Archive for May 2008
Hundreds in Oxford protest at Dalai Lama visit
Hundreds in Oxford protest at Dalai Lama visit
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By Matt Wilkinson
Hundreds of Bhuddist monks gathered in the centre of Oxford this morning to protest loudly against a visit by the Dalai Lama, the Tibetan spiritual leader.
The Dalai Lama is speaking at the Sheldonian Theatre and about 1,000 members of the Western Shugden Society turned up outside.
The protesters chanted “Dalai Lama stop lying” and other slogans as he arrived for the talk at 9.30am.
The chanting reached fever pitch as the Dalai Lama arrived in a chauffeur-driven vehicle and was escorted into the building.
The society claim the Tibetan leader has banned a traditional Bhuddist prayer, while his followers are abusing the human rights of Shugden Bhuddists.
The Sheldonian Theatre was cordoned off to members of the public who are not invited to the talk and there was a strong police presence including officers on horseback.
Supporters of the Western Shugden Society are thought to have come to Oxford from as far away as Brazil, New Zealand and Hong Kong.
Many of the demonstrators have been following the Dalai Lama around the UK and protested at his engagements in London and Nottingham in recent weeks.
They claim the Tibetan leader has banned a traditional Buddhist prayer, the Dorje Shugden, and worshipping a deity while his followers are committing human rights abuses on Shugden Buddhists.
Kelsang Pema, spokesman for the Western Shugden Society, said: “The demonstration is very loud and we hope the Dalai Lama hears our message.
“When the Dalai Lama was 50, he decided that one very simple and pure spiritual prayer should not longer be regarded as Buddhist.
“But even if he experienced a change of heart himself, he should not have inflicted this on Buddhist communities throughout the world.
“We have tried to petition him peacefully since the 1990s but he will not listen and now people are being expelled from monasteries and schools for trying to practise this prayer.”
The demonstration is expected to last until shortly after midday.
George Soros: ‘We face the most serious recession of our lifetime’
George Soros:
‘We face the most serious recession of our lifetime’
George Soros, ‘the man who broke the Bank of England’, tells Edmund Conway of his fears for the economy
‘This is a period of wealth destruction. The people who make money will be few and far between. There will be a lot more money lost than made.” When George Soros – the phenomenally successful hedge fund manager – says this, you know something is wrong, very wrong. And indeed it is. The 77-year-old billionaire sinks back into the sofa in his Chelsea townhouse and exhales.
He has managed to make money almost consistently for over half a century – from his early days as one of the world’s first major hedge fund traders to his involvement in Black Wednesday as the man who “broke the Bank of England”, and in the latter years generating multi-billion-dollar annual profits throughout the 1990s. The conditions today are almost uniquely dismal, however
“I think this is probably more serious than anything in our lifetime,” he says. In short, his feeling is that the United States and Britain are facing a recession of a scale greater than the early-1990s, greater even than the 1970s.
“I think the dislocations will be greater because you also have the implications of the house price decline, which you didn’t have in the 1970s – so you had stagflation and transfer of purchasing power to the oil producing countries, but here you also have the housing crisis in addition to that.”
Such apocalypticisms would be less worrying were it not that Soros was among the few prominent experts who warned of the dire consequences facing the American economy years ago, when the housing bubble was still inflating.
One of the problems is that leverage, the juice that has driven the hedge fund and finance trade in recent years, has all but dried up; the other is that the impending economic slump will be far-reaching and painful.
In the UK, the economic clouds are particularly dark, he says. “House prices have risen over the years and are further away from sustainable than in practically any other country, in terms of household indebtedness and the relationship of house prices to incomes.” The slump may be more gentle than in the US, he adds, but it will be more drawn out.
“This is going to be compounded by the fact that the financial industry weighs more heavily on the economy than in other countries, because London is the centre of the global financial system, and you have the unfortunate condition that the Bank of England is bound into inflation targeting, and is not in a position to lower interest rates until you have an economic slowdown.”
The nice decade, he says, borrowing a phrase from Bank Governor Mervyn King, is over and now the Bank has struck a “Faustian bargain between economic slowdown and inflation”.
Ah, the Bank of England. There can be few more eventful relationships between one man and a bank than this one. There is no doubt he remains proud of his central role in Black Wednesday, when he helped drive Britain out of the Exchange Rate Mechanism, making around a billion dollars in the process. He is reminded of it by the fact that sterling has recently fallen some 20pc against the euro.
“It’s much better than the straitjacket sterling was in when I broke the Bank of England.”
For which, by the way, he is, rightly, unapologetic: “The ERM would have been abandoned even if I had never been born.”
The son of the ERM, meanwhile, the euro, looks unbreakable in comparison – by speculators, at least.
But as hedge funds and other speculators pile in to the current crude oil boom, the Hungarian-born investor instead focuses on the wider picture – maintaining his estimated $8.5bn (£4.3bn) fortune, much of which he spends on his philanthropic and political ventures – most notably his Open Society Institute, which has a particular focus on Eastern Europe. However, don’t try to read any of his politics into his trades, he insists.
“As a hedge fund manager, I do not claim to be serving the public interest. I am in the business to make money,” he says. “It’s a difficult point for people to understand and there’s a general attitude when they see people profiting to say that markets are immoral, or making money by speculating is immoral.
“It’s really the job of the authorities to set the rules, and there are times when some people break the rules or engage in improper activities, like the sub-prime mortgages. The impact fell particularly heavily on black and Hispanic minorities.
“It is a scandal, and I think you can blame [former Federal Reserve chairman Alan] Greenspan for not regulating the mortgage industry. But that’s very different from speculating in government bonds or financial instruments, and that’s a difficult point to get across, but I feel very strongly.
“Markets play a very useful role and they are amoral, not immoral.”
Will We See The End Of Empire In Our Time?
Will We See The End Of Empire In Our Time?
By Richard C. Cook
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The following is based on a talk given by the author at the “End of Empire” session of the “Building a New World” Conference of the Prout World Assembly at Radford University, Radford, Virginia, on May 22, 2008.
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I believe we have had two Americas. One started with the imperialist state which Alexander Hamilton tried to put into place in the 1790s with the First Bank of the United States. Thomas Jefferson overthrew this early expression of empire in the Civic Revolution of 1800 and created a strong and free America which lasted until 1913 in spite of the convulsion of the Civil War.
- In 1913 the empire came back through the Federal Reserve Act and the 16th Amendment to the Constitution authorizing the income tax. Franklin Roosevelt dealt it a blow during the New Deal, but now it has taken over again, starting with the Vietnam War, continuing with the Reagan Revolution, and ending with the catastrophe of Bush II.
- Though the America we know and love is in agony, I believe the ‘real’ America is still there, somewhere, among the people, particularly those who remain true to the teaching of the Master, “to love your neighbor as yourself.” Whether and how that America will now come to the fore is, for me, the next big question.
- A few weeks after I retired from the government in January 2007, I published a book entitled Challenger Revealed: An Insider’s Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age.
- I had gone to work at NASA in the summer of 1985 as the lead resource analyst for the space shuttle solid rocket boosters.
- My first major assignment was to talk with the solid rocket booster engineers and find out about the problems they were having with the O-ring joints. They told me that these joints, located between rocket segments, were being eroded by flame leaks almost every time the shuttle was launched.
- The engineers said that if the flame leaks burned all the way through the joints, then the shuttle would blow up. Documents showed that if this happened the astronauts all would die. The engineers said they were trying to redesign the joints but that for now they “held their breath” each time there was a launch.
