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China Buys Euros as Fear of World Depression Grows

Webster G. Tarpley
TARPLEY.net
August 25, 2010

The US Treasury has just announced that China’s official holdings of U.S. Treasury securities declined by about $30 billion between April and May of this year, from about $900 billion to some $868 billion. According to the US authorities, this means that Chinese holdings of US government paper are now at the lowest level in the past year. A 2% to 3% decline in a month does not qualify as massive dumping, but simply means that China is in the process of diversification. It is also very likely that China has more U.S. Treasury bonds than this official count would indicate, quite possibly through proxy purchases via Hong Kong and other places.

With the sales of existing homes in the United States falling by 27% this morning, together with disastrous statistics regarding unemployment and foreclosures, it ought to be obvious that the US economy is in depression. Even experts interviewed on CNBC are beginning to wake up to this obvious fact.

World Bond Bubble

On August 24, the Treasury’s two-year note reached its highest price in recorded history, meaning that the yield was at a record low. The entire world is piling into short-term U.S. Treasury paper, and many buyers cannot get enough. This makes a mockery out of the right wing reactionary refrain that the US equals Greece and soon will be unable to borrow. If, according to the crackpot Austrian theory, markets know things that individual humans cannot know, then surely the market is signaling a great desire for T
Treasury bills and Treasury notes at the short end. The main reason for this demand is of course fear and panic – coming from the growing awareness that the world is indeed experiencing the second wave of a world economic depression of colossal proportions.

There is now a large-scale international bond bubble involving, among others, US treasuries and German Bunds. Since the flash crash of May 6, many investors have fled the stock markets entirely. It is still too soon to sound the alarm on deflation ahead, but deflation has now appeared over the horizon as a concrete possibility – partly because so many major financial players are now convinced that deflation is the wave of the future. If this were to come about, it would mean a depression looking much more like 1929-1933 than the relatively more mild situation we have experienced over the last two years. The depression may be taking a turn toward something far more excruciating for the masses of the population. One by-product of that would be vastly decreased popular gullibility for the anti-government recipes of the libertarian Austrian school, which are tailored for those who have money, and which have very little appeal to people who are unemployed, homeless, and starving.

Also on August 24, the Japanese yen hit a 15-year high compared to the dollar, and a nine-year high compared to the euro. This kind of currency championship is a Pyrrhic victory which nobody wants, since it means the Japanese exports are in the process of being strangled. This is true currency chaos and world depression at the same time, pointing once again towards the urgent need to restore the fixed rate system of Bretton Woods, which was destroyed 39 years ago this month by Nixon and Kissinger, urged on by Milton Friedman and other snake oil Continue reading China Buys Euros as Fear of World Depression Grows

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Neocon Petraeus Stakes Out Conflict with Obama over July 2011 Afghanistan Pullout; Lays Foundation for GOP Presidential Draft in 2012

Webster G. Tarpley
TARPLEY.net
August 19, 2010

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Stock Market Tremors, Fed Pessimism, US Payments Deficit Presage Dollar Disintegration After Failure of US-UK Blitzkrieg Against Euro; Wall Street In Flight Forward Towards Iran War, Oil Price Spike To Prop Up Greenback

Webster G. Tarpley
TARPLEY.net
August 11, 2010

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Fidel Castro Warns of Imminent Nuclear War; Admiral Mullen Threatens Iran; US-Israel Vs. Iran-Hezbollah Confrontation Builds On Multiple Fronts

Navy Ships and Planes

Webster G. Tarpley
TARPLEY.net
August 9, 2010

On July 21, the present writer offered the evaluation that an attack on Iran by the United States and Israel was now emphatically back on the agenda after a two-year hiatus.1 More than two weeks after issuing that warning, it is possible to offer a second installment of evidence to buttress the original finding. The author considers that this evidence is now sufficient to confirm the July 21 analysis. The contours of the coming conflagration are becoming somewhat more distinct, and give us reason to fear not just a Middle East regional war, but possibly even a world war, with increasing danger that nuclear weapons will come into play.

