Tuesday, September 30, 2008

Why the 2010 currency union makes saving in dirhams a winner


Why the 2010 currency union makes saving in dirhams a winner
AME Info, (Middle East) 09/29/08

Earlier this month the central banks of the GCC met to agree on further steps towards a limited currency union. This long-winded project is far from dead and the next announcements are likely to be the location of the new regional central bank and the formation of a monetary council to coordinate policy convergence for monetary union.These decisions will be passed to the GCC heads of state for ratification later this year.

And it is notable that the whole single currency project appears to have acquired a new sense of urgency.

Importance of single currency
Perhaps this is because unilateral currency revaluation has been passed over in favour of a united approach to monetary policy, and this has put a new emphasis on the importance of the single currency to the overall economic policy of the GCC.

It has been clear for sometime that the dollar peg has not been serving the best interests of the region, and arguably it has not been of benefit to the US either, as it has meant that the impact of rising oil prices has been greater on the US than Europe.

However, while unilateral revaluations have been kicked out of play, there has been an increasing realization that the creation of the common currency provides an ideal opportunity for adjustments of long-term misalignments in global currencies.

In that context the recent bounce in the value of the dollar has provided a breathing space as GCC central bankers plot a very different future.

Currency basket
What seems almost certain to emerge from the monetary council is a Gulf currency pegged to a basket of global currencies and possibly precious metals. Mexico has been looking at including silver as a counter to instabilities within its currency, and the Gold Dinar has occasionally been mooted in the Middle East.

However, the important point to note is not the positive implications for precious metal markets but that revaluation will likely emerge as a part of the final single currency project.

Currency bounce
Hence holding dirhams rather than dollars in a bank account makes sense. The two currencies are now interchangeable at a fixed rate. But at some point in the near future, and presumably by 2010 at the latest, there will be a re-alignment in value and holders of dirhams will get a one-off, one-direction bonus.

For those in the UAE with a savings account paying 2-2.5% at present this will come as a welcome bonus. It is also good news for owners of real estate and other fixed assets in the Emirates as there will be a one-off currency translation gain.

How large the realignment might be against different currencies, and whether precious metals might have a role in the currency basket, are matters that are likely to be keenly debated in the new monetary council.

But there is no prospect of devaluation, so this is a no-lose position for local investors who would be foolish to hold savings in dollars rather than dirhams.

Dollar Declines As Lawmakers Defeat US Govt's Rescue Plan


Dollar Declines As Lawmakers Defeat US Govt's Rescue Plan

Mon, Sep 29 2008, 18:19 GMT

Dollar Declines As Lawmakers Defeat US Govt's Rescue Plan

By Dan Molinski

NEW YORK (Dow Jones)--The dollar declined broadly Monday after the U.S. House of Representatives defeated a $700 billion Wall Street rescue plan and stock markets tumbled.

The House voted down the measure by a vote of 205 for, 228 against.

The Dow Jones Industrial Average dropped more than 600 points as the votes were being tallied, but has since recovered some and was down 571 points in recent trade.

That led to sharp risk aversion and general dollar-selling, pushing the dollar to as low as Y104.20 against the yen. The euro climbed more than one U.S. cent, but remains lower on the day following signs that a banking crisis is enveloping Europe as well.

"It's very nerve-racking, I think most people felt the congressional bill would be supported," said Thomas Benfer, director of foreign exchange at BMO Capital Markets. "It's all frenzy at this point - very emotional trading."

He added that the swings in the currency market, with the dollar largely turning around its earlier gains against the euro, is symptomatic of very low liquidity in currency markets.

"Basically it's just customer driven. If a customer asks for a price - you sell it. But as far as speculating and position taking, it's extremely low," Benfer said.

Oil is also dropping amid the volatility in markets, with crude futures dropping to about $96 a barrel. This is providing some support for the dollar, preventing a sharper decline.

Monday afternoon in New York, the euro was at $1.4515 from $1.4614 late Friday. The dollar was at Y104.25 from Y106.20, according to EBS. The euro was at Y151.40 from Y155.15. The U.K. pound was at $1.8159 from $1.8412, and the dollar was at CHF1.0842 from CHF1.0896 Friday.

-By Dan Molinski, Dow Jones Newswires; 201 938-2245; dan.molinski@dowjones.com

(Riva Froymovich contributed to this story.)

(END) Dow Jones Newswires

September 29, 2008 14:19 ET (18:19 GMT)

Crash Inevitable!


Crash Inevitable!

By David Vaughn

Sep 29 2008 4:57PM


We’ve heard that before, huh? But this time it is real.

“The US stock market could suffer a devastating crash with shares losing a third of their value this week…” “…a meltdown of 1929 proportions…” “Officials close to Paulson are privately painting a far bleaker portrait of the fragility of the global economy than that advanced by President George W Bush…” “…the message from government officials is that “the economy is dropping into the john.” “…We could see falls of 3,000 or 4,000 points on the Dow…” “That could happen in just a couple of days.” “We’re looking at catastrophe, huge, amazing catastrophe.” “It’s going to be really, really nasty.” “This has the potential to make 1929 look like a walk in the park.”


Below is an email I received this last week from a reader.

“Mike M. – “You see I am the person you were talking about. I have lived in a 1200 square foot home for 31 years and I served in the military for 4. I drive a truck for a living, 31years and still going. I live below my means and try to always watch what I spend money for. In the end these people and every single government figure will be held accountable. I wish to God I could put each one of them in the electric chair and just pull the level down for full power. I would personally laugh as each one of them…fried. You say damn this man is crazy; no I am not crazy I just believe in vengeance and fairness. I am sick and tired of a crooked government and a crooked system.”

And what is the average sentiment of our congressional leaders at this moment?

“For the most part, it seemed lawmakers were afraid to vote for the bill, yet afraid to vote against it.” usatoday.com, 9-25-2008

We witnessed a few years ago Enron, WorldCom, and other CEOs with failed companies. But those fellows were small potatoes to AIG, Meryl Lynch, Lehman Brothers. These large banking and insurance institutions understood the measure of the risk they were taking on these past 5 years. Or are we to understand that these Ivy League whores are just stupid?

“Lehman Brothers Chief Executive Richard Fuld…took the blame for the company's staggering second-quarter loss…” "This is my responsibility…" aol.co.nz, 6-17-2008

And how was Lehman Brother’s CEO rewarded for his admitted responsibility?

“…Fuld (Lehman Brothers CEO), a 30-year veteran of the once-venerable Wall Street investment bank that filed for bankruptcy protection…was awarded $22 million…” forbes.com, 9-15-8

And a few years back?

“In the 40 years that Richard S. Fuld, Jr., 60, has been with Lehman Brothers, he has seen the Firm undergo many changes…” “…Fuld's leadership abilities stand out.” "Real leaders earn the right to lead," Fuld said…” “…Fuld was named to Barron's "World's Most Respected CEOs" list in 2006…” harbus.org, 10-16-2006

And what can we say about the largest US bank failure?

“Washington Mutual collapses in biggest bank failure in U.S. history” haaretz.com/hasen, 9-26-2008

Were there any internal warnings within Washington Mutual sending out red flags a few years ago?

“…Washington Mutual was careless, analysts say. The company failed to integrate a number of rapid acquisitions fully and didn't build sufficient room into its financial plan to weather an expected drop-off in mortgage lending…” “…that's meltdown time." marketwatch.com/news/story/failure-heed-rate-warnings, 6-24-2004

But, hopefully, the CEOs were being prepared financially so that they personally would not experience Washington Mutual’s coming failure! Thank the good Lord as this seems to be the case!

“Washington Mutual, the largest U.S. savings and loan, reduced Killinger's (Washington Mutual CEO) total compensation…$5.25 million from $14.2 million in 2006.” “Killinger's salary remained the same at $1 million last year to maintain the tax deductibility of his full salary…” in.reuters.com/article/governmentFilingsNews

Let’s hear now about the new CEO who has replaced outgoing Killinger and how much this new dude will make at Washington Mutual as the new CEO.

“Golden parachute for Washington Mutual CEO” “Washington Mutual's new CEO Alan Fishman -- who had been on the job a measly 17 days -- was paid nearly $20 million in the last month.” “That includes a $7.5 million bonus when he was hired Sept. 8. And it includes a mind-blowing $11.6 million cash severance now that the company has gone under. That's on top of his base salary -- a cool $1 million a year. Plus, he was eligible for annual bonuses worth up to 365 percent of his base pay.” “All this while the company was posting billions in losses. (Yesterday, it became the biggest bank failure in U.S. history…) “ Read over all that again -- and explain to me why something doesn't need to be done about CEO compensation.” dallasmorningviewsblog.dallasnews.com, 9-26-2008

Why isn’t the general public and lawmakers automatically jumping and demanding President George Bush’s 700 billion recovery plan? For over 20 years the American public has been trained to always look for that magic silver bullet. Folks, there are no more silver bullets.

“How did things go so badly? The simple answer: greedy, fat cat investment bankers who used these complicated derivatives no one could understand to leverage themselves, make tons of money at the expense of the typical mortgage holder, and who will never experience any down side from their profligacy.” economist.com, 9-23-2008

These “Masters of the Universe” that created this chaos will ultimately down the road profit in some way off of the very mess they created. It always works that way.”

“Despite steep declines in the performance and stock price of the three companies, Mr. Mozilo (CEO of Countrywide Financial), Mr. O’Neal (Merill Lynch CEO), and Mr. Prince (Citicorp CEO) were rewarded generously.” “… Mr. Mozilo (Countrywide CEO) received over $120 million in compensation…” “Also Mr. Mozilo (Countrywide CEO) received over the past 5 years a total of $391.88 mil.” “…Mr. O’Neal (Merrill Lynch CEO) departed with…$161 million…” “…Mr. Prince (Citicorp CEO) was awarded a $10 million bonus, $28 million in unvested stock and options, and $1.5 million…upon his departure from Citigroup.” oversight.house.gov 2008 & forbes.com

Ready to throw up yet folks?

These mega bankers are the elite of the world and will remain so. Whatever seeds of corruption they plant for others their personal harvest will still be bountiful. The banks rule the world. Even when this depression finally sets in for real these worms will ride the surf, smile and profit.

“…the Mortgage Banker Association is here for the banks, not the people.” “They would throw your grandma under the bus as they foreclose on her home and kick her to the curb in a heart beat.” loanworkout.org, 1-20-2008

The following below is a good explanation and summary written by the venerable Gary North. Well worth reading and absorbing.

Gary North, lewrockwell.com/north, 12-19-7 - “This is the domino effect. The subprime mess cannot be contained. It is like an untreated cancer cell. It will spread.” “If they (banks) knew about the fraud, they should have to buy the bonds back.” “…this bubble is like no other in my lifetime. It is tied to housing, and the entire Western world has been affected.” “The economic losses are gigantic and will grow.”.” “…has sucked in the best and the brightest people on earth, those who allocate capital. They trusted Alan Greenspan. They trusted artificially low interest rates. They trusted fiat money. That trust has been betrayed, as always. But this time, it has been betrayed on a scale that puts the world's banking system at risk. The bailouts have only just begun.”

Gary North, lewrockwell.com/north, 2007

But don’t you worry folks. The perpetrators of this financial crisis will be guaranteed to profit as I stated earlier.

“Golden parachutes here to stay” “…those hoping for an end to golden parachutes - the large pay packages that top executives get when they leave a company - may end up disappointed.” "We're not abrogating contracts," said a Treasury official who briefed reporters Sunday.” “Another Treasury official said that even future golden parachutes could be paid…” CNNMoney.com, 9-28-2008

David Vaughn
Gold Letter, Inc.

What Caused Our Economic Crisis?

JR: The following article is obviously politically bias, but the fact is, both the Democrats and the Republicans are equally responsible for this government created financial crisis. I'd just as soon vote for NONE OF THE ABOVE on election day since neither side really honors our Constitution.

Why was it such a surprise to the pimps in Washington and or the gurus on Wall Street when so many on Main Street saw it coming well over two years ago? But HEY! Main Street just isn't smart enough to understand how these greedy Wall Street bankersters operate, not like the elite financial market experts do.

