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Posts Tagged ‘Pax Americana’

In Yumm-Rika There is no Corruption or How IAC Completely Gets The Story Wrong!

July 14, 2012 6 comments

For reasons that are unclear to me, Indian activistas think that India alone faces a corruption issue. Ignorance or willful negligence?

Globally Govt. has become a set of slogans.  |  Matt Wuerker cartoon in politico.com on December 01, 2011  |  Click for image.

Globally Govt. has become a set of slogans. | Matt Wuerker cartoon in politico.com on December 01, 2011 | Click for image.

Impotent pin-pricks

This tweet refers to report by India Against Corruption (IAC) on the link between Omita Paul and Pranab Mukherjee. Based on significant surmise, innuendo, conclusions, suspicions, this report is quite short on fact.

To start with, the commendation of Rajat Gupta’s conviction, makes me doubt the integrity of this report. Domestic and global media who have tracked Rajat Gupta’s prosecution agree that the trial was based on circumstantial inconvenience of Rajat Gupta – rather than any evidence.

Subsequent events have shown far bigger scandals – for which the US DoJ or other Western authorities have done little. There is nothing that makes me doubt that the DoJ went after weak targets like Rajat Gupta. The DoJ team, led by Preet Bharara, went after Rajat Gupta, while in the same Goldman Sachs there were more viable and pressing targets – like David Loeb.

Hundreds of trillions of loans are done on the basis of the LIBOR – a compromised benchmark, for which no one is going to jail?

Of course waste by US Govt. does not mean that Indian Govt can also ahead and waste.  But these silly examples of 'It does happen in the US.' has to stop.  |  Matt Wuerker cartoon from .politico.com on January 26, 2011  |  Click for image.

Of course waste by US Govt. does not mean that Indian Govt can also ahead and waste. But these silly examples of ‘It does happen in the US.’ has to stop. | Matt Wuerker cartoon from .politico.com on January 26, 2011 | Click for image.

False Flags

More than this remark on Rajat Gupta, the basis of IAC campaign is false.

It rests on two very weak pillars.

One – Corruption exists in India alone. Indians alone are corrupt. Indians alone tolerate corruption. None of this true.

Two – You can have an ever-expanding State that will rule with brutal honesty – and the State will  have more powers, more money, and become wiser and more benign.

Compared to the US$3 trillion that the US Department of Defence is unable to account for, this talk of notional loss of US$30 billion in the 2G scam makes for poor form.

Most recently, during the Iraq and Afghan Wars, the US Department of Defense has not able to properly account for (to the satisfaction of US Govt. auditors) a sum of (still being estimated) of US$2.3 trillion, says Donald Rumsfeld – to US$10 trillion, an estimate by Stephen Glain author of State vs. Defense: The Battle to Define America’s Empire.

In fiscal 1999, a defense audit found that about $2.3 trillion of balances, transactions and adjustments were inadequately documented. These “unsupported” transactions do not mean the department ultimately cannot account for them, she advised, but that tracking down needed documents would take a long time. Auditors, she said, might have to go to different computer systems, to different locations or access different databases to get information. (via Reforming Financial Management System Can Save Big  |  By Jim Garamone  |  American Forces Press Service).

For the accounting entries, $2.3 trillion was not supported by adequate audit trails or sufficient evidence to determine their validity, $2 trillion was not reviewed because of time constraints, and $2.6 trillion were supported. via DoD Audit Report No. D-2000-091 February 25, 2000 (Project No. 0FI-2115.01).

taking a look at the Department of Education, which, for the last three years hasn’t been able to get a clean audit. Then I understand that the Department of Defense shares many of the same problems that we have with the Department of Education. I think the IG just notes that in one of the audits that you went through of the 1999 financial statements included adjustments of $7.6 trillion — that’s trillion — in account adjustments, of which 2.3 trillion were supported by un — by reliable documents — were unsupported by reliable documentation. (REP. PETER HOEKSTRA (R-MI) – Testimony before the House Budget Committee on the FY 2002 Defense Budget As Delivered by Deputy Secretary of Defense Paul Wolfowitz and Comptroller Dov Zakheim, Cannon House Office Building, Wednesday, July 11, 2001.?

Pentagon contracting has been broken for decades. Former defense secretary Donald Rumsfeld said — on September 10, 2001 — that “according to some estimates, we cannot track $2.3 trillion in transactions.” The next day was 9/11, and counting Pentagon dollars was no longer a top priority. (via The Pentagon’s Marauding Fraudsters|Time).

“We know it’s gone. But we don’t know what they spent it on,” said Jim Minnery, Defense Finance and Accounting Service. (via The War On Waste).

DoD financial experts, Zakheim said, are making good progress reconciling the department’s “lost” expenditures, trimming them from a prior estimated total of $2.3 trillion to $700 billion. And, he added, the amount continues to drop. (via Zakheim Seeks To Corral, Reconcile ‘Lost’ Spending).

Problems, solutions, systems and procedures of governance have become standardized across the world.  |  Gary Varvel cartoon of May 18 2012  |  Click for image.

Problems, solutions, systems and procedures of governance have become standardized across the world. | Gary Varvel cartoon of May 18 2012 | Click for image.

In the case of the US$3 trillion (equal to notional loss of 100 2G scams), no arrests, no charge sheets, no court case. Heck, even a police report has not been filed. Thirteen years after the audit report was filed.

