In  its sheer breadth of evilit revealedthe Fuhrer as an irrepressible  optimist as well as a self-deluding  fantasist. For Hitler and his likes it was an act of  deliverance.

Just as the French bourgeoisie had proclaimed  at the moment  of the ‘ Front Populaire:  “Mieux Hitler  que le Front Populaire”  their unwavering  class loyalty  to their  surging  Messiah  was never in doubt.What I am saying to you  is  that Hitler  unleashed his genocidal machine  with  the  supreme benediction  of the European and world bourgeoisie ,and that engulfs  the Japanese who nourished  ambitions of their own. They  had entered a state of ecstasy; the  agony would come later. And the American bourgeoisie which had already repudiated democracy  save in its formal frills was no exception.

In this  Hitler  was  joined to such  excrementas Atonescu, Horthy, Mussolini and others. They were the feeder base to hisgenocidal  machine.  The  neutrals: Switzerland and Sweden were big-timeindirect backers of his war machine. In the case  of Switzerland  that meant credits, arms, machine tools, you name it.  And there were no exceptions. Many Swiss fought in the ranks of the Wehrmacht.

In the case of  Antonescu’s Romania,  Nazi Germany did not  pay a single  pfennig for the food  and indispensable  oil itconsumed with such profligacy and without which his  military and industrial powerhouse would have ground to a halt. The  entire iron and steel, agricultural, mining and manufacturing  and engineering industries of Western capitalism  was shoveled  into  his grandest of Holocausts. The  race and class  enemy – the Ubermensch and the Untermensch, the exploiter and the exploited,  had been identified and was to be destroyed.

The goal was the military defeat  of the USSR and its annihilation as a political entity. The cost to the Soviet Union, in dead alone,  was of the order  of 20-25 millions  and tens of millions wounded.And that is only the human cost as even a perfunctory visit to Stalingrad  and its smashed productive  engine would tragically remind you.

In the earlypre-dawn  hours of the 22 June  the biggest military offensive that the world had ever seen would be unleashed. The long delay was now over. The war machine was  thirsting  for blood.At no point in history  had an attacker benefited  with  such overwhelming  advantages.  The clangof  the sledgehammer reverberated from the Arctic (Finland was now  corralledinto the Nazi  death machine)  to the Black  Sea. The attacking force  of ethnic Germans – Das Herrenvolk -  amounted to slightly over  3 million.Superimposed on this  was a million European mercenariesfrom all countries of occupied Europe that topped one million. A sum of  over  4 million.  This had no precedent in the annals of military history; one fourth  of the invading  killerswere non German.

In short,  joined to the Wehrmacht’scolossal  economic and military firepower  (supplemented  as you will recall by millions of slave  workers) was Western capitalism’s  industrial powerhouse  and its massive demographic base.The  Nazi  juggernaut  that  surged  forth  on  that  early morning of22 Juneincluded  3,600 tanks, 600,000 motorized vehicles, 7,000 artillery pieces, 2,500 aircraft supplemented by 650,000 horses.  Obviously not all was Blitzkrieg.

Well could Hitler gloat from  his  Wolfschanze in East Prussia.  “The world will hold its breath”.  They did.  But for different reasons. The unfolding of Barbarossa  aroused the passion of  the global bourgeoisie.He served  the interests of his class  that  believed  in his Crusade and rapturously applauded him. For years they had  known that he was their man. The proof  was now at hand.

It is not merely what the  printed historical record says, but from  what I learnt  from  my own  personal  contacts with the bourgeoisie  of occupied Europe many of whom I had got to know  at very close range.My mother who was a forewoman in the apparel industry did not however  hold her breath in anger but after the  appalling initial surprise and terrible setbacks  she said: “He has attacked the October Revolution and raped the  working class of the world and out of this  he will never win.” These were not solitary utterances. They were the emanations of the world of labour.It articulated the pain  and the thoughts and aspirations of  countless millions the world over.  That was a force that Hitler and his likes could not match.

This seething anger was not confirmed to  individuals but like a typhoon it swept over  tens of millions.. It was the particular in the general.  My  mother’s sentiments of defiance  were echoed by Nehru, Krishna Menon. General Chu Teh of the Chinese  Eight Route Army, by Ho Chi Minh  and by the young Giap himself. I presume you have read my brochure on Stalingrad. You will recall that I started my comment with OperationSea Lion. But behind its shadow was something of far greater substance.

The  liquidation of the  Untermensch

But we are not dealing  with a war of military conquest and the plunder of its peoples. That was classical imperialism It went  beyond that  and in what follows I shall use some of my archival materials  to illustrate  the horrorsand reverberations ofthe doctrine ofthe Untermensch.In the writings of  Ilya Ehrenbourg  which I  and  others read (I was introduced to his  writings by  my Maltese  comrade-in-arms) I became aware of  some of its dreadful implications but it was only afterthe end of the war  that the diabolical power of its meaning hit me with such  force. Ehrenbourg was by no means- far from it -  the  unique source of my enlightenment.  Let us begin with  Heinrich Himmler, the number 2 in  Der Fuhrer’s cabal.

“What happens to a Russian  does not interest me in the slightest. Whether nations live in prosperity  or starve to death  like cattle  interests me  only in so far  as we need them as slaves for our  Kultur; otherwise it is of no interest to me. Whether 10,000  Russian females fall down from exhaustion  while digging an antitank ditch  interests me  only in so far as the antitank ditch  forthe Third Reich  is finished.” 

Erich Koch, Reich Commissar  for the Ukraine ,masterly articulated  the goals of the Nazi Ubermensch.

“We  are the Master Race and we must govern hard. I will draw every drop of blood out of this country.  I did not come  here to spread bliss… The population must work and work and work again. We  definitely  did not come  here to give out manna… We are a Master Race, which must remember that the lowliest German worker is racially and biologically  a thousand times more valuable  than the population here”.

And there is Martin Bormann, Hitler’s ventriloquist dummy and party secretary.

“The Slavs are to work for us.  In  so far as we  don’t  need them, they may die.  Therefore compulsory vaccination and health services are superfluous. The fertility of the Slavs  is undesirable.  Education is dangerous.  It is enough if they can count up to 100… Every educated person is a  future enemy. Religion we leave to them as a source of diversion.  As for food  they won’t get  any more  than is absolutely necessary. We are the Masters. We come first.”

Herman Goering, as you will remember, was not merely  the boss of the Luftwaffe.  He was to be boss of the Soviet  Plunderbund, one of the most ruthless killers of all times.  And his  personal wealth was one of the highest in  Germany.

“It used  to be  called plunder  in other times.But today things have become  more  humane. In spite  of that,  I intend  to plunder and to do it  thoroughly.”  He was true to his word. In  that year (1942) he told Ciano the Italian foreign minister: “this year  between ten  and thirty million  will die of hunger  in Russia and it is well that it should be so.”  And the fat man without a glint of contrition boasted that Russian prisoners of war “had begun to eat each other”  In the scale of infamy we can sink no lower.

The thunders of Retribution

I started my letter to you that was far longer than  I  expected. But of course, the  span between aspirations and reality  can be  very wide as Hitler  noted in his  bunker.  As so it for the masters of the Third Reich and their mass serial killers. It was merely a period of  exactly ten years that  separated  Hitler’s power  grab  (January 1933)  and  The Third Reich’s  apocalypse  at  Stalingrad.- the 30 January 1943.  Which  brings meto  the  wisdom of Hegel’s teachings  elaborated in his History of Philosophy. “Out of the actions of men comes something quite different  from what they intend and directly know and will”.

And this applies not  merely  to the mass serial killers of  The Third Reich’s counterrevolution,  but pressingly so in our times  to its successor  the Gringo’s crumbling  imperio as  it  hobbles like a drunk from one lamp post to another exhibiting its  horrendous crimes. But the play is not yet ended. For where there is oppression there will always be resistance. 

Frederick Clairmonte is a renowned author, analyst of the global political economy and author of the 1960s classic, The Rise and Fall of Economic Liberalism: The Making of the Economic Gulag.

He was for many years a Permanent Senior Economics Affairs Officer in the United Nations Economic Commission for Africa (ECA) and the UN Conference on Trade and Development (UNCTAD).  He has also taught at several academic institutions including the University of King’s College and Dalhousie University, the University of Lovanium,  the Ecole  Nationale de Droit et d’Administration in the Congo, the Indian Institute of Science in Bangalore. During World War II he served in the Canadian Royal Air Force.

See also: The World in Their Web: Dynamics of Textile Multinationals (Imperialism series) by Frederick Clairmonte and J. Cavanagh (Hardcover 1 Dec 1984).

Global Research article by Clairmont, Frederic

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Depleted Uranium Radiation resulting from NATO Bombings in Serbia : High Incidence of Cancer
- by Ljubica Vujadinovic – 2010-04-01

Is It Time for Law Abiding American Citizens to Stop Paying Their Taxes and Start a New Government?
- by David DeGraw – 2010-04-01

Student Loans: The Government is Now Officially in the Banking Business
- by Ellen Brown – 2010-04-01

More Financial Bubbles Ahead in the US Housing Market
- by Bob Chapman – 2010-04-01

Mongolia: The Pentagon’s Trojan Horse. US-NATO Partner Wedged Between China And Russia
- by Rick Rozoff – 2010-04-01

Is Blogging Useful or a Waste of Time?
Crucial for Spreading Accurate Information
- by Washington’s Blog – 2010-04-01

Rendition and the “Global War on Terrorism”: 28 Nations Have Supported the US in the Detention and Torture of “Suspects”
- by Sherwood Ross – 2010-04-01

Behind the Talks: US-NATO Prepare Confrontation in the Arctic
- 2010-04-01

Canada and the European Union: Advancing the Transatlantic Agenda
- by Dana Gabriel – 2010-04-01

Pedophilia in the Catholic Church: Coverup Operation at the Vatican?
Pope Ratzinger’s Swan Song
- by Mike Whitney – 2010-03-31

Pope Ratzinger’s Swan Song

VIDEO: US-NATO versus Russia. The Battle for Arctic Supremacy
- by Michel Chossudovsky – 2010-03-31

The Illusion of Nuclear Disarmament. US-Russian START Treaty: A Comprehensive Flicker
- by Eric Walberg – 2010-03-31

Terror in Moscow: The Wound that Cannot Heal
- by Binoy Kampmark – 2010-03-31

AFRICOM and the USA’s Hidden Battle for Africa
- 2010-03-31

100 Million Americans Question or Find Fault with the Official 9/11 Story
9/11 Reconstruction: Mental Before Physical
- by Joel S. Hirschhorn – 2010-03-30

US-NATO Atrocities Committed in Afghanistan: How Did We Become this Pacified to War?
- by Kathy Kelly – 2010-03-30

South Africa to Kick Homeless Off Streets before World Cup
- by Gary Anderson – 2010-03-30

Making a Killing: US-NATO Fuel New Arms Race in the Middle East
- by Finian Cunningham – 2010-03-30

Argentina’s Oil Battle with the United Kingdom
Buenos Aires Running Out Of Options In Falklands Oil Fight
- by Fawzia Sheikh – 2010-03-30

Sarkozy Trip Gets Boost as Washington Salutes Reinvigorated NATO Role
- by Lara Marlowe – 2010-03-30

Western Civilization and the Economic Crisis: The Impoverishment of the Middle Class
When Empire Hits Home, Part 2
- by Andrew Gavin Marshall – 2010-03-30

The middle classes of the western world will lose their access to credit, and will be forced into repaying their debts…

Nuclear Non-Proliferation and Disarmament: Shifting the Mindset
- by David Krieger – 2010-03-30

VIDEO: Children of Gaza
- by Channel Four TV (U.K.) – 2010-03-29

Health Care Battle Ends; War on Social Security Begins
- by Shamus Cooke – 2010-03-29

The Social Security reform will resemble the health care reform. The essence of both policies: reduce the US public debt by any means necessary.

VIDEO: NATO Tries to Silence a Truth-Teller in Afghanistan After Killing Pregnant Women
- by Derrick Crowe – 2010-03-29

War Games: Israel gets ready to Strike at Iran’s Nuclear Sites
- 2010-03-29

Chavez: Clinton thinks US owns ‘the continent’
- 2010-03-29

We Need to End Insurance Market-based Health Care
What Did We Get? Where Are We? And, Where Do We Go From Here?
- by Kevin Zeese – 2010-03-29

Beijing Challenges the US-NATO-Israel Military Agenda: China’s Stance Boosts Iran
- by Atul Aneja – 2010-03-29

VIDEO: Balkans: Depleted Uranium in NATO Bombs Remains Deadly

April 6th, 2010 by Ljubica Vujadinovic

VIDEO: Collateral Murder in Baghdad

April 6th, 2010 by Global Research


00:03 Okay I got it.
00:05 Last conversation Hotel Two-Six.
00:09 Roger Hotel Two-Six [Apache helicopter 1],
uh, [this is] Victor Charlie Alpha. Look, do you want your Hotel Two-Two two el-
00:14 I got a black vehicle under target. It’s arriving right to the north of the mosque.
00:17 Yeah, I would like that. Over.
00:21 Moving south by the mosque dome. Down that road.
00:27 Okay we got a target fifteen coming at you. It’s a guy with a weapon.
00:32 Roger [acknowledged].
00:39 There’s a…
00:42 There’s about, ah, four or five…
00:44 Bushmaster Six [ground control] copy [i hear you] One-Six.
00:48 …this location and there’s more that keep walking by and one of them has a weapon.
00:52 Roger received target fifteen.
00:55 K.
00:57 See all those people standing down there.
01:06 Stay firm. And open the courtyard.
01:09 Yeah roger. I just estimate there’s probably about twenty of them.
01:13 There’s one, yeah.
01:15 Oh yeah.
01:18 I don’t know if that’s a…
01:19 Hey Bushmaster element [ground forces control], copy on the one-six.
01:21 Thats a weapon.
01:22 Yeah.
01:23 Hotel Two-Six; Crazy Horse One-Eight [second Apache helicopter].
01:29 Copy on the one-six, Bushmaster Six-Romeo. Roger.
01:32 Fucking prick.
01:33 Hotel Two-Six this is Crazy Horse One-Eight [communication between chopper 1 and chopper 2].
Have individuals with weapons.
01:41 Yup. He’s got a weapon too.
01:43 Hotel Two-Six; Crazy Horse One-Eight.
Have five to six individuals with AK47s [automatic rifles]. Request permission to engage [shoot].
01:51 Roger that. Uh, we have no personnel east of our position. So, uh, you are free to engage. Over.
02:00 All right, we’ll be engaging.
02:02 Roger, go ahead.
02:03 I’m gonna… I cant get ‘em now because they’re behind that building.
02:09 Um, hey Bushmaster element…
02:10 Is that an RPG [Rocket Propelled Grenade]?
02:11 All right, we got a guy with an RPG.
02:13 I’m gonna fire.
02:14 Okay.
02:15 No hold on. Lets come around. Behind buildings right now from our point of view.
… Okay, we’re gonna come around.
02:19 Hotel Two-Six; have eyes on individual with RPG. Getting ready to fire. We won’t…
02:23 Yeah, we had a guy shoot—and now he’s behind the building.
02:26 God damn it.
02:28 Uh, negative, he was, uh, right in front of the Brad
Bradley Fighting Vehicle; an tracked Armored Personal Carrier that looks like a tank].
Uh, ’bout, there, one o’clock. [direction/orientation]
02:34 Haven’t seen anything since then.
02:36 Just fuckin’, once you get on ‘em just open ‘em up.
02:38 All right.
02:40 I see your element, uh, got about four Humvees [Armored cars], uh, out along…
02:43 You’re clear.
02:44 All right, firing.
02:47 Let me know when you’ve got them.
02:49 Lets shoot.
02:50 Light ‘em all up.
02:52 Come on, fire!
02:57 Keep shoot, keep shoot. [keep shooting]
02:59 keep shoot.
03:02 keep shoot.
03:05 Hotel.. Bushmaster Two-Six, Bushmaster Two-Six, we need to move, time now!
03:10 All right, we just engaged all eight individuals.
03:12 Yeah, we see two birds [helicopters] and we’re still fire [not firing].
03:14 Roger.
03:15 I got ‘em.
03:16 Two-six, this is Two-Six, we’re mobile.
03:19 Oops, I’m sorry what was going on?
03:20 God damn it, Kyle.
03:23 All right, hahaha, I hit [shot] ‘em…
03:28 Uh, you’re clear.
03:30 All right, I’m just trying to find targets again.
03:38 Bushmaster Six, this is Bushmaster Two-Six.
03:40 Got a bunch of bodies layin’ there.
03:42 All right, we got about, uh, eight individuals.
03:46 Yeah, we got one guy crawling around down there,
but, uh, you know, we got, definitely got something.
03:51 We’re shooting some more.
03:52 Roger.
03:56 Hey, you shoot, I’ll talk.
03:57 Hotel Two-Six; Crazyhorse One-Eight.
04:01 Crazyhorse One-Eight; this is Hotel Two-Six. Over.
04:03 Roger. Currently engaging [fighting/shooting at] approximately eight individuals,
uh KIA [Killed In Action], uh RPGs, and AK-47s.
04:12 Hotel Two-Six, you need to move to that location once Crazyhorse is done and get pictures. Over.
04:20 Six beacon gaia.
04:24 Sergeant Twenty is the location.
04:28 Hotel Two-Six; Crazyhorse One-Eight.
04:31 Oh, yeah, look at those dead bastards.
04:36 Nice.
04:37 Two-Six; Crazyhorse One-Eight.
04:44 Nice.
04:47 Good shoot.
04:48 Thank you.
04:53 Hotel Two-Six.
04:55 Hotel Two-Six; Crazyhorse One-Eight.
05:03 Crazyhorse One-Eight; Bushmaster Seven. Go ahead.
05:06 Bushmaster Seven; Crazyhorse One-Eight.
Uh, location of bodies, Mike Bravo five-four-five-eight eight-six-one-seven [military map grid reference].
05:15 Hey, good on the uh…
05:17 Five-four-five-eight eight-six-one-seven [map grid reference]. Over.
05:21 This is Crazyhorse One-Eight, that’s a good copy. They’re on a street in front of an open,
uh, courtyard with a bunch of blue uh trucks, bunch of vehicles in the courtyard.
05:30 There’s one guy moving down there but he’s uh, he’s wounded.
05:35 All right, we’ll let ‘em know so they can hurry up and get over here.
05:40 One-Eight, we also have one individual, uh, appears to be wounded trying to crawl away.
05:49 Roger, we’re gonna move down there.
05:51 Roger, we’ll cease fire.
05:54 Yeah, we won’t shoot anymore.
06:01 He’s getting up.
06:02 Maybe he has a weapon down in his hand?
06:04 No, I haven’t seen one yet.
06:07 I see you guys got that guy crawling right now on that curb.
06:08 Yeah, I got him. I put two rounds [30mm cannon shells] near him,
and you guys were shooting over there too, so uh we’ll see.
06:14 Yeah, roger that.
06:16 Bushmaster Thirty-Six Element; this is uh Hotel Two-Seven over.
06:21 Hotel Two-Seven; Bushmaster Seven go ahead.
06:24 Roger I’m just trying to make sure you guys have my turf [area], over.
06:31 Roger we got your turf.
06:33 Come on, buddy.
06:38 All you gotta do is pick up a weapon.
06:44 Crazyhorse this is Bushmaster Five, Bushmaster Four break.
We are right below you right time now can you walk us onto that location over.
06:54 This is Two-Six roger. I’ll pop flares [drop flares].
We also have one individual moving. We’re looking for weapons. If we see a weapon, we’re gonna engage.
07:07 Yeah Bushmaster, we have a van that’s approaching and picking up the bodies.
07:14 Where’s that van at?
07:15 Right down there by the bodies.
07:16 Okay, yeah.
07:18 Bushmaster; Crazyhorse. We have individuals going to the scene, looks like possibly uh picking up bodies and weapons.
07:25 Let me engage.
07:28 Can I shoot?
07:31 Roger. Break. Uh Crazyhorse One-Eight request permission to uh engage.
07:36 Picking up the wounded?
07:38 Yeah, we’re trying to get permission to engage.
07:41 Come on, let us shoot!
07:44 Bushmaster; Crazyhorse One-Eight.
07:49 They’re taking him.
07:51 Bushmaster; Crazyhorse One-Eight.
07:56 This is Bushmaster Seven, go ahead.
07:59 Roger. We have a black SUV-uh Bongo truck [van] picking up the bodies. Request permission to engage.
08:02 Fuck.
08:06 This is Bushmaster Seven, roger. This is Bushmaster Seven, roger. Engage.
08:12 One-Eight, engage.
08:12 Clear.
08:13 Come on!
08:17 Clear.
08:20 Clear.
08:21 We’re engaging.
08:26 Coming around. Clear.
08:27 Roger. Trying to uh…
08:32 Clear.
08:35 I hear ‘em co.. I lost ‘em in the dust.
08:36 I got ‘em.
08:41 I’m firing.
08:42 This is Bushmaster Forty got any BDA [Battle Damage Assessment] on that truck. Over.
08:44 You’re clear.
08:47 This is ah Crazyhorse. Stand by.
08:47 I can’t shoot for some reason.
08:49 Go ahead.
08:50 I think the van’s disabled.
08:53 Go ahead and shoot it.
08:54 I got an azimuth limit for some reason [gunner moved gunsight too far]
09:00 Go left.
09:03 Clear left.
09:15 All right, Bushmaster Crazyhorse One-Eight.
09:20 A vehicle appears to be disabled.
09:22 There were approximately four to five individuals in vehicle moving bodies.
09:28 Your lead Bradley should take the next right.
09:31 That’s cruising east down the road.
09:34 No more shooting.
09:38 Crazyhorse; this is Bushmaster Four.
We’re moving a dismounted element [troops] straight south through the Bradleys [tanks].
09:44 I have your Elem- uh, Bradley element turning south down the road where the engagements were.
09:53 Last call on station’s uh Bradley element say again.
09:56 Roger this is Crazyhorse.
09:58 Your lead Bradley just turned south down the road where all the engagements [shooting] happened.
10:03 Should have a van in the middle of the road with about twelve to fifteen bodies.
10:11 Oh yeah, look at that. Right through the windshield!
10:14 Ha ha!
10:16 All right. There were uh approximately four to five individuals in that truck,
so I’m counting about twelve to fifteen.
10:24 I would say that’s a fairly accurate assessment so far.
10:27 Roger that.
10:29 I want to just be advised Six, Bushmaster Six are getting mounted up right now.
10:35 Okay, roger.
Hey, we can’t flex down that road towards that, uh, where Crazyhorse engaged.
10:43 So, uh, I don’t know if you want us to do so or stay put. Over.
10:46 Why can’t they go down there?
10:56 I think we whacked [killed] ‘em all.
10:58 That’s right, good.
10:59 This is Hotel Two-Six.
11:03 Hey you got my dismounted element [troops] right there over to your left.
11:06 Roger, I see ‘em.
11:11 Hey yeah, roger, be advised,
there were some guys popping out with AKs behind that dirt pile break.
11:19 We also took some RPGs off, uh, earlier, so just uh make sure your men keep your eyes open.
11:26 Roger.
11:27 And, uh, Bushmaster ahead are, uh, Hotel Two-Six; Crazyhorse One-Eight.
11:33 Crazyhorse One-Eight; this is Hotel Two-Six.
11:35 Yeah Two-Six; Crazyhorse One-Eight.
11:37 Uh, location I have about twelve to fifteen dead bodies.
11:42 Uh, where else are we taking fire from?
11:48 Currently we’re not being engaged, ah, but just south of that location. Break.
11:55 You should see dismounted elements with Humvees [armored cars] moving to the east, over.
12:01 This is Crazyhorse One-Eight; we have elements in sight.
12:05 Bushmaster Three-Six.
12:07 I’m gonna get down a little lower.
12:09 All right.
12:10 I’m gonna come down a little lower and take a quick gander.
12:13 Roger that.
12:14 Six; this is four. We’re headed to the area where Crazyhorse engaged.
12:26 Bushmaster Six; this is Hotel Two-Six.
12:28 Request to go to the south to our original BP
so if you flushed them to the south we will be there to uh intercept over.
12:39 Hey this is Bushmaster Seven;
we’re coming up on B… on the ass end of the Brads [tanks].
12:54 Hey uh, Bushmaster Element; this is Copperhead One-Six break.
13:00 We’re moving in the vicinity of the engagement area
and looks like we’ve got some slight movement from ah, the ah van that was engaged.
13:06 Looks like a kid. Over.
13:11 This is Bushmaster Seven, roger. Uh, we’re about a hundred meters behind you.
13:16 Got that big pile, to the right?
13:18 Roger, you gonna pull in here? Do you want me to push stuff so you can, uh, get clear of it?
13:21 Right on the corner?
13:22 What’s that?
13:23 Got that big pile of bodies to the right, on the corner?
13:24 Yeah, right here.
13:25 We got a dismounted infantry and vehicles, over.
13:30 Again, roger.
13:31 And clear.
13:48 There’s the Bradley right there.
13:51 Got ‘em.
14:00 Hotel two-six; are you uh at this grid over?
14:05 Yeah I wanted to get you around so didn’t you just get that one dude to scare them all away.
It worked out pretty good.
14:11 I didn’t want those fuckers to run away and scatter.
14:12 Yeah.
14:15 Bushmaster Six; Hotel Two-Six.
Roger, we linked up with our two element they are all mounted up in our trucks break.
14:23 We moved south so that we could ah possibly intercept personnel being flushed south.
So we are vicinity Fifth Street.
14:30 And ah please line Gadins. Over.
14:37 Bring the trucks in, cordon this area off.
14:39 Can we move the Bradley forward so we can bring trucks in and cordon off this area.
14:44 If the Bradleys could take the south cordon, that could help out a lot.
14:53 Bushmaster or element.
Which Element called in Crazyhorse to engage the eight-elem- eight-men team on top of a roof.
15:02 Bushmaster Six; this is Hotel Two-Six. Uh, I believe that was me.
15:07 They uh had AK-47s and were to our east, so, where we were taking small arms fire. Over.
15:20 Hotel Crazyhorse One-Eight.
15:26 Crazyhorse One-Eight; this is Hotel Two-Six.
15:28 Yeah Two-Six. One-Eight I just also wanted to make sure you knew that we had a guy with an RPG cropping round the corner getting ready to fire on your location.
15:36 That’s why we ah, requested permission to engage.
15:40 Ok, roger that. Tango mike.
15:46 Hotel Two-Six; do you understand me, over?
15:51 I did not copy last, uh, you got stepped on. Say again please?
16:00 They cordoned off the building that the helicopters killed the personnel on.
16:04 Don’t go anywhere else we need to cordon off that building
so we can get on top of the roof and SSC the building. Over.
16:13 Hotel Two-Six; Crazyhorse One-Eight.
16:16 This is Hotel Two-Six.
16:19 Hey, whoever was talking about rooftops,
know that all the personnel we engaged were ground level. I say again ground level.
16:27 Roger I copy ground level. Over.
16:30 One-Eight roger.
16:33 Can I get a grid to that one more time please?
16:36 Target twenty.
16:36 Roger.
16:40 You want me to take over talking to them?
16:42 S’alright.
16:46 Seven-Six Romeo Over.
16:49 Roger, I’ve got uh eleven Iraqi KIAs [Killed In Action].
One small child wounded. Over.
16:57 Roger. Ah damn. Oh well.
17:04 Roger, we need, we need a uh to evac [evacuate] this child.
Ah, she’s got a uh, she’s got a wound to the belly.
17:10 I can’t do anything here. She needs to get evaced. Over.
17:18 Bushmaster Seven, Bushmaster Seven; this is Bushmaster Six Romeo.
17:20 We need your location over.
17:25 Roger, we’re at the location where Crazyhorse engaged the RPG fire break.
17:37 Grid five-four-five-eight.
17:46 Well it’s their fault for bringing their kids into a battle.
17:48 That’s right.
17:56 Got uh, eleven.
18:01 Yeah uh, roger. We’re monitoring [observing].
18:02 Sorry.
18:04 No problem.
18:07 Correction eight-six-one-six.
18:16 Looking for more individuals-south.
18:18 Bushmaster Six-Bushmaster Seven.
18:29 I think they just drove over a body.
18:31 Hey hey!
18:32 Yeah!
18:37 Maybe it was just a visual illusion, but it looked like it.
18:41 Well, they’re dead, so.
18:44 Bushmaster Six; Hotel Two-Six over.
18:56 Six; this is Four.
I got one individual looks like he’s got an RPG round laying underneath him. Break.
19:05 Probably like to get…
19:10 Look at that.
19:12 Bushmaster Six; Hotel Two-Six over.
19:29 Bushmaster Six; Romeo Hotel Two-Six over.
19:44 Bushmaster Six; Hotel Two-Six over.
19:56 Hotel Two-Six; Bushmaster Seven colocated with Six.
20:08 Hotel Two-Six; Bushmaster Seven.
20:10 Bushmaster Seven; Hotel Two-Six over.
20:14 Roger, we got a little girl who needs to be evaced.
What’s your location over?
20:22 On route Gadins, I am all the way to the south.
So I am Gadins and Fifth Street.
20:28 I say again Gadins and Fifth Street, over.
20:40 Bushmaster Seven; Hotel Two-Six. Do you want us to push to your location?
20:55 Hey, uh, I need to get the Brads to drop rads I got a wounded little girl we need to take her off the maya.
21:04 Bushmaster Seven; Hotel Two-Six. Do you want us to move to your location over?
21:30 Bushmaster Six; Hotel Two-Six over.
21:34 Hotel Two-Six; this is Bushmaster Seven.
Roger, come to our location.
21:39 Okay, roger, we’re coming up north on Gadins and then we will push east to your location.
22:06 Bushmaster elements be advised we have friendlies coming from the south to your location. Over.
22:13 All right, got ‘em moving up from the south.
22:35 Bushmaster elements be advised we are coming up from the east.
23:49 Hey One-Two; follow me over.
I’m going to try and get out of here as quickly as possible.
24:10 You guys all right back there?
24:13 Yeah, we’re with you.
24:35 Lotta guys down there.
24:37 Oh yeah.
24:37 Came out of the woodwork.
24:38 This is Operation, ah, Operation Secure.
25:16 Yeah we have fifty rounds left.
25:17 Yep.
25:19 Two-Six; Six Romeo over.
25:21 Two-Six; Romeo over.
25:23 Hey roger, what’s your current location over?
25:47 Six; speak it’s Romeo.
25:50 Three-Six Romeo; Six Romeo over.
25:52 Roger, at the six once it’s back on this guy.
25:56 Lost him.
26:00 What’s he got for us?
26:01 Stand by.
26:06 Hotel Two-Six; Crazyhorse One-Eight.
26:21 Hey, did you got action on that target yet over?
26:25 Speak to Charlie roger.
26:32 Hotel Two-Six; Crazyhorse One-Eight.
26:55 Bushmaster Six; Crazyhorse One-Eight.
26:59 Roger, you have traffic over.
27:02 Roger. Uh, just wondering if you had anything else you wanted us to drive on?
27:08 Yeah roger keep on, ah, for the time being over.
27:11 Six calls Six Romeo.
Can you tell battalion that two civilian children casualties are coming back to SMI in the Bradley over.
27:26 Six calls Six Romeo.
27:29 Bushmaster Six Copper White Six.
27:32 Copperhead White Six; this is Bushmaster Six Romeo over.
27:36 Roger, that’s a negative on the evac of the two, ah, civilian,
ah, kids to, ah, rusty they’re going to have the IPs [Iraqi Police] link up. They can put us over here. Break.
IPs will take them up to a local hospital over.
27:50 Copy over.
27:54 One six oh.
28:08 … they’re all going to.
28:10 Say again?
28:12 Where all those dismounts [infantry] are going to?
28:18 Going into this hous-. Sorry
29:29 Three Six, Three Six; Bushmaster Six Romeo over.
29:37 Six Romeo, Six Romeo.
29:39 Roger, Bushmaster Seven wants an up on all personnel in your battalion over.
29:44 Roger.
30:08 …friendlies [US troops] on the roof.
30:10 Crazyhorse One-Eight; this is Bushmaster Four over.
30:12 Bushmaster Four; this is Crazyhorse One-Eight.
30:15 Roger, I can ah hear small arms fire from your engagement area at two zero zero zero ah
about three hundred meters from that objective over.
30:27 Crazyhorse; from what I understand
small arms fire at two zero zero zero degrees about two hundred meters.
30:39 Just to the southwest.
30:41 Yup.
30:49 Right about where we engaged.
30:51 Yeah, One of them with that RPG or whatever.
30:55 He’s got a weapon. Got an RK–AK 47.
30:58 Hotel Two-Six; Crazyhorse One-Eight.
31:02 Gonna lose him.
31:03 Crazyhorse One-Eight this is Hotel Two-Six over.
31:08 Roger, have another individual with a weapon.
31:10 Dammit, they’re in the same building.
31:12 Hey roger that, just make sure that ah, you’re firing from west to east over.
31:16 Just went in the building.
31:18 Crazyhorse Three and Four will be on their way.
31:21 The individual walked into the building previously past grid [map reference].
So there’s at least six individuals in that building with weapons.
31:30 We can put a missile in it.
31:31 If you’d like, ah, Crazyhorse One-Eight could put a missile in that building.
31:46 It’s a triangle building. Appears to be ah, abandoned.
31:51 Yeah, looks like it’s under construction, abandoned.
31:52 Appears to be abandoned, under construction.
31:56 Uh, like I said, six individuals walked in there from our previous engagement.
32:01 Crazyhorse One-Eight; this is Bushmaster Six Romeo.
If you’ve PIDed [Positively IDentified] the individuals in the building with weapons,
go ahead and engage the building over.
32:08 Crazyhorse One-Eight; will be coming up north to south engaging with Hellfire [missiles].
32:13 All right, I’m going to do manual.
32:17 All right, we’ve been cleared to engage with…
32:18 This is Bushmaster Six Romeo.
Crazyhorse One Eight is going to be engaging north to south with Hellfire missiles over.
32:24 This is Hotel Two-Six. Roger.
32:26 All right, you ready?
32:27 No, I’m trying to get over to the November [target]. Trying to find the fucking…
32:33 This is Bushmaster Six. Has that RPG round been extended already or is it still live, over.
32:38 Looks live to me.
32:40 Let me know when you’re going to fire.
32:44 All right, I’m fucking having a brain fart. Where’s the man [manual] advancement?
32:48 You got one on the clutch on the bottom left on your left door.
32:54 Roger let me stand by.
32:57 Got it?
32:59 No.
33:03 All right.
33:09 Let me just put a kilo [Hellfire missile] in there.
33:12 Ok.
33:15 Got it?
33:21 Put a kilo in?
33:22 All right, let me get back.
33:26 I’m gonna come around, get some more distance.
33:27 Roger that, you’re clear.
33:33 Got more individuals in there.
33:36 You wanna hit from north to south or you wanna go from west to east?
I don’t wanna fire with the friendlies [US forces] right there, you know.
33:41 Yeah, go north to south.
33:53 Right, come around, right.
33:56 I’m just gonna put one or two in, if they want any more.
34:09 Right.
34:12 Found the missile.
34:15 Roger, I’ll get you in this straight.
34:16 You’re clear.
34:17 I’m firing.
34:26 Target hit.
34:28 It was a missile.
34:29 Left.
34:32 You’re clear. I’m above you.
34:36 Crazyhorse One-Eight; was that explosion you engaging over?
34:38 Crazyhorse One Eight, roger. Engaging building with one hellfire.
34:46 Let’s come around and we’ll clear the smoke. We’ll fire one more.
34:50 Hey uh, we’re going to wait for the smoke to clear.
34:52 Yes Crazyhorse One Eight now. We’re going to put one more missile into the building.
34:57 Yeah, did it ah, go in the building? I see the wall knocked out of the way.
34:59 Yeah, it went in.
35:01 Bushmaster Six Romeo; this is Hotel Two-Six.
Yeah roger, that was Crazyhorse engaging with one Hellfire over.
35:10 Yeah roger, I got a November [target] if you want.
35:12 Fire away.
35:13 You want us to fire?
35:18 You ready?
35:19 Yep.
35:20 Bushmaster Six Romeo.
They are going to engage ah, with one more Hellfire in that building.
35:24 Uh shit, why I do I have AP flashing on there? [warning on helicopter display]
35:47 We’re not even going to watch this fucking shit?
35:49 Till next one. It won’t come around, I need a little more distance.
35:53 Still want me to shoot?
35:57 You guys, following hot.
35:59 Roger.
36:13 You are clear.
36:14 Roger.
36:16 You going to bring up the missile?
36:18 Roger.
36:19 And firing.
36:20 Come down? There you go.
36:23 Fire.
36:24 All right.
36:28 I’ve got, ah BACKSCATTER [warning on helicopter display].
36:30 All right, come around.
36:32 Roger.
36:34 Coming around left, backscatter.
36:49 Firing.
36:53 There it goes! Look at that bitch go!
36:56 Patoosh!
37:03 Ah, sweet.
37:07 Need a little more room.
37:09 Nice missile.
37:11 Does it look good?
37:12 Sweet!
37:16 Uh, you ready?
37:18 Roger.
37:30 There’s a lot of dust.
37:36 Crazyhorse One-Eight; this is Hotel Two-Six. Was there a BDA [Battle Damage Assessment]?
37:40 This is Crazyhorse One-Eight. Stand by, engaging with another Hellfire.
37:43 All right.
37:45 You’re clear.
37:47 Lemme know when I’m clear.
37:50 Roger that.
37:59 He wasn’t.
38:02 Hotel Two-Six; Crazyhorse One-Eight.
38:07 Crazyhorse One-Eight.
38:09 Roger, building destroyed. Engaged with three hellfire missiles.

The Micro Chipping of Americans?

April 6th, 2010 by Global Research

Global Research Editor’s Note

Since the publication  of this article by Indymedia, certain portions of the bill were eliminated. There is no National Medical Device Registry in the latest version of the Bill. It follows that the proposals pertaining to micro-chipping were not carried out. Readers are therefore cautioned that part of the analysis below is no longer valid.  We have nonetheless decided,  for reference purposes, to retain this article in our archives.

April 2010

Related links concerning this horrible ‘wealth care plan’ below.*


Submitted by celeste on Sun, 08/30/2009 – Buried deep within the over 1,000 pages of the massive US Health Care Bill (PDF) in a section titled: Subtitle C-11 Sec. 2521, National Medical Device Registry, and which states its purpose as:

“The Secretary shall establish a national medical device registry (in this subsection referred to as the registry, to facilitate analysis of postmarket safety and outcomes data on each device that; (A) is or has been used in or on a patient; (B) is a class III device; or a class II device that is implantable.”

In real world speak, according to this report, this new law, when fully implemented, provides the framework for making the United States the first Nation in the World to require each and every one of its citizens to have implanted in them a radio-frequency identification (RFID) microchip for the purpose of controlling who is, or isn’t, allowed medical care in their country.

Source: Via ‘Daily Ron Paul’ – member of the U.S. Congress. – “Microchipping included in Healthcare Bill?” – Url.:

Required RFID implanted chip

Sec. 2521, Pg. 1000 – The government will establish a National Medical Device Registry. What does a National Medical Device Registry mean?

National Medical Device Registry from H.R. 3200 [Healthcare Bill], pages 1001-1008:

(g)(1) The Secretary shall establish a national medical device registry (in this subsection referred to as the ‘registry’) to facilitate analysis of postmarket safety and outcomes data on each device that— ‘‘(A) is or has been used in or on a patient; ‘‘(B)and is— ‘‘(i) a class III device; or ‘‘(ii) a class II device that is implantable, life-supporting, or life-sustaining.”

Then on page 1004 it describes what the term “data” means in paragraph 1,

section B:

‘‘(B) In this paragraph, the term ‘data’ refers to information respecting a device described in paragraph (1), including claims data, patient survey data, standardized analytic files that allow for the pooling and analysis of data from disparate data environments, electronic health records, and any other data deemed appropriate by the Secretary”

What exactly is a class II device that is implantable?

Approved by the FDA, a class II implantable device is an “implantable radio frequency transponder system for patient identification and health information.” The purpose of a class II device is to collect data in medical patients such as “claims data, patient survey data, standardized analytic files that allow for the pooling and analysis of data from disparate data environments, electronic health records, and any other data deemed appropriate by the Secretary.”


This new law – when fully implemented – provides the framework for making the United States the first nation in the world to require each and every one of its citizens to have implanted in them a radio-frequency identification (RFID) microchip for the purpose of controlling who is, or isn’t, allowed medical care in their country.

See Healthcare Bill H.R. 3200:

Pages 1001-1008 “National Medical Device Registry” section.
Page 1006 “to be enacted within 36 months upon passage”
Page 503 “… medical device surveillance”

Why would the government use the word “surveillance” when referring to citizens? The definition of “surveillance” is the monitoring of the behavior, activities, or other changing information, usually of people and often in a secret manner. The root of the word [French] means to “watch over.”

In theory, the intent to streamline healthcare and to eliminate fraud via “health chips” seems right. But, to have the world’s lone superpower (America, for now) mandate (page 1006) a device to be IMPLANTED is scary!

Microchiping included in Healthcare Bill?

Coverage under Obamacare will require an implantable microchip?

May 2010 sees once again the 5-yearly review conference of the Nuclear Non-Proliferation Treaty taking place in New York.  It is now 40 years ago since this treaty came into force and although currently there are 189 party states to the treaty, India, Pakistan and Israel are non-signatories and North Korea, first ratified, later violated and finally withdrew from the treaty in 2003.

The treaty is frequently talked of in terms of its 3 pillars of: disarmament, non-proliferation and peaceful uses of nuclear technology as if all had equal importance whereas the treaty was designed for non-proliferation.  The treaty also gives special recognition to the 5 nuclear weapon states somehow giving them the right to have these weapons.

In 1996, the International Court of Justice issued an advisory opinion ruling that the use or the threat of use of nuclear weapons would violate various articles of international law, including the Geneva Conventions, the Hague Conventions, the UN Charter, and the Universal Declaration of Human Rights.

In the light of the above, World without Wars and without Violence:

1.      Denounces the hypocrisy of the 5 permanent members of the UN Security Council who believe they have some kind of inalienable right to possess nuclear weapons and who since the end of the Cold War have made little or no attempts to fulfill their obligations to disarm under article 6 of the treaty.

2.      In particular denounces the USA and her allies who threaten countries they declare as “rogue states” with war and the use of nuclear weapons.

3.      Denounces Pakistan, India and North Korea for spending billions of dollars of their countries meager income on developing nuclear technology at the expense of the suffering of their peoples.

4.      Denounces Israel for destabilizing the whole of the Middle East region by possessing nuclear weapons, and denounces the US for having supplied them the knowledge to develop them in violation of article 1 of the treaty.

5.      Denounces NATO countries for deploying US nuclear weapons on foreign soil in violation of articles 1 and 2 of the treaty.

In addition, World without Wars and without Violence:

1.      Declares the NPT to be a failed treaty, having failed to produce the nuclear disarmament and non-proliferation required by the planet’s population.

2.      Calls on all States to start immediate negotiations for a Nuclear Weapons Convention, making the failed NPT redundant.

3.      Calls on those NATO countries that host US nuclear weapons to have them returned.

4.      Pledges to work side by side with all other organizations working towards the elimination of nuclear weapons who share the methodology of nonviolence and non-discrimination.

5.      Calls on the people of the planet to join in massive mobilizations between the 1st of May and the 9th of May 2010 to raise awareness of the NPT conference in the world’s media and to pressure their national politicians and diplomats to work in the conference in New York with a real willingness to negotiate in good faith to finally do what public opinion demands and that is: to disarm now.  This message was vividly manifested during October 2nd 2009 and January 2nd 2010 when in 100 countries the World March for Peace and Nonviolence took the message of disarmament around the world.

The Opium Wars in Afghanistan

April 6th, 2010 by Alfred W. McCoy

In ways that have escaped most observers, the Obama administration is now trapped in an endless cycle of drugs and death in Afghanistan from which there is neither an easy end nor an obvious exit.

After a year of cautious debate and costly deployments, President Obama finally launched his new Afghan war strategy at 2:40 am on February 13, 2010, in a remote market town called Marja in southern Afghanistan’s Helmand Province. As a wave of helicopters descended on Marja’s outskirts spitting up clouds of dust, hundreds of U.S. Marines dashed through fields sprouting opium poppies toward the town’s mud-walled compounds.

After a week of fighting, U.S. war commander General Stanley A. McChrystal choppered into town with Afghanistan’s vice-president and Helmand’s provincial governor. Their mission: a media roll-out for the general’s new-look counterinsurgency strategy based on bringing government to remote villages just like Marja.

At a carefully staged meet-and-greet with some 200 villagers, however, the vice-president and provincial governor faced some unexpected, unscripted anger.  ”If they come with tractors,” one Afghani widow announced to a chorus of supportive shouts from her fellow farmers, “they will have to roll over me and kill me before they can kill my poppy.”

For these poppy growers and thousands more like them, the return of government control, however contested, brought with it a perilous threat: opium eradication.

