As many of you know,
Signs of the Times is not supported by major funding like
many other news sites, and is not affiliated with any
government, political group, corporation, or news agency.
SOTT is financed by any donations we receive as well as
money out of our own pockets. The benefit of this setup
is that we do not have any sponsors that might introduce
unwanted bias into our work. The
obvious and major drawback is that we do not have the
funding to do all the things we would like to do for our
readers.
Almost one year ago, SOTT created the P3nt4gon Str!ke presentation, which has now been viewed by
well over 300,000,000 people worldwide, and is available
in nine different languages. Recently, we wrote and produced
the song You
Lied, performed by Away
With the Fairys. We also recorded our first ever podcast,
beginning a project which we had been trying to get off
the ground for over a year.
A
SOTT editor poses next to his computer
To produce the Signs page, we work very long days (often
upwards of 14-16 hours) without pay. We do it because
we love it, and because our readers often write to tell
us how they have benefited from our work. In order to
continue expanding our work and deepen our analysis and
understanding of our world, we need to enlarge our library.
There are many books we would like to have that we cannot
afford. With our increasing use of sound files and our
future projects that include video, we have and will continue
to incur higher bandwidth costs. As well, the Signs page
and related projects are created on several computers
which are each upwards of five years old. They are very
slow, increasingly unreliable, and won't support regular
podcasts and videos.
Unfortunately, we do not have the financial means to
purchase the books we need, much less new equipment. Current
donations only support our basic needs and living expenses.
In order to continue producing the Signs page, the podcast,
Flash presentations, and expand our operations further,
we need your support.
At the moment, we are preparing six Signs of the
Times Commentary books. These books are collections
of SOTT commentary grouped according to theme. They will
be available for sale soon, and any proceeds will go towards
helping to cover our increasing operating costs.
Our target, based on estimated costs for all the necessary
materials, upgrades, and operating costs for the coming
year is 28,000 euros.
--
Here's How You Can Help Signs of the Times --
Any donation you
can make will help us to continue to produce and improve
the Signs page.
If you donate 50 euros
(approximately US$60; click
here for current exchange rate), you will be a Bronze
Supporter.
Bronze
Supporters will receive a complementary
copy of the 911 Conspiracy Signs
Commentary book.
If you donate 100
euros, you will be a Silver
Supporter.
Silver
Supporters will receive a complementary copy
of 911 Conspiracy, US Freedom, and The
Media.
Donations
of 175 euros will qualify you as a Gold
Supporter.
Gold
Supporters will receive the entire set of
six commentary books: 911 Conspiracy, The
Human Condition, The Media, Religion,
US Freedom, and The Work.
Donations of 250 euros will
qualify you as a Platinum Supporter.
Platinum
Supporters will receive the entire set of
six commentary books: 911 Conspiracy, The
Human Condition, The Media, Religion,
US Freedom, and The Work. In addition,
they will receive one other book of their choice free
from our bookstore.
We have more projects like our podcast in
the works - but we need your
help to make them a reality!
Thank
you in advance from the editors and the rest of the team
at Signs of the Times!
What is becoming increasingly
clear is that the net result of the current conflict
known as the "war on terrorism" is not the
eradication of terrorism around the world but rather
it's promotion and the restriction of civil rights of
ordinary citizens. This much is beyond doubt because
we can all verify that this is indeed what has occurred.
Terrorist attacks have increased dramatically since
the "war" began, and the steady abolition
of civil freedoms continues unabated.
The matter of real importance then, is to understand
to which warring party in this 21st century conflict
such goals belong. Who really wants to embroil the world
in a terror attack nightmare and sweep away our basic
social rights? If it is the terrorists' goal to exterminate
"freedom and civilisation" and if it is the
goal of Bush and Blair to protect our freedoms and our
lives, then clearly the terrorists are winning the war
and Bush and Blair are losing.
The argument that the draconian measures undertaken
by the British and American governments have prevented
worse attacks from occurring is disingenuous as there
is no way to verify this claim and, in any case, progress
in "making the world a safer place" should
be gauged in terms of a comparison between the level
of global security before and since Bush and Blair decided
to lie to the world about the reasons for their collaborative,
illegal invasion of Iraq.
Bush and Blair have repeatedly claimed that the goal
of the terrorists is to turn back the clock on civilisation
and install a fundamentalist Islamic regime across the
globe. Whatever else we say about the terrorists, we
cannot accuse them of setting their sights too low.
That is why I don’t even agree actually …
that in the end they just want us out of Arab countries,
they don’t, it is far more fundamental than
that, they want a war between Islam and other religions,
that is what they want, that is why they keep referring
to this as the crusader Zionist alliance and all this
sort of rubbish. That is what they want, they want
a situation in which we end up being divided.
This statement however, is simply Blair's opinion,
and flies in the face of past statements made by terrorists
to the effect that their attacks are revenge for decades-old
Western meddling in Arab nations, particularly the more
recent invasion and appropriation of the countries of
Afghanistan and Iraq.
The problem for Bush and Blair now is that, since they
have been exposed as having lied about their reasons
for the invasion of Iraq, and that the real reasons
had much more to do with occupying a foreign country
and pillaging it's oil wealth than fighting terrorism,
they can reasonably be accused of actually promoting
terrorism by inspiring ordinary Iraqis and Afghanis
to fight back using the age old guerilla warfare tactics,
aka "terrorism", that have been used by dozens
of groups that faced the overwhelming superior military
power of a nation state aggressor. It is for this reason
that the Bush and Blair governments are now
talking about a "global struggle against violent
extremism" rather than a "war on terror".
It is a subtle maneuver which vectors attention away
from the lies of the war on terror and onto the idea
that the "civilised" world is under threat
from an extremist form of Islam that is as old as the
religion itself.
For the people of the world however, this is an ominous
turn of events which serves nicely as justification
for the Bush and Blair government's continued repression
of basic civil rights and the fomenting of a potentially
violent division along ethnic and religious lines in
their respective countries.
But what then is the answer to the central question
of who is really winning the "war on terror"
or the "global struggle against violent extremism"?
How do we explain that, despite their best efforts,
the actions of the Bush and Blair governments appear
to directly playing into the hands of the "terrorists"
and fulfilling their alleged goals?
For the answer, we need look no further than the increasing
volume of evidence to suggest that both the 9/11 attacks
and the recent London bombings were, at the very least,
carried out with the consent of the Bush and Blair governments
themselves. Indeed, that the Islamic terrorists are
actually agents of the very governments that claim to
be fighting the war on Islamic terrorism.
From this we can draw the conclusion that, when Blair
says that is "not about Western government presence
in Arab countries", that it is "far more fundamental
than that, that "they" want a war between
Islam and other religions, that "they" want
a situation in which we end up being divided,"
he is actually revealing his own agenda and that of
his war on terror allies.
As if to confirm his duplicitous strategy in the same
recent
Press conference Blair clarified the situation:
Israel shouldn't’t exist, yes American foreign
policy is evil, yes what happened in Iraq or Afghanistan
was designed to suppress Islam, [if people accept
those as ideas it is far less of a step into the extremism
of terrorism.]
As has so often been the case throughout the history
of modern civilisation, - the truth is usually to be
found approximately 180 degrees from the official government
version of events.
Just in case there remains any doubt as to the true
goals of Bush and Blair's war on terror, consider the
net results:
Worldwide terrorism has increased dramatically since
the war on terror started; in societies where there
was little or no evidence of social and ethnic strife,
wedges are being driven between Christians and Muslims,
Whites or Westerners and "people of Middle Eastern
origin" or "Asians" in European and
American society;
an innocent Brazilian electrician was recently gunned
down in cold blood for no obvious reason by London
anti-terrorist police;
hundreds of innocent men are currently confined,
and routinely tortured in Guantanamo Bay with no recourse
to legal representation and in flagrant violation
of the Geneva Convention on human rights;
100,000 (and counting) innocent Iraqi men, women
and children have been slaughtered by US forces; women's
rights in "free" Afghanistan are as neglected,
if not more so, as under the Taliban;
opium (heroin) production in that country has skyrocketed;
invasive 'biometric' ID cards will soon be introduced
for the British population;
British police will be granted sweeping new powers
to counter the "terrorist threat", including
the right to detain a suspect for up to three months
without charge instead of the current 14 days. They
will also be granted powers to attack and close down
web sites and to "suppress
inappropriate internet usage", with the
simple act of exposing government lies potentially
falling into the "inappropriate internet usage"
category;
and all of it in the name of fighting a war on terror
- and yet the terror attacks continue, ensuring that
there is no end in sight to these drastic and, dare
we say, "fascist" measures. Plainly, either
the "Islamic terrorists" and the Bush and
Blair governments share the same goals, or they are
in fact one and the same.
The age-old maxim, "by their fruits ye shall know
them" is certainly as true today as it ever was,
and it may be the only clear-cut method at our disposal
to understand the truth behind the dark future that
is beckoning us all.
Over the past fortnight Israeli
intelligence agents have noticed something distinctly
odd happening on the internet. One by one, Al-Qaeda's
affiliated websites have vanished until only a handful
remain, write Uzi Mahnaimi and Alex Pell.
Someone has cut the line of communication between the
spiritual leaders of international terrorism and their
supporters. Since 9/11 the websites have been the main
links to disseminate propaganda and information.
The Israelis detect the hand
of British intelligence, determined to torpedo
the websites after the London attacks of July 7.