And IAC would like to hold the Rajat Gupta conviction as a candle to the 2G prosecution? The U.S. DoD scam was more money than the entire GDP of any other country in the world in 1999.

The Defense Department cannot account for $1.1 trillion that seems to have vanished within the tangled system of financial accounting put in place by private contractors.

Every year trillions of dollars are unaccounted for by federal agencies, and every year these same agencies are called before congressional oversight committees to explain this mismanagement of taxpayers’ funds.

Year after year the bureaucratic mea culpas are longer on process and shorter on substance, leaving overseers with little or no information that is useful to correct the gross mismanagement. Take, for instance, the financial mess at the Department of Defense (DOD).

In May, DOD Deputy Inspector General Robert Lieberman reported to Congress that “the extensive DOD efforts to compile and audit the FY [fiscal year] 2000 financial statements for the department as a whole and for the 10 subsidiary reporting entities like the Army, Navy and Air Force General Funds, could not overcome the impediments caused by poor systems and unreliable documentation of transactions and assets.”

Without ever using the word “money,” a practice common among inspectors general (IGs), the deputy IG at the Pentagon read an eight-page summary of DOD fiduciary failures. He admitted that $4.4 trillion in adjustments to the Pentagon’s books had to be cooked to compile the required financial statements and that $1.1 trillion of that amount could not be supported by reliable information. In other words, at the end of the last full year on Bill Clinton’s watch, more than $1 trillion was simply gone and no one can be sure of when, where or to whom the money went.

via DOD Can’t Find $1.1 TRILLION – Rumsfeld Inherits Financial Disaster.

And this was just one department of the US government. What about other departments?

Weak foundations

The fact is in an expanding State (an idea that IAC supports), executive discretion, latitude are essential – and misuse, abuse, doubtful use can always be alleged. The option is to either reduce the role of the State (which most of these activistas don’t want) or keep a balance between healthy accountability and executive freedom based on trust – and not on paranoia and distrust.

Exactly the opposite of Bharattantra – and all of recorded history.

End of the road. End of the cycle. It is Bharattantra from now on  |  Matt Wuerkar cartoon in politico.com on February 15, 2012  |  Click for image.

End of the road. End of the cycle. It is Bharattantra from now on | Matt Wuerkar cartoon in politico.com on February 15, 2012 | Click for image.

The entire IAC-Anna campaign is based on distrust, paranoia and suspicion. If accountability is what is needed, prosecution like the 2G is the path to be followed. Based on evidentiary basis that will withstand Third Party scrutiny.

Not only was Dimon conflicted in his role on the New York Fed but the President and CEO of the New York Fed had an equally dubious conflict of interest.

William C. Dudley has been employed by the New York Fed since January 1, 2007, first heading up the powerful Markets Group. That Group manages the supply of bank reserves in the banking system according to the mandate of the Federal Open Market Committee (FOMC). On January 27, 2009, Dudley was elevated to President and CEO of the New York Fed. Financial disclosure forms for 2008 through 2010 show that Dudley’s wife, Ann Darby, was a former Vice President of JPMorgan and had holdings of more than $1,500,000 in deferred income accounts at the firm as well as between $250,000 to $500,000 in a 401(K) plan there.

In a letter dated January 22, 2009, authored by the New York Fed’s General Counsel, Thomas C. Baxter, Jr. and Deputy General Counsel, Michael Held, two financial waivers were sought for Dudley. One involved $1.45 million in Treasury Inflation Protected Securities (TIPS) and the other involved a small monthly pension of $124.38 that Dudley would receive from his previous employer, Goldman Sachs, at age 65. (Dudley’s financial disclosure forms show over $1 million in his Federal Reserve Retirement Thrift Plan, which seems an extraordinary sum for his 5-year tenure. It could be that he was permitted to roll over most of his Goldman pension into the Federal Reserve plan, explaining why his monthly Goldman benefit at age 65 is so small.)

via Revealed: JPMorgan Paid $190,000 Annually to Spouse of Bank’s Top Regulator | Economy | AlterNet.

Similarly, without thinking Indian activistas seem to suggest that Indian Government is the most oppressive – and the US government is the most free and l9iberal.

Facts as delineated earlier in 2ndlook posts are otherwise.

On January 23rd, the Obama administration charged former CIA officer John Kiriakou under the Espionage Act for disclosing classified information to journalists about the waterboarding of al-Qaida suspects. His is just the latest prosecution in an unprecedented assault on government whistleblowers and leakers of every sort.

Kiriakou’s plight will clearly be but one more battle in a broader war to ensure that government actions and sunshine policies don’t go together. By now, there can be little doubt that government retaliation against whistleblowers is not an isolated event, nor even an agency-by-agency practice. The number of cases in play suggests an organized strategy to deprive Americans of knowledge of the more disreputable things that their government does. How it plays out in court and elsewhere will significantly affect our democracy.

Punish the Whistleblowers

The Obama administration has already charged more people — six — under the Espionage Act for alleged mishandling of classified information than all past presidencies combined. Prior to Obama, there were only three such cases in American history. (via Obama’s unprecedented war on whistleblowers – Salon.com).


David Loeb

Why Obama is Better Than All Previous US Presidents

Why has Pax Americana become insecure? It’s ability to keep the illusion of free speech, intact. That illusion is now at serious risk.