Throughout all the shooting and shouting, American commanders seemed strangely unaware that Marja might qualify as the world’s heroin capital — with hundreds of laboratories, reputedly hidden inside the area’s mud-brick houses, regularly processing the local poppy crop into high-grade heroin.  After all, the surrounding fields of Helmand Province produce a remarkable 40% of the world’s illicit opium supply, and much of this harvest has been traded in Marja. Rushing through those opium fields to attack the Taliban on day one of this offensive, the Marines missed their real enemy, the ultimate force behind the Taliban insurgency, as they pursued just the latest crop of peasant guerrillas whose guns and wages are funded by those poppy plants. “You can’t win this war,” said one U.S. Embassy official just back from inspecting these opium districts, “without taking on drug production in Helmand Province.”

Indeed, as Air Force One headed for Kabul Sunday, National Security Adviser James L. Jones assured reporters that President Obama would try to persuade Afghan President Hamid Karzai to prioritize “battling corruption, taking the fight to the narco-traffickers.” The drug trade, he added, “provides a lot of the economic engine for the insurgents.”

Just as these Marja farmers spoiled General McChrystal’s media event, so their crop has subverted every regime that has tried to rule Afghanistan for the past 30 years. During the CIA’s covert war in the 1980s, opium financed the mujahedeen or “freedom fighters” (as President Ronald Reagan called them) who finally forced the Soviets to abandon the country and then defeated its Marxist client state.

In the late 1990s, the Taliban, which had taken power in most of the country, lost any chance for international legitimacy by protecting and profiting from opium — and then, ironically, fell from power only months after reversing course and banning the crop. Since the US military intervened in 2001, a rising tide of opium has corrupted the government in Kabul while empowering a resurgent Taliban whose guerrillas have taken control of ever larger parts of the Afghan countryside.

These three eras of almost constant warfare fueled a relentless rise in Afghanistan’s opium harvest — from just 250 tons in 1979 to 8,200 tons in 2007.  For the past five years, the Afghan opium harvest has accounted for as much as 50% of the country’s gross domestic product (GDP) and provided the prime ingredient for over 90% of the world’s heroin supply.

The ecological devastation and societal dislocation from these three war-torn decades has woven opium so deeply into the Afghan grain that it defies solution by Washington’s best and brightest (as well as its most inept and least competent). Caroming between ignoring the opium crop and demanding its total eradication, the Bush administration dithered for seven years while heroin boomed, and in doing so helped create a drug economy that corrupted and crippled the government of its ally, President Karzai.  In recent years, opium farming has supported 500,000 Afghan families, nearly 20% of the country’s estimated population, and funds a Taliban insurgency that has, since 2006, spread across the countryside.

To understand the Afghan War, one basic point must be grasped: in poor nations with weak state services, agriculture is the foundation for all politics, binding villagers to the government or warlords or rebels. The ultimate aim of counterinsurgency strategy is always to establish the state’s authority. When the economy is illicit and by definition beyond government control, this task becomes monumental. If the insurgents capture that illicit economy, as the Taliban have done, then the task becomes little short of insurmountable.

Opium is an illegal drug, but Afghanistan’s poppy crop is still grounded in networks of social trust that tie people together at each step in the chain of production.  Crop loans are necessary for planting, labor exchange for harvesting, stability for marketing, and security for shipment. So dominant and problematic is the opium economy in Afghanistan today that a question Washington has avoided for the past nine years must be asked: Can anyone pacify a full-blown narco-state?

The answer to this critical question lies in the history of the three Afghan wars in which Washington has been involved over the past 30 years — the CIA covert warfare of the 1980s, the civil war of the 1990s (fueled at its start by $900 million in CIA funding), and since 2001, the U.S. invasion, occupation, and counterinsurgency campaigns. In each of these conflicts, Washington has tolerated drug trafficking by its Afghan allies as the price of military success — a policy of benign neglect that has helped make Afghanistan today the world’s number one narco-state.

CIA Covert Warfare, Spreading Poppy Fields, and Drug Labs: the 1980s

Opium first emerged as a key force in Afghan politics during the CIA covert war against the Soviets, the last in a series of secret operations that it conducted along the mountain rim-lands of Asia which stretch for 5,000 miles from Turkey to Thailand. In the late 1940s, as the Cold War was revving up, the United States first mounted covert probes of communism’s Asian underbelly. For 40 years thereafter, the CIA fought a succession of secret wars along this mountain rim — in Burma during the 1950s, Laos in the 1960s, and Afghanistan in the 1980s. In one of history’s ironic accidents, the southern reach of communist China and the Soviet Union had coincided with Asia’s opium zone along this same mountain rim, drawing the CIA into ambiguous alliances with the region’s highland warlords.

Washington’s first Afghan war began in 1979, when the Soviet Union invaded the country to save a Marxist client regime in Kabul, the Afghan capital. Seeing an opportunity to wound its Cold War enemy, the Reagan administration worked closely with Pakistan’s military dictatorship in a ten-year CIA campaign to expel the Soviets.

This was, however, a covert operation unlike any other in the Cold War years. First, the collision of CIA secret operations and Soviet conventional warfare led to the devastation of Afghanistan’s fragile highland ecology, damaging its traditional agriculture beyond immediate recovery, and fostering a growing dependence on the international drug trade. Of equal import, instead of conducting this covert warfare on its own as it had in Laos in the Vietnam War years, the CIA outsourced much of the operation to Pakistan’s Inter-Service Intelligence (ISI), which soon became a powerful and ever more problematic ally.

When the ISI proposed its Afghan client, Gulbuddin Hekmatyar, as overall leader of the anti-Soviet resistance, Washington — with few alternatives — agreed. Over the next 10 years, the CIA supplied some $2 billion to Afghanistan’s mujahedeen through the ISI, half to Hekmatyar, a violent fundamentalist infamous for throwing acid at unveiled women at Kabul University and, later, murdering rival resistance leaders. As the CIA operation was winding down in May 1990, the Washington Post published a front-page article charging that its key ally, Hekmatyar, was operating a chain of heroin laboratories inside Pakistan under the protection of the ISI.

Although this area had zero heroin production in the mid-1970s, the CIA’s covert war served as the catalyst that transformed the Afghan-Pakistan borderlands into the world’s largest heroin producing region. As mujahedeen guerrillas captured prime agricultural areas inside Afghanistan in the early 1980s, they began collecting a revolutionary poppy tax from their peasant supporters.

Once the Afghan guerrillas brought the opium across the border, they sold it to hundreds of Pakistani heroin labs operating under the ISI’s protection.  Between 1981 and 1990, Afghanistan’s opium production grew ten-fold — from 250 tons to 2,000 tons. After just two years of covert CIA support for the Afghan guerrillas, the U.S. Attorney General announced in 1981 that Pakistan was already the source of 60% of the American heroin supply. Across Europe and Russia, Afghan-Pakistani heroin soon captured an even larger share of local markets, while inside Pakistan itself the number of addicts soared from zero in 1979 to 1.2 million just five years later.

After investing $3 billion in Afghanistan’s destruction, Washington just walked away in 1992, leaving behind a thoroughly ravaged country with over one million dead, five million refugees, 10-20 million landmines still in place, an infrastructure in ruins, an economy in tatters, and well-armed tribal warlords prepared to fight among themselves for control of the capital. Even when Washington finally cut its covert CIA funding at the end of 1991, however, Pakistan’s ISI continued to back favored local warlords in pursuit of its long-term goal of installing a Pashtun client regime in Kabul.

Druglords, Dragon’s Teeth, and Civil Wars: the 1990s

Throughout the 1990s, ruthless local warlords mixed guns and opium in a lethal brew as part of a brutal struggle for power.  It was almost as if the soil had been sown with those dragons’ teeth of ancient myth that can suddenly sprout into an army of full-grown warriors, who leap from the earth with swords drawn for war.

When northern resistance forces finally captured Kabul from the communist regime, which had outlasted the Soviet withdrawal by three years, Pakistan still backed its client Hekmatyar.  He, in turn, unleashed his artillery on the besieged capital.  The result: the deaths of an estimated 50,000 more Afghans. Even a slaughter of such monumental proportions, however, could not win power for this unpopular fundamentalist.  So the ISI armed a new force, the Taliban and in September 1996, it succeeded in capturing Kabul, only to fight the Northern Alliance for the next five years in the valleys to the north of the capital.

During this seemingly unending civil war, rival factions leaned heavily on opium to finance the fighting, more than doubling the harvest to 4,600 tons by 1999. Throughout these two decades of warfare and a twenty-fold jump in drug production, Afghanistan itself was slowly transformed from a diverse agricultural ecosystem — with herding, orchards, and over 60 food crops — into the world’s first economy dependent on the production of a single illicit drug. In the process, a fragile human ecology was brought to ruin in an unprecedented way.

Located at the northern edge of the annual monsoon rains, where clouds arrive from the Arabian Sea already squeezed dry, Afghanistan is an arid land.  Its staple food crops have historically been sustained by irrigation systems that rely on snowmelt from the region’s high mountains. To supplement staples such as wheat, Afghan tribesmen herded vast flocks of sheep and goats hundreds of miles every year to summer pasture in the central uplands. Most important of all, farmers planted perennial tree crops — walnut, pistachio, and mulberry — which thrived because they sink their roots deep into the soil and are remarkably resistant to the region’s periodic droughts, offering relief from the threat of famine in the dry years.

During these two decades of war, however, modern firepower devastated the herds, damaged snowmelt irrigation systems, and destroyed many of the orchards. While the Soviets simply blasted the landscape with firepower, the Taliban, with an unerring instinct for their society’s economic jugular, violated the unwritten rules of traditional Afghan warfare by cutting down the orchards on the vast Shamali plain north of Kabul.

All these strands of destruction knit themselves into a veritable Gordian knot of human suffering to which opium became the sole solution.  Like Alexander’s legendary sword, it offered a straightforward way to cut through a complex conundrum. Without any aid to restock their herds, reseed their fields, or replant their orchards, Afghan farmers — including some 3 million returning refugees — found sustenance in opium, which had historically been but a small part of their agriculture.

Since poppy cultivation requires nine times more labor per hectare than wheat, opium offered immediate seasonal employment to more than a million Afghans — perhaps half of those actually employed at the time. In this ruined land and ravaged economy, opium merchants alone could accumulate capital rapidly and so give poppy farmers crop loans equivalent to more than half their annual incomes, credit critical to the survival of many poor villagers.

In marked contrast to the marginal yields the country’s harsh climate offers most food crops, Afghanistan proved ideal for opium.  On average, each hectare of Afghan poppy land produces three to five times more than its chief competitor, Burma.  Most important of all, in such an arid ecosystem, subject to periodic drought, opium uses less than half the water needed for staples such as wheat.

After taking power in 1996, the Taliban regime encouraged a nationwide expansion of opium cultivation, doubling production to 4,600 tons, then equivalent to 75% of the world’s heroin supply. Signaling its support for drug production, the Taliban regime began collecting a 20% tax from the yearly opium harvest, earning an estimated $100 million in revenues.

In retrospect, the regime’s most important innovation was undoubtedly the introduction of large-scale heroin refining in the environs of the city of Jalalabad.  There, hundreds of crude labs set to work, paying only a modest production tax of $70 on every kilo of heroin powder. According to U.N. researchers, the Taliban also presided over bustling regional opium markets in Helmand and Nangarhar provinces, protecting some 240 top traders there.

During the 1990s, Afghanistan’s soaring opium harvest fueled an international smuggling trade that tied Central Asia, Russia, and Europe into a vast illicit market of arms, drugs, and money-laundering.  It also helped fuel an eruption of ethnic insurgency across a 3,000-mile swath of land from Uzbekistan in Central Asia to Bosnia in the Balkans.

In July 2000, however, the Taliban leader Mullah Omar suddenly ordered a ban on all opium cultivation in a desperate bid for international recognition.  Remarkably enough, almost overnight the Taliban regime used the ruthless repression for which it was infamous to slash the opium harvest by 94% to only 185 metric tons.

By then, however, Afghanistan had become dependent on poppy production for most of its taxes, export income, and employment. In effect, the Taliban’s ban was an act of economic suicide that brought an already weakened society to the brink of collapse. This was the unwitting weapon the U.S. wielded when it began its military campaign against the Taliban in October 2001.  Without opium, the regime was already a hollow shell and essentially imploded at the bursting of the first American bombs.

The Return of the CIA, Opium, and Counterinsurgency: 2001-

To defeat the Taliban in the aftermath of 9/11, the CIA successfully mobilized former warlords long active in the heroin trade to seize towns and cities across eastern Afghanistan.  In other words, the Agency and its local allies created ideal conditions for reversing the Taliban’s opium ban and reviving the drug traffic. Only weeks after the collapse of the Taliban, officials were reporting an outburst of poppy planting in the heroin-heartlands of Helmand and Nangarhar. At a Tokyo international donors’ conference in January 2002, Hamid Karzai, the new Prime Minister put in place by the Bush administration, issued a pro forma ban on opium growing — without any means of enforcing it against the power of these resurgent local warlords.

After investing some three billion dollars in Afghanistan’s destruction during the Cold War, Washington and its allies now proved parsimonious in the reconstruction funds they offered. At that 2002 Tokyo conference, international donors promised just four billion dollars of an estimated $10 billion needed to rebuild the economy over the next five years. In addition, the total U.S. spending of $22 billion for Afghanistan from 2003 to 2007 turned out to be skewed sharply toward military operations, leaving, for instance, just $237 million for agriculture.  (And as in Iraq, significant sums from what reconstruction funds were available simply went into the pockets of Western experts, private contractors, and their local counterparts.)

Under these circumstances, no one should have been surprised when, during the first year of the U.S. occupation, Afghanistan’s opium harvest surged to 3,400 tons. Over the next five years, international donors would contribute $8 billion to rebuild Afghanistan, while opium would infuse nearly twice that amount, $14 billion, directly into the rural economy without any deductions by either those Western experts or Kabul’s bloated bureaucracy.

While opium production continued its relentless rise, the Bush administration downplayed the problem, outsourcing narcotics control to Great Britain and police training to Germany. As the lead agency in Allied operations, Donald Rumsfeld’s Defense Department regarded opium as a distraction from its main mission of defeating the Taliban (and, of course, invading Iraq). Waving away the problem in late 2004, President Bush said he did not want to “waste another American life on a narco-state.” Meanwhile, in their counterinsurgency operations, U.S. forces worked closely with local warlords who proved to be leading druglords.

After five years of the U.S. occupation, Afghanistan’s drug production had swelled to unprecedented proportions.  In August 2007, the U.N. reported that the country’s record opium crop covered almost 500,000 acres, an area larger than all the coca fields in Latin America. From a modest 185 tons at the start of American intervention in 2001, Afghanistan now produced 8,200 tons of opium, a remarkable 53% of the country’s GDP and 93% of global heroin supply.

In this way, Afghanistan became the world’s first true “narco-state.” If a cocaine traffic that provided just 3% of Colombia’s GDP could bring in its wake endless violence and powerful cartels capable of corrupting that country’s government, then we can only imagine the consequences of Afghanistan’s dependence on opium for more than 50% of its entire economy.

At a drug conference in Kabul this month, the head of Russia’s Federal Narcotics Service estimated the value of Afghanistan’s current opium crop at $65 billion.  Only $500 million of that vast sum goes to Afghanistan’s farmers, $300 million to the Taliban guerrillas, and the $64 billion balance “to the drug mafia,” leaving ample funds to corrupt the Karzai government in a nation whose total GDP is only $10 billion.

Indeed, opium’s influence is so pervasive that many Afghan officials, from village leaders to Kabul’s police chief, the defense minister, and the president’s brother, have been tainted by the traffic.  So cancerous and crippling is this corruption that, according to recent U.N. estimates, Afghans are forced to spend a stunning $2.5 billion in bribes. Not surprisingly, the government’s repeated attempts at opium eradication have been thoroughly compromised by what the U.N. has called “corrupt deals between field owners, village elders, and eradication teams.”

Not only have drug taxes funded an expanding guerrilla force, but the Taliban’s role in protecting opium farmers and the heroin merchants who rely on their crop gives them real control over the core of the country’s economy. In January 2009, the U.N. and anonymous U.S. “intelligence officials” estimated that drug traffic provided Taliban insurgents with $400 million a year. “Clearly,” commented Defense Secretary Robert Gates, “we have to go after the drug labs and the druglords that provide support to the Taliban and other insurgents.”

In mid-2009, the U.S. embassy launched a multi-agency effort, called the Afghan Threat Finance Cell, to cut Taliban drug monies through financial controls. But one American official soon compared this effort to “punching jello.” By August 2009, a frustrated Obama administration had ordered the U.S. military to “kill or capture” 50 Taliban-connected druglords who were placed on a classified “kill list.”

Since the record crop of 2007, opium production has, in fact, declined somewhat — to 6,900 tons last year (still over 90% of the world’s opium supply). While U.N. analysts attribute this 20% reduction largely to eradication efforts, a more likely cause has been the global glut of heroin that came with the Afghan opium boom, and which had depressed the price of poppies by 34%. In fact, even this reduced Afghan opium crop is still far above total world demand, which the U.N. estimates at 5,000 tons per annum.

Preliminary reports on the 2010 Afghan opium harvest, which starts next month, indicate that the drug problem is not going away. Some U.S. officials who have surveyed Helmand’s opium heartland see signs of an expanded crop. Even the U.N. drug experts who have predicted a continuing decline in production are not optimistic about long-term trends. Opium prices might decline for a few years, but the price of wheat and other staple crops is dropping even faster, leaving poppies as by far the most profitable crop for poor Afghan farmers.

Ending the Cycle of Drugs and Death

With its forces now planted in the dragon’s teeth soil of Afghanistan, Washington is locked into what looks to be an unending cycle of drugs and death. Every spring in those rugged mountains, the snows melt, the opium seeds sprout, and a fresh crop of Taliban fighters takes to the field, many to die by lethal American fire.  And the next year, the snows melt again, fresh poppy shoots break through the soil, and a new crop of teen-aged Taliban fighters pick up arms against America, spilling more blood. This cycle has been repeated for the past ten years and, unless something changes, can continue indefinitely.

Is there any alternative? Even were the cost of rebuilding Afghanistan’s rural economy — with its orchards, flocks, and food crops — as high as $30 billion or, for that matter, $90 billion dollars, the money is at hand. By conservative estimates, the cost of President Obama’s ongoing surge of 30,000 troops alone is $30 billion a year. So just bringing those 30,000 troops home would create ample funds to begin the rebuilding of rural life in Afghanistan, making it possible for young farmers to begin feeding their families without joining the Taliban’s army.

Short of another precipitous withdrawal akin to 1991, Washington has no realistic alternative to the costly, long-term reconstruction of Afghanistan’s agriculture. Beneath the gaze of an allied force that now numbers about 120,000 soldiers, opium has fueled the Taliban’s growth into an omnipresent shadow government and an effective guerrilla army. The idea that our expanded military presence might soon succeed in driving back that force and handing over pacification to the illiterate, drug-addicted Afghan police and army remains, for the time being, a fantasy. Quick fixes like paying poppy farmers not to plant, something British and Americans have both tried, can backfire and end up actually promoting yet more opium cultivation. Rapid drug eradication without alternative employment, something the private contractor DynCorp tried so disastrously under a $150 million contract in 2005, would simply plunge Afghanistan into more misery, stoking mass anger and destabilizing the Kabul government further.

So the choice is clear enough: we can continue to fertilize this deadly soil with yet more blood in a brutal war with an uncertain outcome — for both the United States and the people of Afghanistan. Or we can begin to withdraw American forces while helping renew this ancient, arid land by replanting its orchards, replenishing its flocks, and rebuilding the irrigation systems ruined in decades of war.

At this point, our only realistic choice is this sort of serious rural development — that is, reconstructing the Afghan countryside through countless small-scale projects until food crops become a viable alternative to opium. To put it simply, so simply that even Washington might understand, you can only pacify a narco-state when it is no longer a narco-state.

Alfred W. McCoy is the J.R.W. Smail Professor of History at the University of Wisconsin-Madison. He is the author of The Politics of Heroin: CIA Complicity in the Global Drug Trade, which probes the conjuncture of illicit narcotics and covert operations over half a century. His latest book, Policing America’s Empire: The United States, the Philippines, and the Rise of the Surveillance State, explores the influence of overseas counterinsurgency operations on the spread of internal security measures at home.

Recommended citation: Alfred W. McCoy, “Can Anyone Pacify the World’s Number One Narco-State? The Opium Wars in Afghanistan,” The Asia-Pacific Journal, 14-4-10, April 5, 2010.

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See also: Peter Dale Scott, America’s Drug-Addicted War in Afghanistan: Time to Fight the Drug Problem In Washington, Not Just in Kabul

See the following articles on related subjects: Peter Dale Scott, America’s Afghanistan: The National Security and a Heroin-Ravaged State

Peter Dale Scott, Martial Law, the Financial Bailout, and the Afghan and Iraq Wars

Jeremy Kuzmarov, American Police Training and Political Violence: From the Philippines Conquest to the Killing Fields of Afghanistan and Iraq

MK Bhadrakumar, Afghanistan, Iran and US-Russian Conflict

Peter Van Agtmael, All You Need is Heroin: U.S. Troops in Their Own Hand

Why There Are no ‘Israelis’ in the Jewish State

April 6th, 2010 by Jonathan Cook

A group of Jews and Arabs are fighting in the Israeli courts to be recognised as “Israelis”, a nationality currently denied them, in a case that officials fear may threaten the country’s self-declared status as a Jewish state.

Israel refused to recognise an Israeli nationality at the country’s establishment in 1948, making an unusual distinction between “citizenship” and “nationality”. Although all Israelis qualify as “citizens of Israel”, the state is defined as belonging to the “Jewish nation”, meaning not only the 5.6 million Israeli Jews but also more than seven million Jews in the diaspora.

Critics say the special status of Jewish nationality has been a way to undermine the citizenship rights of non-Jews in Israel, especially the fifth of the population who are Arab. Some 30 laws in Israel specifically privilege Jews, including in the areas of immigration rights, naturalisation, access to land and employment.

Arab leaders have also long complained that indications of “Arab” nationality on ID cards make it easy for police and government officials to target Arab citizens for harsher treatment.

The interior ministry has adopted more than 130 possible nationalities for Israeli citizens, most of them defined in religious or ethnic terms, with “Jewish” and “Arab” being the main categories.

The group’s legal case is being heard by the supreme court after a district judge rejected their petition two years ago, backing the state’s position that there is no Israeli nation.

The head of the campaign for Israeli nationality, Uzi Ornan, a retired linguistics professor, said: “It is absurd that Israel, which recognises dozens of different nationalities, refuses to recognise the one nationality it is supposed to represent.”

The government opposes the case, claiming that the campaign’s real goal is to “undermine the state’s infrastructure” — a presumed reference to laws and official institutions that ensure Jewish citizens enjoy a privileged status in Israel.

Mr Ornan, 86, said that denying a common Israeli nationality was the linchpin of state-sanctioned discrimination against the Arab population.

“There are even two laws — the Law of Return for Jews and the Citizenship Law for Arabs — that determine how you belong to the state,” he said. “What kind of democracy divides its citizens into two kinds?”

Yoel Harshefi, a lawyer supporting Mr Ornan, said the interior ministry had resorted to creating national groups with no legal recognition outside Israel, such as “Arab” or “unknown”, to avoid recognising an Israeli nationality.

In official documents most Israelis are classified as “Jewish” or “Arab”, but immigrants whose status as Jews is questioned by the Israeli rabbinate, including more than 300,000 arrivals from the former Soviet Union, are typically registered according to their country of origin.

“Imagine the uproar in Jewish communities in the United States, Britain or France, if the authorities there tried to classify their citizens as “Jewish” or “Christian”,” said Mr Ornan.

The professor, who lives close to Haifa, launched his legal action after the interior ministry refused to change his nationality to “Israeli” in 2000. An online petition declaring “I am an Israeli” has attracted several thousand signatures.

Mr Ornan has been joined in his action by 20 other public figures, including former government minister Shulamit Aloni. Several members have been registered with unusual nationalities such as “Russian”, “Buddhist”, “Georgian” and “Burmese”.

Two Arabs are party to the case, including Adel Kadaan, who courted controversy in the 1990s by waging a lengthy legal action to be allowed to live in one of several hundred communities in Israel open only to Jews.

Uri Avnery, a peace activist and former member of the parliament, said the current nationality system gave Jews living abroad a far greater stake in Israel than its 1.3 million Arab citizens.

“The State of Israel cannot recognise an ‘Israeli’ nation because it is the state of the ‘Jewish’ nation … it belongs to the Jews of Brooklyn, Budapest and Buenos Aires, even though these consider themselves as belonging to the American, Hungarian or Argentine nations.”

International Zionist organisations representing the diaspora, such as the Jewish National Fund and the Jewish Agency, are given in Israeli law a special, quasi-governmental role, especially in relation to immigration and control over large areas of Israeli territory for the settlement of Jews only.

Mr Ornan said the lack of a common nationality violated Israel’s Declaration of Independence, which says the state will “uphold the full social and political equality of all its citizens, without distinction of religion, race or sex”.

Indications of nationality on ID cards carried by Israelis made it easy for officials to discriminate against Arab citizens, he added.

The government has countered that the nationality section on ID cards was phased out from 2000 — after the interior ministry, which was run by a religious party at the time, objected to a court order requiring it to identify non-Orthodox Jews as “Jewish” on the cards.

However, Mr Ornan said any official could instantly tell if he was looking at the card of a Jew or Arab because the date of birth on the IDs of Jews was given according to the Hebrew calendar. In addition, the ID of an Arab, unlike a Jew, included the grandfather’s name.

“Flash your ID card and whatever government clerk is sitting across from you immediately knows which ‘clan’ you belong to, and can refer you to those best suited to ‘handle your kind’,” Mr Ornan said.

The distinction between Jewish and Arab nationalities is also shown on interior ministry records used to make important decisions about personal status issues such as marriage, divorce and death, which are dealt with on entirely sectarian terms.

Only Israelis from the same religious group, for example, are allowed to marry inside Israel — otherwise they are forced to wed abroad – and cemeteries are separated according to religious belonging.

Some of those who have joined the campaign complain that it has damaged their business interests. One Druze member, Carmel Wahaba, said he had lost the chance to establish an import-export company in France because officials there refused to accept documents stating his nationality as “Druze” rather than “Israeli”.

The group also said it hoped to expose a verbal sleight of hand that intentionally mistranslates the Hebrew term “Israeli citizenship” on the country’s passports as “Israeli nationality” in English to avoid problems with foreign border officials.

B Michael, a commentator for Yedioth Aharonoth, Israel’s most popular newspaper, has observed: “We are all Israeli nationals — but only abroad.”

The campaign, however, is likely to face an uphill struggle in the courts.

A similar legal suit brought by a Tel Aviv psychologist, George Tamrin, failed in 1970. Shimon Agranat, head of the supreme court at the time, ruled: “There is no Israeli nation separate from the Jewish people. … The Jewish people is composed not only of those residing in Israel but also of diaspora Jewries.”

That view was echoed by the district court in 2008 when it heard Mr Ornan’s case.

The judges in the supreme court, which held the first appeal hearing last month, indicated that they too were likely to be unsympathetic. Justice Uzi Fogelman said: “The question is whether or not the court is the right place to solve this problem.”

Jonathan Cook is a writer and journalist based in Nazareth, Israel. His latest books are “Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East” (Pluto Press) and “Disappearing Palestine: Israel’s Experiments in Human Despair” (Zed Books). His website is


A version of this article originally appeared in The National (, published in Abu Dhabi.

When did it begin, all this “We take your [call/problem/question] very seriously”? With answering-machine hell? As you wait endlessly, the company or government agency assures you that they take seriously whatever reason you’re calling. What a kind and thoughtful world we live in.

The BBC reported last month that doctors in the Iraqi city of Fallujah are reporting a high level of birth defects, with some blaming weapons used by the United States during its fierce onslaughts of 2004 and subsequently, which left much of the city in ruins. “It was like an earthquake,” a local engineer who was running for a national assembly seat told the Washington Post in 2005. “After Hiroshima and Nagasaki, there was Fallujah.” Now, the level of heart defects among newborn babies is said to be 13 times higher than in Europe.

The BBC correspondent also saw children in the city who were suffering from paralysis or brain damage, and a photograph of one baby who was born with three heads. He added that he heard many times that officials in Fallujah had warned women that they should not have children. One doctor in the city had compared data about birth defects from before 2003 — when she saw about one case every two months — with the situation now, when she saw cases every day. “I’ve seen footage of babies born with an eye in the middle of the forehead, the nose on the forehead,” she said.

A spokesman for the US military, Michael Kilpatrick, said it always took public health concerns “very seriously”, but that “No studies to date have indicated environmental issues resulting in specific health issues.” 1

One could fill many large volumes with the details of the environmental and human horrors the United States has brought to Fallujah and other parts of Iraq during seven years of using white phosphorous shells, depleted uranium, napalm, cluster bombs, neutron bombs, laser weapons, weapons using directed energy, weapons using high-powered microwave technology, and other marvelous inventions in the Pentagon’s science-fiction arsenal … the list of abominations and grotesque ways of dying is long, the wanton cruelty of American policy shocking. In November 2004, the US military targeted a Fallujah hospital “because the American military believed that it was the source of rumors about heavy casualties.” 2 That’s on a par with the classic line from the equally glorious American war in Vietnam: “We had to destroy the city to save it.”

How can the world deal with such inhumane behavior? (And the above of course scarcely scratches the surface of the US international record.) For this the International Criminal Court (ICC) was founded in Rome in 1998 (entering into force July 1, 2002) under the aegis of the United Nations. The Court was established in The Hague, Netherlands to investigate and indict individuals, not states, for “The crime of genocide; Crimes against humanity; War crimes; or The crime of aggression.” (Article 5 of the Rome Statute) From the very beginning, the United States was opposed to joining the ICC, and has never ratified it, because of the alleged danger of the Court using its powers to “frivolously” indict Americans.

So concerned about indictments were the American powers-that-be that the US went around the world using threats and bribes against countries to induce them to sign agreements pledging not to transfer to the Court US nationals accused of committing war crimes abroad. Just over 100 governments so far have succumbed to the pressure and signed an agreement. In 2002, Congress, under the Bush administration, passed the “American Service Members Protection Act”, which called for “all means necessary and appropriate to bring about the release of any US or allied personnel being detained or imprisoned by … the International Criminal Court.” In the Netherlands it’s widely and derisively known as the “Invasion of The Hague Act”. 3 The law is still on the books.

Though American officials have often spoken of “frivolous” indictments — politically motivated prosecutions against US soldiers, civilian military contractors, and former officials — it’s safe to say that what really worries them are “serious” indictments based on actual events. But they needn’t worry. The mystique of “America the Virtuous” is apparently alive and well at the International Criminal Court, as it is, still, in most international organizations; indeed, amongst most people of the world. The ICC, in its first few years, under Chief Prosecutor Luis Moreno-Ocampo, an Argentine, dismissed many hundreds of petitions accusing the United States of war crimes, including 240 concerning the war in Iraq. The cases were turned down for lack of evidence, lack of jurisdiction, or because of the United States’ ability to conduct its own investigations and trials. The fact that the US never actually used this ability was apparently not particularly significant to the Court. “Lack of jurisdiction” refers to the fact that the United States has not ratified the accord. On the face of it, this does seem rather odd. Can nations commit war crimes with impunity as long as they don’t become part of a treaty banning war crimes? Hmmm. The possibilities are endless. A congressional study released in August, 2006 concluded that the ICC’s chief prosecutor demonstrated “a reluctance to launch an investigation against the United States” based on allegations regarding its conduct in Iraq. 4 Sic transit gloria International Criminal Court.

As to the crime of aggression, the Court’s statute specifies that the Court “shall exercise jurisdiction over the crime of aggression once a provision is adopted … defining the crime and setting out the conditions under which the Court shall exercise jurisdiction with respect to this crime.” In short, the crime of aggression is exempted from the Court’s jurisdiction until “aggression” is defined. Writer Diana Johnstone has observed: “This is a specious argument since aggression has been quite clearly defined by U.N. General Assembly Resolution 3314 in 1974, which declared that: ‘Aggression is the use of armed force by a State against the sovereignty, territorial integrity or political independence of another State’, and listed seven specific examples,” including:

The invasion or attack by the armed forces of a State of the territory of another State, or any military occupation, however temporary, resulting from such invasion or attack, or any annexation by the use of force of the territory of another State or part thereof; and

Bombardment by the armed forces of a State against the territory of another State or the use of any weapons by a State against the territory of another State.

The UN resolution also stated that: “No consideration of whatever nature, whether political, economic, military or otherwise, may serve as a justification for aggression.”

The real reason that aggression remains outside the jurisdiction of the ICC is that the United States, which played a strong role in elaborating the Statute before refusing to ratify it, was adamantly opposed to its inclusion. It is not hard to see why. It may be noted that instances of “aggression”, which are clearly factual, are much easier to identify than instances of “genocide”, whose definition relies on assumptions of intention. 5

There will be a conference of the ICC in May, in Kampala, Uganda, in which the question of specifically defining “aggression” will be discussed. The United States is concerned about this discussion. Here is Stephen J. Rapp, US Ambassador-at-Large for War Crimes Issues, speaking to the ICC member nations (111 have ratified thus far) in The Hague last November 19:

I would be remiss not to share with you my country’s concerns about an issue pending before this body to which we attach particular importance: the definition of the crime of aggression, which is to be addressed at the Review Conference in Kampala next year. The United States has well-known views on the crime of aggression, which reflect the specific role and responsibilities entrusted to the Security Council by the UN Charter in responding to aggression or its threat, as well as concerns about the way the draft definition itself has been framed. Our view has been and remains that, should the Rome Statute be amended to include a defined crime of aggression, jurisdiction should follow a Security Council determination that aggression has occurred.

Do you all understand what Mr. Rapp is saying? That the United Nations Security Council should be the body that determines whether aggression has occurred. The same body in which the United States has the power of veto. To prevent the adoption of a definition of aggression that might stigmatize American foreign policy is likely the key reason the US will be attending the upcoming conference.

Nonetheless, the fact that the United States will be attending the conference may well be pointed out by some as another example of how the Obama administration foreign policy is an improvement over that of the Bush administration. But as with almost all such examples, it’s a propaganda illusion. Like the cover of Newsweek magazine of March 8, written in very large type: “Victory at last: The emergence of a democratic Iraq”. Even before the current Iraqi electoral farce — with winning candidates arrested or fleeing 6— this headline should have made one think of the interminable jokes Americans made during the Cold War about Pravda and Izvestia.

The forbidden “P” word

“Back now at 8:11 with one of our favorite families, the Duggars. Parents Jim Bob and Michelle became the proud parents of their 19th child back in December. This morning we have an exclusive first look at their daughter, Josie Brooklyn. She was born three and a half months premature, but we are happy to report both mom and baby are doing well.” — Meredith Vieira, “The Today Show,”, NBC, January 28, 2010

Wow, ain’t that just real neat! Their 19th child! Wow, and mom and baby are doing so well!

Wow, the Duggars and their children were featured on a TV reality show called “19 Kids & Counting.” Wow, just a newborn and already on a reality show! Pass me some more pizza.

Wow, if it was up to me, I would have had mom and/or Jim Bob sterilized after their third child. Wow. Or maybe after their second. Just tie their damn tubes or something!

“D.C. area’s population is still blooming: Data shows brisk growth 163,000 gain in 2 years” — This is the Washington Post (March 24) exulting over the fact that the District of Columbia has undergone a sharp increase in population in recent years. Wow, the more the better for the city, right? We all love big crowds and jammed trains and waiting a long time for everything, don’t we? In their online version of the same story, the Post headline was: “Washington area population rises faster than other regions”. Wow, even better than I thought. We’re winning the population contest! Is there a Super Bowl we can be invited to? Is everyone crazy?

Wow, people, we’re suffocating in people, we’re drowning in people. So much of importance, so much that we value and take pleasure in, is being choked to death by too many people. But no politician dares touch upon this. Rarely does the mainstream media do so. In fact, rarely does the alternative media do so. Population growth is a driving force behind carbon dioxide-emission increases, but it wasn’t on the agenda at the international environment conference in Copenhagen last December or at any of the climate talks since then. It appears to be an idea that can not be entertained in polite society.

Imagine there were 25 million fewer cars on American roads. Imagine the effect on travel time, on air pollution, on accidents, on road rage, on finding a parking space. Imagine what we could build on the huge amount of space now devoted to parking lots.

There is overwhelming evidence that the UN’s Millennium Development Goals will not be achieved if population growth is not curbed. These goals include eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality, combating HIV/AIDS, and ensuring environmental sustainability. A lot of the work of NGOs and other activists all over the world is nullified by population increases.

Many Marxists insist that there’s no pressing need to control population if we just change the economic system — eliminate private ownership of the means of production, get rid of the profit motive, curtail all the unnecessary economic “growth”, revise our economic priorities so as to run society on a rational, humane basis. Enough food is already produced in the world, they say, to cover the needs of everyone; it’s the distribution of the food that’s the problem. There’s a lot to what they say, but I think the many serious problems caused by overpopulation — from food and water and transportation to housing, soil erosion, sanitation and much more will continue to plague the world as long as we continue inexorably toward a world of billions more vulnerable beings. ALL ELSE BEING EQUAL, imagine the quality of life in the United States with 100 million fewer people. Imagine Chinese society with an additional 400 million people. This is what the Chinese government estimates is what the result would be today if its one-child policy had not been adopted in the 1970s. 7

So I’m advocating a one- or a two-child per family maximum. This law would not be retroactive.

But I’m not advocating support of US foreign policy, even though it does its share of population control by killing people on a regular basis, currently at war against five countries.

All of you who are activists in any way, I urge you to not be afraid to mention the “P” word. Be inspired by Britain’s Prince Philip who once said: “If I were reincarnated, I would wish to be returned to Earth as a killer virus to lower human population levels.” 8

One final point. Everyone knows of the unspeakable sadness of losing a child. Do parents ever get over it? But when did you see this kind of grief over the loss of an embryo or fetus? Who mourns a fetus in the same personal way and to the same degree? That’s why I have no hesitation in fully supporting abortion on demand. Abortion on demand will be an important part of population control in my brave new world.

Free files

My apartment is running out of space. Would anyone like some FBI files I received under the Freedom of Information Act?

Liberation News Service (the Associated Press of the left), late 1960s, early 1970s, about 800 pages.

Prairie Fire Organizing Committee, mid-1970s, about 1,000 pages. From their website:

“In 1974, the Weather Underground Organization published a book entitled ‘Prairie Fire: The Politics of Revolutionary Anti-Imperialism.’ Discussion groups sprang up around the country to discuss the book. In response, Prairie Fire formed in cities across the U.S.”


1. BBC, March 4, 2010; Washington Post, December 3, 2005

2. New York Times, November 8, 2004

3. Christian Science Monitor, February 13, 2009 

4. Washington Post, November 7, 2006

5. Diana Johnstone, Counterpunch, January 27/28, 2007

6. Washington Post, April 2, 2010

7. Associated Press, March 2, 2008

8. The Sunday Telegraph (Sydney, Australia), August 10, 2003

William Blum is the author of Killing Hope: US Military and CIA Interventions Since World War 2, Rogue State: A Guide to the World’s Only Superpower, West-Bloc Dissident: A Cold War Memoir, and Freeing the World to Death: Essays on the American Empire. Portions of the books can be read, and signed copies purchased, at Previous Anti-Empire Reports can be read at this website.

Thursday’s warning by Afghan President Hamid Karzai that US and other NATO troops could be regarded as “invaders” in his country provided a rare glimpse into the political realities in Afghanistan—and called forth a furious reaction from the Obama administration and the American media.

Karzai denounced those in the Washington and the Western media who have criticized the corruption and incompetence of his regime, complaining, “They wanted to have a puppet government. They wanted a servant government.”

The outburst came one day after the Afghan parliament voted to strip Karzai of the power he had claimed to name all five members of the country’s election commission, which is to oversee parliamentary elections in the fall. The decision came under heavy pressure from the US ambassador.

Karzai declared, “In this situation there is a thin curtain between invasion and cooperation-assistance.” He warned that if the people concluded that those in the Afghan government were simply mercenaries for the Western powers, the Taliban-led insurgency “could become a national resistance.”

What Karzai warns of as a possible outcome for the US-led war in Afghanistan has already largely come to pass, as an extraordinary report in Sunday’s New York Times makes clear.

In a front-page dispatch from Marja, the district recently conquered by the US Marines in the first major offensive since Obama ordered an escalation of the war, Times correspondent Richard A. Oppel, Jr. writes that the Marines have no control in the region outside their own bases, the Taliban are resurgent, and those collaborating with the US occupation are isolated and targeted for retaliation. Most US-funded reconstruction work has been forced to shut down.

Oppel concludes: “In Marja, the Taliban are hardly a distinct militant group, and the Marines have collided with a Taliban identity so dominant that the movement appears more akin to the only political organization in a one-party town, with an influence that touches everyone. Even the Marines admit to being somewhat flummoxed.”

“We’ve got to re-evaluate our definition of the word ‘enemy,’” Brig. Gen. Larry Nicholson, commander of the Marine expeditionary brigade in Helmand Province, told the Times. “Most people here identify themselves as Taliban.”

Those fighting the occupation of Afghanistan are invariably described in the Western media as “Taliban,” in an effort to provide a “democratic” and “progressive” cover for the US-led military intervention. What Karzai suggests, and the Times report in effect confirms, is that the US-NATO war is directed against virtually the entire population of the country.

Karzai’s speech lifts the veil over the real nature of the US war in Afghanistan, sold to the American people over nearly nine years as a response to the 9/11 terrorist attacks. The US is engaged in a brutal colonial war aimed at propping up a puppet regime that will serve US interests in Central Asia—one of the largest suppliers of oil and gas to the world market.

It is unusual for the head of a government sustained entirely by US arms and dollars to issue such a public rebuke to his master. This is to be explained by two factors: the growing hostility of the Afghan people to the occupation, in which thousands of innocent people have been killed by American bombs, rockets, night-time commando raids and outright massacres; and the desperation of Karzai, who feels himself increasingly marginalized in his nominal role as head of the Afghan state.

The Afghan president’s speech, to a gathering of election officials, came four days after the visit by Barack Obama to Kabul, where the US president had a confrontational meeting with Karzai. Published reports said that Obama berated Karzai over the corruption in his regime and the vote-rigging in last year’s presidential election. No doubt the topic of Karzai’s recent overtures to Iran and China were also raised.

Karzai’s remarks provoked an immediate response from Washington. White House Press Secretary Robert Gibbs called his statement “troubling” and “cause for real and genuine concern.” State Department spokesman Philip Crowley described Karzai’s intervention as “preposterous.”

US officials sought to contain the political uproar over Karzai’s comments, with Ambassador Karl Eikenberry, the real political power in Kabul, calling on the Afghan president to “clarify” his remarks, which he promptly did the next day in a long phone conversation with US Secretary of State Hillary Clinton.

But the blast from their Afghan puppet has left American officials in a difficult position. To dismiss Karzai’s diatribe as lunacy—the New York Daily Newseditorial was headlined “Cuckoo Karzai”—means that 1,000 US soldiers and tens of thousands of Afghans have lost their lives to keep a madman in power.

The New York Times, in an editorial April 3, called Karzai’s criticism “delusional” and warned that his statement could have political repercussions in the United States, because “it undermines the fragile public support for President Obama’s strategy” of pouring 30,000 more US troops into the Afghanistan war.

“Mr. Karzai is encouraging those who want the United States out of Afghanistan,” the editorial concluded. “He risks boiling down a more complicated policy debate to the notion that American lives are being sacrificed simply to keep him in power. It’s hard to think of a better way to doom Afghanistan’s future, as well as his own.”

The last phrase has a sinister ring, harking back nearly 50 years to when a previous US puppet ran afoul of Washington—in 1963, when President Ngo Dinh Diem of South Vietnam, facing similar criticism for corruption, incompetence and vote-rigging, was overthrown and murdered in a US-backed military coup, setting the stage for a decade of even deeper US military intervention.

The Times returned to the subject again in an article posted on the front page of its web site Sunday afternoon, noting that Karzai had intensified his criticism of the US in a meeting with his parliamentary faction. “If you and the international community pressure me more, I swear that I am going to join the Taliban,” he reportedly said.

The Times article mulled over possible options for US policy towards Karzai, listing three options: “threaten to withdraw, or actually withdraw, troops; use diplomacy, which so far has had little result; and find ways to expand citizen participation in the government.”

The last “option” is meaningless in an occupied country where all such “participation” is dictated by the occupying powers. It is perhaps a euphemism for the one action which has been the most commonly used weapon in the arsenal of American imperialism—a coup engineered and facilitated by Washington.

Sections of the former Northern Alliance, based in the Tajik minority, are certainly capable of carrying out such an action with the proper encouragement from the Obama administration. There is no doubt that discussions about that possibility are under way in the White House, Pentagon and CIA—as well as how to package it as greater “citizen participation” in the Kabul regime.

Karzai and Obama: Biting the Hand That Feeds

April 6th, 2010 by Eric Walberg

Lieutenant colonel Brian Christmas (I’m not making this up) recently threatened the village elders in Sistani, a village near Marja, with “the choice between American guns and American resources”. Read: turn stoolie. The Afghan president begs to differ.