The web has become the new battleground
of terrorism, permitting a freedom of communication
denied to such organisations as the IRA a couple of
decades ago.
One global jihad site terminated recently was an inflammatory
Pakistani site, www.mojihedun.com, in which a section
entitled How to Strike a European City gave full technical
instructions. Tens of similar sites, some offering detailed
information on how to build and use biological weapons,
have also been shut down. However, Islamic sites believed
to be "moderate", remain.
One belongs to the London-based Syrian cleric Abu Basir
al-Tartusi, whose www.abubaseer.bizland.com remained
operative after he condemned the London bombings.
However, the scales remain weighted in favour of global
jihad, the first virtual terror organisation. For all
the vaunted spying advances such as tracking mobile
phones and isolating key phrases in telephone conversations,
experts believe current technologies actually play into
the hands of those who would harm us.
"Modern technology puts most
of the advantages in the hands of the terrorists. That
is the bottom line," says Professor Michael Clarke,
of King's College London, who is director of the International
Policy Institute.
Government-sponsored monitoring systems, such as Echelon,
can track vast amounts of data but have so far proved
of minimal benefit in preventing, or even warning, of
attacks. And such systems are vulnerable to manipulation:
low-ranking volunteers in terrorist organisations can
create background chatter that ties up resources and
maintains a threshold of anxiety. There
are many tricks of the trade that give terrorists secure
digital communication and leave no trace on the host
computer.
Ironically, the most readily available
sources of accurate online information on bomb-making
are the websites of the radical American militia. "I
have not seen any Al-Qaeda manuals that look like genuine
terrorist training," claims Clarke.
However, the sobering message of many security experts
is that the terrorists are unlikely ever to lose a war
waged with technology.
Comment: Israel
suspects it was British intelligence that closed down
the "terrorist" sites... Here's a good question:
Has anyone actually visited one of these alleged sites?
Of course not! We would all be afraid of being associated
with terrorists, right?
It is quite possible that in the near future, the internet
will be shut down - or at the very least, any sites
that are deemed to be questionable will be eliminated,
leaving only those pages approved by the powers that
be. We already have seen it happening with our own web
site. It would be all too easy for those in power to
label a web site or discussion group as "related
to terrorism" and simply pull the plug.
Note also the comment about how modern technology puts
all the advantages in the hands of the terrorists. "Terrorists"
do not have stealth bombers, smart bombs, spy satellites,
and microwave death rays. While we are told that the
US military is the most advanced on the planet, it is
incapable of finding a bunch of supposed terrorists
hiding in caves. If we are really supposed to believe
that such a group of evildoers exists and that they
can outsmart the US military by using the internet
of all things, then the only conclusion to reach is
that the US military must be incompetent - which directly
contradicts the idea that it is the greatest.
Times Online
By Daniel McGrory and Sean O'Neill
August 01, 2005
THOUSANDS of police marksmen will
be on London's streets and rooftops again today after
warnings that another team of suicide bombers is plotting
a third attack on the capital.
The new group is believed to be made up of British
Muslims who were understood to be close to staging an
attack on the Underground network last week. According
to security sources the men are thought to be of Pakistani
origin but born and brought up in this country. They
have links with the Leeds-based terrorist cell that
staged the July 7 attacks, in which 52 innocent people
died.
Even with the transport system so heavily guarded,
police and intelligence sources believe that the bombers
are intent on once more attacking London's bus and Underground
network. Another multiple suicide strike is also intended
to demonstrate how the network can call on more recruits.
The men are said to have access to explosives.
US security sources said yesterday that this third
group of would-be bombers met at Finsbury Park mosque
in North London, where some of the July 7 terrorists
are also known to have stayed. There are reports that
this team originally planned to strike last Thursday,
which is why more than 6,000 police, half of them armed,
were present at Underground stations. Scotland
Yard said at the time that this exercise, the biggest
since the Second World War, was to test their resources
and reassure a nervous public.
As commuters return to work today police chiefs say
that the arrest of five suspected bombers in house raids
in Birmingham, London and Rome has not ended this threat.
Deputy Assistant Commissioner Peter Clarke, head of
the anti-terrorist branch, said: "The threat remains
and is very real."
There is concern among ministers
and police at how long officers can continue such an
intensive operation to "lock down" London
while a threat remains. Although reinforcements
have been brought in and leave has been cancelled, resources
are stretched to keep up the guard on the capital, which
is costing £500,000 a day. Sir Ian Blair, the
Metropolitan Police Commissioner, admitted that his
officers were "very, very tired".
Comment: Well,
gee, it looks like there are only two solutions:
Deport anyone who has dark skin
or anyone that questions the government's actions
in the war on terror to purge the country of "terrorists"
Institute a police state
While the priority is to thwart another strike, police
are still investigating links between the attacks on
July 7 and the botched operation a fortnight later.
They are also hunting for what officers describe as
"key logistical players" behind the attacks.
Seven more people - six men and a woman - were arrested
in raids in Brighton yesterday, bringing the number
of people under arrest in Britain to 18. A Scotland
Yard spokesman said: "This is a further indication
of the fact this is a fast-moving investigation and
we continue to progress. We are searching for other
people in connection with this ongoing inquiry.
"There were quite a few other people involved
in the incidents of the 7th and the 21st. It's extremely
likely there will be other people involved in harbouring,
financing and making the devices."
The major link between the two sets of bombers is that
the alleged leaders of both groups attended Finsbury
Park mosque. Experts are studying similarities between
the bombs used on July 7 and 21. [...]
Ethiopian-born Hussain, 27, who has a British passport,
claimed that the plot was orchestrated by another of
those arrested on Friday, Muktar Said-Ibrahim. Hussain
said that he had been recruited in an underground gym
in Notting Hill.
Immigration officials are trying to find out how he
managed to slip out of Waterloo station on a Eurostar
train to Paris and make way to Italy where he met his
brother, who lives in Rome. Officials want to know why
Hussain, who says his real name is Hamdi Isaac and who
has Italian citizenship, came to Britain posing as a
Somali asylum-seeker in 1996. [...]
Italian police say they are using Hussain's phone records
to unpick the international network that has been helping
him. Alfredo Mantovano, an Interior Ministry official,
said that the network "confirms the presence in
our country of autonomous Islamic cells . . . which
could represent a concrete threat." Italy is worried
that it is the next target for Islamic terrorists.
Tony Blair will leave
London for a family holiday this week despite concern
that he will be out of the country at the same time
as Charles Clarke, the Home Secretary, and Jack Straw,
the Foreign Secretary.
Mr Blair and senior ministers have decided to continue
with planned summer breaks even though the country is
in the midst of its biggest security alert after the
bombings. [...]
Comment:
Blair and his ministers have gone on holiday, safe in
the knowledge that the backroom boys have everything under
control. After all, since the Blair government is the
one directing Islamic terrorism in the UK, he can rest
assured that he will never be caught unawares.
KABUL, Afghanistan - Uzbekistan's
decision to end an agreement that let U.S. military
aircraft use a base - an important hub for American
operations in Afghanistan - will not hinder the battle
against militants here, a U.S. military spokesman said
Monday.
The Karshi-Khanabad air base, commonly
referred to as K2, has been a critical staging point
for U.S. military operations in Afghanistan since the
earliest days of the war, which began in October 2001.
More recently, the base has been used to move supplies,
including humanitarian aid, into northern Afghanistan.
It also is a refueling point for transport planes.
"Our presence there is an integral part of Operation
Enduring Freedom here in Afghanistan and to support
the Afghanistan people," U.S. military spokesman
Col. James Yonts said. However, he said, "our ability
to execute combat operations ... will not be hindered
by this decision." He said
operations would be reorganized to use air bases at
Bagram, just north of the Afghan capital, Kabul; at
Kandahar, in southern Afghanistan; and at Manas, in
neighboring Kyrgyzstan.
His comments echoed those of Defense Secretary Donald
H. Rumsfeld, who said last week that he did not believe
American operations in Afghanistan would be hurt by
the decision that prevents U.S. aircraft from using
the Uzbek base.
The Uzbek government offered no reason
for evicting U.S. forces.
Moscow - The withdrawal of a base
from Uzbekistan by a six-month deadline set by Tashkent
is not a big problem militarily.
But politically, the loss of an ally is quite serious
for the United States. On the one hand, the West will
exert much more pressure on the Islam Karimov regime.
But on the other, China and Russia are not likely to
abandon their partner in the Shanghai Cooperation Organization.
U.S. Undersecretary of State for Political Affairs
Nikolai Burns has conspicuously cancelled his visit
to Tashkent. He told The New York Times that it was
considered inexpedient to pay a visit to Tashkent after
they got notification about the withdrawal of the U.S.
military base. He added that Uzbekistan was isolated
because its government had failed to carry out reforms.
But this is very far from the truth. Tashkent has not
become an international outcast just because the West
is displeased with lack of democracy there, or because
it makes every effort to prevent the extradition of
Uzbek refugees from Kyrgyzstan. To the contrary, both
China and Russia approve to a different extent Tashkent's
tough action against Muslim radicals.
Moreover, the West's desire to encourage Central Asian
nations to make a fast leap to democracy finds no support
in Moscow. Director of the Russian Institute for Strategic
Studies Yevgeny Kozhokin: " Imperfect schemes of
democratization may produce a social and political explosion,
as a result of which secular regimes will be replaced
with Muslim, or even Muslim fundamentalist forces. This
threat exists in Central Asia, especially in Uzbekistan
and Tajikistan." [...]
