By Keith Johnson

Here’s an intriguing thought: Global oil supplies are indeed set to peak within a few years, and no, that is not bullish for oil. Quite the contrary—it will spell the end of the “oil age.”

That’s the take from Deutsche Bank’s new report, “The Peak Oil Market.” In a nutshell: The oil industry chronically under invests in finding new supplies, exemplified both by Big Oil’s recent love of share buybacks and under-investment by big oil-producing nations. That spells a looming supply crunch.

That will send oil to $175 a barrel by 2016—and will simultaneously put the final nail in oil’s coffin and send prices plummeting back to $70 by 2030. That’s because there’s an even more important “peak” moment on the horizon: A global peak in oil demand. That has already begun in the world’s biggest oil-consuming nation, Deutsche Bank notes:

US demand is the key. It is the last market-priced, oil inefficient, major oil consumer. We believe Obama’s environmental agenda, the bankruptcy of the US auto industry, the war in Iraq, and global oil supply challenges have dovetailed to spell the end of the oil era.

The big driver? The coming-of-age of electric and hybrid vehicles, which promise massive fuel-economy gains for short-hop commuting but which so far have not been economic.

Deutsche Bank expects the electric car to become a truly “disruptive technology” which takes off around the world, sending demand for gasoline into an “inexorable and accelerating decline.”

In 2020, the bank expects electric and hybrid vehicles to account for 25% of new car sales—in both the U.S. and China. “We expect [electric propulsion] will reverse the dynamics of world oil demand, and spell the end of the oil age,” the bank writes.

But won’t cheaper oil in the future just lead to a revival in oil demand? That’s what’s happened in every other cycle. Au contraire, says the bank: Just as the explosion of digital cameras made the cost of film irrelevant, the growth of electric cars will make the price of oil (and gasoline) all but irrelevant for transportation.

In a report filled with interesting tidbits, one in particular stands out: The cost of the Iraq war at the pump. Deutsche Bank figures the cost of the war at $1.5 trillion. Amortized over 20 years, that works out to $75 billion a year. “If the US government taxed US gasoline consumers purely to reflect the financial cost of the war in Iraq, gasoline prices should be some 54 cents per gallon higher,” the report notes.

Tuesday, 6 October 2009

Last autumn's global financial crisis set off an economic earthquake. And we are still feeling the tremors. The latest sign of the ground shifting beneath our feet is our report today of plans by Gulf states, China, Russia, France and Japan to end their practice of conducting oil deals in US dollars, switching instead to a diverse basket of currencies.

It is not hard to see the motivation for oil exporters to move away from the dollar. The value of the US currency has fallen sharply since last year's meltdown. And fears are growing, in the light of a spiralling US government deficit, that a further depreciation is likely. They do not want to sell their wares in return for a currency with an uncertain future.

It is also easy to see why China would like a world trading system that is underpinned by other currencies as well as the dollar. For the past decade Beijing has been recycling the proceeds of its giant national trade surplus into purchases of US government bonds and other dollar-denominated assets. China too stands to make a significant loss if the value of the dollar falls. For China, however, the timing is much more sensitive. Beijing needs to reduce its dollar holdings, but if it does so too quickly it will bring about the very devaluation it fears. This explains why Chinese officials appear to want this transition to take place gradually over the next decade.

But the significance of this development goes much further. Since the end of the Second World War the dollar has been the bedrock of world trade. The pre-eminence of the American currency flowed naturally from the economic dominance of the US. Virtually everyone traded with America so it made sense to use their currency.

But the US is not the dominant power that it once was. The financial crisis has left it hobbled with significant government and household debts and sharply reduced prospects for growth. Developing nations such as China, Brazil and India, on the other hand, have weathered the economic storm significantly better. So while this latest proposal is born of financial calculation, it is also a reflection of a new economic world order.

We should not be sentimental for the dollar. It makes economic sense for world trade to be conducted in a variety of currencies. Relying on one only has the advantage of clarity, but it also creates instability if the economy that underpins it faces uncertain prospects.

Yet we need to understand that exchange rate volatility is a symptom, rather than a cause, of what truly ails the world economy. The biggest driver of global economic instability in recent years has been the determination of China to boost its export sector at all costs. Beijing's persistently large trade surpluses and manipulation to prevent its own currency from appreciating have effectively forced Western nations into running persistently large trade deficits. It was this pressure that blew up various asset bubbles that burst with such disastrous effect last year.

A gradual move away from the dollar makes sense. But without a commitment from world governments – both in the rich and developing world – to reduce these destabilising global trade imbalances we will enter an uncertain new era; and one that could yet make us pine for the days of the dominant greenback.

Tuesday, 6 October 2009

Few things would be more powerfully symbolic of the shift in the balance of global economic power than to have oil traded in the Chinese renminbi rather than the American dollar.

True, no one is going to price a barrel of West Texas Intermediate Crude in renminbi tomorrow. But you can see how that could change. Oil is traded in dollars for economic reasons – not sentimental ones. The oil business pretty much started in the US (vividly portrayed in the film There Will be Blood), the giant oil companies are still mostly American, and the US has long been the world's largest consumer, importer and one of the largest producers of oil. The presidency of George W Bush offered ample evidence of the intimate connections between politics and oil. And the dollar is easily the most traded currency in the world. As such, it makes sense to trade oil in dollars.
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Yet the financial tectonic plates are shifting – fast. Yesterday the president of the World Bank, Robert Zoellick, articulated what must be weighing on the minds of many Western policy-makers. A legacy of the current crisis "may be a recognition of changed economic power relations". In other words, the recession has accelerated the rise of China. The brutal truth is that for most of the next decade China's economy will grow by more than 10 per cent a year; America's by less than 2 per cent. China will soon be the world's largest economy, and largest creditor nation, a position enjoyed by a pre-eminent America in the 1950s. China will also be the largest consumer of oil, which will help push trading in it and other commodities towards a "basket" of currencies.

Now America is the world's greatest debtor, she can no longer sustain her role as protector of the world's only reserve currency in the long term. The humbling of Wall Street was proof that the American system was not invincible. Suddenly, a G20 embracing China, India and the other emerging powers is the only forum that matters. China has helped bail out our banks. Spats with the Americans and Europeans are set to grow more bitter. Yesterday the head of the IMF, Dominique Strauss-Kahn and the president of the European Central Bank, Jean-Claude Trichet, resumed their attack on the value of the yuan. Next will come an increasing US resentment at the vast debts built up with China, and, in turn, Chinese nervousness about their long-term worth.

And that is the paradox. China holds approaching $3 trillion in dollar assets, so she cannot afford to see the dollar collapse. Longer term, China does want to become less reliant on the dollar as a place to keep its savings. America needs China to buy her Treasury bills; and China needs America to buy her exports. They are like two drunken giants leaning on each other. Yet a sobering reckoning of some sorts seems inevitable; and it is difficult to see how both can be winners.

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

By CHARLES BABINGTON
Associated Press Writer

WASHINGTON - The amazement was on their faces. Hundreds waited for Barack Obama on that evening in South Carolina, 15 weeks ago, to claim victory — a surprising victory, surprisingly large.

