H5N1 Confirmed Fatality in Bekasi Indonesia Causes Concern

A 15-year-old boy from Subang, in West Java, died on Wednesday in an area where chickens had died, said Nyoman Kandun, director general of communicable disease control at the ministry.

An 11-year-old girl from Bekasi, east of Jakarta, who died on Friday also tested positive for the virus, the official said.
The above comments described a third confirmed case in Indonesia.  The fatal case in Bakasi is close to the two fatal cases in Subang.  However, in Subang only the second sibling has been officially confirmed.  Both siblings were initially diagnosed as dengue fever.  The older brother, described above, was subsequently confirmed to be H5N1 positive. 

The direct general of communicable disease control is denying that the brother died of H5N1.  Such denials are cause for concern. 

Similarly, the death of the aunt of the confirmed case on Sumatra has not been mentioned in the English language press, raising additional concerns, as does the hospitalization of the nurse associated with the cases in Sumatra.

http://www.recombinomics.com/News/03310802/H5N1_Bekasi_Concern.html

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Related links :

 Qinghai H5N1 Wild Bird Surveillance Issues

Breaking News: USA denies making Bioweapons from Bird Flu!

 

US dismisses bird flu claims – Indonesia accuses US of bird flu plot

 

‘Mysterious’ Bird Flu Behavior Baffles Indonesian Scientists

 

Poultry Deaths in Northern and Southern Pakistan

2324 Fever Cases in Birbhum West Bengal Cause Concern

 

Egypt:H5N1, 25 patients per day have been hospitalized for the past several days

 

 Cell Phones Dangerous Due To Brain Cancer Risk

New evidence on mobile phone hazard as cell phone usage is linked to brain cancer.

According to The Independent, a recent study led by a renowned neurosurgeon, Dr. Vini Khurana, strongly demonstrates that prolonged exposure to mobile phone radiation will result in brain cancer and neighboring tissue damage: It draws on growing evidence – exclusively reported in the IoS in October – that using handsets for 10 years or more can double the risk of brain cancer. Cancers take at least a decade to develop, invalidating official safety assurances based on earlier studies which included few, if any, people who had used the phones for that long.

“It is anticipated that this danger has far broader public health ramifications than asbestos and smoking,” says Professor Khurana, who told the IoS his assessment is partly based on the fact that three billion people now use the phones worldwide, three times as many as smoke.

After a quick search on the web, I managed to find the study on the Brain Surgery Research site . The key facts are:

• Mobile phones are convenient and frequently invaluable, yet exposure to their electromagnetic radiation is invisible. Therefore, any danger this exposure poses may be easily dismissed.

• Exposure is long-term and its effects on the body, particularly its electrical organ, the brain, are compounded by numerous other simultaneous long-term exposures including continuous waves from radio and TV transmitter towers, cordless phone base stations, power lines, and wireless/WiFi computing devices.

• A malignant brain tumour represents a life-ending diagnosis in the vast majority of those diagnosed. There is a significant and increasing body of evidence, to date at least 8 comprehensive clinical studies internationally and one long-term meta-analysis, for a link between mobile phone usage and certain brain tumours.

• The “incubation time” or “latency” (i.e., the time from commencement of regular mobile phone usage to the diagnosis of a malignant solid brain tumour in a susceptible individual) may be in the order of 10-20 years. In the years 2008-2012, we will have reached the appropriate length of follow-up time to begin to definitively observe the impact of this global technology on brain tumour incidence rates.

• It is anticipated that this danger has far broader public health ramifications than asbestos and smoking, and directly concerns all of us, particularly the younger generation, including very young children.

The Independent story goes on informing that “mobile phones could kill far more people than smoking or asbestos, a study by an award-winning cancer expert has concluded. He says people should avoid using them wherever possible and that governments and the mobile phone industry must take ‘immediate steps’ to reduce exposure to their radiation.”

http://www.emaxhealth.com/85/21364.html

3 poids 3 mesures : Raedeker, Guigue, Badjeck

 

Russia challenges US in the Islamic world

By M K Bhadrakumar

When US President George W Bush named Karachi-born Pakistani American Sada Cumber as the first US envoy to the Organization of Islamic Conference (OIC), the White House announcement of February 27 almost passed off as pork-barrel politics on the part of a lame-duck administration. Cumber is a Texan entrepreneur – and so was Bush.

Cumber is founder of CACH Capital Management based in Austin, Texas, which is a high-performance wealth management firm with acumen and expertise in rendering advisory services to Muslim countries flushed with disposable petrodollar sovereign wealth funds. But then wouldn’t Bush know the OIC is not an institution for investment selection and portfolio structure?

White House press secretary Dana Perino explained that Bush

considered the OIC to be an important organization and that’s why he appointed a special envoy. She said, “The [OIC] has a constructive role to play in the world, and the president is signaling our desire to have a greater dialogue with the organization as well as Muslims around the world.” But the OIC has been existence for 39 years – and Muslims for over a millennium. Why now?

In June last year Bush first articulated the thought of deputing an envoy to the OIC. Why the delay? When the media asked Perino why Bush had taken so long, she merely said, “He [Bush] wanted to find the right person and he found that in Sada Cumber.”

Islamic card in Kosovo

There is reason to believe, however, that it was in the month of February that the Bush administration woke up to a new reality that cultivating the 57-member OIC could indeed make all the difference in the years to come. Around that time, Washington almost instinctively played the “Islamic card” against Moscow, and found to its dismay that what used to be a highly dependable and potent trump card in Cold War politics is no longer so, and, in fact, it turned out to be a dud card.

Russian Foreign Minister Sergei Lavrov succinctly captured Washington’s “OIC heartache” when he commented in an interview with the government newspaper Rossiskaya Gazeta, “It is not without meaning that many nations, including Islamic states, do not intend to recognize Kosovo’s independence.”

With a touch of sarcasm, Lavrov underscored post-Soviet Russia’s reversal of roles with the US in the Muslim world. He added, “I would like to caution against the temptation to succumb to exhortations that are coming from non-Arab and non-Islamic countries but are addressed precisely to Islamic countries to display Islamic solidarity and recognize Kosovo. For, the situation in Kosovo is the most striking example of ethnic separatism.”

He was cautioning the Islamic world to be wary of the US attempt to “Islamize” the geopolitical setting in the Balkans. He warned, “Disturbances have also begun in other regions of the world. To encourage separatist tendencies, I believe, is immoral. You see what is happening in China’s autonomous region of Tibet, the way the separatists are acting there … And then developments in other parts of the world as well suggest that we see only the beginning of an extremely explosive process. And those who follow this path should not call for a show of solidarity, whether Islamic or Euro-Atlantic. They ought to think of their responsibility in the first place.”

Soon after his interview in Moscow, Lavrov set out on yet another extended tour of the Middle East, but starting with the eleventh summit of the OIC at Dakar, Senegal, on March 13, which was he attending as an “observer” for the second time in a row.

Among the many laurels that Russian President Vladimir Putin gathers as his eight-year tumultuous stewardship in the Kremlin draws to a close, it is often overlooked that history will most certainly judge him as a great bridge-builder between Russia and the Muslim world. Putin’s achievement is extraordinary since Russia had a complex, difficult and hugely controversial relationship with the Islamic world for the better part of the last century.