- On January 26, 1986, space shuttle Challenger did blow up for the reason the engineers had described. Among the seven astronauts who died was Christa McAuliffe, the Teacher-in-Space and the first civilian shuttle passenger. I became the only NASA official to testify publicly to the Rogers Commission that NASA had known for a long time this could happen. For my testimony I later received the Cavallo Foundation Award given to whistleblowers for moral courage in business and industry.
- After my testimony, the engineers for Morton Thiokol came forward and told how they had tried to stop the launch the night before, because they feared the unusually cold temperatures would prevent the O-ring joints from sealing. NASA refused to accept the engineers’ recommendation for a delay, and their own company managers approved the launch in writing.
- This was as far as the Rogers Commission went with its investigation. After four more years of personal investigation, I was able to determine that NASA approved the launch against all expert opinion in connection with the TV publicity for the Teacher-in-Space mission and under pressure from the Reagan White House.
- I was also able to show that the reason NASA kept flying, despite the knowledge that the O-ring joints were flawed and that their performance was further compromised by cold temperatures, was so as not to interfere with military launches the shuttle was going to be making in support of President Reagan’s Star Wars weapons-in-space system.
- I tell you this story because it is a concrete example of what happens when a nation goes from being a democracy to an empire. For one thing, human life no longer matters. They don’t care if people live or die. They’ll kill millions, whole nations, entire cultures, to get what they covet. And they will give it fancy names, like “The War on Terror.” Or they’ll tell you the earth is overpopulated so hundreds of millions must starve, which is starting to happen even as we speak.
- Also, there is always a great leader whose image and prestige matters more than common sense and the truth-a Great Communicator, a Decider, a Unitary Executive. And that leader is going to be good at scaring you and making you do things out of fear you would never do in your right mind.
- Finally, under an empire, ideas of science and knowledge-which is to say, Truth-are sacrificed to the imperatives of militarism and national security. What was happening at the time of the Challenger disaster was that the manned space program, which had given mankind some of its greatest triumphs during the Apollo moon landing program, was now being subverted to begin launching weapons into space. Today, no nation in history has been as proficient as ours at inventing things to kill their fellow human beings.
- Returning to my personal circumstances, I left NASA a few days after my testimony and spent the next twenty-one years working for the U.S. Treasury Department. There I learned more about what it has meant for us to become an empire, because it has affected public finance as much as space science. And I have studied this topic seriously for years. I publish articles regularly on Global Research and other websites and have a new book coming out this fall entitled, We Hold These Truths: The Hope of Monetary Reform.
- The issue of whether we in the U.S. want to be an empire or a democracy goes back to the founding of the nation. In the 1790s, our first Secretary of the Treasury, Alexander Hamilton, got Congress, with President George Washington’s approval, to pass legislation setting up the First Bank of the United States. Hamilton was frank at the time in telling people that the purpose of the Bank was to allow the creation of what he than called an “American empire” in order to compete with the European nations in controlling the world.
- The Bank would do the same for the U.S. as the Bank of England did for Great Britain. It would buy government debt and use it as collateral for private lending. The debt would then be used to fund a large standing army and navy, even though in the long run, this could bankrupt the nation. The army and navy began to be built through the 1790s, until Thomas Jefferson and his followers stood up and said this is not the kind of nation we fought to create during the Revolutionary War.
- Hamilton and Jefferson split, and that split has defined U.S. politics ever since. Hamilton became the de facto head of the Federalist Party, the ancestor first of the Whigs and then of the Republicans. Jefferson called himself a Republican at first, then a Democratic-Republican, then finally his party became the Democratic Party that has lasted until today. Of course we know that the two parties have come more and more to resemble each other in recent decades in supporting policies of imperialism.
- Jefferson was elected president in what was called the Civic Revolution of 1800. The first thing he did was cut military spending. He did what no one has done since, which was to balance the federal budget for eight consecutive years. Then he took an action which defined our nation to a considerable extent all the way into the 20th century. In 1803 he doubled the size of the nation overnight through the Louisiana Purchase.
- So for the next century, instead of competing with the European nations for overseas colonies, our energies were devoted to settling the North American continent, to the detriment, of course, of the Native American peoples. We became, as did Russia in Eurasia and Brazil in South America, a continental land power. And we stayed that way for over a century.
- But empire finally caught up with us. Across the sea in South Africa a man named Cecil Rhodes was devising a plan to make the British Empire the ruler of the globe. He created a secret society to accomplish this, called the Round Table, using money provided by the Rothschild family, who had controlled the British economy since the Napoleonic wars.
- The U.S. was integral to their plans. Following is the relevant passage from Cecil Rhodes’ will of 1877. His aims, he wrote in the will, were:
- The extension of British rule throughout the world, the perfecting of a system of emigration from the United Kingdom and of colonization by British subjects of all lands wherein the means of livelihood are attainable by energy, labour, and enterprise,the ultimate recovery of the United States of America as an integral part of a British Empire, the consolidation of the whole Empire, the inauguration of a system of Colonial Representation in the Imperial Parliament which may to tend to weld together the disjointed members of the Empire, and finally the production of so great a power as to hereafter render wars impossible and promote the best interests of humanity.
- Think about that: “the ultimate recovery of the United States of America as an integral part of the British Empire.” In fact, as Professor Carroll Quigley made clear in his celebrated book, The Anglo-American Establishment, the British planners, whose descendants still rule that nation, acknowledged that a time would come when the U.S. would be the senior partner in the empire, which is exactly what happened over the century that lay ahead.
- The Russian writer P.D. Ouspensky said all the history you read about in the history books is “the history of crime.” This is what he was talking about.
- The takeover of America was accomplished when the British, European, and American bankers created the Federal Reserve System in 1913. That year our nation was hijacked. Congressman Charles Lindbergh, father of the future aviator, called it “the legislative crime of the ages.”
- The Federal Reserve is a privately-owned central banking system modeled on the Bank of England. >From that day onward we got all the accoutrements of empire which have burdened our nation ever since: an enormous national debt, a crushing tax burden, permanent inflation, constant warfare, a gigantic and overweening military-industrial complex, a national character marked by arrogance and violence, and today, the enmity of the world.
- Our wealth has been based, first, of course, on our own industriousness and natural resources-a positive-but, when that has proved insufficient, on taking it from others. Until recently our businesses and industry have dominated the globe-ever since World War II. The American dollar has been the world’s reserve currency and the denominator of trade in the “black gold” known as oil.
- Through the neocolonialist institution known as the International Monetary Fund, we dominated the economies of the developing world. And we backed up our hegemony with military might. Since the start of World War II in 1941 we have been at war with somebody, either overtly or covertly, continuously. This pattern of warfare accelerated with the Reagan Doctrine of fighting proxy wars starting in the 1980s.
- Today our military is based in 166 nations. Our economy is dominated by two industries-banking and armaments. Egged on by Israel and the U.S.-based neocons, we are engaged in the military conquest of the Middle East. This began after the 9/11 attacks through use of off-the-shelf plans to invade Afghanistan and Iraq. We are also seeking “full-spectrum dominance” by planning, once again, to put weapons into space.
- And we are bankrupt-morally and financially. We gave away our manufacturing industries to the operators of overseas sweatshops and have tried to live on our investments and the inflation of our homes and paper assets. Our secret intelligence agencies are heavily involved in the illicit drug trade, and we carry out our foreign policy with assassinations, subversion, and torture.
- Yet we have a national debt approaching $10 trillion and a total societal debt of $50 trillion, neither of which can ever be paid off. Meanwhile the world’s financial controllers, still mainly based in London along with Wall Street, have gotten unbelievably rich from the proceeds of empire over the decades and are probably laughing up their sleeves as they watch us inch toward the next world war.
- Because it’s a fact that the threat of nuclear war which we thought had been dispelled by the end of the Cold War today has come back. Remember talk of the “peace dividend”? What a joke! In our name, and with our money, the U.S. military-industrial complex is seriously preparing for a world war that would be fought with nuclear weapons against Russia and China.