Fidel Castro Convokes Parliament, Issues Dramatic War Warning

The most dramatic and outspoken confirmation of the views expressed here on July 21 comes from Fidel Castro, the first secretary of the Cuban Communist Party, and the de facto head of state of Cuba. During the spring and summer of 2010, Castro has referred several times to the growing war danger among the United States, Israel, and Iran. On August 8, Castro took the unusual step of convening a special session of the Cuban parliament to discuss the nuclear war danger threatening the peace of the world. Essentially, Castro called for the worldwide mobilization of peace-loving forces to avoid the worst, and included a special personal appeal to Obama.

Castro: Hundreds Of Millions Of Deaths

According to the Cuban News Agency, this war avoidance agenda ‘was the purpose of the Cuban Revolution leader’s address to the Cuban parliament summoned for an extraordinary session in Havana, due to the urgency of mobilizing the world, faced with the danger of a nuclear war that would be triggered by a US-Israeli led aggression on Iran.’ Castro said that Obama, ‘in the instant he gives the order, which is the only one he could give due to the power, speed and countless number of missiles accumulated in an absurd competition between powers, he would be ordering the instant death not only of hundreds of millions of people, including, an immeasurable number of inhabitants of his own country, but also the crews of all US ships in the seas near Iran.” “Simultaneously, the war would break out in the Near and Far East and across Eurasia,” said Fidel. Otherwise, if the war breaks out, the current social order will abruptly vanish and the price will be much higher, Fidel warned.’2

Whatever one may think of Castro personally and politically, he is unquestionably one of the longest-serving national leaders in today’s world, and brings to the table his experience during the Cuban missile crisis of October 1962. Castro knows, in short, what a nuclear confrontation looks like from the inside. The American public would do well to put aside the arrogance and impudence of the US mass media and pay attention to why this sick old man is putting so much of his flagging energy into an attempt to alert the world to a danger which Continue reading Fidel Castro Warns of Imminent Nuclear War; Admiral Mullen Threatens Iran; US-Israel Vs. Iran-Hezbollah Confrontation Builds On Multiple Fronts

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China Surpasses US in Energy Consumption, While The Malthusian Crackpots of The Obama Regime Fiddle with Cap and Trade

Webster G. Tarpley
TARPLEY.net
July 22, 2010

Harry Reid says he is dropping the insane cap and trade carbon tax legislation, but beware of an attempt to pass this favorite bill of rich elitists and Malthusian fanatics. The attempt to bootleg cap and trade into law may come during the November-December lame duck session, with the votes of 30-40 dead souls, not of Gogol but of defeated Democrats. Politicians who have lost their seats will be looking to Wall Street for jobs or to Obama for patronage, and they will vote for anything. In the meantime, the world’s first Renewable Energy Ministerial Conference took place in Washington earlier this week. This was the usual Malthusian litany of gimmicks — solar, wind, batteries, and the like. This conference of 24 nations admitted that the world needed 500 new power plants, but decided they should not be built; only windmills and solar cells should be considered, in their grotesque view. This means there will be no development, and only genocide, for Africa and south Asia. The conference was attended by “stakeholders,” in reality rent seekers. The problem with their wind and solar gadgets is that they are uneconomical and require onerous government subsidies unless the price of oil rises far above the current level. (Maybe the idea of an attack on Iran and the closing of Hormuz, which would get oil to $500 per barrel, was discussed during the closed session of the first day — like the Bilderbergers at Saltsjobaden in 1973, when they discussed a 400% increase in the oil price, which arrived soon after.) The big news at the conference was that, for the first time ever, China has surpassed the United States in energy consumption. Ten years ago China consumed half the US total, and now they are ahead by 4% as of 2009. This signals the looming energy decadence and the thermodynamic decline of the US. China is also about to surpass the US in manufacturing, with the US losing the top spot it has occupied since passing Britain in this department in the 1890s. The Chinese will build 1,000 gigawatts of electric generating capacity by 2025, an amount equal to the current total US production. This includes 21 modern nuclear plants; the US is still building none. A rational US government would respond to this emergency by commencing the construction of 100 ultra-modern HTR reactors to replace the aging US reactors. But the US delegation was led by Energy Secretary Cho, who has embraced the crackpot idea of painting roads and roofs white to promote cooling. Such schemes are no substitute for US energy modernization after 30-plus years of stagnation and decay. Obama’s energy czarina Carol Browner, an expert profiteer and lobbyist, was also on hand. The insane ban on offshore drilling is an example of her handiwork. Nor should we forget Obama science adviser John Holdren, a quackademic and charlatan whose tenure in this post is a national scandal. These Malthusian bureaucrats hate real energy production, and want the price of energy to be as high as possible. As long as these sociopaths run US energy policy, it can be assumed that the US will continue to fall behind China, since without modern energy production there can be no recovery from the current depression.

