Mar 302013

Posted by greydogg, 99GetSmart

The content of this video is over 2,500 years old … amazing, even then, people “knew”. This story is from Plato’s most famous book, The Republic. Most people live in a world of relative ignorance. They are even comfortable with that ignorance, because it is all they know. Once you’ve tasted the truth, you won’t EVER want to go back to being ignorant.


Mar 292013

Posted by greydogg, 99GetSmart


Source: ScriptoniteDaily


The private sector is evading its taxes, failing to pay workers a living wage, and becoming a burden on the tax payer for subsidies and bailouts.  At what point to we stop calling them wealth creators and start calling them parasites?

Neoliberal democracies around the globe have been using taxpayer money to underwrite and directly pay off phantom debts made by the banking sector.

In the bailout of 2008/9, the UK government had to guarantee funding to the banking sector, of 101% of GDP.  That is, the UK diverted over £2trn of tax payer money from public expenditure, to a handful of banks. This is equivalent to almost 3 times its entire annual budgettwenty years of NHS spending (£106.7bn a year); forty years of education spending (£48.2bn a year); or five hundred years of job seekers allowance (£4.9bn a year).

According to the Special Investigator General for the Troubled Asset Relief Program’s (SIGTARP) quarterly reports, the US government’s total layout in bailouts was $3.3trn whilst guaranteeing $16.9trn of future protections.  The GDP of the US currently stands at just $14.99trn, meaning the tax payer has guaranteed toxic bank debts to the value of 113% of their total annual earning capacity. This is equivalent to ten years of total federal spending ($6.3trn a year), sixteen years of pension payments ($1.1trn a year), twenty one years of total education spending ($0.8trn a year) or a whole twenty eight years of the entire welfare system ($0.6trn a year).

Most recently, the people of Cyprus have had the Eurogroup and the IMF place conditions on their bailout of the Cypriot Banking sector requiring Cypriot depositors (people holding their money in the banks) rather than bondholders (people investing in the banks).  This is the first time that the bailout of the banks has been made in such an explicit way.  The total sum required from Cyprus’ population of just 1.1 million people, is 5.8bn Euros. […]




The more you obey the more you get punished – that’s the troika’s way. But a second spring of discontent is in the air

By Costas Douzinas, Guardian UK

Cyprus protest

[…] The argument against austerity has been won in southern Europe. The continuation of austerity, a matter of survival for the ruling elites, can be achieved through ideological misinformation and police repression. We cannot predict the timing and location of the next flashpoint but its occurrence is certain. It is the result of systemic pressures and failures felt by all Europeans and exacerbated in the south. Three are the most prominent.

First, permanent work has been abolished. Part time and flexible work, long periods of unemployment following short periods of work are now the rule. In the past, a reserve army of unemployed was used to push wages down. Today technology and the transfer of industry to the developing world are making large numbers of people, particularly the young, superfluous. At the same time, we now have the most educated population in history. One thousand unemployed engineers, lawyers and architects are not likely to accept easily power’s broken promises .

Second, profit takes new forms: rent for services and interest for capital. As wages get pushed down in order to improve profits, late capitalism increasingly works through consumption fuelled by debt, making states, companies and individuals permanently indebted. Debt is first a social and moral relationship. Lifelong indebtedness is an effective control of the debtor’s conduct ensuring future conformity. Full of guilt and forbearance, the debtor must accept a lifestyle of obedience and redemption. Debt is the lubricant of consumption, capital desires and creates indebted populations. But when the banking greed and collapse makes money scarce, the indebted citizen abandons the vicious circle of debt and consumption followed inevitably by frustration and starts questioning the dominant model.

The third change is the extensive and violent privatisation of the commons. The commons of culture – music, poetry, art – and of nature – water, sea, electricity – are systematically sold off. We must rent back our common substance and our collective achievements. Everything that can be sold will be sold and then hired back to us in a process resembling the early modern enclosures of land. The recent wave of occupations reasserted the right to our common substance of life.

All three policies converge in Greece, the textbook case of neoliberal failure and popular resistance. After entry to the euro, the modernising socialists promoted consumption and hedonism as the main way of linking private interests with the common good. People were treated as desiring and consuming machines. Easy and cheap loans, bribing people to transfer their savings into stocks and shares, and an artificially inflated property market became the main instruments of economic growth and the criterion for individual happiness and social mobility. Austerity violently reverses priorities. The population is divided according to age, occupation, gender and race and radical behavioural change is imposed for the sake of “national salvation”. The politics of personal desire and pleasure turned into a strategy of saving the nation’s DNA by abandoning its individual members to the rigours of sin, guilt and punishment. No wonder fascism and xenophobia have risen to unprecedented levels.

Behind southern austerity is a top down re-arrangement of late capitalism with the north acting as colonial masters of an impoverished and disenfranchised south. The debt offered a convenient pretext for the brutal imposition and moralisation of these “reforms”. We were all “in it together” and must be punished. In Greece, the troika increases the punishment every time its policies and predictions go wrong. Like Freud’s superego, it is a sadistic, cold master, the more you obey the more you get punished. […]




By Pauline Imbach, CADTM

Mediterranean Conference of political parties against the debt in Tunis

Mediterranean Conference of political parties against the debt in Tunis

The first Mediterranean coordination against debt, austerity policies and foreign domination, and for a free, united, democratic, social, feminist and environmentally responsible Mediterranean region took place in Tunis on Saturday 23 and Sunday 24 March in the build up to the World Social Forum.

A score of political formations, coming from the Mediterranean perimeter gathered in response to a call by the Popular Front (a coalition of 11 radical left-wing political parties, associations and independent personalities, one of whom was Chokri Belaid, who was assassinated on 6 February 2013). Among those represented were the French parties, Front de Gauche (Left Front) and NPA (New Anti-Capitalist Party); from Spain came Izquierda Unida (United Left) and Izquierda Anticapitalista (Anti-Capitalist Left); others were Sortu from the Basque country, CUP from Catalonia, OKDE from Greece, the Left Block from Portugal, Sinistra Critica from Italy, Al Mounadil from Morocco; also taking part were representatives of organisations from other Mediterranean countries such as Egypt, Lebanon, Syria and Palestine. Organisations from Belgium, Haiti, Venezuela and a number of other countries were also present. This is the first time that political parties and organisations get together in the mediterranean area in order to cancel illegitimate debt.

This gathering was followed by a public meeting attended by over a thousand people, including many representatives of political parties from the Mediterranean region and beyond, a large number of whom were women and youths (although it is to be regretted that among the twenty or so speakers only three were women). The mood was electric, animated by slogans in Arabic, charged with passion, anger, joy and collective feeling, each affirming the ardent will of his or her party to work on the issue of the debt, to resist the dictatorship of the creditors, wipe out the capitalist system and struggle for the emancipation of the peoples by laying the foundations of a New World Order.

Numerous tributes were paid to different leaders, revolutionaries or progressive activists. Emotion was high during a film in homage to Chokri Belaid, who remains a popular personality and inspiration in the Tunisian revolution. Homage was also paid to Hugo Chavez and his commitment to the social transformations needed by his people.

For over 3 hours a number of different speakers hailed the Tunisian revolution and more largely the “Arab Spring” that led to the overthrow of the dictators Ben Ali and Moubarak. These historic events take on an international significance. The Tunisian revolution is, for several generations, the demonstration that revolution is not an idle word and that a people can choose their destiny. The public meeting was brought to a vibrant end by Hamma Hammami who developed an analysis of the debt that is entirely convergent with that of CADTM.

As mentioned in the preamble of the declaration of this Mediterranean reunion against debt, the fall of Ben Ali “has permitted the disarmament of the local capitalist structure without going so far as overthrowing it. The social regime, which is the historical result of foreign domination and, more recently, of the restructuring of worldwide capitalist globalisation, is still standing. The revolutionary crisis opened by the insurrection is still active. The victory of the Tunisian democratic and social revolution remains possible.” |1|

In this context the debt, which remains a central tool for the domination and oppression of the peoples must be cancelled. A real instrument for the transfer of riches and of political domination, this issue was at the heart of the debate. The speakers have affirmed the necessity of liberating ourselves from the dictatorship of the creditors and the international financial institutions, particularly the World Bank and the IMF. Several speakers mentioned as examples, Argentina, Ecuador and Iceland to demonstrate the possibility of resisting creditors so as to implement policies that favour the population. Public debt audits were also presented as possible strategies permitting the identification and cancellation of odious and illegitimate debts, with the stress on the need to mobilise on this question. This is the first time that such a common front has arisen. It is undoubtedly a historic step forward in the struggle against the debt, echoing the call made 26 years earlier by then President of Burkina Faso Thomas Sankara in Addis Abeba in 1987, “The debt cannot be repaid because if we do not pay the lenders will not die, that is certain,. On the other hand, if we do pay; it is we who will die. That is equally certain.” The groups gathered in Tunis have decided to create a follow-up commission and to meet again in Spain some time in 2013 or 2014.

CADTM founder, Eric Toussaint, speaking at the mediterranean conference of political parties against the debt

CADTM founder, Eric Toussaint, speaking at the Mediterranean Conference of political parties against the debt

Translation : Mike Krolikowski and Christine Pagnoule


|1| The final declaration will soon be published.




By Joseph Salerno, The Circle Bastiat


The “Cyprus deal” as it has been widely referred to in the media may mark the next to last act in the the slow motion collapse of fractional-reserve banking that began with the implosion of the savings-and-loan industry in the U.S. in the late 1980s. This trend continued with the currency crises in Russia, Mexico, East Asia and Argentina in the 1990s in which fractional-reserve banking played a decisive role. The unraveling of fractional-reserve banking became visible even to the average depositor during the financial meltdown of 2008 that ignited bank runs on some of the largest and most venerable financial institutions in the world. The final collapse was only averted by the multi-trillion dollar bailout of U.S. and foreign banks by the Federal Reserve.

Even more than the unprecedented financial crisis of 2008, however, recent events in Cyprus may have struck the mortal blow to fractional-reserve banking. For fractional reserve banking can only exist for as long as the depositors have complete confidence that regardless of the financial woes that befall the bank entrusted with their “deposits,” they will always be able to withdraw them on demand at par in currency, the ultimate cash of any banking system. Ever since World War Two governmental deposit insurance, backed up by the money-creating powers of the central bank, was seen as the unshakable guarantee that warranted such confidence. In effect, fractional-reserve banking was perceived as 100-percent banking by depositors, who acted as if their money was always “in the bank” thanks to the ability of central banks to conjure up money out of thin air (or in cyberspace). Perversely the various crises involving fractional-reserve banking that struck time and again since the late 1980s only reinforced this belief among depositors, because troubled banks and thrift institutions were always bailed out with alacrity–especially the largest and least stable. Thus arose the “too-big-to-fail doctrine.” Under this doctrine, uninsured bank depositors and bondholders were generally made whole when large banks failed, because it was widely understood that the confidence in the entire banking system was a frail and evanescent thing that would break and completely dissipate as a result of the failure of even a single large institution.

Getting back to the Cyprus deal, admittedly it is hardly ideal from a free-market point of view. The solution in accord with free markets would not involve restricting deposit withdrawals, imposing fascistic capital controls on domestic residents and foreign investors, and dragooning taxpayers in the rest of the Eurozone into contributing to the bailout to the tune of 10 billion euros. Nonetheless, the deal does convey a salutary message to bank depositors and creditors the world over. It does so by forcing previously untouchable senior bondholders and uninsured depositors in the Cypriot banks to bear part of the cost of the bailout. The bondholders of the two largest banks will be wiped out and it is reported that large depositors (i.e. those holding uninsured accounts exceeding 100,000 euros) at the Laiki Bank may also be completely wiped out, losing up to 4.2 billion euros, while large depositors at the Bank of Cyprus will lose between 30 and 60 percent of their deposits. Small depositors in both banks, who hold insured accounts of up to 100,000 euros, would retain the full value of their deposits. […]




Source: Washington’s Blog

Paintings by Anthony Freda:

Paintings by Anthony Freda:

Reclaiming the Founding Fathers’ Vision of Prosperity

To understand the core problem in America today, we have to look back to the very founding of our country.

The Founding Fathers fought for liberty and justice. But they also fought for a sound economy and freedom from the tyranny of big banks:

“[It was] the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War.”
– Benjamin Franklin

“There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”
– John Adams

“All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.”
– John Adams

“If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied”.
— Thomas Jefferson

“I believe that banking institutions are more dangerous to our liberties than standing armies…The issuing power should be taken from the banks and restored to the Government, to whom it properly belongs.”
– Thomas Jefferson

“The Founding Fathers of this great land had no difficulty whatsoever understanding the agenda of bankers, and they frequently referred to them and their kind as, quote, ‘friends of paper money. They hated the Bank of England, in particular, and felt that even were we successful in winning our independence from England and King George, we could never truly be a nation of freemen, unless we had an honest money system. ”
-Peter Kershaw, author of the 1994 booklet “Economic Solutions”

Indeed, everyone knows that the American colonists revolted largely because of taxation without representation and related forms of oppression by the British. See this and this. But – according to Benjamin Franklin and others in the thick of the action – a little-known factor was actually the main reason for the revolution. […]




Source: RT

EU ‘thieves’ will force people to think twice about where to keep their money, so that it isn’t confiscated like in Cyprus. The Middle East and Asia are the most likely places where these funds will travel next, Patrick Young told RT.




