Sunday

The Daily WAR (12-21)

Reading between the lines, and thinking outside the box . . .
 
 
 
 
 
    Postal services in Germany could be hit next week by strikes, the fallout of an ongoing public sector wage dispute that is far from being settled. Despite hopes that successful weekend negotiations could head off a strike vote by the Verdi services union on April 2, it appears that Germany might have to steel itself up for a protracted labor war involving more than 1 million public-sector employees.
 
 
 
Silvio Berlusconi may be about to bounce back—but so too will Italy's deep-seated economic problems
    Princess Alessandra Borghese is no ordinary parliamentary candidate. A member of the family that produced the pope who finished St Peter's, she spent years in the international jet-set. Ten years ago, the princess discovered religion.
    She is a friend of Pope Benedict and author of such improving works as "Lourdes - My Days in the service of Mary". Last month she announced that she would run for the Senate in Lazio, the region round Rome, in the election on April 13th and 14th, as head of the list for the Union of Christian and Centre Democrats.
 
    This week the European Commission will upgrade plans designed to better sell the EU to its wider public. Known as "Plan D", the concept was launched after the shock no votes to the EU constitution in France and the Netherlands 3 years ago. The results sent the commission back to the drawing board to re-examine its public image.
 
Even in a border-free Europe, everyone wants a homeland
    Not just Belgium, but (supposedly) the entire European Union sighed with relief last week when a new Belgian government got to work—ending 9 months of squabbling among the political parties. To Euro-enthusiasts in Brussels, their host country's failure to form a government after last June's election was alarming.
    The argument is that Belgium matters because it is a model for Europe, with a complex federal system (the country boasts 6 governments and parliaments) designed to share power between 3 regions and 3 linguistic communities. And if small, wealthy Belgium cannot make federalism work, how can the EU?
 
    Serbia is committed to joining the EU, but also adamant about not recognizing Kosovo's independence, said the Balkan country's foreign minister on Saturday after an informal meeting with his EU counterparts.
 
    Russia's ambassador to NATO dismissed NATO's call for President Putin to avoid "unhelpful rhetoric" at next week's NATO summit. "Which is more important in international relations -- aggressive policy or aggressive rhetoric?
    "Is Russia going to deploy any new military bases of its armed forces in Mexico or Canada; or is it negotiating on the accession of Iceland or Northern Ireland to the Warsaw Pact organization; or is Russia deploying its strategic missile defense in Mexico; or is Russia recognizing some parts of sovereign states, like Northern Ireland, Corsica, or the Basque area in Spain, irrespective of the fact that it's prohibited by international law?"
    Russia is doing none of them, he said, in a veiled attack of Washington's military expansion and its policies on NATO enlargement and Kosovo.
 
 
 
    Palestinian president Mahmud Abbas accused Israel of splitting the Palestinian territories into isolated cantons to prevent the creation of a state. "Israel is continuing its aggression, its occupation, the construction of settlements and the Judaisation of Jersualem. The solution which Israel is designing consists of a group of cantons on a land separated by settlements, the separation wall and roadblocks."
 
    Secretary of State Condoleezza Rice has begun a visit to Israel seeking to add fresh impetus to peace talks between Israel and the Palestinians. Despite 4 months of negotiations since the Annapolis summit, there is still little sign of tangible progress.
 
    The annual Arab League summit opens in Damascus today (Saturday) amid deep divisions over the crisis in Lebanon and unhappiness at growing Iranian influence in the Middle East.
    Syria, which is hosting the event for the first time, has adopted a defiant tone in the face of a boycott by Lebanon and a humiliating low-level representation from some of the Arab world's most powerful states, including Saudi Arabia and Egypt.
    Arab summits are usually marred by squabbles between leaders, but rarely has the depth of ill-feeling been so apparent and the disputes of such strategic consequence.
 
