Diminishing Marginal Utility

Source: Newsweek

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.

Posted by Hugo Albert Orwell at 09:20 AM | Permalink | TrackBacks (0)

Source: World Socialist Website

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.

Posted by Hugo Albert Orwell at 01:03 PM | Permalink | TrackBacks (0)

Source: WSJ Online

By BOB DAVIS
October 3, 2007; Page A3

DALLAS -- Hunt Oil Co. Chief Executive Ray Hunt said his ties to the Bush family and the Republican Party didn't help his company cut a deal last month to explore for oil in Iraq's semiautonomous Kurdish region.

The agreement, which gives the closely held Dallas company access to a largely unexplored part of oil-rich Iraq, has been criticized by the Bush administration and Iraqi officials as undermining efforts to strengthen the war-torn country's central government. Some critics also suggested Mr. Hunt was cashing in on his ties to President Bush, while others claimed he was turning his back on the president.

• Outside Politics: Hunt Oil CEO Ray Hunt said his ties to the Bush family and Republican party didn't help it strike a deal with officials in Iraq's Kurdish region.
• Countering Criticism: The State Department says it had warned Hunt against a deal, but Mr. Hunt said his company didn't ask for advice and acts independently.
• Unknown Potential: Iraq is oil-rich, but much of the war-torn country is unexplored and the biggest known reserves are outside Kurdish territory.

In an interview, the 64-year-old Mr. Hunt says that, contrary to the State Department's assertion, the company received no U.S. government advice before striking a deal. "The State Department must have been misinformed," he said. "We did not consult with anyone in the [U.S. government] prior to signing our agreement."

Mr. Hunt, a longtime friend of the Bush family, gave $75,000 to Republican Party fund-raising committees in the past two years, according to the Center for Responsive Politics. But he said his political ties didn't play a role; the company saw an opening in Kurdistan and jumped on it. "It's another example where we're able to move quickly when opportunity presents itself," said Mr. Hunt, who says Kurdish oil executives turned to Hunt because of its oil-development record in Yemen.

Mr. Hunt added: "The fact is, as a matter of policy, we never have and never will go to the government of the U.S. and ask the government's advice on anything we do from a business point of view."

The State Department says it warned Hunt Oil against signing a contract that it viewed as "legally uncertain." In a news conference late last month, Mr. Bush said he was "concerned" the arrangement would "undermine" negotiations for a national oil law.

The Hunt Oil deal has been touted by Kurdish officials, who want to bolster their claim to autonomy in oil-related issues and worry that energy resources are more thoroughly mapped in Shiite-dominated southern Iraq. But the Hunt contract has angered the Baghdad central government, which worries about a breakup of the state.

Hunt Oil is much smaller than super majors such as Exxon Mobil Corp., BP PLC and Royal Dutch Shell PLC. But it has a reputation in the U.S. oil patch as a risk taker. As a closely held company, it feels it can move faster than larger rivals. Mr. Hunt often refers to his firm as a "commando" operation, wooing customers with its derring-do.

Under terms of the Kurdistan contract, Hunt Oil plans to start seismic testing in the next few weeks and to drill its first well sometime next year. But Mr. Hunt emphasized that the contract is for exploration only, not for production, which could take an additional few years to begin -- if the company manages to find oil.

The Kurdish regional government yesterday said it had signed a variety of additional oil deals, which could reduce the political heat on Hunt. They include exploration agreements with two midsize oil companies, Heritage Oil Corp., of Canada, and Perenco SA, of France, and separate agreements to build two oil refineries.

Qubad Talabani, the Kurdish government's representative in the U.S., credited Hunt with boosting the visibility of Kurdistan. "When a name as established as Hunt comes in, it raised eyebrows in the oil-and-gas community," he said.

Iraq is estimated to hold some 115 billion barrels of reserves, making it the third-largest holder after Saudi Arabia and Iran. But after decades of war, the country is relatively unexplored.

Friendly and reserved, Mr. Hunt lacks the family's flamboyance. His father, H.L. Hunt, was a wildcatter who fathered 15 children by three women and used poker winnings for early capital, while two of Ray Hunt's half-brothers tried to corner the world's silver market.

But Ray Hunt shares his family's thirst for business risk and penchant for secrecy. The company won't release its revenue or even the number of Hunt employees.

Mr. Hunt has expanded its business overseas, including the North Sea and Yemen. Hunt Oil is also a big investor in a natural-gas project in Peru's Amazon and is now building a liquefied-natural-gas export facility in Peru.

Hunt is used to politically precarious situations. It struck oil in northern Yemen in the early 1980s and built the operation during periodic civil wars. Yemen expropriated a big part of its holdings in 2005, which Hunt is contesting in international arbitration, though it still has interests elsewhere in the country.

Its record in Yemen helped get it a leg up in Kurdistan, said Mr. Talabani, the Kurdish official. Over the years, Hunt has also kept up contacts with Ashti Hawrami, the Kurdish oil minister.

"We consider ourselves to be loyal American citizens as individuals and as a company," Mr. Hunt said. His company won't deal with countries that are being sanctioned by the U.S., like Cuba or Iran, or look for legal loopholes that would give it a leg up there, he said.

--Chip Cummins and Neil King Jr. contributed to this article.

Posted by Hugo Albert Orwell at 03:19 PM | Permalink | TrackBacks (0)

Source: Consortium News

By Daniel Ellsberg
September 26, 2007 (Text of a speech delivered September 20, 2007)

Editor’s Note: Daniel Ellsberg, the former Defense Department analyst who leaked the secret Pentagon Papers history of the Vietnam War, offered insights into the looming war with Iran and the loss of liberty in the United States at an American University symposium on Sept. 20.

Below is an edited transcript of Ellsberg’s remarkable speech:

I think nothing has higher priority than averting an attack on Iran, which I think will be accompanied by a further change in our way of governing here that in effect will convert us into what I would call a police state.

If there’s another 9/11 under this regime … it means that they switch on full extent all the apparatus of a police state that has been patiently constructed, largely secretly at first but eventually leaked out and known and accepted by the Democratic people in Congress, by the Republicans and so forth.

Will there be anything left for NSA to increase its surveillance of us? … They may be to the limit of their technical capability now, or they may not. But if they’re not now they will be after another 9/11.

And I would say after the Iranian retaliation to an American attack on Iran, you will then see an increased attack on Iran – an escalation – which will be also accompanied by a total suppression of dissent in this country, including detention camps.

It’s a little hard for me to distinguish the two contingencies; they could come together. Another 9/11 or an Iranian attack in which Iran’s reaction against Israel, against our shipping, against our troops in Iraq above all, possibly in this country, will justify the full panoply of measures that have been prepared now, legitimized, and to some extent written into law. …

This is an unusual gang, even for Republicans. [But] I think that the successors to this regime are not likely to roll back the assault on the Constitution. They will take advantage of it, they will exploit it.

Will Hillary Clinton as president decide to turn off NSA after the last five years of illegal surveillance? Will she deprive her administration her ability to protect United States citizens from possible terrorism by blinding herself and deafening herself to all that NSA can provide? I don’t think so.

Unless this somehow, by a change in our political climate, of a radical change, unless this gets rolled back in the next year or two before a new administration comes in – and there’s no move to do this at this point – unless that happens I don’t see it happening under the next administration, whether Republican or Democratic.

The Next Coup

Let me simplify this and not just to be rhetorical: A coup has occurred. I woke up the other day realizing, coming out of sleep, that a coup has occurred. It’s not just a question that a coup lies ahead with the next 9/11. That’s the next coup, that completes the first.

The last five years have seen a steady assault on every fundamental of our Constitution, … what the rest of the world looked at for the last 200 years as a model and experiment to the rest of the world – in checks and balances, limited government, Bill of Rights, individual rights protected from majority infringement by the Congress, an independent judiciary, the possibility of impeachment.

There have been violations of these principles by many presidents before. Most of the specific things that Bush has done in the way of illegal surveillance and other matters were done under my boss Lyndon Johnson in the Vietnam War: the use of CIA, FBI, NSA against Americans.

I could go through a list going back before this century to Lincoln’s suspension of habeas corpus in the Civil War, and before that the Alien and Sedition Acts in the 18th century. I think that none of those presidents were in fact what I would call quite precisely the current administration: domestic enemies of the Constitution.

I think that none of these presidents with all their violations, which were impeachable had they been found out at the time and in nearly every case their violations were not found out until they were out of office so we didn’t have the exact challenge that we have today.

That was true with the first term of Nixon and certainly of Johnson, Kennedy and others. They were impeachable, they weren’t found out in time, but I think it was not their intention to in the crisis situations that they felt justified their actions, to change our form of government.

It is increasingly clear with each new book and each new leak that comes out, that Richard Cheney and his now chief of staff David Addington have had precisely that in mind since at least the early 70s. Not just since 1992, not since 2001, but have believed in Executive government, single-branch government under an Executive president – elected or not – with unrestrained powers. They did not believe in restraint.

When I say this I’m not saying they are traitors. I don’t think they have in mind allegiance to some foreign power or have a desire to help a foreign power. I believe they have in their own minds a love of this country and what they think is best for this country – but what they think is best is directly and consciously at odds with what the Founders of this country and Constitution thought.

They believe we need a different kind of government now, an Executive government essentially, rule by decree, which is what we’re getting with signing statements. Signing statements are talked about as line-item vetoes which is one [way] of describing them which are unconstitutional in themselves, but in other ways are just saying the president says “I decide what I enforce. I decide what the law is. I legislate.”

It’s [the same] with the military commissions, courts that are under the entire control of the Executive Branch, essentially of the president. A concentration of legislative, judicial, and executive powers in one branch, which is precisely what the Founders meant to avert, and tried to avert and did avert to the best of their ability in the Constitution.

Founders Had It Right

Now I’m appealing to that as a crisis right now not just because it is a break in tradition but because I believe in my heart and from my experience that on this point the Founders had it right.

It’s not just “our way of doing things” – it was a crucial perception on the corruption of power to anybody including Americans. On procedures and institutions that might possibly keep that power under control because the alternative was what we have just seen, wars like Vietnam, wars like Iraq, wars like the one coming.

That brings me to the second point. This Executive Branch, under specifically Bush and Cheney, despite opposition from most of the rest of the branch, even of the cabinet, clearly intends a war against Iran which even by imperialist standards, standards in other words which were accepted not only by nearly everyone in the Executive Branch but most of the leaders in Congress. The interests of the empire, the need for hegemony, our right to control and our need to control the oil of the Middle East and many other places. That is consensual in our establishment. …

But even by those standards, an attack on Iran is insane. And I say that quietly, I don’t mean it to be heard as rhetoric. Of course it’s not only aggression and a violation of international law, a supreme international crime, but it is by imperial standards, insane in terms of the consequences.

Does that make it impossible? No, it obviously doesn’t, it doesn’t even make it unlikely.

That is because two things come together that with the acceptance for various reasons of the Congress – Democrats and Republicans – and the public and the media, we have freed the White House – the president and the vice president – from virtually any restraint by Congress, courts, media, public, whatever.

And on the other hand, the people who have this unrestrained power are crazy. Not entirely, but they have crazy beliefs.

And the question is what then, what can we do about this? We are heading towards an insane operation. It is not certain. It is likely. … I want to try to be realistic myself here, to encourage us to do what we must do, what is needed to be done with the full recognition of the reality. Nothing is impossible.

What I’m talking about in the way of a police state, in the way of an attack on Iran is not certain. Nothing is certain, actually. However, I think it is probable, more likely than not, that in the next 15, 16 months of this administration we will see an attack on Iran. Probably. Whatever we do.

And … we will not succeed in moving Congress probably, and Congress probably will not stop the president from doing this. And that’s where we’re heading. That’s a very ugly, ugly prospect.

However, I think it’s up to us to work to increase that small perhaps – anyway not large – possibility and probability to avert this within the next 15 months, aside from the effort that we have to make for the rest of our lives.

Restoring the Republic

Getting back the constitutional government and improving it will take a long time. And I think if we don’t get started now, it won’t be started under the next administration.

Getting out of Iraq will take a long time. Averting Iran and averting a further coup in the face of a 9/11, another attack, is for right now, it can’t be put off. It will take a kind of political and moral courage of which we have seen very little…

We have a really unusual concentration here and in this audience, of people who have in fact changed their lives, changed their position, lost their friends to a large extent, risked and experienced being called terrible names, “traitor,” “weak on terrorism” – names that politicians will do anything to avoid being called.

How do we get more people in the government and in the public at large to change their lives now in a crisis in a critical way? How do we get Nancy Pelosi and Harry Reid for example? What kinds of pressures, what kinds of influences can be brought to bear to get Congress to do their jobs? It isn’t just doing their jobs. Getting them to obey their oaths of office.

I took an oath many times, an oath of office as a Marine lieutenant, as an official in the Defense Department, as an official in the State Department as a Foreign Service officer. A number of times I took an oath of office which is the same oath office taken by every member of Congress and every official in the United States and every officer in the United States armed services.

And that oath is not to a Commander in Chief, which is not mentioned. It is not to a fuehrer. It is not even to superior officers. The oath is precisely to protect and uphold the Constitution of the United States.

Now that is an oath I violated every day for years in the Defense Department without realizing it when I kept my mouth shut when I knew the public was being lied into a war as they were lied into Iraq, as they are being lied into war in Iran.

I knew that I had the documents that proved it, and I did not put it out then. I was not obeying my oath which I eventually came to do.

I’ve often said that Lt. Ehren Watada – who still faces trial for refusing to obey orders to deploy to Iraq which he correctly perceives to be an unconstitutional and aggressive war – is the single officer in the United States armed services who is taking seriously in upholding his oath.

The president is clearly violating that oath, of course. Everybody under him who understands what is going on and there are myriad, are violating their oaths. And that’s the standard that I think we should be asking of people.

Congressional Courage

On the Democratic side, on the political side, I think we should be demanding of our Democratic leaders in the House and Senate – and frankly of the Republicans – that it is not their highest single absolute priority to be reelected or to maintain a Democratic majority so that Pelosi can still be Speaker of the House and Reid can be in the Senate, or to increase that majority.

I’m not going to say that for politicians they should ignore that, or that they should do something else entirely, or that they should not worry about that.

Of course that will be and should be a major concern of theirs, but they’re acting like it’s their sole concern. Which is business as usual. “We have a majority, let’s not lose it, let’s keep it. Let’s keep those chairmanships.” Exactly what have those chairmanships done for us to save the Constitution in the last couple of years?

I am shocked by the Republicans today that I read in the Washington Post who yesterday threatened a filibuster if we … get back habeas corpus. The ruling out of habeas corpus with the help of the Democrats did not get us back to George the First it got us back to before King John 700 years ago in terms of counter-revolution.

We need some way, and Ann Wright has one way, of sitting in, in Conyers office and getting arrested. Ray McGovern has been getting arrested, pushed out the other day for saying the simple words “swear him in” when it came to testimony.

I think we’ve got to somehow get home to them [in Congress] that this is the time for them to uphold the oath, to preserve the Constitution, which is worth struggling for in part because it’s only with the power that the Constitution gives Congress responding to the public, only with that can we protect the world from mad men in power in the White House who intend an attack on Iran.

And the current generation of American generals and others who realize that this will be a catastrophe have not shown themselves – they might be people who in their past lives risked their bodies and their lives in Vietnam or elsewhere, like [Colin] Powell, and would not risk their career or their relation with the president to the slightest degree.

That has to change. And it’s the example of people like those up here who somehow brought home to our representatives that they as humans and as citizens have the power to do likewise and find in themselves the courage to protect this country and protect the world. Thank you.

Daniel Ellsberg is author of Secrets: A Memoir of Vietnam and the Pentagon Papers.

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Source: Daily Koz

by FMArouet
Sat Apr 28, 2007 at 08:11:53 AM PDT

The deaths this week of former Russian President Boris Yeltsin and renowned Russian cellist and conductor Mstislav Rostropovich reminded us all of the heady days of the collapse of the Soviet Union and its empire. With astonishing abruptness the West had won the Cold War by the end of 1991.

But recalling those exhilarating days also raises a more introspective question: is America in turn now experiencing its own systemic crisis, and is it lurching toward an imminent imperial collapse?

Perhaps some insights from Soviet dissident Andrei Amalrik, French demographer Emmanuel Todd, and Yale historian Paul Kennedy can guide us to an answer below the break.

In 1969 Soviet dissident Andrei Amalrik smuggled to the West his prescient essay, "Will the Soviet Union Survive until 1984?"

Amalrik predicted that a collapse of the Soviet system would result from an explosion of suppressed national sentiment in the republics, a moribund economy, the incompetence of a self-selecting leadership, governance based on obedience and adherence to the Party line by loyal apparatchiks unable to cope with reality or to innovate, and an eventual Sino-Soviet war. Of course, it turned out to be the Soviet invasion and occupation of Afghanistan, not a Sino-Soviet war, which served as the catalyst to overwhelm the Soviet economy and ultimately the Soviet Empire. Amalrik was off in his prediction by seven years, but his overall analysis was uncannily accurate.

In 1976 Emmanuel Todd, a French historian, anthropologist, and demographer, scrutinized demographic data on the decline of birth rates in the Soviet Union, on a rise in infant mortality, and on a striking decline in life expectancy among Soviet males to write "The Final Fall: An Essay on the Decomposition of the Soviet Sphere" (1976, Editions Robert Laffont; 1979, Kary Publishers).

When Gorbachev inherited power from the senile Old Guard (the rigid and doddering Brezhnev, followed by the intelligent but doddering Andropov, followed in turn by the clueless and doddering Chernenko), he submitted to political pressure to feed what Khrushchev had called the Soviet Union's "steel-eaters," i.e., the military-industrial complex, and to try to suppress the Afghan insurgency.

At the same time Gorbachev launched a moral crusade against alcoholism, curtailed the state monopoly's production of vodka, limited vodka sales, greatly reduced liquor tax revenues, and increased the central budget deficit, thereby hastening financial and economic collapse. (Oddly enough, during World War I the Tsarist government had done the same thing with vodka production and the national budget, and had suffered the same economic result: collapse.)

Toward the Soviet Empire's end, whether in the outlying satellites and provinces or in the Russian heartland, even lifelong, loyal Communist Party members had stopped believing the lies, the deceptions, and the obvious delusions of their feckless, incompetent, self-serving, utterly corrupt, out-of-touch leadership. The Old Guard's clumsy anti-Gorbachev coup attempt in 1991 proved to be the blunder too far--the mortal wound to the system. Boris Yeltsin stood on a tank outside Parliament to rally Russian democrats to resist the coup, and Mstislav Rostropovich immediately flew to Moscow to camp out at Parliament and show his solidarity with Yeltsin. The coup collapsed, but by then Gorbachev himself had become discredited and irrelevant, and the Soviet Union rapidly disintegrated into its constituent republics.