Source: youtube

How happy are you with your life, our society, the world?

In Ireland over 500 people commit suicide a year, many as a direct result of the financial crisis.

Over 300,000 houses in Ireland remain vacant while thousands of people are evicted and the banks are now looking to start evicting 1000 more families a year each.

Children are sitting in schools with no heating, many are also going to school hungry and soup kitchens are opening up all over the country.

Half of our youth are unemployed leaving university after studying hard for years.

Over 80,000 families wave goodbye to loved ones each year emigrating for work, not knowing when they will meet again.

Crime is rising as it automatically does with an increase in poverty and the government is closing stations, in particular leaving old people vulnerable in their own homes.

Michael Noonan admitted on Pat Kenny’s RTE show that the debt was illegal

World’s 100 richest people have increased there wealth by €241 Billion in 2012

All over the world people fighting against corruption and demanding a better world for you, are being beaten, jailed, shot and murdered, but still we remain silent.

Is this good enough? Is this what it means to be Irish, the great warriors from the land of saints and scholars?

Is it right that through our silence we allow this to continue?

In Spain, Greece, Portugal, Italy, the USA, Canada, Mexico, Britain, Slovakia, Slovenia, Albania, Argentina, Chile, Turkey, China, India, Libya, Egypt, Palestine, Bahrain, Syria, Saudi Arabia and many more countries around the world, the people are rising up, demanding freedom from oppression.

In Portugal thousands of protestors were chanting “Spain, Greece, Ireland and Italy, our struggle is international”

Iceland has shown only people peacefully on the streets can bring about the change needed.

Now is the time the Irish stood up and showed the world we are awake and “Ireland Says No”
We can create a better world.

A sustainable world designed for us to enjoy life, not for profit or greed.

A world we can be proud to leave to our children and grandchildren.

A world without war, poverty or oppression.

We can provide food and homes for everyone on this planet.

We have the technology for free energy.

We can provide everyone with a quality education.

We can collectively redefine right from wrong in our society.

We can collectively decide what is no longer acceptable in our society,

Demand an end to lies and secrecy from politicians

Stop the exploitation of our natural resources

End the destruction of our earth, our eco system

End the oppression of our brothers and sisters around the world

and cruelty to animals.

A better world is possible, but only when we rise up together and demand it.

Speaking out will cost you nothing, but your silence could cost everything.

United we stand, divided we fall.


Mar 282013

Posted by greydogg, 99GetSmart

The TRUTH about the Memorandum In Cyprus. (What They Do Not Want You To Know)

Signatures in Support of a Referendum For The Recapitalization of Cyprus Banks:
It’s EXTREMELY IMPORTANT to Support, for the benefit of Cyprus.…

Stay Informed of WakeUp Cyprus:


Mar 272013

Posted by greydogg, 99GetSmart


By Nicolas Kaloy, Justice for Greece

Dr Nicolas Kaloy, President of the European League of Geneva

Dr Nicolas Kaloy, President of the European League of Geneva

Dear Sirs,

We have heard the news that Mr Schäuble, as a new Nazi Führer, “ordered” that the Eurogroup agreement on Cyprus “does not require approval by the Cypriot parliament”. In addition he added that “Cyprus must be punished because it did not approve the Annan Plan.” This is it … Mr. Barroso v. Mr. Rompuy and Mr. Schulz President of the European Parliament

The Greek Nation MUST BE PUNISHED because it did not approve the Annan (i.e British) Plan of eradication of a nation AND submission by a majority of 82% of the Island’s population to the PUNISHMENT by the 18% minority.

Messrs Barroso and v.Rompuy, and Mr Schulz … you are responsible for the eradication of democracy and of the Rights of all Men within the European Union.

In fact you are personally responsible for the eradication of the EUROPEAN UNION ITSELF. A mass of  petty dictators do not recognize votes, elections or referenda. Why?
BECAUSE they know that whenever their decisions went to public vote, in France, in Ireland, in Cyprus or anywhere THEY WERE  ALWAYS REJECTED BY THE PEOPLE


It is attItudes of this sort as so far it has been shown in History and Actuality that nourish the terrorist movements. Consequently you are RESPONSIBLE IN THE FACE OF HISTORY FOR TERRORISM AGAINST THE GREEK NATION.

Shame throws its shadow on the European Dream of solidarity, union, respect of human rights and of democracy.

A Dark Age starts in the western world where freedom and democracy were once born and NOW are victims of a new issue of GERMAN HOLOCAUSTS.


Dr Nicolas Kaloy, Ph.D. (philosophy)

President of the European League of Geneva

Sent: Tuesday, March 26, 2013 2:24 AM




By Mark J. Grant, AdvisorAnalystViews


After the Dutch Finance Minister indicated that Cyprus would be a template for future European bail-outs there was a lot of consternation. Senior debt was hit and bank accounts were confiscated in Cyprus and the plan just seems lovely for future problems. The notion that the second largest bank in Cyprus went belly up on its own is just not the truth and so the argument that depositors are responsible for where they put their money is not even applicable!

The nation of Cyprus was in trouble, Germany and the rest did not want to pick up the whole tab to bail them out, they had the ECB threaten to pull the funding and forced the bank closure so that they could use the depositor’s money to help pay off the loan to the country. There was no “due process,” no judicial review and the bank’s actual creditors will get zero so let’s at least deal with the reality of what happened and not try to paint it as something else.

Then this morning the 20%-40% seizure of the depositor’s money, which was the range that had been discussed, was now admitted by the Finance Minister in Cyprus today to be more like an 80% expropriation and a timeline to get any money back of six to eight years. This is, I suspect, because while the banks were closed in Cyprus that they were still open in Greece and Britain so that certain monies crept out during the night, and probably big money, so that the banks in Cyprus are in far worse condition than previously thought or admitted.

Then, of course, because the EU Finance Ministers were not going to meet again and re-open this fiasco; more money had to be seized from the depositors. Now the Dutch Finance Minister chaired the meeting on Cyprus. He was the one that directed the entire affair on Cyprus and the template that he revealed was fist denied then admitted, then denied by the ECB and confusion reigned supreme. Now here comes the first pig; the representatives of the Eurozone finance ministries released a document this morning stating that Cyprus was not the template for future bail-outs. I suppose it was initially written in German and translated into English however they must have forgotten to translate it into Dutch. This is because when the Dutch Finance Minister was asked about this document, and he is the Chairman of the Finance Minister group remember; he said he knew nothing about the document.

I am not making this up. My imagination is good but not this good.

It has finally happened; the pigs are flying!

The good news this morning is that we already know which country is going down next. That country is Luxembourg. We know this because the Foreign Minister of Luxembourg, Jean Asselborn, told Reuters yesterday that “Germany does not have the right to decide on the business model for other countries in the EU. It must not be the case that under the cover of financially technical issues other countries are choked.” Now Luxembourg is not so far different than Cyprus. They have a large financial sector, a lenient tax structure and a lot of foreign money. They have just also spoken out again the ubermeisters in Berlin which is not permitted under the EU treaty somewhere I am sure. […]




By Tyler Durden, zerohedge

Cyprus parliament postpones vote on tax

On Monday we reported the very disturbing news that despite the ongoing liquidity blockade, capital controls and (somewhat) closed Cyprus banks, one particular group of people – the very same group targeted to prompt this whole ludicrous collapse of the island nation – Russian Oligrachs had found ways to bypass the ringfence and pull their money out quickly and quietly. We said that, if confirmed, “If we were Cypriots at this point we would be angry. Very, very angry.” Turns out the Cypriots did become angry, and the questions are finally starting. As Spiegel reports, the Cypriot Parliament, which may or may not last too long once the banks reopen tomorrow and the people realize that in a fractional reserve banking system, those deposits you thought were there… they are gone, poof, has begun investigating the capital flight that may means the destruction of Cyprus has been for nothing. Sadly, it is now too little, too late.

From Spiegel:

Banks have been closed and accounts frozen in Cyprus recently. Nevertheless, large amounts were moved out of the country’s crippled financial institutions on the eve of the bailout package. Lawmakers are suspicious and are investigating both the government and the Cypriot central bank.

Panicos Demetriades looked dead tired as he opened the press conference on Tuesday afternoon on the fourth floor of the Central Bank of Cyprus. The questions and answers flew back and forth for 90 minutes, with Finance Minister Michalis Sarris doing his best to back up the central bank head. Outside, the mountains slowly receded from view behind into a haze, while inside journalists became increasingly restive. When the session ended, many were left wondering why Demetriades had invited them in the first place. He had virtually nothing new to say.

Many interpreted the press conference as a symbolic exercise. Central bank head Demetriades, they felt, sought to stage a show of strength to counter the pressure that has been heaped on his shoulders in recent days. For one, he announced earlier this week, without consulting the Cypriot government first, that small banks in the country would open their doors again on Tuesday, in contrast to the island-nation’s two largest financial institutions Laiki and Bank of Cyprus. The result was a massive protest from the smaller banks and a reversal. The banks stayed closed. For the moment, the opening date is set for Thursday, and many fear that a flood of angry customers could overwhelm the sector.

Then, on Monday, the central bank announced that it was installing financial manager Dinos Christofides as a special consultant to the Bank of Cyprus as it prepares to take on assets from Laiki, which is to be liquidated. The deployment of Christofides is legitimate, but it triggered widespread concerns that the Bank of Cyprus too may soon be broken up. Demetriades was accused of not doing enough to explain the steps he was taking, thus intensifying investor anxiety.

Most of all, though, the central bank head has been harshly criticized due to the suspicious capital flight from Laiki and the Bank of Cyprus, the two institutions that have been hit hardest by the Cypriot banking crisis. There are indications that large sums flowed out of the two banks just before the first bailout package was signed in the early morning hours of March 16. At the end of January, some 40 percent of all savings held in Cypriot accounts were on the books of those two banks. Since then, however, much of it has been transferred elsewhere, despite orders from the central bank that accounts at the two institutions be frozen.

‘Special Payments’

The central bank now stands accused of not doing enough to control the movement of capital. Transfers for humanitarian aid were permitted which, while certainly an acceptable exception, opened a loophole for abuse. Many are also furious that the bank allowed “special payments,” the definition of which was never adequately established.

The Cypriot central bank has defended itself by saying that it was impossible to completely prevent all transactions, despite the account freeze. Much of the money was withdrawn from overseas, where Cyprus had no authority. Branches of Cypriot banks in non-euro-zone countries such as Russia and Britain do not answer to the European Central Bank. Their liquidity is controlled by central banks in those countries.

Such a defense is nothing less than a voluntary admission of impotence. Holders of smaller savings accounts have been unable to access much of their money for almost two weeks, companies have been unable to pay their suppliers and across the country people are concerned that their salaries will not arrive on schedule on the first of the month. Meanwhile, rich businesspeople and those with connections overseas have been able to transfer their money into foreign accounts.

In other words, the Cypriots are, indeed, getting very angry. And soon, they may just have a list of people on whom to take it out: […]




By Tyler Durden, zerohedge

The EURUSD sure isn't waiting. Instead, it is plunging.

The EURUSD sure isn’t waiting. Instead, it is plunging.

Here we go again:


Full Reuters article:

The European Parliament will demand that big savers take losses if their banks run into trouble, a senior lawmaker told Reuters, adding momentum to a policy unveiled as part of a Cypriot bailout.

Although some policymakers have sought to portray Cyprus and the losses suffered by depositors at two of its banks as a one-off, many experts believe it marks a dramatic change in tack in how Europe deals with troubled banks, to spare taxpayers who have been on the hook for previous bailouts.

Jeroen Dijsselbloem, head of the Eurogroup of euro zone finance ministers, said on Monday that in future, the currency bloc should first ask banks to recapitalise themselves, then look to shareholders and bondholders and then “if necessary” to uninsured deposit holders.

Now the likelihood is rising that tough treatment of big depositors will be written into a new EU law, making losses for large savers a permanent feature of future banking crises.

“You need to be able to do the bail-in as well with deposits,” said Gunnar Hokmark, an influential member of the European Parliament, who is leading negotiations with EU countries to finalise a law for winding up problem banks.

The European Parliament has an equal say alongside EU countries when deciding who must bear the brunt of future bank failures such as those now being seen on Cyprus.

“Deposits below 100,000 euros are protected … deposits above 100,000 euros are not protected and shall be treated as part of the capital that can be bailed in,” Hokmark told Reuters, adding that he was confident a majority of his peers in the parliament backed this line.

The law, which will also introduce means to impose losses on bondholders, is due to take effect at the start of 2015. Germany wants provisions for bailing in bondholders and others in the same year, though that may be delayed.

The European Commission wrote the first draft of the law but left it to member countries and the parliament to decide whether and when savers should face losses, when a failing bank is being salvaged or shuttered. Earlier on Tuesday, it said only that such a step was possible.

Hokmark urged savers to check their banks’ health before taking the risk of depositing money.

“If you put your money in Royal Bank of Scotland … or Deutsche Bank, depending on how that bank is working you are taking a risk,” he said. “You need to be aware that you are taking a risk.

“I want us to legislate in a way that makes investors aware of the risk,” said Hokmark, adding that savers should be asking whether their bank is solvent. “The bail-in instrument is creating thousands and thousands of supervisory authorities.”