And amazing it was. It made it possible for him to stand today on the verge of being the first black person ever nominated for president by a major party.

One could guess the thoughts of the blacks and whites in that crowd: Can you believe that our state — South Carolina, first to secede and first to open fire in the Civil War — is now catapulting a black man to the front of the presidential contest in a year that bodes well for Democrats?

"Race doesn't matter," some began to chant. "Race doesn't matter!"

The cry soon gave way to more familiar chants of "Yes we can," and everyone in the auditorium surely knew that race does still matter in so many ways. But in a pinch-me moment, they seemed to realize that a barrier had been broken with a swiftness and certainty that even they had not foreseen.

Even more astounding, the man vaulting ahead of the universally known former first lady, Sen. Hillary Rodham Clinton, had been a state legislator only four years earlier — a lawyer with no fame, wealth or family connections.

Now, the entire nation and countless foreigners are absorbing a moment that had seemed decades away, if possible at all. Smart strategists and rank-and-file voters ponder how Obama rose so far so fast, and theories abound. Historians will sort it out someday, but Obama's blend of oratory, biography, optimism and cool confidence come to mind most immediately.

It's not just about him, of course. If America can seriously think of putting a black man in the White House, surely it must also profoundly rethink the relevance of race, the power of prejudice, the logic of affirmative action and other societal forces that have evolved slowly through the eras of Jim Crow, desegregation and massive immigration.

Maybe the toughest question is this:

Is Obama, with his incandescent smile and silky oratory, a once-in-a-century phenomenon who will blast open doors only to see them quickly close on less extraordinary blacks?

Or is he the lucky and well-timed beneficiary of racial dynamics that have changed faster than most people realized, a trend that presumably will soon yield more black governors, senators, mayors and council members?

Presidential campaigns have destroyed many bright and capable politicians. But there's ample evidence that Obama is something special, a man who makes difficult tasks look easy, who seems to touch millions of diverse people with a message of hope that somehow doesn't sound Pollyannaish.

Rep. Elijah Cummings, a black Maryland Democrat who endorsed Obama early, says the Illinois senator convinces people of all races that Americans as a society, and as individuals, can achieve higher goals if they try.

"He says we can do better, and his life is the epitome of doing better," says Cummings, noting that Obama was raised by a single mother who sometimes relied on food stamps. "He convinces people that there's a lot of good within them."

And why should they believe such feel-good platitudes? "Because he's real and he has confidence in his own competence," Cummings says.

Without question, Obama is an electrifying speaker. At virtually every key juncture in his trajectory, he has used inspirational oratory to generate excitement, buy time to deal with crises, and force party activists to rethink their assumptions that a black man with an African name cannot seriously vie for the presidency.

A prime-time speech at the Democratic convention in Boston catapulted him to national attention in 2004. When his presidential campaign badly trailed Clinton's high-flying operation, he gave it new life with a timely Iowa speech that outshone her remarks moments earlier on the same stage. And a heavily covered March 18 speech about race relations calmed criticisms about his ties to his former pastor, although Obama had to revisit the matter when the minister restated incendiary remarks about the government.

Obama has a compelling biography, too. The son of a black African father he barely knew, and a white Kansan mother who took him from Hawaii to Indonesia, he was largely raised by his white maternal grandparents. He finished near the top of his Harvard law class, then rejected big firms' salaries to work as a community organizer in Southside Chicago, where he found a church, his wife and a place that felt like home.

But all those attributes don't explain the Obama phenomenon.

Other great orators have fallen short of the presidency, including Daniel Webster and William Jennings Bryan.

Plenty of brilliant people have tried and failed, too. Bill Bradley was a Princeton graduate, basketball star and Rhodes Scholar.

Intriguing biographies aren't enough, either. John Glenn was an astronaut and American hero, but he couldn't get off the presidential launchpad.

Jim Margolis, a veteran campaign strategist now working for Obama, thinks it is his blend of all these traits, wrapped in "authenticity," which makes Obama's message of hope and inclusion seem plausible, not pie in the sky.

Margolis interviewed many of Obama's Harvard classmates for TV ads and documentaries. They told him Obama "was wise beyond his years, and never talked down to people," Margolis said.

"He has this amazing ability to connect with people and understand their problems," he said. "And through it all, there is this optimism."

For a politician with only four years of experience at the federal level, Obama also has spot-on instincts, associates say, and a steely confidence in his convictions, in good times and bad. His roughest patch came after Clinton revived her campaign with wins in Ohio and Pennsylvania, and a renewed uproar over Obama's former pastor threatened to consume his campaign.

Obama rejected advice to criticize Clinton more fiercely, and went back to his themes of political and racial reconciliation. His solid win in North Carolina and near miss in Indiana confirmed his judgment.

Obama and his small core of longtime advisers also outsmarted the vaunted Clinton team by focusing early on small caucus states, where he racked up important wins. His fundraising has been nothing short of astounding, with millions of dollars pouring in via the Internet from people who never gave a politician a dime.

Obama fans often search for words to express their attraction.

"He just really electrifies you when you are listening to him," said Lena Bradley, 78, a beauty salon owner in Washington. "He has something that's leading him."

As ephemeral as "something that's leading him" sounds, it's hard to explain in more clinical terms his impact on people. But it's there.

As recently as June 2006, a lone reporter could travel with Obama in cars and small planes as he campaigned for other Democrats in state after state. On one such visit to Massachusetts and New Jersey, his charm was on full display before crowds of various size, age and ethnic makeup. He made teenagers guffaw by saying people pronounced his name "Yo Mama." He quoted scripture in a black church, and set every head nodding.

On a plane ride he talked with the reporter for an hour, on the record, with barely a hint of the nervousness or hedging that most politicians understandably display to someone with a pen, pad and tape recorder.

Before an audience of 300 people in East Orange, N.J., Obama spotted local resident and famous singer Dionne Warwick. He smiled impishly and sang, "If you see me walking down the street," the opening line of her hit, "Walk on By." The crowd roared its approval of his on-key ad lib.

Some veteran politicians also see "something that's leading" Obama, whether they can explain it or not.

Sen. Dick Durbin, D-Ill., a longtime friend and supporter, said "nothing was ever the same" after Obama's Boston speech.

Durbin recalls pulling Obama into a vacant meeting room in Chicago's Union League Club, where both had spoken on a Friday afternoon in November 2006. He felt it was time for his young colleague to decide whether to run for the White House.

"There are moments in life when you can pick the time," Durbin said he told Obama. "But when it comes to running for president, the time can pick you. You've been picked. This is your moment."

A short time later, Obama launched his candidacy.