Todd later turned his gaze to the U.S. in "After the Empire: The Breakdown of the American Order" (2002, Editions Gallimard; 2003 Columbia University Press). In this second book Todd's demographic arguments are weak (though recent surges in infant morality in the Deep South give Todd's early demographic data retrospective weight), but his economic and historical analysis seems trenchant, and he predicts that in the relatively near term America's financial indiscipline and runaway consumption habits will result in a crash leading to a necessary 15 to 20 percent reduction in American living standards. Todd reasons that the U.S., despite its military prowess, simply lacks the power to enforce its hegemony everywhere it wishes and that its increasingly fragile, debt-dependent economy cannot sustain for long such an overreaching imperial policy.

Todd describes the U.S. as a "superpower living hand to mouth," led by a ruling class "even more rudderless and clueless than its European counterparts," and incapable of achieving its global aims through repeated applications of "theatrical micromilitarism." Todd argues that the disintegration of American hegemony already is in full swing, and he predicts that the Bush American Administration and its neocon theorists "will go down in history as the gravediggers of the American empire."

In "The Rise and Fall of the Great Powers: Economic Change and military conflict from 1500 to 2000" (1987, Random House), Yale historian Paul Kennedy presented a compelling argument that eerily paralleled Todd's. Kennedy detected an oft-repeated standard formula for great power decline and collapse. Great powers (such as the Habsburg, French, Turkish, Dutch, Spanish, Russian, British, Japanese, Soviet, and eventually American Empires) get in the habit of using military force to protect what they view as their broad economic interests, but in doing so, they divert investment from productive social and economic purposes into nonproductive military ends.

Inevitably, more dynamic, productive economies position themselves to replace the aging great power when its military overspending inexorably leads to its relative economic and social decline, whether gradual or sudden.

Apparently, American neocon ideologues at the turn of the twenty-first century, like Soviet ideologues in the 1980's, "don't know much about his-to-ry." Or perhaps they merely misinterpreted Paul Kennedy and took his paradigm as a tragic Greek template that must be blindly followed.

The more the U.S. seeks to assert its will through diktat and unilateral military force, the more it ensures that the other major players will find it increasingly in their best interests to collaborate more closely with one another to deflect and frustrate the American imperium.

Note the increasing collaboration between rising Asian giants China and India as one canary in the mineshaft. In the past week newly published data showed that China has replaced the U.S. as Japan's major trading partner. Note the deepening commercial relationships between China and Europe. Note the rapidly increasing economic and political collaboration between China and Saudi Arabia. Note the accelerating drift away from the U.S. dollar as the world's reserve currency. In the past week the dollar fell to historical lows against the euro. Note the robust military collaboration between China and Russia. Note the recent decision by China and Japan to establish a military "hot line." China will hold military exercises with several ASEAN states in the coming year. Note the increasing disinclination of Europeans, notably the Germans, French, Spanish, and Italians, to support--much less finance--American imperial misadventures, such as the rapidly imploding debacle in Iraq. Note the disinclination of the Europeans to continue to tolerate the tenure of American neocon ideologue Paul Wolfowitz at the World Bank.

Where and when will the reality-challenged Bush Administration commit its blunder too far? Perhaps that blunder will turn out to be the invasion and failed occupation of Iraq. Or perhaps the ultimate catalytic blunder will occur in Iran, which remains on the neocon wish list as a target for destabilization, intervention, "liberation," and regime change.

The collapse of the American Empire is not over the horizon--an event lurking around a distant corner a few decades down the road. We are already in the very midst of it. It is like a staged train wreck unfolding frame-by-frame as we reflect in head-shaking disbelief on each day's news and on each new blunder by the Bush Administration.

Can the U.S. navigate its way to become a post-imperial, normal country--working responsibly as one great power among several rather than quixotically striving to be the sole global hegemon? Can it do so while avoiding further military disasters and a debilitating financial and economic collapse?

Or will the decline be precipitous and disorderly, accelerated by corrupt, clueless, inept, and rigid leadership, as was the Soviet Empire's collapse?

Posted by Hugo Albert Orwell at 08:20 AM | Permalink | TrackBacks (0)

Source: Oh My News

When will the country's oil bourse finally start trading?

Angelique van Engelen (clixy123)
Published 2007-08-15 15:08 (KST)

Iranian President Mahmoud Ahmadinejad is reshuffling the oil ministry. He says, this way, he hopes to deliver on his promise to redistribute wealth. He's also sacked the industry minister. And next on the agenda is the Foreign Affairs Ministry.

It's not the first time Ahmadinejad's gone about rearranging the furniture back home. But so far, he's tended to project his zest for change to officials dealing with the outside world. Shortly after coming into power two years ago, his replacing 40 ambassadors sent out a strong message -- the Iranian president was unlikely to budge over the nuclear program his country was running.

The replacement of the oil and industry ministers is explained as a tactical move by the Iranian president to increase his control over areas that he believes key to economic prosperity. So now, there's no outside world that he can pitch the rationale for his action against. What's more, the move draws attention to one of Ahmadinejad's failures as president. Having been elected on a highly populist agenda, he's not delivered many of the goodies he promised in his election campaign in 2005. His luring promises to a young population faced with high levels of unemployment, were to the average Iranian just what the country needed.

Ahmadinejad offered to drag the fledgling economy out of the mess it was in and oil revenues were going to be a key factor in this plan. However, Ahmadinejad's plan to reshape the oil sector has been met with strong resistance from within the industry. The oil minister that was sacked, Kazem Vaziri Mahaneh, is known to be highly opposed to restructuring the industry.

Plans to open an Iranian oil bourse to compete with NYMEX in New York and the IPE in London have been continuously deferred for the past two years. At least three deadlines have expired without any progress being made. The bourse, which will be located in the Iranian Free Trade Zone on the island of Kish, is meant to attract international oil trading to the Middle East.

Outside observers say the potential for an oil-trading platform in the Middle East is promising but its main risk will be stability. Oil markets, like currency markets, react much more intensely to political instability than other capital markets. The Iranian nuclear issue won't do the country any favors in creating the best circumstances for a successful oil bourse.

According to many observers, Saddam Hussein's plan to swap dollars into euros was the main reason behind the U.S. invasion of Iraq.

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Source: WashingtonPost.com

U.S. Moving Against Revolutionary Guard

By Robin Wright
Washington Post Staff Writer
Wednesday, August 15, 2007; A01

The United States has decided to designate Iran's Revolutionary Guard Corps, the country's 125,000-strong elite military branch, as a "specially designated global terrorist," according to U.S. officials, a move that allows Washington to target the group's business operations and finances.

The Bush administration has chosen to move against the Revolutionary Guard Corps because of what U.S. officials have described as its growing involvement in Iraq and Afghanistan as well as its support for extremists throughout the Middle East, the sources said. The decision follows congressional pressure on the administration to toughen its stance against Tehran, as well as U.S. frustration with the ineffectiveness of U.N. resolutions against Iran's nuclear program, officials said.

The designation of the Revolutionary Guard will be made under Executive Order 13224, which President Bush signed two weeks after the Sept. 11, 2001, attacks to obstruct terrorist funding. It authorizes the United States to identify individuals, businesses, charities and extremist groups engaged in terrorist activities. The Revolutionary Guard would be the first national military branch included on the list, U.S. officials said -- a highly unusual move because it is part of a government, rather than a typical non-state terrorist organization.

The order allows the United States to block the assets of terrorists and to disrupt operations by foreign businesses that "provide support, services or assistance to, or otherwise associate with, terrorists."

The move reflects escalating tensions between Washington and Tehran over issues including Iraq and Iran's nuclear ambitions. Iran has been on the State Department's list of state sponsors of terrorism since 1984, but in May the two countries began their first formal one-on-one dialogue in 28 years with a meeting of diplomats in Baghdad.

The main goal of the new designation is to clamp down on the Revolutionary Guard's vast business network, as well as on foreign companies conducting business linked to the military unit and its personnel. The administration plans to list many of the Revolutionary Guard's financial operations.

"Anyone doing business with these people will have to reevaluate their actions immediately," said a U.S. official familiar with the plan who spoke on the condition of anonymity because the decision has not been announced. "It increases the risks of people who have until now ignored the growing list of sanctions against the Iranians. It makes clear to everyone who the IRGC and their related businesses really are. It removes the excuses for doing business with these people."

For weeks, the Bush administration has been debating whether to target the Revolutionary Guard Corps in full, or only its Quds Force wing, which U.S. officials have linked to the growing flow of explosives, roadside bombs, rockets and other arms to Shiite militias in Iraq and the Taliban in Afghanistan. The Quds Force also lends support to Shiite allies such as Lebanon's Hezbollah and to Sunni movements such as Hamas and the Palestinian Islamic Jihad.

Although administration discussions continue, the initial decision is to target the entire Guard Corps, U.S. officials said. The administration has not yet decided when to announce the new measure, but officials said they would prefer to do so before the meeting of the U.N. General Assembly next month, when the United States intends to increase international pressure against Iran.

Formed in 1979 and originally tasked with protecting the world's only modern theocracy, the Revolutionary Guard took the lead in battling Iraq during the bloody Iran-Iraq war waged from 1980 to 1988. The Guard, also known as the Pasdaran, has since become a powerful political and economic force in Iran. Iranian President Mahmoud Ahmadinejad rose through the ranks of the Revolutionary Guard and came to power with support from its network of veterans. Its leaders are linked to many mainstream businesses in Iran.

"They are heavily involved in everything from pharmaceuticals to telecommunications and pipelines -- even the new Imam Khomeini Airport and a great deal of smuggling," said Ray Takeyh of the Council on Foreign Relations. "Many of the front companies engaged in procuring nuclear technology are owned and run by the Revolutionary Guards. They're developing along the lines of the Chinese military, which is involved in many business enterprises. It's a huge business conglomeration."

The Revolutionary Guard Corps -- with its own navy, air force, ground forces and special forces units -- is a rival to Iran's conventional troops. Its naval forces abducted 15 British sailors and marines this spring, sparking an international crisis, and its special forces armed Lebanon's Hezbollah with missiles used against Israel in the 2006 war. The corps also plays a key role in Iran's military industries, including the attempted acquisition of nuclear weapons and surface-to-surface missiles, according to Anthony H. Cordesman of the Center for Strategic and International Studies.

The United States took punitive action against Iran after the November 1979 takeover of the U.S. Embassy in Tehran, including the breaking of diplomatic ties and the freezing of Iranian assets in the United States. More recently, dozens of international banks and financial institutions reduced or eliminated their business with Iran after a quiet campaign by the Treasury Department and State Department aimed at limiting Tehran's access to the international financial system. Over the past year, two U.N. resolutions have targeted the assets and movements of 28 people -- including some Revolutionary Guard members -- linked to Iran's nuclear program.

The key obstacle to stronger international pressure against Tehran has been China, Iran's largest trading partner. After the Iranian government refused to comply with two U.N. Security Council resolutions dealing with its nuclear program, Beijing balked at a U.S. proposal for a resolution that would have sanctioned the Revolutionary Guard, U.S. officials said.

China's actions reverse a cycle during which Russia was the most reluctant among the veto-wielding members of the Security Council. "China used to hide behind Russia, but Russia is now hiding behind China," said a U.S. official familiar with negotiations.

The administration's move comes amid growing support in Congress for the Iran Counter-Proliferation Act, which was introduced in the Senate by Gordon Smith (R-Ore.) and in the House by Tom Lantos (D-Calif.). The bill already has the support of 323 House members.

The administration's move could hurt diplomatic efforts, some analysts said. "It would greatly complicate our efforts to solve the nuclear issue," said Joseph Cirincione, a nuclear proliferation expert at the Center for American Progress. "It would tie an end to Iran's nuclear program to an end to its support of allies in Hezbollah and Hamas. The only way you could get a nuclear deal is as part of a grand bargain, which at this point is completely out of reach."

Such sanctions can work only alongside diplomatic efforts, Cirincione added.

"Sanctions can serve as a prod, but they have very rarely forced a country to capitulate or collapse," he said. "All of us want to back Iran into a corner, but we want to give them a way out, too. [The designation] will convince many in Iran's elite that there's no point in talking with us and that the only thing that will satisfy us is regime change."

Staff researcher Madonna Lebling contributed to this report.

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Source: Free-Market News Network

By Noel Gibeson
Thursday, January 11, 2007

In the petrodollar wars, stage one was Iraq and stage two is Iran. Both dared to propose to use the euro instead of the U.S. dollar (USD) to buy Middle East oil. That was a big mistake because it jeopardized the solvency of the USD, a fiat currency; and, therefore, the very heart of the U.S. economy itself. Big business will not stand for that.

What is a fiat currency? A fiat currency in the case of the USD is a currency that is NOT based on gold, silver, or anything else of tangible value; but rather it is "a promise to pay." Essentially, it is an IOU ("I owe you") note that is based on the good faith and credit of the issuer that it will be redeemed at the face value of the note, a USD in this case. This is its weakness for holders of the note, but its strength for the issuer of the currency, in this case the U.S. government who simply continues to print as much money as it wants to in hopes that it will never have to redeem these dollars at their face value all at one time. It is much like an international Ponzi scheme. In reality, it is play money or monopoly money.

New York Post columnist Ralph Peters in "Eyeing Iran" (NYP, January 8, 2007) described the new U.S. military Middle East leadership lineup with General Patreus going to Iraq and Admiral Fallon going to CENTCOM as a sign for the future. Appointing a naval officer to command CENTCOM for the first time is seen as a harbinger of things to come with regard to Iraq, Somalia, and in particular, Iran. The Persian Gulf and the Indian Ocean are key geographical areas in this region. Any attempts by Iran (or anyone else for that matter) to block key strategic geographic features, such as the Strait of Hormuz, or otherwise impede the transport of oil or strategic materials could be met with an instantaneous naval military response. The presence of increased naval forces in the area could also be a sign of potential military action.

What has become more even important than national boundaries, according to Anthony Wile in High Alert (High Alert Publishing, 2007), is the control and domination exercised by global elites over the economies of nations and the destinies of people. Few people are aware of this relationship and this excellent book goes into detail describing how this works. These are the forces that are currently in play worldwide that affect the U.S., Iraq, and Iran, among many other nations.

So when Iraq President Saddam Hussein said in 2000 that Iraq would begin selling Iraqi oil using the euro instead of the USD he instantly became a marked man. Why; because it is vital to the solvency of U.S. fiat currency that there are many foreign holders of the USD in order to keep it afloat; to keep it solvent. This is particularly important in the oil markets where trade must be conducted using the USD that the United States set as the standard long ago for oil purchases. This was done on purpose (Krassimir Petrov, "The Proposed Iranian Oil Bourse," Energy Bulletin, January 26, 2006).

Iran's plan to compete with dollar-dominated and American-owned New York's NYMEX and London's IPE, met with frosty reception from the beginning and things never got better. Because of the United States' high debt levels and stated neo-conservative quest for world domination, the euro inroads to establish a foothold in the dollar-dominated world oil market and posed a direct threat both to the U.S. dollar and to the U.S. economy (William Clark, "The Real Reasons Why Iran is the next Target," Energy Bulletin, October 26, 2004).

The chief obstacle to establishment of a euro-denominated marker has been the three dollar-denominated oil pricing standard, or oil markers as they are referred to in the industry. They are the West Texas Intermediate crude (WTI), Norway Bent crude, and the Dubai crude. Since 2003 Iran has been selling their oil exports to Europe and Asia/ACU in euros. However, in 2004 when Iran announced that it intended to establish an Iranian Oil Bourse that was euro-based, that sent shockwaves through the U.S.-dominated international oil industry because it would compete with the U.S. owned NYMEX and IPE. That set Iran on a path of confrontation with the United States (William Clark, Oil, Iraq, and the Future of the Dollar, New Society Publishers, 2005).

While the United States has no bone with the people of Iran who are generally viewed with great favor in the U.S., it does have a major problem with the Ahmadinejad government of Iran for two reasons; first, their desire to establish an Iranian Oil Bourse, and second, their continued development of a nuclear weapons along with their vow to destroy Israel. Israel would never allow this to happen, nor would the United States.

But perhaps a sin even greater than continued nuclear weapons development has been their quest to establish the Iranian Oil Bourse.

For contrast, North Korea has an even more developed nuclear weapons program and is guilty of proliferating missile technology to Pakistan, Indian and Iran, yet the U.S. does not seem interested in invading them, at least so far. What is the difference? North is not an oil producer, whereas, Iran not only is a major oil producer but intends to setup a non-dollar denominated oil bourse as well. That is why Iran is the next U.S. target.

Posted by Hugo Albert Orwell at 09:12 AM | Permalink | TrackBacks (0)

Source: Slate.com

By Dahlia Lithwick
Posted Saturday, Dec. 30, 2006, at 6:30 AM ET

I love those year-end roundups—ubiquitous annual lists of greatest films and albums and lip glosses and tractors. It's reassuring that all human information can be wrestled into bundles of 10. In that spirit, Slate proudly presents, the top 10 civil liberties nightmares of the year:

10. Attempt to Get Death Penalty for Zacarias Moussaoui
Long after it was clear the hapless Frenchman was neither the "20th hijacker" nor a key plotter in the attacks of 9/11, the government pressed to execute him as a "conspirator" in those attacks. Moussaoui's alleged participation? By failing to confess to what he may have known about the plot, which may have led the government to disrupt it, Moussaoui directly caused the deaths of thousands of people. This massive overreading of the federal conspiracy laws would be laughable were the stakes not so high. Thankfully, a jury rejected the notion that Moussaoui could be executed for the crime of merely wishing there had been a real connection between himself and 9/11.

9. Guantanamo Bay
It takes a licking but it keeps on ticking. After the Supreme Court struck down the military tribunals planned to try hundreds of detainees moldering on the base, and after the president agreed that it might be a good idea to close it down, the worst public relations fiasco since the Japanese internment camps lives on. Prisoners once deemed "among the most dangerous, best-trained, vicious killers on the face of the earth" are either quietly released (and usually set free) or still awaiting trial. The lucky 75 to be tried there will be cheered to hear that the Pentagon has just unveiled plans to build a $125 million legal complex for the hearings. The government has now officially put more thought into the design of Guantanamo's court bathrooms than the charges against its prisoners.