The 46-year stand-off
between Cuba and America has taken a turn for the worse
after Washington appointed a "transition co-ordinator"
to hasten the downfall of President Fidel Castro.
Condoleezza Rice, the US secretary of state, chose
Caleb McCarry to "accelerate the demise of Castro's
tyranny" on the Caribbean island that the Communist
dictator has run since a coup in 1959.
The appointment is part of President George W Bush's
plan to tighten the 40-year programme of sanctions against
Cuba.
In addition, the American government has been beaming
in extra aircraft-transmitted radio and television broadcasts
to Cuba to avoid Castro's jamming of Miami-based ones.
Over the weekend, both Cuba's government and the dissidents
it has repressed criticised the appointment, which was
made last week. President Castro called the move "especially
aggressive".
"Surely he will receive a juicy salary in his
new job, but Caleb McCarry - I assure you - will retire
without setting foot in Cuba," Felipe Perez Roque,
the Cuban foreign minister, said.
Cuban dissidents have been subject to a government
crackdown in recent weeks, with dozens of arrests. President
Castro called them "mercenaries", "traitors",
"bums" and "delinquents" in a speech
last week. But they do not approve of the latest American
move.
"Any transition in Cuba
is for Cubans to define, lead, organise and co-ordinate,"
said Oswaldo Paya, leader of the Christian Liberation
Movement and promoter of a petition seeking democracy
in Cuba. [...]
Comment:
Why should we be surprised? Over the course of the long
and bloody years of American 'Democracy', successive American
governments have shown nothing but contempt for the will
of the people, regardless of which country they live in.
The U.S. dollar closed at 0.8208
euros on Friday, down one percent from the previous
week's close of 0.8293. That put a euro at 1.2184 dollars,
compared to 1.2058 on the previous Friday. Gold closed
at 435.80 dollars an ounce, up sharply (2.4%) from $425.40
a week earlier. In euro terms, an ounce of gold closed
at 357.68 euros up 1.4% from last week's close of 352.79.
Oil closed at $60.83 a barrel, up 3.7% from 58.65 dollars
a barrel the previous week. In terms of euros, a barrel
of oil cost 49.93 euros, up 2.6% compared to 48.64 a
week earlier. The gold/oil ratio closed at 7.16 compared
to 7.25 a week earlier for a drop in gold terms of 1.3%.
In the U.S. stock market the Dow Jones Industrial Average
closed at 10,640.91, down a tenth of a percent from
last week's close of 10,651.18. The NASDAQ closed at
2184.83 on Friday, up 0.2% from 2,179.74 the week before.
The yield on the ten-year U.S. Treasury bond closed
at 4.29 percent, up seven basis points from 4.22 the
previous Friday.
The U.S. economic situation is being spun positively
by the Mainstream Media in the United States as can
be seen by this wire service article:
The U.S. economy grew at a solid 3.4 percent annual
rate in the second quarter, setting the stage for
steady second-half expansion as inventories fell and
Midwest manufacturing picked up, government and industry
reports on Friday showed.
The quarterly report on gross domestic product, or
GDP, showed core inflation well contained but analysts
said there was enough price pressure after nine quarters
of growth exceeding 3 percent to keep U.S. interest
rates on the rise.
A price index based personal consumption expenditures
rose at a 3.3 percent rate that topped the first quarter's
2.3 percent. However, when food and energy were stripped
out -- a formulation that Federal Reserve Chairman
Alan Greenspan favors -- the rate of price rises slowed
to 1.8 percent in the second quarter from 2.4 percent.
But with oil topping $60 a barrel on Friday, investors
bet the Fed's policy of pushing interest rates steadily
higher -- as it has done nine times since June last
year -- will remain in place for some time.
Stock prices dropped, with the Dow Jones industrial
average down 64.64 points, or 0.6 percent, to end
at 10,640.91. The tech-laden Nasdaq Composite Index
lost 13.61 points, or 0.62 percent, to end at 2,184.83.
Similarly, bond prices sagged on the expectation
that interest rates will keep rising. Prices for 30-year
U.S. Treasury bonds plunged 1-9/32s points and their
yield rose to 4.48 percent from 4.40 percent. Ten-year
Treasury notes dropped 21/32 of a point while their
yield gained to 4.28 percent from 4.20 percent on
Thursday.
Other reports showed U.S. Midwest manufacturing gathered
momentum in July while consumer sentiment brightened
slightly. Wages and salaries -- regarded as a potential
strong influence on inflation -- increased at a modest
pace.
The strong second-quarter GDP performance followed
a 3.8 percent growth rate in the first quarter and
reflected well-balanced strength in consumer spending,
business investment and exports.
"Strong, broad-based growth is just the ticket
the Fed needs to support its interest-rate hike program,"
economist Joel Naroff of Naroff Economic Advisors
in Holland, Pennsylvania, wrote. "And the members
can point to this report and say the economy is in
good shape and does not need much stimulus, if any."
GDP measures the value of all goods and services
produced within U.S. borders.
Separately, the Labor Department reported that employment
costs continued to gain moderately in the second quarter,
by 0.7 percent, matching the first quarter's pace.
The Employment Cost Index is a broad measure of what
employers pay in wages and benefits. The second-quarter
data showed pay increased 0.6 percent in the April-June
period, matching the gain recorded in the January-March
quarter.
Most measures of GDP activity remained healthy in
the second quarter, with consumer spending increasing
at a 3.3 percent rate after growing at a 3.5 percent
rate in the first quarter. Business investment advanced
at a 9 percent rate after growing 5.7 percent in the
first three months of the year.
Companies drew down inventories at a $6.4 billion
annual rate during the second quarter -- the first
time they reduced stocks since the second quarter
of 2003. Carmakers restrained production while dealers
used sales incentives to clear their lots of unsold
goods, clearing the way for stronger production in
coming months.
Another gauge of economic activity in the industrial
Midwest -- the Chicago Purchasing Management Index
-- posted a sharp jump in July to 63.5 from 53.6 in
June. Every one of its separate measures, from new
orders to current production levels, strengthened
in July.
A University of Michigan consumer confidence index
rose modestly to a 2005 high of 96.5, implying consumers
are likely to keep adding their purchasing punch to
the economy.
Analysts said the employment costs data was encouraging,
since it did not point to hefty wage demands that
can foster inflation. Over a 12-month period ending
June 30, wages and salaries have grown just 2.4 percent.
Again we see a bifurcation between the conclusions
reached looking at snapshot-data for the U.S. economy
and those reached by looking at the big picture and
at historical trends. People interested in the latter
would have spent the week thinking about the unpegging
of the yuan, the passage of CAFTA and the new U.S. energy
bill as well as the continuing disaster of the war in
Southwest Asia.
The implications of the Chinese move are clear: rising
U.S. interest rates, which could be disastrous when
combined with an out-of-control housing bubble. Here's
Al
Martin:
China acted to revalue its currency, the yuan, on
July 20 -- by removing the dollar peg and substituting
it for a basket of foreign currencies on a trade-weighted
basis. Essentially, the Bank of China duplicated its
own DL dollar contract that trades on the NYBOT. This
means that China will substitute the U.S. dollar for
other currencies belonging to countries they do business
with on a weighted basis – that is, based on
the amount of trade they conduct with these countries.
The U.S. dollar will still be included in this peg,
but will only be 1/5th of the weight ascribed to it
before. What does this mean for the US economy?
The effect of this will be
that the Bank of China will now need to maintain in
its reserves far fewer U.S. dollars -- perhaps only
1/5th as many U.S. dollars as it did before. It also
means that the Bank of China will be purchasing fewer
U.S. Treasury securities in the future.
It should be noted that the Bank of China has been
the largest purchaser of U.S. Treasury securities
in the last 5 years and is now, indeed, the largest
holder of U.S. Treasury securities. It was the Bank
of China's buying of U.S. Treasury securities which
led, in part, to the conundrum which Fed Chairman
Alan Greenspan talks about -- as the Fed has pushed
short-term interest rates, through the Fed funds,
higher, long-term rates actually declined. That's
because of the demand for U.S. Treasury instruments
in dollars coming from China.
This demand is now removed. Therefore, what will happen
is that longer-term U.S. Treasury bond rates must
rise, as they did on Thursday and Friday after China
announced this new action. Why? Treasury rates will
have to rise in order to attract foreign capital from
other sources–now that the Bank of China is
not a ready, and virtually compelled, buyer –
in order to re-circulate U.S. dollars that China accrues
through its enormous trade surpluses with the United
States.
Furthermore, Chinese absorption of U.S. dollars, through
these trade surpluses, has effectively been a supporting
factor of the U.S. dollar in the past. This will no
longer happen.
Therefore, what is also likely to happen is that the
U.S. dollar will decline in value without this support,
no matter the counter-trend rally that the dollar
has had over the last 3 months; thus making the dollar,
for investors, an attractive short-selling opportunity
at current levels.
This will be inflationary for the U.S. economy, in
that it will force longer-term rates up, and it will
exert downward pressure on the U.S. dollar, as well
as increasing the cost of Chinese goods being imported
into the United States. This acts, more so than the
monetary action of any other country, as a triple
inflationary whammy on the United States.
This action by China then will A) force up long-term
U.S. interest rates; B) force down the value of the
U.S. dollar and C) force up the cost of consumer goods
and services imported from China, which are substantial.
(WalMart, the nation's largest retailer imports 83%
of everything it sells from China.)