The plunging greenback threatens to cripple U.S. power. Why are the candidates ignoring this critical issue?
Nov 23, 2007 | Updated: 3:50 p.m. ET Nov 23, 2007

Great powers die slowly. It took years before the world realized that Great Britain was an imperial corpse, sapped of its strength by two world wars. The funeral finally occurred on Feb. 21, 1947, a freezing winter day in bomb-torn, bedraggled London, when the British wrote their own epitaph. That was the day that London cabled Washington: "His Majesty's Government, in view of their own situation, find it impossible to grant further financial assistance to Greece," amounting to a half billion dollars a year and a garrison of 40,000 troops. The British also announced the same day that they were withdrawing from Turkey. "The British are finished," remarked a stunned Dean Acheson, who was soon to be Harry Truman's secretary of State. And so they were. It was the early cold war. With the Soviet Union threatening to extend its influence over Greece and Turkey, there was no time for elegies. Instead, a quick passing of the baton took place: the United States would now fill Britain's role and become the central, stabilizing power in the West. This was the moment of "creation" of the U.S.-led world order, Acheson later realized.

One has to wonder now whether the American superpower is also experiencing a terminal illness, with its decline marked by the dollar's downward drift. The one difference being that there is no successor on the horizon (the Chinese have a long, long way to go), and the currency that is replacing the dollar, the euro, is backed not by an emerging superpower but by the feeble cacophony of voices that is the European Union. Yet the signs of imperial decadence are unmistakable. The world is losing confidence in the dollar, in no small part because it has lost confidence in America's strategic judgment and in its sustainability as a great power in the face of record budget and trade deficits, which are forcing the United States to borrow ever more money from future rivals like China and Russia.

Even as the Bush administration savors the calming news out of Iraq, and prepares for a major Mideast peace conference in Annapolis on Tuesday that will look and feel like grand American gestures of the past, finance ministries and central banks around the world--especially in places like Beijing and the wealthy Persian Gulf states--are making decisions that will further undermine U.S. power, perhaps permanently. The irony for George W. Bush, of course, is that more than anything else he began as a president who wanted to build up American power, which he presumed to have been frittered away by Bill Clinton. Bush believed that enemies such as Osama bin Laden and Saddam Hussein perceived America as soft. "It was clear," he said after 9/11, "that bin Laden felt emboldened and didn't feel threatened by the United States." Bush vowed to reverse that image.

Instead, the world monetary system now is making unfavorable comparisons to America at the height of the Clinton years. And bin Laden seems to be achieving his publicly avowed goal of provoking the United States into overextending itself and draining its economy. In a blistering essay in the current Vanity Fair, Nobel laureate Joseph Stiglitz, a former World Bank economist, notes that Bush took a nation with a budget surplus upon assuming office and turned it into a global debtor, and he has underinvested in education and alternative energy. "In breathtaking disregard for the most basic rules of fiscal propriety, the administration continued to cut taxes even as it undertook expensive new spending programs and embarked on a financially ruinous 'war of choice' in Iraq. A budget surplus of 2.4 percent of gross domestic product (GDP), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II," Stiglitz writes. "Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle 'worst president' when it comes to stewardship of the American economy. The economic effects of Bush's presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America's being displaced from its position as the world's richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush."

If the passing of American hegemony happens, it will occur very slowly--death by a thousand cuts of credit. One reason why it's so hard for Americans to contemplate their loss of prestige, symbolized by the fall of the once-almighty dollar, is that politicians and pundits tend to cast the issue as all-or-nothing. What would happen, they say, if China suddenly decided to dump the trillion dollars of U.S. debt it holds in reserves? This, however, will almost certainly never occur. While China and other big dollar-holding countries such as Singapore, Russia and the Persian Gulf states are very worried about the erosion in value of their dollar-denominated holdings and inflationary pressure, they also know that an abrupt move to cut their pegs to the dollar or to sell off in large amounts would force a run on the currency. That would leave them even poorer. Instead these countries are pursuing careful reallocations of their investment holdings, shifting slowly to the euro or a "basket" of currencies that will allow them to hedge against the dollar's decline. Credit will become more expensive, the U.S. economy will find itself increasingly crimped, and America's ability and willingness to act as the defense umbrella to the world will gradually peter out. The effect will be more like a slow-acting poison: drip, drip, drip.

But the financial world order is such a precarious house of cards today that the markets are getting increasingly jittery. Markets operate on confidence. And today's markets seem to have little confidence that the Bush administration can emerge from its economic never-never land, one in which as Dick Cheney's first-term pronouncement that "deficits don't matter" was allowed to stand unchallenged, in which zero-saving Americans continue their profligate spending habits and descent into deeper indebtedness by simply assuming the rest of the world will continue to fund those habits. "The American consumer is dramatically overleveraged," says Bob Hormats a vice chairman of Goldman Sachs International. That "means we have to borrow roughly $3 billion a day from rest of world. That inflow is now slowing down. Foreigners will say 'we're concerned about lending in dollars, so we're going to be more cautious about lending money to you.' At some point, if we get a lot less money, the dollar will plunge and interest rates will go up." Even wealthy Americans, Hormats notes, are beginning to ship their money abroad, to Europe and Asia, to hedge the dollar.

We should be careful, of course, not too pronounce the death of Pax Americana too quickly. That has been done before. The illness need not be terminal: deficits can be cured, and foreigners still crowd cargo containers and the backs of trucks to sneak into the land of opportunity. (China, by contrast, is not undergoing an immigration debate.) But the country is in such a fiscal hole right now that, as David Walker, the comptroller general of the United States, told my colleague Jeff Bartholet last week, "You could decide not to renew the Bush tax cuts, you could eliminate all foreign aid, eliminate all earmarks, eliminate NASA, eliminate the National Endowment for Humanities and eliminate the entire Defense Department tomorrow, and you still wouldn't solve the problem." This most critical of issues has barely made it into the presidential debates. The drooping dollar is driving it to the public's attention, particularly as gas, oil and other essentials continue to go up in price. Perhaps the next president, whoever he or she is, ought to pay more attention, too.

© 2007 Newsweek, Inc.

Daily Mail | Nov. 21, 2007 | Natasha Courtenay Smith and Morag Turner

Posted on 11/23/2007 4:50:44 AM PST by steadfastconservative

Meet the women who won't have babies - because they're not eco friendly By NATASHA COURTENAY-SMITH and MORAG TURNER - More by this author »

Had Toni Vernelli gone ahead with her pregnancy ten years ago, she would know at first hand what it is like to cradle her own baby, to have a pair of innocent eyes gazing up at her with unconditional love, to feel a little hand slipping into hers - and a voice calling her Mummy. But the very thought makes her shudder with horror.

Because when Toni terminated her pregnancy, she did so in the firm belief she was helping to save the planet.

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Desperate measures: Toni Vernelli was steralised at age 27 to reduce her carbon footprint

Incredibly, so determined was she that the terrible "mistake" of pregnancy should never happen again, that she begged the doctor who performed the abortion to sterilise her at the same time.

He refused, but Toni - who works for an environmental charity - "relentlessly hunted down a doctor who would perform the irreversible surgery.

Finally, eight years ago, Toni got her way.

At the age of 27 this young woman at the height of her reproductive years was sterilised to "protect the planet".

Incredibly, instead of mourning the loss of a family that never was, her boyfriend (now husband) presented her with a congratulations card.