There can be no doubt that Washington is in the throws of a mental breakdown over what to do about Afghanistan. The very unenthusiastic surge now underway is a disaster on the ground, as NATO, Taliban and civilian deaths skyrocket in Marja and Kandahar, with Kunduz coming up in the brutal Afghan summer. The staunchly noncombatant Germans are supposed to spearhead the latter operation, but there is a revolution brewing at home after three of them died in a few seconds last week, and nearby their comrades gunned down five Afghan soldiers in a case of “friendly fire”. To make matters worse, far worse, America’s political hope, President Hamid Karzai, is doing his best to scuttle the occupiers’ plans, however altruistic and noble they might be.

A petulant Karzai invited Iranian President Mahmoud Ahmedinejad to Kabul 10 March and listened approvingly as America’s nemesis gave a fiery anti-American speech, condemning the US drive for control of the Middle East and Central Asia and for promoting terrorism in the region. While Karzai can be commended for the perfectly reasonable initiative — after all Iran is Afghanistan’s most powerful neighbour and getting it onside in search of peace is eminently sensible — what prompted this nonetheless bizarre performance was Karzai’s anger over being “uninvited” to Washington the previous week. Not that Washington was well within its rights, after Karzai decided that his election commission in future should be composed exclusively of his friends rather than any pesky UN officials. 

Another new development is Karzai’s sudden love for his former comrades in the Taliban, whom he betrayed in the late 1990s to take up a job as Unicol lobbyist and to parachute in with the US when it invaded Afghanistan in 2001. Apparently on his own initiative, he had recently undertaken negotiations with second-in-command Taliban leader Abdul Ghani Baradar, who the Pakistanis or Americans immediately arrested in February, much to his displeasure. Undaunted, within days of the Iranian visit, Karzai entertained representatives of the Afghan insurgent group Hezb-e Islami led by Gulbuddin Hekmatyar who, in 2003, the US State Department honoured as a “Specially Designated Global Terrorist” for his work with Al-Qaeda and the Taliban. 

This is a strange peace partner for Karzai considering Hekmatyar tried to assassinate him in 2008. His reputation is far worse than the run-of-the-mill Taliban; even Iran expelled him and his handful of followers in 2002, albeit under US pressure. Karzai’s photo-op with Hizb-e Islami hardly constitutes a breakthrough, and most knowledgeable sources have little hope for negotiations with the real Taliban (as opposed to the megalomaniac Hekmatyar or the soft Taliban defectors now under house arrest in Kabul). Still, Karzai can only be commended yet again for another perfectly reasonable initiative — the only way to salvage his own corrupt and incompetent regime is to bring in people who have the respect of the Afghans for what they surely see as a selfless struggle to protect Afghan culture from the invader Christmases.

But both his initiatives have infuriated his patrons in Washington, as both very much undermine theraison d’etre of the occupiers’ new surge, which is to kill anyone who dares call himself Taliban and to outlaw any admiration of the Islamic republic to the west.

Karzai has burned just about all his bridges at this point. US Ambassador Karl Eikenberryconcluded privately in November that Karzai is “not an adequate strategic partner. … His circle assume we covet their territory for a never-ending ‘war on terror’ and for military bases to use against surrounding powers.” Alas Mr Karzai, you can lead a horse like Karl to water, but you can’t make him drink. 

Since then things have gone from bad to worse. In January, Karzai reiterated this “theory”, complained the US opposes striking a peace deal with the Taliban, and that he is the only one who can stand up to the goddam Yankees. Again, perfectly sound arguments, though hardly music to his sponsors’ ears. His silence since the surge in Marja began — except to criticise civilian deaths — is just as deafening as his loud rhetoric. 

US pundits such as Thomas Friedman angrily attack him: “That is what we’re getting for risking thousands of US soldiers and having spent $200 billion already.”  By ignoring the fraudulent presidential election last year and the widespread corruption, Friedman says Obama is getting what he asks for. “If Karzai behaves like this when he needs us, when we’re there fighting for him, how is he going to treat our interests when we’re gone?” he wails. “He is going to break our hearts.“

In a frantic attempt to bring Karzai to heel, United States President Barack Obama made an unannounced visit to Afghanistan — his first as president — a few days after his Iranian colleague’s coup. He attempted to smooth over the spat with Karzai about the election commission and of course give succour to the troops, though it’s unlikely that either goal was achieved. As Obama flew home, the Afghan president threw another dagger at Obama’s back. Defending the presidential elections last year, he said, “There is no doubt that the fraud was very widespread, but this fraud was not committed by Afghans, it was committed by foreigners.” He pointed his finger at the American Peter Galbraith, deputy UN special representative, who exposed the real fraud and was fired for his pains, and who considered this latest outburst of Karzai an April Fools’ Day joke, “underscoring how totally unreliable this guy is as an ally.” 

Karzai also made the very obvious and very valid point: if Western forces are seen as invaders and the Afghan government their mercenaries, the insurgency “could become a national resistance.” Hello? Who has been supporting the Taliban for almost a decade? As NATO soldiers “mow the grass”, who are the young men who continue to sacrifice their lives for their country? 

The White House called the speech “troubling” and said it was seeking clarification through the State Department, which is diplo-speak for “He’s no longer our SOB.” But the State Department is in as much of a quandary as the military and Obama. Karzai must have had second thoughts about his comments and in a 25-minute phone call to Secretary of State Hillary Clinton last week expressed surprise that his remarks are seen as critical of the US, that he really just meant to criticise Western media. Mrs Clinton soothed her troubled ward, assuring him of America’s commitment to Afghanistan and bemoaned she had no control over American news coverage. As relations between the Obama administration and Karzai become more tense, Karzai has increasingly turned to Clinton, a development that can only be interpreted as a naughty boy appealing to a mother figure — hardly something to reassure Obama that he has a tough, unflinching warrior-prince who can prevail against all odds. 

But this political snake pit is not all that different than the Iraqi one, where the former (and incumbent?) president Nouri Al-Maliki regularly visited and hosted delegations from Iran, and where America’s darling (and incumbent?) former prime minister Ayad Allawi defected from the Baathist regime of Saddam Hussein into UK exile, founded the Iraqi National Accord, and in the lead up to the 2003 invasion of Iraq earned his keep providing “intelligence” about weapons of mass destruction to MI6. Allawi has lived half of his life in the UK and his wife and children still live there. He too parachuted in with his patrons, when they began their “Shock and Awe” devastation of Baghdad in 2003, and now is refashioning himself as the grand compromiser, bridging all chasms, no matter how wide, deep and made-in-the-USA. 

The big difference with Karzai, of course, is that the US occupiers in Iraq are in control of elections, with no UN or other observers, something that irks Karzai, who is no doubt as suspicious of Allawi’s surprising “victory” there as the rest of us, a victory which will conveniently put paid to any more love-ins with the demon Iran.

Though a neutral observer might sympathise with Karzai’s initiatives with Iran and the insurgency considering the fix he is in, it is hard to sympathise with his staunch support of his brother Ahmed Wali Karzai, chairman of the Kandahar provincial council, infamous for his involvement in the drug trade, money laundering, racketeering and electoral fraud. He even pays insurgents not to attack his business interests. As the surge reaches Kandahar, its chief landlord is now seizing land he thinks NATO may want to rent. “What’s really fuelling the insurgency is groups being disenfranchised, feeling oppressed by the institutions of state and criminal syndicates,” said Mark Sedwill, NATO’s top civilian official in Afghanistan. But as there is no one left outside his family that Karzai can really trust, Ahmed stays. 

An editorial in the New York Times goes as far as to suggest that Karzai is losing his marbles with his latest “rambling speech” full of “delusional criticism”, that at times he seemed to be having a conversation with himself, saying that he needed to let go of his anger over the election, but was unable: “We have a knot in our heart; our dignity and bravery has been damaged and stepped on.” Karzai apparently thinks “that American lives are being sacrificed simply to keep him in power. It’s hard to think of a better way to doom Afghanistan’s future, as well as his own.”

Fighting words, those. Has Karzai read his Vietnam history and the fate of nationalist premier Ngo Dinh Diem, who was murdered in a coup sponsored by the CIA in 1963? Closer to his heart — and neck and other appendages — is the gruesome fate of his predecessor Mohammad Najibullah. By openly criticising the occupiers and reaching out to his old friends, like Allawi he is desperately refashioning himself as the grand compromiser, hoping to strike a deal with enough of the Taliban to bring the insurgency under control. No matter how much he badmouths his patrons, he still figures it is less likely he will die at their hands than at the hands of the Taliban. Karzai is right to think that “after me the deluge”, that the US has no one else remotely credible to take over. Waiting in the wings is runner-up in last year’s presidential election, the mysterious Abdullah Abdullah, a native Tajik from the Northern Alliance, unswerving foe of the Pashtun-majority Taliban, who will incite outright civil war. 

Given his D- report card, there are no American officials on Karzai’s side anymore and it is hard not to imagine a scenario where his American guards fail to shield him from the next assassination attempt. But he should watch out. It may not be Hekmatyar, the Taliban or the CIA that takes the next shot at him. Ahmed runs armed mercenary groups said to be behind the assassinations of provincial officials such as Sitara Achekzai and Yunus Hosseini. Fratricide is a time-honoured way to seize power.


Eric Walberg writes for Al-Ahram Weekly . You can reach him at

NOVO-OGARYOVO (Moscow Region) — Venezuela could sign over $5 billion worth of contracts for Russian arms and military equipment, Russian Prime Minister Vladimir Putin said on Monday.

“Our delegation has just returned from Venezuela, while the aggregate volume of contracts could exceed $5 billion,” Putin said at a meeting with Russian defense industry officials.

He said the figure includes a $2.2 billion Russian loan to Venezuela.

He added that the contracts would be placed at 13 leading defense-industry enterprises, including Izhmash, the manufacturer of famed Kalashnikov assault rifles.

“The sources of funding have been established and coordinated with our partners,” Putin said.

The Russian prime minister visited Venezuela on Friday for talks on a range of issues, including military and technical cooperation and joint energy projects.

Repression doesn’t come cheap, just ask the FBI.

As the securitization of daily life increase at near exponential rates (all to keep us “safe,” mind you) the dark contours of an American police state, like a pilot’s last glimpse of an icy peak before a plane crash, wobbles into view.

In the main, such programs include, but are by no means limited to the following: electronic surveillance (call records, internet usage, social media); covert hacking by state operatives; GPS tracking; CCTV cameras linked-in to state databases; “smart” cards; RFID chipped commodities and the spooky “internet of things;” biometrics, and yes, the Pentagon has just stood up a Biometrics Identity Management Agency (BIMA); data-mining; watch listing; on and on it goes.

Pity our poor political minders, snowed-under by a blizzard of data-sets crying out for proper “management”! Or, as sycophantic armchair warrior and New York Times columnist, Thomas Friedman, would have it, “The hidden hand of the market will never work without a hidden fist–McDonald’s cannot flourish without McDonnell Douglas, the designer of the F-15.”

So true; yet neither can an aggregate of repressive police and intelligence agencies function without an army of corporate grifters who guide that “hidden hand” and not-so-hidden fist into highly profitable safe harbors. Call it Big Brother meets market fundamentalism.

And so, the heat is on as America’s premier political police agency struggles to “modernize” their case file management system.

The FBI’s Case Management “Problem”

When circumstances (a massive up-tick in illegal spying since 9/11 courtesy of the USA Patriot Act) forced the Bureau to store a treasure trove of tittle-tattle of “national security interest” on decidedly low-tech storage devices, FBI agents and their all-too-willing helpers from giant telecommunications firms such as AT&T took to scribbling “leads” on post-it notes.

Communications Analysis Unit (CAU) eager-beavers did so in order to speed-up the process of obtaining dodgy “exigent letters” that smoothed over the wrinkles (your rights!) as the Bureau issued tens of thousands of National Security Letters (NSLs).

The secretive lettres de cachet demanded everything: emails, internet searches, call records, bank statements, credit card purchases, travel itineraries, medical histories, educational résumés, even video rentals and books borrowed from public libraries. The contents of such shady administrative warrants cannot be disclosed by their recipients under penalty of stiff fines or even imprisonment.

While such extra-legal missives are supposedly issued only in cases of dire “emergency,” the banal, ubiquitous nature of surveillance in post-Constitutional, “new normal” regimes such as the United States, all but guarantee that extraordinary “states of exception” are standard rules of the game in our managed democracy.

As the Justice Department’s Office of the Inspector General revealed in a heavily-redacted report in January, with all semblance of a legal process out the window, the FBI were caught with their hands in the proverbial cookie jar, repeatedly violating the Electronic Communications Privacy Act.

Fear not, Obama administration legal eagles cobbled together a new theory justifying the practice and have created, yet another, accountability free zone for agents who violated the rules.

Neatly, seamlessly and silently Obama’s Office of Legal Counsel (John Yoo and Judge Bybee’s old stomping grounds) granted them, wait!, retroactive immunity for such lawbreaking. The trouble is, the OLC’s ruling is classified so we haven’t a clue what it entails or how far-reaching is its purview. So much for the new era of “openness” and “transparency.”

But I digress…

The New York Times reported March 18, that work on parts of the Bureau’s cracker-jack case management program known as Sentinel has been “temporarily” suspended.

While the “overhaul” was supposed “to be completed this fall,”Times journalist Eric Lichtblau disclosed that the system will not be ready for prime time until “next year at the earliest.”

Overall, American taxpayers have shelled-out some $451 million to an endless parade of contractors, Lockheed Martin being the latest. Delays are expected to cost “at least $30 million in cost overruns on a project considered vital to national security” Lichtblau wrote, citing Congressional “officials.”

But problems have plagued the project since its inception. Lockheed Martin, No. 1 on Washington Technology’s ”2009 Top 100″ list of Prime Federal Contractors, secured some $14,983,515,367 in defense-related contracts last year and was brought on-board to revamp the troubled case management project.

This is all the more ironic considering that the defense giant was hailed as Sentinel’s savior, after an earlier incarnation of the program known as Virtual Case File (VCF), overseen by the spooky Science Applications International Corporation (SAIC), crashed and burned in 2006.

No slouches themselves when it comes to raking-in taxpayer boodle, SAIC is No. 7 on the Washington Technology list, pulling in some $4,811,194,880 in 2009, largely as a result of the firm’s close political connections to the Defense Department and the secret state.

SAIC’s work on VCF began in June 2001 and was expected to be completed in 36 months. However, after shelling out some $170 million over four years the Bureau concluded the system wouldn’t work. Published reports fail to mention whether or not SAIC was forced to hand the loot back to cash-strapped taxpayers. Probably not.

Open-Ended Contracts: Hitting the Corporatist “Sweet Spot”

As with all things having to do with protecting their national security constituency from lean quarterly reports to shareholders, congressional grifters and secret state agencies alike are adept at showering giant defense and security corporations with multiyear, multibillion dollar contracts.

After all, high-end CEO salaries and lucrative remunerations for top executives in the form of handsome bonuses are based, not on a firm’s actual performance but rather, on the critical up-tick in the share price; just ask Lehman Brothers or other outstanding corporate citizens such as Goldman Sachs. Or SAIC itself, for that matter!

Unfortunately, effective oversight is not the forte of a plethora of congressional committees; nor are crisp, objective evaluations, better known as due diligence, conducted by outside auditors before scarce federal resources, which could be used for quaint things such as health care, education or other reality-based programs, pour into any number of virtual black holes.

Take VCF as an example.

In a post-mortem of the SAIC program, The Washington Post revealed back in 2006, that after spending months writing 730,000 lines of computer code, corporate officers proclaimed VCF’s roll-out “only weeks away.”

The trouble was, software problem reports, or SPRs, “numbered in the hundreds.” Worse for SAIC, as engineers continued running tests, systemic problems were multiplying quicker than proverbial rabbits.

As Post journalists Dan Eggen and Griff Witte disclosed, citing an unreleased audit of the program hushed-up by the Bureau, because “of an open-ended contract with few safeguards, SAIC reaped more than $100 million as the project became bigger and more complicated, even though its software never worked properly.”

Despite evidence that the system was failing badly, SAIC “continued to meet the bureau’s requests, accepting payments despite clear signs that the FBI’s approach to the project was badly flawed.”

Auditors discovered that the “system delivered by SAIC was so incomplete and unusable that it left the FBI with little choice but to scuttle the effort altogether.”

David Kay, a former SAIC senior vice president and Bushist chief weapons inspector in Iraq tasked with finding nonexistent “weapons of mass destruction,” told the Post even though top executives at the firm were aware the project was going “awry,” they didn’t insist on changes “because the bureau continued to pay the bills as the work piled up.”

“From the documents that define the system at the highest level, down through the software design and into the source code itself,” Aerospace, the independent firm that conducted the secretive FBI audit, “discovered evidence of incompleteness, lack of follow-through, failure to optimize and missing documentation.”

Even more damning, a report by computer experts from the National Research Council and SAIC insider, Matthew Patton, removed from the program by top executives after posting critical remarks on VCF in an on-line forum, found that the firm “kept 200 programmers on staff doing ‘make work’,” when a “couple of dozen would have been enough.”

SAIC’s attitude, according to Patton, was that “it’s other people’s money, so they’ll burn it every which way they want to.”

As a cash cow, VCF was a superlative program; however, the IT security specialist told the Post: “Would the product actually work? Would it help agents do their jobs? I don’t think anyone on the SAIC side cared about that.”

Why would they? After all, $170 million buys much in the way of designer golf bags, pricey Hawaiian getaways or other necessities useful for navigating the dangerous shoals of America’s “war on terror”!

As investigative journalist Tim Shorrock detailed in his essential book, Spies For Hire and for CorpWatch, SAIC “stands like a private colossus across the whole intelligence industry.” Shorrock writes, “of SAIC’s 42,000 employees, more than 20,000 hold U.S. government security clearances, making it, with Lockheed Martin, one of the largest private intelligence services in the world.”

As the journalist revealed, while SAIC “is deeply involved in the operations of all the major collection agencies, particularly the NSA, NGA and CIA,” failure also seems to come with the corporate territory.

“For example” Shorrock wrote, the firm “managed one of the NSA’s largest efforts in recent years, the $3 billion Project Trailblazer, which attempted (and failed) to create actionable intelligence from the cacophony of telephone calls, fax messages, and emails that the NSA picks up every day. Launched in 2001, Trailblazer experienced hundreds of millions of dollars in cost overruns and NSA cancelled it in 2005.”

Is there a pattern here?

No matter. Washington Technology reported March 31, that SAIC’s fourth quarter revenues and overall gains for fiscal year 2010 were “$2.68 billion, a 7 percent increase, up from $2.52 billion in the fourth quarter of fiscal 2009, the company announced. Full-year revenues were $10.85 billion, up 8 percent from fiscal 2009. Fiscal 2010 ended Jan. 31.”

“We are pleased to complete the fiscal year with improved operating margin, earnings per share and cash generation,” Walt Havenstein, SAIC’s chief executive officer said in a corporate press release.

“We enter fiscal year 2011 with our portfolio of capabilities well aligned with national priorities, emphasizing areas such as intelligence, surveillance, and reconnaissance (ISR), cybersecurity, logistics, energy, and health technology to fuel our growth and shareholder value prospects,” Havenstein added.

If by “national priorities” SAIC’s head honcho means the continued bleed-out of taxpayer funds into corporate coffers, then, by all means, 2010 was a banner year!

Which brings us full-circle to Lockheed Martin and Sentinel.

DOJ Inspector General: “Significant Challenges”

The Department of Justice Office of the Inspector General (OIG) disclosed in a redacted December 2009 report that the Lockheed Martin system “encountered significant challenges.” As of August 2009, “the FBI and Lockheed Martin agreed to revise the project’s schedule, increase Lockheed Martin’s cost to develop Phase 2 to $155 million, and update the remaining costs for Phases 3 and 4.”

Sound familiar?

“Consequently” the OIG reported, “the overall project completion date has been extended to September 2010, 3 months later than we previously reported and 9 months later than originally planned.” In a new report released in late March, Department of Justice auditors revised their previous analysis. It wasn’t a pretty picture.

According to the OIG, “As of March 2010, the FBI does not have official cost or schedule estimates for completing Sentinel. The remaining budget, schedule, and work to be performed on Sentinel are currently being renegotiated between the FBI and Lockheed Martin. While the FBI does not yet have official estimates, FBI officials have acknowledged that the project will cost more than its latest revised estimate of $451 million and will likely not be completed until 2011.” That can only be music to Lockheed Martin’s ears!

As the Times reported, work on the project has ground to a halt. This was confirmed by the OIG. “On March 3, 2010, because of significant issues regarding Phase 2 Segment 4’s usability, performance, and quality delivered by Lockheed Martin, the FBI issued a partial stop-work order to Lockheed Martin for portions of Phase 3 and all of Phase 4.”

The latest set-back to taxpayers mean that the Bureau’s “stop-work order returned Phase 2 Segment 4 of the project from operations and maintenance activities to the development phase.”

In other words, after four years and nearly $500 million, its back to the drawing board!

After beating out their rivals for work on a program considerably more costly than SAIC’s failed VCF, the OIG revealed that multiple issues and problems plague the system designed by the defense giant.

“First, there were significant problems with the usability of electronic forms that were developed for Sentinel.” The forms are supposedly the heart of the system and the tools through which FBI repressors “manage” case-related information deployed across the Bureau, particularly when agents add or subtract data gleaned from the FBI’s massive Investigative Data Warehouse (IDW).

Last year, Antifascist Calling reported on the Bureau’s spooky “Library of Babel,” IDW, that does yeoman’s work as a virtual Department of Precrime.

A massive project, IDW already holds more than a billion unique, searchable records on American citizens and legal residents that the Electronic Frontier Foundation (EFF) said would be used to “data-mine … using unproven science in an attempt to predict future crimes from past behavior.”

The IDW is one of the data-mining projects that Sentinel will directly tap into, allowing the migration of data currently held in the FBI’s antiquated Automated Case Support (ACS) system.

The OIG report revealed, “there were 26 critical issues related to the functionality of Sentinel that required resolution before deployment” and that “Lockheed Martin had deviated from accepted systems engineering processes in developing the software code for Sentinel.”

According to a review of the program by the shadowy MITRE Corporation, more than 10,000 “inefficiencies” in the software code may collectively result in the diminished performance of the “product.”

Do these problems pose a “challenge” to either the Bureau or Lockheed Martin executives? Hardly! The OIG disclosed that “FBI officials have stated that in order to meet any increased funding requirements, the FBI plans to request congressional approval to redistribute funds from other FBI information technology programs to Sentinel.”

How’s that for creative accounting!

Repression: A Game the Whole Corporate “Family” Can Play

With their fingers into everything from missile design and satellite surveillance technology to domestic spying or that latest craze consuming Washington, “cybersecurity,” Lockheed Martin is, as they say, a “player.”

On the domestic spy game front, Lockheed Martin were one of the contractors who supplied intelligence analysts for the Counterintelligence Field Activity office (CIFA), the secretive Rumsfeld-era initiative that spied on antiwar activists and other Pentagon policy critics.

CIFA was tasked with tracking “logical combinations of keywords and personalities” used to estimate current or future threats. When CIFA was shuttered after public outcry, its functions were taken over by the Defense Intelligence Agency, where Lockheed Martin runs a bidding consortium.

But as with CIFA, the DIA’s Defense Counterintelligence and Human Intelligence Center, relies heavily on the unproven “science” of data-mining and its offshoot, link analysis.

Data-mining by corporate and secret state agencies such as the FBI seek to uncover “hidden patterns” and “subtle relationships” within disparate data-sets in order to “infer rules that allow for the prediction of future results,” according to a 2004 Government Accountability Office (GAO) report.

Sentinel will undoubtedly deploy data-mining techniques insofar as they are applicable to “managing” alleged foreign “terrorism plots,” but also domestic dissidents identified as national security “risks.”

Although the Sentinel program has apparently hit a brick wall in terms of operability, it is also clear that the FBI and other national security agencies, will continue their quixotic quest for technophilic “silver bullets” to “manage” domestic dissent.

That such endeavors are illusory, as with the Pentagon’s “Revolution in Military Affairs” that promised always-on “persistent area surveillance” of the “battlespace,” the deployment of high-priced sensor technologies and data-mining algorithms assure securocrats that “total information awareness” is only a keystroke away.

While “situational awareness” may be an illusive commodity, when it comes to data storage and the indexing of alleged national security threats, systems such as Sentinel or the Investigative Data Warehouse, as well as the broader application of predictive data-mining to map so-called terrorist “nodes” expand the operation and intensification of the “surveillance society” ever-deeper into social life.

As Tim Shorrock revealed in CorpWatch, in 2004 and 2005 Lockheed Martin “acquired the government IT unit of Affiliated Computer Services Inc., inheriting several contracts with defense intelligence agencies and Sytex, a $425 million Philadelphia-based company that held contracts with the Pentagon’s Northern Command and the NSA/Army Intelligence and Security Command. By 2007 the company employed 52,000 IT specialists with security clearances, and intelligence made up nearly 40 percent of its annual business, company executives said.”

According to Shorrock, one of the firm’s “most important intelligence-related acquisitions took place in the 1990s, when the conglomerate bought Betac Corporation. Betac was one of the companies the government hired during the late 1980s to provide communications technology for the secret Continuity of Government program the Reagan administration created to keep the U.S. government functioning in the event of a nuclear attack.”

As readers are aware, secretive Continuity of Government programs went into effect after the 9/11 attacks. Details on these programs have never been revealed, although investigative journalists have discovered that some portions of COG have to do with the national security indexing of American citizens in a massive, classified database known as Main Core.

As investigative journalist Christopher Ketcham revealed in 2008, one “well-informed source–a former military operative regularly briefed by members of the intelligence community–says this particular program has roots going back at least to the 1980s and was set up with help from the Defense Intelligence Agency. He has been told that the program utilizes software that makes predictive judgments of targets’ behavior and tracks their circle of associations with ‘social network analysis’ and artificial intelligence modeling tools.”

Ketcham’s source told him that “‘the more data you have on a particular target, the better [the software] can predict what the target will do, where the target will go, who it will turn to for help,’ he says. ‘Main Core is the table of contents for all the illegal information that the U.S. government has [compiled] on specific targets.’ An intelligence expert who has been briefed by high-level contacts in the Department of Homeland Security confirms that a database of this sort exists, but adds that ‘it is less a mega-database than a way to search numerous other agency databases at the same time’.”

Shorrock writes that “Under a 1982 presidential directive, the outbreak of war could trigger the proclamation of martial law nationwide, giving the military the authority to use its domestic database to round up citizens and residents considered threats to national security. The Federal Emergency Management Agency (FEMA) and the Army were to carry out the emergency measures for domestic security.”

And one of the “biggest winners” was Betac Corporation, “a consulting firm composed of former intelligence and communications specialists from the Pentagon. Betac was one of the largest government contractors of its day and, with TRW and Lockheed itself, dominated the intelligence contracting industry from the mid-1980s until the late 1990s.”

“Its first project for the Continuity of Government plan,” Shorrock reveals, “was a sole-source contract to devise and maintain security for the system. Between 1983 and 1985, the contract expanded from $316,000 to nearly $3 million, and by 1988 Betac had multiple COG contracts worth $22 million. Betac was eventually sold to ACS Government Solutions Group and is now a unit of Lockheed Martin.”

While it is de rigueur, particularly since the rise of the Obama administration, to deride critics who point out the perils of an out-of-control national security state armed with meta-databases such as Main Core and secretive COG programs as “conspiracy theorists,” such “whistling past the graveyard” is done at great peril to an open and transparent democratic system of governance based on accountability and the rule of law.


Here is running commentary from Douglas based on a transcript of this part of the hearing:

S. O’MALIA: Both Mr. Organ and Mr. Epstein in the second panel, raised the concerns that short positions exceed the physical supply. The second panel kind of argued that that wasn’t a concern. Are you concerned that the shorts will not be able to deliver if called upon?

J. CHRISTIAN: No. I am not at all concerned. For one thing it has been persistently that way for decades. Another thing is that there are any number of mechanisms allowing for cash settlements and problems and a third thing is as many people who are actually knowledgeable about the silver market and the gold market have testified today that almost all of those short positions are in fact hedges, the short futures positions are hedges, offsetting long positions in the OTC market. So I don’t really see a concern there.

[Note: It is interesting that Mr. Christian is not concerned about the ability of the shorts to deliver because they can cash settle! He clearly has no understanding that when someone wants to buy precious metals giving them cash  instead is a failure to deliver. It is a default! But he is not concerned! He says that the short position is actually hedged by a long position on the OTC but we will see later in this testimony how he describes the “OTC Physical Market” and we will see that the long position is not bullion but is in fact an unbacked (or only partially backed) I.O.U. bullion.]

S. O’MALIA: Mr Organ would you like to respond?

H. Organ: I do see a risk on this, and I think it is a risk that we have to be very, very careful of. As countries like China, South Korea and Russia start demanding and taking physical delivery of their gold and moving it offshore to their shores and putting pressure on the Comex, and we will probably come to a point in time where we will have a failure to deliver.

A DOUGLAS: Mr. Chairman, could I make a comment?

CHAIRMAN GENSLER: No! Who are you?

A DOUGLAS: I would…


A DOUGLAS: Oh! You said “No”?

CHAIRMAN GENSLER: I don’t know who is this?

A DOUGLAS: I am Adrian Douglas; I am assisting Harvey.

CHAIRMAN GENSLER: Alright, Sir. Yes.

A DOUGLAS: I would just like to make a comment. We are talking about the futures market hedging the physical market. But if we look at the physical market,the LBMA, it trades 20 million ozs of gold per day on a net basis which is 22 billion dollars. That’s 5.4 Trillion dollars per year. That is half the size of the US economy. If you take the gross amount it is about one and a half times the US economy; that is not trading 100% backed metal; it’s trading on a fractional reserve basis. And you can tell that from the LBMA’s website because they trade in “unallocated” accounts. And if you look at their definition of an “unallocated account” they say that you are an “unsecured creditor”. Well, if it’s “unallocated” and you buy one hundred tonnes of gold even if you don’t have the serial numbers you should still have one hundred tonnes of gold, so how can you be an unsecured creditor? Well, that’s because its fractional reserve  accounting, and you can’t trade that much gold, it doesn’t exist in the world. So the people who are hedging these positions on the LBMA, it’s essentially paper hedging paper. Bart Chilton uses the expression “Stop the Ponzimonium” and this is a Ponzi Scheme. Because gold is a unique commodity and people have mentioned this, it is left in the vaults and it is not consumed. So this means that most people trust the bullion banks to hold their gold and they trade it on a ledger entry. So one of the issues we have got to address here is the size of the LBMA and the OTC markets because of the positions which are supposedly backing these positions which are hedges, but it is essentially paper backing paper.

[8 seconds of silence]

CHAIRMAN GENSLER: Oh! I guess I get time. Errr…Umm. I don’t have any other questions. Commissioner Dunn.

M. DUNN: I appreciate the difficulty of trying to do this by remote but at the end of your testimony you start talking about bona fide hedge exemptions for commercial traders and must be part of position limits and not to grant hedge exemptions to swap dealers would be devastating for liquidity of exchanges and the price discovery capacity, and we got into who determines what is legitimate, but could you amplify on that a bit and what you see as a danger there?

J. CHRISTIAN: Yes I can amplify on it; but amplify on it a bit is more difficult because it is a very big subject. The first thing is that precious metals, copper, other metals, energy these are all traded internationally and are fungible commodities by and large. There are a lot of strange things that have been misspoken about the difference between the wholesale and the retail market and we don’t really have the time to go over those, I think. But the fact of the   latter is…

[The lights go off]

J. CHRISTIAN: Oh excuse me. I am in a building with motion sensitive lighting and it doesn’t recognize what I do as human activity.

CHAIRMAN GENSLER: Those were your words not anybody’s here.

J. CHRISTIAN: No, they were my wife’s! If you start putting position limits on bona fide hedgers for example, the bullion banks, and the previous fellow was talking about hedges of paper on paper and that is exactly right. Precious metals are financial assets like currencies, T-Bills and T-bonds they trade in the multiples of a hundred times the underlying physical and so people buying them are voting and giving an economic view of the world or a view of the economic world and so when you start saying to a bank I have a number of people… [

Note: This is mind blowing. He openly admits that the LBMA OTC market is not trading in physical gold or silver; it is trading in paper promises. Gold is not intended to be a “financial asset” like T-Bills and currencies. That is the whole point of owning it. Actual physical bullion is a tangible asset with intrinsic value that doesn’t have counterparty risk. He believes the purpose of trading paper promises in gold is for investors to “vote” on their view of the economic world! He confirms that the LBMA trades hundreds of times the real underlying physical. This is even a higher estimate than I have previously made! It is, as I asserted before the Commission, a giant Ponzi Scheme.]

J. CHRISTIAN: well, actually let’s go back to a concrete example of Mr. Organ when he was talking about August of 2008 when there was an explosion in the short positions in gold and silver held by the bullion banks on the futures market and he seemed to imply that that was somehow driving the price down. If you understand how those bullion banks run their books the reason they had an explosion in their short positions was because they were selling bullion hand over fist in the forward market, in the physical market, and in the OTC options market. Everyone was buying gold everywhere in the world so the bullion banks who stand as market makers were selling or making commitments to sell them material and so they had to hedge themselves and they were using the futures market to do that. So if you place position limits on the futures market they will have to find some other mechanism to hedge themselves …and they will. And someone else will provide that market…

M. DUNN: Jeffery, I am going to cut you off because I want to ask another question of Mr. Organ.

[It is hard to imagine more inane drivel than this. He conjures up the image of bullion bankers selling bullion like crazy to the general public who are in a feeding frenzy and the bullion bankers are “hedging themselves” by selling gold short on the COMEX!!! Did he get that idea from a blonde? A little while later Chairman Gensler also realized that this was the biggest baloney ever concocted as a cover for massive gold market manipulation by JPMorgan and HSBC in 2008 and so poses a follow up question]……

And here is the second must watch clip:

CHAIRMAN GENSLER: I would like to follow up on Commissioner Dunn’s question for Mr. Christian, if I might, because I didn’t quite follow your answer on the bullion banks. You said that the bullion banks had large shorts to hedge themselves selling elsewhere, and I didn’t understand; I might just not have followed it and you’re closer to the metals markets than me on this, but how do you short something to cover a sale, I didn’t quite follow that?

J. CHRISTIAN: Well, actually I misspoke. Basically what you were seeing in August of 2008 was the liquidation of leveraged precious metals positions from a number of places and the bullion banks were coming back to buy it, and they were hedging those positions by going short on the COMEX and that is really what it was.

[Even on a second attempt Mr. Christian invents the most ridiculous poppycock to explain away the blatant manipulation of the precious metals in 2008. If, in his own words, investors were buying gold hand over fist everywhere in the world why would leveraged long holders dump all their long holdings? They would have ordinarily been making a fortune. The bank participation report of August 2008 shows that 2 or 3 bullion banks sold short the equivalent of 25% of world annual silver production in 4 weeks and the equivalent of 10% of world annual gold production. There was simultaneously a decrease in their long positions, which were almost non-existent anyway, which is incoherent with a notion the bullion banks were mopping up dumped leveraged investments. For an intelligent and coherent explanation of what happened in August 2008 read my CFTC written testimony here]

CHAIRMAN GENSLER: So I am glad I asked because I really didn’t follow that. But if I think of the earlier charts of the positions of the bullion banks that Mr. Sherrod had these concentrated shorts have been, well you know, reasonably consistent, they are not exactly the same on every day, but his charts showed a similarity across a couple of years. So what are bullion banks, I mean I am just trying to understand, what are bullion banks hedging on the other side, we heard from other panels, but you seem to be familiar, is it warehouse receipts, what is it?

J. CHRISTIAN: Well it’s a tremendous number of things. You were at Goldman shortly after me and we had an MIS system that kicked out a daily gold book.

CHAIRMAN GENSLER: That’s really remarkable because we don’t seem to have a lot of similar views, but you know, a lot of people were at Goldman Sachs.

J. CHRISTIAN: Well I didn’t like the trends at Goldman so I left in 1986. But honestly, and bad jokes aside, if you look at a bullion bank’s book, its gold book for example, you will see an enormous number of things; there will be gold forward purchases from mining companies, there will be forward purchases from refineries, there will be gold that has been leased out to electronics manufacturers, component manufacturers, and countless manufacturers and jewelers. As gold flows through the beneficiation process and again these are all long complex issues that are hard to reduce, but you know, a lot of producers will sell their gold the moment it leaves their possession at the mine. It might be in concentrate form or it might be in dore form. It then goes to a smelter or a refinery. The bullion bank buys that and it agrees a price at the time it is buying it but it won’t be allowed to sell that metal until the refinery outturn which maybe two weeks but it could be six months. So they will go into the market and short the market in order to cover the commitment they have made to buy at that price and then when they get the metal in the physical market then they can either sell that metal in the physical market and unwind the hedge in the futures market or the forward market or do something else. There are all sorts of other derivative contracts that investment banks and bullion banks will sell to investors, to other banks, pension funds, to insurance companies and each of those will often have a long exposure in gold which will be  hedged with an offsetting short position [note: There he goes again with that blonde idea that when you sell gold to someone you hedge that with a short position!]. So if you look at a bullion bank’s gold book or silver book you would find a large range of topics. One of the things that the people who criticize the bullion banks and talk about this undue large position don’t understand what is the nature of the long positions of the physical market and we don’t help it; the CFTC when it did its most recent report on silver used the term that we use “the physical market”. We use that term as did the CFTC in that report to talk about the OTC market in other words forwards, OTC options, physical metal and everything else. People say, and you heard it today, there is not that much physical metal out there, and there isn’t. But in the “physical market” as the market uses that term, there is much more metal than that…there is a hundred times what there is. If I look at the large short positions on the COMEX my question is where are the other shorts being hedged? because the short position, that I believe the bullion banks use to hedge their physicals, is larger than their short position on the COMEX and the answer is that they hedge it in the OTC market in London.

CHAIRMAN GENSLER: I thank you for that detailed discussion


The CFTC position limits hearing was supposed to usher in a new era of transparency and honesty into the dealings of the gold market. In a very ironic way, it did just that.

Here is Douglas’ must read conclusion – and a warning for anyone who believes that following a wholesale run on commodities, investors will be able to have access to what is contractually theirs.

This is a stunning revelation. Mr. Christian confirms that the “physical market” is not in fact a physical market at all. It is a loose description of all the paper trading and ledger entries and some physical metal movements that occur each day  on behalf of people who believe they own bullion in LBMA vaults but in fact they don’t. They are told they have “unallocated gold” or “unallocated silver” but that does not mean the LBMA has physical metal set aside for those customers and has just not given specific bar numbers to the customers. No, it is the most cynical and corrupt definition of “unallocated”…the customer has NO bullion allocated to him. NONE! The LBMA defines the owners of “unallocated accounts” quite clearly as “unsecured creditors”. That means they have NO collateral. NONE. Can it be any clearer? It is a giant Ponzi scheme.

Mr. Christian confirms what many analysts and GATA have been alleging that there is not much REAL physical metal, but testifies that there is actually one hundred times the REAL Physical metal being sold based on the much more “loose” definition of what “physical” means to the bullion banks.

The last sentence of his statement is mind-blowing. He says the “physical” positions of the bullion banks are so huge that they are much bigger than the COMEX short position. He says the “physicals” are hedged on the OTC market in London! Did you get that? Let me walk you through it. The bullion banks are selling what is supposed to be vault gold but it is just a ledger entry if the customer never asks for delivery. They must balance their exposure with a ledger deposit entry. This has to be some paper promise of gold from a third party, or some derivative, or even some real gold bullion. If all the ledger entries balance out then the bullion bank has no net exposure in exactly the same way the futures market works with a short offsetting a long. A futures market can never default if no one asks for delivery as only paper contracts are traded. The loosely defined “physical” London market is an identical scheme. As long as everyone is prepared to buy and sell “ledger entries” for imaginary gold in the vault no one will ever discover the fraud.

The LBMA does, however, buy and sell some real physical metal as well. But we now know form Mr. Christian’s testimony that this is one one-hundredth the size of the paper gold trading. The LBMA states on its website that it trades 20 million ozs of gold each day on a net basis. We can calculate the net trade of REAL physical gold should be about 200,000 ozs each day; that is 6.25 tonnes per day or 1625 tonnes per year. This is very much in line with the size of total global mining output of approximately 2200 tonnes per year.

So the giant Ponzi trading of gold ledger entries can be sustained only if there is never a liquidity crisis in the REAL physical market. If someone asks for gold and there isn’t any the default would trigger the biggest “bank run” and default in history. This is, of course, why the Central Banks lease their gold or sell it outright to the bullion banks when they are squeezed by high demand for REAL physical gold that can not be met from their own stocks.

Almost every day we hear of a new financial fraud that has been exposed. The gold and silver market fraud is likely to be bigger than all of them. Investors in their droves, who have purchased gold in good faith in “unallocated accounts”, are going to demand delivery of their metal. They will then discover that there is only one ounce for every one hundred ounces claimed. They will find out they are “unsecured creditors”.

GATA has long advocated the ownership of real physical bullion. The “bombshells” dropped in the CFTC Public Hearing have only served to reinforce that view. We believe we have made significant new inroads into exposing the fraud, and the suppression of precious metals prices and it is documented in the CFTC’s own hearing.

March 27, 2010
Adrian Douglas
Director of GATA
Proprietor of Market Force Analysis
[email protected]

When this article appears on the morning of March 31, the much ballyhooed “International Donors Conference Towards a New Future for Haiti” will be getting underway at UN Headquarters in Manhattan.

While demonstrators in the street outside protest the continuing US and UN military occupation of Haiti, now over six years old, and the Haitian people’s exclusion from deliberations on the country’s reconstruction, dignitaries inside like UN Special Envoy to Haiti Bill Clinton, US Secretary of State Hillary Clinton, UN Secretary General Ban Ki-moon, and Haitian President René Préval will unveil a plan with lots of pomp and ceremony but which boils down to just one thing: Washington’s take-over of the “new” Haiti.

Hyperbole? Unfortunately, no. The lead editorial in Sunday’s New York Times, which generally articulates the thinking of the US power elite, lays it out clearly: “The plan envisions a multidonor trust fund *managed by the World Bank* that pools money for big projects and avoids wasteful redundancy. The Haitian Development Authority would *approve* the projects; outside auditors would *oversee* the spending.” (Our emphasis added.)

Translation: the World Bank, not Haiti, will run the show, a council of foreigners (with a sprinkling of token Haitians) will rubberstamp directives, and other foreign overseers will supervise the Haitians carrying out the directives.

Although lots of international “friends of Haiti” will be involved in this circus, Washington is the ringleader, using handmaidens like Canada and the Dominican Republic. The meetings to prepare the ground for Mar. 31 were held in Montreal on Jan.25 and Santo Domingo on Mar. 15-17.

Préval has generally implemented Washington’s austerity and privatization dictates, making him a US darling and the Haitian people’s bogeyman. However, after the quake, he and his prime-minister made some imprudent complaints about being sidelined while the US and NGOs ham-fistedly directed relief and reconstruction efforts. Washington put him back in his place by calling him corrupt, a charge Préval called “arrogant.” Despite such outbursts, Préval appears to be behaving again but still promoting the fiction that he’s deciding things.

“Haiti is an independent government, an independent country and the government must say what must be done,” he told Al Jazeera in a Mar. 29 interview when asked who was in charge in Haiti. “But the government doesn’t have the financial means to do it. So we will have to speak to the donors so that they make available the funds for the government to do what it desires to do.” As for the foreign experts which will dominate in the Haitian Development Authority, he explains that “a lot of our professionals are dead” and “we are leaning on the NGOs to help us to do what we need to do right now.”

The centerpieces of the US, UN, and World Bank plan for Haiti are sweatshops and tourism. Of course there is lip-service paid to the concerns raised by Haitians about revitalizing agriculture and making the country self-sufficient in food again after 25 years of neo-liberal deconstruction. “Decentralization” is another key theme, but, done a certain way, this can also weaken and circumvent Haiti’s central government, which Washington has sought to do since the Haitian people elected President Jean-Bertrand Aristide in 1990.

“Raising money for Haiti is all well and good. But which Haiti is getting the money?” asked Vijay Prashad, Director of International Studies at Trinity College in Hartford, CT. “Is the Haiti of structural adjustment, the raft on the Caribbean, fated to being reduced to a factory and a port for Royal Caribbean’s cruise ships? All the efforts thus far seem to suggest that this is the Haiti that is being promised.”

In articles, radio shows, conferences, demonstrations and graffiti, the Haitian people have made their opposition to this plan known but “Haitian civil society has been completely bypassed in decision-making regarding the post-earthquake reconstruction process,” wrote Bev Bell of the economic justice group Other Worlds earlier this month. “The Haiti government’s Post-Disaster Needs Assessment, launched February 18, granted one week, March 14-20, for ‘consultation with civil society and the private sector,’ according to the terms of reference. However, the government [had] to approve the draft plan on March 15. Furthermore, the government has failed to invoke even the token discussions, not consulting civil society in any way except informally with some businesspeople and several non-governmental organizations who do not speak for citizens.”