China's decision to change the nature of its currency
peg means that it will no longer be in the dollar
buying business, or by extension, the U.S. Treasury
buying business. That means that America will be losing
its biggest benefactor. China will no longer act as
the principal enabler of America's irresponsible extravagance,
ending its subsidies to American consumers and borrowers.
Changing the nature of the yuan peg is a first step
in the ultimate direction of either allowing the Yuan
to float freely or possibly pegging it to gold. In
the meantime the Yuan will remain undervalued, as
it will likely be pegged to a basket of other currencies
using current exchange rates that clearly undervalue
the Yuan. Chinese imbalances will continue to grow,
along with all the domestic inflationary implications
that result.
However, the pressure on China to prop up the dollar
will be greatly diminished. To maintain the peg against
its new basket, Chinese monetary authorities will
most likely now be buyers of those other currencies
likely to be included in its basket, such as the Euro
or Yen. Since its reserves are already disproportionately
held in dollars, it will likely rebalance those reserves
to more accurately mirror the basket to which the
Yuan will be pegged. Such a rebalancing will only
exacerbate the dollar's decline. However, a declining
dollar will not automatically require offsetting dollar
buying by the Chinese as it has during the period
of the yuan-dollar peg. As long as dollar weakness
is offset by strength in other currencies in its basket,
the peg can be maintained.
The implications for America are enormous. Far
from being the panacea that American politicians proclaim,
China's decision to alter its peg could be the pin
that finally pricks America's bubble economy.
Does that mean that U.S. politicians have been actively
pursuing a policy (encouraging China to remove the dollar
peg) that would pop the U.S. economic bubble? It would
seem so.
For America, the direct result of this action will
be the following:
1. Higher consumer prices.
2. Higher interest rates.
3. Reduced profits for American companies, particularly
those dependent on domestic consumption and consumer
debt.
4. Lower stock prices, as earnings decline and multiples
contract.
5. The busting of the housing bubble, as tighter credit
standards and higher interest rates squeeze current
home prices.
6. Rising unemployment, as higher interest rates and
vanishing home equity slow consumer spending and reduce
jobs dependant on that spending.
7. A severe recession as a result of all of the above.
8. Rising federal budget deficits, as recession reduces
tax revenue, while higher interest rates and escalating
outlays increase expenditures.
Schiff ends the article with this somewhat bizarre
paragraph:
In conclusion, July 21, 2005 will be another date
likely to live in infamy. This time the aggressor
is China not Japan, and the bombs are purely economic.
Though there will be no immediate loss of life, and
no American retaliation, the financial damages will
be devastating. History will remember this date as
the beginning of Chinese independence, and the beginning
of the end of America's ability to depend on China.
How can he use the war metaphor
when all prominent U.S. politicians have been urging
China to adopt this policy? That would be like
the United States urging Japan to attack Pearl Harbor
in 1941 (hmm…). Or like the United States urging
Japan and Germany to send troops overseas in wars (wait,
hasn't the United States been urging them to do that?).
Should he then invoke the "treason" metaphor?
Maybe war is not the right analogy for what is happening.
Or maybe it is, but not for the reason most people would
think. War may be a good metaphor if we note the staged
aspects of many wars and the fact that many corporations
flourish during wartime and that many powerful fortunes
are established on war-profiteering.
Doug
Wakefield, on the other hand, uses a natural disaster
metaphor: the Tsunami.
In December 2004 we watched the devastating impact
of a Tsunami. For those living away from the area,
what we saw, horrifying as it was, was impossible
to grasp. How could so much destruction occur? How
could over 240,000 people die from a natural disaster
that started from shifting plates on the earth's floor?
How can water top speeds of 500 mph? We heard stories
of individuals looking at the ocean as it pulled back
hundreds of yards from the beach only to then be totally
surprised by the high wall of water that returned.
It left the observer no time to prepare.
Today, as we look at our financial
markets, most of the talk is of comfortable retirements,
funded pension plans, and safe Social Security and
Medicare Benefits. And yet, as the event of last December
has shown, things are not always what they seem and
they can change quickly. Now is the time for every
investor to ask, "What evidence is there that
a major decline could occur in the financial markets
and what actions can I take to address any systemic
risks?"
As we look out across the exchanges, everything appears
calm. The bond market continues the bull that started
in the early 1980's. The Dow Jones Industrial, after
dipping below 7200 in 2002, looks to be safely resting
on a 10,000 floor. Nationally, real estate has appreciated
moderately for years, and substantially in the last
few.
However, as we look below the happy talk about "how
the Dow has held strong above the 10,000 level since
late 2003" or "how resilient the American
markets are", we begin to notice that long term
investing records are still tarnished by the "downturn"
of 2000 - 2002. When we consider that the S&P500
is still down 10.64% over the 6-year period ending
June 30, 2005, or that the Dow is down 3.17% during
the same timeframe, then the first signs of concern
start to creep into our thinking.
…In June of 1999, total mortgages in the USA
stood at $6,021 billion. At the end of March 2005,
the number is $10,774. This is a 79% increase. Keep
in mind our incomes have only risen 34% while our
credit card bill has grown by 58%. So, what have we,
as a nation, done? The answer is painful, if not obvious.
We have borrowed the money with our homes as collateral
for the loan. As our credit has gotten increasingly
splotchy and our cash flow needs have increased, institutions
have lowered their lending standards and moved toward
riskier finance products. In a May 5th 2005 report
issued by Fannie Mae, we see that the share of interest
only Adjustable Rate Mortgages (ARMs) "A"
paper selling in the Mortgage Backed Securities (MBS)
market has grown from 3% in 2001 to 50.9% in 2004,
while ARMs for the same class and timeframe have grown
from 18% to 72.1%. The Jumbo MBS market has grown
from 5.4% to 52.5% during the same period. In addition
to this we learn that the sub-prime MBS finished 2004
with 66% of their loans as 2 year ARMs. In other words
66% of these notes face a likely upward adjustment
in payments as early as 2006. 5 These are astonishing
numbers.
Ok, before we go any further, let's look at this huge
and growing risk that will affect our financial markets.
The question is not if, but when. In a society where
everything is focused on how we can make payments,
versus what can we afford to purchase, the lending
environment must become more lax when the consumer
starts tapping out. If we cannot afford the house
payment with a fixed mortgage, we can buy the house
with a lower payment with the understanding that the
payments will adjust upward in the future. If we still
cannot afford the payment, the lender cuts the loan
terms to interest only for a period of time, so that
even less may be required of our consumer today. Tomorrow,
well, why worry about that today? Besides, house prices
have been increasing and players in the real estate
game, like condoflip.com, give us the impression that
our property will only be valued higher in 2 - 4 years
when we look to either refinance or sell. So again,
we ask, what's the problem?
On the surface, nothing. But let's look at this a
little closer. If this only
affected the consumer doing this, then this would
only be an issue for the lending institution reckless
enough to allow it. However, since each of these mortgages
are packaged in groups and sold in the bond markets
as mortgage backed securities to investors, it becomes
a concern. When those investors are mutual funds,
large endowments, or pension funds, the problem now
becomes an issue for thousands of investors who never
intended to flip condos. Pretty pie graphs and the
last quarterly statement are nice, but they do not
go far enough in disclosing the true risk each investor
is taking.
While it would be easy to blame one politician, investment
institution, or Federal Reserve official and demand
changes, the size of the markets make it extremely
improbable that one individual could "fix"
these problems. History reveals that the pressures
we now face have been building for decades.
According to Marshall Auerback, there is increasing
evidence that the housing bubble is popping as could
be predicted to happen with rising long-term interest
rates.
Americans have been using their homes as ATM machines,
refinancing their mortgages in order to fund their
spending. But even in the sluggish economy of 2000-2002,
housing prices have soared.
Because of these rising prices, American consumers
have long been seduced into believing that despite
all the ups and downs in stocks and salaries, their
overall situation was okay. Homes are the biggest
asset most families own, and their value has been
rising nicely. For that reason, Americans have felt
more comfortable buying big-ticket items, from SUVs
to new computers to Disney World vacations. Much of
that spending has gone right onto the VISA card. But
that debt has been kept somewhat manageable by another
factor in housing prices: mortgage refinancing, where
China's importance cannot be overstated. Coming at
a time of increasing vulnerabilities in the US housing
market, a higher risk premium on forward US interest
rates needs to rise to cover this uncertainty, which
is clearly not going to help the mortgage market.
(As an example, the Washington
Post recently reported that Philadelphia, its suburbs
and indeed much of Pennsylvania had experienced a
foreclosure epidemic as low-income homeowners took
on mortgage debt they could not afford. In 2000, the
Philadelphia sheriff auctioned 300 to 400 foreclosed
properties a month; now he handles more than 1,000
a month. Allegheny County, which includes Pittsburgh,
had record auctions of foreclosed homes, and officials
speak of a "Depression-era" problem). Could
this be repeated across the country?
The passage last week of CAFTA, the Central American
Free Trade Agreement, also did not go unnoticed as an
ominous portent:
I am working on my computer when I discover that
the House has passed CAFTA. I turn on the TV for the
eleven-o-clock news. The local channels are full of
reports...about an uptown homicide. On cable, both
Fox and MSNBC each have a specialist standing near
a pond in Aruba talking with great earnestness (I
have the sound turned off). On CNN, Paula Zahn is
interviewing an expert on the size of the debris from
the space shuttle.
The House has just passed CAFTA, and the discussion
on television is all about Natalee Holloway and flakes
of foam.