On January 23rd, the Obama administration charged former CIA officer John Kiriakou under the Espionage Act for disclosing classified information to journalists about the waterboarding of al-Qaida suspects. His is just the latest prosecution in an unprecedented assault on government whistleblowers and leakers of every sort.

Kiriakou’s plight will clearly be but one more battle in a broader war to ensure that government actions and sunshine policies don’t go together. By now, there can be little doubt that government retaliation against whistleblowers is not an isolated event, nor even an agency-by-agency practice. The number of cases in play suggests an organized strategy to deprive Americans of knowledge of the more disreputable things that their government does. How it plays out in court and elsewhere will significantly affect our democracy.

Punish the Whistleblowers

The Obama administration has already charged more people — six — under the Espionage Act for alleged mishandling of classified information than all past presidencies combined. Prior to Obama, there were only three such cases in American history. (via Obama’s unprecedented war on whistleblowers – Salon.com).

an organized strategy to deprive Americans of knowledge of the more disreputable things that their government does.

What You Dont Know and They Wont Tell – Pax Americana

September 16, 2011 Leave a comment
So unfair to the US. (Cartoon by Bendib, source bendib.com). Click for source image.

So unfair to the US. (Cartoon by Bendib, source bendib.com). Click for source image.

I have increasing difficulty in understanding what the free world means anymore.

More assassinations, covert operations, killings and bombings than by any other regime, military, terrorist  - or even a criminal group. In more than 50 countries in any month. Even if we ignore the 120 that is being waved around.

2 million people in US prisons. Human beings. All of them. US has more human beings than animals in captivity. More than in any dictatorship. More surveillance cameras and telephone tapping in the US, Britain and Europe than in any dictatorship in the world.

In a conversation with U.S. Special Operations Command spokesman Colonel Tim Nye, Nick Turse — one of the great investigative reporters on military power and national security — learned something truly shocking. He found out that, on any given day, American commandos are carrying out secret missions in 70 countries. And here is some startling news — by the end of the year, that number is likely to reach 120.That’s right. You read that correctly. America’s secret commandos are carrying out operations in 120 countries around the world.

What Nick learned provides striking new evidence of a rising clandestine Pentagon power elite, waging a secret war in about 60% of the world’s nations — a far larger number than was previously acknowledged.This represents a huge expansion by the Obama administration over that of George W. Bush, who deployed “Special Ops” troops in 60 countries.As Turse points out: Without the knowledge of the American public, a secret unit within the U.S. military — U.S. Special Operations Command SOCOM — has grown into a combined force of startling proportions.

Made up of the Army’s “Green Berets” and Rangers, Navy SEALs, Air Force Air Commandos, and Marine Corps Special Operations teams, in addition to specialized helicopter crews, boat teams, civil affairs personnel, para-rescuemen, and even battlefield air-traffic controllers and special operations weathermen, SOCOM carries out the United States’ most specialized and shadowy missions. These include assassinations, counterterrorist raids, long-range reconnaissance, intelligence analysis, foreign troop training, and weapons of mass destruction counter-proliferation operations. (via How Do We Stop the Relentless Expansion of the American Empire? | AlterNet).

Just what is the idea behind this Free World, Democracy and the Rest of the Rigmarole? Just one word comes to my mind.

माया Maya.

In fact, two words. घोर माया Ghor maya .

The shadow of oil

Middle East Politics (from Coming apart, coming together By Edward R. Kantowicz; Page 165; courtesy - books.google.com). Click to go to source.

Middle East Politics (from Coming apart, coming together By Edward R. Kantowicz; Page 165; courtesy - books.google.com). Click to go to source.

Is the USA like Britain was a hundred years ago? (Caroon courtesy - mpg50.com.). Click for larger image.

Is Pax Americana like Britain was a hundred years ago? (Cartoon courtesy - mpg50.com.). Click for larger image.

Fat and lazy

Between 1875-1935, Britain was dependent on India for gunpowder, on USA and Iran for  oil, on Malaya and India for rubber. British economy had grown fat and uncompetitive – unlike Italian, German and Japanese economies.

Even though Britain won WWII, their economy was a lost cause. Though Germany, Italy and Japan were losers, with their economy in shambles, they could make a brilliant recovery and vastly out-compete Britain.

The story of Middle East oil is similar for USA and West. The Welfare State, built on a diet of cheap oil, easy dollars,  is now too expensive for the West to sustain. The above book extract gives an excellent snapshot of the oil industry in the 20th century.

And the shadow of oil on the 21st century.

Abbottabad does not quite add up

May 11, 2011 2 comments
The difference between 'civilized' West and 'barbaric' Islamic world. (Cartoon by John Cole; courtesy - caglecartoons.com). Click for original image.

The difference between 'civilized' West and 'barbaric' Islamic world. (Cartoon by John Cole; courtesy - caglecartoons.com). Click for original image.

Things go bump in the night

In the early hours of 2nd May, 2011, an obscure twitter-user started tweeting  about the US raid on Osama Bin Laden’s safe-house – 35 km from Islamabad, 200 miles south of the Afghanistan border, in Abbottabad. In a city, which houses Pakistan’s equivalent of Indian Military Academy.

But Pakistan’s police, para-military, military forces claimed ignorance, showed surprise, feigned outrage. Par for the course. Was it abject failure or a cover-up in Pakistan , by the powers-that-be?

