November 19, 2011

The Week in Review

November 18, 2011 | From

Middle East 

North Korea helping Iran with nuclear program: Hundreds of North Korean scientists are helping Iran with its nuclear program, according to reports published by Japanese and South Korean newspapers, citing information from anonymous diplomats. The Korea Times reports that the North Korean experts have been working at over 10 sites, including Natanz and Qom. The Japanese paper Sankei Shimbun reports that the North Koreans have been visiting three Iran centers researching nuclear weapons triggering. Bruce Bennett, a senior defense analyst for the Rand Corporation, says experts have suspected this sort of cooperation for years. “There’ve been stories of Iranians at the nuclear tests in North Korea, for example,” Bennett said. “So if information is really being shared, then you’ve got a much more dangerous situation, because most people would argue that the North Korean nuclear program is out ahead of Iran, and we don’t want Iran having that assistance.” 

Explosion at Iranian military base kills 17: A massive explosion at a key missile base near Tehran last Saturday killed 17 troops, including an officer who is considered the founder of Iran’s missile program. Iran is publicly insisting the explosion was an accident, but it is unknown whether or not this is the case, and there is speculation it may have been a result of sabotage by Israel. While Tehran will be seeking to understand how the breach occurred and how it should respond, it “will also likely contemplate the much broader question of what barriers Iran could face as it pursues its strategic aims in the region,” writes Stratfor. “As Iran becomes more confident in the region and asserts its influence more boldly, more clandestine efforts against the country are likely to intensify” (November 16). Stratfor sources say that Hezbollah, under direction from Tehran, is already readying its rocket arsenal. 

PA seeking unity government with Hamas: Fatah and Hamas have been holding secret talks in Cairo over the past few weeks on the formation of a Palestinian unity government, the Jerusalem Post reported November 15. Fatah and Hamas signed an agreement back in May to form a unity government, but their efforts have stalled due to differences between the two parties, particularly over who the prime minister leading the new government should be. Hamas would not accept Prime Minister Salam Fayyad as head of the anticipated government, viewing him as a puppet of the West. It appears a breakthrough on this point has now been achieved, with Fatah conceding to Hamas’s demand. A senior aide to Palestinian Authority President Mahmoud Abbas said this week that Fatah has agreed to put forward a replacement candidate, and Fayyad himself said on Monday that he would be willing to step down. The issue, along with other details of a unity government and a plan to hold elections, is due to be decided at a meeting between Abbas and Hamas leader Khaled Meshal in Cairo next Wednesday. One factor driving Abbas’s push toward an agreement may be the PA’s effort to gain statehood recognition by the United Nations Security Council. The committee appointed by the Security Council to investigate the Palestinians’ membership bid said the PA did not comply with the necessary requirements because it did not control the Gaza Strip. Don’t be surprised if the upshot of this—following presidential and parliamentary elections, proposed for next May—is a Hamas seizure of power in the West Bank. 


Germany and Britain on “a collision course” over the future of Europe: Britain must submit to an EU-wide tax on financial transactions, Volker Kauder, parliamentary leader of Germany’s ruling Christian Democratic Union, said at the party congress November 15. “I can understand that the British don’t want that when they generate almost 30 percent of their gross domestic product from financial-market business in the City of London,” said Volker at the keynote speech. “But Britain also carries responsibility for making Europe a success. Only being after their own benefit and refusing to contribute is not the message we’re letting the British get away with.” The day before, British Chancellor of the Exchequer George Osborn criticized an EU-wide financial transaction tax (ftt) in an article published in the Evening Standard. “Europe certainly shouldn’t be creating new burdens,” he said. “Proposals for a Europe-only financial transactions tax are a bullet aimed at the heart of London. Even the European Commission admit that it would cost hundreds of thousands of jobs.” “Germany and the UK are on a collision course,” the director of the European center of the Carnegie Endowment for International Peace, Jan Techau, told Bloomberg news. “The clashes we see now about deepening ties in the EU have always been there, but the crisis makes them more visible. Now it’s crunch time.” The financial transaction tax is a direct attack on Britain. But even apart from that issue, Britain and Germany are trying to push Europe in opposite directions. Germany, however, is the leader of Europe. As Kauder said, “Now all of a sudden, Europe is speaking German. Not as a language, but in its acceptance of the instruments for which Angela Merkel has fought so hard, and with success in the end.” Britain won’t be able to keep its foot on the brake while Germany is pressing on the accelerator. Sooner or later Britain will get fed up with Europe and quit, or the EU will get fed up with Britain and kick it out. 