CAFTA comes twelve years after NAFTA,
about which every dire prediction -- job losses, erosion
of the manufacturing base, mounting trade imbalances
-- has been borne out in spades. Against this background
the Senate voted 54-45 for the bill a few days back,
and the House has followed with 217-215.
Watching CSPAN the following
day when the Senate re-voted on the revised version
of the CAFTA bill after just 20 minutes of debate,
I saw a couple of senators extoll the bill, saying
how it would remove tariffs on American exports to
Central America. I was reminded of an old remark by
my cousin, "If we had ham, we could have ham
and eggs ---- if we had eggs!" When all the manufacturing
has fled, Senator, I felt like shouting, what do you
plan to export? Like the morning-after pill,
Democrats complained the next day about the House
vote (took place at midnight, was kept open for forty-five
minutes until a majority was....assembled),
complaining how the rules were bent after the original
tally actually rejected CAFTA by five votes. Why did
they then not stage a sit-in or register a vociferous
protest? One Democratic senator referred to this ploy,
but when the vote came, I counted many Democrats --
Dianne Feinstein, both the Washington Senators, and
the Old Reliable, Joe Lieberman himself, all voting
for CAFTA.
Any other country would have made a huge stink about
a re-enactment of such a fire-sale of its wealth.
But not America of the New American Century. If Socrates
died cheerfully sipping hemlock from a chalice, we
will likely reach our end propped up on a couch, watching
the latest 'breaking news' of a high-speed car chase
or a disappeared bride, maybe even to the background
music of 'Suicide is Painless'.
Unlike many others, I have somehow admired President
Bush for his knack, like Mr. Dick (he of David Copperfield,
not he of the undisclosed location), of revealing
profound truths even when appearing to speak in toungues.
Remember his interview last year where he said he
didn't think something like the 'War on Terror' could
be won? Or during the 2000 campaign when he thundered,
"They think Social Security is some kind of a
Federal Program"?
But his purest vision of clarity came some weeks
back, when he introduced 'disassembling'
back into the popular lexicon. Everyone laughed at
his not knowing that the word he wanted was 'dissembling'.
But they were misunderestimating him once more. He
was right. Disassembling is mot juste. My
only regret is that he didn't save the word till January
-- he could have uttered just that one word and delivered
the shortest and most accurate State of the Union
speech in history.
Disassembling covers everything that's happening
around us. The government's sole purpose seems to
be to dismantle every protection the country has,
leaving the borders unguarded, splurging on an empire
project that sputters even before getting under way,
and financing foreign reveries and domestic revelries
with borrowed money hiding the bottom of a Hubbardian
treasure chest. The loyal opposition -- loyal not
to the nation's interests but to focus groups -- silent
or spouting cant while freedoms are freely curtailed,
jobs vanish abroad, and economic security disappears.
The press is rotted (I have reported only the facts
in the opening paragraph), and a once proud people,
now riven by anxiety at one level and addled by a
half-century of don't-worry-be-happy television at
another, have no idea what to do after two generations
of systematic alienation from politics. The notion
of a nationalist bourgeoisie seems to have
vanished too, and big industry is no longer American
in any meaningful sense, being indifferent to American
plight in more ways than a Bermudan or Caymanian registered
address alone might suggest.
And, finally, the U.S. Energy Bill passed the House
of Representatives last week. I don't know about you
but I have been stressed out lately, wondering how we,
as a society, were going to funnel many more billions
of dollars to (already highly profitable) oil companies.
Well, I needn't have worried, the United States Congress
was hard at work tackling this problem the whole time.
Congressional Republican and Democratic negotiators
reached agreement Monday night on major elements of
a new energy bill promoted by the Bush administration
to reward its corporate backers in the oil, coal and
utility industries.
The resulting legislation is set
to provide as much as $14.5 billion in tax breaks
over the next 10 years to corporations that are already
immensely profitable. At the same time, the bill will
relax environmental regulations, thereby permitting
greater industrial pollution with all of the harmful
consequences for public health.
… It is impossible to overstate the importance
of sheer greed in determining both the policies of
the Bush administration and the actions of Congress.
A case in point is oil drilling in the ANWR: if not
a solution to the impending energy crisis, it is nonetheless
a source of enormous potential profits. At the current
price of nearly $60 a barrel, it would provide $600
billion in revenue for Big Oil.
All the environmental and regulatory decisions of
both the White House and Congress have corporate dollar
signs plastered all over them. A recent emergency
military spending bill, for instance, had four paragraphs
that allowed energy exploration in the Gulf Islands
National Seashore, a national park that comprises
ecologically sensitive barrier islands on the Gulf
coast of Mississippi. The first step will be seismic
testing, which involves detonating explosions in an
area that is home to sea turtles, dolphins and a wide
range of fish and birds, and using the resulting sound
waves to locate pockets of oil and gas.
During 2004, the federal Bureau of Land Management
issued 6,052 permits to drill oil and gas wells on
federal land, triple the number issues 10 years before.
Some 40 million acres of public land in the continental
US have been leased out to oil and gas development.
In the meantime, oil industry profits have reached
stratospheric levels. In May, Exxon Mobil Corp. announced
first-quarter revenues of $82 billion and first-quarter
profits of $7.86 billion, up 44 percent over the same
period last year. This works out to an annual profit
of more than $30 billion for the biggest US oil company.
PARIS - Wim Duisenberg, the former
European Central Bank chief who helped create the euro
currency, was found dead Sunday in his swimming pool
in southeastern France, officials said. He was 70.
An autopsy showed Duisenberg had drowned after an unspecified
cardiac problem, a regional prosecutor said. He was
found unconscious in the swimming pool at his home in
the town of Faucon and could not be resuscitated, police
said.
Duisenberg "died a natural death, due to drowning,
after a cardiac problem," said Jean-Francois Sanpieri,
a state prosecutor in the nearby town of Carpentras.
He did not give further details about the autopsy.
Duisenberg was the first head of the ECB, serving from
1998 to 2003. Having shepherded the euro through its
introduction in 1999, he became known as the father
of the 12-nation European common currency.
"With his calm manner, he established people's
basic trust in the euro," German Finance Minister
Hans Eichel told The Associated Press in Berlin. "We
will remember his personality and what he achieved."
Tall and stoop-shouldered, with a large mane of white
hair, Duisenberg sometimes appeared more of a professor
than a heavyweight policy-maker. A chain-smoking golf
lover, he kept a decidedly low profile as the ECB chief
but was a major figurehead bearing overall responsibility
for price stability in the euro zone of more than 300
million people.
During his tenure at the bank, Duisenberg was known
for his cautious monetary policy and was eager to defend
the euro through its early years.
He sometimes frustrated financial markets and politicians
by sticking to the bank's inflation-fighting stance,
keeping rates higher than some investors and officials
would have liked.
"I hear, but I don't listen" to such pleas,
was one of his typically blunt responses. Duisenberg
repeatedly said it was up to European governments to
pursue structural reforms - such as loosening rigid
rules on hiring and firing - if they wanted more growth.
Higher rates are the bank's main tool to fight inflation,
but they can crimp economic growth. The bank's tight
policy helped keep the euro a strong, stable currency
even as it is criticized as a drag on growth.
One of Duisenberg's biggest achievements was the smooth
introduction of euro notes and coins in early 2002.
Twelve national currencies were removed from circulation
by banks and shops and replaced with the new money in
a huge logistical effort that defied predictions of
long lines and consumer confusion.
Duisenberg, who unabashedly sought
to model the ECB on the U.S. Federal Reserve Bank, was
at times referred to as "Europe's Greenspan"
- a reference to Fed chief Alan Greenspan.
His selection as ECB chief was championed by Germany
- Europe's biggest economy - but faced controversy when
France proposed its central banker, Jean-Claude Trichet,
as a rival candidate. Trichet took over in 2003.
Trichet, in a statement, called Duisenberg's death
a "terrible loss," and credited him with a
decisive role in setting up EU monetary institutions,
overseeing the euro launch and building confidence in
the currency.
Willem Frederik Duisenberg was born July 9, 1935, in
the Dutch city of Heerenven. He became a member of the
Dutch Labor party, and received a doctorate in economics
from Groningen University, writing his dissertation
on the economic consequences of disarmament.
Duisenberg also served as finance minister and central
bank chief in the Netherlands, and once ran the European
Monetary Institute - an ECB predecessor - in Frankfurt,
Germany.
He is survived by his wife, Gretta Duisenberg-Bedier
de Prairie, and two adult sons.
Comment: It
seems Duisenberg's wife Gretta was none too happy with
the actions of the Israeli Zionists. From Wikipedia:
Duisenberg was married to the controversial
political activist Gretta Duisenberg. She created
a furor when she announced a plan to collect six million
signatures in protest of Israeli policies in the Occupied
Territories (the figure is thought to have been an
allusion to the number of Jewish victims of World
War II).
In a one-page letter released Wednesday,
Europe's top banker broke his silence to react to
allegations by Dutch Foreign Minister Jaap de Hoop
Scheffer that Gretta Duisenberg was misusing her diplomatic
passport while on a trip to Israel and the Palestinian
territories.
"As my (ECB) position requires,
I had stayed out of my wife's affairs," Duisenberg
wrote de Hoop Scheffer. "But I can tell you I
support her 100 percent."
In any case, Duisenberg's death
also reminded us of the death of banker Arthur Zankel
just a few days ago:
NEW YORK (Reuters) - Arthur Zankel,
a former Citigroup financier and patron of the arts,
died in a fall from the ninth floor of his Manhattan
apartment building, a family member said.