Cypriot President Nicos Anastasiades agreed in a last-ditch deal to close down the second-largest bank, Cyprus Popular, and inflict heavy losses on big depositors, many of them Russian, after Cyprus’s financial sector ran into trouble when investments in Greece went sour.

“The markets may be shocked but some principles have to be laid down,” said one EU official, speaking on condition of anonymity, adding that it would be “unfair” for the new EU law to take a different approach to that used in Cyprus.

READ @€100k



By Nick Malkoutzis, ekathimerini

A protestor rips an European Union flag during a rally outside of the parliament in capital Nicosia, Cyprus, Friday, March 22, 2013. Cypriot authorities were putting the final touches Friday to a plan they hope will convince international lenders to provide the money the country urgently needed to avoid bankruptcy within days. ?The next few hours will determine the future of this country,? said government spokesman Christos Stylianides. (AP Photo/Petros Karadjias)

At the beginning of last week, Cypriot politicians insisted they would not choose a “suicidal” option for their country. By the end of the week, they picked one that would inflict mortal wounds instead.

Nicosia’s handling of its unprecedented predicament has been cataclysmic. But the approach adopted by the European Union and International Monetary Fund to Cyprus’s problems has also been disastrous. The eurozone has been building up to an omnishambles moment throughout the debt crisis and it finally struck in a small island state in the Eastern Mediterranean.

The agreement arrived at in Brussels early Monday, following hours of talks involving Cypriot officials, eurozone finance ministers and EU and IMF chiefs, is being billed as the least worst option after all sides took successive wrong turns on the way. That may be the case but it will be little consolation to thousands of Cypriots who have lost a big chunk of their deposits and face uncertain times ahead.

For those looking at the longer-term picture, the island is in for years of extreme difficulties. Its banking system and concomitant services made up about half of the island’s economy. This has now been obliterated. Depositors are unlikely to trust Cypriot banks for some time to come and young Cypriots will have to choose to become something other than lawyers, financiers and accountants. Many will have to consider a future away from their homeland, which faces a double-digit recession in 2013 and more years of economic contraction ahead. […]




By Seumas Milne, The Guardian  

Illustration by Belle Mellor

Illustration by Belle Mellor

Cyprus risks deepening the eurozone crisis as austerity is failing across the continent. Resistance will have to get stronger

Europe’s flesheaters are back. The claim that the worst of the eurozone crisis is behind us now looks foolish. The deal forced on Cyprus by the German-led Troika at the weekend isn’t a bailout: it will effectively destroy the island’s economy. Instead of getting a grip on its grossly inflated banks, it will impose a brutal credit contraction, combined with sweeping cuts and privatisations, wiping out perhaps a quarter of Cyprus’s national income. Ordinary Cypriots, not Russian oligarchs, will pay the price.

Of course Cypriot politicians are to blame for having allowed the country to be turned into an adjunct of a bloated financial sector and a refuge for hot Russian money. But what tipped the divided island over wasn’t foreign investors’ sharp practices, but the impact of Europe’s wider crisis on its banks: in particular, their exposure to devastated Greece, currently also in the Troika’s tender care.

Some have hailed the fact the raid was carried out on Cypriot bank deposits over €100,000, rather than the public purse. At last the rich and those responsible for private banking failures are being made to cough up, it’s been said. Which would have been a good thing. But it’s savers, not bankers or shareholders, who are taking the 40% hit. And many of the targeted depositors, such as pensioners, are scarcely rich – or are small businesses which will now go bust. […]




By Mark J. Grant author of Out of the Box


In all of the tortuous moments that have taken place with the European Union the one thing that has become apparent is a radical change of mindset. In the beginning there was a kind of democratic viewpoint. All nations had a voice and while some were louder than others; all were heard. This is no longer the case.

There is but one mindset now and it is decidedly German. It is not that this is good or bad or even someplace in between. That is not the real issue. The crux of the matter is that not all of the people in the EU are Germans and so they are not used to being treated in the German fashion, they do not live their lives like Germans and, quite importantly, they do not wish to be Germans.

There is the problem.

The Germans will do what is necessary to accomplish their goals. There is nothing inherently bad or evil about this but it is taking its toll on many nations in Europe. In the case of Greece they went back and retroactively changed the covenants of the bond contract. They did not actually admit this of course and they called it other names but that is what they forced on Greece. In doing so they got the bond holders to shoulder a good deal of the expense of the bailout of Greece. You can say, “Right,” you can say, “Wrong,” but that is what they did. They accomplished their goal.

Always remember that the Germans are under severe financial pressure. They are still paying the bill for the East Germans. They support Target2 and their economy is just $3.6 trillion which is a fraction of the entire Eurozone. They are trying to support a house with less than desirable supports.

Then we come to Cyprus and they make it complicated and put one bank with another bank and take money from depositors and call it a “Tax” and say that people and institutions are liable for where they keep their money when it is more than 100M Euros. All true of course but they do not allow for any “Rule of Law” or “Due Process” by the judicial system but just mandate that the money will be used to help pay Europe for a loan to the sovereign government. Then they also tagged senior bond holders reversing their position of the last years so now, so that it can now be said with accuracy; everyone is at risk. Consequently they have to pay less and they have accomplished several goals which are to punish a “Casino Economy,” to put Cyprus in the same position as Greece, which is not only bankrupt but a ward of the European Union, and finally to insist, by the use of money, that Cyprus succumbs to the German demands. Note that CDS in Europe (Markit iTraxx Financial Index) has jumped 22% in just one week.

It is the occupation of Poland in a very real sense just accomplished without tanks or bloodshed as money is used instead of armaments to dominate and control a nation. Politically you may “Hiss” or you may “Applaud” but there are consequences here for investors that must be understood.

First and foremost is that they will not stop. Nothing will be allowed to get in their way. It can be senior bond holders one day, bank depositors the next, the dismantling of some Parliament on the day after that, a wealth tax on corporations on Thursday, the disallowance of dividends on Friday; with every announcement to come on Saturday evening. The next week can be a cap on bank bonuses, a demand that the cap on bank bonus savings be returned to the State, a financial transaction tax that gets expanded and taxes all bond coupons and the list goes on. What might be, could be, and nothing, absolutely nothing, will be allowed between Germany and her desire to control all of Europe. […]




Source: BorderlineReports @

Radiobubble is a community web radio based in Athens. Alongside its daily radio program, Radiobubble has initiated and oversees rbnews, which is a news service compiled from various inputs: journalists, bloggers, citizen journalism, and eye-witness accounts. It works through the hashtag #rbnews on Twitter, and then on their blog, where the cross-checked news items appear.

They now also run an international rbnews service, with news in English, French and Spanish – news you don’t hear much about in the mainstream Media, whether Greek or international. They also have a weekly rbnews international radio show, where the host Theodora

Oikonomides aka @IrateGreek was kind enough to invite me for a chat about journalism in Greece.

We mainly talked about the case of gold mining in the Skouries forest of Chalkidiki and the fuel smuggling scandal involving Aegean Oil as examples of the need for independent, quality media in Greece. Here’s the podcast:


Mar 272013

El análisis  de James Petras, 99GetSmart


“La colaboración ruso-chipriota se va a terminar ahora porque Chipre se somete a los colonialistas en Europa”, afirmó el sociólogo norteamericano James Petras en su columna de análisis de la coyuntura internacional que emite CX36, Radio Centenario (*) y comentó que “Chipre ahora tiene una economía quebrada  y sin futuro, precisamente por su unidad con los países imperiales”.  En su espacio semanal, Petras también abordó los alcances de la gira del presidente estadounidense Barack Obama por Medio Oriente e hizo hincapié en la profundización del imperialismo a nivel  militar y económico. Lo que sigue es la trascripción del análisis de James Petras del lunes 25 de marzo. 

Efrain Chury Iribarne: Ya está en contacto desde Nueva York, James Petras. Buenos días, bienvenido ¿Cómo está?

James Petras: Estamos muy bien, listos para participar en Radio Centenario. 

EChI: La semana pasada nos hizo un buen análisis de lo que significaba la visita de Barack Obama a Israel. Hoy podemos comenzar –si le parece- con  las consecuencias de esa visita.

JP: Hay varias cosas muy claras.

Primero, el hecho de que Obama insista ahora que los palestinos negocien con Israel, independientemente de los nuevos asentamientos, me parece de un enorme impacto porque va a permitir la anexión de todo el territorio palestino. ¿Y qué sentido tiene negociar con un poder que está cada día anunciando nuevos asentamientos, nuevas anexiones, más desplazamiento de palestinos?

En otras palabras, de las declaraciones de Obama se desprende que es el fin de cualquier posibilidad de la existencia de dos Estados.  Hoy en día, el gobierno del Primer Ministro israelí, Benjamín Netanyahu, anunció la instalación de 16 mil nuevas casas en territorio palestino. Hoy, lunes.

Esto es directamente resultado de la visita de Obama que dice que supuestamente está a favor de dos Estados, pero en la práctica el anuncio de que los palestinos no deben imponer condiciones y que deben permitir que Israel siga tomando los territorios palestinos. Eso me parece fundamental.

La segunda cosa, es que Obama fortalezca la alianza norteamericana con el militarismo israelí. Los militares en Israel realmente dominan el país, es un gobierno y una sociedad terriblemente militarizada. Todas las grandes decisiones se toman siempre en los sectores más bélicos, los sectores del alto mando militar israelí. En este sentido hay una gran coincidencia entre la política imperial militarista y la sociedad económica y política israelí. .

El tercer punto es la conclusión de que Estados Unidos entrega su política a manos israelíes, porque según lo dijo el propio Obama ante el Congreso, si Israel decide atacar a Irán, Estados Unidos asume la responsabilidad de entrar en la guerra. O sea  si Israel toma la decisión de entrar en guerra por cualquier razón, independientemente de lo que está pasando en Irán, donde no hay ningún proyecto de militarizar el poder nuclear; Estados Unidos entra directamente en la guerra. Eso significa que hay una entrega de poder sobre decisiones de paz y guerra a los israelíes.

Es una gran traición, pero refleja otra vez –lo que hemos venido mencionando- que la política norteamericana está determinada por la Quinta Columna israelí que opera en el país. Los sionistas deciden que Washington debe tomar decisiones en función de la política externa de Israel.

Un cuarto punto, es que Washington utiliza su influencia con Turquía, en una forma muy agresiva, y Turquía se somete. El Primer Ministro turco, Recep Tayyip Erdogan aceptó una apología pro-forma de Netanyahu diciendo que ya terminaron las diferencias entre Turquía e Israel.

Ahora esta apología de Netanyahu no tiene nada de contenido. El hecho es que los oficiales militares israelíes mataron nueve ciudadanos turcos en aguas internacionales y Erdogan nunca pidió juicio y condena de los israelitas; nunca puso sobre la mesa el hecho de que Israel mantiene el bloque de Gaza, a pesar de que esa era una de las condiciones para restablecer las relaciones. Israel, en contraste, apretó el bloque a Gaza precisamente en momentos en que Erdogan aceptaba la reconciliación. Y esto va contra todos los sentimientos de los turcos –tanto las familias como los ciudadanos solidarios con las víctimas del ataque israelita-

El hecho de que Erdogan se someta a las presiones de Obama para reconciliarse con Israel, me parece algo siniestro, porque atrás de esto están preparando un eje del mal: Israel,  Turquía, OTAN, atacando Siria.

Además,  los vínculos entre el ejército más grande de la OTAN que es el turco, con las poderosas armas israelitas, es una gran camino para militarizar Medio Oriente, y no digo solamente Siria, sino también los países adjuntos, como Jordania, los países del Golfo, los de los monarcas absolutistas. Es una política para fortalecer el imperialismo, el colonialismo y el sub imperialismo turco en este contexto.

Entonces no es simplemente un acuerdo entre Israel y Turquía, sino que es parte de una configuración de poder para maximizar los poderes reaccionarios en el Medio Oriente. 

EChI: Hay informes que indican que en esta visita de Obama además se habría cambiado un ataque inmediato de Israel a Irán, por una intervención israelí en Siria junto a Turquía. ¿Puede leerse así?

JP: La guerra contra Siria está vinculada con una política de quitar a Irán sus aliados, de quitar a los palestinos sus aliados, de quitar a los pueblos que están luchando contra el terrorismo sus aliados. En otras palabras, el ataque a Siria, más allá del daño y la destrucción que están provocando, tiene como objetivo estratégico fortalecer el cerco militar contra Irán. Y ahora mismo, Estados Unidos está presionando al gobierno de Irak para que no permita vuelos de Irán a Siria, porque Irán y Siria son aliados e Irán naturalmente está mandando apoyo material a Siria.

Con esto Estados Unidos tiene doble meta: destruir Siria e imponer un bloqueo aéreo a Irán, a partir de las presiones sobre Irak. Ahora también Israel está montando actividades contra Siria y tratando por varios métodos -a partir de su quinta columna- de fortalecer las sanciones económicas contra  Irán, por ejemplo presionando a Corea del Sur y a Japón para que bajen las compras de petróleos a Irán.

Por tanto, esta política montada contra Siria tiene enormes implicancias para Irán y para la independencia de los países del medio oriente.. 

EChI: ¿El objetivo final del Imperio cuál es? ¿China y Rusia?