8. Slagging the Media
Whether the Bush administration is reclassifying previously declassified documents, sidestepping the FOIA, threatening journalists for leaks on dubious legal grounds, or, most recently, using its subpoena power to try to wring secret documents from the ACLU, the administration has continued its "secrets at any price" campaign. Is this a constitutional crisis? Probably not. Annoying as hell? Definitely.

7. Slagging the Courts
It starts with the president's complaints about "activist judges," and evolves to Congressional threats to appoint an inspector general to oversee federal judges. As public distrust of the bench is fueled, the stripping of courts' authority to hear whole classes of cases—most recently any habeas corpus claims from Guantanamo detainees—almost seems reasonable. Each tiny incursion into the independence of the judiciary seems justified. Until you realize that the courts are often the only places that will defend our shrinking civil liberties. This leads to ...

6. The State-Secrets Doctrine
The Bush administration's insane argument in court is that judges should dismiss entire lawsuits over many of the outrages detailed on this very list. Why? Because the outrageously illegal things are themselves matters of top-secret national security. The administration has raised this claim in relation to its adventures in secret wiretapping and its fun with extraordinary rendition. A government privilege once used to sidestep civil claims has mushroomed into sweeping immunity for the administration's sometimes criminal behavior.

5. Government Snooping
Take your pick. There's the NSA warrantless eavesdropping program wherein the president breezily authorized spying on the phone calls of innocent citizens, in violation of the Foreign Intelligence Surveillance Act. The FBI's TALON database shows the government has been spying on nonterrorist groups, including Quakers, People for the Ethical Treatment of Animals, and Veterans for Peace. The Patriot Act lives on. And that's just the stuff we know about.

4. Extraordinary Rendition
So, when does it start to become ordinary rendition? This government program has us FedEx-ing unindicted terror suspects abroad for interrogation/torture. Khalid El-Masri, a German citizen, was shipped off to Afghanistan for such treatment and then released without charges, based on some government confusion about his name. Heh heh. Canadian citizen Maher Arar claims he was tortured in Syria for a year, released without charges, and cleared by a Canadian commission. Attempts to vindicate the rights of such men? You'd need to circle back to the state-secrets doctrine, above.

3. Abuse of Jose Padilla
First, he was, according to then-Attorney General John Ashcroft, "exploring a plan to build and explode a radiological dispersion device, or 'dirty bomb,' in the United States." Then, he was planning to blow up apartments. Then he was just part of a vague terror conspiracy to commit jihad in Bosnia and Chechnya. Always, he was a U.S. citizen. After three and a half years, in which he was denied the most basic legal rights, it has now emerged that Padilla was either outright tortured or near-tortured. According to a recent motion, during Padilla's years of almost complete isolation, he was treated by the U.S. government to sensory and sleep deprivation, extreme cold, stress positions, threats of execution, and drugging with truth serum. Experts say he is too mentally damaged to stand trial. The Bush administration supported his motion for a mental competency assessment, in hopes that will help prevent his torture claims from ever coming to trial, or, as Yale Law School's inimitable Jack Balkin put it: "You can't believe Padilla when he says we tortured him because he's crazy from all the things we did to him."

2. The Military Commissions Act of 2006
This was the so-called compromise legislation that gave President Bush even more power than he initially had to detain and try so-called enemy combatants. He was generously handed the authority to define for himself the parameters of interrogation and torture and the responsibility to report upon it, since he'd been so good at that. What we allegedly did to Jose Padilla was once a dirty national secret. The MCA made it the law.

1. Hubris
Whenever the courts push back against the administration's unsupportable constitutional ideas—ideas about "inherent powers" and a "unitary executive" or the silliness of the Geneva Conventions or the limitless sweep of presidential powers during wartime—the Bush response is to repeat the same chorus louder: Every detainee is the worst of the worst; every action taken is legal, necessary, and secret. No mistakes, no apologies. No nuance, no regrets. This legal and intellectual intractability can create the illusion that we are standing on the same constitutional ground we stood upon in 2001, even as that ground is sliding away under our feet.

What outrage did I forget? Send mail to Dahlia.Lithwick@hotmail.com. (E-mail may be quoted by name unless otherwise stipulated.)

Wishing you and yours a happy, and freer, New Year.

A version of this piece appears in the Washington Post Outlook section.

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Source: Axis of Logic

The Proposed Iranian Oil Bourse
By Krassimir Petrov
Dec 29, 2006, 05:48

I. Economics of Empires

A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. One part of the subject taxes went to improve the living standards of the empire; the other part went to strengthen the military dominance necessary to enforce the collection of those taxes.

Historically, taxing the subject state has been in various forms—usually gold and silver, where those were considered money, but also slaves, soldiers, crops, cattle, or other agricultural and natural resources, whatever economic goods the empire demanded and the subject-state could deliver. Historically, imperial taxation has always been direct: the subject state handed over the economic goods directly to the empire.

For the first time in history, in the twentieth century, America was able to tax the world indirectly, through inflation. It did not enforce the direct payment of taxes like all of its predecessor empires did, but distributed instead its own fiat currency, the U.S. Dollar, to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars and paying back later each dollar with less economic goods—the difference capturing the U.S. imperial tax. Here is how this happened.

Early in the 20th century, the U.S. economy began to dominate the world economy. The U.S. dollar was tied to gold, so that the value of the dollar neither increased, nor decreased, but remained the same amount of gold. The Great Depression, with its preceding inflation from 1921 to 1929 and its subsequent ballooning government deficits, had substantially increased the amount of currency in circulation, and thus rendered the backing of U.S. dollars by gold impossible. This led Roosevelt to decouple the dollar from gold in 1932. Up to this point, the U.S. may have well dominated the world economy, but from an economic point of view, it was not an empire. The fixed value of the dollar did not allow the Americans to extract economic benefits from other countries by supplying them with dollars convertible to gold.

Economically, the American Empire was born with Bretton Woods in 1945. The U.S. dollar was not fully convertible to gold, but was made convertible to gold only to foreign governments. This established the dollar as the reserve currency of the world. It was possible, because during WWII, the United States had supplied its allies with provisions, demanding gold as payment, thus accumulating significant portion of the world’s gold. An Empire would not have been possible if, following the Bretton Woods arrangement, the dollar supply was kept limited and within the availability of gold, so as to fully exchange back dollars for gold. However, the guns-and-butter policy of the 1960’s was an imperial one: the dollar supply was relentlessly increased to finance Vietnam and LBJ’s Great Society. Most of those dollars were handed over to foreigners in exchange for economic goods, without the prospect of buying them back at the same value. The increase in dollar holdings of foreigners via persistent U.S. trade deficits was tantamount to a tax—the classical inflation tax that a country imposes on its own citizens, this time around an inflation tax that U.S. imposed on rest of the world.

When in 1970-1971 foreigners demanded payment for their dollars in gold, The U.S. Government defaulted on its payment on August 15, 1971. While the popular spin told the story of “severing the link between the dollar and gold”, in reality the denial to pay back in gold was an act of bankruptcy by the U.S. Government. Essentially, the U.S. declared itself an Empire. It had extracted an enormous amount of economic goods from the rest of the world, with no intention or ability to return those goods, and the world was powerless to respond— the world was taxed and it could not do anything about it.

From that point on, to sustain the American Empire and to continue to tax the rest of the world, the United States had to force the world to continue to accept ever-depreciating dollars in exchange for economic goods and to have the world hold more and more of those depreciating dollars. It had to give the world an economic reason to hold them, and that reason was oil.

In 1971, as it became clearer and clearer that the U.S Government would not be able to buy back its dollars in gold, it made in 1972-73 an iron-clad arrangement with Saudi Arabia to support the power of the House of Saud in exchange for accepting only U.S. dollars for its oil. The rest of OPEC was to follow suit and also accept only dollars. Because the world had to buy oil from the Arab oil countries, it had the reason to hold dollars as payment for oil. Because the world needed ever increasing quantities of oil at ever increasing oil prices, the world’s demand for dollars could only increase. Even though dollars could no longer be exchanged for gold, they were now exchangeable for oil.

The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to accumulate increasing amounts of dollars, because they needed those dollars to buy oil. As long as the dollar was the only acceptable payment for oil, its dominance in the world was assured, and the American Empire could continue to tax the rest of the world. If, for any reason, the dollar lost its oil backing, the American Empire would cease to exist. Thus, Imperial survival dictated that oil be sold only for dollars. It also dictated that oil reserves were spread around various sovereign states that weren’t strong enough, politically or militarily, to demand payment for oil in something else. If someone demanded a different payment, he had to be convinced, either by political pressure or military means, to change his mind.

The man that actually did demand Euro for his oil was Saddam Hussein in 2000. At first, his demand was met with ridicule, later with neglect, but as it became clearer that he meant business, political pressure was exerted to change his mind. When other countries, like Iran, wanted payment in other currencies, most notably Euro and Yen, the danger to the dollar was clear and present, and a punitive action was in order. Bush’s Shock-and-Awe in Iraq was not about Saddam’s nuclear capabilities, about defending human rights, about spreading democracy, or even about seizing oil fields; it was about defending the dollar, ergo the American Empire. It was about setting an example that anyone who demanded payment in currencies other than U.S. Dollars would be likewise punished.

Many have criticized Bush for staging the war in Iraq in order to seize Iraqi oil fields. However, those critics can’t explain why Bush would want to seize those fields—he could simply print dollars for nothing and use them to get all the oil in the world that he needs. He must have had some other reason to invade Iraq.

History teaches that an empire should go to war for one of two reasons: (1) to defend itself or (2) benefit from war; if not, as Paul Kennedy illustrates in his magisterial The Rise and Fall of the Great Powers, a military overstretch will drain its economic resources and precipitate its collapse. Economically speaking, in order for an empire to initiate and conduct a war, its benefits must outweigh its military and social costs. Benefits from Iraqi oil fields are hardly worth the long-term, multi-year military cost. Instead, Bush must have went into Iraq to defend his Empire. Indeed, this is the case: two months after the United States invaded Iraq, the Oil for Food Program was terminated, the Iraqi Euro accounts were switched back to dollars, and oil was sold once again only for U.S. dollars. No longer could the world buy oil from Iraq with Euro. Global dollar supremacy was once again restored. Bush descended victoriously from a fighter jet and declared the mission accomplished—he had successfully defended the U.S. dollar, and thus the American Empire.

II. Iranian Oil Bourse

The Iranian government has finally developed the ultimate “nuclear” weapon that can swiftly destroy the financial system underpinning the American Empire. That weapon is the Iranian Oil Bourse slated to open in March 2006. It will be based on a euro-oil-trading mechanism that naturally implies payment for oil in Euro. In economic terms, this represents a much greater threat to the hegemony of the dollar than Saddam’s, because it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether. If so, then it is likely that almost everyone will eagerly adopt this euro oil system:

The Europeans will not have to buy and hold dollars in order to secure their payment for oil, but would instead pay with their own currencies. The adoption of the euro for oil transactions will provide the European currency with a reserve status that will benefit the European at the expense of the Americans.

The Chinese and the Japanese will be especially eager to adopt the new exchange, because it will allow them to drastically lower their enormous dollar reserves and diversify with Euros, thus protecting themselves against the depreciation of the dollar. One portion of their dollars they will still want to hold onto; a second portion of their dollar holdings they may decide to dump outright; a third portion of their dollars they will decide to use up for future payments without replenishing those dollar holdings, but building up instead their euro reserves.

The Russians have inherent economic interest in adopting the Euro – the bulk of their trade is with European countries, with oil-exporting countries, with China, and with Japan. Adoption of the Euro will immediately take care of the first two blocs, and will over time facilitate trade with China and Japan. Also, the Russians seemingly detest holding depreciating dollars, for they have recently found a new religion with gold. Russians have also revived their nationalism, and if embracing the Euro will stab the Americans, they will gladly do it and smugly watch the Americans bleed.

The Arab oil-exporting countries will eagerly adopt the Euro as a means of diversifying against rising mountains of depreciating dollars. Just like the Russians, their trade is mostly with European countries, and therefore will prefer the European currency both for its stability and for avoiding currency risk, not to mention their jihad against the Infidel Enemy.
Only the British will find themselves between a rock and a hard place. They have had a strategic partnership with the U.S. forever, but have also had their natural pull from Europe. So far, they have had many reasons to stick with the winner. However, when they see their century-old partner falling, will they firmly stand behind him or will they deliver the coup de grace? Still, we should not forget that currently the two leading oil exchanges are the New York’s NYMEX and the London’s International Petroleum Exchange (IPE), even though both of them are effectively owned by the Americans. It seems more likely that the British will have to go down with the sinking ship, for otherwise they will be shooting themselves in the foot by hurting their own London IPE interests. It is here noteworthy that for all the rhetoric about the reasons for the surviving British Pound, the British most likely did not adopt the Euro namely because the Americans must have pressured them not to: otherwise the London IPE would have had to switch to Euros, thus mortally wounding the dollar and their strategic partner.

At any rate, no matter what the British decide, should the Iranian Oil Bourse accelerate, the interests that matter—those of Europeans, Chinese, Japanese, Russians, and Arabs—will eagerly adopt the Euro, thus sealing the fate of the dollar. Americans cannot allow this to happen, and if necessary, will use a vast array of strategies to halt or hobble the operation’s exchange:

Sabotaging the Exchange—this could be a computer virus, network, communications, or server attack, various server security breaches, or a 9-11-type attack on main and backup facilities.

Coup d’état—this is by far the best long-term strategy available to the Americans.

Negotiating Acceptable Terms & Limitations—this is another excellent solution to the Americans. Of course, a government coup is clearly the preferred strategy, for it will ensure that the exchange does not operate at all and does not threaten American interests. However, if an attempted sabotage or coup d’etat fails, then negotiation is clearly the second-best available option.

Joint U.N. War Resolution—this will be, no doubt, hard to secure given the interests of all other member-states of the Security Council. Feverish rhetoric about Iranians developing nuclear weapons undoubtedly serves to prepare this course of action.

Unilateral Nuclear Strike—this is a terrible strategic choice for all the reasons associated with the next strategy, the Unilateral Total War. The Americans will likely use Israel to do their dirty nuclear job.

Unilateral Total War—this is obviously the worst strategic choice. First, the U.S. military resources have been already depleted with two wars. Secondly, the Americans will further alienate other powerful nations. Third, major dollar-holding countries may decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the U.S. from further financing its militant ambitions. Finally, Iran has strategic alliances with other powerful nations that may trigger their involvement in war; Iran reputedly has such alliance with China, India, and Russia, known as the Shanghai Cooperative Group, a.k.a. Shanghai Coop and a separate pact with Syria.
Whatever the strategic choice, from a purely economic point of view, should the Iranian Oil Bourse gain momentum, it will be eagerly embraced by major economic powers and will precipitate the demise of the dollar. The collapsing dollar will dramatically accelerate U.S. inflation and will pressure upward U.S. long-term interest rates. At this point, the Fed will find itself between Scylla and Charybdis—between deflation and hyperinflation—it will be forced fast either to take its “classical medicine” by deflating, whereby it raises interest rates, thus inducing a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse, or alternatively, to take the Weimar way out by inflating, whereby it pegs the long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating the economy.

The Austrian theory of money, credit, and business cycles teaches us that there is no in-between Scylla and Charybdis. Sooner or later, the monetary system must swing one way or the other, forcing the Fed to make its choice. No doubt, Commander-in-Chief Ben Bernanke, a renowned scholar of the Great Depression and an adept Black Hawk pilot, will choose inflation. Helicopter Ben, oblivious to Rothbard’s America’s Great Depression, has nonetheless mastered the lessons of the Great Depression and the annihilating power of deflations. The Maestro has taught him the panacea of every single financial problem—to inflate, come hell or high water. He has even taught the Japanese his own ingenious unconventional ways to battle the deflationary liquidity trap. Like his mentor, he has dreamed of battling a Kondratieff Winter. To avoid deflation, he will resort to the printing presses; he will recall all helicopters from the 800 overseas U.S. military bases; and, if necessary, he will monetize everything in sight. His ultimate accomplishment will be the hyperinflationary destruction of the American currency and from its ashes will rise the next reserve currency of the world—that barbarous relic called gold.

--------------------------------------------------------------------------------

Recommended Reading
William Clark “The Real Reasons for the Upcoming War in Iraq”
William Clark “The Real Reasons Why Iran is the Next Target”

About the Author
Krassimir Petrov (Krassimir_Petrov@hotmail.com) has received his Ph. D. in economics from the Ohio State University and currently teaches Macroeconomics, International Finance, and Econometrics at the American University in Bulgaria. He is looking for a career in Dubai or the U. A. E.