- The trigger could be a U.S. attack on Iran, which seems to be in the works and may take place before the November presidential election. Disgusting and corrupt corporate media outlets like the Washington Post are again beating the drums for war on behalf of the financiers and Israel as they did in the run-up to the war against Iraq.
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Is there still a chance for us to step back and become the nation we once were, the home of liberty and the hope of mankind? Although I have tried to address these and many other issues in my writings, I honestly do not have the answer to that very pertinent question.
- Copyright 2008 by Richard C. Cook
- Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared on numerous websites. His book on monetary reform entitled We Hold These Truths: The Hope of Monetary Reform will be published soon by Tendril Press. He is also the author of Challenger Revealed: An Insider’s Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age, called by one reviewer, “the most important spaceflight book of the last twenty years.”
- His Challenger website is at
- http://www.richardccook.com/>www.richardccook.com
- A new economics website at http://www.realsustainableliving.com/
- www.RealSustainableLiving.com is upcoming with partner/author Susan Boskey.
- http://dandelionsalad.wordpress.com/2008/05/27/will-we-see-the-end-of-empire-in-our-time-by-richard-c-cook/
G743A Acquired by Vaccine Resistant H5N1 in Egypt
G743A Acquired by Vaccine Resistant H5N1 in Egypt
New HA and NA sequences from Egypt have been released. Two of the 2008 HA sequences, A/chicken/Egypt/1709-5/2008 and A/chicken/Egypt/1709-6/2008 are closely related to a sub-clade which was first reported in Egypt from isolates collected between mid-December, 2007 and mid-January, 2008. This sub-clade was easily distinguished from earlier isolates, although it had the regional markers defined by earlier isolates from 2006 and 2007. The majority of these isolates were from vaccinated flocks, indicating this sub-clade was vaccine resistant. The clade also had a large number of non-synonymous changes.
The same sub-clade was found in Israel in early 2008, A/chicken/Israel/1055/2008. Full sequences from this isolate were released and the NA sequence did not have G743A. The NA sequences from the two Egyptian isolates described above were closely related to the NA sequence from Israel. These three NA sequences differed from each other at two positions, One of the two positions (in A/chicken/Egypt/1709-6/2008) was G743A.
G743A had attracted interest in isolates collected form the beginning of 2007. It had been appended onto multiple genetic backgrounds in Egypt. In the same time frame, G743A was also appended onto easily distinguished sequences in Moscow and Ghana. This concurrent acquisition was most easily explained by homologous recombination because like the vaccine resistant isolates describe above, the number of changes between those isolates with G743A and earlier precursors was minimal (2-6 changes), yet one of those small number of changes was G743A. It was also found in clade 2.2.3 isolates from Kuwait, also collected in early 2007. Sequences related to the Kuwait isolates were subsequently found throughout Europe from the summer of 2007 to early 2008. All published NA sequences from these related isolates have G743A. A similar acquisition was also seen in Nigerian isolates from early 2007.
Thus, the addition of G743A to the vaccine resistant sub-clade in Egypt and Israel is yet another example of a distinct clade 2.2 sub-clade with G743A appended. This type of acquisition by recombination involving the appending of the same polymorphism onto multiple genetic backgrounds has important applications for vaccine development.
Bilderberg 2008 evades all scrutiny in Vouliagmeni, Greece – incl. mp3 report
Bilderberg 2008 evades all scrutiny in Vouliagmeni,
Greece – incl. mp3 report
Well the old tricksters did it this year. They evaded all our efforts to track them down to a precise date and venue.
There has been a lot of Bilderberg searching activity on the forum https://217.72.179.7/members/www.bilderberg.org/phpBB2
including examination of bilderbergers’ schedules, checking of hotels but no definite answer.
Bilderberg meeting 2008 on Alex Jones show minus adverts – mp3 4.8M:
http://www.indymedia.org.uk/media/2008/05//398803.mp3
PEPIS bulletin 96 includes the following items too:-
1. Johann Hari: The loathsome smearing of Israel’s critics
2. Listen to drunk Ex UK Home Secretary John Reid MP who wants me to “stop hankering” the Bilderbergers
3. Illuminati in a nutshell
4. My printable Revelation timeline and guide
5. War & black magic Special featuring author and WWII hero Dennis Wheatley
Whilst I had been displaying this at the top of the Bilderberg.org front page as a possible venue and date for a week or so Bilderberg researchers such as Marek Tysis, Jim Tucker and myself simply did not have enough hard facts to pin them down beforehand.
The trouble is that this year particularly all the key Bilderberg people have been keeping very quiet about their future plans. In past years they have been relatively open about where they were planning to be and it’s then quite a simple matter to identify gaps in the schedules of, say the boss of the European Central Bank and the Queen of the Netherlands, that coincide.
Marek Tysis believed, rightly as it transpired, that it would be in Vouliagmeni, Greece in one of the first two weekends of May. What they were talking about we may never know. Let’s hope at least SOMEBODY who realises that these people are where war and money meets and far too close to the Nazis (through Prince Bernhard and the occult connections particularly) has got some leaks.
What are they planning for us this year then? We might guess that Henry Kissinger has had problems with his War on Terror because nobody is believing it is anything other than a US, Israeli and British grab for empire. A continuation of Hitler’s diseased dream of an occult empire to rival the extent of the old British Empire and Commonwealth and all the psychological pressure is now being piled on Gordon Brown who is not playing ball with the Bilderbergers’ fascistic ‘consensus’.
There is not a lot of doubt in my mind that the immense power that Bilderberg wields is ultimately satanic. One could pick a random homeless tramp on the streets of London to preside over such a conference you would get more common sense in his little finger than all the Bilderberg Steering committee have in their collective greedy bodies.
Maybe that is what is needed. A jubilee of renewal to remove these despots and their freemasonic underlings from the committees that select candidates for the political parties.
What seemed a real political hope in the UK, the Liberal Democrat Party has somehow got itself a City of London stooge, Nick Clegg, in charge now so has made itself unelectable just a the time when it could have swept to power because of voter hatred of both Labour and Tory parties.
Israel too is ‘celebrating’ 60 years of existence and as such 60 years of terrorism, horror and hatred of the arabs. The Jewish people don’t want it but what can they do with a fanatical far right Zionist government there. Jews are in exactly the same bind as the rest of us. Democracy has been stealthily and deliberately undermined in Israel just as in the US and Britain and Europe by Secret Societies operating within the ‘cover’ of freemasonry.
The Beijing Olympics looming appears something like the Berlin Olympics of 1936. A derisory show of male and female machismo with a few who will be this year’s Jesse Owens?
So Bilderberg may have been successful in stopping scrutiny of themselves this year, no participant list, nothing whatsoever has emerged. And that bodes extremely ill for the coming Summer and Autumn. Whatever bloodcurdling warstarting event, whether or not connected with the Beijing Olympics, and whether or not leading to a global crash which will make a few people very very rich, you can be sure they will be in the know. Which means that Bilderberg is culpable, there’s a lot of bucks riding on this. That is why they do everything they can, with their limitless supply of money, to keep these meetings out of the public eye.
What we need of course is a united front such as that which has formed in South America, probably because they have been the subject of so much evil and illegal US interference. A united front based on a media free of racist Zionist moles and on an understanding of the true facts behind 9/11 which kicked off all this ‘War on Resistance Fighters’ madness. It really is as if the war is against the plucky partisans and leaders of the French Resistance to Nazi occupation.