JP: Bueno, obviamente que ellos están buscando ampliar, profundizar el imperio. Pero China tiene una enorme capacidad económica y lo muestra actualmente con acuerdos con todos los países de Asia, África, América Latina e incluso con Rusia.

Es muy difícil para los Estados Unidos debilitar China, particularmente por la enorme deuda que tiene con China, porque China tiene más de tres billones de dólares en Bonos del Tesoro.

En todo caso es un proyecto, pero la capacidad de realizar ese proyecto es muy limitada, a pesar de que están montando bases militares en Australia, Filipinas, Corea del Sur.; mientras China sigue creciendo y aumentando sus vínculos comerciales,y  inversiones.  Al final de cuentas, al menos en el corto plazo, Washington no vaya a tener el mismo éxito o tenga las mismas palancas que está utilizando militarmente contra Siria y económicamente contra Irán.Con China es otro juego, es el segundo poder económico en el mundo, no es tan fácil atacarlo. En todo caso, como en cualquier situación, el poder emergente –que es China- enfrenta al imperio en declive en un conflicto, pero mientras tanto el conflicto queda en niveles diplomáticos y no militares. 

EChI: ¿Y la vieja Europa con la OTAN, podrían actuar de otra manera que no sea de gendarmes agresores. 

JP: Es una pregunta hipotética, si miramos la realidad de los últimos años no necesariamente histórica, porque en la historia es claro que la fuerza militar sirvió para abrir países para su explotación. Pero  de facto, en los últimos años, se ve un resurgimiento del militarismo con mucha virulencia. Por ejemplo, Europa con Estados Unidos en las guerras de Afganistán e Irak, en la invasión a Libia, en los ataques a Siria,  en las agresiones en Mali, en África, todo indica que el militarismo sigue siendo el eje de los poderes europeos y norteamericanos.

Y quiero sumar otro hecho importante: no es simplemente que haya un nuevo colonialismo dirigido a fuera de Europa, porque dentro de Europa tenemos a Grecia, España, Portugal e Islandia, donde los banqueros de Alemania, Inglaterra y Francia, están dictando las políticas como cualquier poder colonial. Bruselas, donde no hay oficiales elegidos de los Bancos que toman las decisiones, está extrayendo rentas extraordinarios como forma de cobrar deudas. Incluso ahora podemos ver esto en Chipre donde el poder de los banqueros europeos están extrayendo millones y millones de euros, quebrando la economía, imponiendo condiciones que van a generar una depresión, para que los bancos en Grecia, Chipre, sirvan como cinturón de transmisión de riquezas, primero desde los ahorristas y luego de los clientes de Chipre, desplazando por ejemplo a Rusia, que es el primer cliente de Chipre. La colaboración ruso-chipriota se va a terminar ahora porque Chipre se somete a los colonialistas en Europa.

Entonces podemos ver los dos sentidos del colonialismo europeo: el militar y el económico. Y me refiero a europeo hablando de Alemania, Francia, Inglaterra, Holanda y los países nórdicos que actúan como los nuevos patrones coloniales, montando guerras y montando sistemas oligárquicos dictatoriales sobre las economías de los otros países de la misma Europa. Entonces, el colonialismo ahora está más que nada fortalecido dentro de la misma Europa. 

EChI: ¿Qué otros temas se destacan en estos días?

JP: Es importante lo que mencionaba recién, el caso de Chipre.

Chipre cayó en una trampa sobre desarrollando el sector –financiero-turístico a partir de lazos financieros en todas partes con varios países de Europa y con Rusia en particular. Ahora, esta relación financiera, muy desequilibrada, fomentada por los políticos -tanto comunistas como reaccionarios derechistas- generó una enorme dependencia chipriota del sector financiero, de los financistas.

Chipre tenía ambiciones de ser un poder financiero, pero compitiendo en algún sentido con Alemania, Francia y los demás países dominantes; y eso no se puede tolerar; y en algún momento la crisis económica impactó a partir de Grecia afectando Chipre. Es decir, la depredación de Grecia, la crisis griega, tuvo enorme repercusión en Chipre porque Chipre estaba tomando las acciones y depósitos de los griegos en crisis.

A partir de eso, es que Chipre cae en una trampa, en una situación imposible. Anoche anunciaron un acuerdo, que va a defender a los pequeños ahorristas, pero al mismo tiempo va a perjudicar a todo el sistema financiero porque los grandes financistas rusos no van a confiar más en las transacciones con Chipre. Así, Chipre va a caer en una profunda recesión, aumentará notablemente el desempleo y perderá su posición como  centro financiero ¿Quién va a confiar en un gobierno que rebaja los ahorros en un 30%?  

En otras palabras, podemos ver varias cosas en Chipre: primero, un modelo económico enfocado sobre las finanzas y el sector inmobiliario, lo que es un desastre. ¡Ojo, Uruguay!

Segundo, la necesidad de consolidar un régimen con políticas que se basen en múltiples actividades, tanto productivas como de servicios,  finanzas.

Y tercero, no se puede confiar en la Unión Europea, porque en Europa se repite la misma hierarquía que existe afuera. O sea, la Unión Europea replica lo que existe entre los poderes imperiales y poderes no imperiales; no es un acuerdo o una integración entre iguales. Chipre cae en esa trampa pensando que podía mejorar su vida, subir al nivel europeo a partir de esa ‘asociación’. Pero estaba asociado a asesinos y explotadores. 

Al final de cuentas vemos como siempre el cuento del tiburón y la sardina, donde siempre el tiburón termina comiéndose a la sardina y no a la inversa.

Chipre ahora tiene una economía quebrada  y sin futuro, precisamente por su unidad con los países imperiales, eso quiero enfatizarlo. Mientras, los rusos quedan marginados de estas decisiones y son los grandes perdedores en el sentido económico.

EChI: Por acá lo de Chipre parecía de poca importancia, parece que no es así. ¿Cuál es la importancia de la caída de Chipre?

JP: La razón por la que Europa llegó a un acuerdo con Chipre, fue por una regla generalizada. Si Chipre dejaba de funcionar en la Unión Europea, o sea rechazaba las condiciones  que le impone Europa, abriría la puerta para que los otros países afectados negativamente por los préstamos europeos, puedan también salirse. Grecia, por ejemplo, España, Portugal, Islandia, todos estos países sufren las mismas depredaciones  a partir de Alemania, porque Alemania mand.El nuevo imperio alemán está en función de su control sobre el sector financiero de la Unión Europea. Ahora, si un país decide no aceptar esas condiciones, no imponer el máximo desempleo, y deciden buscar otro camino, renunciar a la deuda y buscar un nuevo modelo, eso crearía una alternativa para todo el sur europea, lo que implicaría la quiebra de la Unión Europea.

Por tanto, pese a que Chipre es una pequeña isla de poco más de 500.000 habitantes, no puede descartar el hecho, porque una vez que un país decide salirse, puede tener un efecto dominó con otros países que puedan seguir a Chipre en la opción de retirarse antes de capitular. Por esa razón, Europa que impone condiciones pero al final de cuentas salva al régimen, salva al sector de la clase política chipriota que sigue colaborando con la explotación y la extracción de riquezas. Ahora habrá una Chipre más pobre, con menos futuro pero en todo caso se queda dentro de la Unión Europea, supuestamente salvando el sistema financiero que de todos modos queda profundamente dañado.

EChI: Petras nos aclaró mucho con su análisis, sólo nos resta agradecer mucho sus aportes y convocarlo nuevamente para el próximo lunes.

JP: Bien, muchas gracias y un saludo a todos los oyentes. 

(*) Escuche en vivo los lunes a las 11:30 horas (hora local) la audición de James Petras por CX36, Radio Centenario desde Montevideo (Uruguay) para todo el mundo a través de

Mar 262013

Posted by greydogg, 99GetSmart


Source: – Solidarity

Sign our petition! Visit

Solidarity with the Greek People Campaign
For a revision of austerity policies

Europe must prevent the situation in Greece from becoming a humanitarian catastrophe and make sure that the same remedy is not applied to other weak economies.

Sign the petition! We ask the members of the Troika and the Greek government, to revise the austerity plan and put humans and their needs at the centre of their policies.

The results will be sent to the Troika and Greek government on the 9th of May 2013.




By Henry Blodget, Business Insider

The good old days ...

The good old days …

As expected, Cyprus and the EU reached a new late-night bailout deal last night that will reduce the chance that Cyprus’s financial system and economy will completely implode.

The new deal is better than the last deal in one key respect:

  • Deposits under 100,000 euros will be protected

That’s very important. Those deposits were ostensibly “insured.” To seize them, the way the last bailout deal would have, would have been grossly unfair and would have set a truly alarming precedent.

Now, small depositors in European banks can breathe more easily. At least in this case of gross malpractice on the part of reckless bank managers, their life savings have been preserved.

Alas, the good news ends there.

Although deposits under 100,000 euros will be spared, deposits over 100,000 euros will be seized and subjected to an as-yet undetermined haircut–with the confiscated money going to bail out the gambling losses of the aforementioned reckless idiots who run some of Cyprus’s banks.

This seizure, needless to say, will dampen the enthusiasm of rich depositors for keeping money in banks that get themselves into financial trouble.

And because many, many banks in Europe have gotten themselves into financial trouble, this will create a general state of unease among rich depositors throughout the Eurozone.

And it should wig out some bank lenders, as well. […]




Source: Bloomberg


After one of the most fabulous verbal faux pas in recent history was committed yesterday, in which the truth briefly escaped the lips of the new Eurogroup head who still has to learn from his masterful “when it becomes serious you have to lie” predecessor and ever since both he and all of uber-incompetent Europe have been desperate to put the genie back into the bottle to no avail, everyone has been caught in a great debate: to template, or not to template?  Below is a summary of Wall Street’s thinking on this key for so many European (and soon global) depositors.

Deutsche Bank:

  • Damage from Dijsselbloem’s earlier message was done even as he tried later to clarify his Cyprus template remark, Jim Reid, head of fundamental strategy at Deutsche Bank, writes in note
  • Cat increasingly let out of bag in past week on different ways to resolve future banking and sovereign crises; comments yday add to risk nothing is off the table when it comes to future issues
  • Investors and creditors may also take the view that there’s increasing inconsistency about future rescues


  • Dijsselbloem’s comments reflect clear misalignment in views among Europe’s leaders on structure and timing of banking resolution, Fabrice Montagne, economist at Barclays, writes in note
  • Expect policymakers to clarify ESM role at upcoming EU summit in June; no clarity at the moment on whether ESM will take full responsibility for bank recapitalization for weak banks once the single supervisory mechanism is in place

Morgan Stanley:

  • Cyprus bailout shows increasingly apparent change in EU approach to place burden on investors and depositors rather than tax payers, Hans Redeker, strategist at Morgan Stanley, writes in note
  • Dijsselbloem’s comments of Cyprus template is consistent with with the change in approach to bailouts even after he back-pedaled; comments consistent with those of Merkel and recent bank nationalization in Holland
  • Investors who recently returned to peripheral mkts may be deterred by perceived change, increasing EUR’s downside risk


  • Dijsselbloem’s comments, together with the ditched plans to take on small deposit holders, show genuine change in approach to solve banking sector problems
  • In future, tax payers may not be the only source to absorb banking sector losses; re-fragmentation in
    Eurozone could be a consequence of Cyprus deal
  • Negative for Ireland if Dijsselbloem’s comments do point at a change in stance; inability to resort to ESM to take over recapitalization of Irish banks may complicate exit from bailout […]




By Paul Wallis, Digital Journal

ADAMS270512_2231005aYou get tired of writing about nothing but human stupidity after a while. The Cyprus case, however, is exceptional in its sheer bastardry. A bailout with no specifics, a policy with no objectives and less economic planning, you name it, it’s all there.

Cyprus, very reluctantly, has been forced into a bottom line deal which it didn’t want. Consumers are being made to pay for the failures of financial institutions. The EU and IMF, supposed guardians of the public interest, are punishing the public. The Cyprian economy is poised to take advantage of natural gas reserves offshore, and is being crippled before it does.

If this sounds like a quick fix at the cash register, it is. What’s screamingly obvious is that the future isn’t being considered at all. Likely job losses will decimate the Cyprus economy, which in what may well be a Depression mode, is then expected to support itself. According to some sources, 70% of Cyprians work in the financial sector. Guess what’s going to happen to those jobs as the sector shrinks.

Double standards, there are many:

(a) Cyprus has been accused, in fact, of having a financial sector that’s “too big”. This means that Luxembourg, Switzerland, Monaco and other financial centres around the world are also too big?

(b) Russian money is a problem- For someone. People have been quick enough to accept Russian money around the world, but not Cyprus? If there are any irregularities with the Russian financial interests, why are the Cyprian people, not the Russians or apparently anyone else, paying for failure to enforce financial laws?

(c)The reasons cited for the crackdown on the Cyprian banks are “poorly performing assets”. The fix is to create a “bad” bank to manage those assets and transfer deposits to the Bank of Cyprus. This will be done after ripping off whatever’s available from the depositors who are supporting the economy.

(d) It’s also being done at the expense of the domestic economy which is paying the bread and butter for businesses with their savings. That means that the net amount of money in the Cyprus economy is being drastically reduced.