Also by this author
“China’s Great Depression”
“Masters of Austrian Investment Analysis”
“Austrian Analysis of U.S. Inflation”
“Oil Performance in a Worldwide Depression”
See: www.financialsense.com/editorials/petrov/main.html

~~~~~ Notes from the Editor of Energy Bulletin~~~~~

An excellent and thought provoking article by Krassimir Petrov!

However, I think perhaps it's not entirely correct to state that "critics can’t explain why Bush would want to seize those fields." The Bush regime are probably aiming to set themselves up as policeman of the Middle East oil fields, 'protecting' oil supply to Asia and Europe in return for various advantages at any future negotiation tables. Meanwhile billions of dollars of unaccountable no-bid contracts have been handed to corporations with ties to Bush administration, and the Iraqi oil industry is set to be privatised. So the reasons for the war are rich and varied. However Petrov has given us one of the clearest explanations yet of one of the most important, and certainly least understood, motivations for the war.

-AF

http://www.energybulletin.net/12125.html

Posted by Hugo Albert Orwell at 10:33 AM | Permalink | TrackBacks (0)

Source: Bloomberg

By Bill Varner

Dec. 23 (Bloomberg) -- The United Nations Security Council voted 15 to 0 to impose sanctions on Iran for its nuclear program for the first time, including a ban on acquisition of materials and technology that might be used to build an atomic bomb.

The measure demands that Iran halt uranium enrichment and heavy-water projects that the U.S. and its European allies have said may lead to the development of nuclear weapons. It freezes the financial assets of 12 named individuals and 11 groups such as the Atomic Energy Organization of Iran.

The resolution also requires the UN's nuclear watchdog agency, the International Atomic Energy Agency, to report on Iran's compliance within 60 days. ``Further appropriate measures'' such as economic penalties and severance of diplomatic relations will be required if Iran doesn't comply, it says.

``We are sending Iran an unambiguous message that there are serious repercussions to its continued disregard of its obligations and defiance of this body,'' U.S. Acting Ambassador Alejandro Wolff said. ``We look forward to Iran's full, unconditional and immediate compliance with this resolution.''

The vote, the result of more than two months of negotiations largely aimed at winning Russia's support, occurred as the U.S. and Britain are close to increasing naval power in the Persian Gulf in a display of military resolve, the New York Times reported, citing unidentified Pentagon and military officials.

Serious Message

``Russia views this resolution as a serious message being sent to Iran regarding the need more actively and more openly to cooperate with the IAEA to lift or resolve the remaining concerns relating to their nuclear program,'' Russian Ambassador Vitaly Churkin said. ``We hope that Iran will correctly and very seriously perceive the contents of this resolution and take the necessary measures to redress their situation.''

The Security Council action will likely add to tensions in the region and may contribute to rising oil prices in 2007, according to Ian Bremmer, president of the Eurasia Group, a New York-based organization that analyzes political risk for businesses. Iran is the second-biggest oil producer in the Middle East.

``Oil markets won't move very much on this resolution,'' Bremmer said. ``But we think Iran is one of the biggest risks out there and that there will be escalation of tensions in 2007 as Iran retaliates. They can disrupt markets by driving proxy wars in Iraq, Lebanon and the Palestinian territories.''

Retaliation

Senior Iranian lawmakers said today that their parliament might retaliate by blocking inspections by the IAEA, according to IRNA, the state-run Iranian news agency. Legislation to suspend inspections has been passed by the parliament's security and foreign affairs committee, the agency reported.

At the UN, Iranian Ambassador Javad Zarif said suspension of enrichment activities was ``not a solution,'' that it was instead a ``temporary, stop-gap measure'' that didn't work from November 2003 to February 206. Without specifying how Iran would react to the vote, he said the ``days of bullying, pressure and intimidation by some nuclear-weapons holders are gone.''

Zarif said the Security Council was guilty of hypocrisy for taking no action against Israel after Prime Minister Ehud Olmert appeared to confirm recently that Israel has nuclear weapons.

The U.S. and its European allies, Zarif said, which ``pushed this council to take groundless punitive measures against Iran's peaceful nuclear program, have systematically prevented any action to nudge the Israeli regime towards submitting itself to the rules governing the nuclear non-proliferation regime.''

Russia agreed to vote for the resolution after Britain, France and Germany dropped a proposed travel ban on Iranian officials and narrowed the scope of the trade embargo to ``proliferation sensitive'' materials and technology. An earlier version of the text, first circulated in October, would have banned any item that could contribute to Iran's nuclear or missile programs.

Nuclear Power Plant

The resolution's sponsors also deleted any mention of the Bushehr commercial nuclear power plant that Russia is helping Iran build. An earlier text would have barred delivery of fuel to the plant.

``It is an important symbolic move, but it is hard to see that this puts sufficient pain on Iran to compel it to do anything,'' said Bruce Reidel, senior fellow at the Brookings Institution in Washington. ``At best, this is a warning shot across the bow of the Iranian state, a long way from authorizing the use of force.''

Iran ignored a July 31 resolution requiring it to suspend enrichment activities by Aug. 31, and President Mahmoud Ahmadinejad, pronounced ah-ma-deen-ah-ZHAD, has said his government will continue its nuclear program.

Vigilance

The resolution creates a Security Council committee to monitor implementation of the sanctions and calls on UN member nations to ``exercise vigilance'' regarding the international travel of the 12 Iranian officials and any ``specialized teaching or training'' of Iranian nationals.

UN member governments are to report to the committee within 60 days on steps they have taken to implement the resolution.

The sanctions would be suspended by Iran's decision to suspend enrichment activities and terminated by a report that the government in Tehran has complied with all UN Security Council and IAEA requirements.

Undersecretary of State Nicholas Burns said in a conference call with reporters that the U.S. would follow the vote with new efforts to persuade other nations to enact the same type of financial and trade sanctions on Iran that the U.S. has had in place for 27 years.

``Russia and China tell us that want to deny Iran a nuclear weapons capability,'' Burns said. ``We want to see more vigorous action by them. We would like to see them stop selling arms to Iran and limit export credits to Iran. We think it is time to an end for business as usual.''

To contact the reporter on this story: Bill Varner in the United Nations at wvarner_at_bloomberg.net.
Last Updated: December 23, 2006 13:02 EST

Posted by Hugo Albert Orwell at 11:51 AM | Permalink | TrackBacks (0)

Source: The Financial Express

Posted online: Thursday, December 07, 2006 at 0000 hours IST

DEC 6: Iran, the world’s fourth-largest oil exporter, plans to reduce its use of the US dollar in world trade and increase use of the euro, two Tehran-based newspapers reported.

The Tehran Times said on Wednesday Iran has started substituting euros for dollars in oil sales, citing an unidentified person at the oil ministry. Iran Daily reported Iran wants to cut its dollar-based transactions to a minimum, citing minister of economy Davoud Danesh-Ja’fari. Iran’s policy of selling oil in US dollars ‘‘has not changed yet,’’ said Hojatollah Ghanimifard, executive director for international affairs at National Iranian Oil Co., in a statement read to Bloomberg News from his office.

The US and several European nations are pushing the United Nations to sanction Iran for its nuclear programme.

The dollar touched a 20-month low against the euro this week, and central banks in the Middle East including the United Arab Emirates have plans to convert some of their dollar reserves into euros. Exporting nations ‘‘are only holding so many dollars because of all the trade in the currency, but if the trend begins to move out of it, then it’s going to be a positive for the euro and add to the negative sentiment on the dollar,’’ said David Mann, a foreign-exchange strategist at Standard Chartered Bank Plc in Hong Kong.

Organisation of Petroleum Exporting Countries members including Qatar earlier this week expressed concern about the falling dollar, saying output should be cut to drive prices higher.

—Bloomberg

Posted by Hugo Albert Orwell at 09:56 AM | Permalink | TrackBacks (0)

Source: Digital Journal

Posted Dec 8, 2006 by Sam Elfassy

The end of the petrodollar is the end of the dollar hegemony. And the end of the dollar hegemony is the end of the United States of America as a superpower, if not worst than that.

Full story: financialexpress.com

The Tehran Times, a central media outlet of the world’s fourth-largest oil exporter, said that Iran has started substituting euros for dollars in oil sales. The minister of economy, Davoud Danesh-Ja’fari, announced that Iran wants to cut its dollar-based transactions to a minimum.
Bloomberg News reports: "Iran's oil export contracts for months have included a clause that allows the nation to seek payment in the euro and other currencies, creating a mechanism for a switch should Iran's policy change, according to traders who buy Iranian oil".

It was expected: Iran seems like it is defending itself from Iraq's diabolic fate generated by the same US which declares it to be next.

Accordingly, Iran, as an act of self defense, signals straight to Washington it can hurt harder.
And it can indeed: by shifting the most valuable commodity on earth nowadays, oil and gas, from a dollar tied commodity (hence “the petrodollar”, trading oil in US dollars) to a euro tied commodity (hence “the petroeuro”) it can collapse, surprisingly easily, the already fragile dollar hegemony. Due to the fact that others will follow.

Other economies around the world will join Iran out of their own substantial reasons. like Iran, they have their own motivation and necessity to get loose from United States’ violent grip. Venezuela, another important OPEC member is one, Russia another, and others. Add it to the just announced new Chinese oil wholesale market plus the upcoming Iranian oil bourse plus the efforts of major central banks to get rid of their dollars while the collapse of the petrodollar looming and the reason for Washington’s panic is getting much clearer.

Iran still leaves an open door for diplomacy, it is sending the message “I can do this already”, but on the other hand “I didn’t start operating the whole transition yet”. It looks as if the Iraq Study Group that showed up suddenly to recommend a diplomatic channel with Iran was formed only to enable Washington to climb down the tall tree it is on.

When asked for an official statement regarding Iran's energy trade policy, by US Bloomberg news, Hojatollah Ghanimifard, executive director for international affairs at National Iranian Oil Co., played the game of the official lines and replied that Iran’s policy of selling oil in US dollars ‘‘has not changed yet’’.

Posted by Hugo Albert Orwell at 09:53 AM | Permalink | TrackBacks (0)

Source: Financial Times (FT.com)

By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London

Published: December 10 2006 20:11 | Last updated: December 10 2006 20:11

Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements.

The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency.

Market liquidity is traditionally low in December, and many traders have locked in profits, potentially reinforcing volatility.

Russia and the members of the Organisation of the Petroleum Exporting Countries, the oil cartel, cut their dollar holdings from 67 per cent in the first quarter to 65 per cent in the second.

Meanwhile, they increased their holdings of euros from 20 to 22 per cent, the BIS said. The speed of the shift may help to explain the weakness of the dollar, which recently fell to a 20-month low against the euro and a 14-year low against sterling.

The BIS, the central bank for the developed world’s central banks, is customarily cautious in its language. However, it noted: “While the data are not comprehensive, they do appear to indicate a modest shift over the quarter in the US dollar share of reporting banks’ liabilities to oil exporting countries.”

The review shows that Qatar and Iran, whose foreign exchange policy has sparked widespread market speculation, cut their dollar holdings by $2.4bn and $4bn respectively.

Such shifts may be modest compared with the total assets held, but they provide a crucial indication on future thinking.

Currency switches are likely to be progressive, subtle and discreet, as untoward attention could hit the dollar, lowering the value of depositors’ remaining dollar-denominated assets.

The last time oil-exporting countries cut their exposure to the dollar – in late 2003 – it pushed the euro to an all-time high against the dollar. Eighteen months ago, the exposure to the dollar of oil producing countries was above 70 per cent.

BIS data is the best guide financial markets have to the currency investment trends of oil producers, which otherwise do not provide figures. The rise in oil prices since 2002 means oil producing countries have amassed a current account surplus of about $500bn, according to the IMF. This is 2½ times the current account surplus of China.

Overall, Opec’s dollar deposits fell by $5.3bn, while euro and yen-denominated deposits rose $2.8bn and $3.8bn, respectively. Placements of dollars by Russians rose by $5bn, but most of their $16bn additional deposits were denominated in euros.

The dollar has suffered weakness because of concerns about global imbalances and the future course of the Federal Reserve’s interest rate policy.

Additional reporting by Peter Garnham in London

Copyright The Financial Times Limited 2006

Posted by Hugo Albert Orwell at 03:30 PM | Permalink | TrackBacks (0)

Source: Spiegel Online

By Christian Reiermann

Is an end of an era looming in the foreign exchange markets? The dollar has been depreciating against the euro for weeks. Currency experts and the German government don't yet see this as cause for alarm. The US currency's role as a lead currency isn't as important as it used to be, they say.

Like most central bankers, Jean-Claude Trichet, the president of the European Central Bank (ECB), has a penchant for cryptic comments. Injecting a certain degree of incomprehensibility is a signal to the professionals that he's competent. And when it comes to laymen, industry jargon has the desired effect of generating the necessary respect.

Last Thursday the public was treated to yet another example of Trichet's convoluted speaking style. A number of risks, the ECB president said, could jeopardize a generally favorable economic outlook in the euro zone. They included, according to Trichet, "concerns regarding possible uncontrolled developments triggered by global economic imbalances."

What Europe's most powerful protector of the currency was actually saying was this: The gradual decline of the dollar in the foreign currency markets in recent weeks could pose a threat to the economy. What Trichet was also trying to broadcast is that the ECB has recognized and is aware of the threat.

Nevertheless, the European Central Bank in Frankfurt again increased its key interest rate on Thursday by a quarter percentage point to 3.5 percent, which makes the euro more attractive to international investors. The central bankers had no choice but to take the step, having already announced their intentions weeks ago.

Experts have been predicting for some time that the dollar would eventually go into a nosedive, and now that time seems to have come. The US currency has lost five percent of its value against the euro since late October, and 13 percent since the beginning of the year. The euro is currently fluctuating around a value of $1.33, which is only 3 cents away from its all-time high in 2004. And yet Trichet's counterpart Ben Bernanke, the chairman of the US Federal Reserve, has done nothing but look on as the dollar plunges.

A sea change appears to be taking place on the international financial markets. For years, global capital flowed in only one direction, with $2 billion going into the United States every day. Investors viewed the world's largest economy not only as a bastion of stability, but also as a place that promised the best deals, the most lucrative returns and the highest growth rates.

The Americans, for their part, welcomed foreign investment. For them, it was almost a tradition to save very little and spend more than they earned -- essentially achieving affluence on credit. Foreigners financed the Americans' almost obsessive consumer spending, which spurred worldwide economic growth for years.

Because the US government was unable to fall back on the savings of its citizens, it too was forced to finance its budget deficit with foreign capital. Both consumer spending and the federal deficit kept the dollar high, because the rest of the world was practically scrambling to invest in the United States.

This phase seems to have come to an end, at least for the time being. "There are fundamental weaknesses in the American economy. This could not continue in the long term," says Alfred Steinherr, chief economist at the German Institute for Economic Research (DIW).

Investors pulling out

Investors worldwide are becoming sceptical and starting to pull their money out of the United States. They have realized that a people and a country cannot live beyond their means in the long term. The US dollar's exchange rate is starting to crumble as a result of this withdrawal.

The depreciation is causing growing concern about what will happen to the global economy if the United States loses its role as an engine of growth. If German cars, machinery and services become more expensive, will the German economic recovery end before it has really started?

The German government isn't worried yet, at least not officially. Nevertheless, experts in the finance and economics ministries have been keeping a close eye on developments. Although they continue to believe that the changes still fall within the scope of long-term averages, they don't rule out that the situation could worsen.

They believe that a first critical threshold for the competitiveness of the German economy will be reached at an exchange rate of about $1.36 per euro, and that Germany could see major difficulties at rates in the neighborhood of $1.50. If there is turbulence in the foreign currency markets, the government in Berlin will find itself in an especially challenging position. In early 2007, Germany will assume the chairmanship of the so-called G8 group of seven major industrialized nations plus Russia.

The G8 has repeatedly engaged in crisis management to deal with problems in the international financial system. It did so in the 1980s, when the combined forces of the G8 were needed to put a stop to the soaring dollar. It stepped in with equal verve a few years to forestall a decline in the American currency with the so-called Louvre Accord.

There are two principal causes behind the most recent development. Both have to do with the fact that Europe is becoming more attractive for international investors compared to the United States. On the one hand, interest rates in Europe and the United States are moving in opposite directions. "The ECB will continue to raise its key rates next year, whereas interest rates appear to have peaked in the USA," says Joachim Scheide, an expert on the economy at the Global Economic Institute (IFW) in the northern German city of Kiel. This means that financial investments denominated in euros are yielding higher interest and are in greater demand internationally, which in turn leads to a rise in the euro.

The prospects for growth are also shifting. The US economy is cooling off. The government recently lowered its 3.3 percent growth forecast for 2007. If Americans consume less as a result of a decline in foreign capital investment, the United States could even face a prolonged period of more modest growth.

Germany has shed 'sick man' image

By contrast the euro zone economy is robust. Germany, in particular, has surprised many with a stream of good economic news. Unemployment dropped below the psychologically critical threshold of four million in November. The Ifo business climate index, which measures the expectations of businesses, is at its highest point in 15 years, while consumer confidence has reached a five-year high.

In the last quarter of this year Germany, long considered the sick man of Europe, will have transformed itself into an engine of economic growth. According to analysts at Postbank, Germany's annual growth, projected at 3.4 percent, will even exceed that of the United States this year.

This is the kind of news that fuels the expectations of investors who now prefer to invest their money in the euro zone. The result is an increase in the exchange rate for the European Union's common currency. But how will the decline in the dollar's value affect future economic development? Could it cause a major imbalance in the global economy, or will the global economy, and Germany, get off lightly?

Pessimists are quick to come out of the woodwork whenever a major shift in the financial markets approaches. Many economists and bank analysts, especially in the United States, believe that the correction will happen very suddenly, with the dollar depreciating by 10 to 30 percent within a short period of time.

This would inevitably cause an adjustment crisis. Growth rates would plunge worldwide and a global recession, coupled with a drastic jump in unemployment, could follow.

This doomsday scenario is by no means the majority view. Some experts, especially in Germany, are more optimistic. "The US trade deficit has grown in the course of a few years," says IFW expert Scheide. "It will also gradually decline over a period of several years."

Scheide expects the dollar to lose another 10 percent in value against the euro in the next five years, a scenario that would be much easier to handle for the German and European economies. Companies would have sufficient time to adjust to changes in exchange rates. "In that case even an exchange rate of 1.40 wouldn't be disastrous," said DIW analyst Steinherr.

Germany is a good example of how effectively this can work. Despite the fact that the dollar has lost half of its value against the euro since 2002, exports have not been adversely affected. Indeed, they even increased from €651 billion ($861 billion) to €786 billion ($1.04 triilion). The Germany economy exported more than ever before in October.