So it doesn’t take a lot of imagination, once you’ve joined the Nazi dots, to see where Henry Kissinger and Bilderberg are coming from. His present company, Kissinger Associates, is the biggest protection racket on the planet and the UN eats out of its hands, that means the UN Charter and the Geneva Conventions have been torn to pieces by these people, paving the way for mass slaughter and maybe a little more power. Kissinger gets kudos from his impunity and Rockefeller, Rothschild and his financial backers and other underground friends are egged on to further madness by our gullibility. Then their is their love of Eugenics, what more proof do we need? How much more can we forget?
They want a more subtly spun global version of what Hitler had in the early 1940s and they are not going to get it because the human spirit will not have it. But they are so greedy and determined, indeed psychopathic in their goal, that they would rather pull our whole beautiful God-given world down around our heads than allow us to be the free people we were made to be. The real solutions to the problem of wage slavery, poverty, are so simple as to be almost obvious. Land reform and money reform, putting land back into the hands of those who need it as a free gift to mankind. Taking the power to issue money out of private corporate hands
Well I said it was a rant!
see more from ranter Gosling here
http://groups.yahoo.com/group/pepis/message/141
http://groups.google.com/group/pepis
Tony Gosling
http://www.indymedia.org.uk/en/2008/05/398802.html?c=on#c195508
Dutch Newspaper: Bilderberg To Meet In Washington June 5-8
Apparent meeting in Athens last weekend was a ruse as suspected
Paul Joseph Watson
Prison Planet
A Dutch newspaper is reporting that Holland’s Prime Minister Jan Peter Balkenende (pictured) and Minister of Foreign Affairs Maxime Verhagen are set to attend the annual Bilderberg conference in Washington DC from June 5-8, apparently confirming that a recent alleged Bilderberg meeting in Athens Greece was merely a ruse.
As we reported on Tuesday, a Greek newspaper claimed that Bilderberg had met in Athens last weekend, but Bilderberg sleuths Jim Tucker and Daniel Estulin, both of whom have always successfully determined the location of the Bilderberg meeting in advance for decades, questioned the accuracy of the report.
Bilderberg occasionally attempts to throw investigative journalists off the scent by having a mock steering meeting in advance of the actual meeting, diverting attention away from the location where their undemocratic scheming will take place.
If the Dutch report is to be believed, Bilderberg will meet in Chantilly, which was also the site of their 2002 conference. Six years ago the Westfields Marriott hotel was chosen to stage the confab and its likely the same venue will be selected again.
A rough translation of the Dutch news report reads as follows.
Prime Minister Jan Peter Balkenende and Minister of Foreign Affairs Maxime Verhagen from 5 to 8 June a visit to the U.S. capital Washington.
On June 5 they received at the White House by President Bush. The Government has indicated that Friday.
Topics at the meeting with Bush would include the international political situation, including developments in Afghanistan, and economic cooperation between the United States and the Netherlands.
Following Balkenende takes part in the annual Bilderberg meeting, which this time will be held at Chantilly, near Washington.
http://www.prisonplanet.com/articles/may2008/051608_bilderberg_meet.htm
Russia: giant of a new economic world order
Russia: giant of a new economic world order
The ‘Bric’ economies have captured the headlines, but India and China have so far won the lion’s share. What about the other half of the acronym? Here, Heather Connon witnesses a revolutionary era in Moscow
Heather Connon, The Observer,
Two decades ago, Russians would always have a string bag known as an avoska – a just-in-case bag – tucked in their pocket ‘just in case’ they spotted some oranges or other consumer staple for sale in the normally empty shops and market stalls. These days, Muscovites are as likely as Manchester United and Chelsea fans to be sporting carrier bags from GUM, the 242m-long shopping mall that runs along the eastern side of Red Square and is crammed with labels from Hugo Boss to Russian specialist shops.
Russia is booming: there are more ‘6 series’ BMWs in Moscow than in any other city in the world and there is barely a Lada to be seen among the Mercedes, Audis and Range Rovers that clog its congested streets; within the next year or two, Russia will overtake Germany to become the world’s biggest car market.
It is not just cars. Ordinary Russians are snapping up everything from baby-food to designer bags as they splash out with their newfound wealth; average earnings have been growing by around 20 per cent a year and consumption has been following close behind. At around $8,500 (£4,300) a year, average earnings are still low by Western standards but they are stratospheric compared with a decade ago, when the average was less than $1,100 and a greater proportion of the population had to get by on less than $1 a day than in India.
Disposable income is also higher than that suggests, given that tax is at a flat rate of 13 per cent and, with every Russian having been given their own flat or house free as the Soviet era ended, mortgages and consumer debts are rare. It is not hard to work out the reason for the transformation: gold, both black and yellow. Russia vies with Saudi Arabia to be the largest oil producer in the world: it has the second-largest oil reserves in the world, the largest gas reserves and the fourth-largest gold reserves. Just over a decade ago, oil was trading at around $10 a barrel; last week it passed through $135 for the first time. Over the same period, the price of gold more than trebled, to over $900 an ounce.
No wonder Vladimir Putin was described as the lucky President: his elevation to that role in 1990 coincided with the commodity boom and his skill in riding it means that, after two terms as President, he has just been elected Prime Minister and can still claim unprecedented popularity ratings.
He deserves plaudits for managing the economy’s growth. He arrived two years after Russia stunned international investors by defaulting on its debts, triggering a collapse in the rouble and a crisis in emerging markets across the world. Growth has since averaged a healthy 7 per cent a year and some commentators say it is the world’s most successful economy. Putin has also husbanded the resource wealth wisely: the stabilisation fund, designed to conserve the oil and gas windfall and to prevent it distorting the rest of the economy, reached almost $160bn by the end of 2007, while Russia has also built up the world’s third-largest foreign exchange reserves.
Oil is undoubtedly crucial. It accounts for two-thirds of exports, a quarter of GDP and half of Russia’s stock market. But the challenge facing Putin and Dmitry Medvedev, his handpicked, and some fear henpecked, successor as president, is to demonstrate that the country is more than simply a resources play and that they have effected a more lasting transformation of the economy.
Russia’s growth strategy will be familiar to anyone who has studied the spectacular growth in China and India: enriching and empowering its 140 million consumers while investing to improve its decrepit infrastructure.
There is still plenty of scope for boosting consumer demand: Yaroslav Lissovolik, chief economist at Deutsche Bank in Russia, says: ‘Moscow is Russia’s showcase. Outside Moscow, there is a very different picture.’ Tyumen Oblast, heartland of the Siberian oil barons, is the next-wealthiest area but is just half as rich as the capital, while the poorest areas could have as little as 4 per cent of Moscow’s wealth per capita. But the cities outside Moscow are now growing far more rapidly and Medvedev aims to increase the proportion of the middle classes from the current 20 per cent to half.
The housing market illustrates just one area of opportunity: while everyone owns their home, the stock is decrepit. Two-thirds of the housing stock is more than 30 years old – many of the five-storey apartment blocks erected during the Khrushchev era during the 1960s and designed to last just 20 years are only now being demolished – and almost 40 per cent of Russians have no running water or sewage systems in their homes.
Putin is promising between 70 and 80 million square feet of new housing by 2010, 10 million of that state housing, so that the number of Russians who can afford to buy a new house should rise to a third, from the current 5 per cent. That should fuel a dramatic increase in mortgages; the number has been doubling annually and, on Putin’s targets, should grow to a million within two years. Consumer credit, too, has been surging as Russians are losing their suspicion that banks are where you risk losing your money and realise they could instead offer a way for them to buy cars or upgrade their houses.
‘The wealth effect is trickling down,’ says Robin Geffen, managing director of emerging market specialist Neptune Investment Management. He points to the recent rapid growth of Aeroflot, the state airline, which has increased its domestic air traffic – where it has a stranglehold – by 18 per cent. ‘It has a young and dynamic management which has responsibility for revitalising what was a pretty antiquated company.’