To be sure, Putin’s effective handling of the Chechnya problem helped remove a potentially debilitating embarrassment with regard to the Muslim world. But that shouldn’t detract from the singular success of his policy in ensuring that no adversary can today hope to get away with manipulating the Muslim world against Moscow in “civilizational” terms in the fashion in which the West managed to do through the Soviet era.

Russia, instead, today is well placed to offer its good offices to mediate a dialogue of civilizations between the Christian West and the Islamic East. In fact, Lavrov in his speech at the Dakar summit of the OIC drew the attention of the Islamic world to the “situation of Muslims in the European countries and the attempts by some politicians to stir up Islamophobia”.

Religions as a panacea for conflicts

Being no longer a citadel of atheism has certainly helped the Kremlin. But it is altogether a new level of exhilaration of the mind and intellect to be able to transmute the newfound religious belief into a hardcore political agenda. Lavrov went on the offensive at Dakar and assured the OIC that Russia is determined to “make its major contribution to ensuring Europe’s civilizational compatibility and promoting tolerance, in particular towards different faiths”. He expressed hope that “a Christian Europe would have been able to find common grounds with other religions more easily”.

In a major political initiative at Dakar, Lavrov sought the support of the OIC for a Russian proposal that an “advisory council of religions” should be set up under the auspices of the United Nations, predicated on the estimation that “the involvement of the religious factor could be of help in settling different conflicts through strengthening confidence and concord of all parties based on international law with full respect of the UN role in international affairs”.

The proposal altogether elevates Moscow’s two-year “dialogue” with the OIC since it gained observer status in the organization to a qualitatively new level. Moscow would know that Washington cannot match the Russian initiative, but at the same time would be hard-pressed to oppose it. Washington’s predicament is that it has no effective way of countering Moscow’s insistent claim that as a multinational and multi-faith society with a centuries-old history, “Russia is also a part of the Islamic world”, to quote Lavrov.

Moscow identifies with Palestine

But it isn’t a matter of oneupmanship. Russia currently enjoys several advantages over the US. The entire regional scenario in the Middle East is loaded against the US. The Bush administration is seen as primarily motivated by Israeli interests. There is a pervasive trust deficit even among the old US allies.

Israel-Palestine relations have deteriorated recently. The acute humanitarian crisis has further deepened in Gaza, compounded by the mindless Israeli military operations with tacit US support. The level of violence has increased sharply since mid-January. The peace process of the Annapolis conference of last November has run aground. The continued exclusion of Hamas by Israel and the US as a full-fledged political participant makes nonsense of the peace process.

On all these fronts, Russia today happens to be standing on the right side of the fence. Moscow has stepped up consultations and coordination with Syria; it unequivocally condemns the construction of Jewish settlements; it seeks the lifting of the Israeli blockade against the Palestinian territories; it keeps in regular touch with the Hamas leadership – Lavrov again met Khaled Meshal in Damascus last week, and, furthermore, he has got Israel to learn to live with such contacts.

The resonance of Russia’s Middle Eastern stances in Arab opinion is extremely favorable for Moscow. Meanwhile, Iraq weighs around the American neck as an albatross. Moscow has sized up that the US is bogged down in a protracted guerrilla war in Iraq. As a Moscow commentator wrote recently, “The end of this conflict is not in sight. Intensive mine warfare is being waged on Iraqi roads. Not a single allied convoy passes without an explosion. Road mining has assumed such a scale that the US Air Force is using its strategic B-1B bombers for remote mine clearance. Weapons and ammunitions are freely crossing Iraq’s lengthy and difficult-to-control borders, while the continued occupation is increasing the mobilization potential of the guerrilla movement.”

Again, if three quarters of politics in the Middle East are about public perceptions, it works to the advantage of Moscow when it insinuates that American oil companies are siphoning off Iraq’s oil wealth and are making a killing out of high oil prices (though these are also provideing Russia with a windfall); that the US strategy is to establish political and military control over the region; that the US “simply does not want stabilization in Iraq, and will keep a sustained conflict”; that the Bush administration may deliberately launch an intensive air attack against Iran with the sole purpose of crippling Iran’s military and economic infrastructure, which would make Tehran’s “claims to regional leadership unrealistic for a long time to come”, to quote Moscow commentators.

Russia is now shifting gear and is extending its involvement in the Middle East by directly challenging the US’s traditional dominance of the region. Lavrov made as the signal tune of his regional tour the Russian proposal to sponsor an international conference on the Middle East. The Arab countries have nothing against the Russian proposal, though they doubt its efficacy, but Israel bristles. Moscow is aware that Washington expects Israel to stifle the proposal. The issue, again, becomes one of public perceptions. Lavrov tauntingly told the Western media while on a visit to Paris on March 11, “My trip to the Middle East next week will make it clear finally who is ready for a [international] conference, and who is not. If all the parties are ready for that, we will hold such a conference.”

Lavrov claimed all the so-called Quartet members – the US, the European Union, the United Nations and Russia – have “already shown an interest” in Moscow hosting the international conference. Washington would be seething with irritation that it couldn’t afford to publicly contradict the Russian claim.

Similarly, the Kremlin’s policy criss-crosses the “Shi’ite-Sunni” divide that the Bush administration meticulously tried to erect on the Middle East and the Persian Gulf chessboard in recent years. Moscow stresses the “civilizational” aspect of the crisis and dilutes the relevance of the sectarian barriers that the US encourages in the Muslim world. In his message to the Dakar summit, Putin stressed the “danger of the world divided between religions and civilizations”, while he called for efforts “aimed at preventing an inter-faith and inter-ethnic divide”.

To be sure, the Russian policy spontaneously strikes a chord of affinity in the Muslim psyche when Moscow blames the Western world for portraying Islam as a religion that drives international terrorism, whereas, the issue, Russian thinkers maintain, really concerns manifestations of Islamic fundamentalism. As the doyen of Russian “Orientalists” and former prime minister Yevgeny Primakov wrote in an essay some two years ago when the Kremlin’s new thinking towards the Muslim world began to surface, “Islamic fundamentalism is about building mosques, observing Islamic rites, and providing assistance to the faithful. But aggressive, extremist Islamic fundamentalism is about using force to impose an Islamic model of governance on the state and society.”

With a strong undertone of irony, Primakov pointed out, “History knows of periods when Christian fundamentalism grew into Christian-Catholic extremism: Remember the Jesuits or the Crusades.”

Economic gains of friendship

But everything in the Russian policy is not about politics and history, either. Ultimately, Moscow places emphasis on the expansion of economic interests. The “peace dividend” of Russia’s growing friendship with the Islamic world is already not inconsiderable in economic terms. In January, for instance, Russia won an US$800 million tender to construct a 520-kilometer railway line in Saudi Arabia. The Russian arms export monopoly, Rosoboronexport, is on record that Russia was discussing supply of T-90 tanks and armored vehicles to Saudi Arabia worth $1 billion.

Again, Russia delivered to Egypt upgraded S-125 Pechora-2M and Tor M-1 air defense systems despite US control over Cairo’s military-technical policy. On Tuesday, Russia signed a path-breaking agreement with Egypt allowing Russian companies to build nuclear power plants in Egypt and envisaging Russia providing training for Egyptian nuclear technicians and supplying nuclear fuel.