Another reason is that the dollar zone is no longer as important for German exports as it was only a few decades ago. Leaving aside exceptions such as the auto industry, other regions of the world have long since become more important to the German economy than the United States, where Germany now sells less than one-tenth of its exports. Germany exports more than 40 percent of its goods and services to other countries within the euro zone, 13 percent to eastern Europe and nine percent to Asia. The turbulence surrounding the dollar has had virtually no effect on German exports to neighboring European countries. Most of the EU's new members have tied their currencies to the euro, and exchange rate risks evaporated for western Europe with the introduction of the euro.

The euro even prevents the kinds of major upheavals in Europe that occurred in the past whenever the dollar fell. When that happened, German businesses and consumers were routinely forced to bear a greater burden of adjustment than the economies of neighboring countries. In the past, if the German mark gained 10 percent in value against the dollar, the French franc or the Italian lira would only gain six or seven percent. As a result, the German mark was overvalued relative to other European currencies, which translated into economic disadvantages for the German economy.

This mechanism was eliminated when the euro was introduced. Now all member states carry the same burden.

The consequences of a declining dollar for the German and European economy will be determined in large part by the way other currencies develop relative to the dollar. "It would be fatal if only the euro were to rise," says DIW analyst Steinherr. "Then it would only be the euro zone that would have to bear the burden of adjustment." But the foreign currency markets suggest a different development, as the dollar is also losing value in relation to other important currencies.

The British pound, for example, rose to new highs last week. Even more importantly, the currencies of east Asian growth regions are also appreciating against the dollar. The Thai Baht, for example, gained about 15 percent against the dollar in 2006, while the South Korean Won gained 10 percent. Even the Chinese Yuan, which slavishly followed the dollar in the past, gained more than three percent. Virtually every economy is bearing part of the burden of adjustment.

The decline in the dollar also has its advantages. For Germany, the greatest advantage is that Germans pay less for oil. The oil price is mainly set in dollars worldwide. If the dollar declines, the same amount of oil costs Europe fewer euros, and the money the Europeans save can be spent on other goods.

A similar dynamic applies to exports from the dollar zone. If the decline in the dollar continues, computers, software licenses and machinery from the United States will become less expensive. Both developments would represent a windfall for companies and people in the euro zone, because the same amount of money would buy more goods.

The perils of a currency crash are not nearly as great as they were in the days of the dollar's absolute dominance 30 or 40 years ago. Globalization has led to the development of a number of growth centers in the world economy which share the burden of turbulence. Gone are the days when an American finance minister could boast: "The dollar is our currency, but it's your problem."

Translated from the German by Christopher Sultan

Posted by Hugo Albert Orwell at 03:27 PM | Permalink | TrackBacks (0)

Source: Falls Curch News Press Online

By Tom Whipple
Thursday, 07 December 2006

On November 29, the Washington Post carried an op-ed by Nawaf Obaid, an advisor to the Saudi government. Despite the obligatory "the opinions expressed are his own", and a press release denying government involvement, the piece clearly carries an important message from Saudi King Abdullah to President Bush, Washington, and the American people.

"Stepping Into Iraq" starts by reminding President Bush that in February 2003 the Saudi Foreign Minister had warned him that if the US removed Saddam Hussein by force he would only be solving one problem by creating five more.

Obaid goes on to point out that had the President followed the Foreign Minister's advice, Iraq would not now be facing "full blown civil war and disintegration."

The thrust of the message, however, is a thinly veiled warning to the US not to walk away from Iraq. Obaid quotes the Saudi Ambassador who said last month: "Since America came into Iraq uninvited, it should not leave Iraq uninvited." And Obaid adds, "If it does, one of the first consequences will be massive Saudi intervention to stop Iranian-backed Shiite militias from butchering Iraqi Sunnis."

"As the economic powerhouse of the Middle East, the birthplace of Islam and the de facto leader of the world's Sunni community (which comprises 85 percent of all Muslims), Saudi Arabia has both the means and the religious responsibility to intervene," he continues.

The Saudis, of course, are reminding us that while America can get on its ships and planes and go home, Saudi Arabia is going to be left right at the heart of what is starting to look more and more like the beginnings of a regional war. Should the fighting increase, it is only a manner of time before the vital interests or perhaps the very existence of the Kingdom, or at least the Royal family, is threatened.

The Saudis are clear about why they are sending this message to America. "Just a few months ago it was unthinkable that President Bush would prematurely withdraw a significant number of American troops from Iraq. But it seems possible today." Obviously the American election, with the unmistakable message that the American voters want out is much on Saudi minds. "The Saudi leadership is preparing to substantially revise its Iraq policy," says Obaid.

The critical part of all this is just what the Saudis are going to do in the face of an American threat to withdraw. The op-ed lists three options. First Riyadh could give their Sunni kinsmen (money, arms and logistical support. So far they claim to have refrained from doing this because the Sunni insurgents were busy shooting and blowing up Americans so it was considered highly impolitic to aid them. This of course shows commendable self-restraint as the Iranians have been supporting the Shiites for years.

The second Saudi option would be to fund, equip, and train new "Sunni brigades" to offset the Shiite militias. This of course would formalize the "civil war."

Now, however, we get to the Saudis' third option as suggested by Obaid— oil. "King Abdullah may decide to strangle Iranian funding of the militias through oil policy." "If the Saudis boosted production and cut the price of oil in half, the kingdom could still finance its current spending. But it would be devastating to Iran, which is facing economic difficulties even with today's high prices."

Now the notion of the Saudis flooding the 85 million barrel a day world oil market with enough oil to halve the world price and destroy the Iranian economy is a stretch. Saudi oil production has been dropping in recent months and some analysts believe this is from necessity not choice. Even if the Saudis were to attempt to increase output, it would likely be hard-to-sell heavy crude, and the effort would probably damage future oil production by over producing existing fields.

The Saudis may no longer be able to increase production enough to attain their political objectives, however, there is no reason why they can't cut their production. Cutting is easy and it can be done is many ways varying from an overt embargo as happened in the 1970's to more subtle reductions.

Why are the Saudi's continuing to produce circa 9 million barrels a day? Given the tight worldwide oil market, the Saudi's could cut their production in half; the price of oil would more that double; they would get richer; their oil fields would get a much needed rest; and there would be oil left for their great-grand children to export.

What keeps them from cutting production and reaping all these benefits? That too is simple, their relationship with the USA. So long as the US was their number one protector, and needed the oil to keep flowing, the Saudis historically would bend over backwards to help Washington out. The only exception was the short-lived oil boycott back in 1973.

Now, however, everything has changed. Against Saudi advice, the US charged into Baghdad and set 27 million Iraqis at each other's throats. America's partners in the invading "coalition" are bailing out one by one. The US people have just voted to change something and it is clear that "stay the course" is not going to obtain for much longer.

The key Saudi foreign policy objective at the minute clearly is to keep sufficient US military forces in Iraq to keep the lid on the situation for as long as it takes to keep the mess from spilling over into Saudi Arabia itself.

The threat to the existence of the Saudi Royal Family from a spreading civil war now is much greater than any threat from an unhappy Washington. Can anyone imagine the new US Congress voting to invade some other large Middle Eastern country in the near future? With what?

Could a major cutback in Saudi oil production bring down America? Maybe not, but it sure could do a lot of harm. The most blatant action would be cut their oil production in half. Taking 4-5 million barrels a day off the world oil market would get everybody's attention very quickly. Oil prices would certainly go well over $100 per barrel. In short order, the US and world economies would suffer greatly.

The Saudis could, however, bring pressure without doing anything so provocative as a major production cut. Simply ratcheting down production in an unobtrusive manner should be enough to scare Washington into reconsidering leaving Riyadh, as the leader of the world's Sunnis to deal with the mess on its own.

Just before President Bush met with the Iraqi Prime Minister in Jordan last week, Vice President Cheney was summoned to Riyadh to receive the whole Saudi message. It may be many years before we learn exactly what that message was, but already President Bush is back to talking about "staying the course."

It may be a lot harder, or a lot more expensive, for the US to get out of Iraq than anyone ever thought.

Posted by Hugo Albert Orwell at 09:54 AM | Permalink | TrackBacks (0)

Source: PINR

October 2, 2006

Russian troops in Georgia were put on "high alert" on Sunday and ordered to "shoot to kill if provoked" while defending Moscow's two military bases in the Caucasian country. Tensions between Russia and Georgia are escalating after Tbilisi arrested four Russian officers on September 27 on spying charges.

As a consequence, Moscow withdrew its diplomats from Tbilisi and warned that it could postpone pulling out its troops by 2008 as initially planned. Russian Foreign Minister Sergei Lavrov told the press on September 27 that the situation is "very serious," and, therefore, "when the U.N. Security Council will consider the Georgia-Abkhaz settlement in the next two weeks, we will insist on assessing Georgia's activities as subversive."

The crisis has its roots in the pro-Western, pro-U.S. turn of Georgian national elites epitomized by President Mikhail Saakashvili and his "Rose Revolution." The situation had already worsened in August when Georgian security forces attempted to secure control of the Abkhazian river valley of the Kodori Gorge in order to regain control of the breakaway regions of Abkhazia and South Ossetia. Tbilisi then called for the replacement of Russia as the official mediator in Georgia's regional conflicts. Moscow maintains peacekeepers there along with two military bases.

This escalation signals that Georgia is likely to become the catalyst for U.S.-Russian geopolitical conflict for strategic and economic influence in the Caucasus. Washington criticized Moscow's reaction to the officers' arrests and continues to sponsor Tbilisi's gradual integration into N.A.T.O. Saakashvili has never concealed his pro-U.S. stance and frequently accuses Russia of being the destabilizing force behind breakaway regions South Ossetia and Abkhazia. Although Moscow officially says that Georgia is a sovereign state and is free to join N.A.T.O., Russia is working to maintain strong influence in the Trans-Caucasus region.

As PINR pointed out on September 19, the recent Russian-backed Transdniester pro-independence referendum may be a pattern for the two Georgian separatist regions' attempts to gain national independence. The United States and N.A.T.O., however, are likely to be more active in preserving Georgia's national integrity by strongly supporting Saakashvili than they have been in Transdniester. Therefore, a continued dispute between Tbilisi and Moscow with significant U.S. and European participation on the Georgian side is to be expected in the coming months. [See: "Intelligence Brief: Transdniester Votes for Independence"]

The stakes in the southern Caucasus region are significant. Georgia and Azerbaijan form a gateway linking the Black Sea to the Caspian Sea and are vital for the control of Central Asia's massive fossil resources, as the well-known Baku-Tbilisi-Ceyhan pipeline testifies.

Georgia's geographic position is also critical to N.A.T.O.'s ability to secure the Black Sea region and it allows Washington to project power toward the Middle East. Furthermore, at a time of uncertainty on Turkey's E.U. accession bid and on Ankara's geostrategic orientation -- due to Turkish Prime Minister Recep Tayyip Erdogan's unwillingness to subscribe to U.S. military actions in Iraq -- Georgia's geostrategic importance for Washington is increasing.

Tbilisi's new pro-Western course is predicated upon a strategic relationship with the United States and N.A.T.O. and serves the purpose of a post-Soviet national elite that is eager to eliminate Russian hegemony. Disputes with Abkhazia and South Ossetia are worrying Tbilisi, but, on the other hand, they are enabling the Saakashvili administration to distract international attention from its increasingly authoritarian rule and provide him an effective ideological tool to boost nationalism and use it against remaining Russian influence.

As a consequence, tensions are likely to remain high in the coming months. While it is unlikely that Russia and N.A.T.O. will make moves that could openly put one against the other in the region, Moscow's support for separatist movements in Abkhazia and South Ossetia will probably continue. Chances that a smooth diplomatic solution to Georgia's regional issues will be implemented soon are decreasing, while Tbilisi's approach to separatism remains militaristic.

Posted by Hugo Albert Orwell at 08:42 PM | Permalink | TrackBacks (0)

Source: Reuters

By Richard Waddington
September 26, 2006

GENEVA (Reuters) - Israel has turned the Gaza Strip into a prison for Palestinians where life is "intolerable, appalling, tragic" and the Jewish state appears to have thrown away the key, a U.N. human rights envoy said on Tuesday.

U.N. special rapporteur on human rights in the occupied Palestinian territory John Dugard said that the suffering of the Palestinians was a test of the readiness of the international community to protect human rights.

"If ... the international community cannot ... take some action, (it) must not be surprised if the people ... disbelieve that they are seriously committed to the promotion of human rights," he told the United Nations' Human Rights Council.

Israel hit back saying there was an "alarming disconnect" between the rapporteur's report to the U.N.'s human rights watchdog and the experience of Israelis who continued to "face the daily threat of Palestinian terrorism."

The South African lawyer, who has been a special U.N. investigator since 2001, repeated earlier accusations that Israel is breaking international humanitarian law with security measures which amount to "collective punishment."

Israel says its security restrictions, which include the construction of a steel and concrete barrier in the
West Bank, are designed to stop suicide bombers entering Israel. Bombings have declined since the barrier was built.

It also maintains tight restrictions on the movement of goods and people into and out of Gaza, a coastal strip that it pulled out of last year after 38 years of occupation.

"UNPUNISHED"

Dugard also attacked the United States, the European Union and Canada for withdrawing funding for the Palestinian Authority in protest at the governing party Hamas's refusal to accept Israel's right to exist.

"Israel violates international law as expounded by the Security Council and the International Court of Justice and goes unpunished. But the Palestinian people are punished for having democratically elected a regime unacceptable to Israel, the U.S. and the EU," Dugard said.

But Israel's ambassador to the U.N. in Geneva Itzhak Levanon said that by putting the "entire blame" on Israel the report "absolves the terrorists that have taken Palestinian society hostage from even the most minimal responsibility."

Dugard said that three-quarters of Gaza's 1.4 million people were dependent on food aid. Bombing raids by Israel since the June 25 capture of an army corporal by Palestinian militants had destroyed houses and the territory's only power plant.

"Gaza is a prison and Israel seems to have thrown away the key," he said.

The West Bank also faced a humanitarian crisis, albeit not as extreme as Gaza, in part due to the barrier, which Dugard alleged was no longer being justified by Israel on security grounds but was part of a move to annex more land.

Palestinians living between the barrier and the Green Line, the frontier at the end of the 1967 Arab-Israeli war, could no longer freely access schools and places of work and many had abandoned local farms, he said.

"In other countries this process might be described as ethnic cleansing but political correctness forbids such language where Israel is concerned," Dugard said.

Posted by Hugo Albert Orwell at 12:00 PM | Permalink | TrackBacks (0)

Source: SFGate.com

Robert Collier, Chronicle Staff Writer
Sunday, September 24, 2006

(09-24) 04:00 PDT El Tigre, Venezuela -- On the hot, shrub-covered plains around this dusty, dingy town, an odd courtship is being carried out between the world's most prominent revolutionary and the world's biggest oil companies.

Just as there is no love between President Hugo Chavez and the Bush administration, there is little love lost between Chavez and the foreign oilmen who are pumping up the huge reservoirs of underground oil. But they need each other. The United States needs Venezuela to help quench its bottomless thirst for oil, and Chavez needs America to buy it from him in order to fund his dreams of spreading his leftist ideology around the hemisphere.

The stakes here are huge. The area around El Tigre, known as the Orinoco Oil Belt, possesses the world's biggest petroleum reserves -- 1.3 trillion barrels of so-called extra-heavy oil. Chevron, Exxon Mobil, ConocoPhillips and dozens of other foreign firms are here, using recently developed technologies to extract the tarlike, sulfurous crude and refine it.

"Everyone agrees that the Orinoco Belt has the biggest reserves in the world," said Alberto Quiros, a Chavez critic and former president of Royal Dutch Shell's Venezuela operations. "What Chavez will do with them is another question, but there's no doubt that Venezuela will take Saudi Arabia's place as No. 1."

Chavez already is forcing Chevron, which is based in San Ramon, and other oil companies to swallow some bitter pills.

In the past two years, he has raised foreign oil companies' corporate income tax to 50 percent from 30 percent and increased royalties payable to the government from as low as 1 percent to 33 percent. After he threatened to confiscate their operations elsewhere in Venezuela, 26 foreign oil companies, including Chevron, agreed earlier this year to convert their operations into joint ventures with the state-owned Petroleos de Venezuela (known as Pdvsa), with the government holding the majority share. Two European firms -- Total of France and ENI of Italy -- refused, and Chavez promptly expelled them.

Now, the government is demanding similar concessions at the four Orinoco Belt operations, in which Chevron, Exxon Mobil and others have invested about $17 billion. The government is demanding that Pdvsa's ownership share of the projects be increased from an average of 40 percent to at least 51 percent and that Pdvsa take over operational control of the oilfields.

Negotiations over these demands are coming to a head, and the outcome may influence whether Venezuela's rising tensions with Washington subside or even escalate. Analysts say foreign companies may seek international arbitration to block Chavez's takeover attempt.

"It will be quite a fight," said Gersan Zurita, an oil-industry analyst with credit evaluator Fitch Ratings in New York, which advises investors who have purchased $3.9 billion in bonds for the Orinoco Belt projects. In June, Fitch Ratings downgraded the projects' credit scores, saying Chavez's demands could damage the projects' viability.

But for Chavez, it's a matter of national pride -- and political bragging points. Around the country, the government has put up posters and billboards showing Chavez extending his arms in a victory salute, accompanied by the slogan, "Full oil sovereignty: Joint ventures -- more benefits for the people!"

As top-secret negotiations begin, all sides in the conflict have tried to keep a low profile. Chevron, Exxon and ConocoPhillips declined Chronicle requests to interview their officials and to visit their installations in Venezuela.

Zurita said the companies fear being blacklisted by Chavez and losing out on future oil deals.

"It's a very delicate situation. It involves more than just these contracts. Any comment by any of these companies could be used by the government to demand more concessions," Zurita said. "The biggest incentive (for the companies) is to preserve access for the future. These are enormous reserves."

Luis Giusti, president of Pdvsa from 1994 to 1999, noted that many companies have little choice but to look to Venezuela because their reserves elsewhere are dwindling and their access to the Middle East is limited by the firm grip of those nations' government monopolies.

"The foreign companies will accept his conditions because they have so much capital sunk there, and they can't afford a confrontation with the government," said Giusti, who during his time at Pdvsa championed many of the privatization policies that Chavez is now reversing.

For its part, the government seems to have adopted a bunker mentality. Pdvsa's Caracas headquarters declined a Chronicle request to interview its officials or to visit its facilities. One official said that all visits were suspended "for security reasons" after a July 17 fire damaged the country's largest oil refinery, at Amuay in the northwest -- a sign that the government is nervous about the company's high rate of accidents, which it blames partially on sabotage by U.S.-inspired domestic opposition groups.

The only government official willing to talk about the subject was Fadi Kabboul, the oil attache at Venezuela's embassy in Washington.