    The Arab League – ideally a symbol of unity – has often served as an arena for regional disputes. But in reality, Arab League meetings have too often been marked by heated disputes and divisions between individual members.
    Has the dream of Arab unity run out of steam? As the 20th Arab Summit gets underway in Damascus, Arab governments appear more divided than ever. Previous Arab summits have exposed cracks in unity and nationalism, but this year the differences have become more public - and pronounced.
    Observers of Arab history believe the divisions come while the Middle East stands at its most dangerous of crossroads.
 
    Clashes took place last week in the Kurdish district of Qamishly, northeastern Syria, between Syrian security and Kurds. This is very bad timing for a region on the verge of explosion.
 
    Former Lebanese prime minister Rafik Hariri was assassinated by a "criminal network," according to a report filed Friday by the head of a UN team charged with investigating the killing. Syrian intelligence was often accused of being behind the murder.
 
    Former "Nightline" reporter Dave Marash has quit Al-Jazeera English, saying his exit was due in part to an anti-American bias at a network that is little seen in this country. He said he felt that attitude more from British administrators than Arabs at the Qatar-based network.
 
    British bombers strafed Iraq's 2nd city yesterday as an embryonic Shia civil war raised the prospect of British troops being drawn back on to the front line of the Iraq conflict. The heavily armed 1 Scots Guards battle group was on alert and ready to leave its fortified airbase outside Basra as fighting spread to a string of cities across southern Iraq.
    The British handed control of Basra to Iraqi forces 6 months ago and are reluctant to wade in again now, despite their superior firepower. Coalition forces are, though, being drawn into the new fighting that has flared up across the Shia south.
 
    US fighter planes and helicopter gunships struck the southern Iraqi city of Basra and the teaming slums of Baghdad's Sadr City with bombs and missiles Friday as the offensive launched by Iraqi puppet troops against the Mahdi Army, the Shia militia loyal to Muqtada al Sadr, faltered badly.
    These air attacks, carried out in densely populated cities, represent another war crime in the 5-year-old campaign of aggression and colonial-style occupation carried out by Washington in pursuit of US strategic interests in the region.
(Profile: The Mahdi Army)
 
    Iran called for an end to fighting between Iraqi government forces and Shi'ite Muslim militants to remove any "pretext" for US troops to stay in Iraq. "The Islamic Republic of Iran does not regard the recent clashes in Iraq as being in the interest of the people of that country and calls for a speedy end to the clashes."
 
    The attacks against aid agency workers in western Sudan reached new levels of violence, putting in danger vital relief operations in the region of Darfur.
 
    Millions of people in India face starvation after a chilling local prophecy, which predicts that a plague of rats will overrun a region of the country every half century, appears to have come true.
    Thousands of tribal families in the state of Mizoram on the Burmese and Bangladesh borders are struggling to feed themselves after being overrun by hundreds of millions of rats — a deadly natural phenomenon known as mautam.
    The mautam is unfolding amid wider concerns over South Asia's ability to feed itself as world prices for staple foods soar.
 
    Coffee sippers who think it might be a good idea to free Tibet from China are about 58 years too late. China is not going to free Tibet, and Western encouragement of Tibetan resistance will only get people killed needlessly.
    Tibet was part of China for centuries. Tibet is a strategic area of China, and the Chinese government is not going to give it up or grant it independence or even autonomy. Don't encourage Tibetans to die in some futile fantasy about independence. They are not independent. They are part of China, and part of China they will stay.
 
    North Korea has let off a salvo of test missiles, issuing a defiant response to American demands for action over nuclear decommissioning and to a new conservative government in the South. The launch of three, perhaps four, ship-to-ship missiles was confirmed by a South Korean presidential spokesman, who said they were part of routine military exercises.
 