Zankel, 73, in a fall from the
Fifth Avenue building on Thursday, his son Tom Zankel
said.
He had been suffering from depression,
The New York Times on Saturday quoted Sanford Weill,
a close friend and the chairman of Citigroup as saying.
[...]
A few days before Zankel's unfortunate
"suicide", the US-Israel crisis seems to have
been bumped up a notch:
George
Rishmawi - IMEMC & Agencies
Wednesday, 27 July 2005
The U.S. administration has deepened
the crisis with Israel over the Israel's weapon-related
exports by refusing to rescind the sanctions against
Israel, Ze'ev Schiff, a prominent military expert
wrote in Haaretz newspaper on Wednesday.
In June, the U.S. House of Representatives
voted to place a five-year ban on the purchase of
defense items from any country that sells military-related
items to China. The crisis erupted, says Haaretz,
when Israel sold China replacement parts for "harpy
attack drones."
The U.S. demanded Israel prove
that it has increased monitoring of military exports.
A trip by Israeli Defense Minister
Shaul Mofaz to the U.S. to discuss this issue was
cancelled following mounting Israeli pressure.
The U.S. demands the Israeli Knesset
enact legislation within 18 months that increases
monitoring of military exports. It also demanded that
a memorandum of understanding be signed, in addition
to a written apology from Israel and Mofaz.
Even though such a memorandum will
not put an end to the crisis, it may allow a gradual
lifting of sanctions. Yet opposition in Israel against
singing this memorandum is mounting. [...]
7.Trading of an abnormally large
amount of commercial airlines put options, a 1200%
increase above average volume, just days before 9/11/2001,
nets $5,000,000. $2,500,00 of which goes unclaimed
to this day.
Who made these transactions?
Maybe A.B. "Buzzy"
Krongard, presently the number three Executive Director
at the C.I.A. and former Chairman at the investment
bank A.B. Brown, could shed some light on this one.
A.B. Brown later became Deutsche - A.B. Brown, where
Krongard continued on as a personal client consultant.
Deutsche - A.B. Brown was the firm used to place most
of these put options. [...]
Are all these pieces related? Could
these recent "banker deaths" be related to
the apparently deteriorating relations between the US
and Israel, and possible even the 9/11 airline put options?
Perhaps. Many assassinations have historically been
presented as heart attacks and suicides.
If any of our readers have further
information on this topic, please e-mail
us.
WASHINGTON - Following the Congress
in a midsummer exodus, President Bush plans a Texas
ranch respite for several weeks, while Supreme Court
nominee John Roberts has August to think about Senate
confirmation hearings.
White House press secretary Scott McClellan said Friday
that Bush will leave after signing into law the Central
American Free Trade Agreement that Congress gave final
approval to earlier this week.
It will be the president's 50th trip to the ranch since
he was elected nearly five years ago.
McClellan said Bush looks forward to being able to
"shed the coat and tie" at his more casual
home near the small town of Crawford, Texas. Bush plans
to travel to seven states from the ranch and hold at
least 10 events to tout his agenda, including the war
on terror and his economic priorities.
Members of Congress can pick among meetings to reacquaint
themselves with their constitutents, march in parades
and attend barbecuers and, doubtless, take some official
trips as well. [...]
McClellan said Bush also will be preparing
for a busy September, when he plans to deliver major
addresses on the war on terror and push the Senate to
confirm Roberts.
By CASSANDRA VINOGRAD
The Associated Press
Saturday, July 30, 2005; 5:32 PM
BIRMINGHAM, England -- Former President
Carter said Saturday the detention of terror suspects
at the Guantanamo Bay Naval base was an embarrassment
and had given extremists an excuse to attack the United
States.
Carter also criticized the U.S.-led
war in Iraq as "unnecessary and unjust."
"I think what's going on
in Guantanamo Bay and other places is a disgrace to
the U.S.A.," he told a news conference at
the Baptist World Alliance's centenary conference in
Birmingham, England. "I wouldn't say it's the cause
of terrorism, but it has given impetus and excuses to
potential terrorists to lash out at our country and
justify their despicable acts."
Carter said, however, that terrorist acts could not
be justified, and that while Guantanamo "may be
an aggravating factor ... it's not the basis of terrorism."
Critics of President Bush's administration have long
accused the U.S. government of unjustly detaining terror
suspects at the Guantanamo Bay Naval Base on the southeastern
tip of Cuba. Hundreds of men have been held indefinitely
at the prison, without charge or access to lawyers.
"What has happened at Guantanamo
Bay ... does not represent the will of the American
people," Carter said Saturday. "I'm embarrassed
about it, I think its wrong. I think it does give terrorists
an unwarranted excuse to use the despicable means to
hurt innocent people." [...]
Comment: Apparently,
world leaders DO sometimes tell the truth, at least
after their terms have ended...
Donald Rumsfeld intends to cut
the number of US troops in Iraq
The United States military says it is hoping to make
a substantial reduction in its forces in Iraq, beginning
next spring and summer. General George Casey, the senior
US commander in Iraq, said that if political developments
continued positively and Iraqi security forces became
stronger then there could be sharp cuts in his 135,000-strong
force.
The announcement will signal in Iraq that American
desire to stay in the country is weakening. The latest
opinion poll in the US shows that 53 per cent believe
the US will not win in Iraq.
At a briefing with Donald Rumsfeld, the Defence Secretary,
in Baghdad, General Casey said troop reductions would
come after the Iraqi elections at the end of the year.
Many Iraqi officials are sceptical
about US claims that an effective Iraqi army and police
force is being rapidly trained by the US. They said
insurgents are capable of taking over Sunni Arab districts
almost at will.
The US remains very much in charge of security in Iraq
despite the nominal authority of the Defence and Interior
Ministries. No military action
happens except on American command. A US plan
to cut the number of foreign troops in Iraq to 66,000
by mid-2006 was outlined in a British Government document
leaked in the US this month.
The Iraqi Prime Minister, Ibrahim al-Jaafari, said
at a joint press conference with Mr Rumsfeld that the
Americans should leave as soon as Iraqis are ready.
He said: "The great desire of the Iraqi people
is to see the coalition forces on their way as soon
as [the new Iraqi security forces] take more responsibility."
He added that there should be no surprise pull-out.
Ordinary Iraqis in Baghdad ascribe
their problems to the US military presence and say nothing
would happen if they pulled out. The tendency
of US soldiers to treat all Iraqis as potential suicide
bombers has led to frequent shootings of innocent Iraqi.
The police general in charge
of the serious crime squad was shot in the head by US
soldiers. Iraqis also blame the US presence for
the lack of personal security, notably the frequent
kidnappings and robberies. But, given the weakness of
the Iraqi security forces, a rapid US departure might
lead to a disintegration of government authority in
much of the country. Mahmoud Othman, an independent
Kurdish member of parliament, thinks the real figure
for the numbers of men in the Iraqi security forces
is 40,000, not 150,000 as claimed.
The US has always had an ambivalent
attitude to rebuilding the Iraqi armed forces. It has
wanted them strong when facing the insurgents but has
been slow to arm them with effective weapons. Iraqi
officials say that "at the end of the day the Americans
do not trust us".
Al-Qa'ida in Iraq has said it has killed two kidnapped
Algerian envoys because of their government's support
for the United States. The statement on a website often
used by the group led by Abu Musab al-Zarqawi read:
"It [Algeria] had sent these two apostates as allies
to the Jews and Christians in Iraq. Haven't we warned
you against allying yourselves with America?"
Algerian radio interrupted its programming to broadcast
an announcement from the office of President Abdelaziz
Bouteflika, which said that Ali Belaroussi and Azzedine
Belkadi had been executed.
The US military has divided Iraq into six major Areas
of Responsibility (AORs) maintained by multinational
forces from 26 countries. The US 11th Armored Cavalry
Regiment from Fort Irwin, California, leads the Baghdad
mission, while the US 42nd Infantry Division from New
York State covers Kirkuk, Tikrit and Samarra.
Since the invasion began, 1,785
American soldiers have died in Iraq, 348 of them since
the 31 January elections. About
5,500 US troops have gone absent without leave since
the beginning of operations in 2003.
At least 23 members of a California National Guard
battalion serving in Iraq are under investigation for
the alleged abuse of Iraqi detainees and for a $30,000
extortion scheme involving promises to protect shopkeepers
from insurgents, the Los Angeles Times reported on Thursday.
Patrick Cockburn was awarded the 2005 Martha Gellhorn
prize for war reporting in recognition of his writing
on Iraq over the past year. His new memoir, The Broken
Boy, has just been published in the UK.
Comment: Given
that the number of American soldiers killed in action
in Iraq that is presented by the Bush administration
has been widely ridiculed as a complete lie, we have
wonder how many US troops have actually gone AWOL. One
might suspect it is a lot higher than 5,500...
King Fahd, Saudi Arabia's ruler
since 1982, has died.
Saudi state television announced that Crown Prince
Abdullah had been named as King Fahd's successor.
King Fahd had been frail since suffering a stroke a
decade ago and had delegated the running of the kingdom's
affairs to Crown Prince Abdullah.
Defence Minister Prince Sultan is next in line to the
throne after Abdullah, and was named crown prince, state
television announced.
Members of the royal family have already pledged allegiance
to Abdullah. An official ceremony confirming him as
the new king is due to be held on Wednesday.