"For the market, the Orinoco extra-heavy oil operations are very profitable, and they will continue being very profitable. There will be ever-greater interest and participation by foreign companies," Kabboul said.

The Orinoco conflict carries echoes of the knock-down, drag-out battle for control that erupted in December 2002, after Chavez ordered Pdvsa to directly fund and operate major social-welfare projects in poor communities. The company's executives, engineers, technicians and ship captains accused Chavez of "politicizing" Pdvsa, went on strike and shut down almost all operations for three months.

The strikers had hoped to topple Chavez by reviving a military-civilian coup effort that overthrew Chavez for two days in April 2002. But Chavez defeated the strike and fired 18,000 of the strikers -- about 90 percent of Pdvsa's white-collar workforce. The company is still struggling to recover, and most energy analysts believe that Pdvsa's production is only one-half of its pre-strike level. Nevertheless, Chavez's oil revenue has been buoyed by the increase of production by foreign companies, which has risen from 400,000 barrels per day to 620,000 per day, and the more-than-doubling of international oil prices.

In El Tigre, dozens of fired Pdvsa employees gather every day at 3 p.m. in a neighborhood park to exchange job tips and speculate hopefully about Chavez's downfall.

"This could be the issue that finally forces the Bush administration to take a stronger stand against Chavez," said Antonio Cardona, a former director of Pdvsa's crude pumping operations for the region. "Foreign companies have been afraid of Chavez, and they're staying just so they don't lose all they have invested, but he may have finally overplayed his hand now."

Cardona said he worked for Pdvsa for 20 years until he joined the strike. Three and a half years later, like his fellow strikers, Cardona is blacklisted throughout the oil industry by Pdvsa, which prohibits even private companies from hiring any ex-striker. Cardona must scrabble for work, doing small engineering jobs for private-sector construction projects.

At the same time, Chavez has begun shifting oil exports away from the United States, where Venezuelan crude is the fifth-largest foreign source of petroleum. During the first half of 2006, Venezuelan oil exports to the United States dropped by approximately 6 percent from the year before to about 1.3 million barrels per day, according to U.S. Energy Department figures.

At the same time, Chavez has struck oil deals with Beijing, including $5 billion of Chinese investments in Venezuelan energy projects by 2012. Venezuela's exports to China, while still relatively small at 150,000 barrels per day, are projected to reach 500,000 barrels by 2010.

Chevron may wind up playing an unwilling role in Chavez's most audacious plan -- construction of a 5,700-mile natural-gas pipeline through South America. The proposed $25 billion project, the central element of Chavez's plan to unify the continent's economies, would start in the eastern Venezuelan city of Puerto Ordaz, slice through Brazil's Amazon jungle and end in Argentina, with trunk lines to Peru, Bolivia and Chile.

Chevron is already a major player in helping Venezuela exploit its offshore natural gas deposits in the Caribbean and Atlantic, which at 151 trillion square feet are the eighth-largest proven reserves in the world. Recently, Venezuelan officials have suggested that despite prior understandings that Chevron would be allowed to convert the production from its Deltana field in the Atlantic into liquefied natural gas and export it to the United States, this supply will instead be sent south via the new pipeline -- whether Chevron likes it or not.

Some experts scoff at Chavez's pipeline idea. "It's a very large and very costly project," said Giusti. "It will never be built to transport reserves of gas that don't exist to markets that don't exist."

Other analysts call it far-thinking. A recent study by the Latin American Energy Organization, a regional alliance headquartered in Quito, Ecuador, concluded that Chavez's pipelines could save the area's governments $100 billion over the next 20 years by lowering imports of liquid natural gas from Asia and Africa.

One smaller project is already under construction -- a 140-mile gas pipeline linking Venezuela to Colombia, with an extension planned to Panama.

In El Tigre, a sprawling small city of 150,000 in Anzoategui state, there is little evidence of the nearby oil bonanza. Main streets are nondescript, and the highways leading out into the surrounding savanna are narrow and potholed.

But billboards are everywhere touting Chavez and the state's governor, Tarek William Saab.

"With Tarek and Chavez, Anzoategui is progressing!" blare the signs, showing a triumphant Chavez leading a slightly sheepish governor, both wearing revolutionary-red shirts and surrounded by cheering crowds.

But even many Chavez supporters complain that the president's grand ambitions have not benefited the people of Anzoategui.

"Because of oil we have everything, yet we have nothing," said El Tigre Mayor Ernesto Paraqueima, a member of Chavez's ruling coalition.

Speaking in his simple office in El Tigre's concrete-block municipal building as a broken sprinkler downstairs coated the windows with water, he bitterly criticized what he said was the waste of huge sums of money.

"The bureaucracy is enormous, and corruption is gigantic," Paraqueima said. "Anzoategui is a rich state, with rich land. You can look on either side of any highway in Anzoategui, and you won't see anything being cultivated anywhere. That's because of oil. We prefer to bring rice and potatoes from Colombia than growing it here. We produce almost nothing but oil.

"Every foreign oil company in the world is here, but where is the benefit?"

Chavez's oil money

In the past three years, as international oil prices have soared, Chavez has eliminated his political opposition's influence over government finances and drawn a tight curtain of secrecy around them.

In 2003, after the opposition led a chaotic strike by executives and technicians at the state-owned, yet formerly autonomous, oil company Petroleos de Venezuela, or Pdvsa, Chavez fired 18,000 of the white-collar strikers. In 2005, Chavez gained full control of the formerly independent Central Bank, and opposition parties' boycott of legislative elections gave his coalition all 167 seats in Congress that December.

Even Citgo, the U.S. refiner and gas retailer wholly owned by Pdvsa, earlier this year paid off all its debt and stopped the routine practice of reporting data to Moody's financial service -- thus ending all outside scrutiny of the company's books.

What's more, much of Venezuela's oil revenue now stays outside the government's budgetary channels. In recent years, Congress has set each year's government budget by setting Pdvsa's tax payments artificially low. This year, for example, Pdvsa's taxes are pegged to a price of $26 per barrel for Venezuela's blend of heavy crudes -- which currently sells for $58. The $32 per barrel difference remains largely off-budget, with no legislative supervision or disclosure of line-item details.

Documents released by the government earlier this month showed oil revenues of $49 billion for Pdvsa in the first six months of 2006, a 21 percent increase from the same period last year.

In Caracas, Pdvsa declined to make officials available to The Chronicle for an interview.

-- Robert Collier

Posted by Hugo Albert Orwell at 10:28 AM | Permalink | TrackBacks (0)

Source: Znet

Transcript
September 21, 2006

Madam President, Excellencies, Heads of State, Heads of government and other government’s representatives, good morning.

First, and with all respect, I highly recommend this book by Noam Chomsky, one of the most prestigious intellectuals in America and the world, Chomsky. One of his most recent works: Hegemony or Survival: America’s Quest for Global Dominance (The American Empire Project) . It’s an excellent work to understand what’s happened in the world in the 20th Century, what’s currently happening, and the greatest threat on this planet; the hegemonic pretension of the North American imperialism endangers the human race’s survival.

We continue warning about this danger and calling on the very same U.S. people and the world to stop this threat, which resembles the Sword of Damocles over our heads. I had considered reading from this book, but for the sake of time, I shall just leave it as a recommendation. It reads easily. It's a very good book. I'm sure, Madam, you are familiar with it.

(APPLAUSE)

The book is in English, in Russian, in Arabic, in German.

I think that the first people who should read this book are our brothers and sisters in the United States, because their threat is in their own house. The devil is right at home. The devil -- the devil, himself, is right in the house.

And the devil came here yesterday.

(APPLAUSE)

Yesterday, the devil came here. Right here. Right here. And it smells of sulfur still today, this table that I am now standing in front of.

Yesterday, ladies and gentlemen, from this rostrum, the president of the United States, the gentleman to whom I refer as the devil, came here, talking as if he owned the world. Truly. As the owner of the world.

I think we could call a psychiatrist to analyze yesterday's statement made by the president of the United States. As the spokesman of imperialism, he came to share his nostrums, to try to preserve the current pattern of domination, exploitation and pillage of the peoples of the world.

An Alfred Hitchcock movie could use it as a scenario. I would even propose a title: "The Devil's Recipe."

As Chomsky says here, clearly and in depth, the American empire is doing all it can to consolidate its system of domination. And we cannot allow them to do that. We cannot allow world dictatorship to be consolidated.

The world parent's statement -- cynical, hypocritical, full of this imperial hypocrisy from the need they have to control everything.

They say they want to impose a democratic model. But that's their democratic model. It's the false democracy of elites, and, I would say, a very original democracy that's imposed by weapons and bombs and firing weapons.

What a strange democracy. Aristotle might not recognize it or others who are at the root of democracy.

What type of democracy do you impose with marines and bombs?

The president of the United States, yesterday, said to us, right here, in this room, and I'm quoting, "Anywhere you look, you hear extremists telling you can escape from poverty and recover your dignity through violence, terror and martyrdom."

Wherever he looks, he sees extremists. And you, my brother -- he looks at your color, and he says, oh, there's an extremist. Evo Morales, the worthy president of Bolivia, looks like an extremist to him.

The imperialists see extremists everywhere. It's not that we are extremists. It's that the world is waking up. It's waking up all over. And people are standing up.

I have the feeling, dear world dictator, that you are going to live the rest of your days as a nightmare because the rest of us are standing up, all those who are rising up against American imperialism, who are shouting for equality, for respect, for the sovereignty of nations.

Yes, you can call us extremists, but we are rising up against the empire, against the model of domination.

The president then -- and this he said himself, he said: "I have come to speak directly to the populations in the Middle East, to tell them that my country wants peace."

That's true. If we walk in the streets of the Bronx, if we walk around New York, Washington, San Diego, in any city, San Antonio, San Francisco, and we ask individuals, the citizens of the United States, what does this country want? Does it want peace? They'll say yes.

But the government doesn't want peace. The government of the United States doesn't want peace. It wants to exploit its system of exploitation, of pillage, of hegemony through war.

It wants peace. But what's happening in Iraq? What happened in Lebanon? In Palestine? What's happening? What's happened over the last 100 years in Latin America and in the world? And now threatening Venezuela -- new threats against Venezuela, against Iran?

He spoke to the people of Lebanon. Many of you, he said, have seen how your homes and communities were caught in the crossfire. How cynical can you get? What a capacity to lie shamefacedly.

The bombs in Beirut with millimetric precision? Is this crossfire?

He's thinking of a western, when people would shoot from the hip and somebody would be caught in the crossfire.

This is imperialist, fascist, assassin, genocidal, the empire and Israel firing on the people of Palestine and Lebanon. That is what happened. And now we hear, "We're suffering because we see homes destroyed.'

The president of the United States came to talk to the peoples -- to the peoples of the world. He came to say -- I brought some documents with me, because this morning I was reading some statements, and I see that he talked to the people of Afghanistan, the people of Lebanon, the people of Iran. And he addressed all these peoples directly.

And you can wonder, just as the president of the United States addresses those peoples of the world, what would those peoples of the world tell him if they were given the floor? What would they have to say?

And I think I have some inkling of what the peoples of the south, the oppressed people think. They would say, "Yankee imperialist, go home." I think that is what those people would say if they were given the microphone and if they could speak with one voice to the American imperialists.

And that is why, Madam President, my colleagues, my friends, last year we came here to this same hall as we have been doing for the past eight years, and we said something that has now been confirmed -- fully, fully confirmed.

I don't think anybody in this room could defend the system. Let's accept -- let's be honest. The U.N. system, born after the Second World War, collapsed. It's worthless.

Oh, yes, it's good to bring us together once a year, see each other, make statements and prepare all kinds of long documents, and listen to good speeches, like Evo's yesterday, or President Lula's. Yes, it's good for that.

And there are a lot of speeches, and we've heard lots from the president of Sri Lanka, for instance, and the president of Chile.

But we, the assembly, have been turned into a merely deliberative organ. We have no power, no power to make any impact on the terrible situation in the world. And that is why Venezuela once again proposes, here, today, September 20th, that we re-establish the United Nations.

Last year, Madam, we made four modest proposals that we felt to be crucially important. We have to assume the responsibility, our heads of state, our ambassadors, our representatives, and we have to discuss it.

The first is expansion, and Lula talked about this yesterday right here: The Security Council’s expansion, both regarding its permanent and non-permanent categories. New developed and developing countries, the Third World, must be given access as new permanent members. That's step one.

Second, effective methods to address and resolve world conflicts, transparent decisions.

Point three, the immediate suppression -- and that is something everyone's calling for -- of the anti-democratic mechanism known as the veto, the veto on decisions of the Security Council.

Let me give you a recent example. The immoral veto of the United States allowed the Israelis, with impunity, to destroy Lebanon. Right in front of all of us as we stood there watching, a resolution in the council was prevented.

Fourthly, we have to strengthen, as we've always said, the role and the powers of the secretary general of the United Nations.

Yesterday, the secretary general practically gave us his speech of farewell. And he recognized that over the last 10 years, things have just gotten more complicated; hunger, poverty, violence, human rights violations have just worsened. That is the tremendous consequence of the collapse of the United Nations system and American hegemonistic pretensions.

Madam , Venezuela a few years ago decided to wage this battle within the United Nations by recognizing the United Nations, as members of it that we are, and lending it our voice, our thinking.

Our voice is an independent voice to represent the dignity and the search for peace and the reformulation of the international system; to denounce persecution and aggression of hegemonistic forces on the planet.

This is how Venezuela has presented itself. Bolivar's home has sought a nonpermanent seat on the Security Council.

Let's see. Well, there's been an open attack by the U.S. government, an immoral attack, to try and prevent Venezuela from being freely elected to a post in the Security Council.

The imperium is afraid of truth, is afraid of independent voices. It calls us extremists, but they are the extremists.

And I would like to thank all the countries that have kindly announced their support for Venezuela, even though the ballot is a secret one and there's no need to announce things.

But since the imperium has attacked, openly, they strengthened the convictions of many countries. And their support strengthens us.

Mercosur, as a bloc, has expressed its support, our brothers in Mercosur. Venezuela, with Brazil, Argentina, Paraguay, Uruguay, is a full member of Mercosur.

And many other Latin American countries, CARICOM, Bolivia have expressed their support for Venezuela. The Arab League, the full Arab League has voiced its support. And I am immensely grateful to the Arab world, to our Arab brothers, our Caribbean brothers, the African Union. Almost all of Africa has expressed its support for Venezuela and countries such as Russia or China and many others.

I thank you all warmly on behalf of Venezuela, on behalf of our people, and on behalf of the truth, because Venezuela, with a seat on the Security Council, will be expressing not only Venezuela's thoughts, but it will also be the voice of all the peoples of the world, and we will defend dignity and truth.

Over and above all of this, Madam President, I think there are reasons to be optimistic. A poet would have said "helplessly optimistic," because over and above the wars and the bombs and the aggressive and the preventive war and the destruction of entire peoples, one can see that a new era is dawning.

As Silvio Rodriguez says, the era is giving birth to a heart. There are alternative ways of thinking. There are young people who think differently. And this has already been seen within the space of a mere decade. It was shown that the end of history was a totally false assumption, and the same was shown about Pax Americana and the establishment of the capitalist neo-liberal world. It has been shown, this system, to generate mere poverty. Who believes in it now?

What we now have to do is define the future of the world. Dawn is breaking out all over. You can see it in Africa and Europe and Latin America and Oceania. I want to emphasize that optimistic vision.

We have to strengthen ourselves, our will to do battle, our awareness. We have to build a new and better world.

Venezuela joins that struggle, and that's why we are threatened. The U.S. has already planned, financed and set in motion a coup in Venezuela, and it continues to support coup attempts in Venezuela and elsewhere.

President Michelle Bachelet reminded us just a moment ago of the horrendous assassination of the former foreign minister, Orlando Letelier.

And I would just add one thing: Those who perpetrated this crime are free. And that other event where an American citizen also died were American themselves. They were CIA killers, terrorists.

And we must recall in this room that in just a few days there will be another anniversary. Thirty years will have passed from this other horrendous terrorist attack on the Cuban plane, where 73 innocents, in a Cubana de Aviacion airliner, died.

And where is the biggest terrorist of this continent who took the responsibility for blowing up the plane? He spent a few years in jail in Venezuela. Thanks to CIA and then government officials, he was allowed to escape, and he lives here in this country, protected by the government.

And he was convicted. He has confessed to his crime. But the U.S. government has double standards. It protects terrorism when it wants to.

And this is to say that Venezuela is fully committed to combating terrorism and violence. And we are one of the people who are fighting for peace.

Luis Posada Carriles is the name of that terrorist who is protected here. And other tremendously corrupt people who escaped from Venezuela are also living here under protection: a group that bombed various embassies, that assassinated people during the coup. They kidnapped me and they were going to kill me, but I think God reached down and our people came out into the streets and the army was too, and so I'm here today.

But these people who led that coup are here today in this country protected by the American government. And I accuse the American government of protecting terrorists and of having a completely cynical discourse.

We mentioned Cuba. Yes, we were just there a few days ago. We just came from there happily.

And there you see another era born. The Summit of the 15, the Summit of the Nonaligned, adopted a historic resolution. This is the outcome document. Don't worry, I'm not going to read it.

But you have a whole set of resolutions here that were adopted after open debate in a transparent matter -- more than 50 heads of state. Havana was the capital of the south for a few weeks, and we have now launched, once again, the group of the nonaligned with new momentum.

And if there is anything I could ask all of you here, my companions, my brothers and sisters, it is to please lend your good will to lend momentum to the Nonaligned Movement for the birth of the new era, to prevent hegemony and prevent further advances of imperialism.

And as you know, Fidel Castro is the president of the nonaligned for the next three years, and we can trust him to lead the charge very efficiently.

Unfortunately they thought, "Oh, Fidel was going to die." But they're going to be disappointed because he didn't. And he's not only alive, he's back in his green fatigues, and he's now presiding the nonaligned.

So, my dear colleagues, Madam President, a new, strong movement has been born, a movement of the south. We are men and women of the south.

With this document, with these ideas, with these criticisms, I'm now closing my file. I'm taking the book with me. And, don't forget, I'm recommending it very warmly and very humbly to all of you.

We want ideas to save our planet, to save the planet from the imperialist threat. And hopefully in this very century, in not too long a time, we will see this, we will see this new era, and for our children and our grandchildren a world of peace based on the fundamental principles of the United Nations, but a renewed United Nations.

And maybe we have to change location. Maybe we have to put the United Nations somewhere else; maybe a city of the south. We've proposed Venezuela.