Therefore the “new” Haiti being drawn up at the conference will look very much like the old. “Expect more of the same when the Haitian elites and their lobbyists get their reconstruction plans approved,” wrote Olofson hotelier and musician Richard Morse in the Huffington Post. “Bill Clinton isn’t bringing hope to Haiti. Bill Clinton isn’t bringing change to Haiti. Bill Clinton, along with USAID, the World Bank, the Inter-American Development Bank and the United Nations are bringing more of the same to Haiti: more for the few and less for the many.”

There are more than strings attached to Clinton’s plan for Haiti. There are chains. Haiti would be yoked to an already sinking U.S. economy by dependency on assembling imported U.S. clothing and electronics for pennies an hour, or scrambling against neighbors to attract U.S. tourists.

But it doesn’t have to be this way. Two South American alliances have offered Haiti substantial aid based on solidarity and common interests, not chains of debt and dependency.

ALBA, the Bolivarian Alliance for the Peoples of Our America, is an alliance of eight Latin American and Caribbean nations comprising Venezuela, Cuba, Bolivia, Ecuador, Nicaragua, Dominica, St. Vincent and Grenadines, and Antigua and Barbuda. On Jan. 25, when the U.S.-led coalition held its Montreal meeting to just plan another meeting, ALBA held an extraordinary session which came with concrete, immediate aid of food, fuel, electricity, medicine and a $120 million Humanitarian Fund. ALBA expressed “concern over the excessive presence of foreign military forces in Haiti, with no justifying reasons and without precision about their authority, purposes, responsibilities, and length of stay, which threatens to further complicate the conditions on the ground and the realization of international cooperation.” The ALBA nations also recognized that “efforts to rebuild Haiti must have the people and government of that country as the principal protagonists.”

There is also the Union of South American Nations or UNASUR, which includes all the nations of the South American continent except French Guiana. In February, it offered Haiti $300 million in cash and money it would borrow on Haiti’s behalf.

One might respond that no South-South cooperation can come up with the $34.4 billion some estimate Haiti needs to rebuild over the next 10 years. But how are such staggering figures arrived at? These estimates assume the costs to be charged by Halliburton, Dyncorp, or one of the Haitian elite’s construction companies. But we have seen tens of thousands of ordinary Haitians digging themselves out and rebuilding their homes, motivated not by profit but by compassion, solidarity and common interest. This giant army could be harnessed and supported with solidarity from Cuba, Venezuela and ALBA, which are already helping with giant contributions of doctors and fuel.

Progressive Haitian and Dominican groups meeting in Santo Domingo on Mar. 17 concluded that a definitive “break” with the current international system is necessary for Haiti to recover. “We must break with economic dependency,” they wrote in a declaration. “We need to build an economic model that encourages national production by focusing on agriculture, livestock, and agro-industry aimed at meeting our own food needs (cereals, tubers, milk, fruit, fish, meats, etc.).”

An anecdote captures the flavor and the essence of the UN Donors Conference. On March 30, the night before the big day, there was an invitation-only special event for about 200 US and UN officials, bankers, CEOs and NGO bigwigs at the United Nations Library. The sponsors of the event: the UN, the Haitian Government, the Inter-American Development Bank, and…. Coca-Cola. The name of the event was “Haiti Hope Project.” If you like the ring of that name, don’t get any thoughts about borrowing it. Coca-Cola is seeking trademark protection for the slogan, which it plans to put on “ready to eat food bars made primarily of oats.”

Kim Ives is the editor of Haiti Liberte. This article is from Haïti Liberté , published in Port au Prince and Brooklyn.

The United States send weak economic signals insufficient for a meaningful and sustainable economic expansion required to gain back confidence of national and foreign investors, finds in the present research.  Political decision-making process is paralyzed by numerous disabilities, while external market constraints obstruct economic recovery.  Stagflation is an imminent danger.


GDP numbers have been significantly influenced by government intervention into the economy and are rather poor at a closer look. Employment data shows that the labor market generally continues to stagnate with rising number of long-term unemployed workers. Government financial obligations including the national debt, Social Security, Medicare, and other benefits and mandatory programs continue to pile up moving the U.S. to the first place in the world for the highest debt to GDP ratio. Budget deficit is growing with no visible turning point. Low interest rates create a risk of stagflation. The market of Treasuries is about to collapse as investors, including China, are losing confidence in the financial stability of the United States.

Weak economy is accompanied by numerous political disabilities making the recovery almost impossible. The country was unable to create a powerful deficit reducing commission. It is unable to cut growing nonproductive military (security) expenses. It does not follow its own economic advice given to other countries in similar critical situations in the past. In addition, it doesn’t cooperate with countries, which will determine the future of the United States.

Finally, market constraints make the crisis in the U.S. even deeper. High oil prices add to economic slowdown and lead to an increase in core inflation. China’s peg to the dollar prevents export growth and creation of new jobs.

All these factors evidence against the future of the dollar as a global reserve currency. Moreover, altogether they indicate increased likelihood of hyperinflation in the near future. was not satisfied with the government’s reaction to the problem, finding that the U.S. will be unable, or even reluctant, to resist dollar depreciation.

Part I

Weak Economics Signals


According to the “third” estimate real Gross Domestic Product (GDP) increased at an annual rate of 5.6 percent in the fourth quarter of 2009 compared to the “second” estimate of 5.9% released in February. (1)

Real GDP decreased 2.4 percent in 2009 in contrast to an increase of 0.4 percent in 2008. This is “the worst single-year performance since 1946,” Bloomberg said. (2)

Efforts to rebuild depleted inventories contributed 3.79 percent to GDP. (3)

Nouriel Roubini, an economics professor at New York University, noted in an interview following the report on GDP: “The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor.”  “I think we are in trouble,” he added. (4)

“Those inventory changes alone cannot sustain growth over an extended period of time,” the New York Times noted, because “as long as the labor market remains weak, consumers — whose purchases make up the bulk of economic output each quarter — will be reluctant to spend money.” (5)

Most of the boost in the third quarter of 2009 was provided by the Government’s program known as “cash for clunkers,” which offered buyers payments of as much as $4,500 to trade in older cars and trucks for new ones. The plan boosted sales by about 700,000 vehicles, according to the Transportation Department. (6)

GDP was also influenced by a significant gain in residential spending activity due to home buyer tax credit. The National Association of Realtors said that nearly half of the jump in home sales in 2009 was directly attributable to the tax credit. (7)  President Obama extended the $8000 tax credit for first-time home buyers till the end of April 2010 beyond its original deadline in the end of November 2009. (8)  It has also been expanded to include more buyers. (9)

Federal Reserve Board economist Jeremy Nalewaik questions the accuracy of GDP (that tracks spending) with respect to the assessment of economy’s performance as opposed to Gross Domestic Income (GDI). While GDP showed a modest rebound in the third quarter of 2009, GDI gave no evidence of a rebound during this period. “These two measures have shown markedly different business cycle fluctuations over the past twenty-five years, with GDI showing a more-pronounced cycle than GDP.” (10)

A genuine economic recovery would be led by real business activity and increased consumer spending. Much of the boost lately was a product of government intervention into the economy. Therefore, there is no ground to say that the United States are heading towards meaningful and sustainable economic expansion.


Government data indicates that the economy gained 162,000 jobs in March after losing 14,000 jobs in February and adding 14,000 jobs in January, and the unemployment rate held at 9.7 percent. (11)  The country has not seen such unemployment levels since the 80s. The data below shows that the labor market generally continues to stagnate.

Most hiring in March occurred due to the 2010 Census (+48,000 jobs), temporary help services (+40,000 jobs), and employment in health care (+27,000 jobs). While manufacturing and construction added 17,000 and 15,000 jobs respectively, financial activities shed 21,000 jobs and employment in the information industry decreased by 12,000.

For some reason the government decided to hire twice as many people in 2010 as were needed for the 2000 Census making some analysts worry that it will just mask the weakness of the employment situation. Most of these jobs will last only for several weeks. “The U.S. economy has lost more than 3 million jobs since President Obama signed the trillion-dollar ‘stimulus’ into law amid promises it would create jobs ‘immediately,’ ” Michael Steel, the spokesman for House Republican Leader John A. Boehner of Ohio, observes. (12)  ”Everyone understands that temporary census hiring may inflate the statistics released on Friday, but the American people will rightly continue to ask, ‘Where are the jobs?’ ” (13)

The fundamental weakness of the labor market was highlighted by the significant increase in the number of long-term unemployed (those jobless for 27 weeks and over). The number rose by 414,000 over the month to 6.5 million. It is estimated that it is much worse than in any other recession in entire post-War period. (14)

The broad measure of unemployment, including not only unemployed but part-time and discouraged workers, rose to 16.9% in March. According to Gallup, a statistical consultancy, this measure is actually 20.3%, an increase from the previous month’s 19.8%, meaning that about 30 million Americans don’t work or work less than their desired capacity. (15)  Automatic Data Processing Inc. conducted its own payroll survey for March that showed a loss of 23,000 jobs in the private sector. (16)

In its March summary of commentary on current economic conditions by Federal Reserve Districts, the Beige Book, the government finds that “labor markets generally remained soft throughout the nation.” (17)  Although “[t]he pace of layoffs slowed in most Districts. . . hiring plans still remained generally soft.” (18)

The Senate approved recently the bill extending unemployment benefits. The bill costs approximately $140 billion. (19)  If the bill eventually is signed into law, which is highly probable, it will not only increase the deficits but will also worsen the unemployment situation. According to numerous economic studies benefits for unemployed significantly reduce the search effort on their part. (20)  When an unemployed person becomes ineligible for benefits the probability that he or she will find a new job rises “markedly”. (21)

Although some specialists are trying to look for positive signs in decreasing numbers of job losses the overall employment situation remains weak. The growing number of temporary workers and those employed by the government does not give an assurance that the labor market conditions have already reached a turning point. When businesses begin to create more full-time jobs this will mark a positive change in the current situation.

Financial obligations of the U.S. government

In the middle of February, Obama signed into law the bill increasing the public debt ceiling from $12.394 trillion to $14.294 trillion. This is a second increase in the upper limit on the national debt in less than two months.

Last time, in December, House Majority Leader Steny Hoyer commented that Congress simply had no other choice: otherwise the United States would have to default on their debt obligations what would be another catastrophe for financial markets. (22)

David Ross from Radiant Asset Management indicates in his research that the total obligations of the U.S. government exceed $90 trillion referring to the estimate of the Financial Management Services of the U.S. Treasury. (23)  They include hospital insurance, supplementary medical insurance, and social security. “[T]he collected money (which Treasury has borrowed and Congress spent) falls far short of what is required to fulfill the long-term obligations of those programs, even if it had not already been spent. Almost all of the $90 trillion are promised obligations with no established method of payment.” (24)

Ross points out further: “Including unfunded obligations, the U.S. moves to 1st, well above Taiwan and Zimbabwe, for the highest debt to GDP ratio. . . U.S. total debt plus unfunded obligations total 625% of GDP.” (25)

The Peterson-Pew Commission on Budget Reform stated that “the United States would almost certainly experience a debt driven crisis,” that “could unfold gradually or it could happen suddenly, but with great costs either way.” (26)  “The excessive debt would. . . affect citizens in their everyday lives by harming the American standard of living through slower economic growth and dampening wages, and shrinking the government’s ability to reduce taxes, invest, or provide a safety net.” (27)

Many experts believe that at some point such system of borrowing is going to collapse. Peter Schiff, the President of Euro Pacific Capital, argues that the way the U.S. government functions is that “we borrow money and then when the interest payments are due we borrow money to pay the interest. . . It is one gigantic Ponzi scheme.” (28)

Budget deficit

The United States reached a record budget deficit of $1.415 trillion in fiscal year 2009 that ended in September. (29)  The deficit will probably again exceed one trillion dollars in the current fiscal year as it is already over $651 billion.

The excess of spending over revenue in the U.S. was $220.9 billion in February 2010, as opposed to a deficit of $193.9 billion in February 2009. (30) This is the largest monthly deficit in the history of the United States. (31)  It is also the 17th straight month in which the government posted a deficit.  (32)

In the beginning of February 2010 Obama transmitted a $3.8 trillion budget for 2011 to the Congress with a record $1.6 trillion deficit. (33)

IMF’s Managing Director Dominique Strauss-Kahn noted at the 10th Annual Herzliya Conference in Tel Aviv that the global crisis had created a problem of fiscal sustainability for many countries that could take decades to fix because of the huge debts built up during the crisis, especially in developed countries. (34)

Federal Reserve Bank of New York President William Dudley said recently in London that it was wrong to “wait and see how things go” in relation to high U.S. deficits implying that the country still does not have a credible exit plan. (35)  Something has to be done already at this point while the situation is under relative control. (36)  Doing nothing “is a risky strategy because it fully exposes the economy to the vagaries of market sentiment and because shifts in such sentiment can have important consequences for both the deficit path and the economy.” (37)

Low interest rates

The Federal Reserve is going to maintain the federal funds rate near zero percent “for an extended period” as the pace of economic activity is going to be moderate for a time and inflation will be, allegedly, subdued. (38)  The government has been keeping the key rate near historical zero percent since December 2008. Rates at this level allow the government to make lower interest payments on the ballooning debt, flood the banking system with credit and drive interest rates lower.

Although, in practice, loan demand remained weak, and lending standards remained tight across the country as banks are cautious about lending during the crisis. (39)  However, low rates provoked “carry trade”, when investors borrow cheap U.S. dollars and buy higher-yielding assets. As the result, international stock and commodity markets grew abnormally within the last twelve months.

These developments produce significant pressure on the dollar. With rising oil prices stagflation becomes the primary risk in a long run. Stagflation is an economic situation in which inflation and economic stagnation occur simultaneously and remain unchecked for a significant period of time. (40)

If this is so, why does not the government raise interest rates?  David Ross states that “high interest rates will mean either substantially higher taxes or a budget that is nothing but interest payments.” (41)

Is there a plan? Although the government does not tell exactly what it is going to do, it is possible to draw a conclusion from its actions that there will be no resistance to dollar depreciation on its part since, according to Ross, authorities will be highly motivated to keep interest rates low and “inflate [their] way out of the debt.” (42)

It is also unlikely that the Obama administration will reduce spending and fight the deficits as the only way out of the debt burden. Sir John Templeton, the John Templeton Foundation, said in 2005: “The psychology all over the world is that people will not re-elect leaders who want them to be thrifty. The voters will elect the government that spends more money.” (43)  There is ample evidence that the current government of the Unites States seems to be driven by this psychology.

The vague future of the market of U.S. Treasuries

The year of 2009 was the worst year for U.S. Treasuries since at least 1978 “as the U.S. stepped up debt sales to help spur growth in an economy recovering from its deepest recession in six decades.” (44)

For the past twelve months the Fed has been actively supporting the Treasury and mortgage markets with purchases of Treasuries and Mortgage Backed Securities (MBS). The Fed had to buy Treasuries in order to suppress the growth in borrowing costs.

Since March 2009 the Fed purchased $300 billion of Treasury securities, $1.25 trillion of agency MBS and about $175 billion of agency debt securities. (45) The last two programs have ended in the end of March 2010.

Specialists warned that markets should be prepared for a ‘surprise’ when the programs end. “If it appears to be that the demand for Treasuries was fueled by the Federal Reserve, the yields on them can grow sharply. This presents great risks for the economy since the borrowing cost is the basis of the whole financial system. And the cost of credit depends on it.” (46)  David Keeble, head of fixed-income strategy at Calyon in London, agrees that “[t]he end of the Fed’s quantitative easing program will hurt the market. We also have to cope with a lot of supply. It doesn’t get smaller.” (47)

When the government leaves the market this would mean that the 5-year, 10-year and 30-year Treasuries will become much less popular, Pimco’s President Bill Gross told CNBC in November 2009. (48)

A few days after the Fed concluded purchases of agency MBS and debt securities risk premiums on securities sold by Fannie Mae, Freddie Mac and Ginnie Mae widened and were heading toward their widest levels in five months. Widening premiums can inflate mortgage rates.

Ten-year Treasury yields are heading upwards. After the government reported job growth in March, which seemed to be encouraging for the mainstream media, demand for the safety of government debt has decreased. Moreover, market participants look at the market of government debt very cautiously now because of the end of several key stimulus programs and because of dangerous government debt levels.

For an extended period of time such countries as China and Russia showed concerns about the reliability of the U.S. government debt. According to the U.S. Treasury Department net outflows from all U.S. securities totaled $33.4 billion in January 2010. (49)  Central banks worldwide were the biggest sellers. (50)  China cut its holdings of U.S. Treasury securities by $5.8 billion in January after trimming them by $34.2 billion in December and by $9.3 billion in November, but still remaining the largest foreign holder of U.S. debt. (51)  Russia’s Treasury holdings fell by a net $17.6 billion in January, while in December 2009 Russia cut them by $9.6 billion. (52)

Jim Rogers, an expatriate American investor and financial commentator based in Singapore, “certainly wouldn’t be buying U.S. Treasuries” and “couldn’t imagine lending money to the U.S. government for long periods of time.” (53)  Pimco’s President Bill Gross said that investors should seek countries where national debt levels are low and reserves are high, while the company was cutting holdings of U.S. debt as the nation increase borrowing to record levels. (54)

Part II

Political Disabilities

Inability to create a powerful deficit reducing commission

During the recent debate on the national debt the Senate rejected a proposed bipartisan commission to suggest ways to reduce the U.S. budget deficit. According to Bloomberg “[t]he legislation would have required that the panel’s recommendations be voted on by Congress without being amended.” (55)

Conrad, of North Dakota, and Gregg, of New Hampshire, said Congress has proven it is incapable of making the difficult decisions needed to reduce the deficit. (56)

Instead of the initial idea of the commission discussed by Congress, President Obama is trying to establish a government-based bipartisan deficit commission.  “The commission would lack any requirement for Congress to act on its advice, it would provide some political cover and big-name backing,” 9&10 News said. (57)  “Such a panel’s recommendations ordinarily could be ignored by lawmakers,” Bloomberg noted. (58)

Analysts say that “a toxic political atmosphere and heavy lobbying from outside interest groups will make lawmakers reluctant to sign off on a plan likely to include a mix of tax hikes and spending cuts that could cause them significant political pain.” (59)  Suvrat Prakash, U.S. interest rate strategist at BNP Paribas in New York, considers that “[t]his is more symbolic than a concrete step to reducing the deficit.” (60)

Inability to cut nonproductive military (security) expenses

President Obama called in January for a three-year freeze on spending for many domestic programs as part of his strategy to rein in the deficit. The proposal would save an estimated $250 billion over a decade at the expense of the Environmental Protection Agency and the Commerce, Interior and Justice Departments, while the Defense Department, Department of Homeland Security, Veterans Affairs and unspecified international affairs programs would be exempt. (61)

In addition, the government asked Congress in February for a “defense budget of more than $700bn. . .  – almost 5% of GDP – for next year,” reported.  (62)  This is exactly 1/3 of total budget receipts for the FY 2009.

Obama’s plan raises concerns as being contrary to basic economic laws. Most of the economists agree that one of the basic nonmonetary reasons of inflation is the existence of significant nonproductive government expenses such as military expenses.

The cost of conducting wars in Iraq and Afghanistan pushed the budget into the red during the presidency of George W. Bush. The situation deteriorated after the beginning of the financial crisis when the government adopted measures such as stimulus packages, financial bailouts, the need to support liquidity in Treasuries, etc. Moreover, early in December 2009 it increased its nonproductive expenses by approving 30,000 troops to be sent to fight in Afghanistan.

However important goals of the war could be, military operations are, undoubtedly, very costly for U.S. citizens especially at the time of the financial crisis and growing deficits. Moreover, the situation is not getting better considering that around 40 percent of the war financing has been borrowed from abroad, Joseph Stiglitz, the Nobel Prize Winner, shows in his research. (63)

“We have lots of needs that we are not able to meet because of the war,” he says. (64)

Explaining why wars are expensive he points out that military expenditures are not only limited to direct operation costs but also include (the bigger part) human casualties, future disability costs, loss of income, increased oil prices, opportunity costs, veterans’ social welfare, nonproductive spending, loss of confidence in the future economic situation, increase in the national debt, and so on. (65)

“If we try to stay the course, we are going to spend more and more money,” Stiglitz stresses. “The fact that we financed the war totally by deficits means that when 10 years from now we decide we want to repay that, which I don’t know if we will, the amount that we will have to raise our taxes will be that much larger because the debt will be that much larger.” (66)

Inability to follow its own advice given to other countries

It is quite unfortunate that the United States act contrary to their own advice given to countries that were undergoing economic crises in the past. In his another article Joseph Stiglitz notes on this point that:

“During the East Asia crisis, just a decade ago, America and the I.M.F. demanded that the affected countries cut their deficits by cutting back expenditures — even if, as in Thailand, this contributed to a resurgence of the aids epidemic, or even if, as in Indonesia, this meant curtailing food subsidies for the starving. America and the I.M.F. forced countries to raise interest rates, in some cases to more than 50 percent. They lectured Indonesia about being tough on its banks—and demanded that the government not bail them out. What a terrible precedent this would set, they said, and what a terrible intervention in the Swiss-clock mechanisms of the free market.” (67)

The difference of approaches in dealing with the current crisis and the East Asia crisis “is stark and has not gone unnoticed,” Stiglitz says. (68)  “To pull America out of the hole, we are now witnessing massive increases in spending and massive deficits, even as interest rates have been brought down to zero. Banks are being bailed out right and left. Some of the same officials in Washington who dealt with the East Asia crisis are now managing the response to the American crisis. Why, people in the Third World ask, is the United States administering different medicine to itself?” (69)

Inability to cooperate with countries, which will determine the future of the United States

IMF’s Managing Director Dominique Strauss-Kahn told that “at the onset of the crisis, world leaders were “scared” and agreed to work together to end the crisis. But now, countries are formulating policies on their own.” (70) “It is absolutely impossible to get out of the crisis without global solutions,” Strauss-Kahn emphasized. “I am not sure that’s the route on which we are,” he added. (71)

Joseph Stiglitz is also of the view that “[t]o solve global problems, there must be a sense of cooperation and trust, including a sense of shared values. That trust was never strong, and it is weakening by the hour.” (72)

Tensions between the U.S. and China are a good example of the lack of cooperation, protectionism and distrust.

China would not yield to foreign pressure for the appreciation of its currency yuan in any form, Chinese Premier Wen Jiabao said in the end of December 2009. Chinese exporters were under strong pressure due to trade protectionism, he said. Figures from China’s Ministry of Commerce showed that as of the end of November, 19 countries [including the United States] and regions have launched 103 trade related investigations against Chinese products. (73)

Recently China threatened to impose sanctions on U.S. weapons suppliers, including a major aerospace and defense corporation Boeing, following the government’s earlier announcement of its first arms package to Taiwan. (74)

Shortly thereafter China announced that it would impose preliminary anti-dumping duties of up to 105 percent on broiler chicken imports from the U.S. (75)

At the same time “Majors General Zhu Chenghu and Luo Yuan and Colonel Ke Chungqio of the Chinese People’s Liberation Army… called for the Chinese government to retaliate against the United States economically” for the decision to sell arms to Taiwan by “dumping some US government bonds.” (76)

In response the U.S. established preliminary duties ranging from 11 to 13 % on Chinese steel pipe. (77)  The United States also announced that it would impose preliminary duties on potassium phosphate salts and coated paper imported from China. (78)

These tensions were aggravated by Obama’s February meeting with Dalai Lama, the exiled Buddhist spiritual leader of Tibet. Chinese Foreign Ministry spokesman Ma Zhaoxu said that “[t]he US act grossly interfered in China’s internal affairs, gravely hurt the Chinese people’s national sentiments and seriously damaged the Sino-US ties.” (79)

In between these mutual attacks the Communist Party of China has ordered reserve managers of the government to withdraw from risky dollar denominated assets leaving in portfolios just U.S. government guaranteed debt. (80)

Today China is a holder of the largest portfolio of U.S. debt and foreign exchange reserves mainly denominated in U.S. dollars. Many analysts say that the future of the dollar, and of the United States, depends to the large extent on China. If this is so, is it the U.S.’ best interest to initiate required cooperation and save its currency from the lack of confidence caused by its own negligence?

Part III

Market Constraints

High oil prices

During the first quarter of 2010, and for the whole fall season of 2009, oil prices predominantly exceeded $75 a barrel climbing above $80 several times, while in summer 2009 oil traded near $70 a barrel.

In 2008 oil went over $140 a barrel. However, the trend was cut by the worldwide drop in stock and commodity prices following the beginning of recession in the United States.

Today nearly 60% of the oil utilized and consumed in the U.S. is imported from other countries. Oil accounts for nearly 40% of all energy utilized in the U.S. (81)

Daniel Yergin, chairman of Cambridge Energy Research Associates, said at the conference in Singapore in November 2009 that “oil prices today do not reflect the world’s supply and demand fundamentals. Instead, prices are reflective of the weak dollar and expectations of a strong economic recovery.” (82)

Nouriel Roubini, the economist who predicted the global economic crisis, points out in his 2006 article that oil at $70 and higher will have the stagflationary effects. (83)  “The factors that sustained U.S. economic growth in 2004-05, in spite of high and rising energy prices, are fizzling away.” (84)  Taking into account poor consumer spending data “the last thing that a shopped-out consumer with negative savings and increasing debt and debt service ratios needs now is higher oil and energy prices. . . with consumption representing 70 percent of GDP.” (85)

He concludes that “if oil prices rise above $70 and stay there. . .  it is highly likely that the U.S. and global economy could experience a serious growth slowdown and a meaningful increase in core inflation that will have effects on monetary policy.” (86)

China’s peg to the dollar

China enjoys low yuan rate giving its exports competitive advantage in relation to those countries with appreciating currencies against the U.S. dollar. As the result, China is actually “stealing” jobs from many countries because their companies are not able to compete with Chinese producers due to the appreciation of their currencies.

In relation to the United States this means that the country should not count on faster recovery. China’s peg to the dollar makes imports into the U.S. cheaper. This supports high level of unemployment in America. Unemployment prevents the growth of GDP and reduces revenues.

 Maurice Obstfeld, Director of the Center for International and Development Economics Research, comes to a conclusion that “[o]ver the longer term, China’s large, modernizing, and diverse economy will need exchange rate flexibility and, eventually, currency convertibility with open capital markets.” (87)

Obstfeld says that currently the exchange rate regime in China is a “managed float within an adjustable [narrow] band.” (88)  “Such a system is incompatible over the long run with increasing openness to international financial transactions.” (89)

Chinese Commerce Minister Chen Deming said the country’s trade surplus slid 50.2% in Jan. and Feb. 2010 combined from a year earlier. (90)  With exports slowing down China needs to boost domestic consumption. However, “a fixed exchange rate, open capital markets, and a monetary policy geared toward domestic goals cannot all be attained at the same time.” (91)

David Ross views a major motivation for China to preserve the value of their current holdings. (92) Thus, even if China decides to move to domestic consumption it will do it slowly. However, “[t]he major worry, and one the Chinese are certainly watching carefully, is a panicked flight from the dollar.” (93)

According to Stephen Jen of BlueGold Capital Management LLP, China may let the yuan appreciate by 5% as early as this March. (94)  Nouriel Roubini said that China will limit the yuan’s appreciation to 4% over the next 12 months. (95)  China may end the peg to the dollar as soon as the 2nd quarter, allowing a 2% one-step gain, and then let the yuan strengthen another 1% to 2% in 12 months, Roubini said. (96)

George Soros considers that the crucial point where the dollar could become irreversibly weak would be unpegging the yuan from the dollar. (97)

However, according to Fan Gang, an adviser to China’s central bank, a revaluation of the Chinese currency would not solve the U.S.’ fundamental problems. In case of an abrupt revaluation of the yuan Chinese companies “would no longer be able to export goods.” (98)  But this would benefit other countries with cheap labor costs, like Vietnam or India, which would immediately fill in the “market vacuum” leaving the unemployment situation in the U.S. unchanged.  If the renminbi appreciates moderately with continuing exports to the United States but at higher prices this would mean lower profits for Chinese companies and higher inflation in the U.S., Fan notes.  Such a scenario would undermine the U.S.’ recovery.  Therefore, “[i]n both scenarios, US employment numbers would not rise and the trade deficit would not diminish.” (99)

What Next

The United States have done almost nothing to resist long-term negative implications of the current crisis. Considering that the country won’t be able to offer any serious solution because of the weak political will the dollar is bound to face significant depreciation, or even collapse in case of a panicked speculative attack.

In light of this, finds the following long-term investment opportunities as reasonable:

* gold, silver, palladium, other commodities; (100)

* investing in less levered growing countries like China, India and Brazil, which would gradually evolve into a consumer-focused economy; (101)

* the Australian dollar, the Canadian dollar, the Norwegian Krone, the Chinese yuan, and currencies of countries with less debt and healthy banks.  (102)

Economy of the United States has all the means for recovery because it is well diversified and competitive. It encourages science, invention and positive thinking. The country is rich in resources and has a moderate climate. Its infrastructure is highly developed. It offers solid protection of property rights and contract enforcement. But before fully enjoying all these potentials it has to overcome a nasty hangover from excessive spending, encouraging debt instead of savings, and abusing its world leadership and dollar’s position as reserve currency. This will take many years to fix.

Additional Reading

1. Lack of Confidence in the U.S. Economy and the Dollar;

2. Is Diversification Out of the Dollar Real?

This study was prepared by ©

The future of the dollar is the primary focus of We follow latest developments in this area and provide our readers information from reliable sources.


1., March 26, 2010;

2. Bloomberg, March 26, 2010;, March 26, 2010;

4. Bloomberg, February 1, 2010;

5. The New York Times, January 29, 2010;

6. Bloomberg, October 28, 2009;

7. Business Insider, October 29, 2009;

8. Bloomberg, February 11, 2010;

9. Ibid.;

10. Jeremy J. Nalewaik, Report on the Income- and Expenditure-Side Estimates of U.S. Output Growth, March 8, 2010, Brookings Papers on Economic Activity;

11. U.S. Department of Labor, April 2, 2010;

12. Los Angeles Times, April 2, 2010;

13. Ibid.;

14. ETFGuide, April 2, 2010;

15., April 1, 2010. Gallup classifies respondents as underemployed if they are unemployed or working part-time but wanting full-time work;

16. The ADP National Employment Report, March 31, 2010;

17. The Beige Book, March 3, 2010;

18. Ibid.;

19. Market Watch, March 10, 2010;

20. Principles of Macroeconomics by N. Gregory Mankiw, fifth edition, 2008, p. 321;

21. Ibid.;

22. Reuters, December 16, 2009;

23. David Justin Ross, The Future of the Dollar and China: The Threat of Collapse and the Move  Towards a New Reserve Currency, October 27, 2009, Radiant Asset Management, LLC;

24. Ibid.;

25. Ibid.;

26., December 14, 2009;

27. Ibid.;

28. Watch the video;

29. The Department of the Treasury,;

30., March 8, 2010;

31. BBC News, March 10, 2010;

32., March 10, 2010;

33. Bloomberg, February 1, 2010;

34. IMF, January 31, 2010;

35. Federal Reserve Bank of New York, press release of March 11, 2010;

36. Ibid.;

37. Ibid.;

38. Federal Open Market Committee, March 16, 2010;

39. The Beige Book, March 3, 2010;

40. Blanchard, Olivier (2000). Macroeconomics (2nd ed.). Prentice Hall;

41. David Justin Ross, The Future of the Dollar and China: The Threat of Collapse and the Move  Towards a New Reserve Currency, Radiant Asset Management, LLC, October 27, 2009;

42. Ibid.;

43. NewsMas;

44. Bloomberg, December 30, 2009;

45. The U.S. Federal Reserve;

46. RBC TV, November 6, 2009;

47. Bloomberg, December 31, 2009;

48. RBC TV, November 6, 2009;

49. Reuters, March 15, 2010;

50. Ibid.;

51. China Daily, news of March 16 and January 1, 2010  /  Xinhua, March 1, 2010;

52. Bloomberg, March 15, 2010  /  Interfax, March 15, 2010;

53. Bloomberg, October 28, 2009;

54. Bloomberg, January 26, 2010;

55. Ibid.;

56. Ibid.;

57. 9&10 News, February 16, 2010;

58. Bloomberg, January 26, 2010;

59. Reuters, February 19, 2010;

60. Ibid.;

61. Bloomberg, January 26, 2010;

62., February 23, 2010;

63. Joseph Stiglitz, The Three Trillion Dollar War: The Real Cost of the Iraq Conflict, book discussion, April 8, 2008;

64. Ibid.;

65. Ibid.;

66. Ibid.;

67. Joseph Stiglitz, Wall Street’s Toxic Message, July 2009, Vanity Fair;

68. Ibid.;

69. Ibid.;

70. Reuters, January 31, 2010;

71. Ibid.;

72. Joseph Stiglitz, Wall Street’s Toxic Message, July 2009, Vanity Fair;

73. Xinhua News Agency, December 27, 2009;

74. The Financial Times, February 2, 2010;

75. China Daily, February 6, 2010;

76. The Washington Independent, February 10, 2010;

77. China Daily, February 25, 2010;

78. China Daily, March 3, 2010;

79. Xinhua, February 19, 2010;

80. The Daily Telegraph, February 10, 2010;

81. Data provided by;

82. Reuters, November 16, 2009;

83. Nouriel Roubini, The unsustainability of the U.S. twin deficits, Cato Journal, The Spring-Summer, 2006;

84. Ibid.;

85. Ibid.;

86. Ibid.;

87. The Renminbi’s Dollar Peg at the Crossroads, Keynote Speech by Maurice Obstfeld, December 2007;

88. Ibid.;

89. Ibid.;

90. Bloomberg, March 8, 2010;

91. The Renminbi’s Dollar Peg at the Crossroads, Keynote Speech by Maurice Obstfeld, 92. December 2007;

92. David Justin Ross, The Future of the Dollar and China: The Threat of Collapse and the Move Towards a New Reserve Currency, October 27, 2009, Radiant Asset Management, LLC;

93. Ibid.;

94. Bloomberg, February 18, 2010;

95. Bloomberg, March 8, 2010;

96. Ibid.;

97. Interfax, October 26, 2009;

98. ChinaDaily, March 26, 2010;

99. Ibid.;

100. Jim Rogers, January 6, 2010, The Business Times, and November 25, 2009, Business Week  /  George Soros, March 1, 2010, Bloomberg  /   Saxo Bank, January 2010, RBK Magazine  /  Radiant Asset, October 27, 2009, David Justin Ross, The Future of the Dollar and China: The Threat of Collapse and the Move Towards a New Reserve Currency;

101. Bill Gross, Investment Outlook, February 2010, PIMCO;

102. Nomura, November 24, 2009, Bloomberg  /  Radiant Asset, October 27, 2009, David Justin Ross, The Future of the Dollar and China: The Threat of Collapse and the Move Towards a New Reserve Currency.

Israeli Journalist Held Under Secret House Arrest

April 5th, 2010 by Global Research

New York – Ma’an – An Israeli journalist has been held secretly under house arrest for months, sources confirmed this week, amid allegations she obtained and leaked classified military information to an Israeli newspaper. 

Israel’s Shin Bet intelligence service has banned news media from mentioning the case or identifying the reporter, Anat Kam, 23, who former colleagues say worked for the Israeli news site Walla! until her arrest last December.

A group of Israeli journalists will challenge the ban in court on 12 April, 48 hours before Kam goes on trial for espionage and treason. Prosecutors will claim she copied at least two classified military documents during her mandatory army service years earlier. These two documents are believed to have inspired a 2008 investigation by Haaretz reporter Uri Blau detailing Israeli army assassination procedures.

Most of the Israeli journalists who contacted Ma’an said they believed Israel’s intelligence community wanted to make an example of Kam in an effort to dissuade others from exposing secret documents in the future. But knowledgeable Israeli sources have also said Blau could be the real target. “This is bigger than you think,” said one source who remains in contact with the Haaretz reporter. “They’re really after him.”

Blau’s report alleged that the Israeli military has repeatedly violated a 2006 ruling by the High Court of Justice against certain types of “targeted assassinations,” predominantly those in which a non-combatant was killed. Some killings were planned more than a month in advance and were later excused as arrest raids gone wrong, according to the story in Haaretz Magazine that republished sensitive documents. 

A year after the story’s publication, Israeli authorities seized Blau’s computer, Ma’an has learned. Blau, who happened to be in China at the time, remains abroad. Colleagues say he fears arrest if he returns to the country. Blau did not respond to inquiries about his present location, although his colleagues say he is somewhere in the United Kingdom. His latest story’s dateline is London. 

‘Hundreds of documents’ 

How Blau convinced Israel’s military censor to approve the story is a matter of debate in journalistic circles. Colleagues believe his report was longer than the one Haaretz ultimately published in November 2008, and that its approval came after Blau agreed to remove certain allegations. 

Some say it was approved only when the censor became aware of hundreds of other highly classified documents — allegedly provided by Kam — proving the assassinations story was just the tip of the iceberg. Giving the okay to one part of the story, these sources claim, put the damper on more damaging elements.

While Kam’s ongoing detention is well-known to local and foreign journalists based in Israel and the occupied Palestinian territories, no Mideast-based news organization has independently reported on the issue until now. Despite criticism that the newspaper has remained notably silent, Haaretz has fought the order in court. It also submitted reports on the Kam case to the censor’s office, which rejected them outright. 

Another Israeli newspaper, Ma’ariv, has published ambiguous references to the case. One came in a January op-ed about a non-existent country that secretly jails journalists, asking its confused subscribers whether that country should still be considered a democracy. Another reference appeared as a satirical correction. “Due to a gag order, we can’t tell you what we know. Due to laziness, indifference, and misplaced trust in the defense establishment, we don’t know anything,” the Hebrew-language daily explained Friday.

No side in the case has officially confirmed involvement, a point of concern noted by press freedom groups. Israel’s military did not return calls seeking comment, nor did a spokesman for Israeli Prime Minister Benjamin Netanyahu, whose office approved the publication ban. 

Haaretz has not confirmed that Kam was Blau’s source. Speaking with Ron Kampeas of the Jewish Telegraph Agency, Haaretz editor-in-chief Dov Alfon called allegations the two journalists collaborated on the assassinations story “absurd.” “More than a year passed between the publication and her arrest, a year in which Uri Blau published several other front-page articles criticizing the army’s conduct,” he said. 

Kam has also denied involvement. Her lawyers did not return calls seeking comment, but one of them, Eitan Lehman, told Donald Macintyre of the London-based newspaper The Independent that his client was doing her utmost to abide by the terms of the publication ban. Lehman said the leaks were coming from “the other side and not from us,” and has stated that the defense did not seek the gag order. 

Cracks in the publication ban’s effectiveness began to appear this spring, when Israeli journalists leaked the news to bloggers. Richard Silverstein’s Tikun Olam blog in the US brought the story to light in English, while the JTA filed its report from Washington, DC on Sunday. Israel’s own state broadcaster, IBA, let the story slip through in Arabic, although it was quoting JTA as a foreign source. 

Macintyre became the first foreign correspondent to report the story from Jerusalem late Tuesday. The move was significant because most international reporters, including those with foreign agencies and newspapers, also sign an agreement with the censor before they are granted Israeli press credentials. Based in the Palestinian territories, Ma’an is neither a party to this agreement nor bound by the gag order.

Jared Malsin and Mya Guarnieri contributed to this report.

Venezuela: New Moves to Build Workers’ Power

April 5th, 2010 by Federico Fuentes

Caracas — The free, sovereign and independent homeland of our dreams will only come true if we radicalise the process and speed up the transition to socialism”, Venezuela’s President Hugo Chavez wrote in his March 14 weekly column “Chavez Lines”.

The Venezuelan government has launched a number of initiatives in recent weeks aimed to tackle threats to the revolutionary process—including from elements within the pro-Chavez camp that seek to undermine plans to deepen the revolution.

Central to this are new measures aimed at speeding up the transfer of power to organized communities.

Chavez wrote in his February 21 column: “The time has come for communities to assume the powers of state, which will lead administratively to the total transformation of the Venezuelan state and socially to the real exercise of sovereignty by society through communal powers.”

Participatory democracy

The previous day, Chavez announced the creation of the federal government council in front of thousands of armed peasants that are part of the newly created peasant battalions in the Bolivarian militia.

As well as the vice president, government ministers, state governors and mayors, the council includes representatives of communal councils, communes and other representatives directly elected by the people.

The communal councils are grassroots bodies that bring together existing community organizations that have sprung up in Venezuela’s poor neighbourhood around issues such as access to health, education, water and electricity.

The councils encompass 200-400 families in urban areas and 20-50 families in rural areas. Decisions on which problems to prioritize and how to tackle them are made in citizen assemblies open to the entire community.

Funding for the councils comes from the government, but a strong emphasis is placed on relying on local cooperatives, volunteer labour and local expertise to bypass private contractors and empower the community.

Communes bring together various local communal councils and other social organizations in order to tackle problems on a larger scale. There are 187 communes are in the process of being created nationally.

Communes are being encouraged to play a direct economic role, such as creating cooperatives, taking over idle factories to be reopened under worker-community control, and setting up communal markets to sell produces from other communes.

The federal government council brings together representatives of the old state structures with the new, emerging communal state. The council aims to help transfer various powers now held by the national government, state governorships and mayoralties to these emerging organs of peoples’ power.

Such organs include workers’ and peasants’ councils, which will also be represented on the council.

Workers’ control

There are also indications the government is moving to transfer control over the running of important state industries to their workers.

One example is Plan Socialist Guayana, which involves tens of thousands of workers in the industrial complex in Bolivar state.

Workers, backed by Chavez, have been discussing, and in some cases implementing, a radical transformation in the running of local aluminum, iron ore, steel and mining companies.

There are also important moves in the electrical sector, which has been plagued with problems. Hydroelectric dams that are at critically low levels due to ongoing droughts generate some 70% of Venezuela’s electricity.

The sector also suffers from years of under-investment by pre-Chavez governments that were preparing to privatize the state-owned industry.

Declaring a state of emergency in the electrical sector, Chavez has called on the workers to actively participate in management.

This has long been a demand of the workers themselves, who finally won this year an important 15-month-long battle against state management for a new collective contract.

The new contract not only equalizes pay and conditions across the electricity sector (as part of integrating newly nationalized companies with the pre-existing state industry), it also enshrines worker and community participation in management.

Since then, the Federation of Electrical Workers (Fetraelec) and new electricity minister Ali Araque Rodriguez have been removing managers who have operated against the interests of the workers and sabotaged the industry.

In some places, workers have begun to take control over local affiliates of Corpoelec, the national state-owned power company.

Chavez also named Raul Arocha as president of CADAFE, a key component of Corpoelec. Arocha is an engineer who was elected by workers as manager of the Merida zone of CADAFE and helped develop workers’ participation there.

Fetraelec proposed Arocha’s appointment due to his proven commitment to promoting worker participation. Fetraelec is organizing nation-wide workers’ assemblies to develop a plan for how workers can run the sector. The assemblies will culminate with a mass meeting with Chavez where workers will present their proposals to restructure Corpoelec.

In a March 18 press conference with Fetraelec leaders, Jaua said: “Chavez wants the workers to convert themselves in protagonist subject … via the creation of socialist companies, with the decisive and active participation of the workers.”

In response to allegations by the right-wing opposition that Chavez is seeking to concentrate power in his own hands, Vice-President Elias Juau told the February 20 gathering of armed peasants: “We did not come here to concentrate power but rather to dismantle the national oligarchy.

“For us, the only way to avoid the concentration of political and economic power in the hands of the oligarchy is to return power to the people.”

This encroachment on the economic and political power of local and Western capitalist interests has provoked a violent reaction.

One example is the response of large landowners to the government’s land reform program, in which 2.5 million hectares have been redistributed to poor peasants since 2001. In that time, more than 250 peasant leaders have been killed at the hands of paramilitaries hired by large landowners.

In response to this violence, and as part of preparing for a potential foreign military attack, peasant battalions of the Bolivarian militia have been formed this year.

Chavez has also argued for the creation of worker battalions organized in factories. He said: “The Bolivarian Militia, as well as community councils, are expressions of the new communal state, an integral part of the new structure of the communal power we are building.”

A new state

Chavez said creating a new state was needed “to demolish the old perverse vestiges and new threats of bueaucratism”. He said, “the best and most radically democratic of the options for defeating bureaucracy and corruption is the construction of a communal state”.

A recent example of government moves to tackle corruption was the arrest of a number of bankers. Many of the arrested claimed to support the revolutionary process. But via deals signed with government ministries and other state institutions, they had created a network of corruption with state funds. More than 30 bankers face charges. The state intervened into eight banks (of which six are now run by the state) and several dozen companies owned by the bankers were nationalized.

Reformist and corrupt practices within state companies and the government have set back past attempts to move towards workers’ control.

The push by electricity workers between 2004 and 2006 for workers’ participation in management was rolled back by reformist sectors within the company and the government. The workers are confronting some of these same forces in the renewed battle for workers’ control.