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Obama is Preparing to Bomb Iran

Webster G. Tarpley
TARPLEY.net
July 21, 2010

After about two and a half years during which the danger of war between the United States and Iran was at a relatively low level, this threat is now rapidly increasing. A pattern of political and diplomatic events, military deployments, and media chatter now indicates that Anglo-American ruling circles, acting through the troubled Obama administration, are currently gearing up for a campaign of bombing against Iran, combined with special forces incursions designed to stir up rebellions among the non-Persian nationalities of the Islamic Republic. Naturally, the probability of a new fake Gulf of Tonkin incident or false flag terror attack staged by the Anglo-American war party and attributed to Iran or its proxies is also growing rapidly.

The moment in the recent past when the US came closest to attacking Iran was August-September 2007, at about the time of the major Israeli bombing raid on Syria.1 This was the phase during which the Cheney faction in effect hijacked a fully loaded B-52 bomber equipped with six nuclear-armed cruise missiles, and attempted to take it to the Middle East outside of the command and control of the Pentagon, presumably to be used in a colossal provocation designed by the private rogue network for which Cheney was the visible face. A few days before the B-52 escaped control of legally constituted US authorities, a group of antiwar activists issued The Kennebunkport Warning of August 24-25, 2007, which had been drafted by the present writer.2 It was very significant that US institutional forces acted at that time to prevent the rogue B-52 from proceeding on its way towards the Middle East. The refusal to let the rogue B-52 take off reflected a growing consensus in the US military-intelligence community and the ruling elite in general that the Bush-Cheney-neocon policy of direct military aggression towards all comers had become counterproductive and very dangerous, running the risk of a terminal case of imperial overstretch. Continue reading Obama is Preparing to Bomb Iran

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Obama-Dodd-Frank FinReg Monstrosity Delays Derivatives Curbs until 2022!

Webster G. Tarpley
TARPLEY.net
July 15, 2010

The Obama-Dodd-Frank financial regulation bill, a miserable excuse for real Wall Street reform, is now about to gain final approval in the Senate. This wretched bill is now supported by the New England liberal (meaning Wall Street) Republican clique including Olympia Snow, Susan Collins, and Scott Brown, who are joined by the notoriously corrupt reactionary Democrat, Ben Nelson of Nebraska. This bill will create a multitude of new regulations and a number of large new bureaucracies, but it is utterly devoid of any bright-line prohibitions against the causes of the financial panic which struck the United States in 2008, and which continues to the present day in the form of a world economic depression.

The cause of the 2008 banking panic was that zombie banks and hedge fund hyenas were speculating with toxic and highly leveraged derivatives. The new bill does virtually nothing to attack the causes of this ongoing financial disintegration. It is a total defeat for the interests of the American people, and an historic victory for the Wall Street financier oligarchy which owns both the Democratic and Republican parties.

Stockbrokers and investment bankers have battled mightily to avoid any legal compulsion to act in the best interests of their clients, who are often the retail investors which both parties claim to care so much about. The new bill will not prevent unscrupulous used-car dealers from ripping off their customers through inflated financing costs. There is nothing in the bill to stop the plague of foreclosures, which last year turned almost 4 million American families into displaced persons on the home front. There is no ban on the disastrous use of Adjustable Rate Mortgages (ARMs), the financial equivalent of time bombs, which are ruining the lives of so many millions of Americans. There is no cap on leverage banks can use in financial transactions. Despite widespread complaining about the Federal Reserve, this bill gives the Fed more regulatory power rather than less. It represents the complete triumph of the Wall Street derivatives lobby, so much so that even hardened cynics are astounded by the impudence and insolence of Obama and both parties in the Continue reading Obama-Dodd-Frank FinReg Monstrosity Delays Derivatives Curbs until 2022!