You know that my personal doctor had to stay in the plane. The chief of security had to be left in a locked plane. Neither of these gentlemen was allowed to arrive and attend the U.N. meeting. This is another abuse and another abuse of power on the part of the Devil. It smells of sulfur here, but God is with us and I embrace you all.

May God bless us all. Good day to you.

Posted by Hugo Albert Orwell at 04:23 PM | Permalink | TrackBacks (0)

Source: The Progressive

By Greg Palast, The Progressive
July 2006 Issue

You’d think George Bush would get down on his knees and kiss Hugo Chávez’s behind. Not only has Chávez delivered cheap oil to the Bronx and other poor communities in the United States. And not only did he offer to bring aid to the victims of Katrina. In my interview with the president of Venezuela on March 28, he made Bush the following astonishing offer: Chávez would drop the price of oil to $50 a barrel, “not too high, a fair price,” he said—a third less than the $75 a barrel for oil recently posted on the spot market. That would bring down the price at the pump by about a buck, from $3 to $2 a gallon.

But our President has basically told Chávez to take his cheaper oil and stick it up his pipeline. Before I explain why Bush has done so, let me explain why Chávez has the power to pull it off—and the method in the seeming madness of his “take-my-oil-please!” deal.

Venezuela, Chávez told me, has more oil than Saudi Arabia. A nutty boast? Not by a long shot. In fact, his surprising claim comes from a most surprising source: the U.S. Department of Energy. In an internal report, the DOE estimates that Venezuela has five times the Saudis’ reserves.

However, most of Venezuela’s mega-horde of crude is in the form of “extra-heavy” oil—liquid asphalt—which is ghastly expensive to pull up and refine. Oil has to sell above $30 a barrel to make the investment in extra-heavy oil worthwhile. A big dip in oil’s price—and, after all, oil cost only $18 a barrel six years ago—would bankrupt heavy-oil investors. Hence Chávez’s offer: Drop the price to $50—and keep it there. That would guarantee Venezuela’s investment in heavy oil.

But the ascendance of Venezuela within OPEC necessarily means the decline of the power of the House of Saud. And the Bush family wouldn’t like that one bit. It comes down to “petro-dollars.” When George W. ferried then-Crown Prince (now King) Abdullah of Saudi Arabia around the Crawford ranch in a golf cart it wasn’t because America needs Arabian oil. The Saudis will always sell us their petroleum. What Bush needs is Saudi petro-dollars. Saudi Arabia has, over the past three decades, kindly recycled the cash sucked from the wallets of American SUV owners and sent much of the loot right back to New York to buy U.S. Treasury bills and other U.S. assets.

The Gulf potentates understand that in return for lending the U.S. Treasury the cash to fund George Bush’s $2 trillion rise in the nation’s debt, they receive protection in return. They lend us petro-dollars, we lend them the 82nd Airborne.

Chávez would put an end to all that. He’ll sell us oil relatively cheaply—but intends to keep the petro-dollars in Latin America. Recently, Chávez withdrew $20 billion from the U.S. Federal Reserve and, at the same time, lent or committed a like sum to Argentina, Ecuador, and other Latin American nations.

Chávez, notes The Wall Street Journal, has become a “tropical IMF.” And indeed, as the Venezuelan president told me, he wants to abolish the Washington-based International Monetary Fund, with its brutal free-market diktats, and replace it with an “International Humanitarian Fund,” an IHF, or more accurately, an International Hugo Fund. In addition, Chávez wants OPEC to officially recognize Venezuela as the cartel’s reserve leader, which neither the Saudis nor Bush will take kindly to.

Politically, Venezuela is torn in two. Chávez’s “Bolivarian Revolution,” a close replica of Franklin Roosevelt’s New Deal—a progressive income tax, public works, social security, cheap electricity—makes him wildly popular with the poor. And most Venezuelans are poor. His critics, a four-centuries’ old white elite, unused to sharing oil wealth, portray him as a Castro-hugging anti-Christ.

Chávez’s government, which used to brush off these critics, has turned aggressive on them. I challenged Chávez several times over charges brought against Súmate, his main opposition group. The two founders of the nongovernmental organization, which led the recall campaign against Chávez, face eight years in prison for taking money from the Bush Administration and the International Republican [Party] Institute. No nation permits foreign funding of political campaigns, but the charges (no one is in jail) seem like a heavy hammer to use on the minor infractions of these pathetic gadflies.

Bush’s reaction to Chávez has been a mix of hostility and provocation. Washington supported the coup attempt against Chávez in 2002, and Condoleezza Rice and Donald Rumsfeld have repeatedly denounced him. The revised National Security Strategy of the United States of America, released in March, says, “In Venezuela, a demagogue awash in oil money is undermining democracy and seeking to destabilize the region.”

So when the Reverend Pat Robertson, a Bush ally, told his faithful in August 2005 that Chávez has to go, it was not unreasonable to assume that he was articulating an Administration wish. “If he thinks we’re trying to assassinate him,” Robertson said, “I think that we really ought to go ahead and do it. It’s a whole lot cheaper than starting a war . . . and I don’t think any oil shipments will stop.”

There are only two ways to defeat the rise of Chávez as the New Abdullah of the Americas. First, the unattractive option: Cut the price of oil below $30 a barrel. That would make Chávez’s crude worthless. Or, option two: Kill him.

Palast: Your opponents are saying that you are beginning a slow-motion dictatorship. Is that what we are seeing?

Hugo Chávez: They have been saying that for a long time. When they’re short of ideas, any excuse will do as a vehicle for lies. That is totally false. I would like to invite the citizens of Great Britain and the citizens of the U.S. and the citizens of the world to come here and walk freely through the streets of Venezuela, to talk to anyone they want, to watch television, to read the papers. We are building a true democracy, with human rights for everyone, social rights, education, health care, pensions, social security, and jobs.

Palast: Some of your opponents are being charged with the crime of taking money from George Bush. Will you send them to jail?

Chávez: It’s not up to me to decide that. We have the institutions that do that. These people have admitted they have received money from the government of the United States. It’s up to the prosecutors to decide what to do, but the truth is that we can’t allow the U.S. to finance the destabilization of our country. What would happen if we financed somebody in the U.S. to destabilize the government of George Bush? They would go to prison, certainly.

Palast: How do you respond to Bush’s charge that you are destabilizing the region and interfering in the elections of other Latin American countries?

Chávez: Mr. Bush is an illegitimate President. In Florida, his brother Jeb deleted many black voters from the electoral registers. So this President is the result of a fraud. Not only that, he is also currently applying a dictatorship in the U.S. People can be put in jail without being charged. They tap phones without court orders. They check what books people take out of public libraries. They arrested Cindy Sheehan because of a T-shirt she was wearing demanding the return of the troops from Iraq. They abuse blacks and Latinos. And if we are going to talk about meddling in other countries, then the U.S. is the champion of meddling in other people’s affairs. They invaded Guatemala, they overthrew Salvador Allende, invaded Panama and the Dominican Republic. They were involved in the coup d’état in Argentina thirty years ago.

Palast: Is the U.S. interfering in your elections here?

Chávez: They have interfered for 200 years. They have tried to prevent us from winning the elections, they supported the coup d’état, they gave millions of dollars to the coup plotters, they supported the media, newspapers, outlaw movements, military intervention, and espionage. But here the empire is finished, and I believe that before the end of this century, it will be finished in the rest of the world. We will see the burial of the empire of the eagle.

Palast: You don’t interfere in the elections of other nations in Latin America?

Chávez: Absolutely not. I concern myself with Venezuela. However, what’s going on now is that some rightwing movements are transforming me into a pawn in the domestic politics of their countries, by making statements that are groundless. About candidates like Morales [of Bolivia], for example. They said I financed the candidacy of President Lula [of Brazil], which is totally false. They said I financed the candidacy of Kirchner [of Argentina], which is totally false. In Mexico, recently, the rightwing party has used my image for its own profit. What’s happened is that in Latin America there is a turn to the left. Latin Americans have gotten tired of the Washington consensus—a neoliberalism that has aggravated misery and poverty.

Palast: You have spent millions of dollars of your nation’s oil wealth throughout Latin America. Are you really helping these other nations or are you simply buying political support for your regime?

Chávez: We are brothers and sisters. That’s one of the reasons for the wrath of the empire. You know that Venezuela has the biggest oil reserves in the world. And the biggest gas reserves in this hemisphere, the eighth in the world. Up until seven years ago, Venezuela was a U.S. oil colony. All of our oil was going up to the north, and the gas was being used by the U.S. and not by us. Now we are diversifying. Our oil is helping the poor. We are selling to the Dominican Republic, Haiti, Cuba, some Central American countries, Uruguay, Argentina.

Palast: And the Bronx?

Chávez: In the Bronx it is a donation. In all the cases I just mentioned before, it is trade. However, it’s not free trade, just fair commerce. We also have an international humanitarian fund as a result of oil revenues.

Palast: Why did George Bush turn down your help for New Orleans after the hurricane?

Chávez: You should ask him, but from the very beginning of the terrible disaster of Katrina, our people in the U.S., like the president of CITGO, went to New Orleans to rescue people. We were in close contact by phone with Jesse Jackson. We hired buses. We got food and water. We tried to protect them; they are our brothers and sisters. Doesn’t matter if they are African, Asian, Cuban, whatever.

Palast: Are you replacing the World Bank and the International Monetary Fund as “Daddy Big Bucks”?

Chávez: I do wish that the IMF and the World Bank would disappear soon.

Palast: And it would be the Bank of Hugo?

Chávez: No. The International Humanitarian Bank. We are just creating an alternative way to conduct financial exchange. It is based on cooperation. For example, we send oil to Uruguay for their refinery and they are paying us with cows.

Palast: Milk for oil.

Chávez: That’s right. Milk for oil. The Argentineans also pay us with cows. And they give us medical equipment to combat cancer. It’s a transfer of technology. We also exchange oil for software technology. Uruguay is one of the biggest producers of software. We are breaking with the neoliberal model. We do not believe in free trade. We believe in fair trade and exchange, not competition but cooperation. I’m not giving away oil for free. Just using oil, first to benefit our people, to relieve poverty. For a hundred years we have been one of the largest oil-producing countries in the world but with a 60 percent poverty rate and now we are canceling the historical debt.

Palast: Speaking of the free market, you’ve demanded back taxes from U.S. oil companies. You have eliminated contracts for North American, British, and European oil companies. Are you trying to slice out the British and American oil companies from Venezuela?

Chávez: No, we don’t want them to go, and I don’t think they want to leave the country, either. We need each other. It’s simply that we have recovered our oil sovereignty. They didn’t pay taxes. They didn’t pay royalties. They didn’t give an account of their actions to the government. They had more land than had previously been established in the contracts. They didn’t comply with the agreed technology exchange. They polluted the environment and didn’t pay anything towards the cleanup. They now have to comply with the law.

Palast: You’ve said that you imagine the price of oil rising to $100 dollars per barrel. Are you going to use your new oil wealth to squeeze the planet?

Chávez: No, no. We have no intention of squeezing anyone. Now, we have been squeezed and very hard. Five hundred years of squeezing us and stifling us, the people of the South. I do believe that demand is increasing and supply is dropping and the large reservoirs are running out. But it’s not our fault. In the future, there must be an agreement between the large consumers and the large producers.

Palast: What happens when the oil money runs out, what happens when the price of oil falls as it always does? Will the Bolivarian revolution of Hugo Chávez simply collapse because there’s no money to pay for the big free ride?

Chávez: I don’t think it will collapse, in the unlikely case of oil running out today. The revolution will survive. It does not rely solely on oil for its survival. There is a national will, there is a national idea, a national project. However, we are today implementing a strategic program called the Oil Sowing Plan: using oil wealth so Venezuela can become an agricultural country, a tourist destination, an industrialized country with a diversified economy. We are investing billions of dollars in the infrastructure: power generators using thermal energy, a large railway, roads, highways, new towns, new universities, new schools, recuperating land, building tractors, and giving loans to farmers. One day we won’t have any more oil, but that will be in the twenty-second century. Venezuela has oil for another 200 years.

Palast: But the revolution can come to an end if there’s another coup and it succeeds. Do you believe Bush is still trying to overthrow your government?

Chávez: He would like to, but what you want is one thing, and what you cannot really obtain is another.

Investigative reporter Greg Palast, who interviewed President Hugo Chávez for the British Broadcasting Corporation (BBC), is the author of “Armed Madhouse: Dispatches from the Front Lines of the Class War,” from which this is adapted.

Posted by Hugo Albert Orwell at 04:54 PM | Permalink | TrackBacks (0)

Fantastic explantion of the history of oil, oil's influence in war, Peak Oil and US Dollar currency hegemony. All done with humor, amusing analogies and in lay person's terms.

http://video.google.com/videoplay?docid=7374585792978336967

Posted by Hugo Albert Orwell at 11:18 AM | Permalink | TrackBacks (0)

Source: Mehrnews.com

September 15, 2006

TEHRAN, Sept. 15 (MNA) -- Oil Minister Kazem Vaziri-Hamaneh said here on Friday that all preparatory requirements were arranged for launching the oil stock market in the country.

Speaking to the reporters at the Mehrabad International Airport upon arriving in Tehran from an OPEC conference in Vienna, Vaziri-Hamaneh said that all un-subsidized oil products can be offered in this stock market.

He also rejected rumors about the preparation of a plan to gradually increase the gasoline price, but added that the cabinet had submitted a bill to the Majlis for importing gasoline.

“If the bill is ratified, the present condition will continue and rationing will be put into practice later.”

Hamaneh further noted that the plan to issue fuel debit cards will be finalized within three months.

As for the decisions made during that OPEC conference, the minister said that the member countries were quite concerned for the downward trend of oil price, and so decided to maintain the present oil production ceiling.

Elsewhere in his remarks, Vaziri-Hamaneh referred to the development of the Azadegan oilfield and said that an agreement has been inked with the Japanese, granting to them a 15-day opening to meet their commitments.

He explained “the Total Company anyway stresses cooperating with the Japanese and is interested in starting the conduction of project after the cooperation contract is finalized with the Japanese contractor.”

Answering a question about the development of the Arash oilfield, Iranian oil minister said that an Iranian delegation will head for Kuwait within 7 to10 days, adding that however, Iran and Kuwait are determined to jointly develop their joint oilfield.

Hamaneh said that a two-month opening has been also granted to the Chinese contractor to develop Yadavaran oilfield.

Elaborating on the development process of the Peace Pipeline, he said the consultant party is supposed to estimate and submit the gas price as soon as possible so that Iran can negotiate it with the Indian and Pakistani ministers.

Posted by Hugo Albert Orwell at 05:10 PM | Permalink | TrackBacks (0)

Source: The New York Times

By JANE PERLEZ
Published: September 18, 2006

STUNG TRENG, Cambodia — In the dense humidity of northern Cambodia, where canoes are the common mode of transportation, a foreman from a Chinese construction company directs local laborers to haul stones to the ramp of a nearly completed bridge.

Nearby, engineers from the China Shanghai Construction Group have sunk more than a dozen concrete pylons across a tributary of the mighty Mekong River, a technical feat that will help knit together a 1,200-mile route from the southern Chinese city of Kunming through Laos to the Cambodian port of Sihanoukville on the Gulf of Thailand.

This is the new face of China’s foreign aid to poor Asian countries: difficult construction in remote places that benefits the recipient, and China, too.

"It is the favor of our government to the Cambodian people," said Ge Zhen, 26, one of the more than 50 engineers and 250 other Chinese workers on the four-year project.

Flush with nearly a trillion dollars in hard currency reserves and eager for stable friends in Southeast Asia, China is making big loans for big projects to countries that used to be the sole preserve of the World Bank, the Asian Development Bank, the United States and Japan.

With the Singapore meeting of the World Bank on Sept. 19 and 20, China, one of the bank’s biggest customers, is quietly shaking up the aid business in Asia, competing with the bank at its own game.

For poor countries like Cambodia, Laos and Myanmar, and somewhat better-off countries like the Philippines, China’s loans are often more attractive than the complicated loans from the West.

The Chinese money usually comes unencumbered with conditions for environmental standards or community resettlement that can hold up major projects. The aid does not carry penalties for corruption that are being increasingly used by the World Bank president, Paul D. Wolfowitz. And China’s offers rarely include the extra freight of expensive consultants, provisions that are common to World Bank projects.

For its part, China benefits from the added infrastructure — roads, ports and bridges — in the underdeveloped but growing region around it, to help increase trade and to move natural resources from China’s periphery to its heartland.

Liqun Jin, vice president of the Asian Development Bank and a former vice minister of finance in Beijing, said in an interview at the bank’s headquarters in Manila that China had carefully considered how to use its increasing wealth.

"China is attracting external capital, and as a balance China wants to help developing countries in the region by financing infrastructure projects," Mr. Jin said. "Helping your neighbors to have a good life is no sin."

He added, "China makes no bones that we want a peaceful neighborhood to develop our own economy."

The effects are likely to be enormous. Tom Crouch, country director for the Philippines at the Asian Development Bank, said, "Here comes a very large new player on the block that has the potential of changing the landscape of overseas development assistance."

Already, in the past several years, China has given aid to African countries, where it is buying oil and gas. They include some with repressive governments like Nigeria, Sudan and Angola.

Even during the cold war, China spread aid around Africa, sometimes to counterbalance assistance from rival countries, which were being helped by Taiwan. In the 1960’s and 70’s, for example, China aided Angola while Taiwan helped neighboring South Africa.

In Cambodia, Prime Minister Hun Sen boasts of China’s offer last spring of $600 million in "no strings attached" loans, made during a visit from the Chinese prime minister, Wen Jiabao. The money will help pay for two major bridges near the capital, Phnom Penh, that will link to a network of roads; a hydropower plant; and a fiber-optic network that will connect Cambodia’s telecommunications with that of Vietnam and Thailand.

In contrast, Mr. Hun Sen points out that the traditional lenders together pledged just $1 million more than China. And the money came laden with conditions, including World Bank anticorruption clauses.

Four World Bank programs in Cambodia worth about $70 million were recently suspended by the bank after its investigators found corruption among Cambodian officials in the procurement process.

China’s generosity to Cambodia has caught Washington’s attention. The United States Navy is planning a port visit to Sihanoukville early next year, a first since the Khmer Rouge seized power in 1975.

In the Philippines, China is also making a big splash, offering an extraordinary package of $2 billion in loans each year for the next three years from its Export-Import Bank.

That made the $200 million offered separately by the World Bank and the Asian Development Bank look puny, officials from those banks said, and easily outstripped a $1 billion loan under negotiation with Japan.

Officially, the World Bank says it is not concerned about competition from China’s increasingly energetic aid program. "The more important impact of China on these countries’ development is trade rather than aid," said Homi Kharas, the bank’s chief economist for East Asia and the Pacific.

The aid, chiefly for infrastructure, was being focused by China on the integration of trade in the region, a useful result for poor countries, he said.

But Western aid donors complain that China is secretive about its aid projects, and that it declines to attend the traditional meetings presided over by the World Bank to coordinate aid activities in poor countries. They also say they doubt that China always delivers the full value of the projects that it announces.

And Western aid officials said they were taken aback when the news of the $2 billion Chinese aid package came out at a lunch meeting of more than 100 aid donors in Manila last month. The size of the Chinese loans came as a shock, in part because the Philippines serves as the headquarters of the Asian Development Bank, a lender dominated by Japan and the United States. China is also a shareholder.