Evidently, Cairo expects that cooperation with Russia will be more advantageous since the US imposes strict conditions, including regular inspections and control. The US has been pressuring Egypt to place its nuclear program under American control, even as a tender is expected to be floated later this year for Egypt’s first nuclear power plant estimated to cost about $2 billion.

Indeed, politics and business are developing between Russia and Egypt on parallel tracks. Speaking after the signing of the Russia-Egypt nuclear power agreement in Moscow, Putin said in the presence of visiting Egyptian President Hosni Mubarak that the two countries will work together as “mediators” to end Israel-Palestine violence and that they saw eye-to-eye on the criticality of an accord between Hamas and Fatah before progress could be made on forming an independent Palestinian state.

No less important is the return of the Russian oil company LUKoil to Iraq. The company had a contract with the regime of Saddam Hussein, signed in 1997, to develop Iraq’s largest oil field, West Qurna-2, which has estimated reserves of about 6 billion barrels of oil.

On Wednesday, following talks in Baghdad by a Russian team led by Deputy Foreign Minister Alexander Saltanov, the prospects have brightened for reviving LUKoil’s production-sharing agreement over West Qurna-2. (Chevron has been reportedly keen to jettison LUKoil and secure West Qurna-2). Again on Wednesday, one of Russia’s largest engineering firms in the oil sector, Stroytransgaz, signed a protocol on reconstructing the Kirkuk-Baniyas pipeline connecting north Iraqi fields to the Syrian port of Baniyas.

Coincidence or not, the very next day, on Thursday, a Russian Foreign Ministry spokesman said in Moscow, “We are urging political and religious leaders in Iraq to do their utmost to end this fratricidal conflict, creating the necessary conditions for building a democratic and prosperous state. Moscow is convinced that a path to settling the crisis in Iraq lies through comprehensive dialogue, the search for compromise, and the achievement of real national reconciliation and accord between all ethnic and religious communities in the country.”

The Russian challenge is indeed becoming serious for Washington. Kosovo was a wake-up call over the decline of US influence and the rise in Russia’s prestige in the Islamic world. Conceivably, the White House press secretary had a point when she admitted Bush had a hard time locating a personality endowed with the genius of a Renaissance man to be the US’s special envoy to the OIC. Cumber’s background at CACH Capital does give him a keen insight into how economic integration affects the political and cultural relationship between the US and the Muslim world.

M K Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India’s ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001).

(Copyright 2008 Asia Times Online)

Weaponizing the Pentagon’s Cyborg Insects.

A Futuristic Nightmare Just Might Come True

By Nick Turse, Tom Dispatch

 

Biological weapons delivered by cyborg insects. It sounds like a nightmare scenario straight out of the wilder realms of science fiction, but it could be a reality, if a current Pentagon project comes to fruition.

Right now, researchers are already growing insects with electronics inside them. They’re creating cyborg moths and flying beetles that can be remotely controlled. One day, the U.S. military may field squadrons of winged insect/machine hybrids with on-board audio, video or chemical sensors. These cyborg insects could conduct surveillance and reconnaissance missions on distant battlefields, in far-off caves, or maybe even in cities closer to home, and transmit detailed data back to their handlers at U.S. military bases.

Right now, researchers are already growing insects with electronics inside them. They’re creating cyborg moths and flying beetles that can be remotely controlled. One day, the U.S. military may field squadrons of winged insect/machine hybrids with on-board audio, video or chemical sensors. These cyborg insects could conduct surveillance and reconnaissance missions on distant battlefields, in far-off caves, or maybe even in cities closer to home, and transmit detailed data back to their handlers at U.S. military bases.

Today, many people fear U.S. government surveillance of email and cell phone communications. With this program, the Pentagon aims to exponentially increase the paranoia. Imagine a world in which any insect fluttering past your window may be a remote-controlled spy, packed with surveillance equipment. Even more frightening is the prospect that such creatures could be weaponized, and the possibility, according to one scientist intimately familiar with the project, that these cyborg insects might be armed with “bio weapons.”

For the past 50 years, work by the Defense Advanced Research Projects Agency (DARPA) — the Pentagon’s blue skies research outfit — has led to some of the most lethal weaponry in the U.S. arsenal: from Hellfire-missile-equipped Predator drones and stealth fighters and bombers to Tomahawk cruise missiles and Javelin portable “fire and forget” guided missiles. For the last several years, DARPA has funneled significant sums of money into a very different kind of guided missile project, its Hybrid Insect MEMS (HI-MEMS) program. This project is, according to DARPA, “aimed at developing tightly coupled machine-insect interfaces by placing micro-mechanical systems MEMS inside the insects during the early stages of metamorphosis.” Put simply, the creation of cyborg insects: part bug, part bot.

Bugs, Bots, Borgs and Bio-Weapons

This past August, at DARPA’s annual symposium — DARPATech — HI-MEMS program manager Amit Lal, an associate professor on leave from Cornell University, explained that his project aims to transform “insects into unmanned air-vehicles.” He described the research this way: “The HI-MEMS program seeks to grow MEMS and electronics inside the insect pupae. The new tissue forms around the insertions, making the bio-electronic interface long-lasting and reliable.” In other words, micro-electronics are inserted at the pupal stage of metamorphosis so that they can be integrated into the insects’ bodies as they develop, creating living robots that can be remotely controlled after the insect emerges from its cocoon.

Video

Storylink

World War #III
 

By: ILYANA_ROZUMOVA

(Last kick of a dying horse)

I am walking. I was walking all day. Looking around, not believing my own eyes.

People are laying everywhere. Women man and children. Sleeping. Nobody is moving. I feel that I am in enchanted kingdom. Nobody is building shelters. Nobody is stocking up with canned food. I want to cry out, to wake everybody up. But the times are different now. Nobody anymore believes boy who is crying “wolf”. What is the chance they would believe a girl.

I still keep on walking, then I see theatre and I walk in. People there are sleeping too.

The stagehands have just finished their work. Actors are prepared. They are only touching up their make up, and combing their hair. The curtain is now opening for the final act.

I am trying to peek thru the gap.

Then I am starting to doubt myself. Maybe I am the one who is sleeping and dreaming.
Still, I am not giving up, so I am walking ahead to have a better view.
I am curious!
Then I look down. In front of my feet there is the script of the play.
I pick it up and I am starting to read it.

Do you want to read it with me?

The WW3 has now become not anymore of an “if” but more like only a “when”. And even “when” can now be determined with reasonable accuracy. I have to only introduce a few “why……?

I have noticed that most of you “folks” do not like voluminous introduction, so I will go
straight to the points, which will demand of course explanation.

Here they are!

1.Why shortly after Iranian revolution Iraq switched sides from being the friend of
Soviet bloc to USA. On whose initiative it happened Iraq, or US?

2.Why Iraq had no claim on Iran’s territory up to that moment, and why claim came up?
Why no negotiations but immediately go to war?

3.Why there was daily contact of Iraqi government with US embassy during war?

4.Why after prolonged war, after no visible results, Iraq went on to occupy Kuwait?
Was Kuwait actually promised gift from US for a job done?
Was there an argument that job was really not done right?