While some might think it strange to celebrate the reversal of nature and denial of motherhood, Toni relishes her decision with an almost religious zeal.

"Having children is selfish. It's all about maintaining your genetic line at the expense of the planet," says Toni, 35.

"Every person who is born uses more food, more water, more land, more fossil fuels, more trees and produces more rubbish, more pollution, more greenhouse gases, and adds to the problem of over-population."

While most parents view their children as the ultimate miracle of nature, Toni seems to see them as a sinister threat to the future.

It's an extreme stance which one might imagine is born from an unhappy childhood or an upbringing among parents who share similar, strong beliefs.

But nothing in Toni's safe, middle- class upbringing gave any clues as to the views which would shape her adult life. The eldest of three daughters, she enjoyed a loving, close-knit family life.

She excelled at her Roman Catholic school, and her doting parents fully expected her to grow up, settle down and start a family of her own.

"When I finished school, I got a job in retail and at 19, I met my first husband," says Toni.

"No sooner had we finished our wedding cake than all our relatives started to ask when they could expect a new addition to the family.

"I always told them that would never happen, but no one listened.

"When I was a child, I loved bird-watching, and in my teens that developed into a passion for the environment as well as the welfare of animals - I became a vegetarian when I was 15.

"Even my parents used to smile and say: 'You'll change your mind one day about babies.'

"The only person who understood how I felt was my first husband, who didn't want children either.

"We both passionately wanted to save the planet - not produce a new life which would only add to the problem."

So, instead of mapping out plans for a family, Toni and her husband began discussing medical options to ensure they would never reproduce.

Toni, from Taunton, Somerset, says: "When I was 21, I considered sterilisation for the first time.

"I'd been on the Pill for five years and didn't want to take hormone-based contraception indefinitely.

"I went to my GP, but she wouldn't even consider the idea.

"She said I was far too young and told me I could 'absolutely not' be sterilised, and that I was bound to change my mind one day.

"I found her attitude frustrating.

"We decided my husband would have a vasectomy instead. He was 25, just a few years older than me, but the GP allowed him to go ahead.

"I found it insulting that she thought that, just because I was a woman, I'd reach a point where an urge to breed would overcome all rational thought."

When Toni was 23, her marriage ended. She says: "We married very young and grew apart."

Toni found herself young, single and with a new life in London, working for an environmental charity.

But while other young women dream of marriage and babies, Toni was convinced it was her duty not to have a child.

She claims she was far from alone.

"Through my job I made many friends who, like me, were more interested in campaigning, trying to change society and save the planet rather than having families of our own.

"We used to say that if ever we did want children, we'd adopt, as there are so many children in need of a loving family.

"At least then, we'd be doing something positive for the world, rather than something negative."

Toni was happy, at last, with fellow environmentalists who shared her philosophy. But when she was 25, disaster struck.

"I discovered that despite taking the Pill, I'd accidentally fallen pregnant by my boyfriend.

"I was horrified. I knew straight away there was no option of having the baby.

"I went to my doctor about having a termination, and asked if I could be sterilised at the same time.

"This time it was a male doctor. I remember saying to him: 'I want to make sure this never happens again.'

"He said: 'You may not want a child, but one day you may meet a man who does'. He refused to consider it.

"I didn't like having a termination, but it would have been immoral to give birth to a child that I felt strongly would only be a burden to the world.

"I've never felt a twinge of guilt about what I did, and have honestly never wondered what might have been.

"After my abortion, I was more determined than ever to pursue sterilisation.

"By then, I had my mother's support - she realised I wasn't going to grow out of my beliefs, and was proud of my campaigning work."

At the age of 27, Toni moved to Brighton, where her dream of medical intervention was realised.

Toni says: "My new GP was more forward-thinking and referred me to hospital. I couldn't wait for the operation."

As Toni awaited the surgery which would destroy her fertility, she met her future husband, Ed, 38, an IT consultant.

"A week before my sterilisation, I went to an animal rights demonstration and met Ed.

"I liked him immediately, and I told him what I was doing straight away - because if he wanted children then he needed to know I wasn't the woman for him," she says.

"But Ed was relieved when I told him how I felt and said he didn't want children for the same reasons."

On the morning of surgery, Ed gave Toni a card saying "Congratulations".

Toni says: "After the operation, which is irreversible, I didn't feel emotional - just relieved.

"I've never doubted that I made the right decision. Ed and I married in September 2002, and have a much nicer lifestyle as a result of not having children.

"We love walking and hiking, and we often go away for weekends.

"Every year, we also take a nice holiday - we've just come back from South Africa.

"We feel we can have one long-haul flight a year, as we are vegan and childless, thereby greatly reducing our carbon footprint and combating over-population.

"My only frustration is that other people are unable to accept my decision.

"When I tell people why I don't want children, they look at me as if I was planning to commit murder.

"A woman who does not have maternal-feelings is seen as some sort of anomaly.

"And a woman like me, who is not having children in order to save the planet, is considered barking mad.

"What I consider mad are those women who ferry their children short distances in gas-guzzling cars."

But Toni is far from alone.

When Sarah Irving, 31, was a teenager she sat down and wrote a wish-list for the future.

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Sarah Irving and Mark Hudson were adamant they would live the greenest possible lives

Most young girls dream of marriage and babies. But Sarah dreamed of helping the environment - and as she agonised over the perils of climate change, the loss of animal species and destruction of wilderness, she came to the extraordinary decision never to have a child.

"I realised then that a baby would pollute the planet - and that never having a child was the most environmentally friendly thing I could do."

Sarah's boyfriends have been less understanding than Toni's, with the breakdown of several relationships.

"I've had boyfriends who wanted children, so I knew I couldn't be with them long term,' says Sarah.

"I've had to break up with a couple of boyfriends because I didn't think it was fair to waste their time.

"In my early 20s I had a boyfriend who I really liked, but he wanted to start a family as soon as possible.

"I was tempted to stay with him and hope he would change his mind, but I knew I couldn't provide him with what he wanted so I walked away."

Sarah started work for the Ethical Consumer magazine, and seven years ago she met her fiancÈ Mark Hudson, a 37-year- old health- care worker.

When they started dating in 2003, they immediately discussed their views on children.

"To my relief, Mark was as adamant as me that he didn't want a family. After a year of dating, we started talking about sterilisation," says Sarah.

"I didn't want to have an 'accident' if contraception didn't work - we would be faced with the dilemma of whether to keep the baby."

While other young couples sit down and discuss mortgages, Sarah and Mark discussed the medical options for one or the other to be sterilised.

"We realised it was a much more straightforward procedure, safer and easier, for a man to be sterilised through a vasectomy than a woman to be sterilised," says Sarah.

"In January 2005, Mark had a vasectomy and we both felt incredibly relieved there was no chance of us having a baby."

Ironically, the couple who have decided to deny themselves children for the sake of the planet, actively enjoy the company of young children.

Sarah says: "We both have nieces who we love dearly and I consider myself a caring, nurturing person.