Meanwhile, the rumbles in a small island economy are affecting global “optimism” and stock prices, according to Bloomberg. Isn’t that just too damn sad? They’ve even found another way for other people to lose money as a result of the crisis. The sheer genius never ends, does it?

Now a few questions:

1. How are Cyprians going to pay bills?

2. How does an economy keep working if people can’t pay their bills?

3. How is the small Cyprian economy expected to function with so much less cash in circulation?

4. How is the economy supposed to develop from this point?

There’s a typical finance sector situation in play here, too:

1. There’s a series of disasters, but absolutely nobody is held responsible. There’s no suggestion that anyone will ever be held responsible.

2. The complexities of financial asset management are used as a smokescreen for various forms of corruption, money laundering etc., but that’s OK with the EU, just as it was with the US after the mortgage securities disaster.

3. The public are penalized. As in the US, the catastrophic failures of the finance sector in Greece and Spain have resulted in massive job losses and trashing the domestic economies.

4. Priorities are distorted. € 10 billion is peanuts to Europe. Why not come up with a workable long term fix, instead of a slash and burn exercise for such a small amount of money over say 20 years, not 2 weeks? Because someone obviously doesn’t want a rational solution. […]




By Tyler Durden, zerohedge


Yesterday, we first reported on something very disturbing (at least to Cyprus’ citizens): despite the closed banks (which will mostly reopen tomorrow, while the two biggest soon to be liquidated banks Laiki and BoC will be shuttered until Thursday) and the capital controls, the local financial system has been leaking cash. Lots and lots of cash.

Alas, we did not have much granularity or details on who or where these illegal transfers were conducted with. Today, courtesy of a follow up by Reuters, we do.

The result, at least for Europe, is quite scary because let’s recall that the primary political purpose of destroying the Cyprus financial system was simply to punish and humiliate Russian billionaire oligarchs who held tens of billions in “unsecured” deposits with the island nation’s two biggest banks.

As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.

From Reuters:

While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.

No one knows exactly how much money has left Cyprus’ banks, or where it has gone. The two banks at the centre of the crisis – Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus – have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia’s Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks’ largest depositors. […]

Via The FT

One Cypriot lawyer with Russian clients said he had already been approached by half-a-dozen European banks in locales ranging from Latvia to Switzerland to Germany, some of them promising they could open new bank accounts for his clients in under an hour.

The Cypriots killed their country in one day,” says Mr Mikhin, referring to Friday March 15, when President Nicos Anastasides accepted the EU’s proposal to seize €5.8bn in emergency funds from Cyprus’s local and foreign depositors.

“The locals should understand: as soon as the money leaves, the people who go to restaurants, buy cars and buy property leave too. The Cypriots’ means of living will disappear,” he says.

“They are saying we laundered all the money, but they lived on that money for 10 years and forgot about it.”

Says another Nicosia-based lawyer: “I don’t understand why it is money laundering when it’s in Cyprus, when in London it’s a perfectly respectable company.”

If the double-taxation treaty is lifted there will be no reason for us to stay in Cyprus,” an oligarch’s Russian lawyer says bluntly.

Mr Mikhin complains that the Cypriots do not appreciate the extent to which Russia has propped up the local economy. “When the Russians leave who is going to stay at the Four Seasons for $500 a night? Angela Merkel?”

But there are signs that a growing number of locals realise how drastic a mass emigration of Russian business would be.

Over the past week, a new billboard has sprung up on the highway between Limassol, the palm-treed beach town favoured by the Russians, and Larnaca International Airport.

Drawing on Russia and Cyprus’s shared Orthodox faith and deep political ties dating back to the Soviet era, the advertisement displays a massive Russian flag, with a desperate plea in Russian underneath: “Brat’ya ne predaite nas!”

“Brothers, don’t betray us!”




By Steve Hanke, Proffessor of Applied Economics, Johns Hopkins University

Hayek v. Krugman – Cyprus’ Capital Controls

Nobelist Paul Krugman has a propensity to spin and conceal. This allows for deception – the type of thing that hoodwinks some readers of his New York Times column. While deception doesn’t qualify as lying, it also fails to qualify as truth-telling.

Prof. Krugman’s New York Times column, “Hot Money Blues” (25 March 2013) is a case in point. Prof. Krugman sprinkles holy water on the capital controls that will be imposed in Cyprus. He further praises to the sky the post-1980 capital controls that were introduced in a number of other countries.

Prof. Krugman then takes a characteristic whack at all those “idealogues” who might dare to question the desirability of capital controls:

But the truth, hard as it may be for ideologues to accept, is that unrestricted movement of capital is looking more and more like a failed experiment.

Fine. But, not once did Prof. Krugman mention that there just might be a significant cost associated with the imposition of capital controls – a cost with which Prof. Krugman is surely familiar.

Before more politicians fall under the spell of capital controls, they should take note of what another Nobelist, Friedrich Hayek, had to say in his 1944 classic, The Road to Serfdom:

The extent of the control over all life that economic control confers is nowhere better illustrated than in the field of foreign exchanges. Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape—not merely for the rich but for everybody.

When it comes to capital controls, I think the Cypriots – even the non-ideologues – might be inclined to agree with Hayek over Krugman. […]

READ @–-cyprus’-capital-controls



By Eirene, A Place Called Space


Mar 252013

Posted by greydogg, 99GetSmart


By Martin Sibileau, View from the Trenches


The Cyprus 2013, like any other event, can be thought in political and economic terms.

Political analysis: Two dimensions

Politically, I can see two dimensions. The first dimension belongs to the geopolitical history of the region, with the addition of the recently discovered natural gas reserves. The historical relevance goes as far back as 1853, the year the Crimean War began. The Crimean War took place in the adjacent Black Sea, but the political interest was the same: To avoid the expansion of Russia into the Mediterranean. The relevance of this episode was the break-up of the balance of power established after the Napoleonic Wars, with the Congress of Vienna, in 1815. From then on, a whole new series of unexpected events would lead to a weaker France, a stronger Prussia, new alliances and a final resolution sixty years later: World War I.  It is within this same framework that I see Cyprus 2013 as a very relevant political event: Should Russia eventually obtain a bailout of Cyprus (as I write, this does not seem likely) against a pledge on the natural gas reserves or a naval base, a new balance of power will have been drafted in the region, with Israel as the biggest loser.

The second political dimension refers to a point I made exactly a year ago, precisely inspired in the KreditAnstalt event of 1931. In an article titled: “On gold, stocks, financial repression and the KreditAnstalt of 1931” I wrote:

“(The KreditAnstalt event) was triggered because France, a public sector creditor, introduced a political condition to Austria, in exchange for a bailout of the KreditAnstalt. Today, like in 1931, in the Euro zone, the public sector is increasingly the creditor of the public sector. In 1931, England and France were creditors of Austria and demanded conditions that no private investor would have demanded.

Private investors live and die by their profits and losses. Politicians live and die by the votes they get. Private investors worry about the sustainability and capital structure of the borrower, the collateralization and the funding profile of their credits. Politicians worry about the sustainability of their power. It’s a fact and we must learn to live with it.

In 2012, Greece and increasingly other peripheral EU countries owe to other governments, the IMF and the European Central Bank. Private investors have been wiped out and will not return any moment soon. We fear that just like in 1931, when the next bailout is due either for Greece again or Portugal or Spain, political conditions will be demanded that no private investor in his/her right mind would ever have demanded. Think of it…What in the world had the customs union between Austria and Germany in 1931 had to do with the capitalization ratio of the KreditAnstalt??? Nothing! Yet, millions and millions of people worldwide were condemned to misery in only a matter of days as their savings evaporated! Ladies and gentlemen, welcome to the world of fiat currencies! You have been warned! If months from now you read in the papers that the EU Council irresponsibly demands strange things from a peripheral country in need of a bailout, remember the KreditAnstalt. Remember 1931.

Please, understand that this is not a tail risk. The tail risk is precisely the opposite. The real tail risk here is that when the next bailout comes due, politicians think like private investors and give priority to economic rather than political considerations. That’s the tail risk! If such a crisis occurred, the media will speak of increased correlations and tell you that everything is actually fine on this side of the Atlantic. But if you read us, you will know that all that led to such a situation was perfectly foreseeable and nothing is really fine on this side of the Atlantic either. You will have remembered 1931…” […]




By Tyler Durden, zerohedge


Having soared in a kneejerk response to news of the Cyprus deal which was a replica of what had been expected to take place last Friday, and thus largely priced in, it was not surprising to see the EURUSD gradually drift lower in the overnight session, printing below 1.30 at last check (and the Cyprus euphoria was not enough to push Shanghai green(. And while S&P futures ramped alongside the carry pairs early in the overnight session, the ramp has so far been contained, as the recently re-carried USDJPY pair has also refused to take out the 95.00 level in an upward direction.

In terms of events, as UBS points out, all eyes should remain focused on Cyprus today, especially since there is no data being reported elsewhere. Financial markets closed Friday on a positive note, as an agreement on Cyprus appeared to be taking shape and a minor relief rally across most asset classes overnight vindicated hopes of a positive outcome as details of the detail were announced overnight. More clarity is still required on some aspects of the agreement (deposit and bondholders) but the fact that the national parliament does not need to vote again should stop the deal from unravelling as it did last week. Whether this is enough to restore confidence and prevent a possible cautionary deposit flight from Cyprus remains to be seen.

However, the key variable now remains Russia, whose first deputy PM Shuvalov said is waiting for final Cyprus deal before reacting; does not rule out renegotiating Cyprus loan. If anyone can tip the boat on Europe now, it is Russia. […]




Source: OpenEurope


Summary: The most positive aspect of last night’s deal was that a deal was reached at all, and that some steps have been taken to counter moral hazard. However, overall, this is a bad deal for Cyprus and the Cypriot population. Cypriot GDP is likely to collapse in the wake of the deal with the possible capital controls hampering the functioning of the economy. The large loan from the eurozone will push debt up to unsustainable levels while the austerity accompanying it (along with the bank restructuring plan) will increase unemployment and cause social tension. There is a strong chance Cyprus could become a zombie economy – reliant on eurozone and central bank funding, with little hope of economic growth. Meanwhile, the country will remain at the edge of the single currency as tensions increase between members with Germany, the ECB and the IMF now looking intent on a more radical approach to the crisis.

The eurozone took this one down to the wire. But late last night, after a week of intense back and forth negotiations, a deal was reached on the Cypriot bailout. Below we lay out the key points of the deal (the ones that are known, there are plenty of grey areas remaining) and our key reactions to the deal.

Key points of the deal:

  • Laiki bank will be fully resolved – it will be split into a good bank and bad bank. The good bank will merge with the Bank of Cyprus (which will also take on Laiki’s circa €8bn Emergency Liquidity Assistance – a last-resort funding system outside the usual ECB operations). The bad bank will be wound down over time with all uninsured depositors (over €100,000) taking significant losses (no percentage yet but some could lose all their money above the threshold).
  • The Bank of Cyprus will be recapitalised using a debt to equity swap and the transfer of assets from Laiki. Uninsured depositors will take large hits in this process – again no percentage but reports suggest up to 40%.
  • These actions will be taken using the new bank restructuring plan passed in the Cypriot Parliament on Friday. Crucially, no further vote will be needed in the Cypriot parliament since there is no direct deposit levy.
  • The banks will not receive any of the €10bn bailout money, the entire recapitalisation will be done using the tools outlined above.
  • Not clear when the banks will reopen but significant capital controls are likely to be in place, creating a risk of Cypriot euros being “localised”.
  • Further tax increases may be included in the detailed plan to be drawn up between the two sides. […]




Source: youtube


Mar 242013

Posted by greydogg, 99GetSmart


By George Lakey, Wagining Non Violence

Protesters demand the resignation of the government in Reykjavík, Iceland, on November 15, 2008. (Wikimedia Commons/OddurBen)

Protesters demand the resignation of the government in Reykjavík, Iceland, on November 15, 2008. (Wikimedia Commons/OddurBen)

When the banks of the Sweden, Norway and Iceland went out of control, the people refused to bail them out, and the economies of all three countries were the better for it. Instead of allowing themselves to be bullied by international investors represented by the IMF and the European Union, the Cypriots who are facing a similar crisis today might want to learn from the Viking example.

The Cyprus banking sector went rogue to the point that it became eight times larger than the rest of the country’s economy. Perhaps the bankers thought they would become too big to fail, requiring the country to rescue them. But why should citizens rescue bankers?

There is a better way, which is what the Scandinavians insisted on.

When it comes to a financial crisis, what’s needed is the combination of popular will and the existence of an alternative. The Vikings combined smart economics with the organizing muscle to make it happen. As a presidential candidate in 2008, Barack Obama said he knew that the Swedes handled their banking crisis in the correct way, but he also acknowledged that the United States wouldn’t follow the Swedish path. Why? Obama believed that we wouldn’t back him with a mass direct action movement in a confrontation with Wall Street.

So, what is the alternative to bailouts for rogue banks? And what can a movement do when the party in power is in bed with the 1 percent?

What democracy looks like when banks go out of control […]




Source: youtube

Professor Yanis Varoufakis on BBC Radio 4 speaking on the Cyprus economic crisis on 21/3/13.




Source: azizonomics

Laiki Bank, Cyprus

ATM lines at Laiki Bank, Cyprus

According to Zero Hedge, it could be Spain:

 Spain, it would appear, has changed constitutional rules to enable a so-called ‘moderate’ levy on deposits.