In Guayana, aluminum workers have denounced a number of attempts by management, and national and state officials, to sabotage workers’ participation—which has increased discontent and disillusionment among workers toward the government.

One recent example is a contract signed by management to sell semi-finished materials to the multinational Glencore for the next six years, with no consultation with the workers.

Such corrupt deals with multinationals remove the possibility of workers deciding where production should be geared.

Venezuela is an underdeveloped nation heavily reliant on its oil industry. One of the key aims of the revolution is to overcome this through national development. Production for foreign markets on behalf of multinationals undermines this goal.

It contradicts Chavez’s January 24 announcement that all state firms should hand their products to a state entity to distribute them according to the needs of the people at cheaper prices.

The aluminum workers are demanding such contracts be rescinded.

Revolution, not reform

On February 20, Chavez again called on the people to continue to “prepare themselves for the transference and redistribution of political, economic, social and military power”.

Chavez said on March 5: “We are not here to carry out a reform, no! This is a revolution, and if we are not clear about what we are dealing with, we could end up carrying out a simple reform so that nothing changes in the end.”

Chavez quoted Polish-born revolutionary Rosa Luxemburg’s famous 1900 pamphlet Reform or Revolution: “Only when the great mass of workers take the keen and dependable weapons of scientific socialism in their own hands, will all the petty-bourgeois inclinations, all the opportunistic currents, come to naught.”

Chavez argued that ideological weakness and ties to business interests where behind the defection in February by Lara governor Henri Falcon, who left the Chavez-led United Socialist Party of Venezuela (PSUV) to join the Homeland For All (PPT) party.

On March 13, Chavez said: “He couldn’t take it any more because he is not a real revolutionary … A special fibre is required in order to confront the oligarchy.”

He said the “regional bourgeoisie” surrounded Falcon. Chavez urged the pre-candidates in the internal PSUV elections to determine the candidates for September national elections to strengthen themselves ideologically by reading Karl Marx, Rosa Luxemburg and Che Guevara. “We have a clear target for the next elections: an overwhelming triumph so that the National Assembly continues being a space to strengthen and deepen the socialist dynamic.”

Rather than simply being a question of the number of PSUV candidates elected, Chavez said, “what we are dealing with is a qualitative revolutionary challenge”. “If we want that the parliament to dismantle the old capitalist state and open the doors to the socialist state, we have to increase our revolutionary conscience and our real socialist praxis [practice].”

Chavez said the aim was moving beyond simple representation to a situation where the people themselves will govern.

“This is about legislating in accordance with the socialist praxis and obeying the people. Those who do not understand it must choose another path.”

This article first appeared in Green Left Weekly, March 24, 2010.

The Greek Financial Crisis and the European Timetable

April 5th, 2010 by Dimitri Diamant

Now that the Lisbon Treaty of 2009 is behind us, after it was forced through Ireland, after the Irish were told to keep voting on this until they said “yes”; now the European Union moves on to the next item on its timetable.  The next step is to create a centralized Ministry in Brussels for Finance and Taxation, thereby further eroding the diminishing national sovereignty of the now twenty-seven member states; and what better way to do this than to organize a specific potshot against the little country of Greece?

After the Berlin Wall fell, the former Warsaw Pact countries have now been Westernized, and so Greece has fallen back to its traditional position in, one could say, the Cinderella portion of Europe, southeast Europe, the Balkans.  So, as Brussels may then have decided, here is our current whipping boy, our current scapegoat, Greece.

The Ministry of Finance of Greece website,, also has several pages in English, and so one can spend quite some time reviewing numbers that have also been sent for many years now as well to the Eurostat Agency in Luxembourg.  While doing this, it helps to keep two fundamental formulas in mind as one reviews the summary data from year to year. All numbers are expressed as a percentage of Gross Domestic Product, currently in the neighborhood for Greece of 250 billion euros per year:

Total Government Revenues


Total Government Expenditures


Net Annual Deficit (no one saves these days)

Previous Year Government Debt


Current Net Annual Deficit


Following Year Government Debt

It should be remembered that bond auctions are held intermittently throughout each year, and the bidders are foreign governments as well as large, private financial institutions.  Such auctions are often held as a previous bond issue is about to expire.  Thus, one can certainly expect that these recurring bidders are constantly aware of what the outstanding Greek government debt has just become, and how the new issue now will affect this total.  Not only the bidders know each time, but the ratings agencies, Moody, Standard and Poor, and Fitch can also be expected to know, and even the Eurostat Agency in Luxembourg knows.

Now, we can briefly consider how the Greek financial crisis was introduced to us by the western media.  After the Pasok Party defeated the New Democracy Party in October, 2009, it was then that the new Prime Minister revealed the suddenly revised numbers.  The outgoing Finance Minister vaguely then agreed, and then so did the President of the Bank of Greece.

There has never been any definite announcement as to how the revised numbers came about.  There have been vague references to maybe it gradually happened in prior years, but there are no numbers to confirm this.

At the website named above, at the left, one can click Economic Data and Reports.  Then click Hellenic Stability and Growth Programme.  Here we see annual updates of the Hellenic Stability and Growth Programme, the most recent one dated January, 2010, the previous dated January, 2009.  Page 20 of the January, 2009 update, and page 58 of the January 2010 update provide the numbers that seem to suddenly lead to much larger deficits for 2008 and 2009, and so talk about misreporting during prior years to Eurostat becomes incorrect.

The thing to carefully do then is to look at the estimates for the calendar years 2008 and 2009, as they are first presented in the January, 2009 report (update), and then see how these estimates change in the January, 2010 report.  The conclusion is that all of the purported damage can be completely localized in this manner.

The revenue number for calendar 2009 drops somewhat going from the (January) 2009 report to the 2010 report, but the real surprise appears in the calendar 2008 and 2009 expenditure numbers as compared between the 2009 and 2010 reports.  How can this happen?  The major components of expenditures are:

Compensation of employees

Social payments

Interest expenditure

In effect, Other

The surprise bumps for calendar years 2008 and 2009 don’t come largely from any particular component.  Instead, one might say, the doctor in charge of the numbers has methodically raised each of the individual component numbers in the neighborhood of two percentage points each time, and then we get the financial crisis.  For calendar year 2009, in the 2010 report, there is even a gap in the addition to reach the total expenditures number.

The obvious question then becomes, was there more borrowing than usual during calendar years 2008 and 2009 to cover these  strangely, belatedly raised expenditure numbers?  And if so, what rabbit hole did that money really go into?  Maybe a credit default swap derivative on an unregulated futures index?  In other words, the financial equivalent of a genuine copy of a fake Dior?

Is Eurostat in Luxembourg really happy with all of this?  Or, is there something smug in the State of Luxembourg?

The Maoist Insurgency in India

April 5th, 2010 by Binoy Kampmark

The Indian government is puzzled by one fundamental problem that has become desperate to its own security.  With its officials eyeing Pakistan and the funnelling of terrorism through its borders, and the concern with international jihadi movements, it has ignored its own, Maoist grown revolt.  Anywhere up to 6,000 people have perished in the Naxalite insurgency of the last 20 years, and the Indian Prime Minister Manmohan Singh has decided to place the Maoist movement’s threat to Indian security at the forefront of public and official debate.

Near the end of 2009, the central Indian government began implanting forceful measures to combat the Naxals, who now have a presence in 180 of Indians 626 districts (Guardian, Dec 6, 2009).  The establishment of this Red Corridor is certainly a far cry from the origins of the movement, which sprouted from the Naxalbari area of West Bengal in 1967.  Then, they were a motley crew, discordant and incoherent, susceptible to internal vendettas and feuds.  With a marriage of Marxist-Leninist ideology and Maoist tactics, the movement staggered and stuttered through near annihilation to emerge as a highly dangerous force.

In December, government forces commenced operations with Operation Green Hunt, a military engagement with little fuss and even less activity.  The rebels, reports suggested, had simply melted into the jungles.  The military solution is now all some officials can talk about.  The logic of force, rather than the force of logic, prevail in these circles.

Union Home Minister P. Chidambaram has insisted that the Maoist ultras will be crushed.  His most recent comments, quoted in the Indian press, suggest that he has little time for their revolutionary antics.  The Naxals were ‘cowards enacting dramas’, lethal thespians who went about the business less of protecting the poor than destroying schools, railway lines and vital infrastructure links.  ‘If they have courage they should take part in democratic processes and face elections.  Who is stopping them from winning elections?’ (Indian Express, Apr 5).

The attacks by the Naxals on schools are certainly doing it no favours.  Violent attacks in such states as Chhattisgarh, involving the dynamiting of scores of school buildings, must surely alienate their core support.  But its members undoubtedly feel that the state has to be attacked at vital centres, endings that require demolition and severance. Education is inevitably one of the targets in this Maoist appraisal.

Truth has not merely been a casualty of this war, but a sure corpse, lying in state for all to witness it.  Paramilitary forces have backed militias and classes who have been ruthless in perpetrating what Manmohan Singh admitted were grave acts of ‘social and economic abuse’.  Atrocities are committed by all participating forces in this conflict.  Martyrs are created in numbers, such as those of Kursam Lakhi and Sukki Modiyam of the village of Pedda Korma, raped and killed by the forces of the Salway Judum militia and their police counterparts on February 6, 2005 (The Observer, Mar 29, 2009).  The Naxal messages of land and wealth redistribution hold a natural attraction.

Chidambaram is confident that the insurgency will be put down in two or three years.  This will be difficult, given the Naxalite rise from conventional guerrilla force to something approximating to an army.  But the refusal to deal with a whole series of reforms, the continuing poverty in the North Eastern states and the perennial problem of ethic conflict, will allow the Naxal flame to burn that much longer.  Military force will simply perform its own dramatic role of obfuscation.  The diplomatic tables will be left empty that much longer.

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge.  He lectures at RMIT University, Melbourne. Email: [email protected]

US Treasury Secretary Timothy Geithner’s recent announcement that the US is postponing its official report on China’s currency is being hailed in the mainstream western media as a diplomatic reprieve to entice Beijing to revalue its yuan (renminbi) and normalise bilateral trade.

The US currency appraisal was due on the 15 April and was expected to confirm months of increasingly strident accusations in the US media that China is a “chronic currency manipulator”.  Allegedly, Beijng is undervaluing the yuan by as much as 20 per cent of its real value against the US dollar, which is giving Chinese exports to the US an unfair advantage. This, in turn, is hampering US exports and adding to America’s burgeoning trade deficit and sluggish economic recovery – allegedly.

As Bloomberg News put it: “Geithner is betting international diplomacy will work better than US pressure to get China to strengthen the yuan.”

Elsewhere in the mainstream US media, there seems to be now an outbreak of diplomatic peace, with talk of relations “calming down” between Washington and Beijing after a series of bitter disputes – disputes, it has to be said, that were sparked by unilateral US actions, such as a massive military sales deal with Taiwan, trade tariffs against Chinese goods and a diplomatic smack in the face when President Barack Obama received the Tibetan dissident leader, the Dalai Lama.

But Geithner’s latest “diplomatic” overture is less to do with the yuan and “normalising bilateral trade” and more to do with US efforts to pressure China to relent on a fourth round of tougher United Nations’ sanctions against Iran over its nuclear research. China is the only member of the UN Security Council that has explicitly refused to consent to further sanctions – thus presenting a crucial stumbling block to the US in its efforts to isolate and weaken the Islamic Republic. Again, the hidden agenda within that hidden agenda is less to do with an “Iranian nuclear threat” and more to do with the US engineering regime change in Tehran to one that would be subservient to Washington’s geopolitical control of the Middle East and beyond.

US Secretary of State Hillary Clinton gave notice of the intensifying US campaign during a speech on 22 March to the American Israel Public Affairs Committee in Washington when she called for “biting sanctions” with “painful consequences” and noted that “more work has to be done” on China’s position [1].

Subsequently, Obama has said that the US wants to see sanctions against Iran “within weeks, not months”.

Geithner’s postponement of the day of reckoning for China over its currency also means postponement (for now) of what would have been undoubtedly an escalation in US trade protectionism – an escalation that would throw a spanner in the works of Chinese economic growth. No matter that such an incendiary and, according to Goldman Sachs’ chief Asian economist [2], unjustified currency assessment by the US would have precipitated a trade war and plunged the world and US economy into the abyss. The faltering US empire has moved beyond rationale thought and normalcy. The crazed, implicit message to China would seem to be: “Follow our agenda on Iran or we will light this Mother touchpaper” – even if that does bring about a global economic collapse.

Geithner’s diplomatic blowing out of the match (for now) can be seen as but one step in a series of choreographed moves to lever China towards tightening the noose on Iran.

As recently as 18 March, the Financial Times reported that UN Security Council “disunity” with China was undermining plans for US-inspired sanctions against Iran.

But then, on 31 March, the FT reported that “Beijing agrees to talks on Iran sanctions”. On 1 April, according to the same paper, Iran’s top nuclear negotiator Saaed Jalili met with Chinese officials to lobby for China “to hold firm” in its opposition to further UN sanctions. However, tellingly, it is noted in the media that Chinese officials are no longer reiterating the previous Beijing line that sanctions against Iran would be “fundamentally wrong”.

The next day, 2 April, Obama is reported by the BBC to have made an hour-long telephone call to China’s President Hu Jintao to “stress the importance of working together to ensure that Iran lives up to its obligations [over its alleged nuclear research]”.

The same day, it is reported that President Hu will now be going to a summit in Washington on 12-13 April to discuss nuclear terrorism – a U-turn on previous statements that the Chinese leader would not be attending that event. The attendance by Hu is seen as a major boost to legitimising the US conference agenda. Or, put another way, the threatened Chinese absence would have been an embarrassing snub to Washington’s geopolitical designs.

Given this “breakthrough” in US-China relations, the following day, 3 April, Geithner announces the delay in Washington’s verdict on the yuan. While the myopic western media hail Giethner’s move as a stepping down in US-China tensions over bilateral trade, the choreographed quid quo pro is rather more accurately seen as a stepping up of US belligerence towards Iran. Or to turn Von Clausewitz on his head: “The continuation of [US-China currency] politics is but war by other means”.


[email protected]




Impending GMO Contamination of the Food Chain

April 5th, 2010 by The National Organic Coalition

Resulting contamination of non-GE and organic alfalfa hay and seed would devastate livelihoods and organic industry

The National Organic Coalition (NOC) today announced that more than 200,000 people submitted comments to the United States Department of Agriculture (USDA) critiquing the substance and conclusions of its Draft Environmental Impact Statement (DEIS) on Genetically Engineered (GE) Alfalfa. Groups, including NOC, Center for Food Safety (CFS), Organic Consumers Association, Food & Water Watch, CREDO Action and Food Democracy Now, mobilized their communities to help generate the unprecedented number of comments.

In addition, more than 300 public interest organizations, farmers, dairies, retailers and organic food producers from the U.S. and Canada delivered a strongly worded letter to USDA, calling upon it to deny approval of Monsanto’s genetically engineered, Roundup Ready alfalfa (GE alfalfa). The letter cites the inevitable contamination of organic and non-GE alfalfa hay and seeds and threats to the viability of organic dairies, livestock, and meat and dairy producers as reasons for urging the denial. NOC, Organic Valley, Whole Foods, National Cooperative Grocers Association, CFS and others agree that it would be irresponsible government policy to approve GE alfalfa in the absence of legal requirements holding companies accountable for GE contamination, as is currently the case.

In 2006, CFS sued USDA for its illegal approval of Monsanto’s GE alfalfa. USDA failed to conduct an environmental impact statement (EIS), as required by law, before deregulating the crop. The federal courts sided with CFS and banned GE alfalfa plantings until USDA analyzed the impacts of GE alfalfa on the environment, farmers and the public. Today marks the deadline for submitting public comments on the draft EIS, which recommends approving Monsanto’s GE alfalfa.

USDA’s EIS claims that organic consumers do not care about GE contamination of their food, despite overwhelming evidence to the contrary. Consumer surveys show that 75 percent or more of respondents repeatedly say that they do not want to eat GE contaminated food and cite their desire to avoid GE food as one of the top five reasons for buying organic.

“GE alfalfa threatens the very fabric of the organic industry,” adds George Siemon, one of the founding farmers and CEO of Organic Valley. “Organic consumers want seeds and products to remain unpolluted by GE.”

Independent, empirical studies and past experience show that containment of GE pollen and seeds is not possible GE alfalfa pollen can travel six miles or more in the air, via bees or other pollinators. Seeds can also travel long distances on harvesting equipment and on the boots and in the trucks of people who work in fields and transport hay and seeds. More than 200 known cases of GE contamination have been documented within the last decade. The most serious and immediate cases of contamination are in canola (rapeseed) crops. Due to widespread contamination, canola crops and oil can no longer be marketed as organic or non-GE in Western Canada.

“The continued deregulation of GE crops threatens our food supply and the diverse organic and conventional farming systems that have fed the world’s growing population for centuries,” said Lisa J. Bunin, Ph.D., Organic Policy Coordinator at Center for Food Safety. “It is unconscionable for USDA to increasingly allow the concentration of our nation’s seed supply in the hands of a few GE companies that produce a limited number of novel, pesticide-promoting seed varieties.”

Despite the inevitable contamination from GE alfalfa, the EIS disavows this harm and places the entire burden for preventing contamination on non-GE farmers, with no protections for food producers, consumers and exporters. “If Roundup Ready Alfalfa is permitted to be sold commercially, the ripple effect would wipe out many organic and non-GE businesses, from organic seed and forage growers to organic dairy farmers and retailers,” said Liana Hoodes, Director, National Organic Coalition. “Every American’s right to cultivate, sell and eat non-GE and organic food would no longer exist.”

Even though the EIS acknowledges that GE alfalfa would increase Roundup herbicide use, since the vast majority of alfalfa farmers do not use any herbicides at all (93 percent), it omits the fact that planting GE alfalfa would require many farmers to use Roundup for the very first time. This would result in the spread of toxic chemicals in regions where such toxins were previously non-existent. Over the past 13 years, the planting of GE crops has significantly increased herbicide use on corn, soybeans and cotton – by 383 million pounds. GE alfalfa deregulation would markedly add to that high toxic burden on the environment.

“Our genetic gene pool is extremely valuable, and we can’t afford to destroy it by handing it over to the biotech companies,” warns Conventional South Dakota alfalfa seed and hay grower, Chuck Noble. “If we’ve learned anything from Europe’s potato famines when millions starved to death, humans need seed variety to protect against blight and famine. Genetic engineering severely compromises that diversity.”

Read the letter from farmers, organic producers and NGOs opposing the deregulation of GE alfalfa

Read the Center for Food Safety’s comments to USDA

Read CFS scientific comments to USDA

To receive updates on GE alfalfa and action alerts for other food issues, consumers can visit Center for Food Safety ( and join the True Food Network community.

About the National Organic Coalition

The National Organic Coalition (NOC) is a national alliance of organizations working to provide a “Washington voice” for farmers, ranchers, environmentalists, consumers and progressive industry members involved in organic agriculture. NOC seeks to work cooperatively with, and add value to, existing organic and sustainable agriculture organizations, networks and coalitions to ensure a united voice for organic integrity.

Obama Gives Key Agriculture Post to Monsanto Man

April 5th, 2010 by Gary Ruskin

Today, President Obama announced that he will recess appoint Islam A. Siddiqui to the position of Chief Agricultural Negotiator, Office of the U.S. Trade Representative.

Siddiqui is a pesticide lobbyist and Vice President for Science and Regulatory Affairs at CropLife America, an agribusiness lobbying group that represents Monsanto.

Following is a letter sent by 98 organizations to U.S. Senators in opposition to Siddiqui’s appointment, and a fact sheet about him. 

Dear Senator:

The following 98 organizations are writing you to express our opposition to the nomination of Islam Siddiqui as Chief Agriculture Negotiator at the office of the United States Trade Representative.  Our organizations— representing family farmers, farmworkers, fishers and sustainable agriculture, environmental, consumer, anti-hunger and other advocacy groups—urge you to reject Dr. Siddiqui’s appointment when it comes up for a floor vote, despite the Senate Finance Committee’s favorable report of his nomination on December 23, 2009.

Siddiqui’s record at the U.S. Department of Agriculture and his role as a former registered lobbyist for CropLife America (whose members include Monsanto, Syngenta, DuPont and Dow), has revealed him to consistently favor agribusinesses’ interests over the interests of consumers, the environment and public health (see attached fact sheet). We believe Siddiqui’s nomination severely weakens the Obama Administration’s credibility in promoting healthier and more sustainable local food systems here at home. His appointment would also send an unfortunate signal to the rest of the world that the United States plans to continue down the failed path of high-input and energy-intensive industrial agriculture by promoting toxic pesticides, inappropriate seed biotechnologies and unfair trade agreements on nations that do not want and can least afford them.

The United States urgently needs a trade negotiator who understands that current trade agreements work neither for farmers nor the world’s hungry. With farmers here and abroad struggling to respond to water scarcity and increasingly volatile growing conditions, we need a resilient and restorative model of agriculture that adapts to and mitigates climate change and that moves us towards energy-efficient farming.

The most comprehensive analysis of global agriculture to date, the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) states unequivocally that “business as usual is not an option.” We need a new, sustainable model of biodiverse, ecologically-based agriculture that regenerates soil health, sequesters carbon, feeds communities, protects farmworkers and puts profits back in the hands of family farmers and rural communities. Siddiqui’s track record shows that he favors none of these solutions.

We call on the Senate to reject Islam Siddiqui’s nomination and reorient trade policy to serve the interests of family farmers, farmworkers, consumers and the planet.


[List of 98 organizations below.]

Siddiqui and CropLife: Statements and Positions

Islam Siddiqui was nominated by US President Barack Obama to the position of Chief Agricultural Negotiator at the office of the US Trade Representative. He is currently Vice President of Science and Regulatory Affairs at CropLife America. CropLife is an agricultural industry trade group that lobbies on behalf of Monsanto, DuPont, Syngenta and other pesticide and agricultural biotech corporations.

Siddiqui’s statements and positions—both as a public official and as an industry executive— coupled with CropLife America’s consistent record on public policy issues demonstrate a narrow and short-sighted view of American agriculture and trade interests. This viewpoint consistently places the special interests of large agribusiness above the health and welfare interests the broader public, the international community and the environment.


Enforcing Trade Agreements

According to the Progressive Government Institute, the Chief Agricultural Negotiator “conducts critical trade negotiations and enforces trade agreements… This includes multilaterally in the World Trade Organization (WTO), regionally in the Free Trade Area of the Americas, and bilaterally with various countries and groups of countries. The ambassador also resolves agricultural trade disputes and enforces trade agreements, including issues related to new technologies, subsidies, and tariff and non-tariff barriers and meets regularly with domestic agricultural industry groups to assure their interest are represented in trade.” The industry groups’ interests will be more than adequately represented, as the WTO’s Doha Round will be a perfect opportunity for the agrochemical industry to push for trade agreements that maintain US subsidies, lower tariffs on chemicals, promote GM crops, and unfairly benefit the agrochemical companies that Siddiqui represents.


Legislative Influence and Defining ‘Sound Science’

Another part of the job description is that “He or she also coordinates closely with the US government regulatory agencies to assure that rules and policies in international trade are based on sound science.” Siddiqui’s background has always favored “sound science” to mean high-cost, high-input (and high profit, for CropLife’s members) agricultural practices being imposed on developing countries, despite their preferences. Many countries have chosen to ban GMOs on the precautionary principle, including the EU, but Siddiqui will be able to use the trade talks as leverage so that CropLife’s member companies can force their way around those precautions. Siddiqui will also be able to influence the results of the Casey-Lugar Global Food Security Act Bill (which mandates government funding for biotechnology research).


Siddiqui Claimed EU Rejection of GMOs was “Denying Food to Starving People”

In 2003, Siddiqui applauded the Bush Administration’s decision to seek an end to the EU’s moratorium on approval of imports of genetically modified crops. Croplife America said the EU’s position had “no scientific foundation” and Siddiqui said, “EU’s illegal moratorium has had a negative ripple effect of creeping regulations and non-science-based decisions, which have resulted in denying food to starving people. The WTO requires that international trade rules be based on sound science, and today’s decision will send that strong message to the EU and other countries in Asia, Africa and Latin America.” [Delta Farm Press, 5/23/03]

Siddiqui Compared GMO Acceptance to Accepting “Microwave Ovens”

In 2002, Siddiqui claimed biotech foods have been proven to be as safe as traditionally grown foods. He cited a similar distrust of a new technology many people had when microwave ovens were first introduced; eventually, consumer acceptance of the technology became widespread. [State Department Washington File, 11/25/02]

Siddiqui Criticized EU for Insisting On “Precautionary Principle” On GMOs

In 2002, Siddiqui criticized the European Union’s precautionary principle rationale for rejecting the import of GMOs. Widely recognized in the international community, the precautionary principle allows societies to protect people and the planet when there are uncertainties or unknown risks associated with the introduction or use of a product. Siddiqui said the principle didn’t offer any more real protection to citizens than U.S.- “science-based” regulations and was being used by politicians as a non-tariff trade barrier. [State Department Washington File, 11/25/02]

Siddiqui Called for New Biotech Green Revolution

Statement by Siddiqui this year on new Green Revolution: “What we need now in the 21st century is another revolution, which some people are calling the second green revolution… You need to have use of 21st century technologies, including biotechnology, genetic technology, and all the other technologies, which are being (inaudible), in terms of achieving that.”

Source: “Green Innovation: Can Patents Help Make the World a Bett… April 22, 2009

Siddiqui Rejected Consumer Labeling of GMOs While Working at USDA

As a special assistant for trade at USDA, Siddiqui in 1999 warned Japan that if they implemented mandatory labeling of foods containing genetically modified organisms (GMOs) it could mislead consumers about food safety and disrupt trade. Siddiqui said, “We do not believe that obligatory GMO labeling is necessary, because it would suggest a health risk where there is none.” He added, “Mandatory labeling could mislead consumers about the safety of these products and require segregation of GMO and non-GMO foods. I fear major trade disruptions and increases in food costs to consumers if Japan requires mandatory labeling.” Siddiqui also said Japan, as a member of the World Trade Organization (WTO), is obligated to find the least trade-restrictive way of achieving its objectives. There are a number of ways other than labeling, such as educational materials and public forums, to provide consumers with information on genetic engineering, he said. [Reuters, 7/27/1999]

Siddiqui is a Former Registered Lobbyist

From 2001- 2003, Islam Siddiqui was a registered lobbyist with CropLife America, which spent just over $2 million on lobbying the federal government in 2008, and just under $1.9 million in 2007 on issues like registering pesticides for use in schools, limiting the Endangered Species Act so that it doesn’t inhibit agricultural pesticide use, revision of EPA pesticide registration fees, and fighting the EPA on restrictions to the use of fumigants.


CropLife America’s Regional Partner Targeted Michelle Obama Organic Garden

CropLife America’s regional partner had notoriously “shuddered” at Michelle Obama’s organic White House garden for failing to use chemical pesticides and launched a letter petition drive defending chemical intensive agriculture and urging Michelle Obama to consider using pesticidies and herbicides. Mid America CropLife Association is listed as a regional partner on CropLife America’s website.



Siddiqui Instrumental in Drafting First Proposed Organic Standards that Would Have Allowed Toxic Sludge, GMOs and Irradiated Food to be Labeled “Organic” 

As Under Secretary for Marketing and Regulatory Programs at USDA, Siddiqui oversaw the release of the first-ever proposed federal standards for organics, an accomplishment the White House has cited in support of his nomination. However, these rules created an uproar when USDA overruled recommendations of the National Organic Standards Board (NOSB) and permitted the use of GMOs, irradiation and toxic sludge under the organic label. Only after 230,000 comments flooded into USDA were these standards strengthened. It remains one of the highest outpourings of public sentiment on any government regulation in U.S. history. [Mother Jones]

Siddiqui Admitted USDA Overruled Organics Board Recommendations

Siddiqui justified allowing for possible allowance of GMOs, irradiated foods and toxic sludge under the organics by saying, “we know that [the] Organics Board had recommended against those two items in the organic agriculture. There’s a considerable debate on these issues; it’s a public debate issue. So essentially, the department has felt that we want to open it up, we want to seek comments. And it could be any one of the three choices; either it could be allowed, it could be prohibited, or it could be allowed on a case-by-case basis, especially dealing with GMOs. [Federal News Service, 12/15/07]

Siddiqui Admitted Allowing no GMOs in Organics Would Possibly be “Inconsistent” with Forcing GMOs on EU

Siddiqui explained one of the reasons GMOs were not banned under organic label was because ” … some of the agencies within the U.S. government felt that we will be inconsistent in going to the EU and telling them to not require GMO contents being spelt out in ingredients.” [Food and Drink Weekly, 1/19/98]


CropLife Spent $500,000 to Defeat County Ballot Banning GMOs

“In March 2004, CropLife poured funding into a campaign to defeat a Mendocino County ballot initiative – known as Measure H – that would make the country the first to ban genetically engineered crops. In the lead up to the vote, CropLife contributed over $500,000 – more than seven times that of the initiative supporters – to defeat the proposal. [1] Despite the massive campaign against the initiative, the bio-tech industry suffered a humiliating defeat. The measure passed by a margin of 56% to 43%. [2]“

Siddiqui Said “Pleased” by Defeat of Ballot Measures

Siddiqui, on behalf of CropLife America, said he was pleased that voters in three California counties had rejected proposed bans on biotech crop cultivation. “I think you’ll see more counties in California try[proposing a ban]the next time they can get it on the ballot,” he said, adding that similar initiatives are unlikely in other states. [Food Chemical News, 1/3/05]


CropLife Lobbied to Allow Children to be Used for Pesticide Experiments

In August 2005, CropLife America met with Bush Administration officials at the Office of Managment and Budget and EPA to allow for children to participate in pesticide experiments. CropLife America urged certain allowances to be made for chemical testing on children.  Public Employees for Environmental Responsibility criticized the meeting for excluding the perspectives of ethicists, child advocates and scientists. EPA one month later adopted a human testing rule in line with CropLife America’s suggestions. Environmental groups sued the EPA for failing to adequately protect women and children. [Public Employees for Environmental Responsibility, 5/30/06]

PEER Executive Director Jeff Ruck commented on the backdoor meeting, “These meeting notes make it clear that the pesticide industry’s top objective is access to children for experiments. After reading these ghoulish notes one has the urge to take a shower. For an administration which trumpets its concern for the ‘value and dignity of life,’ it is disconcerting that no ethicists, children advocates or scientists were invited to this meeting to counterbalance the pesticide pushers.” [Public Employees for Environmental Responsibility, 5/30/06]

Supported Use of Human Test Subjects

In 2003, CropLife America expressed pleasure that the U.S. Court of Appeals overturned EPA’s moratorium on using human clinical test data in pesticide risk assessment. The court ruled that EPA’s “previous practice of considering third- party human studies on a case-by-case basis, applying statutory requirements, the Common Rule, and high ethical standards as a guide, is reinstated and remains in effect unless and until it is replaced by a lawfully promulgated regulation.” “We are pleased that the court recognized that EPA’s moratorium constituted a binding regulation issued without notice and the opportunity to comment,” said Jay J. Vroom, head of CropLife America. [U.S. Newswire, 6/3/03]

CropLife America Secured Continued Use Of Banned Ozone-Depleting Pesticide, Methyl Bromide

CropLife America supported the continued use of methyl bromide by farmers in the U.S. despite its supposed ban under the Montreal Protocol on Substances that Deplete the Ozone Layer (Protocol) and the Clean Air Act (CAA). The Bush administration secured an exemption of the highly controversial chemical in 2006. “By no means is there one product that will fit all the critical uses of methyl bromide today,” CropLife CEO Jay Vroom said. The continued exemptions are needed while research continues on the alternative pesticides, he said, adding, “We’re not there yet, and the American farmer needs to have these tools so we can continue to be have viable exports.” Source: Associated Press, Nov 4, 2006. For more information see the website for the UN Environmental Programme Ozone Secretariat. The PANNA website contains extensive resources and fact sheets on methyl bromide’s use for soil fumigation.

·       Methyl bromide, a powerful ozone depleter used on strawberries, tomatoes, grapes and other crops. The EPA has classified methyl bromide as a Toxicity Category I compound, the most deadly category of substances due to causing neurological damage and reproductive harm. Farmworkers in particular have experienced death, birth defects, blurred vision, nausea, and dizziness as a result of direct exposure to methyl bromide. Methyl Bromide has also been listed as a Class I Ozone Depleter under the Clean Air Act. Methyl bromide is a highly toxic pesticide.

·       From 1982 to 1990, at least 18 people in California died from exposure to methyl bromide. The state Department of Pesticide Regulation also reports at least 148 systemic illnesses, 52 eye injuries and 60 cases of skin damage from methyl bromide. Methyl bromide has also caused birth defects in studies required by U.S. EPA and submitted by the manufacturer.

·       Methyl bromide is toxic to the central nervous system and can damage lungs and kidneys and possibly cause cancer. Direct exposure can lead to headaches, blurred vision, nausea and dizziness. Many farmworkers and residents near fumigated fields have experienced these symptoms. [Pesticide Action Network]

Croplife America Resistant to International Regulations Over Toxic Chemicals

Croplife America has been a driving force to weaken the U.S. position on the Stockholm Convention, a critical effort to regulate the use of toxic “persistent organic pollutants (POPs).” These include the well known chemicals DDT, PCBs and dioxins that have been linked to a host of serious human health problems and environmental concerns. Even at very low levels of exposure, POPs can cause reproductive and developmental disorders, damage to the immune and nervous systems, and a range of cancers. CropLife America has argued that “American sovereignty” concerns should override the treaty if the chemical regulations are stronger than U.S. law. CropLife America explicitly calls for the U.S. to “protect export markets for American produce and farm commodities,” even if they use chemicals that may be outlawed by the POP treaties. [CropLife America Website]

CropLife America Argues for Allowing Usage of Toxic Endosulfans

Croplife America and its international counterpart CropLife International, whom Siddiqui has represented in international negotiations, have continuously argued for a legitimate role for the dangerous POP endosulfan.  However in October 2009, scientists declared that: “endosulfan is likely, as a result of its long-range environmental transport, to lead to significant adverse human health and environmental effects, such that global action is warranted.” The finding sets the stage for a global ban under the Stockholm Convention. Endosulfan is an endocrine disruptor, and low dose exposure while in the womb is linked to male reproductive harm, autism, and birth defects. High dose exposures are acutely toxic, resulting in headaches, nausea and vomiting, seizures, and in extreme cases, unconsciousness and death. [Manila Bulletin, 10/20/09]

CropLife America Withdrew from Landmark UN/World Bank Study on Ag Research (IAASTD) that Highlighted Agroecological Science as Promising Way to “Feed the World”

CropLife Upset Industry Viewpoint Not Allowed to Dictate Findings

CropLife International participated in the UN/World Bank-sponsored International Assessment for Agricultural Knowledge, Science and Technology for Development (IAASTD) for 4 years, before withdrawing in the final days of the process. The IAASTD reports—authored by over 400 scientists and development experts from more than 80 countries, and subjected to two open public review processes—remains the most authoritative study to date on agriculture research and technology. CropLife objected to the measured but lukewarm findings of the IAASTD on “modern biotechnology” and genetic engineering. According to the spokesman for CropLife, their decision to withdraw in the final days was prompted by “the inability of its members to get industry perspectives reflected in the draft reports” —a complaint belied by the fact that IAASTD editors repeatedly offered CropLife a “blank page” to present the industry’s viewpoints. Ultimately, industry authors failed to submit text in time for publication.

The IAASTD concluded that an increase in investments in agroecological practices would be necessary to meet 21st century needs, noting that agroecological, organic, biodiverse and regenerative practices represented highly promising and scientifically robust approaches to feeding the world while also meeting social equity and sustainability goals, particularly under increasing stresses of climate change, water scarcity and fossil-fuel based energy limitations. In contrast, the IAASTD observed that chemical intensive and GMO-based practices were unlikely to meet these goals, had in many cases undermined public health and/or contaminated the environment, and posed severe social equity concerns due to industry concentration, IPR and patent rules. [Bioscience Resource, New Scientist, PANNA]

Prepared by Lindsey Schneider and Vera Glavova, PANNA, with contributions from National Family Farm Coalition. For further information on CropLife:,

Pesticide Action Network has worked to replace pesticides with ecologically sound and socially just alternatives since 1982. PANNA is one of five regional facilitating organizations serving a global network of more than 600 civil society groups in over 90 countries who share these goals. For more information, see

98 organizations who signed on to the letter to the Senate:

Alaska Community Action on Toxics (AK)
AllergyKids (CO)
American Raw Milk Producers Pricing Association (WI)
Beyond Pesticides (DC)
Breast Cancer Action (CA)
California Food and Justice Coalition (CA)
Californians for GE-Free Agriculture (CA)
Californians for Pesticide Reform (CA)
California Rural Legal Assistance Foundation (CA)
Center for Environmental Health (CA)
Center for Food Safety (DC)
Center on Race, Poverty & the Environment (CA)
Central Florida Jobs with Justice Project (FL)
Columban Center for Advocacy and Outreach (NE)
Community Farm Alliance (KY)
Concerned Citizens for Clean Air (OR)
Cornucopia Institute (WI)
Earth Justice (CA)
Equal Exchange (MA)
Fair Trade Coalition (MN)
Family Farm Defenders (WI)
Farm and Ranch Freedom Alliance (TX)
Farm Worker Pesticide Project (WA)
Farmworker Association of Florida (FL)
Farmworker Justice (DC)
Farmworkers Self-Help (FL)
Food & Water Watch (DC)
Food First/Institute for Food and Development Policy (CA)
Food for Maine’s Future (ME)
Florida Immigrant Coalition (FL)
Food Democracy Now! (IA)
Food Systems Integrity (MA)
Florida Organic Growers (FL)
Fresno Metro Ministry (CA)
Friends of the Earth (DC, CA)
Greenpeace US (DC, CA)
Grassroots International (MA)
Growing Power Inc. (WI)
Indigenous Environmental Network (MN) Indiana Toxics Action (IN) Innovative Farmers of Ohio (OH) Institute for Agriculture & Trade Policy (MN)
Iowa Citizens for Community Improvement (IA)
Kids for Saving Earth (MN)
Kentucky Environmental Foundation (KY)
Land Stewardship Project (MN)
Lideres Campesinas (CA)
Maine Fair Trade Campaign (ME)
Maine Organic Farmers and Gardeners (ME)
Maryland Pesticide Network (MD)
Mississippi Association of Cooperatives (MS)
Missouri Rural Crisis Center (MO)
Mvskoke Food Sovereignty Initiative (OK)
National Family Farm Coalition (DC)
National Farm Worker Ministry (MO)
National Latino Farmers & Ranchers Trade Association (DC)
New York Environmental Law & Justice (NY)
Northeast Organic Farming Association Interstate Council (CT)
Northern Plains Resource Council (MT)
Northwest Atlantic Marine Alliance (ME)
Northwest Coalition for Alternatives to Pesticides (OR)
Oakland Institute (CA)
Ohio Conference on Fair Trade (OH)
Oklahoma Black Historical Research Project (OK)
Oregon Fair Trade Campaign (OR)
Oregon Toxics Alliance (OR)
Organic Consumers Association (MN)
Partners for the Land & Agricultural Needs of Traditional Peoples (WV)
Pesticide Action Network North America (CA)
Pesticide Free Zone (CA)
Pesticide Watch (CA)
Physicians for Social Responsibility/Los Angeles (CA)
Public Citizen (DC)
Rochesterians Against the Misuse of Pesticides (NY)
Rural Advancement Foundation International USA (NC)
Rural Coalition/ Coalición Rural
Safe Alternatives for our Forest Environment (CA)
Science and Environmental Health Network (IA)
Sciencecorps (MA)
Search for the Cause (CA)
Sierra Club (CA, DC)
Small Holders Alliance of Massachusetts (MA)
Student Action with Farmworkers (NC)
The Endocrine Disruption Exchange (CO)
The Safe Lawns Foundation (ME)
The Second Chance Foundation Washington (WA)
Washington Fair Trade Coalition (WA)
Western Organization of Resource Councils (MT)
World Hunger Year (NY)

Trade is now a favorite topic for many politicians and the media, especially between China and the U.S.  Likewise, labor and progressive groups continue to delve deeper into trade issues, offering a variety of working class solutions.  The far right, too, is obsessed with trade, using it to fuel nationalism and anti-China sentiment.  No subject is prone to so much demagoguery combined with so little explanation.    

Before one can offer a vision of “fair trade,” it’s helpful to understand what “trade” is. 

A popular misconception of trade is that governments trade goods between themselves.  The false implication here is that trade is a national issue, equally important to all that fall within the boundaries of certain countries.  This mistaken premise — promoted by both media and politicians — leads to erroneous conclusions.

In reality, governments have very little to do with trade.  Instead, giant corporations are the main actors behind global trade: multinational corporations produce goods — in China— and sell these goods overseas to other corporations — to Wal-Mart, for example. 

The Chinese and U.S. governments basically do nothing.  This is “free-trade” in action: goods and services — including investment cash and factories — freely flow between nations, unobstructed by government interference. 

Free trade is negative for the international working class for numerous reasons.  When labor and regulation costs are too high for competitive super profits in the U.S., for instance, corporations jump ship and leave the country to exploit the slave wages of poor countries, working with subjected foreign nations that limit labor and human rights to keep the poverty wages in place.  Free trade also pumps cheaper goods into poor nations, wiping out their local agricultural and other industries, causing mass unemployment and migrations.   

Under capitalism, corporations dominate the global economy, and governments are left with only one recourse if they want to intervene over trade issues: they can lower or raise import/export costs at the border.  The U.S. government can raise taxes (called tariffs or duties) on Chinese goods, which have the effect of limiting Chinese imports, and giving U.S.corporations greater dominance over the U.S. consumer market.  Raising taxes on imports — or keeping them out completely (an embargo) — is referred to as protectionism, which can and often does keep prices high in the domestic market. 

Protectionism is still capitalism dominated by giant corporations at the expense of the rest of us, but unfortunately, many labor and progressive organizations believe that protectionism offers relief to the U.S. working class.  They demand that the U.S. government intervene in trade issues by keeping out foreign goods, thereby “protecting jobs.”   This same solution is also advocated by the far right, including neo-Nazis — people who have not a progressive bone in their body.    

The problems with protectionism are many.  By simply keeping out foreign goods without attacking the power ofU.S. corporations, protectionism merely strengthens U.S.corporations, who then have a monopoly on the U.S.consumer market.  Of course, stronger corporations are a danger to U.S. workers’ standard of living. 

Protectionism also increases international conflicts.  The world economy is arranged in such a way — with U.S. government encouragement — that many countries are “export-based economies:” they are set up to export goods to countries like the U.S., the most valued consumer market on the planet.  This global arrangement has “free-trade” at its foundation: if the U.S. erects trade barriers and keeps out foreign goods, export-based economies are adversely affected, and they interpret such an act as an “economic act of war,” with retaliation to be expected.  History shows that economic warfare often leads to the military type of warfare. 

More importantly, protectionism intellectually disarms American workers, who are naturally skeptical of U.S.corporations’ intentions.   Protectionism attempts to bind workers interests with “their” corporations, in the same way that corporations attempt to use “profit sharing” to give workers encouragement to work harder, not form unions, and see their interests as entirely the same as those of their employers.   

President Ronald Reagan attempted to do the same in his “trickle down” economic theory; the less we tax the corporations, he claimed, and the less we demand from them in wages, the higher their profits will be and the more happy they will be to share with workers.  It’s a lie, of course.  But such lies form the basis of protectionist policy; workers should team up with U.S. corporations against foreign companies, so that, presumably, more U.S. jobs will be saved. 

The current recession has shown how eager U.S. companies are to save jobs.  If corporations can make more profits with fewer workers who work longer with less pay, they’ll do it without a second thought.  Likewise, if protectionist policies provide privileges to U.S. corporate monopolies, they’ll have only U.S. workers standing in their way to even higher profits. 

A similar scenario played itself out a hundred years ago, when American unions teamed up with the “good” corporations who first allowed a unionized workforce.   When the “bad” companies were defeated, leaving the “good” companies without competitors, the labor/company “partnership” was abruptly ended with corporate attacks on unions. 

Today, this modern equivalent is manifest in the Alliance of American Manufacturing (AAM), an organization where giant corporations and U.S. labor unions come under one roof to advocate protectionist policies (most notably anti-China policies). 

The AAM attempts to distract American workers away from their native corporations towards an oversea’s scapegoat.  This unholy alliance will likely end if Chinese corporations are pushed out of the U.S. market, leaving workers and corporations to battle openly over wages vs. profits.

Distraction is an especially dangerous outcome of protectionism, and especially valued by U.S. corporations in times of recession.  When workers are demanding that less money be spent for war and bank bailouts, and more for wages, job creation, education and social services, distraction becomes a crucial political ally.  Corporate dominated governments will do anything to channel this energy away from themselves, and towards foreign governments and native minorities, especially immigrants.  Trade offers corporations an invaluable resource to blind workers to domestic issues in favor of foreign scapegoats.