He can see plenty of opportunities among companies like this, which are being built up by a new class of entrepreneur and are prospering from the growing consumer wealth.
Infrastructure spending is also being stepped up – and it is much needed. Roland Nash, managing director and head of research at Russian investment specialists Renaissance Capital, says that only one in 10 requests for access to the power grid is approved, while the number of airports has plunged from 1,300 in the Soviet era to 300. Road and rail services are poor, with virtually no connections from the north to the south – a key route for trade with China.
The biggest challenge is to manage this spending without fuelling the already rapidly rising inflation. With food accounting for around 40 per cent of the average Russian basket compared with between 10 and 20 per cent for developed countries, the impact of soaring food prices is much more severe and inflation, having been falling, is creeping up towards 15 per cent again.
‘They do need to get inflation under control,’ says Elena Shaftan, manager of Jupiter’s New Europe fund. ‘In Russia, it is being driven by the same forces as everywhere else – food – but the government has not helped with the massive spending before the election in December.’ She adds that the inflation-fighting Prime Minister remains in his job.
She is also relatively sanguine about the other key concern for Russian investors: the role of the state. Few dispute the fact that, during the 1990s, the Russian oligarchs were given state assets too cheaply and much of the current focus is on ensuring that does not happen again.
Last week, BP’s Moscow offices were raided again and both it and Shell have experienced problems with their oil joint ventures there. But, says Shaftan, the key factor is that the regime is both ’stable and predictable’. While not everyone may agree with the way Putin operates or the role of state-controlled resource companies, Shaftan says everyone should know the state of play. ‘If you listen and abide by the rules, you are fine.’
Britain loses 100 unmanned aircraft in Iraq and Afghanistan
Britain loses 100 unmanned aircraft in Iraq and Afghanistan
IAN BRUCE, Defence Correspondent
CommentBritain has lost almost 100 unmanned surveillance aircraft – including a £10m Reaper which had been in service for less than six months – over Iraq and Afghanistan since 2003, The Herald can reveal.
The equipment the robot spy planes carry is so sophisticated and so vital for intelligence-gathering that commanders have ruled it an acceptable risk to launch rescue missions to retrieve it to prevent it falling into enemy hands.
At least one British soldier, Captain James Philippson, of 7 Parachute Regiment, Royal Horse Artillery, was killed by Taliban gunfire when his patrol arrived to rescue another group ambushed while trying to recover top-secret sensors from a crashed drone near Sangin in 2006.
The unmanned aerial vehicle losses include about 50 which were shot down or suffered catastrophic mechanical failure in mid-air and another 40 damaged beyond repair by crash-landing on rough terrain.
The Ministry of Defence admits that 33 have been lost over Iraq, although it has not released details of the types of robot spy planes brought down by enemy fire, severe weather or internal faults.
At least 23 of the older and notoriously unreliable Phoenix drones used to locate enemy positions and movement for artillery bombardment were downed during the combat phase of the Iraq invasion in 2003.
Le Sahara se serait formé lentement et pourrait reverdir
Le Sahara se serait formé lentement et pourrait reverdir
Par Jean-Luc Goudet, Futura-Sciences
En étudiant les sédiments d’un minuscule lac au Tchad, une équipe internationale a découvert les traces d’une aridification dix fois plus lente que ce que l’on pensait. Selon les chercheurs, le Sahara serait déjà en train de reverdir… à cause du réchauffement global.
Plus grand désert du monde, le Sahara était verdoyant il y a six mille ans. Sur ce point, tout le monde est d’accord. Mais en combien de temps cette zone humide est-elle devenue si aride ? La théorie prévalant jusqu’à aujourd’hui affirmait que l’assèchement avait démarré vers 5.500 ans avant le présent et s’était déroulé sur une période très courte, de quelques siècles seulement. Pour établir cette conclusion, les scientifiques se basaient sur des modèles et sur les résultats d’un carottage effectué au large de la Mauritanie. Sous le sable saharien en effet, les traces biologiques et sédimentaires sont rares.
Une équipe internationale, menée par Stefan Kröpelin, de l’université de Cologne, s’est, elle, rendue sur place. Quelque part au nord de Tchad, à l’est de N’Djamena subsiste une petite étendue d’eau de 3,5 kilomètres carrés, le lac Yoa, encore alimenté par des réservoirs d’eau souterrains, souvenirs de la période humide. Sous ses 24 mètres de profondeur, le lac a conservé dans les sédiments les archives des derniers millénaires.
L’équipe a pu y consulter l’évolution de la faune et de la flore en creusant jusqu’à neuf mètres sous le fond de l’eau. Remontant à l’époque où poussaient des fougères, des acacias et des graminées, les paléontologues ont pu reconstituer le changement climatique qu’a connu la région. Surprise, le scénario inscrit dans les sédiments ne ressemble pas du tout à celui des modèles.
Le départ est le même : à la fin de la dernière période glaciaire, les températures augmentent. L’air plus chaud absorbant davantage d’humidité, l’atmosphère se charge d’eau durant les moussons qui vont déverser leurs pluies beaucoup plus loin, jusqu’au Sahara, lequel en verdit de plaisir. C’était il y a 12.500 ans. La paradis vert a peu duré, à cause du rayonnement solaire semble-t-il, dont l’intensité s’est réduite il y a 7.000 ans. Les températures ont un peu baissé mais, surtout, les moussons sont devenues moins abondantes et les pluies se sont raréfiées. Le Sahara s’est alors asséché. Mais pas brutalement ! Les données recueillies au fond du lac Yoa indiquent que le climat a évolué progressivement pendant plus de trois mille ans, entre 6.000 et 2.700 ans avant le présent.
L’humidité reviendra-t-elle ?
Cette durée est près de dix fois supérieure à la valeur admise jusque-là mais elle reste rapide à l’échelle des temps géologiques, de l’évolution de la vie et même de l’histoire des civilisations humaines. Plantes, animaux et hommes n’ont sans doute pas pu s’adapter à un changement si rapide, et ont dû, littéralement, déserter la région en migrant vers le nord et vers le sud. La civilisation égyptienne s’est développée à cette période. Est-ce une coïncidence ?
L’idéal serait maintenant de confirmer ces résultats par des sondages dans d’autres dépôts. Mais les chercheurs n’espèrent pas en trouver. « Si quelqu’un voit un autre lac [saharien] dans Google Earth, qu’il nous prévienne » plaisante Stefan Kröpelin dans le magazine en ligne de Science.
D’après ce spécialiste allemand, l’histoire continue. Le réchauffement climatique renforce les moussons et les conditions se rapprocheraient selon lui de celles de la fin de la période glaciaire. Un air chaud et humide pourrait très bien favoriser la recolonisation du Sahara par la végétation. Stefan Kröpelin pense même que ce reverdissement a déjà commencé en certains endroits…
Anti Islam Islamophobia Italy Demolishes Verona Mosque
Anti Islam Islamophobia Italy Demolishes Verona Mosque
Italy’s far-right, anti-immigrant Northern League party has started its mission in the new government with bringing down a mosque in the northern city of Verona.
“[The mosque destruction] reinforces Muslim fears of seeing the League in the ruling coalition,” Ali Abu Shwaima, the head of Milan-based Islamic Centre, told.
Bulldozers brought down last week a building housing a Muslim prayer room in the city.
“I never felt at ease with this mosque,” Elisonder Antonneli, the head of Verona city council, said.
“This place will be turned into a park and a car parking space and will be named after (Italian writer) Oriana Fallaci.”
Fallaci, who died in 2006, was notorious for anti-Islam stances.