US triumphalism is misplaced. But then Osama's death will surely get Obama many votes. (Cartoon courtesy - http://jeffreyhill.typepad.com). Click for larger image.

US triumphalism is misplaced. But then Osama's death will surely get Obama many votes. (Cartoon courtesy - http://jeffreyhill.typepad.com). Click for larger image.

Afraid of the mullah-madrasa-mujahid combine, predictably, Pakistan started denying any role in the killing of Osama Bin Laden. Truly Pakistan ‘doth protest too much, methinks’. Secret deal or not, in the past or post-facto, a deal around killing Osama could have been easily hammered out between Pakistan and USA.

It suited both the leaderships.

It is election time in USA

Pakistan was not alone in using Osama. Osama alive was source of US funds for Pakistan. Osama dead is an election ticket and a feel-good factor for the a USA being battered by the Great Recession. As Rajiv Dogra points out, on the opposite side of the world,

The timing suited Obama well. It had long been speculated that Osama would be killed around the time Obama’s re-election campaign kicked off.

Predictably, the US made a song-and-dance about the annual aid of US$3 billion that they dole out to Pakistan. Compared to the US$3 trillion that the US Department of Defence is unable to account for, this talk of US$3 billion makes for poor form.

Pakistan's soldiers patrolling the tribal area of Ditta Kheil in North Waziristan for militants and al-Qaida activists in March.| Photograph by Mohammad Iqbal/Associated Press | Picture courtesy nytimes.com /Click for original image.

Pakistan's soldiers patrolling the tribal area of Ditta Kheil in North Waziristan for militants and al-Qaida activists in March.| Photograph by Mohammad Iqbal/Associated Press | Picture courtesy nytimes.com /Click for original image.

On a lighter – and logical side

Famous for the song केम छे ‘kem che, kem che’ from the film जिस देश में गंगा रहता है Jis Desh Mein Ganga Rahta Hain, a Bollywood songwriter confidently predicted, soon after 9/11, that Bin Laden would be found near the White House or Islamabad!

Coming to India

Memories dimmed, history forgotten, India draws wrong conclusions from these Western adventures in our neighbourhood.

After WWII, as British, French and Dutch colonialists were being thrown out of Asia, in country after country, the West was in real danger of losing markets and raw material sources.

To make war palatable, Desert Bloc invented religion. (Image  source - loonpond.com; artist attribution not available at image  source)

To make war palatable, Desert Bloc invented religion. (Image source - http://loonpond.blogspot.com; artist attribution not available at image source).

A new power, fueled by a growing migrant population, USA, took the place of tired, old powers – Britain, France and the Dutch. Instead of the openly exploitative system of European powers directly running colonial governments in these Asian countries, the US installed an opaque system – which is equally exploitative. To impose its writ on the newly independent Asian countries, the US simply destroyed their  economies by war. The USA, then instituted the innovative USCAP Program and ‘helped’ these countries. These countries (Taiwan, Singapore, Japan, South Korea, Indonesia, Malaysia, et al) were now ruled by overtly independent regimes – but covertly, client states of the USA.

US multinationals and home-grown oligarchs (keiretsus, chaebols, etc.) took over the economy – and sidelined British, French and Dutch companies. To impose this economic model, US armies, using nearly 1 million troops, killed 50 lakh Asians. The takeover of European colonial possessions by the USA was handled over 3 regimes of Eisenhower-Kennedy-Johnson seamlessly.

Between a rampant USA, behind biggest terror spots of the world, and a nuclear-armed, imploding Pakistan, India’s choices are difficult – and reactive policies inadequate.

Once more, Osama’s death and Obama’s antics bring out India’s policy inadequacy in sharp relief.

Onward, American Soldiers! Another million await death.

March 15, 2011 5 comments

Toppling USSR cost the US and Europe 4000 tons of gold. With a growing deficit of US$9t how far can Pax Americana go.

After millions killed in Iraq and Afghanistan, Niall Ferguson wants war in Libya. With little to lose, Libyans may ensure that US loses its ‘empire’. (Cartoon by Steve Bell; cartoon courtesy – guim.co.uk). Click for larger image.

Bad history

Niall Ferguson, a popular, British historian, has been a cheer-leader for Pax Americana. On assignment to Harvard currently, he has been at the forefront of ‘persuading’ America to take the place of various European colonial powers. Instead of the USCAP-client states system, Niall Ferguson believes that US must revert to European-style colonialism.

Niall Ferguson starts-off by using two bad examples of revolutions. One is the American Independence and the other was a inconsequential bit of British history.

Was the American Revolution ‘completely organic’? Funny, I could have sworn those were French ships off Yorktown. What about Britain’s Glorious Revolution, the one that established parliamentary rule? Strange, I had this crazy idea that William III was a Dutchman.

Betcha

Yes! Niall is write about one thing!

French supplies of gunpowder were crucial to Washington & Co., as Britain had cornered gunpowder supplies from India.

For the success of the American War of Independence, gunpowder apart, the French and Spanish economic aid to the armies of George Washington, was essential.

But …

My bottom चवन्नी chav-aani says Ferguson’s history teacher never told him, that Britain gave up 13 American colonies. Due to wars in India, especially with Tipu Sultan. Rather than lose India, Britain thought it wiser to let go of these 13 American colonies.