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De Gaulle as Economic Dirigist

Webster G. Tarpley
TARPLEY.net
July 14, 2010

Charles de Gaulle

Charles de Gaulle

In these dark days for France under the Sarkozy regime, we should recall some of the unique contributions of this great nation to the cause of human civilization and human progress. Over recent decades, these contributions are associated above all with the heritage of French President Charles de Gaulle, who twice saved France from catastrophe. It was 70 years ago this summer that de Gaulle issued his famous call of June 18, 1940 from London, calling on the French to resist Nazi occupation and to continue their struggle in the Second World War, thus founding the anti-fascist Free French Movement. De Gaulle deserves to be celebrated for his courage in rallying in preserving the French nation when its existence was threatened by outside invasion and by fascist forces from within.

De Gaulle also deserves high regard as a statesman. His successful and legal assumption of power as prime minister of the Fourth Republic in May 1958 defeated a number of planned coups d’état, some of which would have cast France adrift as a derelict on an ocean of adventures. During the early 1960s, de Gaulle had to defeat a number of attempted coups by disgruntled military forces and revanchist subversives who were unhappy over his successful liquidation of the French colonial problem in Algeria. His radio speeches on these occasions stand today as models of decisive and courageous national leadership in a time of crisis. The constitution which de Gaulle sponsored for the Fifth French Republic would today provide ample emergency powers for France to defeat the forces of international speculation and looting, if only there were a real French president in the Elysée palace, instead of the current negation of all the positive aspects of the French tradition.

De Gaulle’s celebrated speech in Phnom Penh, Cambodia in 1965 contained the best advice any loyal friend could have given the Johnson administration: do not become bogged down in the unwinnable war in Vietnam. On issues like the British desire to enter and subvert the European Economic Community, the future of Québec, nuclear deterrence or warfighting in Europe, the reform of the international monetary system, the quest for durable peace in the Middle East, and many others, de Gaulle provided the world with alternative approaches which were far more conducive to good results than the destructive obsessions of the Anglo-American policy elites. These Anglo-American policy elites attempted to remove him from office by violence: De Gaulle survived at least 30 serious assassination attempts, leaving no doubt that he was considered in his time the public enemy number one of those forces some refer to today as the “New World Order.” De Gaulle was a Roman Catholic and a French nationalist who managed to be patriotic, socially conservative, and economically progressive all at the same time — defying the bankrupt categories of the current sterile dichotomy of left vs. right wedge issues.

I never met General de Gaulle, but I was fortunate enough to benefit from long discussions with one of his closest and most trusted associates, Ambassador Raymond Offroi. Offroi had been the French ambassador to Mexico, and had organized de Gaulle’s triumphant visit to Mexico City in 1963, which inaugurated efforts by France in all of Latin America to provide these countries with a productive and positive alternative to the otherwise inevitable choice between domination by the United States or by the Soviet Union. Discussions with Ambassador Offroi in the United States during one of his visits here, and then in his home in the Avenue Kléber in Paris, convinced me that the full potential of the modern state as a vehicle for human progress is largely unrealized, and represents an immense opportunity for human development if the right leadership and the right reforms can be provided.