It seems that many of our Congress critters, especially the ones up for re-election, were afraid to vote and sat on the sidelines with a NV until they saw what side the vote was headed before they voted. Every member of Congress knew how the American public felt about this bailout bill but thankfully enough either had a conscious or were afraid of their angry constituents and voted it down. Had this vote been after the election, it would have been passed overwhelmingly with NO CONSIDERATION how the people felt. We are not out of the woods yet. There will be another vote on Thursday so the ELITE will make some small change to this bill and plenty of arm twisting and WILL get it passed no matter who they must sacrifice on election day. The only thing to do is VOTE AGAINST ALL INCUMBENTS.

What really scares me the most is that the demoncrats had come to a consensus the previous weekend to basically pass Paulson's original bill, before the latest changes were made and before the public wised up and became outraged. Thankfully they couldn't swing enough republicans votes at the time or even after all the added conditions.

----- Original Message -----
From: spiker
Sent: Monday, September 29, 2008 12:42 PM
Subject: What Caused Our Economic Crisis?

VIP Dems, especially Chris Dodd, got bargain mortgages through Countrywide, all this was reported last June. The Dems are two faced crooks!

Countrywide Loan Scandal

Senators Appear to Have Received Below Market Mortgages from Countrywide

Dodd Must Clear Air Over Deals -- Courant.com

YouTube - Burning Down The House: What Caused Our Economic Crisis?

Monday, September 29, 2008

Why Bail Out the Crooks?

DaboDave is soooooo right! I can remember the first little duplex Jim and I bought, we bought on contract directly from the owners
and we paid it off in 10 years with simple interest. None of this compound interest thievery!!!
Trouble is - the U.S. gummit sent us off to war during Vietnam, taking over 3 years of our life at then poverty wages.
Luckily Jim was not killed or maimed as many honest Americans were. That is when the young men were drafted and
had no choice. It lasted for 8+ years until the college-age youngsters began to revolt - big time!!!

Guess what! We pulled out of Vietnam and what was the result? It went back to peace! There was no real threat there!
Just like Iraq and Iran have done nothing to harm America!!! War is always based in greed and lies!!!

We need to get back to buying homes from each other? Why involve the banksters?
For America and America's families,
Janet Lee and Jim Meisinger

Thanks to: "John Ray" & "dabodave1"
Why Bail out the Crooks?

>> Did they help the poor people who lost their homes? NO!
>> They could have lowered their interest rates, and not have been so greedy,
>> and allowed the home owners to keep their homes and pay lower payments
>> each month.
>> GREED: These Crooks in Banking, mortgaging, are corrupted organized
>> criminals. Their work "Equals control and Power over each Sovereign
>> American" and it must STOP NOW.
>> $170,000.00 mortgage; 10% of that mortgage is $17,000.00 so in an honest
>> mortgage, if you loaned $170,000.00 to a home buyer, if you were an
>> honest person, or bank, or ??; you would make $17,000.00 for that loan.
>> Thus the Mortgage and the interest would be $187,000.00.
>> Now divide that amount into 10 years of payments (which is 120 months, or
>> payments) thus the monthly payment of the loan would be $1,558.33 a month
>> for 10 years.
>> NOW figure how bad the present day mortgage companies are screwing you out
>> of your wealth, you home, destroying families, communities and making you
>> BOND SERVANTS to them....as most mortgages are for 30 years, not 10 years.
>> Thus for 20 years you are being SCREWED.
>> Instead of being understanding, about families and their financial
>> problems, these crooks increase the interest (GREED) and then....
>> They foreclose on the home!!!!
>> "THEY" (the very ones that the governments will now control, and as we
>> all know, the governments are the biggest Organized Crime family
>> organizations in the world... ) Kicked the families out into the streets;
>> then resold the homes and fractionized the asset again, and then sold the
>> paper gaining billions of dollars worth of "out of thin air money" off of
>> the backs of American Families!!!
>> Sent them to jail!
>> Do not bail them out!
>> How much money were the executives paid? How about over $50,000.00
>> an HOUR!!
>> Take all the company assets, including the multi million dollar Salaries
>> from the executives, their homes, their cars, their planes, their yachts,
>> their swimming pools, beach houses, get away cabins, etc.... And pay
>> back to each Sovereign American who lost a home, the total amount of money
>> of that home mortgage in CASH.
>> Bush/Clinton/JP Morgan/etc... and other Organized Crime Families; must
>> NOT be paid for Crimes Against the People of the Untied States of America.
>> It is treason to bail these bums out!
>> David J. D'Addabbo
>> ----------------

Check out how state and some local governments' financial advisors keep two sets of books:

>> CAFR1 Subscribers:
>> The following three reports should be circulated to all, and all should do
>> the same..
>> 1. The Federal Reserve's - Comprehensive Annual Financial Report (CAFR)
>> 2006 - http://cafr1.com/STATES/FedReserve/FR2006CAFR.pdf
>> 2007 - http://cafr1.com/STATES/FedReserve/FR2007CAFR.pdf
>> 2. The US Treasury Auditor Generals Report on the top Bank derivative
>> holdings with it being noted to look down 2/3rds through the report to the
>> "Table" section to see the dollar values (in millions so add six zeros to
>> the shown numbers) Example: JP Morgan Chase - #1 - Net assets 1.4
>> trillion - derivative positions 90 trillion dollars.
>> 2008 March -
>> http://cafr1.com/STATES/US-TreasuryReports/BankDerivativesMarch08.pdf
>> 3. The US Treasury Auditor Generals Report on top Bank mortgage holdings
>> and performance.
>> 2008 June - http://cafr1.com/STATES/US-TreasuryReports/MortgageJune08.pdf
>> People are guessing at whats going on behind the door. No longer, walk
>> through the door and look. See through the looking glass.
>> These three reports should be viewed by the world to see the "scope" and
>> reality of a good piece of the money involved in moving the markets. (over
>> 250 "trillion" dollars in derivatives). The derivative report shows that
>> between the top five banks they can control the ups and the downs at will
>> by the shear scope and size of their leveraged derivative holdings. They
>> can destroy their competition after liquidating their revenue by market
>> manipulations and then eat them up at pennies on the dollar. The moves we
>> are seeing in the market place are not random, they are created by those
>> wielding the greatest leverage through the use of the derivatives held.
>> People talk about drug dealers and how they can destroy lives, but how
>> many can look at their books to see the who, where, when, and how much.
>> These three reports give you a good look at the same per the Banks, so
>> look, learn, and share!
>> Do they need 700 billion or so in taxpayer funds? NOT! Do they need a jail
>> cell? Now that is a more reasonable and timely question to ask..
>> Sent FYI
>> Walter Burien
>> http://CAFR1.com
>> --------------------------------------------------------------
>> The Who, What, How, and Where behind this 700 Billion Dollar tax theft.
>> by Walter Burien - http://CAFR1.com - 09/26/08
>> TREASON: "Treason doth never prosper; what's the reason? For if it
>> prosper, none dare call it treason." Sir John Harrington, 1561-1612
>> Take a look at the money the big boys are rolling over. The three reports
>> below are the behind the looking glass view. I note that on the "Bank
>> Derivative report", JP Moran Chase shows net assets of 1.4 Trillion
>> dollars but they were rolling-over and controlling 90 Trillion dollars in
>> derivatives. The top 25 bank list totaled about 300 Trillion dollars of
>> derivatives (the market maker) under their control. Better not be on the
>> wrong side of the market contrary to where they want the market to swing
>> based on their buying and selling effect. They will take your money every
>> single time in their trading profits from the moves they "create" through
>> the use of that money.
>> 1. The Federal Reserve's - Comprehensive Annual Financial Report (CAFR)
>> 2006 - http://cafr1.com/STATES/FedReserve/FR2006CAFR.pdf
>> 2007 - http://cafr1.com/STATES/FedReserve/FR2007CAFR.pdf
>> 2. The US Treasury Auditor Generals Report on the top Bank derivative
>> holdings. I note to scroll down 2/3rds through the report to the "Table"
>> section to see the dollar values (in millions so add six zeros to the
>> shown numbers) Example: JP Morgan Chase - #1 - Net assets 1.4 trillion -
>> derivative positions 90 trillion dollars. (DOWNLOAD THIS ONE FIRST)
>> ** 2008 March -
>> http://cafr1.com/STATES/US-TreasuryReports/BankDerivativesMarch08.pdf
>> 3. The US Treasury Auditor Generals Report on top Bank mortgage holdings
>> and performance.
>> ** 2008 June -
>> http://cafr1.com/STATES/US-TreasuryReports/MortgageJune08.pdf
>> The big banks manipulate the market, destroy their competition the smaller
>> banks, profit from that manipulation, and then take over that competition
>> weakened by the same manipulation, AND THEN use their contacts to push the
>> government to use Taxpayer revenue to bail-out the economy created by the
>> effect of their own manipulation, as they take-over their competition at
>> pennies on the dollar, and those big boys grow ever larger. Well, I guess
>> they call that activity snack food for the kings..
>> And I will say it again: TREASON: "Treason doth never prosper; what's the
>> reason? For if it prosper, none dare call it treason." Sir John
>> Harrington, 1561-1612
>> Walter Burien
>> P. O. Box 2112
>> Saint Johns, Arizona 85936
>> http://CAFR1.com
>> Tel. (928) 445-3532
>> ---------------------------------------------------------
>> Americans, wake up and see what is all around us! The enemy that
>> threatens our very existence, is not over in Iraq or Iran, or Russia, or
>> China, etc... it is here in our cities, counties, states and federal
>> governments! Its all here in print.
>> Do not allow the crooks to be the judges of the crooks.
>> Hold them accountable for every penny and their greedy criminal actions
>> against the people of the United States of America.
>> WE are tired of presidents, and candidates all shouting about making
>> Sure, the Democrats and Republicans have boasted about making changes
>> every year they come up for elections!
>> But so far, their changes have CHANGED America the Republic, under God,
>> indivisible with liberty and justice for All; into a Socialist Democracy
>> of Organized Criminals who have thrown away our Constitution FOR
>> governments and replaced it with BAR RULES, CODES, COURTS, JAILS, IRS,
>> DOJ, SWAT, POLICE AND SHERIFFS no longer are to protect and to serve, they
>> INSECURITY, CPS, DPS, ETC... all using the laws, rules and regulations of
>> Corporations instead of Constitutions, to make each Sovereign American,
>> We used to have freedoms:
>> Those old enough can remember the days when you drove your pick up to high
>> school after a good morning of dove or quail or rabbit hunting.
>> You had your shotgun hanging in your gun rack and when you drove up to
>> school perhaps the principle noticed your gun hanging on your gun rack.
>> He or she would walk over and ask to see your gun, then take you over to
>> show you his gun, while comparing and discussing the morning hunt.....
>> Now we are told that guns are evil.
>> Then we are told that you must be given a permit to carry a gun.
>> Then we are told that you can not get a permit unless you buy it and are
>> sanctioned by the state or federal governments.
>> Then we are told you can not qualify for a permit, because you broke some
>> illegal law that was ENFORCED UPON YOU ILLEGALLY, by the Organized Crime
>> Families in Governments.
>> Thus, if a deranged person (usually a plant from gun hating people) takes
>> a gun to school and starts shooting people; the FBI, sheriff, Swat, BATF,
>> etc... is called out; and before they get their to PROTECT AND TO SERVE,
>> 25 people are killed by the deranged gunman/woman...
>> Where if their had been a principal and 50 others who had guns, that were
>> good people, the only one dead would be the deranged killer.
>> Change?
>> We used to have the freedom to work
Janet's note: and could keep the fruits of our labor so that mothers could stay at home with their children and we could still:
1. pay for our home in 10 years
2. pay for our children's education
3. pay for our own health care
4. build our own businesses - that is until the federal reserve raised the interest rates to 21% overnight in the earl 8-0's
5. and still have money to invest in our communities!!!
>> We now are forced to kiss the rings of State, federal, city, county,
>> licensing boards, inspections, regulations, permits, fees, etc..
>> We used to have the freedom to drive our personal vehicle.
>> Now we are forced to kiss the rings of the state, so we can drive their
>> vehicle (registered to the state) while we pay for it, and do so, ONLY, if
>> we pay registration and fees to do so.
>> We used to have a choice.
>> Now we are forced to buy insurance so the insurance companies can become
>> filthy rich. If we do not buy, we can be put in jail.
>> We used to have a choice.
>> Now we are forced to buckle up, so the insurance people do not pay so much
>> damages in their claims departments. Its all about the money while they
>> use smoke and mirror illusions to make us think they really care.
>> Sure they care! About how rich that they can become off of the backs of
>> YOU and I.
>> It is time to say NO!
>> NO bail outs!
>> David J. D'Addabbo
>> Christian Patriot Preacher,
>> Sons and Daughters of Liberty,
>> Investigator for the people.
>> dabodave1@netzero.net
>> David, J. D'Addabbo,
>> Investigator for the people,
>> Christian, Patriot Preacher
>> UCC 1-308, Without Prejudice,
>> All Rights Preserved.