Why does Niall Ferguson forget that Haiti threw out their slave-masters.

All by themselves.

Haiti, defeated British, French and Spanish colonial armies in a space of less than 10 years (1794-1804). As did Cuba. I wonder what were ‘foreign additives’ in Kenya, Malaysia, South Africa or in Poland.

Reload /Refresh

Why does Niall Ferguson remind me of a sputtering, slow internet connection. Refresh the page a number of times. After 8 years of war in Iraq, he has the brazenness to

think of the Marsh Arabs’ fate at the hands of Saddam Hussein. Such events tend to be remembered as massacres.

The lowest figure for civilian deaths in Iraq has crossed 1 lakh (100,000) people. Corroborated by multiple news reports, eyewitness accounts, death certificates, hospital records, morgue reports, Western sources, Iraqi official figures, US army figures. The 1 lakh (100,000) figure assumes, in the middle of a civil war, Iraqis will cease all activity, postpone the funeral, in case of a death, to complete documentation and update multiple databases for a Western body-count. The figure of 100,000 assumes that Iraqis share Western enthusiasm, (or is it relish?), for ‘body-count’.

Other less ‘rigorous’ procedures, using Iraqi families as source and base, have reported around 10 lakh (1 million) Iraqi deaths. Whether you accept, 100,000 deaths or 1,000,000, it is a lot more people who died due to US invasion, than due to Saddam’s ‘oppression’.

Ever since, Pax Americana started their unwelcome visit to Iraq.

Hundreds … or hundreds of thousands

We must hope that someone gives Obama a history lesson before thousands of Libyans share their fate.

I am sure 100s of people are killed by Gaddafi’s regime each year. Trouble is, the US will kill more. Many more.

Niall-anna, are you sure that the cost of US intervention will be less than thousands? Iraq’s death-toll is a lot more than thousands – in fact, it is hundreds of thousands. If you can guarantee a figure in hundreds, I am all for a US invasion.

Good upbringing shows

I have always wanted to know, who gave history lessons to Niall Ferguson?

Such hubris cost US billions in Iraq and Afghanista. The bill will up for payment soon. Wil Libya be the straw on the US backs? (Cartoon by Stavro Jabra). Click for larger image.

It will be tragic indeed if America concludes from the experience of overthrowing murderous tyrannies in Afghanistan and Iraq that the correct policy is to turn a blind eye to murder in Libya.

Why not, for a change, pay attention to the home-front.

With more than 2 million prisoners, the capital of State-mandated murders is surely USA.

The evil empire

You get ‘One’ chance. One guess is all that you will need, Niall-bhai. Which country has more per-capita prisoners – USA, erstwhile USSR /post-Soviet Russia. I will throw China as a bonus?

The Cold War ended not because the US achieved a military edge over the Soviet Union, but because the legitimacy of the Soviet system collapsed from within. The West’s role was to insist on the importance of those “human rights and fundamental freedoms.” Even if not all America’s allies in the Cold War always upheld them, the other side respected them less.

And no, the story of Soviet collapse, has nothing to do with “human rights and fundamental freedoms.” It was economic warfare.

In the 70s, with out-sized gains in oil, platinum and aluminum prices, Soviet economy became an economic powerhouse. Soviet Russia, one of the largest gold producers in the world, made windfall gains. Funding anti-US regimes across Africa, South America, Asia and the Middle East, Soviet Union was dubbed the Evil Empire by Ronald Reagan.

The expansion in subsidies by the USSR in the 1970-1990 period to its allies and sympathetic regimes, created a huge pressure on Soviet finances. A simultaneous drop in oil and gold prices in the 1985-1995 period severely dented Soviet export earnings, leading to the economic collapse of the Soviet Union. In USSR’s economy, after WW2, commodities like oil, natural gas, metals (like gold, platinum, uranium) and timber accounted for 65%-80% of Russian exports.

Toppling USSR cost the US and Europeans 4000 tons of gold – and other hidden costs. With a US$9t deficit, which is not going down, how long and how far can Pax Americana go? (Cartoon by Steve Sack; courtesy – sinteur.com.). Click for larger image.

Toppling USSR cost the US and Europeans 4000 tons of gold – and other hidden costs. With a US$9t deficit, which is not going down, how long and how far can Pax Americana go? (Cartoon by Steve Sack; courtesy – sinteur.com.). Click for larger image.

The Central Bank Gold Sales Agreement, further dented gold prices, 1995 onwards. Gordon Brown, the then British Chancellor of the Exchequer, has been under pressure to ‘reveal’ details of British gold sales during this period.

The interesting bit was where did the European Central Banks get so much gold from! Was it the various gold hoards, that had disappeared from 1900-200o, making a re-appearance! A lot of Nazi and Soviet gold came into the markets, it is surmised, during the 1999-2005 Central Bank Gold Sales agreement – which was put in place to depress gold prices. These depressed gold prices, that coincided with price declines in oil, platinum and other commodities, bankrupted the Soviet economy.

Toppling USSR cost the US and Europeans, 4000 tons of gold – and other hidden costs. With a US$9t deficit, which is not going down, how long and how far can Pax Americana go? With an Afghan War going nowhere, Pakistan waiting to implode, will Libya be the straw on the Pax Americana’s back. You must be careful of what you wish for. Your wishes may come true.

Pax Americana may come – and go.