 
 
    Libyan leader Muammar Gaddafi urged fellow Arab leaders to improve ties with non-Arab Iran, saying it was not in their interest to antagonise the Islamic republic. "You have no escape from Iran. It is a neighbour and Muslim brother and it is not in your interest to be its enemy. We have no interest at all in turning Iran against us."`
 
    Saudi Arabia is reportedly preparing to counter any 'radioactive hazards' which may result from a US strike on Iran's nuclear plants. The Saudi Shura Council approved of nuclear fallout preparation plans only a day after Dick Cheney met with the Kingdom's high ranking officials, including King Abdullah.
    The details of Cheney's recent discussions with his Arab allies remain unclear, pundits have begun to question the timing of the drastic measure. Analysts claim the Bush administration had long rattled sabers with Iran over its nuclear program and is now informing its Arab allies of a potential war, in turn, allowing them to take precautionary measures.
 
    Russian military intelligence services are reporting a flurry of activity by US Armed Forces near Iran's borders, a high-ranking security source said. "The latest military intelligence data point to heightened US military preparations for both an air and ground operation against Iran," the official said, adding that the Pentagon has probably not yet made a final decision as to when an attack will be launched.
    He also said the US Naval presence in the Persian Gulf has for the first time in the past 4 years reached the level that existed shortly before the invasion of Iraq in March 2003. And a new US carrier battle group has been dispatched to the Gulf.
    Col.-Gen. Leonid Ivashov, vice president of the Academy of Geopolitical Sciences, said last week that the Pentagon is planning to deliver a massive air strike on Iran's military infrastructure in the near future. He said the Pentagon is looking for a way to deliver a strike against Iran "that would enable the Americans to bring the country to its knees at minimal cost."
 
    Terrible rumors from Russia continue to swirl around the Middle East that the Cheney-Bush junta has decided to bomb Iran on April 4th or 6th, targeting not only nuclear-power research facilities but ships, planes, antiaircraft installations, and the Iranian pentagon.
    Apparently the nuclear-power reactor being built by Russian companies will be spared, but not much else. Will it happen? Certainly the neocon hate network is working overtime to make it so.
    [WAR: Bush will be in Russia meeting with Putin on the 6th. So that would be interesting if the war started then.]
 
 
 
Our polls show the UK-US may have less in common than they think
    This is all fascinating stuff for policy wonks, and readers are enthusiastically referred to our website for more of the same. But do the differences we found matter? They might, for the world order is changing and its components are up for review. Few agree on the nature, let alone the future, of the special relationship between Britain and America.
 
    New Hampshire State Representative Betty Hall, age 87, is fighting to save the nation from the Bush-Cheney cabal and return us to constitutional democracy, with her bill, HR 24, to the NH State House, to impeach President Bush and Vice President Cheney.
    If passed on April 16th, when it is scheduled for vote before the entire NH House, the bill will go under state seal, without need of governor signature, to the US House for review, demanding in the name of New Hampshire's people that Congress begin impeachment hearings immediately for Bush-Cheney high crimes against the Constitution, the American people, and humanity.
 
Whether it is Clinton, McCain or Obama, the world will still quarrel with America's foreign policy
    To judge by the polls, millions of people in America and around the world are gasping to see the back of George Bush. With his going, America can extract itself from a catastrophic war in the Middle East, stop its preaching and bullying, win back lost friends and rediscover its founders' advice to show a decent respect for the opinions of mankind.
    Or so the millions hope. They had better prepare for a disappointment.
    [WAR: They're really going to be disappointed when Bush ends up staying on...]
 
    Democratic leaders are moving to end the acrimonious battle for the White House nomination, reducing Hillary Clinton's chances of overcoming Barack Obama by shutting down the contest 2 months before the party convention.
 
    After months of virtual silence on the collapse of the speculative binge on Wall Street that has plunged the US economy into recession, all 3 major presidential candidates delivered speeches last week on the housing and credit crises.
    The speeches all demonstrate, notwithstanding certain policy differences, the subservience of all 3 candidates and both major parties to the US financial elite. That it took a near-meltdown of the US financial system to prod the candidates to address the panic gripping financial markets is itself politically significant.
    "The separation of presidential politics from the troubles assailing the US economy is now verging on the surreal. With banks collapsing, the dollar reeling, the Federal Reserve making up new rules as it goes and observers discussing a new Great Depression, the presidential candidates are still on scripts they wrote a year ago."
 