The secretary general of the National Economic and Development Authority in the Philippines, Romulo Neri, compared the Chinese aid package to those from other sources, and noted the appealing absence of the expensive consultant fees common to Western projects.

After being a favorite of the Bush White House, the Philippine president, Gloria Macapagal Arroyo, fell out of favor when she pulled her country’s troops out of Iraq in 2004.

The Chinese appeared to have quickly filled the economic breach for the Philippines and, according to a memorandum from Mr. Neri’s office, a number of projects are expected to be completed when Mr. Wen visits Manila in December.

They include two toll roads and a water supply system for Manila, and further financing for a rail project already under way to connect northern Manila with four provinces.

In some countries, like Cambodia, China’s construction projects seem clearly aimed at helping to assure China’s access to natural resources.

Western diplomats and aid officials in Phnom Penh said they believed that Cambodia had recently granted China the rights to one of five offshore oil fields that could yield as much as $700 million to $1 billion a year. Chevron already has an agreement for exploratory drilling at one of the Cambodian fields.

Washington does not know yet, and would like to know, whether China plans to offer loans for an often-discussed deep-sea port at Sihanoukville that would allow China a convenient delivery point for its Middle East oil imports.

In resource-rich Myanmar, the former Burma, Beijing’s only real competitor on the aid front is India. China has built dams and roads connecting the interior of the country to China’s southern flank, and is currently reported to be working on a deep-water port on Myanmar’s west coast.

Myanmar is in deep arrears to the World Bank, which said it had no loan program there. The United States offers no official aid, either, because of the repressive nature of the government.

In Laos, China has built a major road up the spine of the country, and has been influential as much by the prospect of what it might do, than by what it has actually accomplished.

After years of study on the impact on the environment, the World Bank broke ground on a environmentally controversial major dam, known as Nam Theun 2, in Laos last year, because it knew that China was ready to step in to build the dam, bank officials say.

Beyond its no-strings approach, China is often appreciated as a lender by poor countries because it is willing to take on complicated projects in distant areas that others are not.

The bridge that Mr. Ge, the engineer, and his colleagues have sweated over during the last four years — the temperature creeps up as high as 106 in April — is in one of the most underdeveloped corners of Southeast Asia, the area where the Khmer Rouge first took power.

Running from the bridge is a new, smooth 130-mile road built by Mr. Ge’s team that connects Kratie, a village to the south of Stung Treng, to the Laotian border.

"When we came here four years ago, we would leave at breakfast time from Kratie and we would arrive here for dinner — eight hours," Mr. Ge said. "It now takes two hours."

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Source: The Sydney Morning Herald

Dafna Linzer in Washington
September 15, 2006

UNITED NATIONS inspectors investigating Iran's nuclear program have angrily complained to the Bush Administration and a Republican congressman about a report on Iran's capabilities, calling parts of the document "outrageous and dishonest".

International Atomic Energy Agency officials, who produced evidence to refute the report's main claims, said in a letter on Wednesday that the report contained "erroneous, misleading and unsubstantiated statements".

The letter, signed by a senior director at the agency, was addressed to Peter Hoekstra, the chairman of the House of Representatives intelligence committee, which issued the report. A copy also was hand-delivered to Gregory Schulte, the US ambassador to the IAEA in Vienna.

The agency noted five significant errors in the committee's report, which claimed Iran's nuclear capabilities were more advanced than either the agency or US intelligence had shown.

The report said Iran was producing weapons-grade uranium. The IAEA called that "incorrect", noting that weapons-grade uranium is enriched to a level of at least 90 per cent; Iran had enriched uranium to 3.5 per cent, and done so under agency monitoring.

The UN letter surfaced as the Iranian President, Mahmoud Ahmadinejad, said he was open to new conditions to resolve Tehran's standoff with the West over its nuclear program and believed talks could end the dispute.

"I am announcing that we are available, we are ready for new conditions," Mr Ahmadinejad said yesterday, before leaving for a Non-Aligned Movement summit in Cuba.

A meeting between the European Union foreign policy chief, Javier Solana, and the Iranian negotiator Ali Larijani, set for yesterday, was postponed.

The IAEA had openly clashed with the Bush Administration on pre-war assessments of alleged weapons of mass destruction in Iraq. Relations all but collapsed when the agency revealed that the White House had based some allegations about an Iraqi nuclear program on forged documents.

After no weapons of mass destruction were found in Iraq, the agency came under criticism for taking a cautious approach on Iran, which the White House says is trying to build nuclear weapons in secret. At one point, the Administration orchestrated a failed campaign to remove the agency's director, Mohamed ElBaradei.

Wednesday's letter was the first time the IAEA has publicly rebutted US allegations about its Iran investigation.

When the congressional report was released last month, Mr Hoekstra said it was "to help increase the American public's understanding of Iran as a threat". The report is still to be voted on and has not been discussed by the full committee.

Several intelligence officers privately said the report included at least a dozen claims that were either demonstrably wrong or impossible to substantiate.

"This is like prewar Iraq all over again," said David Albright, a former nuclear inspector who is president of the Washington-based Institute for Science and International Security. "You have an Iranian nuclear threat that is spun up, using bad information that's cherrypicked, and a report that trashes the inspectors."

The report's author, Fredrick Fleitz, is a one-time CIA officer who had been a special assistant to John Bolton, the Administration's former point man on Iran at the State Department. Mr Bolton, now US ambassador to the United Nations, had been highly influential during President George Bush's first term in crafting a policy that rejected talks with Tehran.

The Washington Post, Reuters

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Source: The Age [Australia]

Jonathan Weisman, Washington
September 10, 2006

THERE is no evidence of formal links between former Iraqi leader Saddam Hussein and al-Qaeda leaders before the invasion of Iraq by the US in 2003, a long-awaited declassified US Senate report has revealed.

The finding, contained in a 2005 CIA report released by the Senate's Intelligence Committee, is a major embarrassment for President George Bush and casts more doubt on the reasons why the so-called "Coalition of the willing" went to war.

President Bush has said the presence of the late Abu Musab al-Zarqawi, al-Qaeda leader in Iraq, before the war was evidence of a link. But the report revealed that US intelligence analysts were strongly disputing the alleged links between Saddam Hussein and al-Qaeda while senior Bush Administration officials were publicly asserting them to justify invasion.

Far from aligning himself with al-Qaeda and Jordanian terrorist Zarqawi, Saddam repeatedly rebuffed al-Qaeda's overtures and tried to capture Zarqawi, the report said. Tariq Aziz, the detained former deputy prime minister, has told the FBI that Saddam "only expressed negative sentiments about bin Laden".

The report also said that exiles from the Iraqi National Congress tried to influence US policy by providing, through defectors, false information on Iraq's nuclear, chemical and biological weapons capabilities. After sceptical analysts warned that the group had been penetrated by hostile intelligence services, including Iran's, a 2002 White House directive ordered that US funding for the INC be continued.

The newly declassified intelligence report provided Administration critics with fresh ammunition less than two months before mid-term elections and in the middle of President Bush's campaign to refocus the public's attention away from Iraq and towards the threat of terrorism.

Senior Senate Democrats immediately seized on the findings, using some of their strongest language yet to say that the President continues to wilfully and falsely connect Saddam to al-Qaeda.

As recently as August 21, Mr Bush suggested a link between Saddam and Zarqawi, who was killed by US forces in June. A CIA assessment in October 2005 concluded that Saddam's government "did not have a relationship, harbour, or turn a blind eye towards Zarqawi and his associates", according to the report. "The President is still distorting. He's still making statements which are false," said Senator Carl Levin, an intelligence committee member.

The partial release of the report came after nearly three years of partisan wrangling over what is to be a five-chapter analysis of the use of pre-war intelligence in the run-up to the 2003 invasion of Iraq. The heart of the report — a detailed comparison of Administration statements with the intelligence then available — is still far from release. But the committee voted on Thursday to release two chapters: one on the role that Iraqi exiles played in shaping pre-war intelligence; the other on the accuracy of the pre-war analyses of Saddam's nuclear, chemical and biological weapons capabilities and his suspected links to al-Qaeda and the September 11, 2001, attacks.

White House spokesman Tony Snow dismissed the findings as old news. "If we have people who want to re-litigate that, that's fine," he said.

But Republican attempts to paint the findings as a partisan rehash were undercut by intelligence committee members. The committee report's conclusions are based on the Democrats' findings because two Republicans — senators Olympia Snowe of Maine and Chuck Hagel of Nebraska — supported those findings.

"After reviewing thousands of pages of evidence, I voted for the conclusions that most closely reflect the facts in the report," Senator Snowe said in a written statement. "Policy-makers seemingly discounted or dismissed warnings about the veracity of critical intelligence reports that may have served as a basis for going to war."

Committee chairman Pat Roberts was emphatic last week that Iraqi exiles did not fundamentally shape the critical assessment of the Iraqi threat in the 2002 National Intelligence Estimate.

But, as Senator Snowe emphasised in her statement, the report concluded that information provided by an INC source was cited in that estimate and in then secretary of state Colin Powell's February 2003 speech to the United Nations as corroborating evidence about Iraq's mobile biological weapons program. Those citations came despite two April 2002 CIA assessments, a May 2002 Defence Intelligence Agency fabrication notice, and a July 2002 National Intelligence Council warning — all saying that the INC source may have been coached by the exile group into fabricating the information.

Democrats and Republicans agree that analysts and politicians of all political stripes were wrong about the pre-war assessments of Saddam's weapons of mass destruction. But the committee report indicates that intelligence analysts were substantially right about his lack of operational links to al-Qaeda.

And Democrats compared the Administration's public statements with newly declassified intelligence assessments to build their case that efforts to link Iraq to al-Qaeda were wilfully misleading. In a classified January 2003 report, for instance, the CIA concluded that Saddam "viewed Islamic extremists operating inside Iraq as a threat". But one day after that conclusion was published, Senator Levin noted, Vice-President Dick Cheney said the Iraqi government "aids and protects terrorists, including members of al-Qaeda".

Intelligence reports in June, July and September 2002 all cast doubts on a reported meeting in Prague between Iraqi intelligence agents and September 11 hijacker Mohamed Atta.

Yet, in a September 8, 2002, appearance on NBC's Meet The Press, Mr Cheney said the CIA considered the reports on the meeting credible, Senator Levin said.

The Democrats were unequivocal in asserting that the chapters chronicle an indisputable pattern of deception.

WASHINGTON POST

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Source: Capitol Hill Blue
By DOUG THOMPSON
Dec 9, 2005, 06:39

Last month, Republican Congressional leaders filed into the Oval Office to meet with President George W. Bush and talk about renewing the controversial USA Patriot Act.

Several provisions of the act, passed in the shell shocked period immediately following the 9/11 terrorist attacks, caused enough anger that liberal groups like the American Civil Liberties Union had joined forces with prominent conservatives like Phyllis Schlafly and Bob Barr to oppose renewal.

GOP leaders told Bush that his hardcore push to renew the more onerous provisions of the act could further alienate conservatives still mad at the President from his botched attempt to nominate White House Counsel Harriet Miers to the Supreme Court.

"I don't give a goddamn," Bush retorted. "I'm the President and the Commander-in-Chief. Do it my way."

"Mr. President," one aide in the meeting said. "There is a valid case that the provisions in this law undermine the Constitution."

"Stop throwing the Constitution in my face," Bush screamed back. "It's just a goddamned piece of paper!"

I've heard from two White House sources who claim they heard from others present in the meeting that the President of the United States called the Constitution "a goddamned piece of paper."

The record shows the Bush Administration, the Constitution of the United States is little more than toilet paper stained from all the shit that this group of power-mad despots have dumped on the freedoms that "goddamned piece of paper" used to guarantee.

Attorney General Alberto Gonzales, while still White House counsel, wrote that the "Constitution is an outdated document."

Put aside, for a moment, political affiliation or personal beliefs. It doesn't matter if you are a Democratic, Republican or Independent. It doesn't matter if you support the invasion or Iraq or not. Despite our differences, the Constitution has stood for two centuries as the defining document of our government, the final source to determine - in the end - if something is legal or right.

Every federal official - including the President - who takes an oath of office swears to "uphold and defend" the Constitution of the United States.

Supreme Court Justice Antonin Scalia says he cringes when someone calls the Constitution a "living document."

""Oh, how I hate the phrase we have-a 'living document,'" Scalia says. "We now have a Constitution that means whatever we want it to mean. The Constitution is not a living organism, for Pete's sake."

As a judge, Scalia says, "I don't have to prove that it's perfect; I just have to prove that it's better than anything else."

President Bush has proposed seven amendments to the Constitution over the last five years - a record for any modern President, including a controversial amendment to define marriage as a "union between a man and woman." Members of Congress have proposed some 11,000 amendments over the last decade, ranging from repeal of the right to bear arms to a Constitutional ban on abortion.

Scalia says the danger of tinkering with the Constitution comes from a loss of rights.

"We can take away rights just as we can grant new ones," Scalia warns. "Don't think that it's a one-way street."

And don't buy the White House hype that the USA Patriot Act is a necessary tool to fight terrorism. It is a dangerous law that infringes on the rights of every American citizen and, as one brave aide told President Bush, something that undermines the Constitution of the United States.

But why should Bush care? After all, the Constitution is just "a goddamned piece of paper."

(Updated September 3, 2006)

© Copyright 2006 by Capitol Hill Blue

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Source: The Pioneer [India]
By Sandhya Jain

If Iranian President Ahmadinejad is serious about opening a Euro-based oil bourse in Tehran to undermine the US dollar, now is the time to strike. Strategic experts believe that internationally, the mega strategic energy deals are slipping away from corporate America, whose strong arm tactics are alienating growing nationalist sentiment across the world.

Washington's use of the September 2001 New York terror strike to cynically assume a commanding position in oil and gas rich Central Asia has startled the international community, especially after the unwarranted invasion of Iraq and takeover of its economy by cronies of the White House. This has forced a major rethink in world capitals, and resource-rich regimes in the Gulf and Central Asia are responding to Russia and China, who are cooperating to combat America's monopolistic ambitions.

Pakistan is Washington's non-NATO ally in the war against terror, but has turned to China for economic development, as evident in troubled Balochistan. It is keen on an energy deal with Iran, bete noire of Uncle Sam, but the tripartite energy deal with India cannot take off due to Pakistan's status as the epicentre of jihadi terrorism. As a rising Asian economy, India is also engaging with the Central Asian Republics for better energy security, though its anxiety for American goodwill has upset Iran and caused a stalemate over the price of LNG.

Saudi Arabia, however, is moving out of the American orbit by sewing up energy deals with China and India, though Washington has compensated itself with the oilfields of Libya. Yet the unmistakable geo-political trend among oil and gas producing nations of the Gulf, Latin America, Africa and Central Asia is to avoid US oil companies in favour of nations that do not interfere in their internal affairs. America's high comfort levels with dictatorial regimes on one hand, and promotion of puppet democracies on the other, as per its corporate convenience, has diminished its value as a desirable economic and strategic global partner.

Central Asia is alert after the string of 'coloured' revolutions. America currently retains bases in Kyrgyzthan, Tajikistan, Ukraine, Georgia and Azerbaijan. But Uzbekistan asked it to vacate the crucial Karshi-Khanabad (K2) base after the failed Andijan riots. President Islam Karimov was warned by ousted Georgian leader Eduard Shevardnadze against American financier George Soros and West-funded NGOs; he promptly expelled the Open Society Institute, stifled other NGOs, and courted Russian President Putin. A gas deal with Russia's Gazprom is expected to affect America's hydrocarbon pipeline over Afghanistan to the Arabian Sea. Karimov has invited India to share an energy partnership along with Russia and China, a move that makes profound geo-political sense.

Meanwhile, the Shanghai Cooperation Organisation (SCO) is pressing America to wind up its bases in Central Asia, especially as heightened tensions with Iran raise fears of another regional misadventure. Kazakhstan, which has enormous hydrocarbon resources, is also upset with President Bush, and even allies like Kyrgyzstan and Tajikistan favour a security relationship with Russia. Tajikistan made the Russian military base there permanent after President Putin's visit in October 2004, while Russia has a base at Kant in Kyrgyzstan.

China is very proactive in the region. There is a thousand kilometre pipeline from Kazakhstan's central Karaganda region to Xinjiang, part of an ambitious three thousand kilometre link to the Caspian Sea. China has also invested heavily in Russia's energy sector, especially Siberia's coal and oil. It is active in Uzbekistan, Tajikistan and Kyrgyzstan.

Experts opine that Russia is leading the attempt to marginalise Western multinational oil companies. The move strikes a chord because the White House is dominated by a cartel of the oil and gas industry and some banker-financiers, and the oil-rich nations of Central Asia, the Gulf and Latin America prefer joint ventures with State enterprises rather than these rapacious multinationals. Thus, a very basic economic nationalism drives their tilt towards Russia and China. The West, used to more than a century of de facto imperialism in the oil and gas sector, finds itself on a sticky wicket.

The new oil-and-gas producer States and the key consumer Asian economies (China, India) are joining hands to forge State-to-State joint ventures and arrive at strategic energy security. Analysts say this could eventually diminish the role and status of OPEC in future. Russian leaders had cleverly positioned the Russian Federation to take advantage of global energy trends, and is now emerging as natural leader of the world's key producing and consuming powers.

Washington facilitated this process by its unacceptable oil greed in Iraq. In a path-breaking work, "The Bush Agenda: Invading the World, One Economy at a Time," Antonia Juhasz exposes the US corporate invasion of Iraq. So far, 150 US corporations have received a staggering $50 billion worth of contracts for the failed reconstruction of Iraq, even as a new oil law has opened the oil sector to private foreign corporate investment.

Copyright © 2006 Nick Anderson, Houston Chronicle

Under the Geneva Convention, it is completely illegal for an occupying power to change the laws or political structure of the occupied country. Yet the United Nations and the international community have been idle bystanders as the Bush Administration has changed all basic economic and political laws, while totally failing in the primary task of providing for the security and basic needs of the Iraqi people. Thus, as many as 30 oil contracts signed by President Saddam Hussein with oil companies from all around the world, except the US, were simply cancelled. Iraq oil is now being guzzled by Chevron, Exxon and Marathon. And when you consider that some geologists believe that Iraq's oil reserves are larger or at par with those of Saudi Arabia, you can envisage a very slow American pullout from the region. No wonder the Central Asian nations with American military bases are no longer keen to play host to Uncle Sam.

America's obduracy has reinforced the global preference for State-to-State long-term agreements and contracts which serve the energy-security interests of nations, rather than private corporate entities. Russia's domination of oil and gas flowing to the West has helped it re-emerge as a global power in concert with its strategic partners. And, surprising as it may seem, Washington lacks the global leverage to refashion events in its favour.

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