Day of Reckoning

Day of Reckoning
By Patrick J. Buchanan

How did the United States of America, the richest nation on earth,
whose economy represents 30 percent of the Global Economy, arrive
at the precipice of a financial panic and collapse?

The answer lies in the abject failure of both America's financial
elite and the political elite of both parties -- the same elites
now working together to determine how much of our wealth will be
needed to bail the nation out of the crisis of their own creation.

Big Government is riding to the rescue -- saddlebags full of our
tax dollars -- to save us from the consequences of the stupidity
and folly of Big Government. New York and Washington, the twin
cities responsible for the crisis, are now being hailed by the
media as the 7th Cavalry, coming to rescue a beleaguered nation.

Had there not been a steady and constant infusion of easy money and
credit into the U.S. economy by the Fed, for years on end, a
housing bubble of the magnitude of the one that has just exploded
could never have been created.

Had the politicians of both parties not coerced and pressured
banks, S&Ls, Fannie Mae and Freddie Mac to make all those sub-prime
mortgages, then to tie this rotten paper to good paper, convert it
into securities and sell to banks all over the world, there would
have been no global financial crisis.

Had they seen this coming and acted sooner, the Federal Reserve and
U.S. Treasury would not today, like Henny Penny, be crying, "The
sky is falling!" and the end times are at hand, unless we give them
5 percent of our gross domestic product to buy up suspect
securities backed by sub-prime mortgages.

Consider what the "Paulson Plan" of Treasury Secretary Hank
Paulson, against which Sen. Richard Shelby and the House
Republicans rebelled, entails.

Since Americans save nothing and have to borrow from abroad to
finance our trade and budget deficits, wars and foreign aid, what
the secretary proposes is this: that Congress authorize the
Treasury to spend $700 billion to buy up the toxic paper on the
books not only of U.S. banks, but of foreign banks operating in the
United States. According to The Washington Times, the Treasury
would also be authorized to buy up securities backed by rotten auto
loans, student loans and credit card debts.

Thus America would be borrowing from China, Japan and the Middle
East to tidy up the balance sheets of the banks of China, Japan and
the Middle East. And all the rotten paper will be offloaded onto
U.S. taxpayers, who hopefully will be able to recoup some of their
losses, because some of the paper will be good.

Why should we do this? Because otherwise there will be a financial
panic, followed by a market collapse, wiping out pensions, 401Ks,
portfolios and defined benefit plans of Middle America, forcing
millions into bankruptcy and millions more to put off retirement
and continue working until they drop.

In a democracy, it is said, you get the kind of government you
deserve. But what did the American people do to deserve this? What
did they do to deserve the quality of financial, corporate and
political leadership that marched them into this mess -- and that
today postures as their rescuers?

Consider what this mess has already cost taxpayers: $29 billion to
buy the rotten paper of Bear Stearns so J.P. Morgan would buy the
investment bank; $85 billion for 80 percent of AIG to nationalize
it; $150 billion in a stimulus package to flood the nation with
cash; perhaps $300 billion to bail out Fannie Mae and Freddie Mac;
and now $700 billion to begin taking the toxic paper off the hands
of America's big banks.

And even if this is passed, say Paulson and Fed Chairman Ben
Bernanke, there is no guarantee this will resolve the crisis. If
the $700 billion is not provided and the toxic paper is not pulled
off the books of the world's banks by U.S. taxpayers, however, we
face an almost certain collapse, surging bankruptcies, rising
unemployment, a shrinkage of GDP and a recession, if not worse.

Yet, the fellows who tell us we face a financial mushroom cloud
over every American city if we do not act at once to provide the
$700 billion did not see this coming and can make no guarantee that
this will succeed and end the crisis.

Nevertheless, it must be done, and done now, as collapse is imminent.

Looking at all the money being ladled out by the U.S. government to
prevent a collapse, and the diminished revenue coming in, it is
hard to see how America avoids future deficits that reach $1
trillion a year. These will imperil both the dollar itself and the
ability of the United States, which saves nothing, to borrow from
the rest of the world.
The downsizing of America is at hand.

Yes, indeed, we have arrived at the Day of Reckoning for Uncle Sam.



Please forward this email to friends, family
and colleagues... For the Cause!

Linda Muller - WebMaster - ForTheCause!

Please support our work by donating here:

And stop by for a visit to our websites:

Postal Address:
707 West Main Street, Smethport, PA 16749, USA

To unsubscribe or change subscriber options visit:

Machinists International President: Bankers Should Go to Jail without Bail

Machinists International President: Bankers Should Go to Jail without Bail
27 Sep 2008

September 26, 2008 (LPAC) - The International President of the International Association of Machinists (IAM), Thomas Buffenbarger, issued a statement, opposing the Paulson and other bailout schemes. Lyndon LaRouche heartily approved of the Buffenbarger statement, which appears in full here:

Just Say No!

For the last eight years, the Wizards of Wall Street have operated an international Ponzi scheme. They created a blizzard of paper derivatives, collateralized debt obligations, structured investment vehicles which they sold to the global gurus of high finance.

The Wizards made a conscious choice to manufacture what is now non-investment grade paper rather than manufacture consumer products. And by creating and trading in commercial paper confetti, they made billions in profits for their firms and millions in bonuses for themselves.

But like all Ponzi schemes, their get-rich-fast machine ground to a halt. The lubricants timely lower interest rates and constant infusions of liquidity by the Federal Reserve and other central bankers dried up. And now, after eight years of global hyper-greed, an estimated 47 trillion dollars worth of worthless paper is raining down on Wall Street and the burses of the world. The deeper that sea of bad debt gets, the more frantic becomes their cries of rescue me. This is not an American phenomenon. Virtually every member of the G-8 is impacted by this downpour of debt-based terror.

And yet, for the last fifteen months, the Federal Reserve, the U. S. Treasury Department and their counterparts on five continents have failed repeatedly to prevent the collapse of this Ponzi scheme. Not that they havent tried. Together, the central bankers have increased liquidity by over a trillion dollars; let non-bank firms borrow at below prime rates; picked winners and losers; and consistently deprecated the true dimensions this crisis.

Now, the same government officials who said let us handle it, we know what were doing are saying something very different. Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke are running down the street shouting the vaults empty; the moneys gone.

They want Americas workers, businesses and taxpayers to fill the void, to purchase an undeterminable, unfathomable and unknowable amount of debt from the single largest financial failure since the South Seas Company collapsed in the 1700s. These two George Bush appointees are demanding that Congress pass a $1,000,000,000,000 bailout package. They want the money in a small bill in the next ninety-six hours, or else.

I urge Congress to Just say, NO!

It is bad enough that Bernanke and Paulson were in cahoots with the bank robbers. But by pointing a gun at the American people and demanding more than all the gold in Fort Knox (and the New York Federal Reserve Bank), they are abetting the wildest bank robbery ever.

Make no mistake. This is a bank heist, nothing more, nothing less. And the Federal Bureau of Investigation should be the first responders.

Those Wizards of Wall Street should be arrested, their computers, bank accounts and records seized, their rights read to them, and their cases placed on a rocket docket. They should be treated as the common criminals they have become. We cannot undo the damage they have done to our economy. But we can turn a massive bailout into a monumental jail-in.

Union's Wall Street Rally: Jail Not Bail
27 Sep 2008

September 26, 2008 (LPAC)--The New York City Central Labor Council organized an emergency protest Thursday on Wall Street. Hundreds of construction workers, auto workers, transit workers, machinists, teachers and government workers rallied against the Bush bailout plan. Their signs called for jail, rather than payments, for the financier swindlers. AFL-CIO president John Sweeney said, "The Bush administration wants us to pay the freight for a Wall Street bailout that does not even begin to address the roots of our crisis.... We must put working families first in line." Sweeney called for consequences for "the perpetrators of this disaster."

Jesse Jackson told the rally, "This is a Roosevelt moment. It's time for reconstruction of manufacturing law, trade law and banking transparency."

Pre-election Militarization of the North American Homeland. US Combat Troops in Iraq

Pre-election Militarization of the North American Homeland. US Combat Troops in Iraq repatriated to "help with civil unrest"

By Michel Chossudovsky

URL of this article: www.globalresearch.ca/index.php?context=va&aid=10341
Global Research, September 26, 2008

The Army Times reports that the 3rd Infantry’s 1st Brigade Combat Team is returning from Iraq to defend the Homeland, as "an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks." The BCT unit has been attached to US Army North, the Army's component of US Northern Command (USNORTHCOM). (See Gina Cavallaro, Brigade homeland tours start Oct. 1, Army Times, September 8, 2008).

"Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.

It is not the first time an active-duty unit has been tapped to help at home. ...

But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities

After 1st BCT finishes its dwell-time mission, expectations are that another, as yet unnamed, active-duty brigade will take over and that the mission will be a permanent one.

The command is at Peterson Air Force Base in Colorado Springs, Colo., but the soldiers with 1st BCT, who returned in April after 15 months in Iraq, will operate out of their home post at Fort Stewart, Ga.,


The 1st of the 3rd is still scheduled to deploy to either Iraq or Afghanistan in early 2010, which means the soldiers will have been home a minimum of 20 months by the time they ship out.

In the meantime, they’ll learn new skills, use some of the ones they acquired in the war zone and more than likely will not be shot at while doing any of it. (ibid)

The BCT is an army combat unit designed to confront an enemy within a war theater.

With US forces overstretched in Iraq, why would the Pentagon decide to undertake this redeployment within the USA, barely one month before the presidential elections?

The new mission of the 1st Brigade on US soil is to participate in "defense" efforts as well as provide "support to civilian authorities".

What is significant in this redeployment of a US infantry unit is the presumption that North America could, in the case of a national emergency, constitute a "war theater" thereby justifying the deployment of combat units..

The new skills to be imparted consists in training 1st BCT in repressing civil unrest, a task normally assumed by civilian law enforcement.

What we are dealing with is a militarization of civilian police activities in derogation of the Posse Comitatus Act.

The prevailing FISA emergency procedures envisage the enactment of martial law in the case of a terrorist attack. The 1st BCT and other combat units would be called upon to perform specific military functions:

They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.

Training for homeland scenarios has already begun at Fort Stewart and includes specialty tasks such as knowing how to use the “jaws of life” to extract a person from a mangled vehicle; extra medical training for a CBRNE incident; and working with U.S. Forestry Service experts on how to go in with chainsaws and cut and clear trees to clear a road or area.

The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.

“It’s a new modular package of nonlethal capabilities that they’re fielding. They’ve been using pieces of it in Iraq, but this is the first time that these modules were consolidated and this package fielded, and because of this mission we’re undertaking we were the first to get it.”

The package includes equipment to stand up a hasty road block; spike strips for slowing, stopping or controlling traffic; shields and batons; and, beanbag bullets.

Civil unrest resulting from from the financial meltdown is a distinct possibility, given the broad impacts of financial collapse on lifelong savings, pension funds, homeownership, etc.

The timing of this planned militarization is crucial: how will it affect the presidential elections scheduled for Tuesday November 4.

The brigade in its domestic homeland activities will be designated as the Consequence Management Response Force ( CCMRF) (pronounced “sea-smurf”).

What " Consequences" are being envisaged?

In a conference held under NorthCom last February, the mission of CCMRFF was defined as follows;

"How to protect communities from terrorist and biological attacks topped the agenda last week for more than 100 service members and civilians gathered at Joint Task Force Civil Support headquarters at Fort Monroe, Va.

The U.S. Northern Command Chemical, Biological, Radiological, Nuclear, and High-Yield Explosive Commanders’ Conference, held Feb. 21-23, brought JTF-CS subordinate task force and unit commanders here to discuss common concerns regarding operational requirements of the CBRNE Consequence Management mission and to begin preparations for Exercise Ardent Sentry 2007.