5.Why in US media in a week before Iraq invading Kuwait, there was justification
of the Iraqi action, in a sense that it was always Iraqi territory, and Iraq allowed
Bedouins to settle there, and British made mistake drawing the borders for independent
Kuwait.

6.Why US needed world opinion uproar, and $250Bl from Germany, Japanese, and
Saudis to liberate Kuwait? Was this liberation of Kuwait actually act of treachery
on a friend?

7.Why after end of first “Gulf war” there was great hullabaloo about dreaded elite
Republican guards “ with thousands of tanks, who escaped?
Was it already preparation of excuse for second (this time properly planed) invasion?

8.Did 9/11 made this excuse redundant?

9.Why after only one day after 9/11 we had all the information about the terrorist?

10.Why there is a claim that most of them were from Saudi Arabia?
Is it really true or only preparation for next excuse?
Oops! We have invaded a wrong country, now we have to invade the right one?

11.Why there was necessity to parade long time dead Ben Laden and keep scaring
Everybody? (Did they get the idea from movie “Weekend at Bernie’s”?)

12.Why there was necessity to invade Iraq, at this time when Sadam was now
like wet dog with tail between his legs?
Why to build a permanent bases and largest US embassy in the word? Is this embassy?
Really only for purpose of serving only US and Iraqi affairs?

13. Where is the 2.1 billion dollars weekly revenue from Iraqi oil going?
To Iraqi people, or it is going straight to US banks?

14.Why the US army after 5 years of occupation is not showing any signs of leaving?

15.Why Mc Cain said “Al-Queda is coming from Iran? (Than Lieberman needed to
Correct him?)
Why he also said “We will stay in Iraq 100 years? (Liberman was not there to
Correct him: No! No! No! We will stay there only until we suck out the last drop of
oil from their land.)

16.Why republicans are choosing for their candidates, these people with advanced
stage of Alzheimer disease? (Regan could not recognize even his own wife.)

17.Why would be other nations interested in this “beautiful shiny best system called
Democracy” if it take 100 years to install?

12.Why after invasion of Iraq, Russians and Chinese conducted joint military exercises?

13. Why were these colored revolutions on the southern border of Russia?
Was it only to keep CIA busy or create buffer zones?

14.Why was there invasion of Afghanistan? Was it really because of Al-Queda?
Or to officially involve NATO and create the second buffer zone and this time defense
line to stop (mountainous terren) coming Russian and Chinese armies?

15. Why is there this hysteria about nonexistent Iran’s nuclear weapons, when there is
no proof that they ever produced an ounce of weapons grade uranium?

16. Why is so urgent to create in Poland missile shield for NATO to protect them from
nonexistent Iranian NUCLEAR TIPPED missiles?

17. Even If Iran would be capable of nuking Western Europe why would they do it?

18. If not Iran, than, why Russia would want to nuke Western Europe now when they
have mutualy beneficial economic relations?

19.Why suddenly is necessary to build another missile shield in Turkey?

20.A few months ago Bush visited Middle East Sheikdoms (not very much publicized)
Was it a courtesy visit? Or was it a visit to let them know that US economy will be
going now thru some tough time, and to tell them that US economy is “resilient” and
they do not have to worry about their investments?

21. Why Rice and Gates visited Russia with no clear publicized purpose, and returned
with very somber faces?

Why? Why? Why? Why?

I was getting headaches trying to figure them out one by one.

I couldn’t, so they have remained in the back of my mind for a long time!
Then it dawned on me!
There is no answer for each question.
There is one answer for all of them!!!!!!!!!
The eternal truth!

“IT’S THE ECONOMY STUPID”

The demise of US economy was already concluded by academics with whose knowledge I cannot compete, and was described with eloquence that I cannot even dream of achieving.

So for me remains only with utmost humility to add an only a few footnotes.

Some optimistic economist find advantage in everything. So what if economy collapses, so what if dollar folds two or maybe three times, so what if stock market will nosedive.

A few traders will jump out the windows; also everything will be in ashes. But then from ashes, US economy will rise as Phoenix and will assume again its rightful place in the word.

It will be good for US economy. The US goods will be cheaper oversees employment will increase and economy will balance out itself.

In my opinion it is actually truth in the long run. The problem now is in the short run.
The nosedive of the stock market will hit the investors such way, that the will get probably 10 cent on the dollar, but who cares about them anyway, that is not a problem.

But the serious problem is with SWF.

Te Arab sheiks who were up to now busy with overwhelming problems, like for example staffing theirs harems, they will now start to pay attention to their funds.

If they find out that they were throwing their money for 35 years in the bottomless pit called “US economy” and now they are not retrieving very much, they will in the words of queen Victoria “not be very pleased.”

In their eyes the US credit rating will fall overnight from one hundred to zero.
They will figure out that it is actually better to leave their oil in the ground than to give it away for free.

Lack of Arab oil will not hurt US economy.
It will bring life in the US, as we know it to a standstill.

And here we are:
US government will have only one option on the table:
To invade all Arab peninsula!

Now Saudi royal family and all sheiks will find out themselves how it feels, (like Sadam must have felt) to change from best pal to enemy #1.

From here on the events will develop in logical interlocking chain.
By act of invading Saudi Arabia together with all the sheikdoms around USA will push Russians and Chinese in the corner. Both of them will realize (they are not stupid) that if they do not act, they will be on their knees until the judgment day.
So they will have now two options on the table fight or to bow their head to “the lord of the word”. I am inclined to think that they will fight.

They will be coming, you can bet your ass on it.
Chinese from the east, and Russians from the north.

The buffer zones in the color republics and the defense line in Afghanistan will not even slow them down.
Even if the Chinese would not be coming, the Russian forces themselves will be able to crush US forces in Arabia. Although Russians left 40 000 tanks in Germany thanks to the traitor Gorbachev it does not matter.

They still certainly have their U.Ns. (Sorry I cannot tell you what it is.) But in comparison to them 40 000 old tanks is like spit.
So they will be coming. And US forces will be finding out how the Russians are waging war.
I definitely would not wont to be in US soldier skin. I have seen Russians waging war.

Although every word below is truth it is not very relevant, so if you are impatient reader as you can just jump over it.

I have seen Russians wage war.

There was no great military tactic. No brilliant maneuvering. They were just coming,
The endless columns of horse drown carriages with supplies. We knew that they were coming and we were waiting for them with big god sharpened knives, waiting for our moment. Than it happened. The column stopped and we were looking for the gap in cavalcade. We saw it and were running there.
Already four Russian soldiers were unhooking one of the horses, pushing him of the rod and shooting him. Our moment came. We descended on the corpse as crows, pushing each other to get to position above legs and carving out two big slices of horsemeat.
And then running home. Next day one of the officers waved to us and when we came he lifted the cover of the carriage and he gave to each of us two sausages.
I never forged that officers face sad and the same time the sympathetic smile on it,
But also proud that he could help us. He is of course long dead now, but his face lives in my memory.

And then the cavalcade stopped. All sleepy soldiers become alive unhooking the horses pulling canons aligning them, unloading the munitions stocking them besides cannons. Then there were these kids like we were. In uniforms with binoculars holding the telephones and unwinding the wires, and claiming on the tallest trees.