New legislation in New Zealand suggests that depositor funds could be used to bail out banks there, too.

Far more worrying for American and British depositors though is this paragraph Golem XIV brings up from a joint Bank of England and FDIC paper from 2012 which points to the possibility of using deposit insurance funds to bail out illiquid banks:

The U.K. has also given consideration to the recapitalization process in a scenario in which a G-SIFI’s liabilities do not include much debt issuance at the holding company or parent bank level but instead comprise insured retail deposits held in the operating subsidiaries. Under such a scenario, deposit guarantee schemes may be required to contribute to the recapitalization of the firm, as they may do under the Banking Act in the use of other resolution tools. The proposed RRD also permits such an approach because it allows deposit guarantee scheme funds to be used to support the use of resolution tools, including bail-in, provided that the amount contributed does not exceed what the deposit guarantee scheme would have as a claimant in liquidation if it had made a payout to the insured depositors.

Of course, if deposit insurance money is used as a resolution tool to bail out a bank which then goes on to fail anyway (as we have already seen multiple times since 2008 — a bank receives a large liquidity injection, and goes onto fail anyway) depositors could end up moneyless.

As Golem XIV notes:

The new system makes the Deposit Guarantee fund available for use as bail out money.

The rationale is that if using your deposit guarantee fund for propping up the bank ‘saves’ the bank from collapse then you wouldn’t need that deposit guarantee would you? This overlooks the one lesson we have all learned from the bank bail outs of the last 5 years, that the bail outs are never, ever, ever, a one off. The first one fails to save the bank as does the second and third and and and.

So if I have read the above correctly – the new system raids the Deposit Protection scheme, gives it to the bank instead of you  and when that fails to save the bank…then what? The bank fails again and there is no money left in the Deposit Guarantee scheme. […]




Source: Washington’s Blog

Bernanke Entirely Fails to Answer Question

The government of Cyprus wants to grab bank deposits, and the chief economist of the German Commerzbank has called for private savings accounts in Italy to be similarly plundered, and other nations may be moving in that direction as well.

The American government has seized private assets before, and President Obama authorized seizure of property again last year. (The Argentinian government grabbed 401k assets; and some in the American government have mulled the same thing. And the  U.S. government’s take-down of Megaupload was also an exercise of the power to seize all of the legal property held in a storage facility because a handful of crooks have illegal property in theirs.  )

Zero Hedge has been warning for years that Western governments – including the U.S. – would eventually seize bank assets.

Bernanke was asked yesterday whether a Cyprus-style grab of bank deposits is possible in the U.S. :

Question: I was wondering if you can tell me how if a run on the banks happens in Cyprus, how that might affect U.S. markets. And also is it possible for the U.S. to levy a tax on regular deposits here? Or why not?

Bernanke: As someone mentioned Cyprus is a tiny economy. I don’t think these issues as worrisome as they are and as concerned as we would be for the Cyprus people, I don’t think that they have a direct implications for the U.S. economy.

The only way that they would create a problem would be if the runs became contagious in some sense, if depositors in other countries lost confidence. But to this point I’m not aware of any evidence that that is in fact the case.

The argument the Europeans are making is that Cyprus is a unique situation, very different situation, and indeed, it is quite unusual to have a banking sector as large as they have relative to their economy.

In terms of the United States, the FDIC was founded in 1934, and we have insured deposits and they are very proud of the fact that no one has ever lost a dime in insured deposits.

And during the crisis the response of the government was in fact to increase the level of deposit or account sizes that were insured. So I consider that to be extremely unlikely in the United States. […]




Source: Yiannis Biliris, vimeo

Θέλουν να πουλήσουν το νερό; Stop the water privatisation in EU from Yiannis Biliris on Vimeo.

Sign the European Citizens Initiative (All EU Citizens).

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By Sergio Ferrari, Mimoun Rahmani, CADTM

logo_forum_social_mundial2The success of the next World Social Forum (WSF) in Tunis depend fundamentally on the ability of social movements to appropriate open space and give a true transformer content. This is the main thesis of Mimoun Rahmani, an active member of the Maghreb Social Forum, which, as such, has participated in several preparatory meetings in Tunis 2013.

“The region of the Maghreb / Mashreq, mainly Tunisia, Morocco, Algeria and Egypt, was the scene of major uprisings in recent years. This is an ongoing process, unfinished, which will require us time and struggles … “said Rahmani, a leader of ATTAC Morocco and the Committee for the Abolition of Third World Debt (CADTM) the same country.

In this sense, the convening of the Forum, to the end of March, in the Tunisian capital, where between 30 and 50 thousand participants are expected to meet – according to estimates by organizers – “may have a significant impact if social movements are present the most dynamic in the region, those actors revolutionary process.”

A challenge which is not a foregone conclusion, given that many of these social actors frontline “have very specific agenda of priorities and, in addition, many suffer financial constraints to move,” said Rahmani.

For this reason it is particularly important that can be achieved on the promise of the organizers of the WSF 2013, to devote a percentage of the budget to facilitate this participation. According to Rahmani, a total budget of about one and a half million euros, was planned originally, allocating 15% to the solidarity fund to promote participation:

“We realized assemblies preparation of the WSF in July and December … And we see that NGOs predominate. But the end of 2012, there was a low participation of social movements. “

The biggest challenge reiterates Rahmani, is “how movements mobilize who actually struggled, how they are involved. Especially youth movements, the unemployed, students, peasants … that exist in the region but do not have the resources to move. And who does not clearly identify the WSF as a means to catalyze their real fighting.”

Thinking behind the leader of ATTAC Morocco, is a recurring theme in the space of altermondialiste Forums : That of “political content”. Although programmatic axes are provided extensive and interesting, the challenge is to “give political content in the Forum.”

Thus, “some sectors have expressed the need for a forum with discussions, lectures but also concrete actions on the ground, holding shares in public places; protests outside the Central Bank of Tunisia … engage people, create Forum areas close to the people and not in isolated areas difficult to access.”

Not to mention, insists Rahmani, “the explosive situation in the Maghreb, and many other parts of the world, is the result of a hegemonic system, based on structural adjustment and free trade agreements that have impacted catastrophic for the people. ” The importance of the WSF Tunis will be linked to the ability to “reconcile and unite the struggles. In a strategic location such as North Africa, close to Europe, sub-Saharan Africa and the Middle East in turmoil, “he concludes.

Translation : Liliane Fazan




Source: youtube


Mar 232013

By James Petras, 99GetSmart



As President Obama enters his second term with a new Cabinet, the foreign policy legacy of the past four years weighs heavily on their strategic decisions and their empire-building efforts. Central to the analysis of the next period is an evaluation of the past policies especially in regions where Washington expended its greatest financial and military resources, namely the Middle East, South Asia and North Africa.

We will proceed by examining the accomplishments and failures of the Obama-Clinton regime.  We will then turn to the ongoing policy efforts to sustain the empire-building project.  We will take account of the constraints and opportunities, which define the parameters resulting from imperial military ambitions, Israeli-Zionist influence in shaping policy and the ongoing anti-imperialist struggles. We will conclude by examining likely polices and outcomes resulting from current strategies.

The Clinton-Obama Imperial Legacy:  The Accomplishments

The greatest success of the Obama-Clinton (OC) imperial legacy was the virtual elimination of organized domestic anti-war dissent, the demise of the peace movement and the co-optation of virtually the entire ‘progressive’ leadership in the US – while multiplying the number of proxy wars, overt and covert military operations and ‘defense’ spending.  As a result, the entire political spectrum moved further to the right toward greater militarization abroad and increased police-state measures at home.

Facing mass revolts and the overthrow of long-standing client regimes in Egypt, Tunisia and Yemen, the Obama-Clinton (OC) Administration moved rapidly to reconfigure new client regimes while preserving the state apparatus – the military, intelligence, police, judicial and civilian bureaucracy.  The empire dumped incumbent regimes in order to save the repressive state, the key guarantor of US strategic interests. Washington reminded its client rulers that ‘There are no permanent alliances, there are only permanent imperial interests’.  Washington successfully engineered a political pact between conservative Islamist leaders and parties and the old military elite.  The new political blocs in Egypt upheld Israeli annexation of Palestine, the brutal blockade of Gaza and the neo-liberal economic order.  Washington repeated the ‘reshuffle of clients’ in Yemen and Tunisia.  The OC intervention temporarily aborted the pro-democracy, anti-Zionist and anti-corruption popular revolt.  The OC policies secured a temporary respite, but the subsequent effort by Egypt to secure an IMF loan has led to a stalemate amid deteriorating economic conditions and rising political protest.  The successful imposition of new client regimes amenable to US hegemony in Egypt, Tunisia and Yemen, in the face of popular revolts, marked the beginning of a series of favorable political-military outcomes in the region for the OC regime.

Facing Israeli annexation of ever-widening swaths of Palestinian land and the end of any pretense of ‘peace negotiations’, Washington continued to provide Israel with massive military assistance, modern weapons systems and unconditional political support in the UN.  By submitting to Israel the OC regime succeeded in retaining the political support of the domestic Zionist power configuration (ZPC). The OC regime’s economic handouts supported the puppet Palestinian Liberation Organization (PLO) as it policed the West Bank for Israel.  Despite losing the vote to seat the Palestinians as a non-voting member in the UN, Washington succeeded in blocking full membership.  The OC regime succeeded in fulfilling its role as Israel’s handmaiden, despite opposition from the vast majority of UN members.

The OC regime succeeded in tightening sanctions on Iran, by securing Russian, Chinese and Arab League support, without provoking a potentially destructive war. The US sanction policy toward Iran is largely designed and implemented by key Zionist appointees in the Treasury (formerly Stuart Levy, now David Cohen) and in Congress, by legislators bought and directed by the powerful America-Israel Political Affairs Committee (AIPAC).

The US, under Obama-Clinton, destroyed the independent nationalist Gadhafi government via a joint air war with the EU and tried to set up a client regime.  In turn, Libya became a key recruiting ground for violent Islamist mercenaries invading Syria and weapons depot supplying Islamist terrorists. The OC regime’s military success in Libya was part of a general strategy to accelerate the expansion of US and European military operations in Africa.  This includes setting up drone bases and promoting African mercenary armies from Uganda, Kenya, and Ethiopia to expand imperial control in Somalia, Mali and elsewhere.

In the Gulf region the US succeeded in propping up the autocratic Bahrain monarchy, as it killed and jailed opponents and outlawed the mass pro-democracy social movement among its oppressed Shi’a majority population.  The OC regime successfully secured Gulf state financing for the Libyan and Syrian wars.

In Iraq, the US has succeeded in dividing the devastated nation into fragments of warring fiefdoms, Shi’a, Sunni, Kurd and subsets of each.  It succeeded in destroying a once modern and secular society, an advanced economy and independent nationalist regime.  Initially the OC regime hoped to establish a client outpost in Iraq from which to secure Washington’s wealthy petro-clients in the Gulf, especially among the patrimonial dictatorships in Saudi Arabia, Qatar, Bahrain, Kuwait and United Arab Emirates.

Washington, in alliance with other NATO powers and its Gulf state clients, succeeded in converting a peaceful civilian protest movement in Syria into a full scale civil war and military invasion, increasingly dominated by armed Al Qaeda ‘internationalists’.  The US-EU-Gulf State-Turkey-Israeli alliance has armed, financed, trained and advised Islamist and mercenary terrorists to effectively destroy the Syrian state, society and economy, dispossessing and uprooting a million refugees across the border and resulting in the death and injury of hundreds of thousands. The US promoted invasion of Syria has seriously weakened one of the last governments defending the Palestinians, opposing Israeli colonization of the West Bank and providing a refuge for persecuted Palestinian leaders.  By virtually destroying the Syrian state, the OC regime has driven a wedge between Hezbollah, the leading nationalist force in Lebanon and its ally Iran, while tightening the military encirclement of Teheran and exerting cross-border pressure against Iraq.  A brutal Islamist regime in Syria will replace the secular state with prospects of massive ethnic cleansing against minority populations, especially Christians and Allevis.

Obama and Clinton successfully expanded the drone assassination program throughout the Middle East and South Asia, killing more civilian non-combatants than suspected adversaries especially in Pakistan, Afghanistan and Yemen.

The OC regime successfully imposed the presidential doctrine of killing of US citizens via drones with the support or acquiescence of the US Congress, judiciary and most of the mass media and without a shred of judicial due process.  Accompanying the license to assassinate civilians via drones, Obama/Clinton successfully expanded the use of Special Operations death squads, dispatching them to seventy countries to assassinate political adversaries, destabilize independent governments and bolster client regimes.

The OC regime has spent tens of billions of dollars and succeeded in building a 350,000 man mercenary army in Afghanistan to defend US strategic interests, sustain its military bases and destroy the nationalist-Islamic opposition (‘Taliban’).  OC hoped to cover Washington’s retreat from the combat front.  Despite the military build-up and in the face of a sharply deteriorating military situation in Afghanistan, the OC regime has been negotiating with political sectors of the ‘Taliban’, to dump the current client ruler, Karzai, and ‘reshuffle the regime to save the state’, hoping to pull-off a coalition-collaborator Islamist-military regime such as has been shoe-horned in place in Egypt, Tunisia and Yemen.