“We’re giving operationally focused briefs to our CCMRF ( CBRNE Consequence Management Response Force) units to help them prepare and successfully deploy for a CBRNE mission in the continental United States, its territories and possessions,” said JTF-CS Current Operations Specialist Hawley Waterman, who helped organized the conference. “This is also an opportunity to get acquainted and establish better relationships with (subordinate commanders).”(NorthCom, March 2007)

What is envisaged is the possibility of a (false flag) terrorist attack on America, which could be used as a justification for retaliatory or preemptive military action overseas (e.g. Iran) as well actions on the domestic front. The ultimate objective of this deployment of 1st BCT is to apply combat experience in the Homeland:

“I can’t think of a more noble mission than this,” said Cloutier, who took command in July. “We’ve been all over the world during this time of conflict, but now our mission is to take care of citizens at home ... and depending on where an event occurred, you’re going home to take care of your home town, your loved ones.”

While soldiers’ combat training is applicable, he said, some nuances don’t apply.

The operation officially has an emergency mandate to "help American citizens on American soil, to save lives, provide critical life support, help clear debris", but it also implies the running of military style operations. :in fact it would appear that the emergency tasks helping civilians is a cover-up. This is a combat unit, which is trained and equipped to kill people:

Some brigade elements will be on call around the clock, during which time they’ll do their regular marksmanship, gunnery and other deployment training. That’s because the unit will continue to train and reset for the next deployment, even as it serves in its CCMRF mission.

Should personnel be needed at an earthquake in California, for example, all or part of the brigade could be scrambled there, depending on the extent of the need and the specialties involved.

Other branches included The active Army’s new dwell-time mission is part of a NorthCom and DOD response package.

Active-duty soldiers will be part of a force that includes elements from other military branches and dedicated National Guard Weapons of Mass Destruction-Civil Support Teams.

A final mission rehearsal exercise is scheduled for mid-September at Fort Stewart and will be run by Joint Task Force Civil Support, a unit based out of Fort Monroe, Va., that will coordinate and evaluate the interservice event.

In addition to 1st BCT, other Army units will take part in the two-week training exercise, including elements of the 1st Medical Brigade out of Fort Hood, Texas, and the 82nd Combat Aviation Brigade from Fort Bragg, N.C.

There also will be Air Force engineer and medical units, the Marine Corps Chemical, Biological Initial Reaction Force, a Navy weather team and members of the Defense Logistics Agency and the Defense Threat Reduction Agency.

One of the things Vogler said they’ll be looking at is communications capabilities between the services.

“It is a concern, and we’re trying to check that and one of the ways we do that is by having these sorts of exercises. Leading up to this, we are going to rehearse and set up some of the communications systems to make sure we have interoperability,” he said.

A national emergency could be triggered. "[H]orrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive [attack]" or a so-called CBRNE type scenario. One assumes that this is some form of domestic attack, allegedly by terrorists.

But at the same time, the Bush administration may be seeking a justification to establish martial law and intervene militarily within the USA.

“I don’t know what America’s overall plan is — I just know that 24 hours a day, seven days a week, there are soldiers, sailors, airmen and Marines that are standing by to come and help if they’re called,” Cloutier said. “It makes me feel good as an American to know that my country has dedicated a force to come in and help the people at home.” (Army Times, op cit , emphasis added)

"This type of planning and coordination and training is a priority both in our headquarters and at NORTHCOM, as we understand our responsibilities to be ready should the requirement arise, God forbid," (Army News Service Sept 15m 2008)

Please support Global Research
Global Research relies on the financial support of its readers.

Your endorsement is greatly appreciated

Subscribe to the Global Research e-newsletter
Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.

To become a Member of Global Research

The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: crgeditor@yahoo.com

www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.

For media inquiries: crgeditor@yahoo.com

© Copyright Michel Chossudovsky, Global Research, 2008

The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=10341

Sunday, September 28, 2008

Hang 'Em High!

Hang 'Em High!
By Israel Shamir


Seven years after 9/11, we witness another, greater and even more enjoyable collapse, that of the American financial pyramid. It took some twenty years in building; its collapse took only a few weeks. Let us cut the hypocritical crap: this was a wonderful show, no ifs, ands or buts. The US stock markets boomed when they bombed Baghdad and Belgrade, they prospered when they robbed Moscow and squeezed sweat from Beijing. When they had it good, they had plenty of money for invading Iraq, threatening Iran and strangling Palestine. In short, when it was good for them, it was bad for us. Let them have a taste of their own medicine!

"They" are not the Americans, and "we" are not the rest of the planet. "They" are a small sliver of the American population, the get-rich-quick crowd from the East Side of Manhattan and similar places. The last twenty years witnessed a great shift of money upwards, to a smaller and smaller pack of greedy beasts. While the majority of Americans lost the ability to send their children to universities, these fat cats bought themselves villas in Florida and houses in Tel Aviv. Worse, they spent their billions buying up the media in order to subvert American democracy and send American soldiers to fight wars in far-away places. A big part of the stolen money was siphoned off to Israel, where apartment prices went through the roof and are still rising.

They had it good; they were proud that the financial charts of the US and of the world were drawn up in a small room by Henry Paulson of the Treasury, Ben Bernanke and Alan Greenspan of the Federal Reserve, by Maurice Greenberg of A.I.G. They built their world surrounded by Lehman Brothers, Merrill Lynch, Goldman Sachs, Marc Rich, Michael Milken, Andrew Fastow, George Soros, et al. Their exciting new world of Lexus and Nexus was glorified by Tom Friedman of the New York Times. They gave the Nobel Prize in Economics to Myron Scholes and Robert C. Merton, proud board directors of the now infamous Long Term Capital Management hedge fund that was bailed out by the Federal Reserve Bank of New York to the tune of $3.6 billion. President Bush rewarded them for their unaccountability by releasing them from the burden of taxation. Let them pay now for all the fun they had.

They took your real dollars and turned it into funny money -- "unredeemable, non-interest-bearing promissory notes of the Fed, that are not backed by anything other than the confidence of the credulous", in the words of one Internet wit. The ruination of the American working class and even its middle class is unavoidable The fears about the Large Hadron Collider creating a big black hole in place of Earth were based on this sinking feeling that the incredible riches of the US are disappearing into their own black hole.

This is not the first confidence trick in US history: Jay Gould and Joseph Seligman caused the 'Black Friday' stock market crash in the late 19th century, while Jacob Schiff caused the notorious 'Black Thursday' panic that led to a nationwide economic depression[1]. Seligman was also the mover behind the Panama affair, a stock market swindle that became proverbial in France. The swindle was set up by two Jews of German origin, Jacques Reinach and Cornelius Herz who bribed parliamentarians. While Reinach was working on the right wing, the 'Republicans' of his day, Herz was working on the 'Democrats'. Wikipedia quotes Hannah Arendt, who wrote that the middlemen between the business sector and the state were almost exclusively Jews. This warm embrace between the state and the business sector was a recipe for disaster.

Obviously things have changed since then, and now the Mammonites are of various persuasions, even of Christian Science, like Hank Paulson, whose net worth is estimated at $700 million and whose career at Goldman Sachs (Chairman 1998-2006) made him the obvious choice for the position of secretary of the treasury. Only their devotion to the god of Greed remained constant. In the world of ideal capitalism ("market economy") they so glorified, they would have paid a price. In Glen David Gold's vastly entertaining novel Carter Beats the Devil, their spiritual ancestor was tarred and feathered by strong-willed Connecticut folk circa 1670, for he had bought a whole boatload of imported products with the criminal intent of getting rich quick by cornering the market and ripping off his fellow men. Nowadays such a criminal would get a medal from the neo-liberal Milton Friedman Fund, a citation from JINSA and be taught as a positive example by the Harvard Business School.

Now they intend to use their control over the government in order to shift their losses onto ordinary Americans. Whether this act is called 'nationalisation' or 'privatisation' or 'bailout', the bottom line is that many Americans will find themselves poor, and all Americans will have a huge tax burden to bear. But the perpetrators of the pyramid will get off scot-free; they will retire to their castles and to their sure and protected investments as they have always done before.

The Americans were played for suckers; they were cleaned out as easily as were the unsophisticated Albanians a few years ago. Even worse: the Albanians took out their guns and pursued the robbers; the Americans take it all lying down. But the device was the same.

The Americans are entitled to know who robbed them and their children: these are the men who became so ostentatiously rich during last two decades. They should pay the price of their crime. And if the government, the President, the Congress and Senate, the Democrats and the Republicans are reluctant to enforce it, the ordinary Americans may do as their Connecticut Yankee ancestors did: apply tar and feathers liberally. If this does not help, hang the bastards on the lamp posts.

This is exactly the time to remember why America's Founding Fathers enshrined the people's right to own and bear arms in the Second Amendment to the Constitution. Thank God the ADL did not cancel it yet. These arms are not for robbers: they are given to enforce justice when all other means fail. Aux armes, to arms, as the French said when giving this treatment to their tricksters. America has a great tradition of instant direct justice enforcement, this Hang'em High call of the Westerns. Heed it now!

Let US soldiers come back from unneeded wars and remote bases all over the world: their real enemy is in their own country. In the ringing, still relevant words of Lenin, let us turn the imperial war into a civil one, against the greedy bastards. Instead of charging taxpayers, turn the US into a billionaire-free zone! The billionaires, these greediest rats, gained most from the Great Pyramid; pauperise them. Nullify their bank accounts. The disappearance of trillions of dollars from their electronic bank accounts will drive the value of the greenback up; your salary will become real money again!

If we assume that more than half of all billionaires are proud members of the Israel Lobby, it will also solve the Middle Eastern problem. To be on the safe side, confiscate all the assets of the Pyramid-builders: of Paulson and Bernanke, of Merrill Lynch and Goldman Sachs executives, and of President Bush who allowed it all to happen. Peace will come to Palestine, Afghanistan and Iraq; Americans will again become proud of their country. Such mass confiscation will restore democracy in the US: the next candidates for the Presidency will not go hat in hand to AIPAC to declare their fealty. The defeat of Greed will turn people back to God; the eliminated ballast will allow for national medical care, social security and free education for all. Instead of being a disaster, the financial collapse offers a unique opportunity to fix all America's ills. Do not miss it!

Speaking for the wide world outside America, I'll tell you this: do not throw good money after bad. Reject the seductive purring from Washington. Consider your funds in the US already lost. If you can still get something, good; but do not waste money and efforts to regain what is gone. There is a most valuable asset you may get for the lost ones; that is your freedom and independence. An undermined dollar means your economy will be safe. The Pyramid collapse will set you free!

[1] Benjamin Ginsberg, The Fatal Embrace: Jews and the State, University of Chicago Pres, Chicago 1993, p 73

Saturday, September 27, 2008

The Destabilization of Bolivia and the "Kosovo Option"

The Destabilization of Bolivia and the "Kosovo Option"

by Michel Chossudovsky

Global Research, September 21, 2008
- 2008-09-20

Email this article to a friend
Print this article

StumbleUpon Submit

The secession of Bolivia's Eastern provinces is part of a US sponsored covert operation, coordinated out of the US State Department, in liaison with US intelligence.

The death squads armed with automatic weapons responsible for killing supporters of Evo Morales in El Porvenir are supported covertly by the US. According to one report, "USAID has an "Office of Transition Initiatives" operating in Bolivia, funneling millions of dollars of training and support to right-wing opposition regional governments and movements."(The Center for Economic and Policy Research, September 2008). The US also provides support to various opposition groups through the National Endowment for Democracy (NED).

The expelled US Ambassador Philip S. Goldberg worked under the helm of Deputy Secretary of State John Negroponte, who directly oversees the various "activities" of US embassies around the World. In this regard Negroponte plays a far more important role, acting behind the scenes, than Secretary of State Condoleeza Rice. He is also known as one of the main architects of regime change and covert support to paramilitary death squads both in Central America and Iraq.

Philip S. Goldberg's mandate as ambassador to Bolivia was to trigger the fracture of Bolivia as a country. Prior to his appointment as ambassador in early 2007, he served as US Chief of Mission in Pristina, Kosovo (2004-2006) and was in permanent liaison with the leaders of the KLA paramilitary, who had integrated civilian politics, following the NATO occupation of Kosovo in 1999.

Supported by the CIA, the Kosovo Liberation Army (KLA), whose leaders now head the Kosovar government, was known for its extensive links to organized crime and the trade in narcotics. In Kosovo, Goldberg was involved in setting the stage for the subsequent secession of Kosovo from Serbia, leading to the installation of an "independent" Kosovar government.