Then all activities stopped and there was standing the commander and he jerked his hand, as he would be splashing the toilet.ogony! he shouted. The explosions were so noisy that we had to run back and watch from there.

On the horizon there was this rising smoke and dust. We did not see much movement only few German trucks and a few running soldiers. Than we did not see anything.

On the third day they left, not much signs of the war remained, only scattered concrete balls (we called them Hitler’s eggs) we looked inside them, and in each one of them was German solder with blood soaked uniform lying there holding in his hand crimpled picture of a girl. Some of them had picture of their families in their hand.

(I bet you did not know that Germans had many times more “kamikaze” fighters than Japanese.)

We jumped in holding our noses, thru out machine gun rifle and the attack knife and whatever ammunition we found.
We played soldiers for a few weeks but then accident happened. (One of us got shot right between the eyes. We newer find out who was the shooter.) Than police came and we had to show where we were hiding our guns.)

There is no doubt in my mind that combine Russian and Chinese forces without any additional help will squash in relatively short time anything what US and NATO forces will place on Arabian peninsula.

Than of course next step is inevitably nuclear exchange. Even here US forces will have no advantage, because of the location. All Asian states are actually on the same ship, and radioactive fall-aut will affect all of them. So even Pakistan and India will join Russians and Chinese targeting US.

Russians will of course first level New York and that will be like killing two birds with one stone. Because they will get also Mr. general secretary Gorbachev, for the treason committed on Russian people.

Well, that is the way I see it.

On the other hand -I do not know!

Maybe all this is only fruit of my sick overheated mind.
But then maybe not!

Although this time I will not be calling on you to be judge.

The events, which will follow, will be the ultimate judge.

(And now you know)

P.s.

Mc Cain’s speech last Wednesday March 26, 2008 (on US foreign relations) was already de facto declaration of war on Russia, all Moslem world, and on any country (like Venezuela) which will not willingly submit its natural resources to a “New World Order”. Curiously he embraced all other Asian countries, including China as friendly democracies. Of course it is not McCain’s view, moron like Mc Cain has no views, he was just reading the teleprompter. It is the view of some American “think tank” like American enterprise institute” or others. And this view is the “bible” will be implemented, and doesn’t really matter who will eventually be the next president of US.

By Ilyana Rozumova

Thousands of Ukrainians rally against Bush visit, NATO bid

 

 

 

Thousands of people gathered on Kiev’s main square on Monday to protest against the U.S. president’s visit, and the Ukrainian leadership’s drive for NATO membership.

George W. Bush will arrive in the city on Monday evening for talks with President Viktor Yushchenko expected to focus on Ukraine’s plans to join the Western military alliance, before leaving for Bucharest on Tuesday afternoon for a NATO summit.

“We are now on our way to the United States Embassy with a resolution and message for the American people, asking them to pacify their hawks – Bush and [State Secretary] Condoleezza Rice,” a protest organizer who asked to remain anonymous told RIA Novosti.

Activists on Independence Square (Maidan Nezalezhnosti) are displaying banners with the slogans “NATO is worse than the Gestapo” and “Put Bush’s bloody dictatorship under an international tribunal.”

The organizer said between eight and nine thousand people are expected to take part in today’s protest, which will run until April 4, the final day of the NATO summit.

During the April 2-4 meeting, NATO members will consider whether to let Croatia, Albania and Macedonia into the alliance. Bush has made clear his support for Ukraine’s membership plans, and is likely to raise the issue at the summit, which will be his last as U.S. leader.

However, European NATO members, in particular France and Germany, have voiced doubts over allowing Kiev into the alliance, saying it would create dangerous tensions with Ukraine’s neighbor Russia. Moscow has warned it could target missiles at Ukraine if the country joins NATO.

Protesters in Kiev have set up about a dozen tents on Independence Square, which was the focus of “orange revolution” protests that helped pro-Western Yushchenko into power in 2004.

Ukraine’s drive toward NATO membership has triggered domestic parliamentary opposition protests amid widespread antipathy toward the alliance. A survey published earlier this month said only 11% of Ukrainians supported the idea of NATO membership, while almost 36% were strongly opposed.

The ex-Soviet republic requested to join the Membership Action Plan, a precursor to full membership in the Western military alliance, in January.

The protest organizer said; “If Ukraine is not accepted into the Membership Action Plan, we will remove the tents. But if Ukraine joins the plan, we will toughen the measures.”

The protesters will gather on Tuesday morning in front of the presidential administration, where Bush will be meeting with his Ukrainian counterpart for closed-door talks.

 

http://en.rian.ru/world/20080331/102597128-print.html

USA 2008: The Great Depression

 

 

 

 

We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.

The increase – from 26.5 million in 2007 – is due partly to recent efforts to increase public awareness of the programme and also a switch from paper coupons to electronic debit cards. But above all it is the pressures being exerted on ordinary Americans by an economy that is suddenly beset by troubles. Housing foreclosures, accelerating jobs losses and fast-rising prices all add to the squeeze.

Emblematic of the downturn until now has been the parades of houses seized in foreclosure all across the country, and myriad families separated from their homes. But now the crisis is starting to hit the country in its gut. Getting food on the table is a challenge many Americans are finding harder to meet. As a barometer of the country’s economic health, food stamp usage may not be perfect, but can certainly tell a story.

Michigan has been in its own mini-recession for years as its collapsing industrial base, particularly in the car industry, has cast more and more out of work. Now, one in eight residents of the state is on food stamps, double the level in 2000. “We have seen a dramatic increase in recent years, but we have also seen it climbing more in recent months,” Maureen Sorbet, a spokeswoman for Michigan’s programme, said. “It’s been increasing steadily. Without the programme, some families and kids would be going without.”

But the trend is not restricted to the rust-belt regions. Forty states are reporting increases in applications for the stamps, actually electronic cards that are filled automatically once a month by the government and are swiped by shoppers at the till, in the 12 months from December 2006. At least six states, including Florida, Arizona and Maryland, have had a 10 per cent increase in the past year.

In Rhode Island, the segment of the population on food stamps has risen by 18 per cent in two years. The food programme started 40 years ago when hunger was still a daily fact of life for many Americans. The recent switch from paper coupons to the plastic card system has helped remove some of the stigma associated with the food stamp programme. The card can be swiped as easily as a bank debit card. To qualify for the cards, Americans do not have to be exactly on the breadline. The programme is available to people whose earnings are just above the official poverty line. For Hubert Liepnieks, the card is a lifeline he could never afford to lose. Just out of prison, he sleeps in overnight shelters in Manhattan and uses the card at a Morgan Williams supermarket on East 23rd Street. Yesterday, he and his fiancée, Christine Schultz, who is in a wheelchair, shared one banana and a cup of coffee bought with the 82 cents left on it.

“They should be refilling it in the next three or four days,” Liepnieks says. At times, he admits, he and friends bargain with owners of the smaller grocery shops to trade the value of their cards for cash, although it is illegal. “It can be done. I get $7 back on $10.”