Europe—all eyes on the dragon: As France fights to avoid being sucked into the euro crisis and losing its triple-A rating, it is leaning on the European Central Bank (ecb) to do more. French government spokeswoman Valerie Pecresse stated November 16 that “The ecb’s role is to ensure the stability of the euro, but also the financial stability of Europe. We trust that the ecb will take the necessary measures to ensure financial stability in Europe.” However, Germany’s Chancellor Angela Merkel is holding out against ecb intervention. Pointing out that EU regulations prohibit such action by the ecb (not that EU rules have ever stopped Germany from breaking them in the past), she is pushing for yet another treaty change to force structural economic reforms on the EU and “build a closer European political union” (Reuters, November 16). History shows that Germany will have its way. Still, this is a high-risk gamble playing for the highest of stakes. ecb chief Mario Draghi has a reputation as a master poker player in the high-stakes game of global economics and finance. He is the man of the moment upon whom all eyes are fixed to watch for the slightest feint, being not only the game’s main banker, but also the holder of the winning hand. It’s now up to Draghi to see if he has the mettle to play his cards right such that Rome and Berlin come out the winners. With the deck stacked against it, France is finally being forced to fold, and is now subject to the German chancellor’s diktat. The longer Draghi holds out, the greater the risk of the traditional link between the EU’s two leading members being fractured. 

There goes Greece: Angela Merkel’s Christian Democratic Union (cdu) voted to allow euro nations to voluntarily leave the currency after a speech by the chancellor at the party congress November 14. The party supported a motion that would allow nations to leave the euro without quitting the EU. The fact that this is illegal under the German-created treaties that launched the eurozone in the beginning, then had it enshrined in the pseudo-EU constitution in 2009, means nothing. German elites have always been first to create the rules and have proven the best at forcing their breaking. The motion changes no law, but it gives Chancellor Merkel a mandate to shrink the eurozone, something the Trumpet has been forecasting for many years. 

Germany after Italy’s gold, again: Italy should sell its gold reserves to help deal with its debt, Gunther Krichbaum, chairman of the Committee on the Affairs of the European Union in the German Parliament, was quoted as saying in the Rheinische Post. Several months ago, members of Merkel’s cdu and its coalition partner the Free Democratic Party (fdp) made similar suggestions. Italy and Spain should “fix their budgets, something they can carry out through privatization and the sale of its gold reserves,” said Michael Fuchs, deputy spokesman of the cdu’s parliamentary group. fdp economist Frank Schäffler agreed, saying it is “necessary” for nations to hand over some of their gold to the European Central Bank as collateral. German Minister for Labor and Social Affairs Ursula von der Leyen has said that the piigs countries (Portugal, Ireland, Italy, Greece and Spain) should allow Germany access to their gold and industry in return for the loans. According to cnbc, Italy has the world’s fourth-largest gold reserves. Germany has the second-largest, and seems set to get more. Germany believes Europe’s struggling nations owe it a lot for its help. Germany’s power as a creditor nation already means it has toppled two governments. Expect its demands to grow. 

Germany uncovers far-right terror cell: Germany has discovered a secret neo-Nazi organization that has been operating in the country for years without the authorities having any knowledge of it. Police found four dvds on November 16 in a house that had been torched by a suspected member of the terrorist group. The dvds contain a video by a group calling itself the National Socialist Underground. It appears to be responsible for the murder of eight people of Turkish origin, one person with Greek roots and a policewoman, in addition to dozens of bank robberies and an attack in Cologne in 2004. The left-wing Tageszeitung says that the fact that the cell was not detected shows a “failure of state.” It writes: “It’s something we don’t want to imagine: a Nazi terrorism, permitted by the state, in Germany, six decades after the end of the National Socialist dictatorship.” An employee of Germany’s domestic intelligence agency, the Federal Office for the Protection of the Constitution, was reportedly at the scene of one of the murders, and close to the scene of four other shootings. The agent was reportedly called “Little Adolf” by his colleagues for his far-right views. The man was eliminated from police inquiries. The fact that the cell went undetected for so long could mean either incompetence or, worse, a cover-up by the authorities. 