In the course of the 1990s, Goldberg had played an active role in the break up of Yugoslavia. From 1994-1996 he was responsible for the Bosnia Desk at the State Department. He worked closely with Washington's Special Envoy Richard Holbrooke and played a central role as Chief of Staff of the US negotiating team at Dayton, leading up to the signing of the Dayton Accords in 1995. These accords were conducive to the carving up of Bosnia-Herzegovina. More generally they triggered the destruction and destabilization of Yugoslavia as country. In 1996, Goldberg worked directly as Special Assistant to the Deputy Secretary of State Strobe Talbott (1994-2000), who together with Secretary of State Madeleine Albright, played a key role in launching the war on Yugoslavia in 1999.

The Central Role of John Negroponte

Deputy Secretary of State John Negroponte plays a central role in the conduct of covert operations. He served as US ambassador to Honduras from 1981 to 1985. As Ambassador in Tegucigalpa, he played a key role in supporting and supervising the Nicaraguan Contra mercenaries who were based in Honduras. The cross border Contra attacks into Nicaragua claimed some 50 000 civilian lives. During the same period, Negroponte was instrumental in setting up the Honduran military death squads, "operating with Washington support's, [they] assassinated hundreds of opponents of the US-backed regime." (See Bill Venn, Bush Nominee linked to Latin American Terrorism, Global Research, November 2001)

"Under the rule of General Gustavo Alvarez Martnez, Honduras's military government was both a close ally of the Reagan administration and was "disappearing" dozens of political opponents in classic death squad fashion.

(See Peter Roff and James Chapin, Face-off: Bush's Foreign Policy Warriors , Global Research, July 2001)

This did not prevent his nomination to the position of US Permanent Representative to the UN under the Clinton administration.

The Salvador Option

Negroponte became Ambassador to Iraq in 2004, where he set up a "security framework" for the US occupation, largely modeled on the Central American death squads. This project was referred to by several writers as the "Salvador Option".

While in Baghdad, Negroponte hired as his Counselor on security issues, a former head of special operations in El Salvador. The two men were close colleagues going back to the 1980s in Central America. While Negroponte was busy setting up the death squads in Honduras, Colonel Steele had been in charge of the US Military Advisory Group in El Salvador, (1984-86) "where he was responsible for developing special operating forces at brigade level during the height of the conflict.":

"These forces, composed of the most brutal soldiers available, replicated the kind of small-unit operations with which Steele was familiar from his service in Vietnam. Rather than focusing on seizing terrain, their role was to attack ‘insurgent’ leadership, their supporters, sources of supply and base camps." (Max Fuller, For Iraq, "The Salvador Option" Becomes Reality, Global Research, June 2005)

In Iraq, Steele was "assigned to work with a new elite Iraqi counter-insurgency unit known as the Special Police Commandos". In this context, Negroponte's objective was to encourage ethnic divisions and factional strife, by triggering covert terrorist attacks directed against the Iraqi civilian population.

Negroponte was appointed as the Head of the Directorate of National Intelligence in 2005, and subsequently in 2007 came to occupy the Number Two position in the State Department.

The Kosovo Option: Haiti

This is not the first time that the "Kosovo model" of supporting terrorist paramilitaries has been applied in Latin America.

In February 2003, Washington announced the appointment of James Foley as Ambassador to Haiti. Ambassadors Goldberg and Foley are part of the same "diplomatic stable". Foley had been a State Department spokesman under the Clinton administration during the war on Kosovo. He was involved at an earlier period in channeling support to the Kosovo Liberation Army (KLA).

Amply documented, the Kosovo Liberation Army (KLA) was financed by drug money and supported by the CIA. ( See Michel Chossudovsky, Kosovo Freedom Fighters Financed by Organized Crime, Covert Action Quarterly, 1999 )

At the time of the Kosovo war, the then ambassador to Haiti James Foley had been in charge of State Department briefings, working closely with his NATO counterpart in Brussels, Jamie Shea. Barely two months before the onslaught of the NATO led war on 24 March 1999, James Foley, had called for the "transformation" of the KLA into a respectable political organization:

"We want to develop a good relationship with them [the KLA] as they transform themselves into a politically-oriented organization,' ..`[W]e believe that we have a lot of advice and a lot of help that we can provide to them if they become precisely the kind of political actor we would like to see them become... "If we can help them and they want us to help them in that effort of transformation, I think it's nothing that anybody can argue with..' (quoted in the New York Times, 2 February 1999)

In other words, Washington's design was "regime change": topple the Lavalas administration and install a compliant US puppet regime, integrated by the "Democratic Platform" and the self-proclaimed Front pour la libération et la reconstruction nationale (FLRN), whose leaders are former FRAPH and Tonton Macoute terrorists. (For further details see Michel Chossudovsky, The Destabilization of Haiti, Global Research, February 2004)

Following the 2004 coup d'Etat which led to the downfall of the Aristide government, KLA advisers were brought into Haiti by the United States Agency for International Development (USAID) to assist in the country's reconstruction. (See Anthony Fenton, Kosovo Liberation Army helps establish "Protectorate" in Haiti, Global Research, November 2004)

Specifically, the KLA consultants were to assist in restructuring the Haitian police force, bringing into its ranks, former members of FRAPH and the Tonton Macout.

[In support of] the "Office of Transition Initiatives," (OTI) ... USAID is paying three consultants to help consult for the integration of the former brutal military into the current Haitian police force. And who are those three consultants? Those three consultants are members of the Kosovo Liberation Army." (Flashpoints interview, November 19, 2004, www.flashpoints.net )

USAID's "Office of Transition Initiatives" (OTI)

The Salvador/ Kosovo option is part of a US strategy to fracture and destabilize countries. The USAID sponsored OTI in Bolivia performs much the same function as a similar OTI in Haiti.

It is also worth noting that there was an Office of Transition Initiatives (OTI) in Venezuela, where a plot, according to reports, was recently uncovered to allegedly assassinate President Hugo Chavez. The role of the OTI office in Venezuela is discussed in Eva Golinger's recent book "Bush vs. Chavez."

The stated purpose of US covert operations is to provide support as well as as training to "Liberation Armies" ultimately with a view to destabilizing sovereign governments. In Kosovo, the training of the Kosovo Liberation Army (KLA) in the 1990s had been entrusted to a private mercenary company, Military Professional Resources Inc (MPRI), on contract to the Pentagon.

Pakistan and the "Kosovo Option"

It is worth noting that in Pakistan, recent developments point towards direct forms of US military intervention, in violation of Pakistani sovereignty.

Already in 2005, a report by the US National Intelligence Council and the CIA forecast a "Yugoslav-like fate" for Pakistan "in a decade with the country riven by civil war, bloodshed and inter-provincial rivalries, as seen recently in Balochistan." (Energy Compass, 2 March 2005).

According to a 2006 report of Pakistan's Senate Committee on Defence, British intelligence was involved in supporting the Balochistan separatist movement. (Press Trust of India, 9 August 2006). The Bolochistan Liberation Army (BLA) bears a canny resemblance to Kosovo's KLA, financed by the drug trade and supported by the CIA.

Washington favors the creation of a "Greater Balochistan" [similar to a Greater Albania] which would integrate the Baloch areas of Pakistan with those of Iran and possibly the Southern tip of Afghanistan, thereby leading to a process of political fracturing in both Iran and Pakistan. (Michel Chossudovsky, The Destabilization of Pakistan, December 30, 2007)

Global Research Articles by Michel Chossudovsky
Please support Global Research
Global Research relies on the financial support of its readers.

Your endorsement is greatly appreciated

Subscribe to the Global Research E-Newsletter

Spread the word! Forward to a friend!
Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.

To become a Member of Global Research

The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: crgeditor@yahoo.com

www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.

For media inquiries: crgeditor@yahoo.com

© Copyright Michel Chossudovsky, Global Research, 2008

The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=10284

Thursday, September 25, 2008

Trillion Dollar Treasury Defects: Truth and Consequences


Trillion Dollar Treasury Defects: Truth and Consequences

By Richard Benson

Sep 24 2008 10:25AM


One of my recent articles explained why the US Treasury deficit, without financial bailouts or government stimulus, was heading towards $600 billion a year. Another one forecasted that the bill for the financial bailouts would also be huge. This week, the cost of the bailout was confirmed with the nationalization of Fannie, Freddie, and AIG, added to the failure of Lehman Brothers, and the new massive $700 billion plus Treasury “Taxpayer Cash for Wall Street Trash” legislation. The total bill for this legislation plus existing bailouts will cost taxpayers more than a trillion dollars paid out over the next three years.

It's important to realize that this bailout plan adds nothing to economic growth and was necessary to prevent a worldwide global collapse of the financial system. The proposal will shift hundreds of billions of taxpayer dollars to purchase rotten financial assets from Wall Street institutions and banks for more than they are worth. This is all happening as our economy has been weakened by higher unemployment and non-financial corporate failures, and we’re bracing for a worldwide recession that is unfolding in never-ending newspaper headlines. Even now, before America has a newly-elected President and a fresh Congress in office, legislators in Congress have already started discussions to launch another stimulus package. My bet is that the stimulus needed will total at least $500 billion. Trillion dollar federal deficits for the next few years are now inevitable and as this truth sinks in, the consequences will be enormous. Here are the reasons (see chart below):
Reported Outstanding Treasury Debt


Debt held by the Public

Intragovernmental Holdings

Total Public Debt Outstanding





The $4.2 Trillion of Intragovernmental Holdings is the "fictional borrowing" from Social Security and Medicare accounts. This fictional borrowing consists of social security taxes collected in excess of benefits paid out since the program began. In the past, the federal government profited nicely from excess social security taxes, but now the excess taxes have been spent on government projects like the war in Iraq, earmarks, etc. In a few short years when the Baby Boomers start to retire, the Social Security benefits paid out will exceed the taxes collected. When that happens, this fictional borrowing will flip back into real borrowing from the public. This means the government borrowing will be real, not fictional.

Of the $5.5 Trillion to date that has been borrowed from the public by the Treasury, $3 trillion of it is Treasury debt owned by foreign central banks. It turns out that the Chinese and other Asian countries (along with the Gulf Arabs and many other governments) have been generous and ready lenders to the US Treasury. The question remains whether they will continue to be. It took our fine republic a few hundred years to run up $5.2 trillion in debt, but over the next three years Treasury borrowing could exceed $8 trillion, a staggering 60 percent increase in the real national debt. Is it rational to believe that foreigners will double their holdings of US Treasury debt from $3 Trillion to $6 Trillion in the next three years? Yes, indeed! Where else would they get that amount of money?

The US Treasury will be facing major funding problems when they attempt to borrow the next three trillion dollars. The last few trillion they borrowed was a piece of cake despite the fact that Americans have no savings and, therefore, bought little of the new Treasury debt. Borrowing from foreign governments was also easy because of the way it was done (see below):

First, Americans would borrow dollars using their credit cards and homes (home equity loans), and then send them to the Asians and Gulf Arabs in exchange for manufactured goods and oil. That gave the foreigners lots of dollars to buy Treasury debt and other US financial assets, such as the debt of Fannie & Freddie. Notice the cause and effect: First, the foreigners got the dollars then they invested them in US Treasuries. Americans used a massive dollar-trade deficit to finance the Treasury’s dollar-budget deficit. This paradigm is now over. America’s trade deficit is falling and the US is in recession.

Our country’s ability to buy goods and services from abroad is diminishing and Santa is not coming this Christmas (just look around and you’ll see Christmas decorations already in some stores – how desperate is that?) Foreign manufacturers are going to be scratching their heads over the holidays wondering where the dollars that used to come from America suddenly went.

The financial markets are going to slowly realize that the only reason foreign central banks bought Treasuries is because the US bought their goods first! China, as one example, realizes our money is not that good and will take an interest in holding dollars only because we are buying goods and services from them. Foreign countries have no reason to buy massive amounts of Treasury debt unless we buy something from them first.

So here we are now with the Treasury deficit that will quickly zoom past the trade deficit by several hundred billion dollars; the Treasury debt still can't be sold to American savers because America doesn't have savers; and, we are no longer buying enough goods from foreigners and sending them our dollars to finance the Treasury deficit.