Richard Enright, the manager at this Morgan Williams, says the numbers of customers on food stamps has been steady but he expects that to rise soon. “In this location, it’s still mostly old people and people who have retired from city jobs on stamps,” he says. Food stamp money was designed to supplement what people could buy rather than covering all the costs of a family’s groceries. But the problem now, Mr Enright says, is that soaring prices are squeezing the value of the benefits.

“Last St Patrick’s Day, we were selling Irish soda bread for $1.99. This year it was $2.99. Prices are just spiralling up, because of the cost of gas trucking the food into the city and because of commodity prices. People complain, but I tell them it’s not my fault everything is more expensive.”

The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months. “The amount of food stamps per household hasn’t gone up with the food costs,” says Dayna Ballantyne, who runs a food bank in Des Moines, Iowa. “Our clients are finding they aren’t able to purchase food like they used to.”

And the next monthly job numbers, to be released this Friday, are likely to show 50,000 more jobs were lost nationwide in March, and the unemployment rate is up to perhaps 5 per cent.

http://www.independent.co.uk/news/world/americas/usa-2008-the-great-depression-803095.html

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Chinese Automakers may buy GM and Chrysler

 

 

by Bertel Schmitt

Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports. LINK A National Enquirer the paper is not. It is one of China’s leading business newspapers, with a daily readership over three million]. This newspaper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry– who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?

A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.

The editors of 21st Century Business Herald, obviously with input from higher-up, writes that Chinese industry must change and upgrade. China wants their factories to change from low-value-added manufacturing to technically innovative and financially-sound high-value-add industries. Says the paper: “It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis.”

Deloitte & Touche sees a trend: “Chinese automakers can start with buying out the OEM projects and Chinese ventures of some global carmakers such as GM and Chrysler.”

The Chinese appear to have bigger plans than an accounting firm can imagine. 21st Century Business Herald acts and writes as if its already a done deal, and the beginning of more to come. “In the coming two years China is likely to see a few of its large Chinese automakers and other manufacturing enterprises set a precedent for achieving globalization by acquiring global companies, just like SAIC or Dongfeng’s possible acquisition of troubled GM or Chrysler.”

Just in case you missed it, the Shanghai Automotive Industry Corporation (SAIC) is China’s largest auto manufacturer. In 1984, the company entered a joint venture with Volkswagen. A decade later, SAIC entered a joint venture with General Motors. In 2007, SAIC bought the Nanjing Automobile Corporation, which had acquired British MG Rover in 2005.

Dongfeng Motor Corporation is a public company, although 70 percent of their shares are reported to be in government hands. They also are one of China’s Big Three. The company has numerous joint venture partners, such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which means “East Wind”) was founded at the behest of Mao Zedong himself in 1968.

Editorial reference, LINK

Link

 

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∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏∏

 

US and China set for currency clash

Wang Qishan, China’s vice-premier, greeting Paulson before the start of the talks AFP

The US and China could be heading for a possible clash as they open two days of high-level talks in Beijing on Thursday.

The biannual talks, known as the Strategic Economic Dialogue, are expected to centre on the value the Chinese currency.

Henry Paulson, the US treasury secretary, is under pressure at home to tackle the country’s financial woes and is expected to call on Beijing to allow a strengthening of the yuan amid fears that a plunge in its value could destabilise global markets even further.

US companies complain that China keeps the yuan undervalued, giving its exporters an unfair advantage and adding to its swollen trade surplus, and US politicians have pressed for punitive action if Beijing fails to take faster action on trade complaints.

But China’s exporters, suffering as their main markets such as the US and Europe cut back on spending, have lobbied the government to slow or reverse the yuan’s rise against the dollar to make their goods more competitive abroad.

The US is struggling with recession and China has seen a sharp slowdown in growth in recent months.

How well they keep one of the world’s biggest trading relationships stable and productive could be of global importance.

Strong signal

The yuan plunged on Monday in government-controlled trading in its sharpest one-day fall since 2005, wiping almost one per cent of its value against the dollar.

Frank Gong, the chief Asia economist for JPMorgan Securities, said in a report to clients that the plunge could be a message to Washington to go easy on the issue.

“The signal China sent on Monday is: we also have our own political problems and issues in a slowing economic environment,” he said.

Gong added the Beijing may have been sending a warning to Barack Obama, the US president-elect, who has yet to say whether he will continue the talks, that talking will be more effective than confrontation.

On Wednesday, Chinese state media made the warning more explicit.

“US urged not to harp on currency issue at talks,” said a headline in the China Daily.

Relationship-building exercise

The Strategic Economic Dialogue, launched in 2006, covers a broad agenda, including co-operation in energy conservation and environmental protection, and it is meant as a relationship-building exercise rather than a forum for negotiation.

But David McCormick, the US treasury undersecretary, told reporters this week that US officials at the dialogue would urge China to continue allowing the yuan to rise.

In a speech on Tuesday, Paulson said it was important for China to stick to its currency reforms and rely more on domestic demand to drive growth.

“As I have said in the past, continued reform of China’s exchange-rate policies is an integral part of this broader reform process,” he said.

Beijing broke a direct link between its yuan and the dollar in July 2005 and has let its currency rise by about 20 per cent since then.

That has hurt Chinese exporters, which are seeing their goods get more expensive in foreign markets just as global demand slows.

http://english.aljazeera.net/news/asia-pacific/2008/12/200812422152176956.html

 

 

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As Rome Burns, China Won’t Talk

 

 

So the global economy is in meltdown, Europe and China are both facing the prospect of a seriously ugly downturn. They’d scheduled a summit for this week. You’d think both sides would want to participate. Not China.

China canceled it. The reason? Because several European leaders — including French President Nicolas Sarkozy — have recently met with the Dalai Lama. Whoa! Now there’s a solid reason if I ever saw one. You meet with Buddhist spiritual leader, we blow off key meeting on future of the world.

There is still something of the petulant 3-year-old here, brazenly pursuing something that is decidedly not in her interests. It illustrates the fact that China’s foreign policy, its strategy and its world view are anything but mature.

First, it’s not like China doesn’t need friends right now. It’s economy is in crisis. More than half of all of China’s toy manufacturers are belly up. The Federation of Hong Kong Industries says that one quarter of its members’ 70,000 plants in China have closed or will soon close. After annual double-digit growth for the past decade, China’s economy is only expected to grow by about 9 percent this year, if that. Next year could be a lot worse. Over the weekend President Hu Jintao told a gathering of Communist Party members that the global crisis could undermine the country’s economy and threaten the party’s capacity to rule China.

Europe is China’s largest market. But the Europeans are restless. European businesses want to know why they sell more stuff to Switzerland than to China. Cancel a summit and these questions will only grow louder.

Second, it’s not like a meeting between Sarkozy and the Dalai Lama is going to amount to much for the Tibetan cause anyway. It’s not going to result in the withdrawal of Chinese troops from the Tibetan plateau or independence for Tibet, right? And it certainly won’t resuscitate the moribund talks that representatives of the Dalai Lama have been holding with China for several years now. Those talks are practically dead.

So why did Hu really blow off Sarko?

The stated Chinese reason in this case bears scrutiny because of its brazen honesty. According to wire service reports, Qin Gang, a spokesman at the China’s foreign ministry, acknowledged to reporters that France was being held to a higher standard than, say, the United States, whose leaders routinely huddle with the Dalai Lama and barely suffer a slap on the wrist.