Recessions create yet another motivation for corporations to focus on trade issues.  Since the global economy is interconnected, recessions create an incentive for them to push the negative effects on to the corporations inside other nations, called “beggar thy neighbor” policies.  Thus, theU.S. is demanding that the Chinese raise the value of its currency, so that U.S. corporations can sell their goods cheaper in China.  Such a move would indeed boost the profits of some U.S. corporations, but the more important consequence is the distraction offered to U.S. workers.  The threats and bluffs coming from the Obama administration towards China are classic beggar thy neighbor tactics.

Any vision of “fair trade” cannot include giant corporations dominating the economy, since you cannot make fair what you do not own.  The best example of fair trade between nations today exists in Latin America, inside the trade bloc, Bolivarian Alternative for the Americas (ALBA).  Instead of “protecting” corporations from competition abroad, the ALBA countries have nationalized corporations, using them for public consumption and to trade with other nations who have nationalized goods and services.  State ownership sets ALBA apart from free-trade agreements like NAFTA and the European Union, and decisively ends the never ending debate between capitalist nations: free trade or protectionism.  Another vision of trade is possible, though not within the realms of corporate domination. 

Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (  He can be reached at [email protected]

A Luftwaffe navigator has flown into combat in the same plane as an RAF pilot for the very first time.

Sixty-five years after the end of the Second World War, the navigator climbed into a Tornado GR4 ground attack aircraft at Kandahar airbase in southern Afghanistan to provide air support for troops in Helmand province.

While some RAF colleagues did “mention the war”, as Basil Fawlty put it, they only did so in jest, according to sources.


However, what has upset British aircrew is the fact that their German counterparts in Afghanistan are earning up to £3,000 a month more for performing the same job.

The unnamed German navigator flew a series of missions with 31 Squadron during a six-week tour in December and January.

The pair’s Tornado was armed with 500lb Paveway air-to-ground bombs, Brimstone missiles and a 27mm cannon.

A British source told the Sunday Times: “No one actually said, ‘Achtung, he’s behind you!’ but all the old jokes about the war came out and there were a few laughs among the aircrew.”

However, the German navigator had “proved himself” in the job, he said.

But another source said that the Luftwaffe’s more generous pay arrangements for those serving in Afghanistan had caused “a fair amount of grumbling”.

German aircrew receive £100 a day more than their British equivalents when on tour, he said.

A Ministry of Defence spokesman confirmed the German officer had flown with 31 Squadron as part of an International Security Assistance Force (ISAF) mission.

China will remain committed to further talks aimed at resolving the Iran nuclear issue. So says the country’s Foreign Ministry following U.S. reports that Beijing is willing to back sanctions against Tehran. A veto-holding member of the Security Council, China backed three previous UN sanctions resolutions, but had been opposed to a fourth round hoping for a diplomatic settlement. To talk about what could lie ahead here is investigative journalist Webster Tarlpey.

German Easter Demos Focus on Deadly Afghan Clashes

April 5th, 2010 by Global Research

Frankfurt- Peace activists held traditional Easter protest rallies across Germany on Saturday, focusing on the latest clashes in Afghanistan, in which three German soldiers and at least five Afghan soldiers were killed.

The deaths were blamed on the government’s “cynical and short- sighted politics,” in a statement issued by the central office coordinating the Easter demonstrations. 

“Troop withdrawal must begin immediately,” the protest organizers wrote, adding that this was the only way peaceful reconstruction could take place.

At least 30 protests took place across the country – marking the 50th year of the Easter demonstrations. The peace movement also demanded the abolition of all nuclear weapons and an end to German arms exports.

An estimated 1,200 gathered for a rally in the Bavarian capital, Munich, according to the organizers. Another 500 peace activists took part in a Dusseldorf demonstration, police said. In Stuttgart, 750 people took to the streets.

A minor skirmish occurred in the eastern city of Leipzig, where six people tried to join a rally, wearing the blue helmets of the former East German FDJ youth organization. The issue was resolved when they placed stickers over the “FDJ” emblem.

At least 450 other people took part in marches, in towns including Wiesbaden, Bremen, Ramstein and Duisburg. Germany’s Easter marches date back 50 years, after starting in 1960 based on British peace activists campaigning against nuclear weapons. Since the end of the Cold War, interest in the marches has waned.

German Peaceniks Demand That US Remove Nukes

April 5th, 2010 by Global Research

Easter peace pickets outside an American airbase in Rhineland-Palatinate have called for the removal of all American nukes from German territory. They said they believed the Americans are illegally storing 20 thermonuclear devices at the base. On the 26th of March, the German Bundestag overwhelmingly sided with a pronouncement by Foreign Minister Guido Westerwelle that the Americans must withdraw nuclear weapons from Germany and also do more to bring forward universal nuclear disarmament.  

Whew. That was fast. It didn’t take long for Wall Street to figure out how to game Obama’s new mortgage modification program, did it? The plan was hyped as help for “struggling homeowners”, but it turns out, it’s just another stealth bailout for pudgy bank-execs. It’s funny, the program hasn’t even kicked in yet and, already, bigtime speculators are riffling through their filing cabinets looking any garbage paper they can find to dump on Uncle Sam. Take a look at this on today’s Bloomberg report:

“Subprime-mortgage securities are rising at an accelerating pace as the U.S. begins to encourage reductions to homeowners’ balances, which may lead to fewer foreclosures and a quicker end to the housing slump….Senior-ranked bonds tied to borrowers with poor credit will mostly benefit after the Treasury Department said for the first time it would seek to cut the size of mortgages, reducing the likelihood that loan modifications will fail, according to JPMorgan Chase & Co., Morgan Stanley and Barclays Plc. (Bloomberg)

What does it mean? It means that Obama’s mortgage modification extravaganza has touched-off a gold rush in toxic paper. Subprime securitizations, which had been worth next to nothing, are now the hottest trade on Wall Street. It’s a subprime bonanza! The investment sharpies are scarfing up all the crummy MBS they can get their hands on, because they know they can trade it in for Triple A FHA-backed loans when the program get’s going. It’s another swindle cooked up by Treasury Secretary Timothy Geithner to keep the brokerage clan in the clover. Here’s how a Wall Street veteran explained it to me:

“It looks like the investors in securitizations will be swapping underwater real estate for govt-insured paper… I think the scam here is just to provide some cover so the hedge funds and other high net worth individuals can trade their low grade paper for Triple AAA mortgages insured by the FHA at the taxpayer expense.”

That’s it, in a nutshell. The faux-foreclosure prevention program has nothing to do with helping homeowners. That’s just diversionary gibberish to confuse the public. The real objective is to create a government landfill (aka–FHA) where the banks and other financial institutions can dump their toxic MBS-sludge and walk away with gov-backed loans. Get a load of this:

(Bloomberg) — The Federal Reserve’s completion this week of its program to buy $1.25 trillion in mortgage bonds probably won’t mean significantly higher U.S. home loan rates as investors return to the market, replacing the Fed…

What we are seeing is an effective handoff occurring between the Fed and industry buyers such as banks and pension funds,” said Christopher Sebald, chief investment officer for Advantus Capital Management in St. Paul, Minnesota…

Advantus is purchasing mortgage bonds after the Fed’s program drained supply in the $5.4 trillion market.” (Bloomberg)

Of course, they’re “purchasing mortgage bonds”, because the government is going to insure them. It’s a “no brainer”. And don’t you love that expression, “a handoff”, because that’s exactly what it is. The government hasn’t stopped pumping liquidity into the system; they’ve just found another entry-point where they can push it in. Here’s how it works: The new program offers incentives to banks and other deep-pocketed investors (in mortgage-backed securities) to slash the principal on underwater mortgages which keeps people from strategic default or foreclosure. Sounds good, right? But here’s the catch: When the mortgage is refinanced, it’s converted into a FHA-backed loan which provides an explicit gov-guarantee. So, for a slight loss on the face-value of the MBS, the investors (ie–investment banks, hedgies, etc) are able to resuscitate their moribund securitizations (MBS) and reap hefty gains. It’s like taking Fido’s steaming pile on the front lawn and turning it into the Hope Diamond. Abracadabra!

Geithner has figured out how to put together a bailout that will cost taxpayers hundreds of billions of dollars without any money actually exchanging hands. The value of the putrid mortgage-paper will soar because of the gov-underwriting, and the ginormous losses won’t be realized until the mortgages start blowing up sometime in the future. That’s when FHA will be put-to-pasture along with fellow-homicide victims, Fannie and Freddie. Pretty clever, eh?

So, the cutthroat speculators and bunko artists who fleeced us all with their dogshit subprimes, have returned for another dip at the public trough. That means taxpayers will get scalped on the same investments a second time. Hey, it’s a double-whammy!

This really takes the cake. You gotta hand it to that sniveling scamster Geithner. He had his back to the wall and, presto, he extracts another rabbit from his hat. What a guy. He knew he couldn’t go begging to congress for more money, or they’d kick him to the curb. So he worked out a scam that picks up where the Fed’s $1.25 trillion quantitative easing bailout leaves off. It’s a seamless transition from one massive corporate giveaway to the next. Now the Fed has nearly $2 trillion worth of structured garbage on its balance sheet, (which it will undoubtedly dump on Fannie or Freddie) the banks are loaded with fresh reserves, and another trillion or so is earmarked for the shadow bankers who provide funding to the regulated banking system. AND IT’S ALL 100% FREE. Such a deal.

This bank/credit cabal is robbing us blind in broad daylight and no one seems to give a hoot. Maybe Barack Obama will save us from all ruin?

Fat chance!

We have an economy run on smoke and mirrors, based on the manipulation of markets. That was accomplished via the executive order signed by President Ronald Reagan in 1988 in the aftermath of the stock market collapse of October 19, 1987, known as the “President’s Working Group on Financial markets.” This order intended to be implemented during emergencies has been used to manipulate markets worldwide 24/7.

We experienced an example of this misuse of power when the Dow Jones Industrial Average rose from 6,500 to 10,900 over this past year. This rise was aided by TARP and a host of other programs that injected trillions of dollars into the economy, which, of course, the American citizen is responsible for. The result is we do not have free investment markets. A secret group led by the Federal Reserve and the US Treasury Department runs them. The SEC and the CFTC play their parts as government agencies to make sure the public doesn’t know what is going on. Another recent example is the CFTC testimony of Andrew Maguire, who informed the CFTC the date on which the market in silver was going to be manipulated by JPMorgan Chase. The manipulation occurred as outlined by Maguire and the CFTC did nothing to stop it. Thus, we have heavily manipulated markets that are part of control planning by our government in order to shape economic policy. If you happen to be on the right side of the trade it is fine. That is in this case if you are long the market. The other side of the trade is you lose as your government suppressed the gold and silver markets. You lose in a rigged market. This is the new American way. Seeing 72% of NYSE trades are black box created Wall Street wins and you lose. Better yet you just were allowed to bailout Wall Street and banking. Such a deal brought to you by the masters of the universe members of the Illuminist Skull & Bones.

Elitists believe that everything you have belongs to them because they created it are managing your financial life. A good example of that was on March 18th our President passed the most recent stimulus act, the $17.5 billion Hiring Incentives to Restore Employment Act HR 2487, which is now not only known as HIRE, but the Capital Controls Act as well. It requires foreign banks to withhold 30% of all outgoing capital flows to the Treasury and to disclose the full details of non-exempt account holders to the IRS. That is because the elitists allowed you to make that money and so they demand their 30% cut. If this demand is illegal in a foreign destination then the US government demands that the account be closed. The bottom line is if a foreign financial institution operates in the US or has a subsidiary in the US, they have to comply. That means the law is easy to get around, but the very fact that government has implemented Capital Controls is ominous.

Who do they think they are? Is there no privacy left? We also understand that those who have offices in the US must reveal all information in a foreign account in a foreign country and if that information is not forthcoming the US government demands the account be closed. Many banks will leave the US and that is understandable. Very few Americans have foreign accounts, thus this is just more harassment, and an attempt to further control the lives of Americans. As the world turns its something new monthly from government. We are averaging ten emails a day because of this and medical legislation from people who are very serious about leaving the country.

As you can see manipulation of the public masses and the market are part of official public policy, as well as of that of Wall Street. It has been for many years. We started to write on the subject in 1965. Today it is becoming public knowledge. This manipulation has become the nexus or mainstay of economic and political policy. The resultant financial policy has produced zero interest rates and more money and credit than at any time in modern history. They, the planners, expect that soon unemployment will reverse, but as yet that has not occurred, in spite of trillions of dollars being poured into G-20 countries, plus tens of trillions more in guarantees. In the US $1.5 to $2 trillion was put into financial companies, while the public was thrown a bone. Now that interest rates are rising and will continue to do so for some time to come, our master planners are getting nervous. The Fed is withdrawing funds from the system and stimulation has ended. What our geniuses are finding out are that once having achieved this withdrawal the US and world economy will start stepping back from this so-called recovery. Massive monetization has to continue to buy sovereign debt. If it is not available there are a minimum of 19 sovereign nations that will go bankrupt. America and the world haven’t gone under due to massive quantitative easing. The Fed is reducing money and credit, which is a major mistake. They are going to find there is going to be no exit.

As a result of very low interest rates investors have been attracted by high yielding junk bonds, which is a fatal mistake. Sooner or later 12 to 15 percent will go under as yields rise and bond prices fall in the future.

The ability of companies to increase earnings during a depression is via layoffs and forced productivity increases, as well as quantitative easing and stimulus. When you have 22-1/8% unemployment you have far less consumers to sell too. As this situation persists it can only be a matter of time before earnings fall.

That means that at current levels the stock market is very overpriced. The crowding out caused by sovereign debt sales is exerting tremendous pressure on bond yields and as we have said we expect the 10-year Treasury note to soon be over 4% and up to 5% over the next nine months. These events will bring the housing market to an abrupt halt. We see no way that can be halted.

What will it be, foreign governments dumping US Treasuries and other sovereign debt or a massive oversupply of such debt? Probably a combination of both. It is hard to declare a recovery when 92% of small businessmen say they as yet see no recovery and 60% say if it comes it’s 14 to 18 months away. These kinds of poll results mean less not more spending and the selling of shares and bonds. That means a higher commodity market and gold and silver prices as a place of refuge. Bond yields are telling you something is not right. The bond market speaks with a very loud voice. As we said before yields are rising, which can be viewed in an overall sense as normal. The real problem, which is getting much worse daily, is the overhang of sovereign debt and sales by formerly large Treasury buyers. Now that China has been accused as a currency manipulator and for keeping US goods out of China, I think we can expect more sales rather than buys in the future. Debt is the Achilles heel of our financial system. The yuan is strengthening. That means US imports from China will rise in price and the US will experience higher inflation. All these factors will bring a lower stock market.

Everyone on Wall Street is well aware of what the plunge protection team has been up to for a long time, No one says anything because as long as the market rises they do not care. It is a conspiracy of silence. They know the market is selling where it is because of manipulation, but they could care less. They believe the Fed will keep the 10-year note under 4%. We disagree – we will see. Irrespective to the damage to the economy they want a goldilocks economy. There has even been talk of negative interest rates. Government will pay you to borrow money to accelerate the economy and, of course, at the same time create more inflation. We wonder what Wall Street will do when more Treasury debt hits the market? It is $50 billion a week now. We cannot envision monetary tightening without a collapse. We see tariffs versus China that will grow to include the world and that has to mean Chinese sales of Treasuries. Confrontation is on the way, which means everyone is going to suffer.

While all this transpires commodities continue their relentless move upward in price as investors seek safety. Oil, copper, platinum, palladium, gold and silver look like they are headed higher. The dollar rally as we said in the last issue has run its course at 82 on the USDX and the next stop is 74. There are certainly complicating factors.

The bottom line is there will be more stimuli and quantitative easing this year, accompanied by higher inflation. If the Fed is audited 2011 will be a wild year. Hold on tight.

The Chicago Purchasing Managers Index expanded less than expected in March as it slipped to 58.8 from 62.6 in February. The experts predicted 61. The employment component of the Index edged up to 53.1 from 53. New orders fell to 61.8 from 62.2.

New factory orders rose for a 5th straight month in February. Orders for manufactured goods increased 0.6% after a 2.5% jump in January.

The MBA Purchase application Index was 6.8%. Refis fell 1.3%. The 30-year fixed rate mortgage rose 3 bps to 5.04%, the 15’s rose 1 bps to 4.34%.

Having seen so many fragile markets over the past 50 years we say to ourselves what untoward even will bring this one down? Fundamentals versus share prices are 1/3 of what they were just several months ago. Stock yields are as slim as bond yields. Richard Russell and Joe Granville tell us the market is headed lower and we agree. Not only is the stimulus induced recovery faltering, unemployment still isn’t in the plus column, banks are not lending to small companies and individuals, and the cost of money is rising. The political situation is deplorable; 81% of Americans do not trust their government and 92% of small businessmen do not see any kind of a recovery for at least 14 to 18 months. Business is not expanding and has no intention of doing so. We now have nationalized Soviet style health care that 70% of Americans do not want passed by the Democrats by unconstitutional trickery.

We ask ourselves what will trigger the coming collapse? We believe that if $500 billion in stimulus is not forthcoming and $500 billion in additional money and credit is not injected into the system that it will collapse.

Wall Street, banking and government are almost totally corrupt. The people are disgusted and are more and more angry every day. They see the US and world economy is again faltering. They see the sovereign debt crisis, especially that of the US. They know that soon America will lose its AAA sovereign debt rating because we have a government that keeps on spending and refuses to cut costs.  They know that such a course can only lead to bankruptcy. They see the beginnings of capital controls being erected and the vote buying in Congress.

The world economy is beginning to again slow as quantitative easing ends and stimulus packages of the G-20 countries run out of steam. As a result of these previous methods of propping up economies inflation is rising, as wages remain stagnant. Taxes and fees are rising as home foreclosures hit new records. The American government has veered so far to the left we can hear the laughter from Karl Marx. What is left of people’s assets is about to disappear as home prices fall further and stock and bond markets finally fall. The purging that should have taken place three years ago is upon us and the temporary antidote is more, more and credit again. There is no real growth; it is a mirage. In 50 years America’s leadership has led it to financial, economic and political suicide. We know where this is headed; we just hope this year we can stop it. If we can’t we tremble to think what the outcome will be.

The number of planned layoffs rose in March to 67,611 from February’s 42,090, says Challenger, Gray & Christmas. The first quarter saw 181,183 layoffs, which was 69% lower than the 578,510 announced in the first quarter of 2009, which was the peak of downsizing.

The US Commercial paper market fell for a third straight week, off $5.2 billion to 41,109 trillion.

The Fed’s help to big banks comes at a big cost to savers.

In February 2006, when Ben Bernanke was first sworn in as chairman of the Federal Reserve, the federal-funds target rate stood at 4.5%. That same year, the average yield on a one-year certificate of deposit was 5.4%. A retiree who diligently saved for a lifetime and had amassed a nest egg of $100,000 could count on an added $5,400 in retirement income per year. That may not sound like much to the average Wall Street Journal subscriber, but for a senior on fixed incomes that extra money improved the quality of his life.

Today’s average rate for an identical one-year CD is roughly 1.3%. On the same nest egg, that retiree will now get annual payout of just $1,300—a 76% decline in four years.

To put the scale of this problem in context, consider the fact that more than $7.5 trillion in American household wealth is held today in short-term, interest-bearing products such as checking and savings accounts, retail money funds and CDs. At today’s low interest rates, the return on those savings is hundreds of billions less than it would have been at 2006 interest rates. Retirees feel the consequences disproportionately, but because much of that income would have made its way into the economy, spending and job creation also suffer.

Never say never. Treasury Secretary Timothy Geithner broke that cardinal rule last week when he said a ratings downgrade “will never happen to this country.”

Yet his remark, made during an ABC TV interview, reflects fears that at times swirl through the market, fears that the U.S. government could indeed lose its coveted AAA rating. Because of heightened concern about unsustainable long-term obligations in Medicare, Medicaid and Social Security, the ratings agencies Moody’s, Standard Poor’s and Fitch all recently opined about the possibility of a downgrade one day.

Companies in the U.S. unexpectedly cut payrolls in March, according to data from a private report based on payrolls.

The 23,000 decline was the smallest in two years and followed a revised 24,000 drop the prior month, data from ADP Employer Services showed today. Over the previous six months, ADP’s initial figures have overstated the Labor Department’s first estimate of private payroll losses by as little as 2,000 in February to as much as 151,000 in November.

Companies are still hesitant to add workers until they see sustained sales gains and are convinced the economic recovery has taken hold. Economists surveyed by Bloomberg News anticipate the government’s report April 2 will show payrolls increased by 184,000, in part due to temporary hiring by the federal government to conduct the 2010 census and because of better weather compared with February.

“Just because things are getting better tomorrow doesn’t mean that things are good today,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the report. “Weak labor markets remain the single- biggest risk to economic growth for the coming years.”

The ADP figures were forecast to show a gain of 40,000 jobs, according to the median estimate of 35 economists surveyed by Bloomberg. Projections ranged from a loss of 20,000 to a 100,000 gain.

A nonstop airline ticket from New York to Paris on the first weekend in May costs $1,142. A Continental Airlines Inc. flight to attend Berkshire Hathaway Inc.’s annual shareholder meeting in Omaha, Nebraska the same weekend: $1,433.

As investors have been making plans to attend the event that Berkshire’s chairman, Warren Buffett, calls the “Woodstock for capitalists,” airlines including Continental and Delta Air Lines Inc. have been raising prices for the weekend of the meeting. They’re asking four times the normal rate for round trip tickets, which means New Yorkers will pay more to visit Omaha for the May 1 meeting than London, Rome or Barcelona.

Continental has added one flight from the New York area on April 29 and three on April 30, said Mary Clark, a spokeswoman for the airline. Attendees who bought tickets earlier paid less for their seats, she said. Now, the Houston, Texas-based company is demanding a premium for the spots that remain.

“There does appear to have been high demand,” Clark said. “Since many of those fares have already been sold and there are very few seats left, the seats that are left are at the higher fares.”

Dan Fuss, whose Loomis Sayles Bond Fund beat 95 percent of competitors in the past year, says Bill Gross got it right by forecasting declines for U.S. Treasuries.

U.S. 10-year yields will rise past 4 percent next year as the government sells record amounts of debt, from 3.86 percent today, Fuss said in an interview from Tokyo on Bloomberg Television. “Bonds have seen their best days,” Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said last week on Bloomberg Radio.

“I agree with what Bill is saying but I don’t go to the degree that he does,” Fuss said. “I do think very strongly that we will soon see — soon being next year sometime — the start of a long, gradual rise in interest rates in the U.S. and in other parts of the world.”

Treasuries headed for their first monthly loss this year on concern President Barack Obama’s attempts to sustain economic growth by borrowing unprecedented amounts will overwhelm demand. The U.S. can’t ignore the effect of the growing federal deficit on Treasury yields, Federal Reserve Bank of Dallas President Richard Fisher said yesterday. [We are projecting 5%, not 4%. The crowding out effect is going to be enormous.   The Federal Reserve supposedly has ended quantitative easing if that in fact is the case rates could hit 5% by the end of the year on the 10-year US T-note. We believe that if more stimuli, perhaps $500 billion, is not forthcoming, and that the Fed does not inject another $500 billion in quantitative easing, then the economy will collapse. Bob]

It’s Official – America Now Enforces Capital Controls  

March 18, with very little pomp and circumstance, president Obama passed the most recent stimulus act, the $17.5 billion Hiring Incentives to Restore Employment Act (H.R. 2487), brilliantly goalseeked by the administration’s millionaire cronies to abbreviate as HIRE. As it was merely the latest in an endless stream of acts destined to expand the government payroll to infinity, nobody cared about it, or actually read it. Because if anyone had read it, the act would have been known as the Capital Controls Act, as one of the lesser, but infinitely more important provisions on page 27, known as Offset Provisions – Subtitle A—Foreign Account Tax Compliance, institutes just that. In brief, the Provision requires that foreign banks not only withhold 30% of all outgoing capital flows (likely remitting the collection promptly back to the US Treasury) but also disclose the full details of non-exempt account-holders to the US and the IRS. And should this provision be deemed illegal by a given foreign nation’s domestic laws (think Switzerland), well the foreign financial institution is required to close the account. It’s the law. If you thought you could move your capital to the non-sequestration safety of non-US financial institutions, sorry you lose – the law now says so. Capital Controls are now here and are now fully enforced by the law.

By the end of 2010, about half of all commercial real estate mortgages will be underwater, said Elizabeth Warren, chairperson of the TARP Congressional Oversight Panel, in a wide-ranging interview on Monday.

“They are [mostly] concentrated in the mid-sized banks,” Warren told CNBC. “We now have 2,988 banks—mostly midsized, that have these dangerous concentrations in commercial real estate lending.”

As a result, the economy will face another “very serious problem” that will have to be resolved over the next three years, she said, adding that things are unlikely to return to normalcy in 2010.

Meanwhile, the U.S. Treasury on Monday pledged to sell its 7.7 billion Citigroup shares this year, a step that further reduces the government’s influence on the banking giant. Warren said she is having difficulty getting clarity on Citigroup’s business plans.

“This is a cake that is still being baked,” she said of the company’s plans. “[Citi's CEO] Vikram Pandit said he was going to shrink the company by 40 percent…and Citi’s numbers keep moving around so much I don’t know.”

Speaking on troubled mortgage lenders, Warren said it’s time for the government to “pull the plug” on mortgage lenders Fannie Mae and Freddie Mac.

“I’m one of those people who never liked public-private partnership to begin with. I think what they did was use public when public was useful and private when private was useful,” she said. “And I think we’ve got to rethink that whole thing.”

“There is no implicit guarantee anymore,” she added. “I don’t care how big you are, if you make serious enough mistakes, then your business can be entirely wiped out.”

California took in 3.9 percent more since December than projected in January, Controller John Chiang said this month. New York got $129 million above forecasts in its budget year through February. In New Jersey, the second-wealthiest state per capita, January sales-tax collections were 1.9 percent higher than a year earlier, the first annual increase in 19 months, forecasters said in a report last month.

The good news about sales tax receipts increasing is tempered by these factors: 1) Y/y comparisons are very easy because the nadir of the financial crisis was January thru March 2009; 2) Sales tax rates have been hiked; 3) Tax rebates and tax refunds have been a prime driver of activity; and 4) Q1 and Q2 are expected to be the peak of economic activity for 2010.

Morgan Stanley: Remarkably, American households are now receiving more in cash benefits from the government than they’re paying in taxes.  In short, they’re getting the government for ‘free’.  Finally paying what it’s worth…but clearly unsustainable in a macro sense.  [It’s the ‘free lunch’ recovery.]

Despite widely publicized indications that the economic tide has turned and a recovery is under way, new consumer polling data show that eight out of ten U.S. supermarket shoppers see no improvement in the economy, and forty percent say things have actually gotten worse in recent months.     

Asked whether the economy has changed over the past few months, 40% said conditions were worse, while another 42% said things have stayed the same.  Fewer than one in five felt the economy had improved, The Chicago Purchasing Management Index for March declined from 62.6 to 58.8.  The production component declined 5 points; and New Orders declined 0.5 to 61.8.  Perhaps the inventory overhang is starting to have an effect…Employment increased 0.1.

More than 500,000 readers of the company’s free Daily E-letter were asked a single question: Are you more open to moving outside the United States than you were 12 months ago?  A stunning 95.6% of those who responded said they were now more willing to make the move and leave the U.S.

On March 18, 2010, the President signed the Hiring Incentives to Restore Employment Act (HIRE Act), and once again payroll becomes center stage for tax relief.  The HIRE Act provides two new tax benefits for certain 2010 new hires.  First, employers may qualify for exemption from the employer’s share of Social Security tax for most 2010 wages for certain new employees hired after February 3, 2010 (a similar exemption applies to Railroad Retirement Taxes).  Second, an employer may claim an additional general business tax credit of $1,000 per qualified worker.  As the IRS works out the details on the applicable wages and how to take advantage of the relief, a summary of the relief is set forth in the attached memo.  

The strategic framework and the correlation of forces in the Gulf of Guinea — one of the most significant and growing energy resource regions of the world — is changing rapidly. A new era in security arrangements for the region is beginning.

The region is moving from an area of low technology defense and security systems, and minimal command and control at national levels, to one of growing sophistication, higher mobility, and the potential for military confrontation.

The five-year, $250-million Equatorial Guinea maritime security program – essentially the build-up of an integrated naval and air capability – announced on February 24, 2010, signalled the start of a re-defined strategic architecture in West Africa . It has brought a coherent military-security framework into life, highlighting issues which are vital to the welfare of the regional states in a way in which some earlier boundary disputes were not.

Given the strategic maxim that military planning must be based to a large degree on the capabilities, rather than the stated intent, of neighboring or competing states, the move by Equatorial Guinea serves as a focus for response and activities by regional strategic planners. Capabilities take years to develop; intent can change in moments. This means that Equatorial Guinea ’s neighbours must address changing realities.

Gen. Ashfaq Kayani, Pakistan ’s Chief of Army Staff, is fond of saying that it takes 30 years to develop an army up to corps level, whereas political realities can change a nation’s intent overnight. This means that defense planners must develop capabilities over the long term to be ready for any rapidly-emerging eventuality. In the Gulf of Guinea context, the Equatorial Guinea Government of Pres. Brig.-Gen. (rtd.) Teodoro Obiang Nguema Mbasogo, has, in fact, been quietly shaping its defense capabilities over the past few years, particularly as its offshore energy assets come on stream and produce revenue surpluses. This has given Equatorial Guinea profoundly more wealth than, say, two decades ago. As well, the offshore Equatorial Guinea oil and gas producing areas are often contestable — or at least close enough to cause friction — with neighbors ( Gabon , Nigeria , Cameroon ).

Equatorial Guinea , too, has often had a fractious relationship with its major neighbor, Nigeria , even though Malabo has depended on Abuja for subsidies and even military training and security coverage.

Equatorial Guinea’s contract with the MPRI subsidiary of the US defense corporation, L3, made public in late February 2010 (but actually shaping up well before that), highlights the reality that Equatorial Guinea intends to be a major player in Gulf of Guinea security; that it has the capacity to influence sea lane security to and from Nigeria and Cameroon; and that it will not be a passive participant in the region. A number of incidents have occurred in recent years to indicate that Equatorial Guinea forces – components of the Guardia Nacional de Guinea Ecuatorial (GNGE) – will take aggressive action with regard to what they feel might be penetrations or violations of Equatorial Guinea ’s sovereign space or economic zone.

Part of this activist stance is based on the reality that there is – or has been – no cohesive and professional command and control structure in place in Equatorial Guinea , other than personal links between arbitrarily-ranked colleagues of Pres. Obiang, all of who are ethnic Fang, as is the President. The ranking of the Minister of Defense, Antonio Mba Nguema, and the Vice-Minister of Defense, Anthonio Ndong, as a lieutenant-generals, for example, is arbitrary when the total manpower strength of the GNGE is only in the neighborhood of 3,500, including a significant number of foreign nationals in key slots (such as aircrew and maintenance). The rank of lieutenant-general implies command of a corps-sized unit, or an Army, with numbers in the region of 20,000 or more.

The substance of the latest agreement with MPRI/L3, however, is significant, especially as MPRI – which is undertaking the latest Equatorial Guinea military expansion – had been called in, at the insistence of the then US Administration of Pres. Bill Clinton, in 2000 to “democratize” and “professionalize” the Nigerian Army, even while it was working on a contract initiated with Equatorial Guinea in 1998 to help train the Equatorial Guinea military. The MPRI training package with the Nigerian Army did not go well, especially as the Nigerian Army had just emerged from successfully fighting a range of wars and peacekeeping operations in Africa with few resources and yet remarkable success.

[Lt.-Gen. Victor Leo Malu, the Nigerian Chief of Army Staff, questioned MPRI’s plan to reduce the size of the Nigerian military from 100,000 to 50,000, and MPRI’s need to have access to sensitive military information. GIS/Defense & Foreign Affairs has first-hand knowledge that the then-Nigerian Government of Pres. Olusegun Obasanjo was warned at the time, by external advisors, that MPRI had questionable capabilities and motives, as well as ill-suited background, for training the Nigerian Army, and the Nigerian Government was warned as well of MPRI’s legally questionable rôle in providing actual combat operational command to Croatian forces engaged in ethnic cleansing in the Krajina area of what is now Croatia, during the Yugoslav break-up in the 1990s. Nonetheless, Pres. Obasanjo, unwilling to alienate the Clinton Administration, dismissed Gen. Malu rather than resist the MPRI demands.]

Now, however, MPRI is engaged in helping a state which has, arguably, potential concerns with Nigeria , making it difficult for MPRI to re-engage in Nigeria , even if the Nigerian Army was so inclined.

But the new MPRI/L3 initiative with Equatorial Guinea is – as its title suggests – maritime-oriented. Even though the MRPI contract with Equatorial Guinea was announced in March 2010, the company was recruiting for former US military personnel in December 2009 to meet the contract. It sought personnel in security, search and rescue, detainee processing, information technology, logistics/maintenance, and administration, with hirings to begin in “the early months of 2010”. Experience in maritime security, with a background of employment in the US Navy or Coast Guard was desired, along with some trainer skills.

L3’s announcement on February 24, 2010, was that MPRI had been awarded a $58-million firm-fixed-price task order with the Government of Equatorial Guinea to establish a Maritime Security Enhancement Program (MSEP). This task order was the first part of a multi-year contract, with a potential value of approximately $250-million. The MSEP was designed to provide nationwide coastal surveillance coverage for Equatorial Guinea .

Jim Jackson, general manager for MPRI’s International Group, noted: “This important contract award represents a strategic opportunity to contribute not only to the vital maritime security of Equatorial Guinea , but also provides a thoughtful approach toward establishing long-term stability for the entire region.”

The MSEP contract envisions completion of a surveillance site network and operations centers in Equatorial Guinea within three years. This would be followed up by two years of sustainment and maintenance support for an estimated contract total of five years.

In fact, the emphasis of the contract – given the hiring pattern – implies a greater emphasis on physical security, rather than merely the integrated surveillance system, although that is clearly part of the program. GIS/Defense & Foreign Affairs sources in Malabo said that new Equatorial Guinea program would include AIS (automatic identification system), radar, and command and control. The program could expand to include L3’s Raytheon/Beech King Air-based aerial surveillance systems, as well as light patrol vessels. MPRI was also to train oil workers in anti-piracy tactics as part of the contract.

Significantly, the new Government of Nigeria under Acting Pres. Goodluck Jonathan is known to have begun looking at an integrated national surveillance and response system, linked through a command and control function with all the Armed Services, the Intelligence Community (IC), Police and Customs. The concept had been proposed a year earlier, but the Government of Pres. Umaru Musa Yar’Adua was even then becoming paralyzed politically for a number of reasons.

Equatorial Guinea , Nigeria , Gabon , and São Tomé and Príncipé all recognize that they have common security threats, quite apart from any potential friction between them, and with other neighbors such as Cameroon (with which Nigeria recently concluded a difficult dispute over the sovereignty of the Bakassi Peninsula ).

Freedom Onuoha, a research fellow at the African Centre for Strategic Research and Studies at the National Defence College in Abuja, writing in African Security Review, Vol. 17, No. 3, published by the South Africa-based Institute for Security Studies in 2008, cited a “recent study commissioned by Royal Dutch/Shell” as saying that between 100-million and 250-million barrels of oil was stolen each year by bunkerers or vandals, putting the cost, at an average US$60 a barrel, at around US$15-billion a year. This was, he said, in addition to other costs to the Nigerian State due to oil pipeline sabotage, and other related activities. As well, the Nigerian Government Inter-agency Maritime Security Task Force on Acts of Illegality in Nigerian Waters (IAMSTAF) was told on December 5, 2008, by President of the Nigerian Trawler Owners Association (NITOA), Mrs Margaret Orakwusi, that the rising spate of piracy, sea robberies, poaching, bunkering, and other illegal operations in Nigeria’s territorial waters and seas (with the exception of illegal oil bunkering in the Niger Delta region) have cost the country more than N25-billion in less than four years. Mrs Orakwusi told the task force that the country’s fishing industry had witnessed at least 293 documented sea robberies and pirate attacks between 2003 and 2008, which she said had culminated in loss of lives and destruction of vessels and trawlers.

Significantly, and without any increase in budget, the Nigerian Navy literally “bootstrapped” its way back into a reasonable operational capability over recent years, rebuilding ships which had been thought to have been beyond salvage. As a result, and without fanfare, the Nigerian Navy has re-emerged as a factor in the Gulf of Guinea region.

Nigeria , however, faces a far greater challenge than Equatorial Guinea . Its coastline and offshore facilities are in a far more complex situation than those of Equatorial Guinea , and the volume of facilities, pipelines, and traffic are far greater. Moreover, Nigeria continues to address a militant, armed opposition force – MEND: the Movement for the Emancipation of the Niger Delta – which has fractured into a number of groups in the oil- and gas-producing Niger Delta region. Acting Pres. Jonathan, as a former Governor of Bayelsa state, one of the major energy-producing Niger Delta states, is highly aware that the legacy of his brief Administration (until the April 2010 Presidential elections) must be to address and bring under control the Niger Delta crisis.

Whereas the Equatorial Guinea forces have been growing, commensurate with the financial surpluses generated by energy exports, the Nigerian Defence Forces have faced growing constraints. Former Pres. Olusegun Obasanjo, although once a military head-of-state in Nigeria and a former Army general, had, as an elected President, fully embraced the US Clinton Administration’s view that the Nigerian military should be suppressed and kept on a reduced budget. Even so, the Nigerian Armed Forces, as with the Navy’s example, were able to adapt to the situation.

The new security paradigm, however, implies that the Nigerian Government will now be forced to act rapidly if it is to contain its own security concerns and also retain its dominance of the Gulf of Guinea . The Nigerian National Security Advisor during the Obasanjo Administration, Lt.-Gen. (rtd.) Aliyu Mohammed Gusau (who is now back in that role with the Jonathan Administration) successfully draft the framework for a Gulf of Guinea Commission to begin developing offshore security modalities from the immediate Gulf of Guinea region down to Angola and South Africa.

Abuja may now need to revive that, while it also deals with its own approach to development a strategic asset protection program to safeguard pipelines, installations, sea routes, and so on. This will be significantly larger in scale and in conceptual thinking than the Equatorial Guinea approach.

But, as noted above, Equatorial Guinea has expanded its military capabilities considerably in recent years, relying heavily on foreign contractors and mercenary military personnel. During the past decade, the Guardia Nacional de Guinea Ecuatorial (GNGE)’s Naval Division has obtained two lightly-armed (Typhoon G mounting of an Oerlikon 20mm cannon with electro-optical guidance) 24.8m (LOA) Shaldag Mk.II fast patrol vessels (acquired 2005) from Israel Shipyards Ltd.; the Air Wing has obtained at least two new Enstrom 480B Guardian turbine helicopters which are used on maritime duties (delivered 2007); the Air Wing has also acquired a steady supply (now totaling six) of Ukraine-surplus Mil Mi-24V Hind helicopter gunships (deliveries in 2001, 2004, and 2007), and at least one Mil Mi-172 utility helicopter; the Air Wing has also obtained four Su-25 strike aircraft variants (two Su-39s, Su-25TM second generation variants, transferred from Ukraine and possibly carrying Kopyo (Russian: Spear) radar for air-engagement combat, along with RVV-AE/R-77 air-to-air missiles, and Kh-31 and Kh-35 anti-shipping missiles), along with two Su-25UB trainers. The Air Wing also obtained one Antonov An-32 twin-turboprop VIP transport, which was lost, with all hands, in April 2008; it has two Czech Aero L-39 advanced jet trainer/strike aircraft, and possibly one An-26 transport aircraft. The Presidential flight has one Agusta A109 VIP helicopter, a Dassault Falcon 50 and/or a Falcon 900, a Yak-40 executive jet, and the one Mi-172 helicopter, and an Embraer ERJ145EP executive jet. Virtually all of these rely on foreign aircrew and maintenance personnel, and mostly operate from Malabo airfield, where the bulk of the Air Wing operates.

One helicopter, at least, is based at the airfield at Bata, the northernmost of the two major towns on the mainland coast.

Much of the Equatorial Guinea hydrocarbon wealth has been derived from fields around Bioko Island , the seat of Government and the capital, Malabo . However, the mainland region — until recently fairly neglected apart from its timber resources — borders at the Atlantic on areas claimed by Cameroon and Gabon . A dispute between Cameroon and Equatorial Guinea over an island off the mouth of the Ntem River in Cameroon remains unresolved. A dispute with Gabon over sovereignty over the Gabon-occupied Mbane area and its associated islands is under United Nations mediation. The potential for disputes over rights to the coastal waters remains high, and could lead to confrontation in the oil and gas producing Corisco Bay area.

Equatorial Guinea faces a significant geographic challenge to its limited, albeit growing, maritime and air forces. It is a challenge which can only be met through the application of tight coordination and high technology. As well, it will require significant support from Equatorial Guinea ’s very limited policy planning and diplomatic resources. Indeed, the lack of forward-looking planning and diplomatic resources makes the likelihood of clashes over disputed areas and assets more likely, particularly if accidental or provocative cross-border movements by neighbors stimulate reaction by Equatorial Guinea forces.

[Significantly, Bioko, the main island territory of Equatorial Guinea , and Río Muni , the mainland territory, were never historically a single country. Spain, which was the colonial power controlling both territories, brought the two areas under a single administration, as two provinces, in 1956. The United Nations asked Spain , in 1963, to grant independence to the provinces, and this was done in 1968. At the time, Spain did not wish to give separate independence to each of the two provinces, because Madrid was in the throes of attempting to push Britain into handing Gibraltar over to Spanish control. To have allowed self-determination in Bioko and Río Muni separately was perceived to have opened the door to Britain allowing the Gibraltans to entertain a separate vote on whether to opt for Spain or opt for sovereign independence. The Fang population, which now controls Equatorial Guinea , is from Río Muni, and has gradually subordinated and reduced the Bioko population, comprised mostly of Bubi ethnicity. Some Fang migration to Bioko began in 1924, when a labor shortage caused the Catholic Church to indent workers from the mainland for cocoa production. The Fang migrants proved unsuitable, but a significant Fang population remained on Bioko .]

Nigeria, by contrast, has a more concentrated area of concern around the Niger Delta, but still has a large exclusive economic zone (EEZ) to monitor — as does Equatorial Guinea and Cameroon— with regard to illegal fisheries. But the Nigerian situation has greater challenges because of the complexity of the onshore energy assets, including pipelines, coupled with an historical pattern of ethnic and political differences, both within the Niger Delta region and with regard to the Delta states’ relationship with the Nigerian Federation.

Nigeria , unlike Equatorial Guinea, has developed a defense and security framework over five decades of independence and a century of modern military structures as a component of the British military system. The current dynamic, however, has been characterized by rising capabilities and ambitions by the Equatorial Guinea forces, and severely constrained capabilities in the Nigerian Armed Forces due to budgetary constraints and Continent-wide military responsibilities in peacekeeping.

Nigeria has, in the past decade, begun a process of using technology in its civil sector – particularly telecommunications – to leapfrog moribund and paralyzed structures. Nigeria’s revived approach to integrated, national-level real-time security intelligence coupled to command and control would, if it is adopted, help re-assert Abuja’s strategic leadership in the region. Despite its population size — at around 150-million – Nigeria has, like most sub-Saharan African states, devoted relatively little of its GDP to defense.

The following comparative statistics [derived from World Bank and GIS/Defense & Foreign Affairs archives] — while not entirely like-for-like — are significant in helping shape a balanced view of the region:

Cameroon: Population est. (2008) 18.9-million; GDP (2008) $23.4-billion; Defense expenditure (2001) $211.1-million.

Equatorial Guinea: Population est. (2008) 660,000; GDP (2008) $18.53-billion; Defense expenditure (2004) est. $126.2-million.

Gabon: Population est. (2008) 1.45-million; GDP (2008) $14.43-billion. Defense expenditure (1996) $91-million.

Nigeria: Population est. (2008) 151.32-million; GDP (2008) $212.08-billion; Defense expenditure (2007) $979.3-million.

São Tomé and Príncipé: Population est. (2008) 160,000; GDP (2008) $170-million; Defense expenditure (2004) est. $126.2-million.

These are static snapshots, and do not reflect the dynamics of the region, the respective economic potential versus overhead responsibilities of each society, or the relative inertia of each government, but they do indicate latent capability to some extent. What is emerging, because of the evolving discovery and exploitation of hydrocarbon deposits in the region, is a more strategically mobile and competitive framework. Many of the old boundary issues, as well as the prospect for the movement of societies as a result of wealth opportunities (not evenly distributed), mean that stability can no longer be guaranteed.

A more competitive regional environment, in which very tangible economic resources such as hydrocarbon deposits are at stake, coupled with growing wealth, will demand the kind of increasing reliance on technological solutions to security challenges which are now beginning to emerge.


Analysis from GIS sources in Malabo and elsewhere in the region.


This article was written by Philip H. de Leon for 

Iran’s Foreign Ministry Spokesman Ramin Mehmanparast says Tehran’s international conference on nuclear disarmament has been widely welcomed. 

According to Mehmanparast, the conference dubbed “Nuclear energy for all, nuclear weapons for none,” will be held in Tehran on April 17th and 18th. 