Vulnerability and Failures of the Obama-Clinton Legacy

The apparent and real empire-building successes of the Obama-Clinton regime are fraught with vulnerabilities and are based on fragile political and socio-economic foundations.  Temporary tactical gains reveal strategic weaknesses and high military costs without commensurate imperial economic gains.

The Obama-Clinton counter-revolutionary offensive and its political military successes are driven by a military conception of empire building without a shred of economic thinking.  It is not surprising that many of the key decision-makers promoting military-driven empire building are militarist ideologues and Zionist policy-makers, who specialize in utterly destroying adversaries (of Israel) and not in promoting or protecting US imperial oil, manufacturing and service interests.

A telegraphic point-by-point analysis and critique of the major policy interventions of the Obama-Clinton regime highlights strategic weaknesses and failures, even in areas that the empire-builders currently celebrate as ‘successes’.

While the OC regime succeeded in procuring close to fifteen billion US tax payer dollars in tribute payments to Israel, they failed to secure a neo-colonial settlement of the Israeli-Palestine conflict, even one based on conceding a truncated part of the West Bank composed of disconnected enclaves (‘Bantustans’).  As a result of the total dominance of US Middle East policy by the Zionist power configuration (representing less than 1% of the US populace), the OC regime was repeatedly ‘humiliated’ by their Israeli overlords.  The supremely confident, beefy Israeli Prime Minister Netanyahu launched and flaunted massive new exclusive Jews-only colonial settlements on Palestinian land, despite near universal condemnation, knowing he could count on the veto power of Washington in the United Nations and its political leverage over EU allies and Arab clients.  Strategically, the OC regime’s deep links to the Zionist power configuration includes the appointment of Israel Firsters to top positions in the US foreign policy establishment.  These appointments ensured that Israeli interests would continue to determine US policies in North Africa, the Middle East and the Gulf region.  The Zionist appointees designated which political clients would be acceptable and which adversaries would be targeted for destruction.  The OC regime’s biggest failure as US empire-builders was their inability to achieve independence from the Zionist incubus and accommodate the emergence of new socio-political forces as well as its failure to reap economic gains commensurate with its budget-busting military expenditures.

The successful imposition of new client regimes in North Africa and the Arabian Peninsula (Yemen) is a short-term victory, based on force and the continuation of the authoritarian repressive state apparatus.  The introduction of regressive neo-liberal policies will doom this short-term success.  If the US ‘won’ the first round in the ‘Arab Spring’, its client rulers face a more radical social upheaval, one which goes beyond the earlier anti-dictatorial struggle and which explicitly targets the US, EU and the IMF. The new clients’ prospects of achieving stability via economic recovery are virtually non-existent.  The full implementation of the OC-IMF agenda of ending popular food and fuel subsidies, increasing regressive taxation and wide spread privatizations will create a powder-key among the Arab masses.  Under pressure from new waves of mass uprisings against brutal neo-liberal economic policies, the Arab clients’ US-mandated complicity with Israel may end.

The OC regime’s successful overthrow and assassination of President Gadhafi was accompanied by the utter destruction of the Libyan nationalist state, its economy and social fabric.  The OC policy of total war has produced a miserable, lawless, chaotic society ‘headed’ by powerless expat neo-liberals at the top and run by local tribal chiefs, Islamist thugs and criminal gangs on the ground.  They specialize in running guns, dispatching armed mercenaries abroad (especially to Syria), trafficking in migrant workers, drugs and sex slavery.  The oil industry enclave has partially recovered but few if any oil profits make it to the US.  Meanwhile, even US Embassy personnel (including the Ambassador) have been murdered and visiting US officials only travel in heavily armed conveys.  Instead of a political victory, Washington has lost a potential oil partner for its own extractive industry.  One might say the only real ‘beneficiary’ of the US-EU war to destroy Libya was Israel: Gadhafi had been a staunch ally and supporter of the Palestinian people.  The invasion of Libya led to the massive displacement of armed ethnic communities, which has exacerbated conflicts in resource-rich sub-Sahara neo-colonies.

The Zionist power configuration, embedded in Congress, Treasury and inside the OC regime, has succeeded in imposing new and harsher economic sanctions on 75 million Iranians in support of Israel’s goal of ‘regime change’ in Teheran.  However, the effect has been to strengthen the unity of the ethnically diverse Iranian population, especially when overt military threats, emanating from nuclear-armed Israel, are amplified by the White house and the Zionist-occupied US Congress.

Iran’s peaceful nuclear program continues; oil and gas sales to China, Japan, India and Korea and Pakistan continue.  A new billion-dollar gas pipeline agreement with Pakistan has been signed.  Iran has replaced the US as the major foreign influence in Iraq.

In other words the Obama-Clinton diplomatic success (‘sanctions against Iran’) have not enhanced US power nor achieved any strategic goals.  Moreover Zionist-designed sanctions have had a negative effect on US energy prices and oil company profits.  The OC regime’s policy toward Iran has ‘succeeded’ in maintaining Israel as the only nuclear power in the Middle East, a goal of Tel Aviv.

Obama and Clinton’s success in expanding outposts, missions, drone platforms and mercenary armies in Africa has been costly, politically destabilizing and has not prevented large-scale long-term Chinese economic penetration in the most lucrative resource sectors of the region.  The US may have closer ties with African generals and dictators; its bankers come and go; but capital flight out of Africa accompanies inflows of US foreign aid.  While the OC regime were building drone platforms, thousands of Chinese miners, investors, construction and transport companies were establishing an economic empire that over time will enhance China’s power, long after the US military empire has collapsed.

The OC regime claims ‘military victory’ in Iraq when, in fact, what we see is ‘defeat via retreat’ on the ground.  The US has spent $2 trillion dollars in order to overthrow and execute the Iraqi President Saddam Hussein.   The Bush and Obama-Clinton regimes have made absolute fools out of the entire executive branch of the US government by justifying the war on the basis of crudely manufactured intelligence (falsely claiming the existence of weapons of mass destruction) through a series of lies cooked up by Israeli-collaborators in the Pentagon, White House and New York Times (especially the infamous propagandist Judith Miller).  The end result is a failed state:  savage ethnic-religious divisions, millions of dead, displaced and injured, daily terror bombings against a brutalized population, and a great leap backward in terms of Iraq’s economic, scientific and social development.  In political terms, Iraq is now ruled by a thuggish Shia elite closely tied to Iran – which is the biggest beneficiary of the US invasion of Iraq and principal adversary of US empire building.  The OC regime’s post-war Iraq is composed of an overwhelmingly hostile population, a divided and fragmented country pitting Arabs against Kurds, where the most qualified and educated have been driven out or assassinated and entire ancient Christian communities have been obliterated.  The OC regime claims to ‘success in Iraq’, in fact, show a weakening of the overall US presence in the Gulf region.  Economically, Turkey has become Iraq’s main trading partner with trade growing by double and triple digits each year.

In other words, the US invasion of Iraq destroyed an adversary of Israel, broke the US economy ($2 trillion and counting), increased the influence of Iran and handed Iraq’s petro-dollar consumer market and lucrative reconstruction contracts over to Turkey.  The Obama-Clinton regime’s claims of military victory ring hollow in the empty coffers of the US Treasury – where are the ‘spoils of this imperial war’?  Most of the intellectual authors of the invasion of Iraq have departed from the US government and are now comfortably ensconced within Zionist think tanks (propaganda mills) in Washington or flaunt lucrative ‘consultant’ contracts in Wall Street and Tel Aviv.  Meanwhile, the American taxpayers are left to struggle with an enormous war debt and to grieve the several hundred thousand American casualties – soldiers who lost their lives, limbs and minds – all for a blatant lie perpetrated at the behest of a foreign power, Israel.

The people of Afghanistan, Iraq, Libya and now Syria – serial victims of the US-EU military machines and their Islamist mercenaries – face an increasingly militarized Middle East, North Africa and South Asia, out of which new wars are already emerging, like pus from festering wounds.  In Libya, the US and EU diplomats cringe in their bunkers and travel only in armed convoys, the consequences of their ‘humanitarian’ imperial-Islamist alliances.

As the US and EU supply arms to Islamist terrorists and murderous gangsters who plunder Syrian cities, decapitate captured government soldiers and execute civilian suspects (civilian government functionaries, such as school teachers), Syria’s diverse secular society is on the brink of extinction. Islamist fanatics bristling with advanced weaponry bought by the Saudi monarch and Gulf petro-oligarchs capture sophisticated Syrian cities and impose medieval Sharia law on what was one of the region’s most diverse and sophisticated secular societies.  The large communities of Alewites, Orthodox and Syriac Christians, Kurds and educated secular Syrians face mass extermination or expulsion by Saudi-funded Wahhabi fanatics.  The EU-US backed ‘secular’ clients (mostly ex-pat Syrians with US or UK passports) serve as propaganda cover for the armed Islamists thugs and mercenaries.  Authoritarian Turkish Prime Minister Erdogan, himself a ‘soft-core’ Islamist, provides bases, training, and logistical support for the Syrian invasion.  Turkey has become the Islamist pivot for fundamentalist power taking over Syria and the Levant.  Islamist terrorist violence is spilling over the border into Lebanon today, Jordan tomorrow and may eventually lead to multiple wars involving vulnerable Gulf clients.

Yes, the Obama-Clinton regime undermined an independent, secular, nationalist adversary in President Assad and by doing so they destroy an advocate of Palestinian self-determination, but the ultimate results will not favor US imperial military, economic or diplomatic interests.  The OC regime’s wars have destroyed US commercial prospects for decades ahead; the victory of their mercenary Islamist ‘rebels’ is setting in motion a more virulent armed version of Al Qaeda with a territorial base and access to immense quantities of modern weapons in areas contiguous to US client regimes.

The OC regime claim to have discovered a low-cost (in terms of American blood) technique to project US military power:  killing anti-imperial opponents by drone and Special Forces.  According to the OC regime’s strategists the advantages of assassination by drone warfare is that it would not result in the death of US combat soldiers and the Special Forces, whose high-intensity, low visibility operations are ‘off-budget’ would not elicit any public or legislative scrutiny.  But drones have become highly visible, even to the usually complacent and highly myopic US Congress and are routinely condemned even by client regimes in Pakistan and Afghanistan.  The United Nations has publically condemned drones as civilian casualties have far exceeded the number of so-called ‘terrorist’ targets.  Most experts agree that drone assassinations have vastly increased the number of opponents and facilitated the recruitment of resistance fighters.  Drone warfare has increasingly isolated client regimes like Yemen that permit US drone attacks against its citizens.  The strategy of foreign policy by ‘drone and death squad’ has not replaced the need for ground troops in the task of empire building.  Once US troops do withdraw, its mercenary armies have proved incapable or unwilling to obey US advisors, trainers or Special Forces.

The clearest expression of the failed strategy is the rising number of defections from Afghan security forces and the killing of NATO and US officers by Afghan soldiers and officers – even those with the highest security clearance.  This infiltration into the highest ranks of the Afghan military and police points clearly to the near-future demise of puppet Karzai regime.  The various ministers in the Afghan client regime and their banker cronies know they have no chance of surviving a post-US withdrawal situation:  they have multiple passports in hand and millions in stolen funds stashed in Gulf State bank accounts; their families are safely housed abroad; and their private planes are ready to take off at a moment’s notice.  We may witness the panic scenes at the US Embassy, reminiscent of the last days in Saigon (Viet Nam), with local ‘small-fry’ collaborators clamoring to board the ‘last flights out’ before the advancing Taliban insurgents – if our jaded media even bother to cover the debacle.  The current attempt by the US to strike a face-saving deal with the ‘political Taliban’ (under auspices of ‘our friends’, the Saudi autocrats) has infuriated our current puppet in Kabul, Hamid Karzai.  As a result he is publically condemning Special Forces operations and their arbitrary killing and torture of villagers, as well as US drone attacks against Afghan civilians.

The OC regime’s overtures to the Taliban have so far failed because the sine quo non-condition of the Islamist nationalists is the total withdrawal of all US military and civilian occupation forces: in other words an unconditional collapse of US power in Afghanistan.  The Taliban do not need to offer Obama a ‘face-saving’ formula allowing for a ‘residual’ US presence.  As the withdrawal proceeds, more and more Afghan military officers will switch sides, dumping the losers and building bridges toward the new rulers.  If the US decides to reverse course and retain ‘garrison bunkers’ in Afghanistan, they will face a continuing and deepening war of attrition under conditions of growing budgetary constraints and US electoral hostility.

Results and Perspectives:  The Obama-Kerry-Hagel (OKH) Era

The Obama-Kerry-Hagel (OKH) regime has few imperial assets with which to confront the next four years of US empire building and has powerful constraints against devising strategic innovations or even tactical advances, capable of limiting US losses.

The most significant obstacle to any shift from costly and ineffective military-driven empire building to economic and diplomatic informed policies is the influence of the Zionist power configurations (ZPC) influence over the ‘troika’ (OKH) and the Congress.  The new Israeli coalition regime is even more extreme and militarist, as indicated by the powerful presence of a radical settler-colonist party intent on violently annexing what remains of the Palestinian West Bank.  The effective Israeli veto over US foreign policy in the Middle East is enforced by the Presidents of the Major America (sic) Jewish Organizations (representing over 50 powerful Zionist groups) that exclude any possibility that the Obama-Kerry-Hagel regime can even paste a tiny fig leaf ‘peace process’ onto Israel’s accelerating seizure of Palestinian land.  The OKH regime, under war-mongering ZPC tutelage, will never attempt any reasonable negotiations with Iran.