"My sister recently had a little girl, and that has taken the pressure off me because my parents wanted to be grandparents.

"At first, they were surprised by my decision, but they have never criticised us.

"I'd never dream of preaching to others about having a family. It's a very personal choice. What I do like to do is make people aware of the facts.

"When I see a mother with a large family, I don't resent her, but I do hope she's thought through the implications."

Mark adds: "Sarah and I live as green a life a possible. We don't have a car, cycle everywhere instead, and we never fly.

"We recycle, use low-energy light bulbs and eat only organic, locally produced food.

"In short, we do everything we can to reduce our carbon footprint. But all this would be undone if we had a child.

"That's why I had a vasectomy. It would be morally wrong for me to add to climate change and the destruction of Earth.

"Sarah and I don't need children to feel complete. What makes us happy is knowing that we are doing our bit to save our precious planet."

Leaders urge OPEC members to declare economic war against U.S. 'imperialism'

Posted: November 19, 2007
3:10 p.m. Eastern

By Jerome R. Corsi
© 2007 WorldNetDaily.com

Iran and Venezuela have declared war on the U.S dollar following al-Qaida leader Osama bin Laden's call for a jihad on the American currency.

At this past weekend's OPEC summit in Saudi Arabia, Venezuelan President Hugo Chavez and Iran President Mahmoud Ahmadinejad urged members to move away from the dollar as the currency of choice for foreign-exchange reserves resulting from oil sales.

Calling the dollar a "worthless piece of paper," Ahmadinejad told the OPEC summit that a "credible hard currency" other than the dollar should be found.

Chavez, in his concluding speech at the summit, called for OPEC to use oil to fight U.S. imperialism, arguing "the empire of the dollar has to end."

Ahmadinejad's call for a basket of currencies for trading oil first surfaced over the weekend, after a closed OPEC members-only meeting was inadvertently shown on a TV monitor in the media center.

The call for an oil jihad against the dollar was first issued by bin Laden in his "Letter to the American People," published by the London Guardian Nov. 24, 2002.

Bin Laden wrote, "You steal our wealth and oil at paltry prices because of your international influence and military threats. This theft is indeed the highest theft ever witnessed in the history of the world."

He declared, "Whoever has stolen our wealth, then we have the right to destroy their economy."

At the Riyadh summit, Chavez told the group the price of oil could reach $150, or as high as $200 a barrel, "if the United States is crazy enough to attack Iran."

Ahmadinejad argued that oil was under-priced at $100 a barrel, contending higher prices on world markets would be fair to oil-producing countries such as Iran.

Saudi Arabia, a strong U.S. ally, was reluctant to take political advantage of OPEC's oil-producing strength, arguing the cartel has always acted "moderately and wisely."

According to the Islamic Republic News Agency, or IRNA, Chavez stopped off in Tehran today for direct talks with Ahmadinejad before returning home from the summit.

During the meeting, Chavez reported the two nations have signed 186 agreements, including a proposal to form a joint bank and create a joint fund for industrial projects. Bilateral trade between Iran and Venezuela has reached $4.6 billion annually.

According to IRNA, Chavez said "the value of dollars on global markets is declining, and we will witness the fall of the dollar in the future."

IRNA also reported Ahmadinejad's statement that Venezuela and Iran are in full support of each other.

In February 2006, WND reported, Iran was on a course to declare a jihad on the dollar, calling for the creation of an Iranian oil bourse organized to quote oil in euros, instead of dollars.

To date, Iran has yet to follow through with the actual creation of an oil bourse.

In the same month, WND reported Venezuela declared a policy of moving the country's foreign-exchange holdings out of the dollar and into the euro.

At that time, Chavez called for the creation of a South American central bank designed to hold in euros all the foreign-exchange holdings of the participating countries.

In February, WND reported an announcement by Ehrabhim Sheibany, governor of Iran's central bank, that about 60 percent of Iran's oil income is collected in non-dollar currencies, affirming Iran's decision to end all oil sales in dollars.

According to the Associated Press, the dollar has lost 11 percent of its value against the euro since the start of this year.

In December 2006, WND first reported a warning of the possibility of a dollar collapse.

In January came warnings that the fall of the dollar in world currency markets that began in 2006 would accelerate this year.

WND reported last week that with oil at over $90 a barrel, the U.S. has begun spending $1 billion a day for foreign oil, an outflow of dollars that both deepens the country's negative balance of international trade and further weakens the dollar on world currency markets.

By Jim Kunstler
Novermber 5, 2007

One of the biggest laughs of the season came out of a New York Times business section story last Tuesday by reporter Michael Grynbaum, who wrote, "Oil is on a steady march toward toppling the inflation-adjusted high of $101.70 it set in April 1980, analysts said, though many are at a loss as to what keeps driving the price." (Italics mine.) Actually, lots of people know what is driving up the price -- just not anybody who works at that once-august and now-clueless newspaper. It can be stated simply -- the demand line has crossed the supply line -- though that simple fact has many curious ramifications.

Among the most subtle is a theory out of Doug Noland's latest Credit Bubble Bulletin (published every Friday).

"There are literally trillions of dollars of liquidity sloshing around the world keen to hold “things” of value. Liquidity sources include the massive central bank reserve holdings as well as funds at the disposal of the sovereign wealth funds. Importantly, the more apparent becomes U.S. financial fragility, the keener they are to stockpile real 'things'. . . . Indeed, it should be noted that this is the Federal Reserve’s first attempt at reflation where U.S. securities are not the speculators’ or foreign central banks’ asset class of choice . . . . Not only is the pool of potential global buying power unparalleled in scope. It is fervidly attracted to tangible assets -- as opposed to U.S. securities -- and is highly speculative in character. At the same time, an unwieldy global boom is stoking unprecedented demand in China, India, Asia generally, and the other “emerging” markets including Russia and Brazil. Throw in various weather related issues and energy production constraints and the prospect for some very serious bottlenecks and shortages has developed."

In short, foreigners stuck holding dollars that are hemorrhaging value would rather spend them on something other than dollar-denominated financial paper, and nothing is more crucial to the maintenance of industrial economies than oil. Noland's theory comes on the heels of reported oil and gasoline shortages in China, bad enough to have caused some civil unrest -- and bad enough for China's leadership to want to spend some of its vast US dollar reserves bidding up oil prices in the open markets to quell that unrest.

This is nothing more complicated than hoarding behavior on a global scale, a mounting crisis of frightened self-interest that has already been well-described by investment banker Matthew Simmons. Simmons was only one of many analysts who spoke at the mid-October Houston conference put on by ASPO-USA (the Association for Study of Peak Oil) -- to which The New York Times failed to send a reporter. Simmons has also said that the American public (and its leaders) will probably not "get" the fundamental problem with oil until rising prices are joined by spot shortages -- i.e. gas station lines, which will represent hoarding behavior on the basis of individual motorists.

Behind the hoarding dynamics are several clear circumstances.