“Officials from various countries, international organizations, and non-governmental organizations have been invited to attend the conference,” the Iranian spokesperson added. 

Iran’s Ambassador to the International Atomic Energy Agency (IAEA) Ali Asghar Soltanieh said that senior officials form the International Atomic Energy Agency (IAEA) and the Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) will also attend the disarmament summit. 

“The conference has been widely welcomed by all countries,” he went on to say. 

Mehmanparast further pointed out that all the countries in the world have the right to use peaceful nuclear energy. 

“We believe the world must be free from nuclear weapons,” he asserted. 

Earlier, Mehmanparast had urged the countries which possess nuclear weapons to destroy their atomic armaments. 

“We insist that all countries must be committed to nuclear disarmament,” he said early February. 

Russia has supplied 15 batteries of S-300 long range surface-to-air-missile systems to China, ITAR-TASS reported Friday. According to an official with the national defense sector this is an unprecedented contract both in terms of sales volume and in numbers of serial production. He added that such an ambitious task has been implemented within a given term. All the supplied S-300 systems will be used for the defense of the Chinese cities of Beijing and Shanghai. An upgraded S-300 surface-to-air missile system is capable of hitting ballistic short range missiles and also fixed land targets.     

Hundreds Detained in Belgian Anti-Nuclear Protest

April 4th, 2010 by Global Research

BRUSSELS — Belgian police on Saturday detained hundreds of anti-nuclear activists protesting in and outside a military base where nuclear weapons are believed to be stored, rally organisers said.

A spokesman for the protestors said 300 people demonstrated near Kleine Brogel base not far from the Dutch border while more than 800 protesters tried to storm the police-protected military area.

Police put the total number of demonstrators at around 700.

“At this stage police has given the figure of 360 detained, registered and held in custody at aircraft hangars at the base,” said Benoit Calvi, spokesman for the Belgian non-government organisation Action for Peace.

Belga news agency quoted a police spokesman as saying that 270 people were detained.

Public prosecutors have warned that anyone trying to enter the base would be prosecuted.

Police officers arrested the demonstrators outside the base while those who breached the barbed wire enclosure were held by the military, said Calvi.

The Kleine Brogel demonstration was part of Europe-wide protests putting pressure on governments in NATO countries about to revise the alliance’s strategic concept.

The stockpiling of nuclear warheads at the northern Belgian base has never been officially confirmed but experts believe that they are part of the B61 nuclear bombs stockpiled in five NATO countries — Belgium, Germany, Italy, the Netherlands and Turkey.

Belgian Prime Minister Yves Leterme said in February his country wanted a world free of nuclear weapons and was promoting this position inside NATO.

US President Barack Obama’s administration has vowed to make “dramatic reductions” in its nuclear arsenal as part of a national review.

MEXICO CITY — A delegation of top-ranking Bolivian officials will visit Moscow on April 26 for talks on energy, military and industrial cooperation, Bolivian President Evo Morales has said.

“The delegation will include heads of leading ministries, who are to discuss and sign intergovernmental agreements with their Russian colleagues,” Morales said after returning to La Paz from the Venezuelan capital, Caracas, where he met with Russian Prime Minister Vladimir Putin.

“We take as a premise that Russia should return to Latin America, and that is why [we] are positively seeking to expand diplomatic, economic, and trade relations with Moscow,” the Bolivian leader said.

After the meeting with Putin, which was initiated by the Bolivian side, Morales told journalists thatMoscow had agreed to lend Bolivia $100 million to buy Russian helicopters to help tackle drug trafficking.

He also said considerable progress had been made in enhancing bilateral cooperation in the energy sphere.

The Russian prime minister arrived in Venezuela on Friday for talks on a range of issues including military-technical cooperation and joint business projects primarily in the energy sphere.

After talks with Venezuelan President Hugo Chavez, Putin said Russia was ready to grant Venezuela a $2.2-bln loan, which Chavez had requested during his visit to Moscow last year.

The prime minister also said Russia would continue deliveries of military equipment to Venezuela to help the Latin American country boost its national defense.


VIDEO: Israel: An Apartheid State

April 4th, 2010 by Rami El Harayri

This short video documents the Apartheid System imposed by the state of Israel including the crimes committed against the Palestinian people.  

Two stories this week prove once again that torture is unnecessary and counter-productive for obtaining intelligence.

First, according to the Washington Post, the CIA’s top spy – Michael Sulick, head of the CIA’s National Clandestine Service - said :

The spy agency has seen no fall-off in intelligence since waterboarding was banned by the Obama administration. “I don’t think we’ve suffered at all from an intelligence standpoint.”

Second, after repeatedly torturing a supposed “senior Al Qaeda” leader and key player in 9/11, the government now admits that he had no knowledge or role in 9/11, and wasn’t even affiliated with Al Qaeda.

Real men don’t torture.

I cinque stati nuclear non dichiarati

April 4th, 2010 by Prof Michel Chossudovsky

Turchia, Germania, Belgio, Olanda e Italia sono Potenze Nucleari? 

Secondo una recente relazione, l’ex Segretario Generale della NATO George Robertson ha confermato che la Turchia possiede da 40 a 90 armi nucleari “Made in USA” nella base militare di Incirlik. ( 

Significa che la Turchia è una potenza nucleare? 

“Lungi dal rendere l’Europa un posto più sicuro e dal creare un’Europa meno dipendente dal nucleare, [la strategia] potrebbe tranquillamente avere come risultato quello di introdurre più armi nucleari nel continente europeo, frustrando così alcuni dei tentativi che si stanno compiendo per ottenere un disarmo nucleare multilaterale” (citazione dall’ex Segretario Generale della NATO George Robertson su “Global Security” del 10 febbraio 2010). 

“L’Italia è in grado di sferrare un attacco termonucleare?… 

Sarebbero in grado Belgio e Olanda di sganciare bombe a idrogeno sul bersaglio nemico?… 

Le forze aeree tedesche non potrebbero forse essere istruite per gettare bombe 13 volte più potenti rispetto a quella che ha distrutto Hiroshima? 

Le bombe nucleari vengono conservate in basi aeree dislocate in Italia, Belgio, Germania e Olanda – e gli aerei di ciascuno di questi paesi sono in grado di trasportarle” (“Cosa Fare in merito alle Testate Nucleari Segrete dell’Europa”[1], Times Magazine, 2 dicembre 2010) 

Gli Stati Nucleari “Ufficiali” 

Cinque Paesi, ovvero America, Inghilterra, Francia, Cina e Russia, sono considerati “stati nucleari” (NWS), “uno status riconosciuto a livello internazionale e attribuito dal Trattato di Non Proliferazione Nucleare (TNP)”. Altri tre Paesi “non-TNP” (ovvero non firmatari del TNP) cioè India, Pakistan e Corea del Nord, hanno ammesso di possedere armi nucleari. 

Israele: “Stato Nucleare Non Dichiarato” 

Israele è definito come “stato nucleare non dichiarato”. Produce e dispiega testate nucleari puntate contro bersagli militari e civili nel Medio Oriente, Teheran compresa. 


Giravano diverse voci, supportate da prove poco consistenti, sul fatto che l’Iran potesse in futuro diventare uno stato nucleare. Di conseguenza, un attacco nucleare preventivo a scopo difensivo sull’Iran finalizzato a distruggere il suo programma di armi nucleari inesistenti potrebbe davvero essere preso in considerazione “per rendere il mondo un posto più sicuro”. I principali mezzi di comunicazione abbondano di opinioni improvvisate sulla minaccia nucleare iraniana. 

E allora anche i cinque “stati nucleari non dichiarati” europei, ovvero Belgio, Germania, Turchia, Olanda e Italia possono rappresentare una minaccia? 

Belgio, Germania, Olanda, Italia e Turchia: “Stati Nucleari Non Dichiarati” 

Se la capacità in termini di armi nucleari dell’Iran non è confermata, quella di questi cinque stati, comprese le procedure di distribuzione, sono ufficialmente risapute. 

Gli Stati Uniti hanno fornito circa 480 bombe termonucleari B61 a cinque cosiddetti “stati non nucleari”, compresi Belgio, Germania, Italia, Olanda e Turchia. Casualmente ignorata dal Comitato di Supervisione Tecnica delle Nazioni Unite, con sede a Vienna (IAEA), l’America ha contribuito attivamente alla proliferazione delle armi nucleari nell’Europa occidentale. 

Come parte di questa riserva europea la Turchia, che è inserita assieme a Israele nella coalizione capitanata dall’America contro l’Iran, possiede circa 90 bombe termonucleari B61 bunker buster [2], conservate presso la base aerea nucleare di Incirlik (National Resources Defense Council, Nuclear Weapons in Europe , Febbraio 2005) 

Secondo la definizione ufficialmente riconosciuta, queste cinque nazioni sono “stati nucleari non dichiarati”. 

La riserva e l’uso dei missili tattici B61 in questi cinque “stati non nucleari” sono concepiti per bersagli localizzati in Medio Oriente. Inoltre, secondo i “piani d’attacco della NATO”, queste bombe termonucleari B61 bunker buster (conservate dagli “stati non nucleari”) potrebbero essere lanciate “contro bersagli che si trovano in Russia o in paesi del Medio Oriente, come Siria o Iran” (tratto da National Resources Defense Council, Nuclear Weapons in Europe, febbraio 2005) 

Forse questo significa che l’Iran o la Russia, che sono dei bersagli potenziali di un attacco nucleare da parte dei cosiddetti stati non nucleari, dovrebbero prendere in considerazione una tattica difensiva fatta di attacchi nucleari preventivi contro la Germania, l’Italia, il Belgio, l’Olanda e la Turchia? La risposta è ovviamente no. 

Mentre questi ‘stati nucleari non dichiarati’ accusano senza troppi problemi Teheran di progettare armi nucleari, senza alcuna prova documentale, essi stessi sono nelle condizioni di poter sganciare testate nucleari che hanno come bersaglio l’Iran. Dire che questo è un chiaro esempio di “doppio standard” da parte dell’IAEA e della “comunità internazionale” è sarcastico. [Clicca per Vedere i Dettagli e la Mappa delle Strutture Nucleari che si trovano nei 5 “Stati Non Nucleari” d’Europa]

Le riserve di armi sono composte da bombe termonucleari B61. Tutte le armi sono bombe di gravità del tipo B61 –3, -4 e –10. 

Queste valutazioni si basano su affermazioni private e pubbliche rese da una serie di fonti governative e su ipotesi riguardanti la capacità di stoccaggio di armi nucleari di ciascuna base. (National Resources Defense Council, Nuclear Weapons in Europe, Febbraio 2005) 

Germania: Produttore di Armi Nucleari 

Dei cinque ‘stati nucleari non dichiarati’ la “Germania è il paese più fortemente nuclearizzato, con tre basi nucleari (due delle quali pienamente operative) e una capacità di stoccaggio di almeno 150 [bombe B61 bunker buster]” (Ibid.). Secondo i “piani d’attacco della NATO” sopra citati, queste armi nucleari tattiche hanno anch’esse come bersaglio il Medio Oriente. 

Se la Germania non è ufficialmente catalogata come potenza nucleare, d’altro canto essa produce testate nucleari per la marina francese. Conserva testate nucleari (prodotte in America) e ha la capacità di sganciare armi nucleari. Inoltre, la ‘European Aeronautic Defense and Space Company – EADS’, una joint venture franco-tedesco-spagnola, controllata dalla Deutsche Aerospace e dal potente Gruppo Daimler, è la seconda produttrice di materiale militare in Europa, fornendo i missili nucleari M51 alla Francia. 

La Germania importa e distribuisce armi nucleari dagli Stati Uniti. Produce inoltre delle testate nucleari che vengono esportate in Francia. Tuttavia, è classificata come stato non nucleare. 

Articoli Correlati: Rick Rozoff, NATO’s Secret Transatlantic Bond: Nuclear Weapons In Europe, Global Research, 4 dicembre 2009. 

[1] Titolo originale “What to Do About Europe’s Secret Nukes”, NdT. 
[2] Per dettagli, si rimanda a  (NdT) 
Titolo originale: “Europe’s Five “Undeclared Nuclear Weapons States” Are Turkey, Germany, Belgium, The Netherlands and Italy Nuclear Powers? “ 
Traduzione per  a cura di RACHELE MATERASSI

Redazioneonline- Gli Speciali Della Redazione

Tittle-tattles regarding the possibility of a military strike against Iran are being renewed these days. President Obama, to whom I still wonder why the Nobel Peace Prize has gone, is confessing that former President Bush was right in his belief that Iran poses a serious threat to the international community; Russia is cowardly retreating from its position, joining the rest of world’s tyrannical powers who favor the imposition of new sanctions against Iran; fueled up by Israel and AIPAC, American corporate media are laying the groundwork to prepare the public opinions forcefully, convincing them that Iran is the most dangerous country in the Middle East and should be disarmed as soon as possible, otherwise, it may attack Israel to wipe it off the map.

All of what’s happening right now resonates with the developments which we’ve been a witness to two years before the invasion of Iraq. New York Times is exactly replaying the unpleasant scenario it had devised to convince us that the late dictator Saddam Hussein has had Weapons of Mass Destruction. History is being repeated once again and Iran is now subject to a backbreaking, multilateral psychological warfare in addition to the previously-running economic embargo. The very fact that Iran is still standing on its own feet demonstrates the powerful will and strong capability of this nation; however, what’s really happening behind the scenes? What will happen if U.S. or its Middle East subordinate, Israel, attack Iran?

Who made Saddam out of Saddam?

Even a 7-year-old child could simply distinguish that Saddam Hussein, who was deplorably executed by the U.S. in 2006, was a marionette of the very same United States that waged and imposed the 8-year proxy war on the newborn Iran of post-revolution days, taking the life of more than 350,000 people human beings relentlessly. Comically, this is the very same United States that perpetually drums its commitment to “human” rights and brands the other countries human right violator. Weren’t those 350,000 Iranian people human beings?

In his 1991 book “The Death Lobby: How the West Armed Iraq”, Kenneth R. Timmerman implies that U.S. should have sought a new puppet in the Middle East once its crony, Mohammad Reza Pahlavi, was ousted overnight by the Iranian people who could not tolerate their country being a pawn of the foreign powers: “Islamic revolution in Iran upset the entire strategic equation in the region. America’s principle ally in the Gulf, the Shah, was swept aside overnight, and no one else on the horizon could replace him as the guarantor of U.S. interests in the region”. So they sought refuge in Iraq’s dictator and promised to support him unconditionally, provided that the dictator also sticks to his pledge of paralyzing the Iranian revolution.

In 1982, Iraq was suddenly removed from the U.S.-fabricated list of State Sponsors of Terrorism, demonstrating the falsehood and baselessness of the list. At the outset, nobody figured out that what could lead a country to be qualified to the list of States not-Sponsoring Terrorism at once; however, everything made known progressively.

President Ronald Reagan dispatched Donald Rumsfeld as his special envoy to Saddam Hussein so as to restore ties with the former “State Sponsor of Terrorism”. Two cordial meetings between Rumsfeld and Saddam took place in 1983 and 1984 where they reached different agreement over the supports U.S. would provide to Iraq as to the artilleries, ballistic missiles, aviation facilities and intelligence services. Iraqi troops received tactical battlefield advice and advanced military training along with unconventional warfare schemes which were exclusive to U.S. Department of State doctrine of defense.

However, United States did not even spare sending chemical weapons to Iraq so as to be dropped on the roofs of human beings’ houses. This was another representation of United States’ commitment to human rights. In May 1994, a report by the U.S. Senate Banking Committee disclosed that “pathogenic (disease producing), toxigenic (poisonous), and other biological research materials were exported to Iraq pursuant to application and licensing by the U.S. Department of Commerce.”

A British expert of biological weapons and former UN inspector of chemical weapons to Iraq, David Kelly, confirmed that “Iraq purchased 8 strains of anthrax from the United States in 1985″.

Anyway, U.S. did whatever it was capable of, in order to fortify and strengthen a dictator who could never foresee, even in his dreams that will be shortly eradicated by the very people with whom he shook hands affectionately.

A 2003 May report by the “LA Weekly” published a list of 41 American companies that assisted Saddam in his mission to destroy Iran and bring down the Islamic Revolution which ended in the elimination of a U.S.-backed king. Interestingly, Caterpillar Inc, Hewlett-Packard, IBM, Carl Zeiss and Phillips Exports were among these companies that the LA Weekly listed.

As an instance, NRM Corp. “supplied $3,310,485 worth of tire-manufacturing machines and $950,000 worth of presses and accessories to Iraq’s State Establishment for Heavy Engineering Equipment”. One may wonder whether Saddam could have practically employed all of the facilities, apparatuses and facilities he received from a total of 150 foreign companies, introduced by the German newspaper “Die Tageszeitung”; however, the conclusion might be that the Western world consciously elevated Saddam to the position of an invincible and indomitable tyrant and then decided to being him down all at once.

The story of Iran

Iran is a different country. It endeavors to maintain its difference and distinctiveness. Iranian people don’t need a foreign supremacist to decide for them. Even if a devastating civil war happens in Iran and different political groups quarrel with together severely, they won’t for good seek refuge in foreign saviors to help them, because the history of Iran’s developments demonstrates the fact that foreign powers have not ever come to Iran with goodwill and pure intention. A relentless enemy which is already busy with the bloodshed it has mounted in Palestine possesses 200 nuclear warheads that are targeted towards Iran while the “human rights” activists continue keeping silent.

Iran is a country of peace. Literature and culture is intertwined with every piece of Iranian citizen’s life. Iran is home to one of the world’s ancient civilizations along with Roman Empire and Hellenic Empire. I’m personally opposed to any kind of weaponry; whether it’s chemical, nuclear whatsoever. If all of the countries in the world put their military and armed forces aside, no war will take place and nobody will lose his life; however, we all now that such austere statements can be exclusively the ambitions of a primary school student who sees his surrounding word with the eyes of innocence and purity. If Israel’s “right of existence” and “right to self-defense” is important, then Iran’s right of “peace and tranquility” is important, as well.

As John Pilger implies in his recent article, go and seek the nuclear stockpiles of Israel, not Iran, because you don’t find anything of worth in the nuclear power plants of Iran; nevertheless, if you are adventurous and are highly interested in excitement, Israel has much more to offer to you.

Although Egypt’s heir apparent Gamal Mubarak says next year’s election “is going to be free and fair,” his father Hosni’s regime has tightened the election laws to block other contenders to his presidency, an American magazine says.

Mubarak senior has also used the odious Emergency Law to jail five of the 16 leaders of the Muslim Brotherhood in the past year and is imprisoning secular critics as well. People are afraid to speak out, much less run for office. Gamal Eid, executive director of the Arabic Network for Human Rights Information, told Joshua Hammer of The New Yorker magazine that “Hundreds of bloggers are being summoned, kept for days, or weeks, or months, and then released.” One blogger, Mosaad Abu Fajr, who ripped the government’s human-rights abuses against Bedouins, has been imprisoned since 2007 and Kareem Amer, who mockingly referred to boss Hosni as a deity, is serving a four-year term for his joke.

Enacted in 1981, the Emergency Law “has been used to jail thousands of people without charges,” Hammer writes, and bans public gatherings of more than five people without prior official permission. This makes it nearly impossible for opponents of the dictatorship to fill the streets with protesters in a show of support. And just so his political opponents get the message, Mubarak’s regime jailed Ayman Nour, a lawyer who finished second in the farcical 2005 presidential election. Nour, whose “fraud” conviction bars him from running again, was freed last year ahead of schedule perhaps because of U.S. pressure (Washington gives the Egyptian dictatorship $2 billion a year).

Even as the U.S. says makes a show of calling for fair elections in Egypt, its CIA has rendered suspects there without due process of law for interrogation and likely torture by electro-shock. Egypt is one of 28 countries that detain U.S. suspects from its bogus “War on Terror.”   

In an article called “The Contenders” in the April 5 issue, Nour tells Hammer Gamal’s succession would be a “catastrophe.” “It will kill democracy. It will encourage the militant groups to become even more militant, because the regime is illegitimate,” Nour says.

One formidable threat to a Mubarak dynasty is Mohamed ElBaradei, the former director general of the International Atomic Energy Agency and winner of the Nobel Peace Prize. “His international stature and his reputation for integrity have made him an appealing symbol in a country where forty per cent of the population lives on less than two dollars a day, and where anger with Mubarak’s regime is growing,” The New Yorker’s Hammer observes. “The gap between rich and poor is widening dramatically,” ElBaradei told him.

ElBaradei’s reputation was earned in part from standing up to Bush administration lies that Iraq’s dictator Saddam Hussein was developing nuclear arms. ElBaradei was to later term the U.S. invasion of Iraq “a glaring example of how, in many cases, the use of force exacerbates the problem rather than solving it.” ElBaradei also was widely praised for urging Libya to dismantle its nuclear program as part of his campaign against nuclear proliferation. For good measure, his long-standing opposition to Israel’s nuclear arsenal might not be lost on Egyptian voters, should he run. “This is not really sustainable that you have Israel sitting with nuclear weapons capability there while everyone else (in the region) is part of the non-proliferation regime,” ElBaradei remarked during his tenure at the watchdog agency. Foreshadowing a nuanced diplomatic stance he might take if ever he were to get elected president, ElBaradei said, “I don’t think it’s a matter of p;ressure. It’s a question of providing Israel with a credible alternative that they are better off without nuclear weapons.” 

Hala Mustafa, an Egyptian academic, told Hammer that ElBaradei enjoys “wide appeal—he can attract supporters from different backgrounds, and different generations, which gives him more leverage than any other figure. He doesn’t look like someone who has been co-opted by the regime.” However, Mustafa called El Baradei’s ambitions for democratizing Egypt unrealistic against “a real state machine.” She said, “Even ElBaradei himself, unless he gathers a huge number of people into the streets, can’t succeed.”

Asked if he felt ready to serve as Egypt’s president, Gamal Mubarak told Hammer, “in the last nine years, my social and political exposure has given me a better understanding of the issues, of the problems that average citizens feel.” He added, “The government must show people that we are making a difference in their daily lives. And then we have to organize, mobilizing our activists, and supporters. This is our focus. Any talk beyond that, about 2011, is simply premature.”

The world’s focus, however, will be on Egypt to see if the presidential campaign  under the Mubarak regime is indeed going to be “free and fair.” If it conducts next year’s elections the way it ignores the rule of law and runs its prisons, there’s little hope of it.”

Sherwood Ross, an award-winning journalist who formerly reported for the Chicago Daily News  and wire services, is an American publicist and free-lance writer. Reach him at [email protected].

In the tragic situation which confronts humanity, we feel that scientists should assemble in conference to appraise the perils that have arisen as a result of the development of weapons of mass destruction, and to discuss a resolution in the spirit of the appended draft.

We are speaking on this occasion, not as members of this or that nation, continent, or creed, but as human beings, members of the species Man, whose continued existence is in doubt. The world is full of conflicts; and, overshadowing all minor conflicts, the titanic struggle between Communism and anti-Communism.

Almost everybody who is politically conscious has strong feelings about one or more of these issues; but we want you, if you can, to set aside such feelings and consider yourselves only as members of a biological species which has had a remarkable history, and whose disappearance none of us can desire.

We shall try to say no single word which should appeal to one group rather than to another. All, equally, are in peril, and, if the peril is understood, there is hope that they may collectively avert it.

We have to learn to think in a new way. We have to learn to ask ourselves, not what steps can be taken to give military victory to whatever group we prefer, for there no longer are such steps; the question we have to ask ourselves is: what steps can be taken to prevent a military contest of which the issue must be disastrous to all parties?

The general public, and even many men in positions of authority, have not realized what would be involved in a war with nuclear bombs. The general public still thinks in terms of the obliteration of cities. It is understood that the new bombs are more powerful than the old, and that, while one A-bomb could obliterate Hiroshima, one H-bomb could obliterate the largest cities, such as London, New York, and Moscow.

No doubt in an H-bomb war great cities would be obliterated. But this is one of the minor disasters that would have to be faced. If everybody in London, New York, and Moscow were exterminated, the world might, in the course of a few centuries, recover from the blow. But we now know, especially since the Bikini test, that nuclear bombs can gradually spread destruction over a very much wider area than had been supposed.

It is stated on very good authority that a bomb can now be manufactured which will be 2,500 times as powerful as that which destroyed Hiroshima. Such a bomb, if exploded near the ground or under water, sends radio-active particles into the upper air. They sink gradually and reach the surface of the earth in the form of a deadly dust or rain. It was this dust which infected the Japanese fishermen and their catch of fish. No one knows how widely such lethal radio-active particles might be diffused, but the best authorities are unanimous in saying that a war with H-bombs might possibly put an end to the human race. It is feared that if many H-bombs are used there will be universal death, sudden only for a minority, but for the majority a slow torture of disease and disintegration.

Many warnings have been uttered by eminent men of science and by authorities in military strategy. None of them will say that the worst results are certain. What they do say is that these results are possible, and no one can be sure that they will not be realized. We have not yet found that the views of experts on this question depend in any degree upon their politics or prejudices. They depend only, so far as our researches have revealed, upon the extent of the particular expert’s knowledge. We have found that the men who know most are the most gloomy.

Here, then, is the problem which we present to you, stark and dreadful and inescapable: Shall we put an end to the human race; or shall mankind renounce war? People will not face this alternative because it is so difficult to abolish war.

The abolition of war will demand distasteful limitations of national sovereignty. But what perhaps impedes understanding of the situation more than anything else is that the term “mankind” feels vague and abstract. People scarcely realize in imagination that the danger is to themselves and their children and their grandchildren, and not only to a dimly apprehended humanity. They can scarcely bring themselves to grasp that they, individually, and those whom they love are in imminent danger of perishing agonizingly. And so they hope that perhaps war may be allowed to continue provided modern weapons are prohibited.

This hope is illusory. Whatever agreements not to use H-bombs had been reached in time of peace, they would no longer be considered binding in time of war, and both sides would set to work to manufacture H-bombs as soon as war broke out, for, if one side manufactured the bombs and the other did not, the side that manufactured them would inevitably be victorious.

Although an agreement to renounce nuclear weapons as part of a general reduction of armaments would not afford an ultimate solution, it would serve certain important purposes. First, any agreement between East and West is to the good in so far as it tends to diminish tension. Second, the abolition of thermo-nuclear weapons, if each side believed that the other had carried it out sincerely, would lessen the fear of a sudden attack in the style of Pearl Harbour, which at present keeps both sides in a state of nervous apprehension. We should, therefore, welcome such an agreement though only as a first step.

Most of us are not neutral in feeling, but, as human beings, we have to remember that, if the issues between East and West are to be decided in any manner that can give any possible satisfaction to anybody, whether Communist or anti-Communist, whether Asian or European or American, whether White or Black, then these issues must not be decided by war. We should wish this to be understood, both in the East and in the West.

There lies before us, if we choose, continual progress in happiness, knowledge, and wisdom. Shall we, instead, choose death, because we cannot forget our quarrels? We appeal as human beings to human beings: Remember your humanity, and forget the rest. If you can do so, the way lies open to a new Paradise; if you cannot, there lies before you the risk of universal death.


WE invite this Congress, and through it the scientists of the world and the general public, to subscribe to the following resolution:

“In view of the fact that in any future world war nuclear weapons will certainly be employed, and that such weapons threaten the continued existence of mankind, we urge the governments of the world to realize, and to acknowledge publicly, that their purpose cannot be furthered by a world war, and we urge them, consequently, to find peaceful means for the settlement of all matters of dispute between them.”

Max Born

Percy W. Bridgman

Albert Einstein

Leopold Infeld

Frederic Joliot-Curie

Herman J. Muller

Linus Pauling

Cecil F. Powell

Joseph Rotblat

Bertrand Russell

Hideki Yukawa

The U.S. economy added 162,000 jobs in March, but the unemployment rate held steady at 9.7 percent, according to new figures released by the Labor Department Friday. 

On the whole, the economic news was mixed, but for African Americans, it was particularly troubling. The unemployment rate for whites held steady at 8.8 percent compared to February and went down for Asians from 8.4 percent to 7.5 percent. But it rose to 16.5 percent for blacks from 15.8 percent. Hispanics showed a slight increase as well from 12.4 percent to 12.6 percent. 

“It’s very disappointing,” said Peter Edelman, a former Clinton administration official who directs the Center on Poverty, Inequality, and Public Policy at the Georgetown University. 

While there have long been disparities in white and minority employment, Edelman said, the latest unemployment numbers from the Labor Department show that while “some white people got jobs, some black people and Latinos actually fell behind more.” 

“We’re seeing a whole set of things happening in the recession that are making the inequity worse,” said Seth Wessler, a researcher at the Applied Research Center, a racial justice think tank in Oakland. 

Chief among those factors are the massive cuts meted out to public services on the state and local level, particularly to public transportation. 

“If the bus line you depend on is cut, it’s impossible to look for a job or even hold onto the one you have,” Wessler said, “and we know that across the country – from New York to Los Angeles – bus service is being cut and fares are increasing.” 

“We know that people of color are much more likely to depend on public transportation,” he added. “White people are not being impacted in quite the same way.” 

Edelman of Georgetown University believes the primary source of the job gap is the type of work that is emerging as the economy recovers: “mid-skilled” jobs in the health care and alternative energy sectors. 

“There will be job growth. The question is who gets the job,” Edelman said. 

“The jobs that we project over the next decade that are reasonably well paying involve a degree of skills and a degree of preparation,” he added, “and people of color have disparate educational attainment,” and will be less able to land that work without an associates degree or certificate from a local community college. 

President Obama recognizes this, Edelman said, and included a $10 billion investment in community colleges as part of his health care package, but the amount was slashed down to just $2 billion as part of the “reconciliation” process between the House and Senate versions of the bill. 

Other efforts at major federal job training and employment programs have floundered in Congress because of Republican opposition, Edelman said, and Obama has not done enough to overcome it. 

Minority communities will likely see an increase in the coming months as the Census Bureau hires 700,000 enumerators who help count the U.S. population, said Heidi Shierholtz, a labor economist at the Economic Policy Institute in Washington. 

But those jobs will be gone by the fall and Shierholtz believes unemployment will be on the rise again in the fourth quarter of 2010. The latest unemployment figures from the Labor Department show that more than 400,000 Americans have been out of work for more than six months and have joined the ranks of the “long-term unemployed.” 

“I don’t think we’ve turned the corner,” she said, “and we will not turn the corner until early next year.”

What Do the New Unemployment Numbers Mean?

April 3rd, 2010 by Washington's Blog

What do the new BLS numbers - 162,000 nonfarm jobs added in March – mean?

Barry Ritholtz provides a very useful summary:

Let’s break down the highlights into the good and bad:

• Average Hourly Earnings of all employees NFP fell by 2 cents, or 0.1%.
• Unemployment rate is unchanged at 9.7% (no improvement this month)
• U6 Unemployment, the broadest measure, rose to 16.9% –that’s off of the December 2009 peak of 17.3, but higher than January (16.5%) and February (16.8%) of 2010.
• Long-term unemployed (jobless for 27 weeks+) increased by 414,000 to 6.5 million. (bad)
• 44.1 percent of unemployed persons were jobless for 27 weeks +. (Also very bad)
• Involuntary part-time workers increased to 9.1 million in March. (This remains a stubborn problem area)

• +162k is the best report since March, 2007.
• Average workweek was up by 0.1 hour to 34.0 hours in March.
• Temp help services added 40,000 jobs in March. That’s a cumulative add of 313k since September 2009.
• Census added “only” 48,000 workers — far below the 100-150k consensus. This pushes their hiring out into the rest of the year.
• Civilian Labor Force Participation Rate at 64.9% edged up in March
• Manufacturing continued to trend up (+17,000); Mfr added 45,000 jobs in Q1.
• Revisions: January 2010 data was revised upwards 40k (from-26k to +14k); February was revised up 22k (from -36k to -14k).

Stone-McCarthy points out that – if we subtract the temporary hiring of census workers, better weather and birth-death model adjustments – we’re left with a netloss of 67,000 jobs.

Indeed, Goldman Sachs attributes the job gain as “due mainly if not entirely to census hiring and weather rebound”, finds “little underlying improvement”, and says that “productivity gains have diminished sharply”.

Mish gives a detailed analysis on the jobs report, concluding:

The official unemployment rate is 9.7%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

It reflects how unemployment feels to the average Joe on the street. U-6 is 16.9%.

Looking ahead, there is no driver for jobs. Moreover, states are in forced cutback mode on account of shrinking revenues and unfunded pension obligations. Shrinking government jobs and benefits at the state and local level is a much needed adjustment. Those cutbacks will weigh on employment and consumer spending for quite some time.

Expect to see structurally high unemployment for years to come.

All things considered, this report looks OK on the surface, and horrendous underneath.


For background, see this.

Caracas, Apr 2 (Prensa Latina) Russian Prime Minister Vladimir Putin arrived Friday in Caracas to preside over the signing of a set of cooperation agreements with his Venezuelan and Bolivian peers Hugo Chavez and Evo Morales, which will strengthen Moscow”s strategic relations with these two Latin American countries.

Russian and Venezuelan officials plan to sign new agreements for energy projects in Venezuela, as well as industrial, commercial and agriculture projects. There is, too, an agreement to set up a Russian-Venezuelan development bank to finance oil and gas exploration in Venezuela’s Orinoco river basin.

Chavez also reiterated that Russia will help Venezuela develop nuclear energy plan he has mentioned previously that has yet to take shape. Russia has also offered to help Venezuela set up its own space industry, including a satellite launch site.

Moscow and Caracas are studying, too, the establishment of a joint oil company that will begin producing 50,000 oil crude barrels daily this year and has growth prospects.

President Chavez, who welcomed Putin at the airport, underlined the importance of extending collaboration to sectors as agriculture, education, fishing, infrastructure, transport and health.

The relations between both countries have outstandingly increased since Chavez’ first trip to Russia in 2001.

Putin and Evo Morales, meanwhile, are expected to discuss their own joint venture for gas and oil exploration in Bolivia, which has the second largest natural gas reserves in Latin America.

In Moscow last February, Morales and President Dmitri Medvedev signed a memorandum on energy cooperation to develop a gas pipeline network in the land-locked South American nation.

Medvedev at the time also told Morales he hoped Russia would soon deliver a batch of military helicopters, its first defense hardware for the Andean republic.

With Putin, Morales plans to discuss a credit of 100 million dollars for the Bolivian army.

Besides, Morales will assess with Chavez to close a trade deal, said his spokesman Ivan Canelas. The two countries have already signed eight agreements on energy, agriculture-livestock, rural development, higher education, social development, education, sports, health and security cooperation.

Mass Graves Used to Cover-Up Atrocities in Colombia

April 3rd, 2010 by Daniel Kovalic

The biggest human rights scandal in years is developing in Colombia, though you wouldn’t notice it from the total lack of media coverage here. A mass grave – one of a number suspected by human rights groups in Colombia – was discovered by accident last year just outside a Colombian Army base in La Macarena, a rural municipality located in the Department of Meta just south of Bogota. The grave was discovered when children drank from a nearby stream and started to become seriously ill. These illnesses were traced to runoff from what was discovered to be a mass grave – a grave marked only with small flags showing the dates (between 2002 and 2009) on which the bodies were buried.

According to a February 10, 2010 letter issued by Alexandra Valencia Molina, Director of the regional office of Colombia’s own Procuraduria General de la Nacion – a government agency tasked to investigate government corruption – approximately 2,000 bodies are buried in this grave. The Colombian Army has admitted responsibility for the grave, claiming to have killed and buried alleged guerillas there. However, the bodies in the grave have yet to be identified. Instead, against all protocol for handling the remains of anyone killed by the military, especially the bodies of guerillas, the bodies contained in the mass grave were buried there secretly without the requisite process of having the Colombian government certify that the deceased were indeed the armed combatants the Army claims.

And, given the current “false positive” scandal which has enveloped the government of President Alvaro Uribe and his Defense Minister, Juan Manuel Santos, who is now running to succeed Uribe as President, the Colombian Army’s claim about the mass grave is especially suspect. This scandal revolves around the Colombian military, recently under the direction of Juan Manuel Santos, knowingly murdering civilians in cold blood and then dressing them up to look like armed guerillas in order to justify more aid from the United States. According to the UN High Commissioner for Human Rights, Navi Pilay, this practice has been so “systematic and widespread” as to amount to a “crime against humanity.”

To date, not factoring in the mass grave, it has been confirmed by Colombian government sources that there have been 2,000 civilians falling victim to the “false positive” scheme since President Uribe took office in 2002. If, as suspected by Colombian human rights groups, such as the “Comision de Derechos Humanos del Bajo Ariari” and the “Colectivo Orlando Fals Borda,” the mass grave in La Macarena contains 2,000 more civilian victims of this scheme, then this would bring the total of those victimized by the “false positive” scandal to at least 4,000 –much worse than originally believed.

That this grave was discovered just outside a Colombian military base overseen by U.S. military advisers — the U.S. having around 600 military advisers in that country — is especially troubling, and raises serious questions about the U.S.’s own conduct in that country. In addition, this calls into even greater question the propriety of President Obama’s agreement with President Alvaro Uribe last summer pursuant to which the U.S. will have access to 7 military bases in that country.

The Colombian government and military are scrambling to contain this most recent scandal, and possibly through violence. Thus, on March 15, 2010, Jhonny Hurtado, a former union leader and President of the Human Rights Committee of La Cantina, and an individual who was key in revealing the truth about this mass grave, was assassinated as soldiers from Colombia’s 7th Mobile Brigade patrolled the area. Just prior to his murder, Jhonny Hurtado told a delegation of British MPs visiting Colombia that he believed the mass grave at La Macarena contained the bodies of innocent people who had been “disappeared.”

Daniel Kovalik is a labor and human rights lawyer working in Pittsburgh, Pa.

Many things have been said about the Greek crisis in recent weeks, most of them obnoxious and confusing [1]. These stories result in an argument that is aimed for export to all developed countries. The media has extensively incorporated the official message, which could be divided into 5 chapters:

1) Greece cheated to hide “unsustainable” public debt;

2) The country is on the verge of defaulting on their debt, as well as other countries in the euro area; 

3) The European Union can not help but sympathize and even encourage the adoption of austerity measures and ask for the Mediterranean country to be placed under a trusteeship; 

4) Greece must take austerity measures to reduce its fiscal deficit;

5) The crisis in developed countries means the need for a widespread adoption of austerity plans of the same nature.

We therefore need to decode the ideological message intended, as a matter of fact, to all the peoples of the North.

Greece cheated to hide “unsustainable” public debt

Yes, without doubt and this reveals a State plagued by corruption and backdoor arrangements between friends. It seems clear today that Goldman Sachs, through the use complex arrangements (swaps) and credit derivatives, enabled the Greek government to reduce its notional debt by more than 2 billion euros by means of an invisible loan [2]. This practice allowed Greece to enter the Euro zone. There is also evidence that the successive governments since 2001 decided to look the other way on this issue.

But Greece is not the only country in the euro area that has done so. There is a storm of hypocrisy on the matter. 

In 1996, Italy used swaps with JPMorgan to artificially reduce its deficit. Afterwards, Berlusconi sold for 10 billion euros the entrance fees of national museums to a financial corporation, which in exchange received 1.5 billion euros per year for 10 years. France, issued bonds in 2000 and included the repayment of the interest at the end of a period of 14 years. In 2004, Goldman Sachs and Deutsche Bank have completed a financial package for Germany called “Aries Vermoegensverwaltungs”. Germany thus borrowed at rates well above the market, just to avoid that the debt ended showing up in the public accounts [3].

Placing in context the “unfathomable abyss” of Greece

Greece would have a deficit of 12.7% of GDP, and not of 6% as announced by the previous government, and a public debt of 115% of GDP, but if we compare to other countries, there is nothing that justifies the panic cries. The cost of servicing the debt, which was 14% of GDP in 1993, is now 6%! The position of the accounts of the Greek State is certainly far from equilibrium, but it is less tarnished when compared to other northern countries.

Table 1: Public Debt as a % of GDP





Growth after 2007


































































Euro Zone






            *Estimation; ** Prevision; Source: Eurostat

            Note: For Finland, the rate of growth is calculated on the base of the year 2008

Neither the European Commission, Eurostat or even the rating agencies, have lessons to give to Greece!

After 2001, the European Commission could not be unaware of the unreliability of the accounts presented by Greece. It only had to look at the accounts of the central government to measure the permanent deficit of the budget of the Greek state, to observe the multiplication of armament orders, to assess the cost of Olympics 2004 and to compare them with the budgetary resources and reserves held by the Greek Central Bank to understand that the official debt (made presentable to join the euro zone) was not  that which was announced. It could not be unaware of this situation but in fact did nothing to denounce it.

The integration of Greece into the euro area was necessary for the Commission for political and geo-strategic reasons. The top advocates for the acceptance of Greece in 2001 were, France (2nd armament supplier of the country) and Germany. Banks in both countries now hold 80% of the Greek debt.

As regards Eurostat, no lessons to be given either

According to Bloomberg, Eurostat was perfectly aware of this operation. It is also in the name of good accounting rules that the EU statistical agency dismisses the outstanding public debt, after the billions of euros given to banks without compensation as part of the different bailout programs (SEC decision in June 2009). Eurostat is the same, which allows to avoid the incorporation of the loans of the State into the stock of public debt (“great debt” in France, borrowing Greek and Portuguese). And yet the taxpayers (those who do not benefit from tax cuts to the wealthy) have to pay these sums one way or the other.

As for the rating agencies, how reliable are they?

They have a pretty questionable credibility, as they were the ones who gave a triple-A rating to the subprime securities issued by Lehman Brothers, just 3 days before its bankruptcy.

These same “clairvoyant” agencies are extremely powerful and do as they please on financial markets, including on those unregulated known as OTC (Over The Counter Derivatives) or the toxic markets in which agents buy insurance against the risk of default, CDS (Credit Default Swaps). They are closely related to Anglo-Saxon banks (including Goldman Sachs and Citibank). 
These agencies do not work with a crystal ball, but with the abundant data provided by the issuer of the loan or the intelligence provided by the market of specific financial products. In our case, the agencies have downgraded the bonds after the change in the sentiment of the majority of the market, once the Greek government itself provided new data.

2) Greece is on the verge of defaulting on their debt just like other countries in the euro area

The message has a primary function: that of increasing interest rates (risk premiums) and thus the profits of lenders (including Goldman Sachs and hedge funds). The bonds issued by Greece were traded with an interest rate of 6.40%, which is double what a creditor could expect in this area. It should be noted that this bond for 5 billion euros, received at the moment of its initial issuance, 3 times the initial offer [4]. Beautiful contradiction from the part of financial markets regarding a country considered being “on the verge of default”.

The dominant ideology has a tendency to compare the situation of the state budget with that of a household or a business, which makes no sense. One state, unlike a household or a business, always has the possibility to increase its revenue through taxes. It is this fact, coupled with a quite higher life expectancy, the essential difference and the reason that makes this comparison absurd. The U.S. state has existed for 221 years and accumulated debt since 1837, or 173 consecutive years [5].

The second reason behind this alarmist discourse is to prepare public opinion to accept a path towards social regression and austerity. The Greek government also has discretion to conduct a thorough reform of the tax system in order to eliminate tax breaks and social gifts for the wealthy as well as taxing capital income and rent; in short, the freedom to increase its tax revenue in order to eliminate the budget deficit. This is a matter of political choice, which the PASOK (Greek Socialist Party) didn’t choose because it agrees with the basic premises of neoliberalism: the Greek world is and must remain a neoliberal economy market! For several decades, the public policies followed by successive governments have increased fiscal deficits and the stock of public debt. Joining the euro area (2001) has only amplified this phenomenon. (See Tables 2, 3 and 4 below).

Table 2: Comparison of the Fiscal Policies, Greece and EU 27

Fiscal Revenues as % of GDP

Max. Legal Tax on Earnings

Corporate Tax


EU Average


EU Average


EU Average






















Variation 2007/2000







Source: Eurostat

Table 3: Fiscal Deficit as % of GDP






















Euro Zone











Source: Eurostat

Table 4: Public Debt as % of GDP






















Source: Eurostat

3) The European Union can not help but sympathize and even encourage the adoption of austerity measures and ask for the Mediterranean country to be placed under a trusteeship;

The European Central Bank (ECB) does not have the right to lend to states! Whereas the European Central Bank lent heavily to the banks in 2008-2009 to save them from bankruptcy, it is not allowed to do the same with regards to the public authorities of the Member States. It’s a shame.

Is important to note that Article 123 of the Treaty of Lisbon stipulates the rules out the ECB and central banks of Member States from undertaking “direct acquisitions [from public authorities, other bodies or public companies of Member States ] of debt instruments”.

So, no “direct” acquisition of government debt (and no help to states) but at the same time preferential loans are granted to banks which are required to use as a collateral… securities obligations of States (including the Greek state!). Beautiful hypocrisy the one allowed by this mechanism of the Lisbon Treaty.

The European Investment Bank, which amorality is well known in developing countries [6], cannot finance the deficit Greek? On paper, it’s true. But as a matter of fact, it funds many dubious investment projects which increase the deficit and the rising public debt such as the 2004 Olympics whose total cost is still unknown (estimated between 20 and 30 billion euros).