What are the obvious consequences of Trillion dollar Treasury deficits? One such consequence is called "Crowding Out". Crowding Out is the phenomenon that occurs when the US Treasury sells debt in a world where foreigners and Americans are no longer flush with dollars. That means that the dollars to buy the debt must be squeezed out of the financial system and interest rates are forced up. Trillion dollar deficits aren’t chump change! However, squeezing a trillion dollars out of the money markets of the world is clearly impossible and the only remaining option to fund the US Treasury’s insatiable appetite is through "monetization". Monetization means that the Federal Reserve would step in and print up new money out of thin air and buy the Treasury debt. If that occurs, monetary growth rates would soar and, in turn, create very high inflation as too many dollars start chasing too few goods. Rising inflation forces interest rates up, and rising interest rates always have devastating consequences for the prices of financial assets such as stocks and bonds.

So, how will we all be affected? First, start reading about what life has been like in the Banana Republic and in countries like Argentina, where the inflation rate in 2002 rose to 20 percent following the devaluation of the country’s currency, the peso. Brace yourself for several years of rising inflation and interest rates and, by all means, protect your portfolio. Remember, cash is king again.

My investment plan remains the same. I expect real assets will greatly out-perform financial assets. First, I want to buy gold and silver in physical form whenever I can. In the world of inflation, while cash is king, gold is the emperor! Second, I look to accumulate real assets if they are quality assets and the prices have crashed down. So, I do believe that in a few years even real estate will again be a great inflation hedge!

Richard Benson



Thubten Jigme Norbu
Buddhist leader and brother of the Dalai Lama, he plotted with the CIA to free his Tibetan homeland
John Gittings
The Guardian, Monday September 8 2008

Thubten Jigme Norbu, who has died aged 86, was the eldest brother of the Dalai Lama. Recognised at the age of three as the reincarnation of a Tibetan lama, he became the abbot of a great monastery, but as a young man he also underwent another remarkable transformation. After rejecting overtures from the Chinese communists, who hinted that he should get rid of his brother, he left Tibet in 1951 for the US under the sponsorship of a CIA-front organisation. Within a few years he was helping the Americans to promote covert guerrilla warfare against the occupation of his homeland.
While living in Lhasa before the Chinese storm broke, Norbu and the young Dalai Lama became friendly with the Austrian mountaineer Heinrich Harrer, who had just completed the long trek from India. This "nice young man" could tell them about the west, and mend their broken watches. He would also become an intermediary with the Americans and help Norbu to write his autobiography, Tibet is My Country (1960). This remains the only substantial source for Norbu's early life and his dealings with the Chinese - but avoids any mention of the CIA connection.
Born in Taktser village, in Qinghai province, Norbu left home at the age of eight and began his religious training at the Shartsong Ritro, a remote monastery perched so high that pilgrims to the chapel at its peak sometimes fell to their death below. It was here in the 14th century that Tsongkhapa, founder of the leading Yellow Hat sect of Tibetan Buddhism, had also learned his first lessons.
Norbu was no ordinary apprentice monk, but had been recognised by the 13th Dalai Lama (predecessor of the current Dalai Lama) as the Taktser Rinpoche, one of the highest reincarnates in the region of Amdo (eastern Tibet), which was already under Chinese Nationalist rule. The subsequent discovery of his younger brother as the new incarnate Dalai Lama was not quite so amazing as the usual story makes out. The family was already known in religious circles: the previous Taktser Rinpoche was their father's maternal uncle and one of their own uncles was treasurer of the great monastery of Kumbum.
Norbu soon moved to Kumbum, near Xining (the present-day capital of Qinghai province), where he studied under strict discipline, rising every morning before dawn. He learned by heart almost 2,000 pages of scripture, which, as he would recall, "talked of both merciful and vengeful gods and treated of the exorcising of demons".
Passing his first exams at the age of 14, Norbu joined the general assembly of monks. In the mornings, he drank butter-tea with them and listened to sermons in the great hall; in the afternoons, he studied in the courtyard of the school of logic, taking part in public disputations known as "intellect sharpeners". His brother's elevation put him in a more exalted position, and in 1941 he joined his family in Lhasa, continuing his studies in Drepung, one of the three leading monasteries of Tibet.
As the Dalai Lama's eldest brother, Norbu had a place of honour everywhere in Lhasa. When Harrer visited the Dalai Lama's family, he found Norbu sitting on a throne elevated above his mother, the much-loved Dekyi Tsering, and his father. In 1947-48 Norbu travelled through India to China, then still under Chiang Kai-shek's rule, returning home to bury his father's ashes and resume his position at Kumbum monastery.
Within the year the monks had asked Norbu to become their new abbot - a dubious honour, as the victorious Chinese communists approached. Norbu was soon put under great pressure by them and followed everywhere by two Chinese minders who sought to "re-educate" him. Had prayer ever filled anyone's belly, they inquired sarcastically?
Norbu now resolved to resign the abbotship and return to Lhasa, still then under Tibetan rule. The local Chinese officials agreed, on condition that he would convey their demands for a peaceful liberation of Tibet to his brother. They promised to make him governor-general if he could persuade the Tibetan government to welcome in the Chinese army. According to Norbu's later account to Harrer, if the Dalai Lama objected, "ways and means would have to be found to get rid of him." Even fratricide, the officials apparently hinted, would be justifiable to further the cause of socialism.
Shaking off more Chinese minders, Norbu finally reached Lhasa late in 1950 and told his brother the dreadful story. With the news that Chinese troops were advancing, the young Dalai Lama withdrew to the Sikkim border, but eventually rejected overtures from the US to leave the country. While he returned to Lhasa, Norbu headed for Washington as guest of the CIA-funded Committee for Free Asia. His official biography describes him as "the first Tibetan to settle in the US". A second elder brother of the Dalai Lama, Gyalo Thondup, followed soon after. By 1956, when the Dalai Lama visited India, both brothers were involved with a CIA project to set up a clandestine network of agents in Tibet. Once again the Dalai Lama had to decide whether to return to Lhasa: Norbu told him that he had obtained "foreign support", but China's premier Zhou Enlai persuaded the Dalai Lama to continue cooperating with Beijing.
Norbu and his brother were soon helping the CIA to recruit and train Khampa fighters, from the toughest Tibetan tribe, to be infiltrated into the borderlands of China. Norbu's name appears in reports of secret training camps in the Colorado Rockies and on the Pacific island of Saipan. The operations were unsuccessful, but the Beijing authorities became aware of the brothers' role. Their suspicions of US involvement may have heightened the harsher policies adopted towards Tibet, especially after the Lhasa uprising and the Dalai Lama's flight in 1959.
The covert US programme only ended in the early 1970s, when President Richard Nixon initiated his famous thaw with Beijing. Norbu became the Dalai Lama's representative in the US, and in 1965 began teaching at the University of Indiana in Bloomington, where he later set up the Tibetan Cultural Centre and built a stupa (or Buddhist pagoda) in memory of the "one million Tibetans who have died since 1959".
In the 1990s he led several walks for Tibetan independence across the US, implicitly disagreeing with the Dalai Lama's more limited call for autonomy from China. He continued to lecture on Buddhism, but having renounced his monastic vows on leaving Tibet, went on to marry and have children.
He never spoke publicly about his transition from reincarnate lama to CIA trainer, and in 2000 deprecated his religious origins. "Some Tibetans believe that I am the reincarnation of the teacher from a monastery," he said. "That is their belief. But who knows? I don't know anything..." Asked what he would like his epitaph to be, he replied, "I would have nothing written, nothing. What does that matter?" He had "no more tears" to cry for the fate of Tibet. He is survived by his wife Kunyang Norbu and three sons.
• Thubten Jigme Norbu, religious leader and campaigner, born 1922; died September 5 2008

Wednesday, September 24, 2008

George Friedman on the Presidential Debates


Dear Stratfor Reader:

Below is the first installment of a four-part report from Stratfor founder and Chief Intelligence Officer, George Friedman, on the United States Presidential Debate on Foreign Policy.
On Friday night, every government intelligence agency in the world will be glued to television sets watching the US Presidential Debate on foreign policy. Government intelligence agencies won't be rooting for one candidate or the other, nor are they trying to call the "winner" of the debate - or even ultimately the election.
A government intelligence agency's goal is to provide national policy makers an unbiased analysis of contingencies. In this instance, they're attempting to answer two questions, "What will US foreign policy look like under an Obama or McCain administration? And how will that impact our country?"
Stratfor is a private-sector, independent intelligence service and approaches the debates from a similar perspective. We have zero preference for one candidate or the other, but we are passionately interested in analyzing and forecasting the geopolitical impact of the election.
The essence of our business is non-partisan, dispassionate analysis and forecasting. For individuals in today's global world - oil traders and missionaries, soldiers and equity analysts, educators and travelers - Stratfor provides the intelligence analysis that has long been exclusively available to governments.

Part 1 - The New President and the Global Landscape - September 23
This introductory piece frames the questions that the next president will face. Regardless of a given candidate's policy preferences, there are logistical and geographical constraints that shape US and foreign options. The purpose of this analysis is to describe the geopolitical landscape for the next administration. The analysis concludes with a list of questions for the debate that define the parameters facing both candidates.
Part 2 - Obama's Foreign Policy Stance - September 24
Senator Obama has issued position papers and made statements about his intended foreign policy. Like all Presidents, he would also be getting input from a variety of others, principally from his own party. This second analysis analyzes the foreign policy position of Sen. Obama and the Democratic Party.
Part 3 - McCain's Foreign Policy Stance - September 25
Senator McCain has issued position papers and made statements about his intended foreign policy. Like all Presidents, he would also be getting input from a variety of others, principally from his own party. This second analysis analyzes the foreign policy position of Sen. McCain and the Republican Party.
Part 4 - George Friedman on the Presidential Debate - September 29
The final installment in this series will be produced after the debate. This is NOT an effort to call a "winner" or "loser." That's for pundits, not an intelligence service. This will be an analysis of the candidates' statements and positions.
This is a special four-part report, distinct from the geopolitical analysis that we provide our Members on a daily basis. As such, we encourage you to re-post this special series to your website or to forward this email as you like. We would ask that you provide a link to www.stratfor.com for attribution purposes.
To receive your own copy of each installment of this special series as well as other free Stratfor intelligence, please click here.
Very truly yours,
Aaric S. Eisenstein
SVP Publishing

Stratfor on the Presidential Debate

If you're not already receiving Stratfor's free intelligence, CLICK HERE to have these special reports emailed to you.

For media interviews, email PR@stratfor.com or call 512-744-4309.

By George Friedman

It has often been said that presidential elections are all about the economy. That just isn’t true. Harry Truman’s second election was all about Korea. John Kennedy’s election focused on missiles, Cuba and Berlin. Lyndon Johnson’s and Richard Nixon’s elections were heavily about Vietnam. Ronald Reagan’s first election pivoted on Iran. George W. Bush’s second election was about Iraq. We won’t argue that presidential elections are all about foreign policy, but they are not all about the economy. The 2008 election will certainly contain a massive component of foreign policy.

We have no wish to advise you how to vote. That’s your decision. What we want to do is try to describe what the world will look like to the new president and consider how each candidate is likely to respond to the world. In trying to consider whether to vote for John McCain or Barack Obama, it is obviously necessary to consider their stands on foreign policy issues. But we have to be cautious about campaign assertions. Kennedy claimed that the Soviets had achieved superiority in missiles over the United States, knowing full well that there was no missile gap. Johnson attacked Barry Goldwater for wanting to escalate the war in Vietnam at the same time he was planning an escalation. Nixon won the 1968 presidential election by claiming that he had a secret plan to end the war in Vietnam. What a candidate says is not always an indicator of what the candidate is thinking.

It gets even trickier when you consider that many of the most important foreign policy issues are not even imagined during the election campaign. Truman did not expect that his second term would be dominated by a war in Korea. Kennedy did not expect to be remembered for the Cuban missile crisis. Jimmy Carter never imagined in 1976 that his presidency would be wrecked by the fall of the Shah of Iran and the hostage crisis. George H. W. Bush didn’t expect to be presiding over the collapse of communism or a war over Kuwait. George W. Bush (regardless of conspiracy theories) never expected his entire presidency to be defined by 9/11. If you read all of these presidents’ position papers in detail, you would never get a hint as to what the really important foreign policy issues would be in their presidencies.

Between the unreliability of campaign promises and the unexpected in foreign affairs, predicting what presidents will do is a complex business. The decisions a president must make once in office are neither scripted nor conveniently timed. They frequently present themselves to the president and require decisions in hours that can permanently define his (or her) administration. Ultimately, voters must judge, by whatever means they might choose, whether the candidate has the virtue needed to make those decisions well.