'Sorrow and sadness'
"With all sorrow and sadness, the royal court
in the name of his highness Crown Prince Abdullah bin
Abdel Aziz and all members of the family announces the
death of the servant of the two holy mosques, King Fahd
bin Abdel Aziz," Minister of Information Iyad bin
Amin Madani announced on state television.
"He died after suffering an illness. God now allows
the custodian of the two holy mosques, King Fahd, with
great mercy and forgiveness, to reside in his wide heaven."
The Associated Press news agency says the king died
early on Monday at the King Faisal Specialist Hospital
in the capital, Riyadh, where he was admitted on 27
May for unspecified medical tests.
An extraordinary Arab summit due be held Wednesday
in the Egyptian resort of Sharm al-Sheikh has been postponed
because of King Fahd's death.
France's President Jacques Chirac expressed "profound
sadness" at the news in a message of condolence
to the Saudi government.
"During his reign, King Fahd put the safety of
his people above all else. In perilous times he was
the guarantor of his country's cohesion and the defender
of regional stability. He knew how to apply wisdom to
the Kingdom's changes," the message said.
Absolute monarch
King Fahd ascended the throne in 1982 after seven years
as crown prince, making him absolute monarch of the
world's largest oil-producing country and home of Islam's
two holiest sites, the mosques at Mecca and Medina.
He threw the weight of the kingdom behind Arab causes
and was heavily involved in regional issues such as
the search for a peaceful settlement to the Lebanese
civil war which ended with an agreement signed in the
kingdom.
The monarch's decision in 1990 to invite American forces
into Saudi Arabia after Iraq's invasion of Kuwait was
heavily criticised within the country.
Many say it contributed to the rise of al-Qaeda whose
leader, Osama bin Laden, is a Saudi-born businessman.
LONDON - Oil prices climbed above
$61 a barrel on Monday after the death of Saudi Arabia's
King Fahd, but expectations that the new king would
keep oil policy unchanged stemmed the rise.
U.S. light, sweet crude was up 52 cents at $61.09 a
barrel after hitting a near three-week high of $61.23.
The price has risen 40 percent this year and is just
over a dollar below the record high of $62.10 hit on
July 7.
King Fahd died in hospital on Monday and will be succeeded
by Crown Prince Abdullah, his half-brother who has been
the de-facto ruler of Saudi Arabia since Fahd suffered
a stroke in 1995.
Abdullah is expected to adhere to Saudi Arabia's long-standing
oil policy aimed at ensuring global markets are well
supplied, a Saudi source said on Monday.
"I am sure nothing will change regarding Saudi
Arabia's oil policy," the Saudi source told Reuters.
Analysts also saw any changes in Saudi policy as unlikely,
and expected the price impact to be minimal.
"It's not going to have a great deal of effect
because Crown Prince Abdullah has been effectively running
the country for several years," said Geoff Pyne,
Energy Consultant to Standard Bank. [...]
REFINERIES UNDER STRAIN
Before the news of Fahd's death, prices had risen on
Monday after a spate of refinery problems in the United
States resurrected concerns about meeting strong fuel
demand.
BP added to the anxiety at the weekend by shutting
a gasoline-producing unit at its giant Texas City refinery
-- the third-largest in the U.S. and source of 3 percent
of its gasoline -- for maintenance, a regulatory filing
showed.
It was unclear whether or not the shutdown was related
to a Thursday night fire in a secondary unit that BP
had said reduced the plant's overall gasoline production
by 35,000 bpd.
That fire came four months after an explosion at the
plant killed 15 workers, highlighting the rising risks
to operations as refiners attempt to run flat-out to
satisfy rising demand. [...]
SHANGHAI - Chips designed, or partly
designed, in China will account for 14.8 percent of
global semiconductor sales this year, making the country
the world's third-biggest for chip design, according
to an industry report.
Design activity in the United States will lead the
market this year, with U.S.-based design houses accounting
for 40.2 percent of new semiconductor sales this year,
according to the report last week from technology consultant
iSuppli.
Japan will come in second, accounting for the design
activity behind 15.5 percent of sales this year. After
China, Taiwan would be fourth at 10.1 percent.
China is gaining strength as a semiconductor manufacturing
base.
Homegrown players such as number-three foundry Semiconductor
Manufacturing International Corp. are expanding capacity
and global names from Intel Corp. to Advanced Micro
Devices Inc. and STMicroelectronics are assembling or
planning to make microchips in China.
But chip design has been slower to take off, largely
due to a lack of experienced chip designers.
Taken together, China, Hong Kong and Taiwan will collectively
generate almost as much design activity this year as
Japan, said Greg Sheppard, an executive vice president
at iSuppli.
"By 2006, China/Hong Kong/Taiwan
likely will surpass Japan and become the world's second-largest
region for design-driven semiconductor sales after the
United States," Sheppard wrote in a report.
China's semiconductor market has been growing rapidly
in recent years, and was worth about $40 billion last
year, according to various estimates.
By comparison, the global semiconductor market was
worth about $213 billion last year, according to the
U.S.-based Semiconductor Industry Association.
The China market is expected
to keep growing at double-digit rates in the next two
years -- compared with flat to low single-digit growth
for the global industry this year -- as a growing
number of players shift production to China to take
advantage of lower costs and be closer to their customers.
A 3.3-magnitude earthquake
trembled beneath Mount St. Helens early yesterday, the
latest in a series of stronger-than-usual quakes at
the volcano.
The quake at 2:34 a.m. likely triggered the overnight
collapse of a large section of rock at the north end
of the growing lava dome, U.S. Geological Survey scientists
reported yesterday from the Cascades Volcano Observatory.
Much of the smooth surface of the ridge, which is created
as rock extrudes from the vent, has been removed by
rockfalls over the past few weeks.
After years of quiet, the mountain rumbled awake in
September, and in October a flow of molten rock reached
the surface, marking a renewal of dome-building activity
that had stopped in 1986
It's been a shaky
weekend for several countries around the world, with
moderate earthquakes reported in Turkey, Japan, Taiwan,
Indonesia and New Zealand. No serious injuries or property
damage has been reported.
Turkey
An earthquake measuring 5,3 on the open-ended Richter
scale shook north-western Turkey early on Sunday, seismologists
said, but there were no reports of casualties or major
damage.
The quake was centred on a rural area in the Bala district
of Ankara province and struck at 9.45pm GMT on Saturday,
the Kandilli seismology centre in Istanbul said.
It was followed by a series of aftershocks.
Authorities quoted by the Anatolia news agency said
there were no immediate reports of casualties or major
damage.
Earthquakes are frequent in Turkey, where about 20
000 people were killed in two massive tremors in August
and November 1999.
Japan
An earthquake measuring 4,7 on the Richter scale shook
central Japan on Sunday, the Japan Meteorological Agency
said.
The quake occurred at 5.53am GMT in Yamanashi prefecture,
about 95km west of Tokyo, with its focus located 20km
underground, the agency said.
There were no immediate reports of injuries or any
property damage.
On Saturday, an earthquake measuring 4,7 on the Richter
scale also shook northern Japan, but there was no risk
of a tsunami, the Japan Meteorological Agency said.
The quake occurred at 8.50am GMT in Iwate, about 450km
north of Tokyo, with its focus located 50km below the
seabed, the agency said.
There were also no immediate reports of injuries or
property damage.
Taiwan
An earthquake measuring five on the Richter scale rocked
Taiwan on Sunday, seismologists said. There were no
immediate reports of damage or casualties.
The quake struck at 2.45am GMT, with an epicentre 17km
north-east of the eastern Hualien county. It originated
22km underground.
Taiwan, lying near the junction of two tectonic plates,
is shaken regularly by earthquakes. The country's worst,
measuring 7,6 on the Richter scale, struck in September
1999 and left 2 400 people dead.
Indonesia
A strong earthquake has struck off the coast of the
Indonesian island of Sumatra, Hong Kong seismologists
said on Sunday. No damage or injuries were reported.
The tremor struck late on Saturday and was recorded
in Hong Kong at 3.18pm GMT on Saturday, the Hong Kong
Observatory said in a statement. It was centred off
the coast of northern Sumatra, about 100km west-southwest
of Banda Aceh, the statement said.
Indonesia has been repeatedly rocked by quakes since
the massive temblor on December 26 that produced a deadly
tsunami. The Indian Ocean disaster killed more than
200 000 people in 11 countries, and left about 50 000
missing and hundreds of thousands homeless.
New Zealand
The top of New Zealand's South Island has been shaken
by two moderate earthquakes but no damage was reported,
officials said on Saturday.
The earthquakes were centred on the prime grape-growing
region of Blenheim.
The first tremor of 4,1 on the Richter scale occured
on Friday and was followed by a jolt of 3,8 on Saturday,
the Department of Geological and Nuclear Sciences said.
-- Sapa-AP, Sapa-AFP
By JOSEPH B.VERRENGIA
AP Science Writer
August 1, 2005
Is global warming making hurricanes
more ferocious? New research suggests the answer is
yes. Scientists call the findings
both surprising and "alarming" because they
suggest global warming is influencing
storms now - rather than in the distant future.
However, the research doesn't suggest global warming
is generating more hurricanes and typhoons.
The analysis by climatologist Kerry Emanuel of the
Massachusetts Institute of Technology shows for the
first time that major storms spinning in both the Atlantic
and the Pacific since the 1970s have increased in duration
and intensity by about 50 percent.
These trends are closely linked to increases in the
average temperatures of the ocean surface and also correspond
to increases in global average atmospheric temperatures
during the same period.