4) Greece must take austerity measures to reduce its fiscal deficit

This is where the proponents of economic capitalism and financial want to arrive at! On the alleged reason of a public debt deemed as unsustainable, the government imposes an unprecedented dose of austerity for its people in the name of fiscal consolidation: an end to stimulus measures, a freeze on civil service salaries in 2010, reduction by 10% of bonuses and 30% of overtime work in the public service, 10% decrease of public spending of which 100 million euros are comprised by reduction in education expenses and hospital costs, 2 years lengthening of the age of retirement which passes thus to 63 years, hiring freezes, reduction of CSD in the public, raising taxes on fuels, tobacco, cell phones, 2 percentage point raise in the VAT…

And EU wants some more! It requires structural reforms that affect all jurisdictions, the liberalization of goods, labor flexibility, comprehensive reforms of pensions and health …

Conservatively speaking, it is a 15% unemployment arte and a contraction of at least 7.5% of GDP, which awaits the Greek people in the short term, according to estimates by Deutsche Bank.

Yet, other internal budgetary solutions exist!

The expected savings of the austerity plan are in the order of 5 billion euros. Other choices are however possible! Greece is the country of the EU whose military expenditures are the largest as a share of GDP. They reached 9.642 billion dollars in 2006 [7]. In 2008, Greece spend 2.8% of its GDP on defense and this figure does not include the totality of the military expenditure [8]. This considerable burden on the state budget primarily benefits the defense industries of the U.S. and Europe. 

Greece also has the world’s No. 1 commercial fleet with more than 4 000 vessels that drain each year almost 6 billion euros in VAT rates from the Greek state through advantageous mechanisms.

The majority of the large employers have transferred their assets to offshore companies in Cyprus (where they face a tax rate of 10%). The Orthodox Greek church is tax exempt, even though is the National Champion of real state property ownership.

Greek banks have received 28 billion euros of public funds under the bailout without any compensation, and now they speculate against the public debt with impunity. Therefore the resources exist to follow a different path!

To acquire these resources requires a thorough reform of taxation but the PASOK government, serving the capitalists, decided to leave things as they are. They prefer to make the poor pay in order to stay in the euro area, even though this membership in the name of “free and undistorted competition”, is the source of deregulation and loss of national sovereignty.

5) The crisis in developed countries means the need for a widespread adoption of austerity plans of the same nature.

In all developed countries, governments and the media repeat the same message. Whether is in Portugal where the government has launched a vast program of privatization of the public services; in Spain, which is entangled in a housing crisis, and where the rate of unemployment around 20%; in Ireland, whose budget deficit is close to that of Greece,; in Italy, which holds the EU record with a national debt of 127% of its GDP or the United Kingdom whose deficit now exceeds 14.5%.

Other European countries are also expected to pass through the mill of austerity plans. Proposed reforms of pension systems and rupture of the health and social security systems are already at work everywhere in Europe.

One thing is certain: the public money, obtained at very low rates by large private banks from the European Central Bank, will not go to households or businesses. Outstanding loans have declined massively in 2009 across Europe. This money will go, and has already gone back to speculation on the public debt and sovereign risk. Today Greece. Tomorrow, Portugal, Spain, Italy, Ireland. After tomorrow, Belgium, France … The euro area is completely fragmented and reveals his true face: it is a system built for the richest economies on the backs of the poor.

Provisional conclusions and six proposals 
The European Union is political bankrupt: with a common currency but a tax and social competition between its Member States, with a common market, but without a mechanism to transfer resources from the rich to poor; with its neo-liberal dogma that crushes the people, it is unable to provide a response to the crisis for its population.

In return, people are beginning to mobilize and organize the response by themselves: two  consecutive general strikes in Greece, with massive manifestations taking place in most major cities; the 93% of Icelanders which refused the payment of the private debts envisaged by the Icesave law [9][9]; impressive demonstrations in Portugal; also demonstrations taking place the 23rd of March, which mark the beginning of a third social cycle in France.

The wind is rising throughout Europe and carries the refusal of employees, pensioners and the poor to bear the brunt of the crisis.

What is missing in these mobilizations, in addition to break the isolation of struggles, is an outlet, which establishes the links between the social and political responses. Throughout Europe, social movements need to bring elements of alternative programs to address the systemic crisis, choosing to defend and expand the collective rights against the logic of valorization of the capital.

The central question raised by these “crisis pretexts” of the public debts in the North is about a different distribution of wealth.

For that, we must keep two irons in the fire: increasing salaries by levying taxes on dividend and implementing a comprehensive a tax reform.

Increasing wages would bring debt relief to households and would open up opportunities for the production of goods and services.

A drastic reduction of working time along the retention of wages and compensatory recruitment is also required. This would address both the problem of unemployment, the financing of social security (by increasing the number of contributors) and the insufficient leisure time and recreation for those who work.

A harmonized tax reform on a European scale would allow to address the existing tax loopholes, as well as restoring a progressive tax on all income (taxes on income and corporate taxes); to reduce or abolish indirect taxes which strike especially the poorest (VAT, taxes on petroleum products). Any effort for reform has to establish a special tax on financial income and wealth of the creditors of the debt, without forgetting the taxation on other capital income and pension tax.

A cleansed fiscal policy would also cancel the many social contribution exemptions for enterprises; increase employer contributions, and thus ensure sustainable social protection for all as well as a good standard for retirement and pensions.

Finally, the financial system has proven its adverse social effects. We must expropriate the banks and other financial institutions, transfer them to the public domain and place them under citizen control.

There is also the need for a citizens’ audit of public debts, to measure their legitimacy or illegitimacy (what have they financed?).

Let’s put these proposals into discussion to determine a list of demands.

Pascal Franchet is vice-president of CADTM France.

Translated by Daniel Munevar (CADTM)

[1] The headlines have been full of racist comments, such as the title of the article of Le Monde of the 6th of February, “Bad Greece puts the Euro under pressure” using the acronym PIIGS (Portugal, Italy, Ireland, Greece and Spain). The acronym was termed by the liberal magazine The Economist.

[2] “With the complicity of Goldman Sachs, Greece has improved the presentation of its accounts, but the gain has been marginal. The transactions made in 2001, lowered the Greek debt by 2.3 billion euros, bringing it from 105.3 to 103.7% of GDP over the period concerned.”


[4] AFP dispatch of March 4, 2010.

[5] “Let us compare the budget of government to that of a household”, by Randall Wray,


[7] Global military spending


[9] View Bonfond Olivier, Jerome Duval, Damien Millet “Whew! Icelanders have said massive ‘no’,

Putin Plays his Hand in Venezuela

April 3rd, 2010 by Robert Bridge

President Hugo Chavez is hosting Prime Minister Vladimir Putin on Friday for meetings that will seal an assortment of lucrative deals – as well as raise some eyebrows in Washington.

Russia, which has been running a marathon of business deal-making this year (Russia secured $10 billion in energy, nuclear and arms deals in India this month), is now set to strengthen its hand in South America with a trilateral meeting between Vladimir Putin, Bolivian President Evo Morales and Venezuela’s Hugo Chavez. But the visit may be more noteworthy, perhaps, for the dust it will kick up north of the border.

It is no secret that Washington enjoys less-than-amiable relations with the left-leaning governments of Bolivia and Venezuela, and nowhere is the expression “nature abhors a vacuum” more applicable than in the jungle of geopolitics. So with Moscow searching for new commercial markets and Caracas looking to update its military hardware, relations between Russia and Venezuela were almost inevitable (Even Belarus has managed to profit from US-Venezuela tensions, but more on that later).

“We have found a very reliable partner in Caracas,” commented a senior Russian diplomat on the sidelines of the talks. “It is always fascinating when two peoples from separate parts of the planet can see things so similarly.”

Russian Deputy Prime Minister Igor Sechin and Venezuelan First Vice-President Elias Jaua held a bilateral meeting in Caracas ahead of a session of the high-level Russian-Venezuelan intergovernmental commission.

The two statesmen discussed expanding cooperation in the energy sphere, industry and mining, agriculture, as well as in other sectors.

“Particular emphasis was made on the possibility that Venezuela may purchase Russian aircraft, in particular the Be-200ChS amphibious aircraft, which is mainly used to guard water surfaces, transport people and cargoes and put out fires,” a source in the Russian delegation said, as quoted by Interfax.

In addition to the amphibious craft, the Russian package of proposals includes the An-148 military cargo aircraft as well as maintenance and airfield services since “the issue may involve the sale of 50 units of aircraft,” the source said.

During his visit, Putin will also negotiate the final shipment of the last four Russian Mi-17 Hip helicopters out of 38 purchased under a 2006 contract.

Since 2005, Venezuela, South America’s top oil exporter and a member of the oil-producing cartel OPEC, has purchased some $4 billion worth of Russian weaponry, including fighter aircraft, helicopters and Kalashnikov assault rifles.

However, the relationship between Russia and Venezuela goes beyond just good business opportunities.

Geopolitical Maneuvering

With NATO creeping steadily toward the Russian border, and a US missile shield in Romania looking fait accompli, Moscow is anxious to prove that it is not limited to just issuing complaints about the situation. Indeed, Russia’s baby steps in South America have served to expose America’s soft superpower underbelly, while underscoring Russia’s resurgence on the global stage.

In early March, US Secretary of State Hillary Clinton made a South American tour in an effort to heal the diplomatic wounds that many observers blame on the foreign policy decisions of George W. Bush, whose global war on terror campaign did not sell well south of the border. Although relations seem to be slowly improving with US President Barack Obama at the helm, tensions still exist.

While in Brazil, for example, Clinton’s entreaties to Brazilian President Lula da Silva to support sanctions against Iran, which the United States says is pursuing a nuclear weapons program, went nowhere.

“It is imprudent to push Iran against a wall,” da Silva replied. “The prudent thing is to establish negotiations.”

Clinton, who expressed concern last September about Venezuelan arms purchases and their potential for triggering an arms race in the region, gambled once again in Brazil, hurling gratuitous insults at the government of Hugo Chavez.

“We wish Venezuela were looking more to its south and looking at Brazil and looking at Chile and other models of a successful country,” she said. The comment drew more uncomfortable throat-clearing than golf claps considering that Brazil and Venezuela enjoy good relations.

It is important to bear in mind exactly how bad things have gotten between Caracas and Washington. Chavez regularly accuses the United States of imperialism and wanting to invade Venezuela to “steal its oil reserves”. Then in September 2006, at his most eccentric, Chavez referred to George W. Bush as “the devil” in a speech to the General Assembly of the UN.

“The devil came here yesterday,” Chavez said, referring to Bush, who addressed the world body during its annual meeting. “And it smells of sulfur still today.”

Belarus deals itself in

So needless to say, the United States is beginning to wean itself from Venezuelan oil, and just last week President Obama announced plans to open vast expanses of American territory for oil drilling. These developments opened up new prospects for the Belarusian government of Aleksandr Lukashenko, which is attempting to diversify its economy.

Last month, Lukashenko met with Hugo Chavez in Caracas where the two leaders hammered out a deal that sees Venezuela delivering up to 80,000 barrels of crude oil per day to Belarus in return for the Tor M-1 Missile Defense System, which can detect aircraft and cruise missiles, according to military profiles of the system.

The deal comes on the heels of a bitter dispute between Minsk and Moscow at the start of the year over duty-free oil imports.

On Friday, Lukashenko went to pains to assure Moscow that the deal with Caracas was merely Minsk “diversifying its economy.”

“We (with Russia) have no confrontation, it is absolutely unnecessary for us,” he underlined.

According to Lukashenko, Belarus will compete for the Russian market, but “at the same time we will look for other markets.”

Whatever the case may be, Venezuelan President Hugo Chavez must certainly be gloating over all of the international attention he has attracted to himself and his country, which has turned out to be a significant player in the game of geopolitics.

Robert Bridge, RT

The accidental discovery of mass graves outside in Colombia has raised questions about the victims and what role the US might have played. Mass graves have been found in Columbia, and while the army has claimed responsibility for the bodies, many questions surround the site.

The mass graves were discovered last year outside a Colombian army base in La Macarana, a rural area south of the capital, Bogota. None of the 2,000 bodies in the site have been identified, but they are believed to be victims of Colombia’s ongoing “false positive scandal,” in which civilians are killed and then disguised as militants.

Adrienne Pine, professor of anthropology at American University in Washington, DC, says that Colombia’s system of paying fighters for killing insurgents is to blame.

“Columbia has received $6 billion in US aid, 80 percent of it military,” said Pine. “Troops are paid for how many FARC insurgents they kill, so the military has started killing civilians to justify the funding they are getting from the US military.”

These accusations directly tie US aid to a massive human rights violation, yet the issue is not being covered in the mainstream media.

“I think the mainstream US media has an interest in not portraying the US government negatively,” said Pine. “The US government has been directly involved in training the Colombian military to root out insurgents. Over 10,000 Columbian soldiers have received training at the School of the Americas in Ft. Benning, Georgia.”

The accidental discovery of this mass grave implies that more exist. The deepening of this scandal could affect not only Columbia’s upcoming presidential elections, but also the close relationship between the US and Colombia. US President Barack Obama and Colombian President Alvaro Uribe signed an agreement last year to allow the US military access to more Colombian military bases.

Let’s Put an End to Public Debt Blackmail!

April 3rd, 2010 by Damien Millet

There is a striking contrast in the most industrialized countries at the epicenter of the global crisis that broke out in 2007-2008: the governments and their friends running the major banks are congratulating themselves on having saved the financial sector and initiated limited economic recovery, but people’s living conditions continue to deteriorate. Furthermore, with stimulus packages for the economy of over 1000 billion dollars, the major financial institutions have received government aid in the form of bail out funds, but the different States have no say in the management of these companies or are not taking advantage of this opportunity to radically change the policies governing them.

The path chosen by governments to emerge from the private financial crisis caused by bankers has led to an explosion in public debt. For many years to come, this sudden growth in public debt will be used by governments as a form of blackmail to impose social cuts and to deduct from the wages of “those at the bottom” the money needed to repay the public debt now held over our heads by the financial markets. How will this scenario be played out? Direct taxes on high income earners and companies will be reduced, while indirect taxes, such as VAT, will increase. Yet, as a percentage of disposable income, VAT is mainly a burden on low income households, which makes it an extremely unfair tax. For example, with a 20% VAT tax, a poor household that spends all its income just to survive, pays the equivalent of a 20% tax on its income, whereas a well off household, which saves 90% of its income, and therefore only spends 10% of it on daily expenses, pays the equivalent of a 2% tax on its income.

Therefore, the richest win twice: as a percentage of their disposable income, they contribute the least amount to taxes, and with the sums they have saved, they buy stocks of public debt and make profit from the interest paid by the State. On the contrary, wage earners and pensioners are doubly penalized: their taxes increase while public services and their social security benefits deteriorate. The repayment of public debt is therefore a mechanism for transferring revenue from “those at the bottom” to “those at the top”, as well as an effective form of blackmail in order to pursue neo-liberal policies benefitting “those at the top”. 

Meanwhile, profits and bonus distributions (in 2009, 1.75 billion euros in bonuses for the traders of French banks, and 20.3 billion dollars for Wall Street traders — a 17% increase compared to 2008!) have returned to their mad ways while the people are called upon to tighten their belts. In addition, with the easy money central banks lend them, bankers and other institutional investors have launched into new speculative operations, which are highly dangerous for the rest of society, as we have seen with the Greek debt for example, not to mention the price of raw materials and the dollar. Not a word from the International Monetary Fund (IMF) or the Organization for Economic Cooperation and Development (OECD), and a refusal from the G20 to take measures on bonuses and speculation. Everyone agrees to intensify the race for profit based on the pretext that this will eventually lead to job creation. 

The Finance Ministers’ overall objective is a return to growth, even if it turns out to be unequal and harmful to the environment. In no way do they question the system which has proven to be a failure. If they do not react, the dismantling of the State will be pushed to its limits, and the entire cost of the crisis will be borne by the very people who are its victims, while those responsible for it will emerge more powerful than ever before. Today, banks and hedge funds have been saved with public money without offering the slightest tangible compensation in return.

We believe public policy should be reformulated as follows: “You large creditors have greatly profited from public debt, but fundamental human rights are seriously threatened and inequalities are widening at an alarming rate. Our priority is to maintain and guarantee these fundamental rights and it is you, the large creditors, who should pay for this. We are going to tax you according to the amount that you loaned back to us: the money will not come out of your pockets but the loans will disappear. Count yourselves lucky that we are not demanding back the interest we have already paid you to the detriment of citizens’ interests!” In a nutshell, we support the idea of taxing the large creditors, such as banks, insurance companies, and hedge funds, as well as wealthy individuals according to the money owed to them. This tax revenue would give the State the means to increase social spending and create socially useful and economically sustainable employment. It would eliminate public debt in the North, without making the people who are the victims of this crisis pay. At the same time, it would place the entire burden on those who have caused or worsened the crisis, and have already greatly profited from this debt.

Our proposition would entail a radical change towards a policy of redistribution of wealth, benefiting those who produce wealth and not those who speculate on it. If coupled with the cancellation of foreign public debt of developing countries and a series of reforms (including wide ranging fiscal reform, a radical reduction in working hours without loss of wages and with compensatory hiring, and the transfer of the financial sector to the public domain with citizen control), these measures could enable us to emerge from the current crisis with social justice and in the interests of the people.

Translated by Francesca Denley in collaboration with Charles la Via.

Eric Toussaint is Spokesman, vice-president of CADTM France and president of CADTM Belgium (Committee for the Abolition of Third World Debt,

Latin American and Caribbean Community; Its Challenges

April 3rd, 2010 by Carmen Esquivel

Havana, (Prensa Latina) Getting the Latin American and Caribbean Community underway will be a priority on the agenda of the regional countries in the forthcoming months, as they are convinced that just with an integrating view they will be able to overcome huge challenges.

The new organization, without the US tutelage, will bring together the 33 States in the area comprising a population of 560 million inhabitants, who live from the south of the Bravo River to Patagonia.

For the region, it is a transcendental and historical milestone that on the bi-centennial of most countries’ independence, it has been agreed to step towards true unity, just as Latin American paladins had dreamt of.

“Pretending to make a single nation with only one link uniting their parts among them and with the whole is a bright idea”, the Liberator Simon Bolivar used to say.

Meanwhile, José Martí wrote in his Our America: “It is time for recountering and marching united and we should move closed to each other, like silver in the Andes’s roots”.

Nowadays, in an increasingly globalized and interdependent world, unity is a must for facing and overcoming common problems and, at the same time, strengthening the voice of Latin American and Caribbean nations in the international arena.

The world economic crisis severely hit the region, which registered a 1,7 percent economic contraction of its GDP after having kept six years of continuous growth.

This situation brought about an increase in the number of impoverished people from 180 to 189 millions and that of needy ones from 71 to 76 millions, according to data from the UN Economic Commission for Latin America and the Caribbean (ECLA).

International financial turmoils also caused an increase of unemployment, the fall of exports, remittances and foreign investments as well as the diminishment of trade and tourism, above all in Mexico, Central America and the Caribbean.

In a report presented at the recent Summit of Unity, held in the Riviera Maya, ECLA called for higher cooperation to cope with the crisis.

The body proposed that the leaders focus on efforts for promoting intra-regional investment in infrastructure, social cohesion and reduction of assymetries, reform of the financial system and climatic change.

Although Latin America and the Caribbean is the second least greenhouse-gas-emitting region, it is undergoing the effects of global warming more than any other; and unless actions are undertaken, it could suffer great economic harms.

Important losses in agriculture, strong pressures on infrastructure and intensity of disasters are some of them.

An increase of temperature and the sea level will affect island states in the caribbean, but they will also harm mangrooves in shallow coasts of Brazil, Colombia, Ecuador and the Rio de La Plata coastline, in Argentina.

The phenomenon would bring about reduction of precipitation in the Amazon, thus causing deterioration of the wilderness owning the greatest bio-diversity in the planet, and it would reduce availability of water in South America as well.

These and other topics, such as the indigenous people’s situation, the accomplishment of the UN’s goals for the Millenium or energy problems will be drawing the attention of the Community of Latin American and Caribbean States, which could could be launched at the next 2011′s summit in Venezuela.

The new organization, which will deal favorably with small and vulnerable economies, will work on the bases of equity, social justice, flexibility and complementarity of actions.

“This is an organization allowing us to advance with our own views”, said President of Ecuador Rafael Correa, while his Brazilian counterpart Luis Inácio Lula Da Silva, regarded it a big-dimension event.

For decades, steps at the sub-regional level in the area led to the implementation of integrating mechanisms such as the Central American Integration System, The Southern Common Market, the Caribbean Community and the Bolivarian Alliance for the Peoples of Our America (ALBA, by its Abbreviation in Spanish), just to mention some of them.

ALBA even made progress towards establishing a common currency for member countries: SUCRE (Single System of Regional Compensation).

But up to now, it had not been possible to achieve articulation of collaborative actions among various mechanisms of integration and bring together all the countries in the area, without exclusion.

When referring to the decision of founding the Community of Latin American and Caribbean States, the leader of the Cuban Revolution, Fidel Castro, stated: “No other institutional deed in our hemisphere during the last century reflects such repercussion”.

The author is the head of Prensa latina’s Central American and Caribbean desk.


Today, the Real Economy Project of the Center for Media and Democracy (CMD) released an assessment of the total cost to taxpayers of the Wall Street bailout. CMD concludes that multiple federal agencies have disbursed $4.6 trillion dollars in supporting the financial sector since the meltdown in 2007-2008. Of that, $2 trillion is still outstanding.

CMD’s assessment demonstrates that while the press has focused its attention on the $700 billion TARP bill passed by Congress, the Federal Reserve has provided by far the bulk of the funding for the bailout in the form of loans amounting to $3.8 trillion.

Little information has been disclosed about what collateral taxpayers have received in return for these loans, sparking the Bloomberg News lawsuit covered earlier. CMD also concludes that the bailout is far from over as the government has active programs authorized to cost up to $2.9 trillion and still has $2 trillion in outstanding investments and loans.

Learn more about the 35 programs included in the CMD tally by visiting our Total Wall Street Bailout Cost Table, which contains links to pages on each bailout program with details including the current balance sheet for each program.


While the Treasury Department has been patting itself on the back for recouping some of the Troubled Asset Relief Program (TARP) funds and allegedly making money off of its aid to Citigroup, the CMD accounting shows that TARP is only a small fraction of the federal funds that have gone out the door in support of the financial sector. Far more has been done to aid Wall Street through the back door of the Federal Reserve than through the front door of Congressional appropriations.

The tally shows that more scrutiny needs to be given by policymakers and the media to the role of the Federal Reserve especially as the Fed has accounted for the vast majority of the bailout funds, yet provides far less disclosure and is far less directly accountable than the Treasury.


In addition to a comprehensive here Wall Street Bailout Table which will be updated monthly as a resource for press and the public, CMD is also making available a Financial Crisis Tracker, a widget that links to the table that can be downloaded to websites and provides up–to-date numbers on the financial crisis and the bailout. The Financial Crisis Tracker shows unemployment rates, housing foreclosure rates and the bailout total on a monthly basis. It is a more accurate measure of how we are doing as a nation than any Wall Street ticker.







Altogether, $4.6 trillion of taxpayer funds have been disbursed in the form of direct loans to Wall Street companies and banks, purchases of toxic assets, and support for the mortgage and mortgage-backed securities markets through federal housing agencies. This is an astonishing 32% of our GDP (2008) 130% of the federal budget (FY 2009).


Most accountings of the financial bailout focus on the Troubled Asset Relief Program (TARP), enacted by Congress with the Emergency Economic Stabilization Act of 2008. However, a complete analysis of the activities of all the agencies involved in the bailout including the FDIC, Federal Reserve and the Treasury reveals that TARP, which ended up disbursing about $410 billion was less than a tenth of the total U.S. government effort to contain the financial crisis. TARP funds only account for about 20% of the maximum commitments made through the bailout and less than 10% of the actual funds disbursed.


The Federal Reserve has provided by far the bulk of the funding for the bailout in the form of loans – $3.8 trillion in total. Little information has been disclosed about what collateral taxpayers have received in return for many of these loans. Bloomberg News is suing the Federal Reserve to make this information public. On March 19, 2010 Bloomberg won its suit in the 2nd Circuit Court of Appeals, but it is not clear if this case will continue to be litigated to the Supreme Court.


A key component of the bailout has been the federal support for mortgages and mortgage-backed securities, primarily through the Federal Reserve. Altogether, the government has disbursed more than $1.5 trillion in non-TARP funds to directly support the mortgage and housing market since 2007.

The opposition Liberals want Prime Minister Stephen Harper to clarify what he plans for Afghanistan. But he is clear. He says he’s bringing Canada’s troops home.

The real puzzle is: What would the Liberals do?

This is not an academic question. By the time Canada’s scheduled troop withdrawal begins next July, we may well have had another election. Should Michael Ignatieff’s Liberals win, it will be up to them to decide how to proceed.

Yet, what exactly do the Liberals have planned for Afghanistan after 2011? We don’t know.

We do know, however, what Harper says he’ll do.

“Canada’s military mission in Afghanistan will end in 2011,” he told the Commons Tuesday. “We will continue … with a mission on governance, on development and on humanitarian assistance.”

Or, as Foreign Affairs Minister Lawrence Cannon put it: “After 2011, we’re out.”

Note that the Prime Minister has gone well beyond the resolution passed by the Commons in 2008. That specified only that Canadian troops would be removed from Afghanistan’s Kandahar province by the end of 2011 — which left open the possibility that they might be deployed elsewhere in the country.

The Prime Minister now says the entire Afghan military mission will be terminated.

If he’s sincere, that means Canadian troops won’t be staying on as trainers or advisors — which, to a large extent, is what they are doing now. Nor will they provide security for reconstruction.

It is possible that Harper isn’t sincere. Politicians can be economical with the truth.

Still, the Prime Minister — once an ardent cheerleader for the war — has been remarkably consistent over the past year.

He has said he believes the war is unwinnable. He has said that after 10 years of fighting, Canada will have done its bit. He has said he is firmly committed to the 2011 timetable.

He has said all of this at home and on American television. Earlier this week, he reportedly said it straight to U.S. Secretary of State Hillary Clinton, after she publicly pressed Ottawa to change its mind.

As Defence Minister Peter MacKay has signalled, the Conservative government has not ruled out helping America fight its wars somewhere else in the world.

Indeed, it remains committed to building a strong Canadian military that can do just that.

But — unless Harper is lying — he’s finished militarily with Afghanistan. He has read the polls and knows that most Canadians want the troops to come home.

He’ll send aid workers and governance experts to Afghanistan. But another country will have to provide the soldiers that protect them.

The Liberals on the other hand, remain vague. It was their government that initiated the troop commitment to Afghanistan. But since Canadian casualties began to mount in 2006, they’ve been deeply divided over the war.

In an embarrassing Commons vote that year, the Liberal caucus itself split on whether to support Harper’s move to extend the Afghan mission. The Conservative motion passed only because it was supported by Ignatieff and 23 other Liberal MPs

Another Commons motion two years later managed to paper over the divisions within the Liberal party.

In that vote, and over the objections of the New Democrats and Bloc Quebecois, Liberals and Conservatives joined forces to extend the mission yet again — with the proviso that all Canadian troops be pulled from Kandahar by the end of 2011.

So what do the Liberals think now?

Like Harper, Ignatieff is by instinct a hawk. As an academic, he approved of America’s 2001 invasion of Afghanistan, calling it a form of justified imperialism.

As a candidate for the Liberal leadership in 2006, he supported Canadian involvement in the war, noting that: “We should be willing to do things that are tough and difficult once in a while.”

A vigorous supporter of the idea that Canada needs to regain its place in the world, he has argued — like Harper — that this country must be willing to take part in not just peacekeeping but full-scale foreign wars.

“Canadians want a foreign policy that involves projection of moral influence,” he told the National Post in 2002. “But without combat-capable, lethal-power projection, we are just beating our gums.”

In this Ignatieff represents a strain of liberal hawkishness that says the country must be willing to wage war if it hopes to be taken seriously by big powers like the U.S.

It’s a point of view found particularly among foreign policy elites who know they’ll never have to do the fighting.

And it crosses party lines. This week, Conservative Senator Hugh Segal, another liberal hawk, called the decision to withdraw troops from Afghanistan an “avoidance of international responsibility.” Expect more such talk from those unnerved by Washington’s decision to signal its displeasure.

Liberal foreign affairs critic Bob Rae argues that Clinton’s undiplomatic remarks are evidence that Harper has not been clear enough about his post-2011 plans in Afghanistan.

The reality is quite the reverse. We know what the Conservatives say they’d do. We have virtually no idea what the Liberals intend.

Thomas Walkom’s regular column appears Wednesday and Saturday.

The international donors’ conference for Haiti, held Wednesday at the United Nations in New York, was a forum for the United States, in the persons of Bill and Hillary Clinton, to assert American colonial-style control over the devastated island nation.

The event, co-sponsored by the US State Department and the UN, took pledges from some 100 countries, multilateral lending institutions and charities for $5.3 billion in aid to Haiti over the next two years and an additional $5 billion thereafter. This sum, already far from adequate to rebuild an impoverished country that lost between 250,000 and 300,000 people and suffered an estimated $14 billion in damage in the January 12 earthquake, includes an unknown amount of previously pledged monies.

Going into the event, Haiti had received a mere $23 million in cash of more than $1.35 billion in previously committed humanitarian assistance.

On the dais for the event, UN General Secretary Ban Ki-moon and Haitian President René Préval were flanked by US Secretary of State Hillary Clinton and former President Bill Clinton, who is the UN special envoy to Haiti. Préval announced the formation of an Interim Haiti Reconstruction Commission, co-chaired by Haitian Prime Minister Jean-Max Bellerive and Bill Clinton, which is to oversee the distribution of the reconstruction funds.

The board for the commission will have representatives from the US, Canada, Brazil, France, Venezuela and the European Union, along with the Inter-American Development Bank, the World Bank and the United Nations. This structure, to remain in place for at least 18 months, is transparently designed to place the fate of Haiti in the hands of the imperialist powers, with the US playing the uncontested dominant role.

Only the flimsiest pretense is being made that the Haitian government will exercise any sovereign control. As the New York Times noted in a March 31 article: “There has been a certain amount of grumbling around the United Nations about tight control by the State Department over the donor conference, with a senior European diplomat dubbing it ‘The Bill and Hillary Show.’”

A Washington Post blog on Thursday noted: “Despite universal lip service about the necessity of Haitians taking ownership of their rebuilding, no one was really fooled. Hillary Clinton, as US secretary of state, was co-chair of the conference… Bill Clinton—the “United Nations special envoy for Haiti”—will be calling the shots in the near term in conjunction with Haiti’s prime minister as to the strategy, coordination and direction of that international aid. Can you say, ‘Mr. Viceroy?’”

Of the $5.3 billion in short-term aid pledged at the conference, the US accounted for only $1.15 billion, less than the $1.7 billion pledged by the European Union and even less than Venezuela’s pledge of $1.3 billion. The US pledge to help a country whose devastation is largely the result of over a century of American imperialist domination, including repeated military occupations, is a tiny fraction of the amount allocated to bail out Wall Street.

The Obama administration responded to the January 12 earthquake by dispatching coast guard cutters and naval ships to patrol the waters around Haiti and prevent refugees from the disaster finding shelter in the US. This was followed by a massive military occupation, involving over 12,000 soldiers and Marines.

The US seized control of the Port-au-Prince airport and for days blocked desperately needed food, water, medical supplies and medical personnel from getting into the city, which had been leveled by the 7.0 magnitude quake, so that it could deploy its military forces. Washington’s overriding aim was to suppress any popular unrest arising from the disaster and utilize the tragedy to tighten its grip on the country.

As a result, thousands died needlessly, either buried in the rubble or dying from wounds not treated in time. More than two months later, while the dignitaries gathered in New York and discussed their plans to “rebuild” Haiti, more than a million Haitians who lost their homes were struggling to survive in makeshift tents set up in squalid camps without proper sanitation or other elementary services.

The US military continues to control the airport and a large contingent of troops remains in the country.

As the New York Times reported March 27, much of the aid money that has gone to Haiti has ended up further enriching the country’s tiny ruling elite, which basks in luxury while 80 percent of the people survive on less than $2 a day. The Times quoted one resident of a tent city set up in the exclusive Pétionville district of Port-au-Prince, who said, “The rich people sometimes need to step over us to get inside” their chic restaurants.

The article continued: “Often, just a gate and a private guard armed with a 12-gauge shotgun separate the newly homeless from establishments like Les Galeries Rivoli, a boutique where wealthy Haitians and foreigners shop for Raymond Weil watches and Izod shirts.”

The danger of a social eruption by the oppressed Haitian masses was undoubtedly what Hillary Clinton had in mind when she told the donors’ conference, “The challenges that have plagued Haiti could erupt with global consequences.”

Bill Clinton continued, as he had prior to the earthquake, to insist that Haiti’s salvation lay in attracting private capital, primarily American, by promoting the profit potential of exploiting Haiti’s vast pool of super-cheap labor. He said he would push to remove trade barriers to the US import of Haitian garments, produced by workers earning less than $3 a day.

Referring in his remarks to the conference to a social and human tragedy with few parallels in modern history—to which he greatly contributed during his two terms as president—Clinton spoke as if he were discussing a corporate merger or the setting up of a new hedge fund. “My job in the next 18 months,” he said, “is going to be to try to connect the inside and outside forces in a way that maximizes the input and the impact of all the players, and minimizes the frictions and transaction costs.”

Aside from setting up more garment sweatshops, the main component of the “reconstruction” plan submitted by Haitian President Préval with the blessing of Washington appears to center on relocating impoverished workers from Port-au-Prince to more rural areas. This would serve the two-fold function of permitting a gentrification of the capital, making it more attractive to foreign investors, and disaggregating the working class in the hope of dissipating its potential social and political power.

Israel & Aid

April 2nd, 2010 by Ralph Nader

July 10, 1996, at a Joint Session of the United States Congress, Israeli Prime Minister Benjamin Netanyahu received a standing ovation for these words: “With America’s help, Israel has grown to be a powerful, modern state. …But I believe there can be no greater tribute to America’s long-standing economic aid to Israel than for us to be able to say: we are going to achieve economic independence. We are going to do it. In the next four years, we will begin the long-term process of gradually reducing the level of your generous economic assistance to Israel.”

Since 1996, the American taxpayers are still sending Israel $3 billion a year and providing assorted loan guarantees, waivers, rich technology transfers and other indirect assistance. Before George W. Bush left office a memorandum of understanding between the U.S. and Israel stipulated an assistance package of $30 billion over the next ten years to be transferred in a lump sum at the beginning of every fiscal year. Israel’s wars and colonies still receive U.S. taxpayer monies.

What happened to Mr. Netanyahu’s solemn pledge to the Congress? The short answer is that Congress never called in the pledge.

In the intervening years, Israel has become an economic, technological and military juggernaut. Its GDP is larger than Egypt’s even though Israel’s population is less than one tenth that of the Arab world’s most populous nation. The second largest number of listings on America’s NASDAQ Exchange after U.S. companies are from Israel, exceeding listings of Japan, Korea, China and India combined. Its venture capital investments exceed those in the U.S., Europe and China on a per capita basis.

Israel is arguably the fifth most powerful military force in the world, and Israel’s claims on the U.S.’s latest weapon systems and research/development breakthroughs are unsurpassed. This combination has helped to make Israel a major arms exporter.

The Israeli “economic miracle” and technological innovations have spawned articles and a best-selling book in recent months. The country’s average GDP growth rate has exceeded the average rate of most western countries over the past five years. Israel provides universal health insurance, unlike the situation in the U.S., which raises the question of who should be aiding whom?

Keep in mind, the U.S. economy is mired in a recession, with large rates of growing poverty, unemployment, consumer debt and state and federal deficits. In some states, public schools are shutting, public health services are being slashed, and universities are increasing tuition while also cutting programs. Even state government buildings are being sold off.

Under U.S. law, military sales to Israel cannot be used for offensive purposes, only for “legitimate self-defense.” Nonetheless, there have been numerous violations of the Arms Export Control Act by Israel. Even the indifferent State Department has found, from time to time, that munitions such as cluster bombs were “likely violations.”

Violations would lead to a cut-off in aid but with the completely pro-Israel climate in Washington, the White House has never allowed such findings to be definitive.

The same indifference applies to violations of the U.S. Foreign Assistance Act that prohibits aid to countries engaging in consistent international human rights violations. These include the occupation, colonization, blockades and military assaults on civilians in the Palestinian West Bank and Gaza, regularly documented by the highly regarded Israeli human rights group B’Tselem as well as by Amnesty International and Human Rights Watch.

This week, Prime Minister Netanyahu visits President Barack Obama after the recent Israeli announcement of 1,600 new housing units in East Jerusalem made while Vice President Joe Biden was visiting that country.

The affront infuriated New York Times columnist, Tom Friedman, who wrote that Mr. Biden should have packed his bags and flown away leaving behind a scribbled note saying “You think you can embarrass your only true ally in the world, to satisfy some domestic political need, with no consequences? You have lost total contact with reality.”

Friedman, a former Times Middle East correspondent, concluded his rebuke by writing: “Palestinian leaders Mahmoud Abbas and Salam Fayyad are as genuine and serious about working toward a solution as any Israel can hope to find.”

But until a few days ago, the U.S. government had no levers over the Israeli government. Cutting off aid isn’t even whispered in the halls of Congress. Raising the issue would further galvanize Israel’s allies, including AIPAC.

The only lever left for the U.S. suddenly erupted into the public media a few days ago. General David Petraeus told the Senate that resolving the Israeli-Palestinian conflict has foreign policy and national security ramifications for the United States.

He said that “The conflict foments anti-American sentiment, due to a perception of U.S. favoritism for Israel. Arab anger over the Palestinian question limits the strength and depth of U.S. partnerships with governments and peoples in the Area of Responsibility…Meanwhile, Al-Qaeda and other military groups exploit that anger to mobilize support.”

A few days earlier, Vice President Joe Biden told Prime Minister Netanyahu in Israel that “what you’re doing here undermines the security of our troops who are fighting in Iraq, Afghanistan and Pakistan.”

What Obama’s people are publically starting to say is that regional peace is about U.S. vital interests in that large part of the Middle East and, ultimately, the safety of American soldiers and personnel.

As one retired diplomat commented “This could be a game-changer.”

WASHINGTON — The successor agreement to a landmark U.S.-Soviet nuclear arms control treaty faces a number of political and technical challenges to its chances for ratification in Russia, a leading foreign policy expert said yesterday (see GSN, April 1).

“I would be happy to say that the Russian people enthusiastically wait for the new [Strategic Arms Reduction Treaty] to be ratified and implemented,” Alexei Arbatov, head of the Russian Academy of Sciences’ International Security Center, said during an event at the Carnegie Endowment for International Peace. “But that would be a great exaggeration.”

Russians have “great doubts” about the new compact because “nuclear weapons are for the Russian people now much more important than decades ago” during of the Cold War and are viewed as the last reliable pillar of the country’s national security, according to Arbatov.

Articles have already started appearing in respected Russian military magazines and newspapers calling the original Strategic Arms Reduction Treaty “traitorous” and “detrimental” to national security, Arbatov said.

Such publications represent the “opening salvo” of a campaign that would be waged against the new treaty once it is signed and presented for ratification by the lower house of the Russian parliament. He did not say what else the public opinion campaign might involve.

Members of Russia’s political elite are worried about what the agreement says or does not say about U.S. ballistic missile defense and “prompt global strike” systems, according to the analyst.

Last week, U.S. President Barack Obama and Russian President Dmitry Medvedev approved the final terms of a follow-on agreement to the 1991 arms control agreement. The new accord requires the former Cold War adversaries to lower their respective strategic arsenals to 1,550 deployed warheads (see GSN, March 26).

That represents a nearly 30 percent reduction from a 2,200-weapon limit the states were to meet by the end of 2012 under the 2002 Moscow Treaty. Some experts, though, have questioned the size of the cut because of an apparent loophole that would count a nuclear bomber as a single warhead despite each aircraft’s ability to carry multiple weapons (see GSN, March 31).

Both countries would also cap their deployed nuclear delivery vehicles — missiles, submarines and bombers — at 700, with another 100 held in reserve.

Obama and Medvedev are slated to sign the new accord April 8 in Prague, but there has already been significant debate on whether the administration can muster the required 67 votes needed for ratification in the U.S. Senate. That process could prove difficult, with Republicans opposed to any language that would constrict the U.S. missile defense activities and possibly looking to link support for the treaty to updates to the nation’s nuclear arsenal.

In addition, work must still be finished on the technical annexes to the compact that lay out details of inspection and verification regimes, Ellen Tauscher, undersecretary of state for arms control and international security, told reporters this week (see GSN, March 30).

“It is clear that the signing of the Prague agreement will only be the first in a very long series of steps that the entire governments of the United States and Russia — not just their presidents — will have to take if they are to move further along the ‘road to zero’ [nuclear weapons] and to improve U.S.-Russian strategic relations,” according to Miles Pomper, a senior research associate with the James Martin Center for Nonproliferation Studies, who attended the Carnegie event.

Yesterday, Arbatov said the main argument against the new treaty in Moscow is that it would not place limits on U.S. ballistic missile defenses while instituting stringent restrictions on Russia strategic forces for at least the next 10 years.

The Kremlin vehemently opposed Bush administration plans for Europe-based defense as a threat to its strategic security. It has expressed skepticism about Obama’s revised plans — which emphasize use of land- and sea-based systems around the continent as a defense against short- and medium-range threats — and has reserved the right to withdraw from the new compact if those defense systems appear overly threatening.

The accord also does not address the prompt global strike systems being developed in the United States, the analyst noted.

The anticipated first such weapon, the Air Force’s Conventional Strike Missile, could hit a target halfway around the world within an hour of launch. It could be fielded as early as 2012.

Arbatov said it would be particularly troublesome if part of the reductions called for in the new treaty were conducted by converting strategic nuclear weapons into conventional prompt global strike systems.

The lead argument in favor of the successor agreement inside Russia is that it is mainly about U.S. nuclear reductions, according to Arbatov. Moscow would have no trouble making the cuts as it is already moving to replace its older systems with a smaller number of newer weapons, he said.

The Kremlin has stated it intends to modernize at least 70 percent of the country’s strategic forces in the next 10 years.

Also, “nothing in the treaty prevents Russia from introducing new systems,” he told the audience, adding that Moscow already has plans to develop and deploy a new heavy missile, referring to the RS-24 mobile multiwarhead ICBM that could be fielded by 2016.

To assuage Russian fears the United States must be able to demonstrate that nuclear disarmament would not affect the nation’s prestige in the world and that even with fewer warheads Moscow’s interests will receive the same amount of attention in Washington, Arbatov said.

The United States must also show it is “serious” about disarmament, he said, noting the new treaty’s “artificial counting rules” that would tally an individual U.S. bomber aircraft as one launcher and one warhead. In that respect, the new agreement sends “conflicting signals,” he said.

Russian observers also lack confidence that the U.S. political bureaucracy would see the new reductions carried out, as well as further nuclear cuts in the future, according to Arbatov.

Lastly, the United States needs to prove it is pursuing warhead cuts in order to improve and strengthen international security and not enhance its “huge superiority” in other weapons systems such as prompt global strike, Arbatov told the audience.

The Obama administration should also directly engage Russian Prime Minister Vladimir Putin, who has remained largely silent on the new accord, he said. The former president is the leader of the majority party in the Duma, United Russia.

Arbatov, who served in the lower house of parliament for nearly 10 years, also noted that the 1993 Strategic Arms Reduction Treaty II took the Kremlin seven years to ratify. The pact never entered into force and Moscow later withdrew from the treaty when the Bush administration pulled out of the Antiballistic Missile Treaty.

Russia, meanwhile, can take steps to increase chances for ratification in the United States by being more “constructive” on ballistic missile defense, including endorsing the idea of a Joint Data Exchange Center, which would enable the two countries to share information on missile launches, the analyst said.

He emphasized that the new treaty should serve as the basis for better relations between the two countries, whose strategic relationship experienced a rough period in the later years of the Bush administration. The Obama administration came into office promising to “reset” its relationship with Moscow.

Arbatov warned the former Cold War adversaries should ratify the agreement because it would be the first legally binding compact on disarmament in nearly 20 years and not because it would allow them to accelerate other weapons programs, such as ballistic missile defense in the case of the United States or the RS-24 missile system for Russia.

The challenges laid out yesterday resonated with those in attendance. 

“There are prospects of improved cooperation on issues such as missile defense and Iran, but to seize them both countries will have to demonstrate a deep commitment to a new relationship that heretofore has been lacking and a willingness to overcome deep wells of mistrust in both countries that still seems far from evident,” Pomper told Global Security Newswire yesterday by e-mail. “And there is the danger that the upcoming ratification battles in both countries may increase, rather than decrease that mistrust.”

A new nuclear treaty would be important in “improving bilateral relations and ongoing Russian concerns over U.S. and [North Atlantic Treaty Organization] military dominance,” Paul Walker, head of the Security and Sustainability program at the environmental organization Global Green USA, said today by e-mail.