Virtue, as we are using it here, is a term that comes from Machiavelli. It means the opposite of its conventional usage. A virtuous leader is one who is clever, cunning, decisive, ruthless and, above all, effective. Virtue is the ability to face the unexpected and make the right decision, without position papers, time to reflect or even enough information. The virtuous leader can do that. Others cannot. It is a gut call for a voter, and a tough one.

This does not mean that all we can do is guess about a candidate’s nature. There are three things we can draw on. First, there is the political tradition the candidate comes from. There are more things connecting Republican and Democratic foreign policy than some would like to think, but there are also clear differences. Since each candidate comes from a different political tradition — as do his advisers — these traditions can point to how each candidate might react to events in the world. Second, there are indications in the positions the candidates take on ongoing events that everyone knows about, such as Iraq. Having pointed out times in which candidates have been deceptive, we still believe there is value in looking at their positions and seeing whether they are coherent and relevant. Finally, we can look at the future and try to predict what the world will look like over the next four years. In other words, we can try to limit the surprises as much as possible.

In order to try to draw this presidential campaign into some degree of focus on foreign policy, we will proceed in three steps. First, we will try to outline the foreign policy issues that we think will confront the new president, with the understanding that history might well throw in a surprise. Second, we will sketch the traditions and positions of both Obama and McCain to try to predict how they would respond to these events. Finally, after the foreign policy debate is over, we will try to analyze what they actually said within the framework we created.

Let me emphasize that this is not a partisan exercise. The best guarantee of objectivity is that there are members of our staff who are passionately (we might even say irrationally) committed to each of the candidates. They will be standing by to crush any perceived unfairness. It is Stratfor’s core belief that it is possible to write about foreign policy, and even an election, without becoming partisan or polemical. It is a difficult task and we doubt we can satisfy everyone, but it is our goal and commitment.
The Post 9/11 World

Ever since 9/11 U.S. foreign policy has focused on the Islamic world. Starting in late 2002, the focus narrowed to Iraq. When the 2008 campaign for president began a year ago, it appeared Iraq would define the election almost to the exclusion of all other matters. Clearly, this is no longer the case, pointing to the dynamism of foreign affairs and opening the door to a range of other issues.

Iraq remains an issue, but it interacts with a range of other issues. Among these are the future of U.S.-Iranian relations; U.S. military strategy in Afghanistan and the availability of troops in Iraq for that mission; the future of U.S.-Pakistani relations and their impact on Afghanistan; the future of U.S.-Russian relations and the extent to which they will interfere in the region; resources available to contain Russian expansion; the future of the U.S. relationship with the Europeans and with NATO in the context of growing Russian power and the war in Afghanistan; Israel’s role, caught as it is between Russia and Iran; and a host of only marginally related issues. Iraq may be subsiding, but that simply complicates the world facing the new president.

The list of problems facing the new president will be substantially larger than the problems facing George W. Bush, in breadth if not in intensity. The resources he will have to work with, military, political and economic, will not be larger for the first year at least. In terms of military capacity, much will hang on the degree to which Iraq continues to bog down more than a dozen U.S. brigade combat teams. Even thereafter, the core problem facing the next president will be the allocation of limited resources to an expanding number of challenges. The days when it was all about Iraq is over. It is now all about how to make the rubber band stretch without breaking.

Iraq remains the place to begin, however, since the shifts there help define the world the new president will face. To understand the international landscape the new president will face, it is essential to begin by understanding what happened in Iraq, and why Iraq is no longer the defining issue of this campaign.
A Stabilized Iraq and the U.S. Troop Dilemma

In 2006, it appeared that the situation in Iraq was both out of control and hopeless. Sunni insurgents were waging war against the United States, Shiite militias were taking shots at the Americans as well, and Sunnis and Shia were waging a war against each other. There seemed to be no way to bring the war to anything resembling a satisfactory solution.

When the Democrats took control of Congress in the 2006 elections, it appeared inevitable that the United States would begin withdrawing forces from Iraq. U.S expectations aside, this was the expectation by all parties in Iraq. Given that the United States was not expected to remain a decisive force in Iraq, all Iraqi parties discounted the Americans and maneuvered for position in anticipation of a post-American Iraq. The Iranians in particular saw an opportunity to limit a Sunni return to Iraq’s security forces, thus reshaping the geopolitics of the region. U.S. fighting with Iraqi Sunnis intensified in preparation for the anticipated American withdrawal.

Bush’s decision to increase forces rather than withdraw them dramatically changed the psychology of Iraq. It was assumed he had lost control of the situation. Bush’s decision to surge forces in Iraq, regardless by how many troops, established two things. First, Bush remained in control of U.S. policy. Second, the assumption that the Americans were leaving was untrue. And suddenly, no one was certain that there would be a vacuum to be filled.

The deployment of forces proved helpful, as did the change in how the troops were used; recent leaks indicate that new weapon systems also played a key role. The most important factor, however, was the realization that the Americans were not leaving on Bush’s watch. Since no one was sure who the next U.S. president would be, or what his policies might be, it was thus uncertain that the Americans would leave at all.

Everyone in Iraq suddenly recalculated. If the Americans weren’t leaving, one option would be to make a deal with Bush, seen as weak and looking for historical validation. Alternatively, they could wait for Bush’s successor. Iran remembers — without fondness — its decision not to seal a deal with Carter, instead preferring to wait for Reagan. Similarly, seeing foreign jihadists encroaching in Sunni regions and the Shia shaping the government in Baghdad, the Sunni insurgents began a fundamental reconsideration of their strategy.

Apart from reversing Iraq’s expectations about the United States, part of Washington’s general strategy was supplementing military operations with previously unthinkable political negotiations. First, the United States began talking to Iraq’s Sunni nationalist insurgents, and found common ground with them. Neither the Sunni nationalists nor the United States liked the jihadists, and both wanted the Shia to form a coalition government. Second, back-channel U.S.-Iranian talks clearly took place. The Iranians realized that the possibility of a pro-Iranian government in Baghdad was evaporating. Iran’s greatest fear was a Sunni Iraqi government armed and backed by the United States, recreating a version of the Hussein regime that had waged war with Iran for almost a decade. The Iranians decided that a neutral, coalition government was the best they could achieve, so they reined in the Shiite militia.

The net result of this was that the jihadists were marginalized and broken, and an uneasy coalition government was created in Baghdad, balanced between Iran and the United States. The Americans failed to create a pro-American government in Baghdad, but had blocked the emergence of a pro-Iranian government. Iraqi society remained fragmented and fragile, but a degree of peace unthinkable in 2006 had been created.

The first problem facing the next U.S. president will be deciding when and how many U.S. troops will be withdrawn from Iraq. Unlike 2006, this issue will not be framed by Iraq alone. First, there will be the urgency of increasing the number of U.S. troops in Afghanistan. Second, there will be the need to create a substantial strategic reserve to deal with potential requirements in Pakistan, and just as important, responding to events in the former Soviet Union like the recent conflict in Georgia.

At the same time, too precipitous a U.S. withdrawal not only could destabilize the situation internally in Iraq, it could convince Iran that its dream of a pro-Iranian Iraq is not out of the question. In short, too rapid a withdrawal could lead to resumption of war in Iraq. But too slow a withdrawal could make the situation in Afghanistan untenable and open the door for other crises.

The foreign policy test for the next U.S. president will be calibrating three urgent requirements with a military force that is exhausted by five years of warfare in Iraq and seven in Afghanistan. This force was not significantly expanded since Sept. 11, making this the first global war the United States has ever fought without a substantial military expansion. Nothing the new president does will change this reality for several years, so he will be forced immediately into juggling insufficient forces without the option of precipitous withdrawal from Iraq unless he is prepared to accept the consequences, particularly of a more powerful Iran.
The Nuclear Chip and a Stable U.S.-Iranian Understanding

The nuclear issue has divided the United States and Iran for several years. The issue seems to come and go depending on events elsewhere. Thus, what was enormously urgent just prior to the Russo-Georgian war became much less pressing during and after it. This is not unreasonable in our point of view, because we regard Iran as much farther from nuclear weapons than others might, and we suspect that the Bush administration agrees given its recent indifference to the question.

Certainly, Iran is enriching uranium, and with that uranium, it could possibly explode a nuclear device. But the gap between a nuclear device and weapon is substantial, and all the enriched uranium in the world will not give the Iranians a weapon. To have a weapon, it must be ruggedized and miniaturized to fit on a rocket or to be carried on an attack aircraft. The technologies needed for that range from material science to advanced electronics to quality assurance. Creating a weapon is a huge project. In our view, Iran does not have the depth of integrated technical skills needed to achieve that goal.

As for North Korea, for Iran a very public nuclear program is a bargaining chip designed to extract concessions, particularly from the Americans. The Iranians have continued the program very publicly in spite of threats of Israeli and American attacks because it made the United States less likely to dismiss Iranian wishes in Tehran’s true area of strategic interest, Iraq.

The United States must draw down its forces in Iraq to fight in Afghanistan. The Iranians have no liking for the Taliban, having nearly gone to war with them in 1998, and having aided the United States in Afghanistan in 2001. The United States needs Iran’s commitment to a neutral Iraq to withdraw U.S. forces since Iran could destabilize Iraq overnight, though Tehran’s ability to spin up Shiite proxies in Iraq has declined over the past year.

Therefore, the next president very quickly will face the question of how to deal with Iran. The Bush administration solution — relying on quiet understandings alongside public hostility — is one model. It is not necessarily a bad one, so long as forces remain in Iraq to control the situation. If the first decision the new U.S. president will have to make is how to transfer forces in Iraq elsewhere, the second decision will be how to achieve a more stable understanding with Iran.

This is particularly pressing in the context of a more assertive Russia that might reach out to Iran. The United States will need Iran more than Iran needs the United States under these circumstances. Washington will need Iran to abstain from action in Iraq but to act in Afghanistan. More significantly, the United States will need Iran not to enter into an understanding with Russia. The next president will have to figure out how to achieve all these things without giving away more than he needs to, and without losing his domestic political base in the process.
Afghanistan, Pakistan and the Taliban

The U.S. president also will have to come up with an Afghan policy, which really doesn’t exist at this moment. The United States and its NATO allies have deployed about 50,000 troops in Afghanistan. To benchmark this, the Russians deployed around 120,000 by the mid-1980s, and were unable to pacify the country. Therefore the possibility of 60,000 troops — or even a few additional brigades on top of that — pacifying Afghanistan is minimal. The primary task of troops in Afghanistan now is to defend the Kabul regime and other major cities, and to try to keep the major roads open. More troops will make this easier, but by itself, it will not end the war.

The problem in Afghanistan is twofold. First, the Taliban defeated their rivals in Afghanistan during the civil war of the 1990s because they were the most cohesive force in the country, were politically adept and enjoyed Pakistani support. The Taliban’s victory was not accidental; and all other things being equal, without the U.S. presence, they could win again. The United States never defeated the Taliban. Instead, the Taliban refused to engage in massed warfare against American airpower, retreated, dispersed and regrouped. In most senses, it is the same force that won the Afghan civil war.

The United States can probably block the Taliban from taking the cities, but to do more it must do three things. First, it must deny the Taliban sanctuary and lines of supply running from Pakistan. These two elements allowed the mujahideen to outlast the Soviets. They helped bring the Taliban to power. And they are fueling the Taliban today. Second, the United States must form effective coalitions with tribal groups hostile to the Taliban. To do this it needs the help of Iran, and more important, Washington must convince the tribes that it will remain in Afghanistan indefinitely — not an easy task. And third — the hardest task for the new president — the United States will have to engage the Taliban themselves, or at least important factions in the Taliban movement, in a political process. When we recall that the United States negotiated with the Sunni insurgents in Iraq, this is not as far-fetched as it appears.

The most challenging aspect to deal with in all this is Pakistan. The United States has two issues in the South Asian country. The first is the presence of al Qaeda in northern Pakistan. Al Qaeda has not carried out a successful operation in the United States since 2001, nor in Europe since 2005. Groups who use the al Qaeda label continue to operate in Iraq, Afghanistan and Pakistan, but they use the name to legitimize or celebrate their activities — they are not the same people who carried out 9/11. Most of al Qaeda prime’s operatives are dead or scattered, and its main leaders, Osama bin Laden and Ayman al-Zawahiri, are not functional. The United States would love to capture bin Laden so as to close the books on al Qaeda, but the level of effort needed — assuming he is even alive — might outstrip U.S. capabilities.