Germany and France push for visa-free travel with Russia: Germany and France believe the EU should quickly begin talks on visa-free travel with Russia, according to the EUobserver. “EUobserver understands the foreign ministers of the two countries outlined their position at an informal dinner in Brussels on Sunday (November 13) with foreign relations chief Catherine Ashton and fellow EU ministers,” it writes. “The visa question is highly political because it risks giving the impression Russia is more important to the EU than smaller post-Soviet countries that want to join the EU.” This is yet another area of increasing German-Russian cooperation. 

Pope endorses “Prussian” PM: On November 11, the official Vatican newspaper, L’Osservatore Romano, praised the undemocratic imposition of Mario Monti as leader of Italy. Noting the president’s appointing him as “senator for life,” the paper described how “various political and other forces … see in him a balance and a wisdom that are exemplary in his guidance through the difficult phase the country is currently going through.” Last year, Monti was effusive in his endorsement of the pope’s encyclical “Caritas in Veritate,” claiming it was a virtual textbook for the operation of a global economy and universal society. La Stampa reported that as he presented Benedict xvi’s social encyclical in Saint John Lateran on Feb. 23, 2010, Monti declared that “The ‘Caritas in Veritate’ document resembles a technical governing handbook for society in which economy plays a fundamental role, as a natural outcome of ethical reflection, and even has the agreement of those who do not share in the Catholic ethical vision” (November 14). Monti used that occasion also to publicly declare himself “to be Catholic.” Mario Monti is a member of the EU splinter organization called “The Spinelli Group.” That group is committed to establishing a federal Europe based on the Catholic social chapter that underpins the pope’s “governing handbook for society.” Endorsement of that Roman imperialist vision marks Monti out as one of those in tune with the European elites who are carving up Europe into a continent where the many will become the vassals of the few. Monti’s new minister for international and domestic cooperation is “a historian of the Catholic Church with close ties to the Vatican,” according to the Associated Press. The choice “seemed to reward pro-Vatican lawmakers in parliament,” it wrote. Paolo Ferrero, leader of a small left-wing party, said: “This government—ties to banks, to business, to the Vatican, to private universities, to the usual names—is the opposite of what this country needs.” Monti also has strong links to Germany. Spiegel Online wrote that in Italy, “he is more often referred to as the ‘Italian Prussian,’” (November 14). EU elites are playing for high stakes—Holy Roman imperial stakes. With Joseph Ratzinger and Mario Monti joined at the hip in Rome, and the Roman Mario Draghi now heading up the European Central Bank at its Frankfurt home base, the one Roman Catholic name missing from the list to complete the quadrella is the future leader who will one day soon cement the Roman connection with the chancellorship in Berlin. 


Russia and China block UN actions: After the International Atomic Energy Agency’s report earlier this month accused Iran of involvement in secretive nuclear weapons development, Western powers have discussed levying new sanctions on Tehran. But Russia and China came to Iran’s rescue on Wednesday by staunchly opposing any new sanctions and condemning any use or threat of military force against Iran. Last month, Russia and China locked arms to block a UN Security Council decision to condemn Syrian President Bashar Assad’s crackdown on uprisings, and the two Asian powers accused the West of discouraging dialogue in Syria. A survey of the broader geopolitical landscape reveals a widening rift between Western powers on the one side and China and Russia on the other. 

China’s largest ratings agency threatens U.S. with another debt downgrade: The leader of China’s biggest ratings agency, Dagong Global Credit Rating, warned Washington last Saturday that it may downgrade the U.S.’s sovereign debt rating once again because of the Americas’s failure to rectify its federal budget deficit. For the last year, Dagong has been a lead player in the global motion to downgrade America’s rating, lowering it from AA to A+ just a year ago. In August it reduced the U.S. rating again, and, days later, Standard & Poor’s followed suit, becoming the first Western credit rating agency to downgrade U.S. debt. China is becoming increasingly vocal about the U.S.’s debt addiction, and the historic S&P downgrade in August proves that another downgrade by Dagong could prompt Western agencies to lower the U.S. rating once again. 