    Crude oil is running $100 a barrel and it costs $50 instead of $35 to fill your car, but you carpool occasionally and watch the number of trips across town so you're doing all right so far. But what happens when, in addition to the $50 fillup, your groceries go from $80 to $120 and you hunt for new jeans but the shelves don't even have your size?
    That's the very real possibility that is triggering an unofficial nationwide call for a shutdown by thousands of independent truck operators who deliver those supplies – all sparked by the rising costs of fuel.
    One website already explains about 18,000 trucks have been committed to the shutdown starting April 1, and whether it goes for a day or a week, they are hoping that their actions will get the attention of officials who, they demand, must do something to help.
    How could a shutdown affect individual consumers? Just remember that your average discount store or grocery will be served my multiple truckloads of goods every day. No trucks backing up to the docks means no new consumer goods [and food!] on the shelves.
 
 
 
    The financial market crisis could cause losses of up to $600 billion at banks and other financial institutions worldwide, Der Spiegel reported on Saturday, citing an internal report by German financial watchdog BaFin.
    Der Spiegel also said BaFin cited the risk that the financial crisis could spread beyond the banking sector to affect hedge funds, insurance companies, pension funds and even some non-financial companies.
 
    The dark clouds threatening the economy since last summer are getting blacker.
 
The recent rise in corporate bankruptcies in America may well be a sign of much worse to come
    Capitalism without bankruptcy, it is said, is like Christianity without hell. With recession looming, the air in America's bankruptcy courts is thick with brimstone and the coals are being heated in readiness for the many sad souls whose sin was to borrow too much.
    After several heavenly years, in which bankruptcies fell to record lows, going bust is back. How bad will things get?
 
    Like Paul Revere, Konrad Hummler sounded the alarm last week as he made his way by train and by plane to his bank's branches across Switzerland. This country's storied role as secret banker to the world's wealthy is under threat like never before, he warned. "What is going on is a power play. It may be unusual in today's Europe, but it is here."
    This land of stunning Alpine vistas, which has chosen to remain outside the EU, has always loomed large in the global imagination as the place where the wealthy stash their money beyond the tax man's reach. The best estimates suggest that image is true, to the tune of $1 - $2 trillion.
 
    Crude oil for April delivery hit $110 per barrel. The US dollar fell to a new low against the Euro. It now takes $1.55 to purchase one Euro. These new highs against the dollar are the ongoing story of the collapse of the US dollar as world reserve currency and corresponding collapse of American power. Each new decision from the insane Bush Regime pushes the dollar a little further along to oblivion.
    The US economy, which has been kept alive by enormous debt expansion that has overreached its limit, is falling into recession. The traditional way out by expanding the supply of money and credit is blocked by the impaired banking system, the levels of consumer debt, the collapsing value of the US dollar, and rising inflation.
    The bottom line: US power is enfeebled. US power depends on the willingness of foreigners to finance our wars and on the willingness of foreigners to continue to accumulate depreciating dollar assets.
    US living standards will plummet once dollar decline forces China off the dollar peg. So far prices of the Chinese made goods on Wal-Mart shelves have not risen, because the Chinese currency, pegged to the dollar, falls in value with the dollar. In a word, tottering US living standards are being supported by China's willingness to subsidize US consumption by keeping its currency grossly undervalued.
    The US is overextended economically and militarily, just as was Great Britain with the fall of France in the opening days of WW2. The British had the Americans to bail them out. After the chewing gum and bailing wire patch-ups are exhausted, who is going to bail us out?
 