One biggie is the growing export crisis, described by geologist Jeffrey Brown. Countries like Saudi Arabia and Mexico that sell oil to importing nations like The USA and Japan are using more of their own oil and producing less. Mexico's trajectory is so steep (due to the severe depletion of its giant Cantarell oil field) that it could easily go from being America's Number 3 source of imports to zero in less than five years. The anticipated yearly growth in worldwide oil demand next year will equal 80 percent of the USA's entire oil production.

The export crisis is only an additional layer on top of the general peak oil situation, but it illustrates the way that complex systems we depend on -- and oil markets are one -- are liable to wobble and fail just as the world comes off the all-time oil production peak for good. Finance is another complex system and it, too, is entering a stage of robust instability. Food production is yet another, with a grain scarcity that has driven wheat prices to all-time highs. The roster of complex systems entering phase change is long and gruesome.

Another big element behind rising oil prices is oil nationalism. The old "major" oil companies -- Exxon-Mobil, Shell, BP, Chevron, et cet -- now only account for about five percent of world oil production. The other 95 percent comes from nationalized oil industries like Saudi Aramco, Mexico's Pemex, Petroleos de Venezuela, and Brazil's Petrobras. Russia's Lukoil and Rosneft are effectively state-controlled. Not only is worldwide oil in depletion (past peak) generally, but most of the remaining oil is controlled by entities that are inclined to both withhold (hoard) some remaining oil for their own future use and to direct whatever oil they do sell into places other than open auctions on the futures markets. Selling oil to favored customers will be an extremely potent instrument of geopolitics in the decade ahead, and is only one aspect of a desperate global resource contest that could turn ugly and violent. For the moment, though, its meaning for the US is that the two-thirds of our daily oil supply composed of imports is in jeopardy.

Another big element of the oil price story is the condition of the equipment used all over the world for getting it out of the ground, moving it around the globe, and refining it into useful byproducts like gasoline and aviation fuel. The world is woefully short of drilling rigs, and the cost of steel is way up. The demand for new equipment is out-of-sight. The existing worldwide inventory of equipment can be fairly described as decrepit. As Simmons points out, there is a frightening gap between the need for investment in new rigs, tankers, and refineries and the money available to just keep production at current levels. The outlook is grim. In fact, the worldwide lack of will to invest in oil industry equipment is itself a symptom of the crack-up of global finance as a complex system under duress. On top of the equipment problem is a human resource problem: the world us not producing enough oil technicians and engineers to keep up with production, let alone increase it, and every year another wave of senior specialists retires out of the system.

Beyond these parts of the oil price story are even more sub-plots, like the political strife in Nigeria that effectively holds its oil industry hostage, not to mention the fragile state-of-affairs throughout the Middle East, and dare we leave out the insane habits of America's Happy Motoring utopia.

There is really no excuse for The New York Times and the rest of the mainstream news media to not understand what is going on out there. The pervasive cluelessness is a symptom of another complex system out of whack -- the system that informs us what's going on. Meanwhile, the danger mounts. The heating season is underway and the furnaces are clanking. Many Americans will have to start choosing whether to pay their mortgage, fill the tank of the Chevy Suburban, buy that brick of Velveeta, or pay the heating oil guy. It looks like China will be spending more of its accumulated dollars bidding up the price of oil (or making favorable contracts with foreign suppliers) instead of buying Freddie Mac bonds. The USA could not find itself in a less favorable position among all these forces roiling the scene. It certainly can't afford to continue its pathetic pose of cluelessness.

Click image for full size:

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By Bill Van Auken
26 October 2007

In an act unprecedented in the history of international relations, Washington on Thursday unilaterally imposed harsh and potentially crippling economic sanctions against Iran’s main uniformed security force, as well as against more than 20 Iranian companies and the country’s three major banks.

The sanctions, announced by US Secretary of State Condoleezza Rice and Treasury Secretary Henry Paulson, represent a deliberate provocation aimed at precluding any negotiated settlement to the dispute over Iran’s nuclear program and making a US war against the country all but inevitable.

In announcing the measures—which are considerably more punitive than those imposed by Washington during the seizure of the US embassy which followed the 1979 Iranian revolution—Rice said they were designed “to increase the costs to Iran of its irresponsible behavior.”

The sanctions are directed in the first instance against Iran’s Revolutionary Guard Corps, which the US government has now branded as “proliferators of weapons of mass destruction,” and its Quds Force, which has been labeled a “supporter of terrorism.”

The Revolutionary Guards, a force of some 125,000, is responsible for law enforcement, border patrol and resistance against foreign attack. It also organizes Iran’s people’s militia, providing military training to some 12 million volunteers.

The Quds Force is a special unit within the Revolutionary Guards that handles overseas operations. It has acted in a number of countries with the direct approval of Washington.

In Bosnia, it provided arms to the US-backed Muslim government; in Afghanistan, it aided the forces fighting the Soviet military and then supported those fighting the Taliban; in Iraq, it assisted Kurdish guerrillas against the Baathist regime of Saddam Hussein.

Elsewhere, it has aided organizations opposed by the US, principally those resisting Israeli aggression, such as Hezbollah, the mass Shia movement in Lebanon, and organizations in the occupied Palestinian territories.

By imposing these designations upon the official armed forces of a sovereign state, the Bush administration is carrying out a brazen intervention into the internal affairs of Iran. In so doing, it is setting out a pseudo-legal framework for war, spelling out two alternative pretexts—weapons of mass destruction and terrorism—which are identical to those contrived and propagated in preparation for the unprovoked US invasion of Iraq.

Washington has charged that Iran is pursuing its nuclear program in order to construct a nuclear weapon. Tehran has denied this charge, insisting that it is utilizing the program for peaceful purposes, in particular, the development of an alternative power source.

In regard to the second casus belli, the Bush administration and some senior US military commanders have repeatedly accused Iran and the Quds Force, in particular, of arming, funding and training forces in Iraq responsible for attacks on US occupation troops.

Washington has yet to provide concrete evidence to back these charges and has produced no one that it can credibly claim is an Iranian agent engaged in these alleged activities. Tehran has denied responsibility for the attacks, which it points out are carried out in their great majority by Sunni resistance fighters, not the Shia movements with which the Iranians have enjoyed a longstanding relationship.

The sanctions against the Revolutionary Guards are aimed at inflicting significant damage to the Iranian economy. The Guards’ role in Iran includes far-ranging economic activities.

Its engineering unit, for example is involved in a number of major projects, ranging from a $2 billion contract for the development of the country’s main gas field, to a $1.3 billion contract for a new pipeline directed to Pakistan, to the construction of a Tehran metro extension, a high-speed rail link between the capital and Isfahan, shipping ports and a major dam.

The immediate impact of sanctions allowing the freezing of assets in US banks or barring US businesses from economic ties to the Iranian Guards, as well as the named Iranian bank and other companies, is negligible, given that Washington’s imposition of sanctions in response to the 1979 revolution that overthrew the US-backed dictatorship of the Shah had already largely frozen American banks and corporations out of the Iranian market.