"When I look at these results at face value, they
are rather alarming," said research meteorologist
Tom Knutson. "These are very big changes."
Knutson, who wasn't involved in the study, works in
the National Oceanic and Atmospheric Administration's
Geophysical Fluid Dynamics Laboratory in Princeton,
N.J.
Emanuel reached his conclusions by
analyzing data collected from actual storms rather than
using computer models to predict future storm behavior.
Before this study, most researchers believed global
warming's contribution to powerful hurricanes was too
slight to accurately measure. Most forecasts don't have
climate change making a real difference in tropical
storms until 2050 or later.
But some scientists questioned Emanuel's
methods. For example, the MIT researcher did not consider
wind speed information from some powerful storms in
the 1950s and 1960s because the details of those storms
are inconsistent.
Researchers are using new methods to analyze those
storms and others going back as far as 1851. If early
storms turn out to be more powerful than originally
thought, Emmanuel's findings on global warming's influence
on recent tropical storms might not hold up, they said.
"I'm not convinced that it's happening,"
said Christopher W. Landsea, another research meteorologist
with NOAA, who works at a different lab, the Atlantic
Oceanographic & Meteorological Laboratory in Miami.
Landsea is a director of the historical hurricane reanalysis.
"His conclusions are contingent on a very large
bias removal that is large or larger than the global
warming signal itself," Landsea said.
Details of Emanuel's study appear Sunday in the online
version of the journal Nature.
Theories and computer simulations indicate that global
warming should generate an increase in storm intensity,
in part because warmer temperatures would heat up the
surface of the oceans. Especially in the Atlantic and
Caribbean basins, pools of warming seawater provide
energy for storms as they swirl and grow over the open
oceans.
Emanuel analyzed records of storm
measurements made by aircraft and satellites since the
1950s. He found the amount of energy released in these
storms in both the North Atlantic and the North Pacific
oceans has increased, especially since the mid-1970s.
In the Atlantic, the sea surface temperatures
show a pronounced upward trend. The same is true in
the North Pacific, though the data there is more variable,
he said.
"This is the first time I have been convinced
we are seeing a signal in the actual hurricane data,"
Emanuel said in an e-mail exchange.
"The total energy dissipated
by hurricanes turns out to be well correlated with tropical
sea surface temperatures," he said. "The
large upswing in the past decade is unprecedented and
probably reflects the effects of global warming."
This year marked the first time
on record that the Atlantic spawned four named storms
by early July, as well as the earliest category 4 storm
on record. Hurricanes are ranked on an intensity
scale of 1 to 5.
In the past decade, the southeastern United States
and the Caribbean basin have been pummeled by the most
active hurricane cycle on record. Forecasters expect
the stormy trend to continue for another 20 years or
more.
Even without global warming, hurricane cycles tend
to be a consequence of natural salinity and temperature
changes in the Atlantic's deep current circulation that
shift back and forth every 40 to 60 years.
Since the 1970s, hurricanes have caused more property
damage and casualties. Researchers disagree over whether
this destructiveness is a consequence of the storms'
growing intensity or the population boom along vulnerable
coastlines.
"The damage and casualties produced
by more intense storms could increase considerably in
the future," Emanuel said.
By Rina Chandran and Braden
Reddall
Reuters
August 1, 2005
BOMBAY - Heavy rain again flooded
Bombay on Monday after a record downpour last week triggered
floods and landslides that killed
nearly 1,000 people in and around India's financial
capital.
Floods closed key roads and delayed train services
in the sprawling metropolis of more than 15 million
people, but there were no reports of new casualties
or serious damage.
"The speed of the relief operations has come down,
but we have deployed personnel and equipment and we
are working round the clock," said Suresh Kakine,
director of relief for the western state of Maharashtra,
of which Bombay is the capital.
He said 600 medical teams had been dispatched around
the state to help treat the injured and cremate the
dead.
Disease remains a serious threat as dead bodies and
animal carcasses are still strewn around the city due
to last week's floods, while clean water was scarce
in parts as burst sewage pipes polluted supplies.
Financial markets were open and operating normally,
though volumes were fairly thin as traders could not
get to work, while schools were shut as police urged
people to stay off the roads.
Smita Gaikwad, who works at a back-office services
firm, said she had to move in to her brother's 10th
floor apartment because her ground-floor flat was under
two feet (0.6 meter) of water.
"The slums nearby are washed away," she said.
"Dead buffaloes are floating on water. We didn't
have power for 72 hours."
"Everybody is in a state of numbness."
Before a renewed downpour on Sunday, there were angry
protests in the parts of the city where people have
been without electricity and water since flooding started
last Tuesday.
Film-makers in the city, home to India's prolific movie
industry, have started legal action against the state
government over its handling of the floods, newspapers
reported. [...]
Jeevan Vasagar
in Tahoua, Niger
Monday August 1, 2005
The Guardian
The two faces of Niger
In Tahoua market, there is no sign that times are hard.
Instead, there are piles of red onions, bundles of glistening
spinach, and pumpkins sliced into orange shards. There
are plastic bags of rice, pasta and manioc flour, and
the sound of butchers' knives whistling as they are
sharpened before hacking apart joints of goat and beef.
A few minutes' drive from the market, along muddy streets
filled with puddles of rainwater, there is the more
familiar face of Niger. Under canvas tents, aid workers
coax babies with spidery limbs to take sips of milk,
or the smallest dabs of high-protein paste.
Wasted infants are wrapped in gold foil to keep them
warm. There is the sound of children wailing, or coughing
in machine-gun bursts.
"I cannot afford to buy millet in the market,
so I have no food, and there is no milk to give my baby,"
says Fatou, a mother cradling her son Alhassan. Though
he is 12 months old he weighs just 3.3kg (around 7lbs).
Fatou, a slender, childlike young woman in a blue shawl,
ate weeds to survive before her baby was admitted to
a treatment centre run by the medical charity MSF.
This is the strange reality of Niger's
hunger crisis. There is plenty of food, but children
are dying because their parents cannot afford to buy
it.
The starvation in Niger is not the inevitable consequence
of poverty, or simply the fault of locusts or drought.
It is also the result of a belief
that the free market can solve the problems of one of
the world's poorest countries.
The price of grain has skyrocketed; a 100kg bag of
millet, the staple grain, costs around 8,000 to 12,000
West African francs (around £13) last year but
now costs more than 22,000 francs (£25). According
to Washington-based analysts the Famine Early Warning
System Network (Fewsnet), drought and pests have only
had a "modest impact" on grain production
in Niger.
The last harvest was only 11% below the five-yearly
average. Prices have been rising also because traders
in Niger have been exporting grain to wealthier neighbouring
countries, including Nigeria and Ghana.
Niger, the second-poorest country in the world, relies
heavily on donors such as the EU and France, which favour
free-market solutions to African poverty.So
the Niger government declined to hand out free food
to the starving. Instead, it offered millet at
subsidised prices. But the poorest could still not afford
to buy.
At Tahoua market the traders are reluctant to talk
about the hunger crisis affecting their countrymen as
they spread their wares under thatched verandas jutting
out from mud buildings. Snatches of the Qur'an from
tinny tape players compete with Bollywood songs and
the growl of lorries bringing sacks of rice and flour.
One man opens his left palm to display half a dozen
tiny scorpions, a living advert for the herbal scorpion
antidote he is selling in his other hand.
Omar Mahmoud, 18, who helps sell rice at his father's
shop, blames the famine on drought: "I know there
is hunger. It is because there wasn't enough rain. The
price of millet has gone up because there wasn't enough
rain last year."
Last month around 2,000 protesters marched through
the streets of the capital, Niamey, demanding free food.
The government refused. The same month, G8 finance ministers
agreed to write off the country's $2bn (£1.3bn)
debt.
"The appropriate response would have been to do
free food distributions in the worst-affected areas,"
said Johanne Sekkenes, head of MSF's mission in Niger.
"We are not speaking about free distribution to
everybody, but to the most affected areas and the most
vulnerable people."
The UN, whose World Food Programme
distributes emergency supplies in other hunger-stricken
parts of Africa, also declined to distribute free food.
The reason given was that interfering with the free
market could disrupt Niger's development out of poverty.
[...]
Comment:
Given the bad press that "globalisation" has
received over the past few decades, the words "free
market" are used when referring to first world country
plans to solve Africa poverty. This does not however change
the reality of the Western economic policies that have
afflicted African nations for many, many years. Globalisation
"encourages decreasing National control and increasing
control over the (Internal) economy (of the state) by
outside players.
The gospel of globalisation through its economic liberalism
has been elevated to a position of absolute truth, a sort
of single theory against which there is no credible alternative”.
In short, globalisation, while claimed by Western nations
as the solution to Africa poverty, is in fact the cause
of African poverty, and the above article makes that very
clear.
Western "free market" policies mean that many
African nations are now essentially owned by large mulitnational
corporations and Western governments. These corporations
and governments put pressure on African governments to
toe the "free market" line which encourages
elevated food prices claiming that this will stimulate
the economy in the long term and ultimately lead to an
eradication of poverty. Yet what is not mentioned is the
fact that the main motivation for Western government and
multi-national corporation involvement in the economies
of African nations is to generate vast profits, the majority
of which end up in the bank accounts of Western nations.
'By their fruits we shall know them', and when the net
result of "free market" policies is to force
African governments to refuse to give surplus food to
their starving population at no charge, we understand
the true face of the globalisation movement.