The OKH regime is openly committed to entering a war on Israel’s behalf, if the Jewish state unilaterally decides to attack Teheran.  Obama’s visit to Israel, and his obligatory ‘consultation’ with leading Jewish-Zionist leaders prior to the trip, was designed ‘to fix’ the White House agenda:  US lock-step conformity with Netanyahu’s policy of provoking war against Iran and Israeli annexation of Palestinian lands. The Zionists have even dictated Obama’s own body language toward Netanyahu: no public spats, only smiles and handshakes, the lapdog US President agreed.  If anything, the OKH regime will be even more servile to Israeli demands over the next four years because the Zionist occupied US Congress has given Israel a ‘free hand’ in deciding US foreign policy in the Middle East, including the timing of war and the substance of negotiations.

Obama’s newly appointed Secretary of State John Kerry and Treasury Secretary Jack Lew are unconditional lifetime Zionists who can be expected to advance economic sanctions against Iran in hopes of strangling its economy and provoking a military confrontation.

Given Washington’s costly commitment to Israeli war plans and the constraints of US budget cuts, the new OKH regime will try to ‘coordinate’ policies with the other NATO powers, including sharing material resources and devising complementary strategies in counter-insurgency operations in sub-Sahara Africa, Islamist mercenary operations in Syria and managing ‘Muslim–neo-liberal’ regimes in Tunisia, Egypt and Libya.  Kerry’s visit to Europe was designed to strengthen inter-imperial efforts and especially to bolster French ‘Socialist’ President Hollande’s imperial war policies in Mali and Niger and the ‘Franco-Saudi’ efforts against Syria.

Under pressures from the puppet Syrian mercenary army invading Syria, British Prime Minister Cameron and French President Hollande, the OKH regime will step-up the flow of US arms in an attempt to forestall the advance of the Wahhabi Islamist terrorists who have effectively taken over regions of Syria with backing from Saudi Arabia, Qatar and the other Gulf petro-dictatorships.  The great fear in Washington is that its modern weapons will not just contribute to overthrowing the secular nationalist Assad regime but will put in power a new Al Qaeda-type regime on the borders of the most vulnerable client rulers in Jordan and Lebanon.  An Islamist fundamentalist Syria could serve as a ‘headquarters’ and trampoline for cross border attacks on US bases throughout the region.  Israel will finally annex the strategic Syrian ‘Golan Heights’, which it has occupied since 1967, on the pretext of protecting itself from the Islamist it worked hard to put in power.  The Kurds will try to seize regions of Northern Syria as part of ‘Greater Kurdistan’, to Ankara’s consternation.  Turkey will traffic its ‘gentler’ version of ‘Islamist nationalism’.  Washington, London and Paris will be unable to enthrone their London-based ex-pat clients in Damascus … The OKH regime may have ousted the secular, nationalist President Assad but it will certainly reap the whirlwind of long-term bloody strife pitting regional powers, rival clients and Al Qaeda terrorists all intent on pillaging the war-ravaged Syria.

Faced with its dubious prospects in Syria, unable to secure a deal with the Taliban in Afghanistan and impotent to regain influence over Shi’a Iraq, the new OKH regime will make an effort to bolster the military-Islamist regimes in Egypt and Tunisia by co-opting sectors of the liberal secular opposition.  This won’t be an easy task given the growing socio-political polarization.  Washington’s prospects for consolidating a new set of client regimes will be severely tested by its support for brutal IMF demands on Morsi to eliminate popular food and fuel subsidies  – a policy guaranteed to provoke large-scale rioting among impoverished Egyptians and even the threat of a mass national uprising, uniting secular leftists and poor Muslims.  The key concern in Washington is that the ouster of its Islamist client Morsi might jeopardize Egypt’s subservient deal with Israel to enforce the economic blockade of millions of Palestinians in Gaza and to accept the Jewish State’s seizure of more Palestinian land in the West Bank.

So far the OKH regime has relied on the combined repressive power of the intact Mubarak military, police and intelligence services to prop-up its client Morsi. But in a pinch, if he falls, the US may try to reshuffle the deck and seek a new set of ‘liberal’ political clients or impose an outright military dictatorship on the Egyptians.

In Obama’s never-ending pursuit on behalf of Israeli interests, his new Secretary of State John Kerry made a point of directly attacking Prime Minister Erdogan for equating Zionism with fascism as soon as he landed in Turkey. While his ham-fisted tirade made little headway in achieving a Turkish-Israeli reconciliation, Obama convinced Erdogan to accept a pro-forma apology from Netanyahu.  Erdogan now has to face the political reality that 90% of the Turkish people clearly oppose Israel’s savage repression of the Palestinians.  In the meantime, Turkish capital has been the main beneficiary of the US military-imposed ‘partition’ of Iraq.  Turkish traders and oil speculators dominate the market in Iraqi ‘Kurdistan’.  The US may have wasted hundreds of billions of dollars in the invasion but the Turks have made many billions in profits from a war they did not support and immensely increased Turkey’s regional influence.  The OKH regime can do nothing about Turkey, an opponent of Washington’s Iraq invasion, reaping huge profits from that $2 trillion-plus investment of US treasure and blood.  The OKH regime may have secured Erdogan’s support for the violent overthrow of the Assad regime in Syria … but it will be for Turkey’s own hegemonic interests.  Erdogan’s interest in overthrowing the secular-nationalist Assad is based on his plans to establish a compliant client Islamist regime in Damascus and market to be dominated by Turkish business leaders and policy makers.  Erdogan has taken a page from the Israeli playbook of manipulating the US military machine for its own regional interests and profit.

Washington will continue to rely on Saudi and Qatari financing of mercenary armies and Islamist terrorists to destabilize and invade anti-imperialist regimes but with the caveat that the battle-hardened mercenaries are also fanatics – profoundly hostile to the US and the EU.

Qatar’s billions of petro-dollars are like a venereal disease, ‘here, there and everywhere’, infecting a region through the funding and arming of Islamist terrorists in tandem with NATO missiles and bombs to destroy Gaddafi’s nationalist welfare state in Libya, savaging the independent secular government in Syria and providing billions of dollars to prop up the puppet Islamist regimes in Egypt and Tunisia (Financial Times, 3/19/2013, p.7).  Qatar’s autocratic monarchy enriches its extended royal family and the foreign imperial protectors – namely the US and UK, in exchange for buying and distributing weapons to Islamist mercenaries attacking independent nationalist regimes.

The OKH regime will retain the presence of its naval armada in the Gulf and its training missions and military bases in order to prop-up the decadent Gulf petro-monarcho-dictatorships.  However, the entire Gulf-US complex could become the scene of a grisly military conflagaration if the extremist Israeli regime decides to launch a pre-emptive attack on Iran and provoke a generalized regional war.  As it stands, the stability of the entire US-Gulf oil alliance rests on the whims of a ‘third party’ (Israel) and its Fifth Column embedded in the US Congress and Executive branch.


Obama’s second term depends on a precarious set of alliances, conditioned by the decisions of a fanatical ultra- militarist foreign power (Israel) and subject to a rising tide of mass pro-democracy movements in an arc extending from Tunisia, Egypt and Yemen over to Pakistan.  Moreover, many of the crucial outcomes are beyond the control of the US White House.  The OKH regime does not control the mass movements in North Africa and the mercenary Islamists currently taking over Syria are sworn enemies of both Washington and Damascus.  Washington may retain, within a shrinking budget and in concert with the EU, the power to brutally destroy independent regimes.  However, in the process they rip the very fabric of complex societies and shatter their economies, thus undermining their own capacity to reap the economic spoils of imperial conquest.  Indeed the main ‘booty’ extracted from Washington’s imperial wars has derived from the US Treasury, as rapacious contractors, corrupt politicians and US military officials pillage billions of US taxpayer dollars in ‘aid and reconstruction programs’ for themselves.

A 2011 report from the Commission on Wartime Contracting in Iraq and Afghanistan estimated that defense contractors had wasted or lost to fraud as much as $60 billion dollars – or $12 million a day since 2001 ( Financial Times, 3/19/2013, p. 4).  The biggest military contractor ($39.5 billion dollars) is Kellogg, Brown and Root, a subsidiary of Halliburton – formerly run by George W. Bush’s Vice President Richard Cheney.  Cheney was a co-architect of the Iraq war along with the Pentagon Zionists Paul Wolfowitz and Douglas Feith.  Corrupt war profiteers and Zionist Fifth Columnists (for Israel) teamed up to pillage the US Treasury for self-enrichment and to destroy Iraq, a key ally of Palestinian liberation and consolidate what Obama hails as Israel’s military supremacy in the Middle East.

The legacy of the Bush regime and Obama’s first term is one of pyrrhic military victories:  an Iraq shredded by sectarian wars and the reversal of half a century of socio-economic, educational and scientific progress under a secular nationalist government.  The OKH regime cannot undo the growing ties between Iraq and Iran.  Nor can they reverse the growing commercial, gas and energy ties between Iran and Pakistan.  The US has secured greater Israeli military links with NATO and the European Union, but a growing popular European and North American boycott against Israeli good and investments is taking its toll on the Jewish state.  The Obama-Kerry-Hagel regime shows no sign of making even a partial break with costly policy of ‘military driven imperialism’ in the Middle East and North Africa.  Moreover, it lacks economic resources to prop up its new clients in North Africa.  While they scurry to fund the current brutal war against Syria, they will have to prepare for new wars against Lebanon and Iran.  The OKH regime will have to rely on low-cost, high-risk, mercenary warfare in Syria.  It will try to carve out defense perimeters around its political and petroleum enclaves in Libya.  It will have to concede even greater economic and Islamist ideological influence to Turkey.  Above all, it will need to appease the Jewish State’s annexation of the West Bank, under pressure from the ZPC!

The old RCA Victor Company marketed its Victorolas, ancient phonograph players with huge horn-like amplifiers, with the image of an attentive dog sitting before the machine in eager anticipation of ‘his master’s voice’.  The recent trip by the Obama to Israel evokes such an image.  Obama’s speech to Jewish students in Jerusalem included such ecstatic praise of everything Israeli or Jewish that he exceeded any propagandistic AIPAC press release, surpassed any fabrication by Netanyahu and embellished (almost to the point of caricature) every racist myth of Jewish superiority.  He lauded Israel as a ‘land of peace and democracy’ in the face of 45 years of brutal military rule and expropriation of 60% of the occupied Palestinian West Bank.  He spoke of ‘negotiations without conditions’, a euphemism for giving Israel the green light to annex what remains of Palestinian land in the West Bank.  He praised Israel’s creativity and courage in founding the Jewish State, ignoring the violent ethnic cleansing and expulsion of over 850,000 Palestinian Arab Muslims and Christians.  He spoke of Israeli technological genius, forgetting that Israel’s main exports are weapons of massive destruction.  No US leader, past or present (or any other imperial ruler), has so faithfully echoed and embellished the lies of such a bloody colonial power and its US-based Fifth Column with greater fervor than Obama’s degrading effort to satisfy his Zionist handlers in Washington.  His performance far exceeded their highest expectations of US servility.  In style and substance he fulfilled and over-fulfilled their demands for unconditional US subordination to the Jewish state.  In fact, one might suspect that in doing so he set a new standard for the boot-licking belly crawl so familiar to observers of US Congressional servants to Israel.  Needless to say, the entire Zionist propaganda apparatus from neo-cons to liberals were ecstatic.  Here was a Shabbat goy out-Zionizing the most fanatical Zionist.

The day Obama spoke in Jerusalem will be remembered as a day of shame for all Americans who believe in freedom and dignity and peace with social justice.  To listen to the President of the United States grovel before a racist colonial power is degrading.  It was also a day of anger for the five billion people of the world who have broken their chains of colonial racist oppression.  Obama has made his choice:  His administration will have to live with this for the next four years.

The OKH regime’s attempt to penetrate Africa via military missions and the promotion of Pan-African mercenary forces will require an accommodation of France’s rising imperial militarism.   It will have to acknowledge China’s increasing economic supremacy in Africa’s extractive sectors, infrastructure and trade.  The OKH regime’s ‘pivot to Asia’ involving trans-Pacific free trade agreements excluding China, military bases encircling Beijing and encouraging Japan’s provocation over disputed territory has had no impact on China’s economic growth and burgeoning trade relations.  China’s trade with Asia now surpasses its trade with the US.  The two way flow of investments into and out of China trump all the OKH regime’s offshore war mongering.  The OKH regime’s Asian ‘pivot’ has failed to produce any imperial economic rewards for Washington’s coffers.  However, it has incited greater military tensions between Japan and China and between North and South Korea.  This is occurring at a time when the Pentagon faces major budget cuts and US Treasury Secretary Lew is trying to drum up greater trade with China.

In sum, the past military commitments, the links to Israel, the legacies of political failures in Iraq and Afghanistan and the fragility of new client rulers mean that the OKH regime will play an increasingly marginal economic role in the Middle East, North Africa and South Asia.  The Obama-Kerry-Hagel troika will do their best to salvage the US military bases and political influence among autocratic petro-states in the Gulf.