Pax Americana handles criticism

`Crowley was not even dissenting - unlike Bradley Manning? (Image courtesy - cartoonistgroup.com; cartoonist Matt Wuerker). Click for larger image.

Crowley was not even dissenting - unlike Bradley Manning? (Image courtesy - cartoonistgroup.com; cartoonist Matt Wuerker). Click for larger image.

The official spokesman at the US State Department, PJ Crowley, resigned. His

resignation followed Crowley’s remarks to an MIT seminar last week about Manning’s treatment in military prison.

Crowley had said: “What is being done to Bradley Manning is ridiculous and counterproductive and stupid on the part of the department of defence.”

Glenn Greenwald, a Salon reporter who has been outspoken about Manning’s detention, tweeted that “detainee abuse is allowed, speaking out against it isn’t”.

Last week, Manning gave his own account of how he is being held, saying that it was harsh treatment designed to punish him even before he was put on trial. He said he was stripped naked every night after he made a sarcastic comment to guards about the absurdity of the regime he was under.

Manning has been charged with multiple counts relating to the leaking of thousands of secret US embassy cables, as well as videos and warlogs from Afghanistan and Iraq.(via PJ Crowley Resigns After Remarks Bashing Bradley Manning’s Detention, Ed Pilkington, The Guardian, March 13, 2011).

What is the real story …

Crowley was not a critic – or even dissenting. He was an establishment man – concerned that Manning’s treatment may ‘impact on global standing and leadership’ of Pax Americana. Was this display of power more important than the display of ‘freedom’?

Intriguing.

The dangerous case of the Chinese stumper

The dollar and euro need to be devalued by 25%-50% which means yuan must appreciate another 20%-35% from it record high (update on 26th August, 2011)

Let us call this the Chinese Stumper! (Hambone by Mike Flanagan; Cartoon courtesy - Business Standard; from issue dated 19th May 2010; Copyright - Graphic Syndication, England).

Let us call this the Chinese Stumper! (Hambone by Mike Flanagan; Cartoon courtesy - Business Standard; from issue dated 19th May 2010; Copyright - Graphic Syndication, England).

Siamese’ triplets

The Great Recession is like a case of conjoined triplets.

One is the USA – who has used their Bretton Woods licence to print dollars and flood the world market with excess liquidity. The US has also used their ‘dollar power’ to gain loyalty by favouring their allies, satellites and client states with low exchange rates that boost exports. Europe, Japan, Asian Tigers, (and now) China have all been favored with a ‘beneficial’ exchange rate in the past. At an ‘appropriate’ time, this ‘benefit’ was taken away. The US gained by ‘recruiting’ low-cost labour of these economies.

The US 'out-thunk' the Euro-zone on the Euro-currency strategy!

The US 'out-thunk' the Euro-zone on the Euro-currency strategy!

US imports, were underwritten by an increasing volume of IOUs, denominated in depreciating dollars. By paying for imports with IOU notes, the US could subsidize their high-cost exports, to these ‘semi-captive’ markets.

With dollar IOUs and dollar liquidity, US funded hi-tech R&D, overseas acquisitions (of companies, raw materials, allies), commercialize new technologies and standards (internet, software) space and defense, et al. Last forty-year estimates, show that US obtained funding equal to one full year’s US GDP. At nil cost!

All this due to the US dollar’s reserve currency status!

Can Europe be far behind

The Euro unwinds!

The Euro unwinds!

Post-Plaza Accord, Europe decided to get into ‘reserve-currency’ game, with the launch of the Euro currency in Jan 2002. As an incentive to TT-Note holders, the ECB ‘allowed’ the Euro to appreciate – vis-à-vis the dollar. This gave windfall gains to countries holding Euro as a reserve currency.

From dollar parity in 2002, the EU appreciated by more than 60%. After the introduction of Euro, in the first six years, Euro-bond holders hit a gusher. Anyone who held Euro bonds from January 2002 upto Decemeber 2007, would have made some 80% return during this six years. A return of 15% per annum. Close to junk bond returns.

After the ECB took the bait, the US played a waiting game. After running with the overvaluation bait, for 8 years, the Euro- fish is now tired. It is not able to break free of the over-valuation hook. The US is now reeling in the fish.

With a ‘strong’ currency, the option for Euro-zone is massive and painful deflation. Wages, pensions, prices, welfare state benefits will need to come down – and drastically. Do they have the steel or the hunger to do this. Used to a gold-plated Welfare State, Euro-zone does not have the moral resolve to go on a cold turkey diet of frugality.

500 years ago, a poor and marginal Europe could take the risk – and inflict genocide, slaughter, war, crime on a hapless world. Today’s geriatric Europe, effete and crumbling, cannot repeat their run of ‘success’, confronted as it is, by a militarily prepared Asia. Modern Europe’s problem is compounded by the lack of availability of victims.

Which brings us to China.

Change in US Govt securities by China - which has ranged between 30%-60% of total reserves. (Image source and courtesy - http://usa.chinadaily.com.cn). Click for larger image.

Change in US Govt securities by China - which has ranged between 30%-60% of total reserves. (Image source and courtesy - http://usa.chinadaily.com.cn). Click for larger image.