“France keeps saying that China is a strategic partner. Then it should do more than other countries, mean what it says and set a high standard for its behavior,” Qin said.
“We hope France will make efforts to honor its commitments and not do things that harm the feelings of the Chinese people or undermine the foundation for the two countries’ cooperation.”

Chinese tea-leaf readers have focused on another reason: They’ve wheeled out the old bogeyman of Chinese political calculus, claiming that unidentified “hard-liners” were behind the cancellation. That’s rich.

The reality is that China just screwed this one up.

http://newsweek.washingtonpost.com/postglobal/pomfretschina/2008/12/

china_cancels_summit_with_europe.html#more

 

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All the world Burns, not only Rome, China has been totally dependent on exporting consumer goods to the US and other ‘western’ countries.

The only way, western countries have find to save financial system is war (false flag everywhere, wars every where) – The solution is: If Rome Burns, the all world must burns – Proxy wars, destabilization, bacteriologic wars, rise the ethnic and religion tension in Africa an Asia, that’s the Western solution.

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Update 2

Financial System in Collapse, Credit Crisis Worst Yet to Come

 

 

By: Dr_Krassimir_Petrov

Mark Twain once said that “if you don’t read the newspaper, you are uniformed. If you do read the newspaper, you are misinformed”. It is no surprise then, even to people who don’t follow the news, that a truly serious financial crisis is sweeping the world.

The headlines of newspapers and internet portals speak for themselves. Readers are inundated with facts about what is taking place. At one moment, bank write-offs to the extent of trillions are being discussed. The next moment, notice is given of guardian-angel intervention by governments and interest rate cuts by central banks.

Aid packages in the trillions exceed the calculation skills and comprehension capabilities of ordinary people by a factor of several times. The main message conveyed by all of this “information” is mostly emotional. While write-offs may lead the reader to pessimism – what will become of my life, the government creates a feeling of security with the aura of a paternal figure, adding trillions of dollars to banks and “guaranteeing” that bank deposits and security holdings won’t simply vanish. Those geniuses are on the task and will never let the system collapse, the reader thinks, so he turns his attention to the next page of the paper.

What is missing is a deep analysis of the causes of the crisis, as well as possible future scenarios – papers look neither in the distant past, nor in the distant future. The cause of the financial crisis is claimed to be driven by two emotions – fear and greed; blame goes to poor regulations and greedy Wall Street investment bankers; rhetorically is added the fact that crises accompany capitalism, that they have regularly occurred in the past, and that they will continue to occur in the future. Some stock broker releases investment advice that from a long-run perspective, now is a good time to buy stocks.

Unfortunately, investing in stock markets is never as simple as it sounds. If every time we buy when stocks are down and afterwards stocks go up, then we would be all fabulously wealthy. Naturally, it is forgotten that this is accompanied by inflation and a drop in the purchasing power of money. Moreover, the fact that the world’s largest companies and banks can go bankrupt is never mentioned in financial publications; neither is the possibility that the assets of shareholders could be completely wiped out. Bankruptcies of large companies and banks are regarded only as a theoretical possibility and relegated to the pages of abstract economics textbooks.

Fundamental Causes of the Crisis

But let’s start at the beginning, with the question of why the current financial crisis has occurred. The reasons are quite fundamental, not fear and greed, nor a lack of faith in the markets. The problems are not caused by loose regulations either. The crisis also has nothing to do with herd instinct, which helps along, of course, in the deepening of the crisis. These are, after all, only symptoms of the underlying problems.

To gain a better understanding, one must first take a look at history. Unfortunately, from inside the system, it is difficult to view the system as a whole; all that is visible are individual problems and attempts to fix them, instead of understanding that perhaps the entire system is basically built on flawed and shaky basis, that the foundation of out global monetary system is built on sand and the current financial crisis and the resulting economic crisis are objectively inevitable.

The current attempts by the government are, above all, a desire to preserve the status quo, a desire to sustain the unsustainable, a desire to extend the life of a pathological system doomed to failure from the beginning. But governments have always set the goal for themselves of preserving the system. An exception would have been Gorbachev’s declaration, were he to have announced that the socialist system is destined for destruction and should be replaced by a capitalist system. Also excepted are central bank press releases, where it is announced that the current financial system is fundamentally wrong. As stated – inside the system it is impossible to see the system’s faults.

The main fault in the current system is that monetary historical experience is largely ignored. Throughout history, all successful monetary systems have, in one way or another, been tied either to gold, silver, or some other real asset of intrinsic value. If money has been only a piece of paper or a piece of copper, the system has always collapsed.

Beginning in 1971, for the first time in the history of global finance, no currency in the world has been backed by anything. This monetary experience should be properly called an experiment, which is now reaching its logical conclusion. This includes some curious facts, such as the Estonian kroon, which is backed by a reserve currency, primarily the Euro, while at the same time the Euro itself is backed by nothing. And the Estonian Kroon is not backed by euro banknotes, but instead, in all likelihood, is backed by a mixture of German, US, and Japanese treasury bills. These are only government promises to pay that will, at the end of the crisis, make Estonia’s entire foreign reserves, gathered for bad times, almost worthless.

If money is backed by nothing more than government seals, decorated paper, and strongly voiced promises, greed enters into play. No army in history has hindered central bankers and governments from creating money out of thin air and then spending it according to their own vision. The modern term for this is credit money, the loaning of credit by the central bank that becomes money itself. In normal and stable systems, bankers have only been able to loan out money that they have in their own vaults, and they were also always ready to exchange issued paper money and obligations for the gold bars stored in the vault of the bank. However, there has come a moment when bankers realised that people were not coming back to request gold, the result of which was that worthless pieces of paper (read: banknotes and electronic impulses) were placed into circulation and if they issued supplementary paper currency, which lacked any coverage, nothing happened, at least initially. In the old days, the mess would eventually surface and the matter ended with either the bankruptcy of the bank or the destruction of the state’s monetary system through hyperinflation.

Currently, the entire monetary system is global, and therefore has lasted longer than usual. The process, which took place in Germany in the 1920’s over a period of 3-4 years, will last for 3-4 decades on the global market. Throughout history there has been no monetary system that was not backed by a precious metal or some other equivalent accepted by all, ever, without exception, that has remained standing. The current experiment cannot remain standing either. We have created financial “capital” in a heretofore unseen extent. This “capital” is incorrectly believed to be wealth, because it could be exchanged for actual wealth during certain historical stages. Unfortunately, all this financial “capital” and all of this financial “wealth” have little backing in real goods or productive assets. This is an inherent property of our modern-day fractional-reserve banking system. Te result is that, whether we want it or not, the entire global financial system will fall into chaos and will destroyed, and hopefully a new and better system will be created.

What will happen is another important question, and impulse psychology comes into play here. People have a tendency to view things, above all, with a short-term time horizon. This “short-termism” can be seen on the stock markets and by the developments in the financial world. Even though the crisis had already been predicted at the end of the 1990’s, financial analysts were guided by “mystical” numbers and assessed the condition of the current situation as good. This type of analysis reminds of the anecdote where a man falls out of a skyscraper; when asked by someone from the fifth floor window how things are going, he answers “so far so good, I’m simply moving quickly”.