    Measuring a political disaster, derivative securities now taking down the financial system, troubles for homeowners, but bankers get bailed out, Inflation problems need to be cleansed out of system, Bear Stearns saved to enrich JP Morgan, addressing the criminal monstrosity ...
 
    In the past 2 weeks, the Federal Reserve, long the guardian of the nation's banks, has redefined its role to also become protector and overseer of Wall Street.
    With its March 14 decision to make a special loan to Bear Stearns and a decision 2 days later to become an emergency lender to all of the major investment firms, the central bank abandoned 75 years of precedent under which it offered direct backing only to traditional banks.
    Inside the Fed and out, there is a realization that those moves amounted to crossing the Rubicon, setting the stage for deeper involvement in the little-regulated markets for capital that have come to dominate the financial world.
 
    The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.
    The proposal is part of a sweeping blueprint to overhaul the nation's hodgepodge of financial regulatory agencies, which many experts say failed to recognize rampant excesses in mortgage lending until after they set off what is now the worst financial calamity in decades.
    Many of the proposals, like those that would consolidate regulatory agencies, have nothing to do with the turmoil in financial markets. And some of the proposals could actually reduce regulation.
    According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms.
    While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation.
 
    Democrats from Carter to Clinton helped roll back the government's regulatory power, but as the economic crisis deepens, "regulation" is no longer such a dirty word.
 
    The Federal Reserve is presently considering an emergency operation that is so risky it could send the dollar slip-sliding over the cliff.
    The Fed is examining the feasibility of buying back hundreds of billions of dollars of mortgage-backed securities (MBS) with public money to restore investor confidence and clear the struggling banks' balance sheets. The Fed, of course, denied the allegations, but the rumors abound.
 
    The Wall Street Journal calls the last ten years a "lost decade" for stockholders. The S&P is now about where it was in 1999. Stock market investors are ten years older and wiser; but not a penny richer. And now they're beginning to wonder about the whole scheme of things. Wall Street has revealed itself not as cunningly cupid, but as blunderingly stupid.
 
    The dollar is taking a pounding. With the US sinking deeper into recession, the greenback recently hit an all-time low against the euro and a 12-year low against the yen. Last week, America's currency fell again - dropping more than 2% in euro terms, to $1.5779. On a trade-weighted basis, the dollar is now south of its late-70s low point and close to its historic nadir of the mid-1990s.
    The markets sense the Federal Reserve will soon cut rates even more. The European Central Bank, in stark contrast, looks determined to keep rates at 4%. In other words, the gap between euro and dollar rates looks set to get wider - making the US currency even less attractive.
    As has often happened in recent decades, a falling dollar has shoved the burden of America's adjustment onto the rest of the world. And now - as the White House knows well - a further dollar slide will play a large part in rescuing the domestic economy.
    That's why the ECB head now expresses "concern" at the drooping dollar. President Sarkozy has gone further - describing America's ailing currency as "a precursor to economic war". Elsewhere, too, the complaints are getting louder. Japan's Finance Minister says the dollar's decline is now "excessive".
    The big question is whether to intervene in foreign exchange markets to prop up the currency. But, if the G7's upcoming dollar dialogue is conducted in whispered tones, another much bigger question won't be discussed at all - the dollar's status as the world's reserve currency.
    This reserve currency status brings America huge power. It puts the dollar constantly in demand, meaning the US can secure cheaper debts and run bigger deficits at everyone else's expense.
    The cracks are now starting to show in the dollar's reserve currency status. For the first time, Saudi Arabia now refuses to cut interest rates in line with the Fed - the first step towards a break in the kingdom's dollar peg. If that break happened, it would spark a massive flight of Middle Eastern assets away from the US currency.
    Chinese exporters are also now shunning the dollar in non-US transactions. Again, that's a worrying sign for the States.
    So the US may be forced into a G7 initiative to strengthen its currency. The trouble is, since the last joint-intervention, the balance of world power has changed. Today, around 75% of the world's foreign exchange reserves are held not by the West, but by the likes of China, Russia and Brazil. So any initiative will have to involve them - even though they're not in the G7. And that will expose the grouping for what it is - an anachronistic hark-back to a world that no longer exists.
 