Doing business with bankrupt customers

China’s currency reserves of some US$2.5 trillion, (Update – US$ 3.2 trillion August 2011) in rapidly depreciating Euros and dollars with manufacturing overcapacity, exports-growth economic model is building into a complicated pressure head. Waiting to blow up. Already under US pressure for a yuan revaluation, add complications like

  1. Empty building blocks combined with inflated real-estate prices
  2. Bloated banks loan ledgers with ballooning bad debts
  3. Low entrepreneurial levels with foreign ownership of Chinese businesses
  4. Aging population with a dominant public sector
  5. Increasing foreign exchange reserves of depreciating currencies

and the Chinese Growth story begins to sputter.

As for the Rest of the world

The real challenge for the rest of the world, will be, one, wealth protection. Easily done. Buy gold.

Two, how do we let events unfold – safely. Insulating ourselves from the cycle of calamity, catastrophe, chaos, confrontation, confusion, crises – and then finally a crash.

A cycle that a 86-year young, mentally active, Gujju stock-broker, in Mumbai, shivering with Parkinson’s, explained to me, a few days ago.

The looming Yuan-Dollar currency crisis

No dearth of pretenders - EU, Japan ... and now China!

No dearth of pretenders - EU, Japan ... and now China!

There are three separate reasons for this … The reasons refer to the broad determinants of economic growth — capital, labour and productivity.

On the first, India is investing at the same rate as China (approximately 40 per cent of GDP), on the second, India’s labour force growth is about 1.8 per cent per year faster than China, and on the third, China has outpaced India by about 2 per cent per annum (for the last five years).

Most of this outpacing has had to do with the deep and deeper currency undervaluation practised by the Chinese authorities which led to two unsatisfactory outcomes: the great financial crisis of 2008, and now the largest and fastest growing polluter of the world.

For how long will the international community stand idly by? Not very, and this is the first big forecast for the ensuing decade: China’s exchange rate will appreciate significantly starting 2010. How significantly? A first year appreciation to about 6 yuan per dollar from the present 6.8 level. (via Surjit S Bhalla: India’s Shining Decade).

Plausible! Probable … Possible?

'Get to heaven by climbing the terraced fields'. Great Leap Forward poster, Artist - Yang Wenxiu, Published - 1958, September, © Stefan R. Landsberger

'Get to heaven by climbing the terraced fields'. Great Leap Forward poster, Artist - Yang Wenxiu, Published - 1958, September, © Stefan R. Landsberger

Surjit Bhalla outlines a plausible scenario – with China needing to adjusting their exchange rate upwards – much like other US client-states had to! Europe had to in the 70s, Japan in the 90s, Asian Tigers in last 10 years. As examined earlier in some detail by 2ndlook. One question is settled. There will be economic mayhem.

However, Bhalla assumes that the Dollar-Yuan revaluation will happen smoothly – without any significant disruption. And that is one, big, huge assumption – which is based on really, really slippery slope.

Bhalla would do well to remember that last time when China had a problem, it resulted in the India China War of 1962. Just after the disastrous Great Leap Forward and before the equally disastrous Cultural Revolution.

The Great Leap Forward began in 1957-58, saw famine and hunger across China. After the Communist takeover of China, land seized from land owners, was given to peasants in 1949. Ten years later, in 1959, the Chinese State took away the same land from the same peasant. Food shortages, starvation followed. Western (questionable) estimates are that 30 million people died during this period. War with India followed in 1962 – a diversion from the domestic Chinese catastrophe.

What will it be this time?

The approaching mayhem

The next few years will be tumultuous for China.

Much like, when Europe was weaned off the low exchange rate crutch in 1967-1974 period. Stagflation, oil shock, the Nixon Chop followed. How Japan had to live with endaka, the Plaza accord, with S&L crisis in the US.  Or the Asian Tigers had to reset to a higher exchange rate and higher foreign reserves, that accompanied the 1997 (Asian Crisis) to 2000 (The Tech meltdown).

What will follow the Chinese moment in the sun? What will set off economic mayhem in China?

Crime in China (a simmering threat), terrorism in Xinjiang (remote possibility), real estate bubble (a real scenario), dollar-yuan exchange ratio (significant risk)?

Will the Chinese Government be able to ride this storm? Without a war with India? Which side of the fence will China fall? Answers to these questions will be worth waiting for! And prepared with!

Signs of coming troubles?

Great Leap Forward © Stefan R. Landsberger; Source - Zhongguo meishuguan (ed.), 中国美术年鉴 1949-1989 (Guilin: Guangxi meishu chubanshe, 1993). Designer: Zhang Xin'guo (张辛国); Liu Duan (刘端); 1958, October; Put organizations on a military footing, put actions on a war footing, put life on a collective footing; Zuzhi junshihua, xingdong zhandouhua, shenghuo jitihua (组织军事化,行动战斗化,生活集体化); Publisher: Hebei renmin meishu chubanshe (河北人民美术出版社).

Great Leap Forward © Stefan R. Landsberger; Source - Zhongguo meishuguan (ed.), 中国美术年鉴 1949-1989 (Guilin: Guangxi meishu chubanshe, 1993). Designer: Zhang Xin'guo (张辛国); Liu Duan (刘端); 1958, October; Put organizations on a military footing, put actions on a war footing, put life on a collective footing; Zuzhi junshihua, xingdong zhandouhua, shenghuo jitihua (组织军事化,行动战斗化,生活集体化); Publisher: Hebei renmin meishu chubanshe (河北人民美术出版社).