Following the 9/11 attacks, the far-right writer published a book entitled “Rage and Pride” in which she ridiculed the Noble Qur’an.
She has also authored another book “The Force of Reason” in which she warned that Europe was turning into “an Islamic province, an Islamic colony” and that “to believe that a good Islam and a bad Islam exist goes against all reason.”
The Northern League has four ministers in Silovio Berlusconi’s government, including the portfolio of the Interior.
The League grabbed 8 percent of the vote in last month’s general elections, securing Berlusconi’s right-wing coalition a comfortable majority in the parliament.
The party has nearly doubled its parliamentary strength from 4.5 percent two years ago.
The Northern League is widely accused of racism with many critics calling it the BNP of Italy, a reference to the British right-wing party.
Its election campaign played on issues such as immigration crime and economic and cultural fears from immigration.
Hard Time
Abu Shwaima, the Muslim leader, said Italian Muslims will face hard times under the far-right league.
“We believe the life of Italian Muslims will get more complicated,” he said.
He said Muslims in the city of Verona used to find spiritual comfort at the razed mosque.
“The mosque destruction is sign of spiraling Islamophobia in many European countries,” he said.
There are nearly 20,000 Muslims in Verona.
“I used to pray in the mosque for years,” an Italian Muslim in Verona told IOL, requesting anonymity.
“But this Friday I went to the mosque for prayers but I could not as it was razed.
“We live in a state of anticipation and fear after the mosque was destroyed and we want Arab and Muslim governments to pile pressures on Italy to stop anti-immigrant and anti-Islam policies.”
Abu Shwaima, the Muslim leader, has a similar message.
“We want to tell the Muslim world that mosques’ construction in Italy is almost a mission impossible.
“Except for the Milan-based Islamic Center and the Rome mosque, there are no real mosques in Italy.”
Last November, former Italian deputy Education Minister and League member Mariella Mazzetto angered Muslims after parading a pig on the site of a planned mosque in the northern city of Padua.
Two months earlier, League senator Roberto Calderoli called for a “Pig Day” protest against the mosque construction in the northern city of Bologna.
In 2006, protesters left a pig’s head at a mosque building site in the central Italian city of Tuscany.
Italy has a Muslim population of some 1.2 million, including 20,000 reverts, according to unofficial estimates.
source:
http://www.daily.pk/world/europe/81-europe/3940-anti-islam-islamophobia-italy-demolishes-verona-mosque.html
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Capitalism in an Apocalyptic Mood
Capitalism in an Apocalyptic Mood
An apocalyptic mood has seized the highest levels of global capital as the global financial system continues to implode. This implosion is but the latest financial crisis to wrack global capitalism. Financial crises are inevitable since capitalist growth has increasingly been driven by speculative bubbles such as the housing bubble in the United States. The increasingly uncontrolled financial gyrations stem from the increasing divergence between an expansive financial economy and a stagnant real economy. This “disconnect” stems from the persistent stagnationist trends in the real economy owing to overproduction or overcapacity. The search for profitability is capitalism’s driving force, and increasingly, significant profits can only be obtained from financial speculation rather than investment in industry. This is, however, a volatile and unstable process since the divergence between momentary financial indicators like stock and real estate prices and real values can proceed only up to a point before reality bites back and enforces a “correction.” The bursting of the US housing bubble is one such correction, and it is leading not only to a recession in the US but to a global downturn owing to the unprecedented level of integration fostered by corporate-led globalization. It will not be easy to restore dynamism by fostering another speculative bubble, for instance, by resorting to “military Keynesianism.”
“We have to pay for the sins of the past.” Klaus Schwab, key organizer of the Davos elite jamboree
Skyrocketing oil prices, a falling dollar, and collapsing financial markets are the key ingredients in an economic brew that could end up in more than just an ordinary recession. The falling dollar and rising oil prices have been rattling the global economy for sometime, but it is the dramatic implosion of financial markets that is driving the financial elite to panic.
Capitalist Apocalypse?
And panic there is. Even as it characterized Federal Reserve Board Chairman Ben Bernanke’s deep cuts amounting to a 1.25 points off the prime rate in late January as a sign of panic, the Economist admitted that “there is no doubt that this is a frightening moment.” The losses stemming from bad securities tied up with defaulted mortgage loans by “subprime” borrowers are now estimated to be in the range of about $400 billion, but, as the Financial Times warned, “the big question is what else is out there” at a time that the global financial system “is wide open to a catastrophic failure.” What is “out there” is suggested by the fact that it has only been in the last few weeks that a series of Swiss, Japanese, and Korean banks have owned up to billions of subprime-related losses. The globalization of finance was, from the beginning, the cutting edge of the globalization process, and it was always an illusion to think that the subprime crisis could be confined to US financial institutions, as some analysts had thought.
Some key movers and shakers sounded less panicky than resigned to some sort of apocalypse. At the global elite’s annual weeklong party at Davos in late January, George Soros sounded positively necrological, declaring to one and all that the world was witnessing “the end of an era.” World Economic Forum host Klaus Schwab spoke of capitalism getting its just desserts, saying, “We have to pay for the sins of the past.” “It’s not that the pendulum is now swinging back to Marxist socialism,” he told the press, “but people are asking themselves, ‘What are the boundaries of the capitalist system?’ They think the market may not always be the best mechanism for providing solutions.”
Ruined Reputations and Policy Failures
While some appear to have lost their nerve, others have seen the financial collapse diminish their stature.
As chairman of President’s Bush’s Council of Economic Advisers in 2005, Ben Bernanke attributed the rise in US housing prices to “strong economic fundamentals” instead of speculative activity, so is it any wonder, ask critics, why, as Fed Chairman, he failed to anticipate the housing market’s collapse stemming from the subprime mortgage crisis? His predecessor, Alan Greenspan, however, has suffered a bigger hit, moving from iconic status to villain of the piece in the eyes of some. They blame the bubble on his aggressively cutting the prime rate to get the US out of recession in 2003 and restraining it at low levels for over a year. Others say he ignored warnings about aggressive and unscrupulous mortgage originators enticing “subprime” borrowers with mortgage deals they could never afford.
The scrutiny of Greenspan’s record and the failure of Bernanke’s rate cuts so far to reignite bank lending has raised serious doubts about the effectiveness of monetary policy in warding off a recession that is now seen as all but inevitable. Nor will fiscal policy or putting money into the hands of consumers do the trick, according to some weighty voices. The $156 billion stimulus package recently approved by the White House and Congress consists largely of tax rebates, and most of these, according to New York Times columnist Paul Krugman, will go to those who don’t really need it. The tendency will thus be to save rather than spend the rebates in a period of uncertainty, defeating their purpose of stimulating the economy. The specter that now haunts the US economy is Japan’s experience of virtually zero growth per annum and deflation in the nineties and early part of this decade despite one stimulus package after another after Tokyo’s great housing bubble deflated in the late 1980’s.
The Inevitable Bubble
Even as the finger-pointing is in progress, many analysts remind us that if anything, the housing crisis should have been expected all along. The only question was when it would break. As progressive economist Dean Baker of the Center for Economic Policy Research noted in an analysis several years ago, “Like the stock bubble, the housing bubble will burst. Eventually, it must. When it does, the economy will be thrown into a severe recession, and tens of millions of homeowners, who never imagined that house prices could fall, likely will face serious hardship.”
The subprime mortgage crisis was not a case of supply outrunning real demand. The “demand” was largely fabricated by speculative mania on the part of developers and financiers that wanted to make great profits from their access to foreign money that flooded the US in the last decade. Big ticket mortgages were aggressively sold to millions who could not normally afford them by offering low “teaser” interest rates that would later be readjusted to jack up payments from the new homeowners. These assets were then “securitized”with other assets into complex derivative products called “collateralized debt obligations” (CDO’s) by the mortgage originators working with different layers of middlemen who understated risk so as to offload them as quickly as possible to other banks and institutional investors. The shooting up of interest rates triggered a wave of defaults and many of the big name banks and investors— including Merrill Lynch, Citigroup, and Wells Fargo—found themselves with billions of dollars worth of bad assets that had been given the green light by their risk assessment systems.