Blackmailing foreign banks and corporations

The aim of these measures—which are far more sweeping than anything the US could hope to get passed in the United Nations—is to blackmail foreign banks and corporations with the threat that their continued operations inside Iran could lead to American-imposed penalties and exclusion from the US market.

Treasury Secretary Paulson called upon “responsible banks and companies around the world” to cut off all ties with the named bank, companies and all affiliates of the Revolutionary Guards. US officials have stressed that the Guards’ ties are so widespread that any economic relations whatsoever with Iran carry with them the threat of US retaliation.

The US action won quick endorsement from the British government of Prime Minister Gordon Brown, which, according to some press reports, has also signaled its willingness to go along with eventual US air strikes against Iran. Brown appears prepared to play the same role that Blair played in paving the way for the invasion of Iraq, by pushing for the United Nations Security Council to impose another set of sanctions, a move that is opposed by Russia and China, both of which have substantial interests in Iran and hold veto power on the council. In 2003, Bush invoked the failure of the UN to pass a resolution authorizing military action as the pretext for unilaterally launching the US war.

Other European powers, however, were more cool towards Washington’s diktat. German Foreign Minister Frank-Walter Steinmeir said Thursday that any decision on further sanctions against Iran should await an evaluation of Iran’s willingness to answer more questions from the International Atomic Energy Agency (IAEA). German companies exported $5.7 billion worth of goods to Iran last year, while the German Economics Ministry granted the government in Tehran $1.2 billion in export credit guarantees.

Iran’s new nuclear negotiator, Saeed Jalili, joined by his predecessor, Ali Larijani, held two days of talks this week with the European Union’s foreign policy director, Javier Solana, in Rome to discuss Tehran’s nuclear program. At the end of the talks Wednesday, the Iranian negotiators joined Solana and Italian Prime Minister Romano Prodi in a joint press conference in Rome. Both sides described the talks as “constructive,” while Prodi insisted that “dialogue is the only way to find a solution for Iran’s nuclear program in the UN Security Council and Italy encourages this way.”

Russian President Vladimir Putin voiced a harsh reaction to the US sanctions. Meeting with European Union leaders at a summit in Portugal, he insisted that the controversy over Iran’s nuclear program should be resolved through negotiations, along the lines of those pursued with North Korea.

“Why worsen the situation and bring it to a dead end by threatening sanctions or military action?” Putin said. In an obvious characterization of Bush, he continued, “Running around like a madman with a razor blade, waving it around, is not the best way to resolve the situation.”

Iran dismissed the US sanctions. “The hostile policies of America against the respectful Iranian nation and our legal organizations are against international regulations and have no value,” said Foreign Ministry spokesman Mohammad Ali Hosseini. “Such ridiculous measures cannot rescue the Americans from the crisis they themselves have created in Iraq.”

Speaking at a conference on “Privatization in Iran” held in Dubai for foreign investors, the head of Iran’s Chamber of Commerce, Industries and Mines, Mohammad Nahvandian, said that while the sanctions could lead to “an increase in costs,” they could not “disturb or stop Iran’s massive trade relations with other countries.”

The principal aim of the sanctions, however, appears to be not so much economic as political. By increasing tensions, they are designed to slam the door on any negotiated settlement of the nuclear dispute and pave the way for US military action.

In that sense they are of a piece with the steady escalation of threats against Iran, including Bush’s warning last week about “World War III” and Cheney’s threat last Sunday that Iran would face “serious consequences” if it continued on its present course, and that the US would not “stand by as a terror-supporting state fulfills its most aggressive ambitions.”

Fresh evidence of US war preparations against Iran came in the details of the nearly $200 billion budget request sent to Congress last Monday for funding the continuation of the wars in Iraq and Afghanistan.

Included was nearly $88 million for fitting “bunker-busting” bombs onto B-2 stealth bombers. Some lawmakers and congressional aides pointed out that there is little use for such weapons in the current counterinsurgency campaigns in Iraq and Afghanistan, and that the bombs were in all likelihood intended for attacking Iran’s underground nuclear facilities.

As the Bush administration prepares for yet another war, the Democrats in Congress have once again emerged as willing accomplices. The administration’s imposition of sanctions was actually prefigured by legislation passed in the Democratic-led House—by an overwhelming 397-16 vote—that would impose sanctions on non-US energy companies doing business in Iran.

While Democratic leaders claimed the measure was intended to cut off funding for Iran’s nuclear program, its real intention is evident. American oil conglomerates frozen out of the Iranian market want to deny their competitors any advantage.

In the final analysis, the propaganda about nuclear threats and terrorism notwithstanding, a US war against Iran would be launched to impose American capitalism’s hegemonic control over the strategic oil reserves of the Persian Gulf.

25.10.2007
By Sergei Malinin, Bigness.ru
Translated by Guerman Grachev' Pravda.ru

The United States is unlikely to have the best investment environment in the next five years, according to Evgeni Nadorchin, a chief economist at Trust bank. Bigness.ru requested Nadorshin to comment on recent developments in the U.S. securities market.

The last week brought sad news for the White House. To begin with, Japanese companies agreed to make payments in yens for Iran’s crude imports last Tuesday. The Japanese had previously paid for Iranian oil in the U.S. dollar. In fact, Iran had earlier signed an agreement on the yen payments for its crude exports with a number of small-sized Japanese refineries. Two leading Japanese oil exporters of Iranian crude joined the agreement last Tuesday. Japan is one of the world’s major oil exporters. The country has sent a clear message to the global oil market by switching to the yen in its payments for Iran’s oil.

“The dollar isn’t a convenient currency for Iran’s oil receipts for political reasons. The dollar payments for oil are made via correspondent accounts at U.S. banks,” Nadorshin said, in an interview to Bigness.ru. “Keeping in mind that Iran is listed by the U.S. government among the countries of the “axis of evil,” the U.S. government is not only aware of those accounts, it can control them. The U.S. government even blocked certain accounts in the past,” Nadorshin added. From the technical point of view, it would be more difficult for the United States to block such accounts in a Japanese bank.

A mere 15 percent of Iran’s oil income is now being paid in the dollar. The biggest part of Iran’s income (65 percent) from crude exports is in euros. The yen payments account for 15 percent of Iran’s oil income.

Another of the last week’s unpleasant surprise for the dollar economy was of Asian origin. According to data released by the U.S. Treasury last Tuesday, the region’s major economies, namely, Japan, China and Taiwan unloaded some of U.S. Treasury bonds from their foreign reserves. The amount of U.S. Treasury bonds shed by the three countries totals $52 billions.

Compared with the countries’ aggregate amount of foreign reserves, which are worth trillions of dollars, the above sum is fairly small. However, the fact is of importance: Japan, China and Taiwan cut their investments in U.S. Treasure bonds to a record low in the last five years.

The United States have expressed concern about the move since the above three economies plus Hong Kong and South Korea account for 51 percent ($1.14 trillion) of the total amount of foreign investments in U.S. Treasury bonds.

Tougher times could be in store for the U.S. Treasury following all those developments if the government fails to curb inflation, according to Mark Ostwald, an analyst at Insigner de Beaufort.