    When economist Robert Parks predicted early last week that there was more than a 60% probability the current financial meltdown in the US would lead to the "Bush depression," his phone began ringing like crazy with calls from the media.
    Only last fall, most economists were forecasting a modest slowdown. Now, a good majority of them see a slump big enough to qualify as a recession. But a depression?
 
Surging cost of rice (scroll down for story)
    The most important economic headline of the week wasn't about housing, "sub-prime" or any of the central banks. You may not have read that "Rice prices hit $760 a tonne" in the mainstream press. But it's a trend everyone needs to notice.
    Rice is the staple food of more than 3 billion people. Only a few days ago, it was $580 a tonne. So the price of the crop relied upon by half the world's population, many of them close to the poverty line, just surged 30% cent.
    Global food prices are now caught in a "supercycle" – on an inexorably upward trend. Apart from rice, corn prices just hit a 12-year high. Earlier this year, wheat prices jumped 90% cent in a single month.
    Sky-high food prices are now stoking fears of serious social unrest across Asia and parts of Africa. And with leading rice producers now imposing export bans to keep local prices down, the shortages are likely to get even worse.
 
    World food prices have risen by 75% since the new millennium with a 20% increase last year alone. The fact that food costs represent a bigger proportion of the income for the poor in the so-called undeveloped countries will exacerbate their plight.
    "More and more people are going to be facing food shortages in the future.... Given what is happening due to rising food prices we need to think about the impact this will have on people [in the developing world] who are spending up to 80% of their incomes on food."
    The impact of the economic crisis of the capitalist system will have a devastating affect on the lives of some of the poorest people in the world.
 
 
 
Two books about how the world is changing reach very different conclusions
    On the face of it, these two books are about the same thing: the great trends in geopolitics as the economic power of Asia grows and as the world grimaces at America in the aftermath of the Iraq war. Yet they could hardly be more different.
    Parag Khanna's is a long, complicated book on the basis of which he has drawn a simple—well, simplistic—conclusion: that the world is now dominated by 3 great empires, those of America, China and the European Union. Robert Kagan's is a short, simple book which states that the world is much more complicated than it once appeared.
    One thing that both authors do agree on is that the dream of a simple, safe world has gone for good.
 
    When looking at today's linear line-up of 3 large sunspots, it does have a startling visual of solar craters. But they are not craters, they are fiery sunspots perched to release its load of fire bombs which are 'charged particles' unfolding in the way of solar flares and CME's (coronal mass ejection).
 
Playing with fire?...
    More strife in Iraq. US financial system in crisis. Rice prices soar. None of these headlines will matter a bit, though, if 2 men pursuing a lawsuit in a court in Hawaii turn out to be right.
    They think a giant particle accelerator that will begin smashing protons together outside Geneva this summer might produce a black hole that will spell the end of the Earth - and maybe the universe. Scientists say that is very unlikely - though they have done some checking just to make sure.
    The world's physicists have spent 14 years and $8 billion building the Large Hadron Collider, in which the colliding protons will recreate energies and conditions last seen a trillionth of a second after the Big Bang. Researchers will sift the debris from these primordial recreations for clues to the nature of mass and new forces and symmetries of nature.
    Although it sounds bizarre, the case touches on a serious issue that has bothered scholars and scientists in recent years - namely how to estimate the risk of new groundbreaking experiments and who gets to decide whether or not to go ahead.
 
    Even babies are more responsive to a beautiful face than a plain one. It is as if humans are programmed to look for the sort of perfection that few of us can hope to get near to, let alone possess.The relationship between beauty and goodness may be at the heart of our deeper instinctive admiration.
 
    [WAR: Here's the premier (and only?) issue of my new newsblog about religious affairs.]
 
 
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