The Initial Phase – Financial Crisis

Unfortunately, the depth and length of the crisis are currently being discounted. At the moment, the crisis is in its initial phases. What is taking place only has affected mostly the financial sector; there has been only a minimal effect on the real economy. However, at the latest by next year, the second phase of the crisis will begin, with spillover effects into the economy. In 2009, the weakness of the global economy will become central.

The current economic system is built on providing loans in ever increasing amounts, not on saving and the repayment of debt over time. If a private person builds his life on a series of new loans, where he repays old debt with new debt, then he would be considered crazy and would inevitably end up either in debtor’s prison or bankruptcy. If the same thing were to take place at the corporate and state level, then nobody would dare say anything. It would be considered perfectly normal. Where is the child from the fairytale who wasn’t afraid to cry out that the king was naked!

Companies have become accustomed to taking new loans, although the financial system is attempting to correct. A contraction of bank credit to the private sector is in place, and inevitably the economy will not receive the money (read: credit) that it was planning on receiving. In addition, financial companies are unable to sell financial securities to finance themselves, since even the currently successful companies that kept free funds in shares and securities in order to earn a higher return, have lost over half of their value.

This first initial phase is well familiar to us. We have lived with it for almost two years. The media has called it by various names: “The Subprime Crisis”, “The Credit Crunch”, and “The Credit Crisis”.

The Second Phase – Economic Crisis

The lack of money becomes evident in the second phase of the crisis – the financial crisis is replaced by an economic crisis, triggering massive bankruptcies that would spread globally in a chain reaction. After the series of initial difficulties encountered by home borrowers and the construction companies, there have been no bankruptcies so far in manufacturing, shipping, media, food processing, not to mention luxury goods like luxury cars, yachts and watches, or exotic businesses like space tourism. But their time will come. During the second phase of the crisis, another large sum of capital will “evaporate” from the market, because a company which is going bankrupt will leave nothing for shareholders and very little for its bondholders. In the second stage of the crisis, unemployment will begin to grow along with the wave of bankruptcies. The final quarter of 2008 is only the beginning. Remember that in 1931-1932, the unemployment rate in the USA was 20%, with one in five people unemployed.

The Third Phase – Hyperinflation

Throughout the series of crises, politicians will attempt to interfere in the game, but the third stage of the crisis will nevertheless begin. Since banks were “saved” with large bailouts, politicians will also begin to lavish corporations with various aid packages. The recent charade of automakers begging for money is only the beginning. Thus, measures will be undertaken that, in the opinion of politicians, will help the economy and save jobs, something that will likely become known as Obama’s “ New New Deal”. This will include a multitude of spending programs and, above all, the loaning of credit with astronomical increases in the money supply, together with the classifying of the corresponding numbers into the trillions. Just like now nobody talks any more in terms of millions, so in the not so distant future no one will be talking any more in terms of billions. Trillions will be the order of the day. Perhaps bank lending standards will be relaxed. Perhaps the government will lavish the banks with a lot more money than it does today, just to keep them lending. Perhaps the central bank will directly monetize private debt. Perhaps the government will guarantee many more corporate loans, just like it recently guaranteed the securities/loans of the GSEs. Perhaps GSEs will proliferate throughout the economy, transforming the U.S economy into the “GSE Economy”, transforming a former great capitalist economy into a modern-day nationalsozialistische economy. Perhaps the government will implement all of the above.

It will seem for awhile that peace has arrived, that the crisis has been overcome, as if the bankrupt companies have been “saved”, although this will only be the calm before the storm. If there is already more money in the financial system than actual goods, then after the subsequent injections of money, more like dropping money from helicopters or showering corporations with money, the economic ship will begin to heel.

In this stage, the third stage, the hyperinflation scenario will begin when people realize that the money in banks will buy them next month half as much as it did this month. Then panic will ensue. People will begin to buy essential and non-essential items, just as long as there is something of value that can be obtained in exchange for their colourful pieces of worthless paper. Manufacturing enterprises would no longer want to sell goods, because the money received in exchange for the sale of their goods is not sufficient to purchase the new raw materials. Everyone who sells an actual object or good for paper money is a loser, since the same money is no longer enough to purchase again the same goods. Money created out of thin air electronically has brought tremendous benefits to the initial users and issuers, but at the expense of the wider masses through the collapse in their standards of living in this stage.

The third phase will be chaotic and difficult. The details are difficult to predict, but if history is any judge, the politicians won’t be asleep. They will likely pass a number of important laws, prices will be fixed, wages will be standardized, foreign currency accounts will be frozen; in general, everything that could be done, will be done, and this will only serve to extend the agony. Social upheaval and riots will be suppressed by brute force; many democratic freedoms and values will likely be lost. As of today, the hyperinflation spiral and Zimbabwe Syndrome have reached the point of no return.

Final Phase – Monetary Collapse

In the event that democracy survives, then the fourth and final phase will begin, a phase which can be called The Darkness before Dawn, the final agony before the rising of the sun. This is the ultimate destruction of the monetary and financial system, the loss of all electronic and financial values that is accompanied by monetary reform throughout most of the world.

In the worst case scenario, this will result in the creation of a Global Government; in the best case scenario, the process will take place separately in each country. For example, at the end of the Tulip Mania of the 17th century, all futures transactions with which tulips were bought and sold for millions of florins were declared void. Similarly, all electronic assets, contracts, securities, and futures contracts will be declared void, because the world doesn’t have a court or executive power which is capable of enforcing bankruptcies and debt collection resulting from millions of non-performing contracts. Only the actual collateral for loans will be demanded – land, houses, apartments. The losers will be private persons, while legal entities, along with their debts and non-existent collateral, will be lost in the virtual world, the place from whence they came.

Things will begin again with a clean slate. We will once again all be on an equal level. Railroads and planes, bridges and houses won’t disappear. All real wealth will remain, lost is only the paper wealth, those things that people believed they had and that they believed someone else (read: government, banks, pension funds, etc) will preserve for them. At that moment, faith will truly have been lost, as the fruits of a person’s life will have, through several metamorphoses, been transformed into banking sector profits and executive bonuses that had been spent by the suits long before the crisis even began.

The new economic system will be different than the current one. Its type, shape, or form is impossible to predict at the moment. Similarly to the end of the slave-holding system, it was not possible to see the creation of the feudal system. It was also impossible to foresee the blossoming of capitalism before the industrial revolution in England in 1785. So, it now is impossible to predict all the changes, although those changes are inevitable. Each process must go through its historical development and must reach its natural conclusion.

History shows that every changeover from one organisation of society to another has been very painful. Nevertheless, each following step, no matter how painful, has moved humanity forward and offered a better life to more people. Hopefully it will also go forward this time. All we have to do is hang on.

By Alar Tamming, Tavex and Dr. Krassimir Petrov,
Prince Sultan University

More Info : The vision presented in this article is that of Alar Tamming. He is the founder and Chairman of the Supervisory Board of the TAVEX Group, the largest gold bullion dealer in Northern Europe. Visit www.tavex.eu to purchase your gold bullion coins and bars. Tavex can also offer help in finding storage in a safe jurisdiction in Stockholm, Helsinki, Tallinn or Riga.

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.

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