“The Asian banks didn’t plan shedding their dollar reserves completely,” Nadorshin said in his interview to Bigness.ru. He stressed the point that $52 billion is a drop in the water for the countries “whose combined foreign reserves exceed two trillion U.S. dollars.” The move falls into the trend of the last several years i.e. the dollar proportion of foreign reserves is on the decrease.

Nadorshin reminded that U.S. Treasury bonds were traditionally considered gilt-edged securities.

However, now investors are concerned about the fact that they bought assets in a currency that is growing increasingly weaker. Besides, the U.S. economy may be heading for a recession.

The unloading of dollar assets was inevitable. On the contrary, the last several weeks have seen an inflow of $11 billion to investment funds that put money in the developing markets e.g. Russia.

Speaking of the negative impact on the U.S. economy in the wake of the events that occurred last week, Nadorshin argued that they might indicate a long-term economic crisis the global superpower is currently going through. “The U.S. economy has been showing its weakness throughout the year. It’s a weakness that prevents the economy from keeping the dollar strong against other currencies as the main unit of account. The economy has to tackle a number of issues including deficits and structural issues. The economic measures proved to be ineffective in resolving any of those issues. The country recently experienced a suprime mortgage crisis that will probably help them resolve the issues, which they tried to resolve by increasing interest rates,” Nadorshin said in his interview to Bigness.ru

By Ben Stewart
Published on: October 22, 2007

TOKYO, JAPAN — Toyota may be the first to market with a plug-in hybrid electric (PHEV) vehicle. Today, we were briefed on Toyota’s future hybrid and alternative fuel plans. And while there was no official announcement by Yoshitaka Asakura, Project General Manager of Toyota’s Hybrid Vehicle System Engineering Development Division, he mentioned that their plug-in development program was under way and that it may not wait for lithium-ion battery technology to mature.

"Toyota has the knowledge and experience with nickel metal hydride. And we have to use the battery we know best, in terms of overall performance," said Asakura.

Toyota is using their proven nickel-metal hydride (NiMh) battery packs in prototype Prius PHEV’s which we had an opportunity to drive at Toyota’s Higashi-Fuji Technical Center about 45 minutes (by train) outside Tokyo. The prototype PHEV’s use two current generation Prius battery packs sandwiched together with the charging system in-between. The packs are modified to deliver a greater ability to charge and discharge. This is, according to Asakura, so that they can get an accurate representation of how the more energy dense lithium ion pack will perform in production vehicles. In all likelihood, the first of those vehicles will be the next generation Prius. The prototype battery system weighs about 220 lbs. more than the current production Prius pack and intrudes into the trunk so that that’s there’s only room for about two medium size suitcases. A lithium ion pack would be much smaller and lighter—about the size of today’s production battery pack.

Asakura said the prototypes can operate on electric power for a range of about 7 miles and can re-charge in three to four hours using a 110-vlot outlet. Under the hood is the current Prius’s 1.5-liter inline four. The electric motor generates 50kW, which combined with the more powerful pack, allows the Prius prototype to reach 62 mph on electric-only power. Current cars can only hit about 25 mph before the gasoline engine cuts in.

Our drive in the prototype PHEV was brief, only four laps of a small course setup inside the test facility. But it was impressive. The hybrid system has an "EV" mode and a more conventional "hybrid" mode. In EV mode the vehicle can run on electric power longer and with a more aggressive throttle input than in the hybrid mode. With an eye on the energy flow meter (basically a reprogrammed and updated version of what’s in the Prius now) we were able to accelerate up to approximately 50 mph and keep the car in electric mode all the way around the track. Like many owners do in the current Prius, we found ourselves playing the efficiency game of trying to keep the car in electric mode as long as possible. After two back-to-back laps, the monitor said we still had around 6 kilometers of battery life remaining. The most impressive part of the system was that it can take 1/4 to 1/2 throttle without engaging the gasoline engine. And that means for short 3 to 4 mile commutes, one could conceivably get to work and return home solely on electric power. The hybrid mode works much like the current car, engaging the internal combustion engine much sooner. This mode, it is presumed will be most applicable to long trips, when charging the battery isn’t an option.

The next generation Prius, due around calendar year 2009, will almost certainly use a plug-in system. The car may launch as a normal hybrid and later, once the lithium ion battery technology is ready, switch to plug-in capability. Or, it may be a plug-in from the beginning using a large NiMh pack and switch to lithium ion later. We think the latter may be true because we’ve heard rumors that the vehicle architecture is being designed for both battery types.

Whichever route Toyota goes, it will need more hybrids on the road. They have publicly announced their goal is to sell 1-million hybrids each year beginning early next decade. And PHEV’s are sure to make up a healthy portion of those vehicles.

Wednesday October 24, 10:41 am ET
By Martin Crutsinger, AP Economics Writer

Sales of Existing Homes Fall by Largest Amount on Record in September

WASHINGTON (AP) -- Sales of existing homes plunged by a record amount in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years.

The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record.

The weakness in sales translated into further pressure on prices. The median price -- the point at which half the homes sold for more and half for less -- fell to $211,700 in September, down by 4.2 percent from the sales price a year ago. It marked the 13th time out of the past 14 months that the year-over-year sales price has decreased.

The 8 percent decline in sales was bigger than the 4.5 percent decline that had been expected.

Analysts blamed the bigger-than-expected slump on the turmoil that hit credit markets and mortgage markets in August as worries increased over rising mortgage foreclosures.

Those worries resulted in a drying up of the availability of so-called jumbo mortgages, loans over $417,000, which are particularly important in high-cost areas such as California.

"Mortgage problems were peaking back in August when many of the September closings were being negotiated and that slowed sales notably in higher priced areas that rely more on jumbo loans," said Lawrence Yun, senior economist for the Realtors.

By region of the country sales were down 10 percent in the Northeast, 9.9 percent in the West, 7 percent in the Midwest and 6 percent in the South.

The slowdown in sales meant that the inventory of unsold homes rose to 4.4 million units in September. At the September sales pace, it would 10.5 months to eliminate the overhang of unsold homes, a record length of time.

Economists are worried that the huge levels of unsold existing and new homes will put further downward pressure on prices.

Yun said that the price declines should be put into perspective in that they are occurring after a five-year housing boom which pushed prices up to record levels.

He forecast that prices will decline by about 1.5 percent this year. That would be the first annual price decline on Realtors' records going back four decades.

The troubles in housing have been a drag on overall economic growth, increasing worries that the housing slump and related credit market troubles could become so severe that they will push the country into a recession.

However, many private economists believe that the Federal Reserve, which cut a key interest rate for the first time in four years last month, will continue cutting rates in a campaign to make sure that the weakening economy does not tumble into a full-blown recession.

Analysts said the price declines will worsen in coming months until inventories are reduced to more sustainable levels. Ian Shepherdson, chief U.S. economist at High Frequency Economics, predicted that the housing troubles will prompt the Fed to cut rates by a quarter-point at its meeting next week.

"The housing crunch is accelerating. The Fed can't stand by and watch," Shepherdson said.