The Failure of Self Regulation
The housing bubble is but the latest of some 100 financial crises that have swiftly followed one another ever since Depression-era capital controls began being lifted at the onset of the neoliberal era in the early 1980’s. The calls now coming from some quarters for curbs on speculative capital have an air of déjà vu to many observers. After the Asian Financial Crisis of 1997, in particular, there was a strong clamor for capital controls, for a “new global financial architecture.” The more radical of these called for currency transactions taxes such as the famed Tobin Tax that would slow down capital movements or for the creation of some kind of global financial authority that would, among other things, regulate relations between northern creditors and indebted developing countries.
Global finance capital, however, resisted any return to state regulation. Nothing came of the proposals for Tobin taxes. Even a relatively weak “sovereign debt restructuring mechanism” akin to the US Chapter Eleven to provide some maneuvering room to developing countries undergoing debt repayment problems was killed by the banks despite its being proposed by Ann Krueger, the conservative American deputy managing director of the IMF. Instead, finance capital promoted what came to be known as the Basel II process, described by political economist Robert Wade as steps toward global economic standardization that “maximize [global financial firms’] freedom of geographical and sectoral maneuver while setting collective constraints on their competitive strategies.” The emphasis was on private sector self surveillance and self policing aiming at greater transparency of financial operations and new standards for capital. Despite the fact that it was Northern finance capital that triggered the Asian crisis, the Basel process focused on making developing country financial institutions and processes transparent and standardized along the lines of what Wade calls the “Anglo-American” financial model.
While there were calls for regulation of the proliferation of many of the new, sophisticated financial instruments such as derivatives being placed on the market by developed country financial institutions, these got nowhere. Assessment and regulation of derivatives were to be left to market players who had access to sophisticated quantitative “risk assessment” models that were being developed.
Focused on disciplining developing countries, the Basel II process accomplished so little in the way of self regulation of global financial from the North that even Wall Streeter Robert Rubin, formerly Secretary of the Treasury under President Clinton, warned in 2003 that “future financial crises are almost surely inevitable and could be even more severe.” As for risk assessment of derivatives such as the “collaterized debt obligations” (CDOs) and “structured investment vehicles” (SIVs)-the cutting edge of what the Financial Times has described as “the vastly increased complexity of hyperfinance”—the process collapsed almost completely, with the most sophisticated quantitative risk models left in the dust as risk was priced according to one rule by the sellers of securities: Underestimate the real risk and pass it on to the suckers down the line. In the end, it was difficult to distinguish what was fraudulent, what was poor judgment, what was plain foolish, and what was out of anybody’s control. As one report on the conclusions of a recent meeting of the Group of Seven’s Financial Stability Forum put it:
There is plenty of blame to go around for the financial chaos: The US subprime mortgage market was marked by poor underwriting standards and ‘some fraudulent practices.’ Investors didn’t carry out sufficient due diligence when they bought mortgage-backed securities. Banks and other firms managed their financial risks poorly and failed to disclose to the public the dangers on and off their balance sheets. Credit-rating companies did an inadequate job of evaluating the risk of complex securities. And the financial institutions compensated their employees in ways that encouraged excessive risk-taking and insufficient regard to long-term risks.
The Specter of Overproduction
It is not surprising that the G 7 report sounded very much like the post-mortems of the Asian financial crisis and the dot.com bubble. One chieftain of a financial corporation chief writing in the Financial Times captured the basic problem running through these speculative manias, perhaps unwittingly, when he claimed that “there has been an increasing disconnection between the real and financial economies in the past few years. The real economy has grown…but nothing like that of the financial economy, which grew even more rapidly-until it imploded.” What his statement does not tell us is that the disconnect between the real and the financial is not accidental, that the financial economy expanded precisely to make up for the stagnation of the real economy.
This growing gap between the financial and the real cannot be comprehensively understood without referring to the crisis of overaccumulation that overtook the center economies in the late seventies and 1980’s, a phenomenon that is also referred to as overproduction or overcapacity.
The golden period of postwar growth globally that skirted major crises for nearly 25 years was due to the massive creation of effective demand via rising wages for labor in the North, the reconstruction of Europe and Japan, and the import-substituting industrialization in Latin America and other parts of the South. This was done principally via state intervention in the economy. This dynamic period came to a close in the mid-seventies, with stagnation setting in, owing to global productive capacity outrunning global demand, which was constrained by continuing deep inequalities in income distribution. According to the calculations of Angus Maddison, the premier expert on historical statistical trends, the annual rate of growth of global gross domestic product (GDP) fell from 4.9 per cent in what is now regarded as the golden age of the post-World War II Bretton Woods system, 1950-73, to 3 per cent in 1973-89, a drop of 39 per cent. These figures reflected the wrenching combination of stagnation and inflation in the North, the crisis of import substitution industrialization in the South, and erosion of profit margins all around.
In the eighties and nineties, global capital blazed three escape routes from the specter of stagnation. One was neoliberal restructuring, which included redistribution of income towards the top via tax cuts for the rich, deregulation, and an assault on organized labor. Neoliberalism took the form of Thatcherism and Reaganism in the developed North and World Bank and International Monetary Fund (IMF)-imposed structural adjustment in the global South.
Another was corporate-driven globalization or “extensive accumulation,” which opened up markets in the developing world and moved capital from high-wage to low-wage areas. As Rosa Luxemburg long ago pointed out in her classic The Accumulation of Capital, capital needs to constantly integrate precapitalist societies to the capitalist system to shore up the fall in the rate of profit. In the last two decades, the most spectacular case of incorporating a precapitalist society into the global capitalist system was China, which became both the world’s second biggest exporter and the primary destination of foreign investment. This was, however, a double edged sword for capitalism, as we shall later see.
A third was the process we are mainly concerned with here: “intensive accumulation or “financialization,” that is, the channeling of investment towards financial speculation, where much greater returns were to be derived than in industry, where profits were largely stagnant. Finance capital forced the elimination of capital controls, the result being the rapid globalization of speculative capital to take advantage of differentials in interest and foreign exchange rates in different capital markets. These volatile movements, the result of capital’s liberation from the fetters of the post-war Bretton Woods financial system, was one source of instability. Another was the proliferation of novel sophisticated speculative instruments like derivatives that escaped monitoring and regulation. Instability derived ultimately from the fact that speculative finance boiled down to an effort to squeeze more “value” out of already created value instead of creating new value since the latter option was precluded by the problem of overproduction in the real economy.
The disconnect between the real economy and the virtual economy of finance was evident in dot.com bubble of the 1990’s. With profits in the real economy stagnating, the smart money flocked to the financial sector. The workings of this virtual economy were exemplified by the rapid rise in the stock values of Internet firms which, like Amazon.com, still had to turn a profit. The dot.com phenomenon probably extended the boom of the 1990’s by about two years. “Never before in US history,” Robert Brenner wrote, “had the stock market played such a direct, and decisive, role in financing non-financial corporations, thereby powering the growth of capital expenditures and in this way the real economy. Never before had a US economic expansion become so dependent upon the stock market’s ascent.” But the divergence between momentary financial indicators like stock prices and real values could only proceed to a point before reality bit back and enforced a “correction.” And the correction came savagely in the dot.com collapse of 2002, in the form of the wiping out of $7 trillion in investor wealth.