The most difficult step politically for the new U.S. president will be to close the book on al Qaeda. This does not mean that a new group of operatives won’t grow from the same soil, and it doesn’t mean that Islamist terrorism is dead by any means. But it does mean that the particular entity the United States has been pursuing has effectively been destroyed, and the parts regenerating under its name are not as dangerous. Asserting victory will be extremely difficult for the new U.S. president. But without that step, a massive friction point between the United States and Pakistan will persist — one that isn’t justified geopolitically and undermines a much more pressing goal.

The United States needs the Pakistani army to attack the Taliban in Pakistan, or failing that, permit the United States to attack them without hindrance from the Pakistani military. Either of these are nightmarishly difficult things for a Pakistani government to agree to, and harder still to carry out. Nevertheless, without cutting the line of supply to Pakistan, like Vietnam and the Ho Chi Minh Trail, Afghanistan cannot be pacified. Therefore, the new president will face the daunting task of persuading or coercing the Pakistanis to carry out an action that will massively destabilize their country without allowing the United States to get bogged down in a Pakistan it cannot hope to stabilize.

At the same time, the United States must begin the political process of creating some sort of coalition in Afghanistan that it can live with. The fact of the matter is that the United States has no long-term interest in Afghanistan except in ensuring that radical jihadists with global operational reach are not given sanctuary there. Getting an agreement to that effect will be hard. Guaranteeing compliance will be virtually impossible. Nevertheless, that is the task the next president must undertake.

There are too many moving parts in Afghanistan to be sanguine about the outcome. It is a much more complex situation than Iraq, if for no other reason than because the Taliban are a far more effective fighting force than anything the United States encountered in Iraq, the terrain far more unfavorable for the U.S. military, and the political actors much more cynical about American capabilities.

The next U.S. president will have to make a painful decision. He must either order a long-term holding action designed to protect the Karzai government, launch a major offensive that includes Pakistan but has insufficient forces, or withdraw. Geopolitically, withdrawal makes a great deal of sense. Psychologically, it could unhinge the region and regenerate al Qaeda-like forces. Politically, it would not be something a new president could do. But as he ponders Iraq, the future president will have to address Afghanistan. And as he ponders Afghanistan, he will have to think about the Russians.
The Russian Resurgence

When the United States invaded Afghanistan in 2001, the Russians were allied with the United States. They facilitated the U.S. relationship with the Northern Alliance, and arranged for air bases in Central Asia. The American view of Russia was formed in the 1990s. It was seen as disintegrating, weak and ultimately insignificant to the global balance. The United States expanded NATO into the former Soviet Union in the Baltic states and said it wanted to expand it into Ukraine and Georgia. The Russians made it clear that they regarded this as a direct threat to their national security, resulting in the 2008 Georgian conflict.

The question now is where U.S.-Russian relations are going. Russian Prime Minister Vladimir Putin called the collapse of the Soviet Union a geopolitical catastrophe. After Ukraine and Georgia, it is clear he does not trust the United States and that he intends to reassert his sphere of influence in the former Soviet Union. Georgia was lesson one. The current political crisis in Ukraine is the second lesson unfolding.

The re-emergence of a Russian empire in some form or another represents a far greater threat to the United States than the Islamic world. The Islamic world is divided and in chaos. It cannot coalesce into the caliphate that al Qaeda wanted to create by triggering a wave of revolutions in the Islamic world. Islamic terrorism remains a threat, but the geopolitical threat of a unifying Islamic power is not going to happen.

Russia is a different matter. The Soviet Union and the Russian empire both posed strategic threats because they could threaten Europe, the Middle East and China simultaneously. While this overstates the threat, it does provide some context. A united Eurasia is always powerful, and threatens to dominate the Eastern Hemisphere. Therefore, preventing Russia from reasserting its power in the former Soviet Union should take precedence over all other considerations.

The problem is that the United States and NATO together presently do not have the force needed to stop the Russians. The Russian army is not particularly powerful or effective, but it is facing forces that are far less powerful and effective. The United States has its forces tied down in Iraq and Afghanistan so that when the war in Georgia broke out, sending ground forces was simply not an option. The Russians are extremely aware of this window of opportunity, and are clearly taking advantage of it.

The Russians have two main advantages in this aside from American resource deficits. First, the Europeans are heavily dependent on Russian natural gas; German energy dependence on Moscow is particularly acute. The Europeans are in no military or economic position to take any steps against the Russians, as the resulting disruption would be disastrous. Second, as the United States maneuvers with Iran, the Russians can provide support to Iran, politically and in terms of military technology, that not only would challenge the United States, it might embolden the Iranians to try for a better deal in Iraq by destabilizing Iraq again. Finally, the Russians can pose lesser challenges in the Caribbean with Venezuela, Nicaragua and Cuba, as well as potentially supporting Middle Eastern terrorist groups and left-wing Latin American groups.

At this moment, the Russians have far more options than the Americans have. Therefore, the new U.S. president will have to design a policy for dealing with the Russians with few options at hand. This is where his decisions on Iraq, Iran, Afghanistan and Pakistan will intersect and compete with his decisions on Russia. Ideally, the United States would put forces in the Baltics — which are part of NATO — as well as in Ukraine and Georgia. But that is not an option and won’t be for more than a year under the best of circumstances.

The United States therefore must attempt a diplomatic solution with Russia with very few sticks. The new president will need to try to devise a package of carrots — e.g., economic incentives — plus the long-term threat of a confrontation with the United States to persuade Moscow not to use its window of opportunity to reassert Russian regional hegemony. Since regional hegemony allows Russia to control its own destiny, the carrots will have to be very tempting, while the threat has to be particularly daunting. The president’s task will be crafting the package and then convincing the Russians it has value.
European Disunity and Military Weakness

One of the problems the United States will face in these negotiations will be the Europeans. There is no such thing as a European foreign policy; there are only the foreign policies of the separate countries. The Germans, for example, do not want a confrontation with Russia under any circumstances. The United Kingdom, by contrast, is more willing to take a confrontational approach to Moscow. And the European military capability, massed and focused, is meager. The Europeans have badly neglected their military over the past 15 years. What deployable, expeditionary forces they have are committed to the campaign in Afghanistan. That means that in dealing with Russia, the Americans do not have united European support and certainly no meaningful military weight. This will make any diplomacy with the Russians extremely difficult.

One of the issues the new president eventually will have to face is the value of NATO and the Europeans as a whole. This was an academic matter while the Russians were prostrate. With the Russians becoming active, it will become an urgent issue. NATO expansion — and NATO itself — has lived in a world in which it faced no military threats. Therefore, it did not have to look at itself militarily. After Georgia, NATO’s military power becomes very important, and without European commitment, NATO’s military power independent of the United States — and the ability to deploy it — becomes minimal. If Germany opts out of confrontation, then NATO will be paralyzed legally, since it requires consensus, and geographically. For the United States alone cannot protect the Baltics without German participation.

The president really will have one choice affecting Europe: Accept the resurgence of Russia, or resist. If the president resists, he will have to limit his commitment to the Islamic world severely, rebalance the size and shape of the U.S. military and revitalize and galvanize NATO. If he cannot do all of those things, he will face some stark choices in Europe.
Israel, Turkey, China, and Latin America

Russian pressure is already reshaping aspects of the global system. The Israelis have approached Georgia very differently from the United States. They halted weapon sales to Georgia the week before the war, and have made it clear to Moscow that Israel does not intend to challenge Russia. The Russians met with Syrian President Bashar al Assad immediately after the war. This signaled the Israelis that Moscow was prepared to support Syria with weapons and with Russian naval ships in the port of Tartus if Israel supports Georgia, and other countries in the former Soviet Union, we assume. The Israelis appear to have let the Russians know that they would not do so, separating themselves from the U.S. position. The next president will have to re-examine the U.S. relationship with Israel if this breach continues to widen.

In the same way, the United States will have to address its relationship with Turkey. A long-term ally, Turkey has participated logistically in the Iraq occupation, but has not been enthusiastic. Turkey’s economy is booming, its military is substantial and Turkish regional influence is growing. Turkey is extremely wary of being caught in a new Cold War between Russia and the United States, but this will be difficult to avoid. Turkey’s interests are very threatened by a Russian resurgence, and Turkey is the U.S. ally with the most tools for countering Russia. Both sides will pressure Ankara mercilessly. More than Israel, Turkey will be critical both in the Islamic world and with the Russians. The new president will have to address U.S.-Turkish relations both in context and independent of Russia fairly quickly.

In some ways, China is the great beneficiary of all of this. In the early days of the Bush administration, there were some confrontations with China. As the war in Iraq calmed down, Washington seemed to be increasing its criticisms of China, perhaps even tacitly supporting Tibetan independence. With the re-emergence of Russia, the United States is now completely distracted. Contrary to perceptions, China is not a global military power. Its army is primarily locked in by geography and its navy is in no way an effective blue-water force. For its part, the United States is in no position to land troops on mainland China. Therefore, there is no U.S. geopolitical competition with China. The next president will have to deal with economic issues with China, but in the end, China will sell goods to the United States, and the United States will buy them.

Latin America has been a region of minimal interest to the United States in the last decade or longer. So long as no global power was using its territory, the United States did not care what presidents Hugo Chavez in Venezuela, Evo Morales in Bolivia and Daniel Ortega in Nicaragua — or even the Castros in Cuba — were doing. But with the Russians back in the Caribbean, at least symbolically, all of these countries suddenly become more important. At the moment, the United States has no Latin American policy worth noting; the new president will have to develop one.

Quite apart from the Russians, the future U.S. president will need to address Mexico. The security situation in Mexico is deteriorating substantially, and the U.S.-Mexican border remains porous. The cartels stretch from Mexico to the streets of American cities where their customers live. What happens in Mexico, apart from immigration issues, is obviously of interest to the United States. If the current trajectory continues, at some point in his administration, the new U.S. president will have to address Mexico — potentially in terms never before considered.
The U.S. Defense Budget

The single issue touching on all of these is the U.S. defense budget. The focus of defense spending over the past eight years has been the Army and Marine Corps — albeit with great reluctance. Former Defense Secretary Donald Rumsfeld was not an advocate of a heavy Army, favoring light forces and air power, but reality forced his successors to reallocate resources. In spite of this, the size of the Army remained the same — and insufficient for the broader challenges emerging.

The focus of defense spending was Fourth Generation warfare, essentially counterinsurgency. It became dogma in the military that we would not see peer-to-peer warfare for a long time. The re-emergence of Russia, however, obviously raises the specter of peer-to-peer warfare, which in turn means money for the Air Force as well as naval rearmament. All of these programs will take a decade or more to implement, so if Russia is to be a full-blown challenge by 2020, spending must begin now.

If we assume that the United States will not simply pull out of Iraq and Afghanistan, but will also commit troops to allies on Russia’s periphery while retaining a strategic reserve — able to, for example, protect the U.S.-Mexican border — then we are assuming substantially increased spending on ground forces. But that will not be enough. The budgets for the Air Force and Navy will also have to begin rising.

U.S. national strategy is expressed in the defense budget. Every strategic decision the president makes has to be expressed in budget dollars with congressional approval. Without that, all of this is theoretical. The next president will have to start drafting his first defense budget shortly after taking office. If he chooses to engage all of the challenges, he must be prepared to increase defense spending. If he is not prepared to do that, he must concede that some areas of the world are beyond management. And he will have to decide which areas these are. In light of the foregoing, as we head toward the debate, 10 questions should be asked of the candidates:

1. If the United States removes its forces from Iraq slowly as both of you advocate, where will the troops come from to deal with Afghanistan and protect allies in the former Soviet Union?
2. The Russians sent 120,000 troops to Afghanistan and failed to pacify the country. How many troops do you think are necessary?
3. Do you believe al Qaeda prime is still active and worth pursuing?
4. Do you believe the Iranians are capable of producing a deliverable nuclear weapon during your term in office?
5. How do you plan to persuade the Pakistani government to go after the Taliban, and what support can you provide them if they do?
6. Do you believe the United States should station troops in the Baltic states, in Ukraine and Georgia as well as in other friendly countries to protect them from Russia?
7. Do you feel that NATO remains a viable alliance, and are the Europeans carrying enough of the burden?
8. Do you believe that Mexico represents a national security issue for the United States?
9. Do you believe that China represents a strategic challenge to the United States?
10. Do you feel that there has been tension between the United States and Israel over the Georgia issue?