Russia’s military head warns that border conflicts may turn nuclear: Nikolai Makarov, chief of the General Staff of the Russian armed forces, condemned nato’s eastward expansion and said the risk of Russia entering into conflicts has “risen sharply” and that “conflicts may develop into a full-scale war involving nuclear weapons.” Moscow views nato’s drive to expand into former Soviet territories in Eastern and Central Europe as a critical threat to Russia’s security, and is becoming more serious about halting it. Expect Moscow’s blustering to become more heated as its desire to regain its former position as a geopolitical heavyweight intensifies. 

China angered over plans for U.S.-Australian marine base: After President Obama announced on Wednesday that the U.S. plans to deploy 2,500 marines in Australia, Beijing accused Mr. Obama of escalating military friction in the region. Washington’s new deal with Australia will shore up America’s presence near the South China Sea, a major commercial route that has been shaken by China’s aggressive claims of ownership. The deal also represents the first long-term expansion of U.S. military presence in the Pacific since the Vietnam War ended, and China has made no attempt to disguise its disapproval. “It may not be quite appropriate to intensify and expand military alliances and may not be in the interest of countries within this region,” Liu Weimin, a Foreign Ministry spokesman, said about the plans. China’s state-run Global Times said Australia should be careful about permitting the United States to use its bases to “harm China” and that Australia risked getting “caught in the crossfire.” 


The European Union eyes the Horn of Africa: EU development ministers meet in Brussels on Monday to discuss the situation in the Horn of Africa and exchange ideas about enhanced EU engagement in the region. The strategic framework sets out five areas for EU action: 1) building accountable political structures; 2) contributing to conflict resolution; 3) mitigating security threats; 4) promoting economic growth; and 5) supporting economic cooperation. As Iranian-backed, Islamic insurgents rampage through Ethiopia, Eritrea, Kenya and Somalia, expect Germany and its vassal federation, the European Union, to step up the present process of recolonizing—by trade, aid and “peacekeeping” operations. 


UK youth unemployment passes 1 million: The number of unemployed 16-to-24-year-olds has passed 1 million for the first time since the current methods of counting unemployment began 19 years ago, according to data published 16 November by the Office of National Statistics (ons). That’s an unemployment rate of 21.9 percent. Overall unemployment is at 2.62 million, or 8.3 percent—the highest unemployment rate for 15 years. The ons indicated that the last time youth unemployment figures were higher was the mid-1980s, but the figures aren’t directly comparable because of changes in the calculation of the unemployment rate. Foreign workers, however, don’t seem to be suffering the same way British workers are. The number of non-UK nationals working in the country has increased 147,000 over the past year. Meanwhile, the number of UK nationals with jobs has fallen by twice that. “The figures fueled concerns that, facing a slowing economy, British companies are choosing to hire experienced foreign staff instead of meeting the higher costs of hiring young British novices,” reports the Telegraph. The Daily Mail writes that the reason for the difference is that foreign works tend to be better workers. “Levels of youth unemployment have reached crisis point,” said commercial manager of skills and young people, Matthew Freeman at Working Links. “With over a million young people out of work, we risk creating a lost generation of young Britons.” 

U.S. banks face serious risk from Europe: The creditworthiness of U.S. banks will take a serious hit if the eurozone debt crisis deepens and spreads beyond the five most-troubled nations, according to Fitch Ratings. “Unless the eurozone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen,” the New York-based rating company said this week in a statement. The six biggest U.S. banks—JPMorgan Chase & Co., Bank of America Corp, Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley—have $50 billion in risk tied into Greece, Italy, Ireland, Portugal and Spain. While U.S. banks have hedged some of their risk with credit-default swaps, those may not be effective if voluntary debt forgiveness becomes “more prevalent” and the insurance provisions of the instruments aren’t triggered, Fitch said in the report. A world-changing financial crisis is on the horizon. Expect the American economy to be hit hard.
Occupy Wall Street protesters face eviction in several cities: After a judge ruled that free speech rights do not extend to pitching a tent and setting up camp for months at a time, the Occupy Wall Street camp in Zuccotti Park in Manhattan was cleared by police in an hours-long action Tuesday afternoon. Confrontations between police and protesters also broke out in Oakland, Austin and Denver this week. Last Saturday evening, Denver riot police began to move in and request the remaining protesters clear the Civic Center Park. According to a statement on the Occupy Denver website, police had to use pepper balls, shotgun-propelled beanbag rounds, pepper spray and tear gas to disperse the crowd. Whether or not this last statement is true, expect more violence and civil unrest to break out as the economy worsens.

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