A long recession was avoided, but it was only by encouraging another bubble, the housing bubble, and here, as noted earlier, Greenspan played a key role by cutting the prime rate to a 45-year low of 1 per cent in June 2003, holding it there for a year, then raising it only gradually, in quarter-percentage-increments. As Dean Baker put it, “an unprecedented run-up in the stock market propelled the US economy in the late nineties and now an unprecedented run-up in house prices is propelling the current recovery.” The result was that real estate prices rose by 50 per cent in real terms, with the run-ups, according to Baker, being close to 80 per cent in the key bubble areas of the West Coast, the East Coast, North of Washington, DC, and Florida. How big was the bubble created? It is estimated by Baker that the run-up in house prices “created more than $5 trillion in real estate wealth compared to a scenario where prices follow their normal trend growth path. The wealth effect from house prices is conventionally estimated at five cents to the dollar, which means that annual consumption is approximately $250 billion (2 per cent of gross domestic product [GDP]) higher than it would be in the absence of the housing bubble.”
The China Factor
The housing bubble fueled US growth, which was exceptional given the stagnation that has gripped most of the global economy in the last few years. During this period, the global economy has been marked by underinvestment and persistent tendencies toward stagnation in most key economic regions apart from the US, China, India, and a few other places. Weak growth has marked most other regions, notably Japan, which was locked until very recently into a one per cent GDP growth rate, and Europe, which grew annually by 1.45 per cent in the last few years.
With stagnation in most other areas, the US has pulled in some 70 per cent of all global capital flows. A great deal of this has come from China. Indeed, what marks this current bubble period is the role of China as a source not only of goods for the US market but also capital for speculation. The relationship between the US and Chinese economies is what I have characterized elsewhere as “chain-gang economics”: On the one hand, China’s economic growth has increasingly depended on the ability of American consumers to continue their debt financed spending spree to absorb much of the output of China’s production. On the other hand, this relationship in depends on a massive financial reality: the dependence of US consumption on China’s lending the US Treasury and private sector dollars from the reserves it accumulated from its yawning trade surplus with the US-some one trillion so far, according to some estimates. Indeed, a great deal of the tremendous sums China-and other Asian countries—lent to American institutions went to finance middle class spending on housing and other goods and services, prolonging the US’s fragile economic growth but only by raising consumer indebtedness to dangerous, record heights.
The China-US coupling has had massive consequences for the global economy. One has to do with the addition of massive new productive capacity by American and other foreign investors moving to China. This has aggravated the persistent problem of overcapacity and overproduction. One indicator of persistent stagnation in the real economy is the aggregate annual global growth rate, which averaged 1.4 per cent in the 1980’s and 1.1 per cent in the 1990’s, compared to 3.5 per cent in the 1960’s and 2.4 per cent in the 1970’s. Moving to China to take advantage of low wages may shore up profit rates in the short term but, as it adds to overcapacity in a world where a rise in global purchasing power is limited owing to growing inequalities, it erodes profits in the long term. And indeed, the profit rate of the largest 500 US transnational corporations, which fell drastically from +4.9 per cent in the 1954-59, to +2.04 in 1960-69, to -5.30 in 1989-89, -2.64 in 1990-92, and -1.92 in 2000-2002. Behind these figures, notes Philip O’Hara, was the specter of overproduction: “Oversupply of commodities and inadequate demand are the principal corporate anomalies inhibiting performance in the global economy.” The succession of speculative manias in the US have had the function of absorbing investment that did not find profitable returns in the real economy and thus not only artificially propping up the US economy but also “holding up the world economy,” as one IMF document put it. Thus, with the bursting of the housing bubble and the seizing up of credit in almost the whole financial sector, the threat of a global downturn is very real.
Decoupling or Chain-Gang Economics?
In this regard, talk about a process of “decoupling” of regional economies, especially the Asian economic region, from the United States has been without substance. True, most of the other economies in East and Southeast Asia have been pulled along by the Chinese locomotive. In the case of Japan, for instance, a decade-long stagnation was broken in 2003 by the country’s first sustained recovery, fueled by exports to slake China’s thirst for capital and technology-intensive goods; exports shot up by a record 44 per cent, or $60 billion. Indeed, China became the main destination for Asia’s exports, accounting for 31 per cent while Japan’s share dropped from 20 to 10 per cent. As one account pointed out, “In country-by-country profiles, China is now the overwhelming driver of export growth in Taiwan and the Philippines, and the majority buyer of products from Japan, South Korea, Malaysia, and Australia.”
However, as research by Jayati Ghosh and C.P. Chandrasekhar has underlined, China is indeed importing intermediate goods and parts from these countries but only to put them together mainly for export as finished goods to the US and Europe, not for its domestic market. Thus, “if demand for Chinese exports from the US and the EU slow down, as will be likely with a US recession, this will not only affect Chinese manufacturing production, but also Chinese demand for imports from these Asian developing countries.” Perhaps the more accurate image is that of a chain gang linking not only China and the United States but a host of other satellite economies whose fates are all tied up with the now deflating balloon of debt-financed middle class spending in the US.
New Bubbles to the Rescue?
One must not, however, overestimate the resiliency of capitalism. Many are now asking: After the collapse of the dot.com boom and the housing boom, is there a third line of defense against stagnation owing to overcapacity? One theory is that military spending could be a way that the government might pull the US out of the jaws of recession. And, indeed, the military economy did play a role in bringing the US out of the 2002 recession, with defense spending in 2003 accounting for 14 per cent of GDP growth while representing only four per cent of the GDP of the US. According to estimates cited by Chalmers Johnson, defense-related expenditures will exceed $1 trillion for the first time in history in 2008.
Stimulus could also come from the related “disaster capitalism complex” so well studied by Naomi Klein—that “full fledged new economy in home land security, privatized war and disaster reconstruction tasked with nothing less than building and running a privatized security state both at home and abroad.” Klein says that, in fact, “the economic stimulus of this sweeping initiative proved enough to pick up the slack where globalization and the dot.com booms had left off. Just as the Internet had launched the dot.-com bubble, 9/11 launched the disaster capitalism bubble.” This subsidiary bubble to the real estate bubble appears to have been relatively unharmed so far by the collapse of the latter.
It is not easy to track the sums circulating in the disaster capitalism complex, but one indication is that InVision, a General Electric affiliate, producing high tech bomb detection devises used in airports and other public spaces received an astounding $15 billion in Homeland Security contracts between 2001 and 2006.
Whether or not “military Keynesianism” and the disaster capitalism complex can in fact play the role played by financial bubbles is open to question. For to feed them, at least during the Republican administrations, has meant reducing social expenditures, resulting in their positive employment effects being overwhelmed fairly quickly by reductions in effective demand. A study Dean Baker cited by Johnson found that after an initial demand stimulus, by about the sixth year, the effect of increased military spending turns negative. After 10 years of increased defense spending, there would be 464,000 fewer jobs than in a scenario of lower defense spending.
But even more important as a limit to military Keynesianism and disaster capitalism is that the military engagements to which they are bound to lead are likely to create quagmires such as Iraq and Afghanistan that could trigger a backlash both abroad and at home. This would eventually erode the legitimacy of these enterprises, reduce their access to tax dollars, and erode their viability as sources of economic expansion in a contracting economy.
Yes, global capitalism may be resilient, but it looks like its options are increasingly limited. The forces making for the long term stagnation of the global capitalist economy are now too heavy to be easily shaken off by the economic equivalent of mouth-to-mouth resuscitation.
URL: http://www.cadtm.org
Dr. Walden Bello is president of the Freedom from Debt Coalition and senior analyst at Focus on the Global South.
http://www.focusweb.org/capitalism-in-an-apocalyptic-mood.html?Itemid=92