When the Soviet Union imploded, one of the unexpected fall out was the Russian mafia. Recent troubles in China, with the underworld creates a spectre of yet another mafia creating global disturbances. One more element in global trouble spots. To understand this better, turn to Chinese cinema.

Most films that have any Chinese element in it, (actors, directors, characters, locations) end up having the Chinese underworld as an important part of the storyline. Is it that the Chinese are morbidly fascinated by criminals and the underworld – much like Europe was with English pirates and murdering Spanish Conquistadors.

Ranging from Jet Li in Kiss of the Dragon, (Jet Li takes on the French mafia) or Chow Yun-Fat in The Corrupter (exposing police-underworld nexus and corruption in the USA), or Jackie Chan in Rush Hour series or the Chinese Ric Young in The Transporter, Jet Li in Lethal Weapon 4.

All have two elements in common.One is the pervasive Chinese underworld. Across Europe, in the USA. In drugs, fake currency, in smuggling boat people, the Chinese are there – everywhere. Many of these movies have Chinese stars, directed by Chinese directors or even partly funded by Chinese studios .

The second is the absence of the Buddhist monk.

India – the loose cannon!

What kind of ending will we see ...?

What kind of ending will we see ...?

Now, India is one box which defies description. By any global and historical standards, the country should not even exist – much less prosper, or be a significant global player. Too many languages, too much poverty, too much freedom, too many political parties, too many languages, too many religions, too many racial types are the common factors going against India (so goes the Desert Bloc narrative).

In such a situation, even in India, for the Westernized types or the remnants of the Desert Bloc admirers, India remains a failure waiting to happen.

Unfortunately, for these doubting Cassandra’s, India has proven them wrong for more than 5000 years now!

equally

Shashi Tharoor patterns Indian foreign policy on US-Israel template

September 2, 2009 Leave a comment

As President-elect Barack Obama prepares to take office this month, he has avoided the fawning praise of India that has become fashionable in some Washington circles. But experts on the region say that India-US ties now have a momentum of their own. Industries in each country now have a vested interest in deepening ties with their counterparts.

“In 20 years, I expect the Indo-US relationship to resemble the Israel-US relationship, and for many of the same reasons,” said Shashi Tharoor, an Indian writer and former undersecretary general of the United Nations. (via Will the love-fest stoked by Singh, Bush bear fruit? – Economy and Politics – livemint.com).

Am I missing something here?

Am I missing something here? Look at the cartoon date!

Why is the Israeli model a bad idea

The first disqualification against accepting the Israeli State model is the fact it is heavily dependent on America, for fiscal and military aid – which “since 1974 totals roughly $80 billion”.

Do I sense envy when an article from Daily Times Of Pakistan says “The United States has poured $140 billion into Israel since its formation”. That is about a US$56,000 for every Israeli family.

Is this what you learnt at the UN Tharoor Saar

First, did it ever occur to Tharoor Saar to check where is the guarantee that the US will be in a any position to underwrite India’s long term requirements?

After satisfying himself, did Tharoor Saar ever ask, “Why would the US underwrite India?” In case of Israel, the US had good reasons. After all, (as NYT says)

America has vital long-term strategic interests in the Middle East. The gulf has well over 60 percent of the world’s proven conventional oil reserves and nearly 40 percent of its natural gas.

To some it may look like a boon, but is surely the kiss of death.

American policymakers began regarding Israeli strength as an American asset in the Cold War, they supported significant aid as a matter of strategy, not charity. … American aid continues to flow to Israel. … critics on the opposite end of the political spectrum argue that while aid to Israel may be tied to the best of intentions, it does more harm than good to the Jewish State by propping up a big and inefficient government and making Israel dependent upon the U.S.

For how long can any country, society, individual survive on foreign largesse? Note how during the 1973, Arab Israeli War, the tide of battle finally turned when the massive US airlift of weapons, tanks, spares happened! Which itself, is self-serving – American assistance, emerging as a disjointed policy that urges a peaceful resolution to the conflict while boosting military aid to Israel.”

Another client state of US, Pakistan enviously records, that

Israel is the only country that receives all of its U.S. aid in a single package, while others only receive it in quarterly installments.” It continues, “Most recipients of military aid are obliged to spend it in the US but Israel is permitted to spend 25 percent of what it receives to subsidize its own defence industry,”…

Doubtful motives, suspect intentions

Three aspects of the Israeli behaviour makes Israeli intentions doubtful.

One - Israel surely knows that US support cannot continue ad infinitum. What will be the Israeli response after they stop getting US support?

Two - After consistent and constant efforts to make enemies, over the last 50 years, how does Israel plan to continue living in a hostile neighbourhood – without American aid?

Three - With a population of little over 50 lakhs (5 million) in Israel and a world Jewish population of less than 1.3 crores (13 million), how does the Jewish population stop itself from going extinct?

Is there a pattern …

Tharoor Saar’s statement needs to be read in light of two other incidents. For starters, read Manmohan Singh’s speech at Oxford, praising the Raj,  while receiving his honorary doctrate. Continue with Chidambaram’s decision to end “abject poverty” in India that he seems to “have known for 5,000 years.” And now add Tharoor Saar’s stated objective to make India into a US-client state in another 20 years. Are these three incidents stray and unrelated? Do they form a pattern?

Any which, Tharoor Saar’s thinking is a cause for concern.

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