De Gaulle and Jean-Baptiste Colbert

The de Gaulle we need most of all today is very likely de Gaulle as an economist, located in the French tradition of economic dirigism which goes back to Jean-Baptiste Colbert, the French Finance Minister from 1665–1683 under Louis XIV, and known as one of the founding fathers of modern protectionism and mercantilism, inspiring Alexander Hamilton. Colbert built the Canal du Midi to link the Mediterranean with the Atlantic in what was one of the greatest works of civil engineering in the world up to that time. De Gaulle’s brand of dirigism also benefited from the theory of indicative planning developed by Jean Monnet for the Marshall Plan in Europe, as well as for the original European Coal and Steel Community. De Gaulle worked through a Commissariat du Plan, which established five year plans or sets of broad national priorities. This French approach to planning was totally different from and immensely superior to the Soviet Gosplan method of directive planning, which attempted to prescribe the actions of a national economy down to the last bolt. The French plan was simply a list of public-private projects for the immediate future, designed to meet the development and modernization needs of French society. It was worked out in close coordination with the legislative branch, and had the effect of giving the French people more of a voice in their own economic future than the methods used before or since. The dominance of monetarist and neoliberal economic thinking, in particular influenced by the Chicago school and the Austrian school, has by now virtually obliterated this positive tradition from European Union institutions. Today, we have the Europe of derivatives and wild financial speculation, the Europe of the banks and cartels, something de Gaulle never would have accepted.

De Gaulle’s forceful and effective crackdowns on financial speculators and parasitical profiteers can provide some object lessons for Continue reading De Gaulle as Economic Dirigist

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Trichet’s Fake Stress Tests Bring European Banking System to Edge of Abyss

Webster G. Tarpley
TARPLEY.net
July 11, 2010

Seventy-nine years ago this month, the German banking system disintegrated. The Danat Bank closed its doors, and only a government-declared bank holiday saved the Deutsche Bank from liquidation. This July, it may well be that the entire European banking system is poised on the brink of a similar cataclysmic event. The $31 trillion European banking system, three times bigger than the US banks, may be about to dissolve.

The first weeks of summer 2010 have brought with them a series of ominous events, quite possibly harbingers of a new wave of panic at the door. In one 5-minute period, the stock of Citigroup, one of the leading US zombie banking institutions, collapsed 17% within a few minutes, and the stock had to be halted. A vigorous intervention by the ubiquitous Plunge Protection Team clawed back much of the loss, but Citigroup still closed down 7% on the day — a rout. What used to be called the New York stock market is now the plaything of the frenzied geeks who run the leading high frequency trading firms, and the hapless small investor is at their mercy.

At the end of June, the bucket shop known as the credit default swaps market was showing the second highest levels of fear registered thus far concerning an imminent default by Greece and other members of the Southern tier of the euro. A bet against Greek debt was quoted at 1,001 basis points, down just slightly from the all time record registered in the first week of June. In general, the credit default swaps-jobbers were showing a 40% likelihood of Continue reading Trichet’s Fake Stress Tests Bring European Banking System to Edge of Abyss

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FBI Indicts Ten as Alleged Russian Spies; Timing of Case and Nature of Charges are Highly Suspect

Webster G. Tarpley
TARPLEY.net
June 28, 2010

In the wake of the Medvedev-Obama hamburger summit, most normalized US-Russian parley of its kind in history, the FBI has launched indictments of 10 alleged Russian spies, who were not government officials and who had no access to US state secrets. There is no indication so far that the accused succeeded in reporting any valuable information. The FBI’s allegations concentrate rather on cat and mouse games between their agents and the defendants that could easily come out of the pages of Ian Fleming or John LeCarré. Skepticism based on this case is enhanced by the current media campaign around Sergei Tretyakov, supposedly a high-level defector from the Russian SVR foreign intelligence who claims that he was station chief in New York for five years. “The cold war never ended,” is Tretyakov’s main talking point. On June 17, Defense Secretary Robert Gates, who owes his career to the sponsorship he enjoyed from Russophobe Zbigniew Brzezinski in the Carter National Security Council, told the Senate Armed Services Committee that Russia is “schizophrenic” about Iran — torn between fear of Iran as a security threat and the desire to cash in on lucrative trade deals. We are thus delaing with a pattern of events that add up to something of a neo-McCarthyite anti-Russian campaign. Is this campaign the handiwork of a US intelligence faction which does not like the current US-Russia rapprochement? The strident anti-Russian line of the Washington Post shows that a significant anti-Russian faction continues to agitate in Washington.

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