Friday, April 30, 2010


April 24, 2010 posted by Gordon Duff ·



By Gordon Duff STAFF WRITER/Senior Editor

Rumors of an upcoming terror attack to be blamed on Iran are moving around the world, “backchannel chatter.” The primary suspect is Israel who is said to have a number of small “suitcase” type nuclear weapons, some primarily “dirty bombs,” possibly supplied secretly by a previous US administration. These devices are in the “40 ton” range, highly radioactive, extremely small and can be engineered to leave the signature of a primitive device. They were originally designed for use against Soviet armor and troop concentrations in Europe if a massed attack on NATO were to occur. Current conventional systems have made this type of weapon obsolete.

We have been told that federal authorities have interviewed, on video, a prominent individual with specific knowledge of the possession of this type of weapon.

This won’t be in the news. All that “every day folks” will see is a story here or one there that don’t make sense. Why would “ultra-Liberal” Senator Chuck Schumer, nightmare “anti-gun” nut, extreme lefty and staunch New York democrat turn on the president? In fact, why are extreme liberals and conservatives all attacking President Obama and, less visibly, our military leaders, all at the same time? Who is orchestrating this oddest turn of political events in recent history? Why would the Pentagon ban Reverend Billy Graham’s son from a prayer breakfast as an “Islamophobe?”

Dad, the famous Reverend Billy Graham, primary spiritual advisor to every American president since Harry Truman held different views.
Rev. Billy Graham openly voiced a belief that Jews control the American media, calling it a “stranglehold” during a 1972 conversation with President Richard Nixon, according to a tape of the Oval Office meeting released Thursday by the National Archives.

“This stranglehold has got to be broken or the country’s going down the drain,” the nation’s best-known preacher declared as he agreed with a stream of bigoted Nixon comments about Jews and their perceived influence in American life.

“You believe that?” Nixon says after the “stranglehold” comment.

“Yes, sir,” Graham says.

“Oh, boy,” replies Nixon. “So do I. I can’t ever say that but I believe it.”

“No, but if you get elected a second time, then we might be able to do something,” Graham replies.

Consider this report as a form of “innocualtion,” meant to prevent an unseemly accident.


YouTube - Veterans Today - Treason by Members of the United States Congress


Israel has never been in more trouble today, not from any imaginary Arab armies or a “holocaust” from Iran, a country with only minor defensive weaponry, a 4th rate military power, for those who really pay attention to these things. Israel has gotten in trouble because of “chickens coming home to roost.” Americans and Europeans have been conditioned by the press, yes, Israel controls the press in the US, Europe, Australia, New Zealand and elsewhere, to ignore ethnic cleansing and war crimes in Palestine. Years of news and “infotainment” along with movies and TV series, always depicting Palestinians as crazed murders has done its job, covered mass murder in ways that Josef Goebbels could never do for Hitler.

Things started to go wrong for Israel when top military leaders became increasingly suspicious of 9/11. None will openly admit to it, but as years have gone on, and Iraq and Afghanistan could no longer be called real security issues for the US, an unspoken movement toward lending a suspicious eye to Israeli involvement in 9/11 has festered. Israel’s hand in propagandizing our news has become too obvious for trained observers to miss, with the direction not “pro-Israel” but looking more like a country covering for crimes.

This is the potential list:

* Possible complicity in some part of 9/11 with or without help from groups in the US and one other Middle Eastern nation known to secretly finance Israeli operations but pretending to be a “blood enemy” of the Jews
* Israeli complicity in massive financial crimes in the US, including engineering of the sub-prime mortgage collapse as an operation meant to destabilize the United States. That current financial reforms meant to prevent a repeat of this, pushed by President Obama (and military leaders) is opposed by groups financed by the Israeli lobby is a “smoking gun.”
* Terrorist attacks in Iraq, Russia, Iran and Pakistan carry clear signs of involvement of one or more intelligence agencies being involved, among them Israel.
* Israeli political machinations backed by a massive propaganda and disinformation campaign attempting to justify an unprovoked attack on Iran, disinformation including “holocaust” rhetoric and clearly falsified intelligence on Iran’s non-existent nuclear program are an almost perfect repeat of the same operation that pushed the Bush administration to mistakenly attack Iraq. Note this classic example of disinformation propaganda, conditioning “the west” to expect a dirty bomb attack: Debka/Israel Hoax and, more “cover” still from Israeli stooge Mikhail Saakashvili.
* The “Israel Project” actually has run ad advertisement warning of exactly such an attack. You can see an RT (Russia Television) video about this video, labeled “crazy” and “propaganda.” A national survey mentioned indicates that 70% of the American people because of Israeli propaganda, now believe Iran currently has nuclear weapons. Many prominent lawmakers advise “the Israel Project,” a group with no other purpose than to condition Americans to expect terror attacks and to “pre-blame” Iran.
* Nuclear threats made by “extremists” in Israel against Western Europe went unheeded and the desired outcry of support for an attack on Iran never materialized. Israel would never have allowed prominent sources in its defense establishment to voice “crazy threats” to “nuke Rome” unless some purpose were served.
* Highly orchestrated attacks on the Obama administration, now finally working in close association with top military leaders, is meant to destabilize the US. Moving threats against the US, the engineering of a new market collapse by Goldman Sachs, an ineffective attack by Israel on Iran, cutting off all oil to the west or attempts by Israeli controlled media giants to forment civil unrest in the US are all “on the table” and being pushed forward.


YouTube - Veterans Today - Politicians Asked "What country in the Middle East ACTUALLY has Nukes?"


The deteriorating situation in Iraq and Afghanistan have tied down so many resources that our defense capabilities, the contingency response that our defense planners have spent years creating and over a trillion dollars financing is a shambles. We are trucking supplies hundreds of miles through enemy territory to resupply in Afghanistan, that and flying everything thousands of miles across Russia followed by more trucking, hundreds of miles across enemy territory again. In the process, we are paying hundreds of millions of dollars a year to our own enemies, simply to keep ourselves in Twinkies and Ho Hos.

America is saddled with an incompetent and corrupt ally who has hopelessly embroiled us in his endless and ineffective plots, all with a massive subtext of drug dealing, selling weapons to the enemy and double dealing with foreign intelligence services.

How we got here is no secret and military leaders are unhappy. America got herself led into these disasters for the good of, not Israeli security but a series of intrigues, more like a chess match, playing country against country, while raking in cash selling weapons to everyone, including the US and India, but, less overtly, to Iran and the Taliban as well. These are some of the worst kept secrets in the world. Even President Obama knows, heaven forbid.


With massive control of news organization, half our top retired military leaders taking regularly paid “junkets” to Israel and 363 members of congress indicating an “unbreakable bond” with Israel, no matter what they are caught doing, and they have been caught so many times, starting with the 1956 Suez/Sinai invasion, the 1967 USS Liberty attack, which helped Israel sell the idea that they were attacked when quite the opposite is true, the belief is that that a new “false flag” attack can be covered easily.

Who could blame Israel, poor beleaguered country, the only “democracy” in the Middle East surrounded by vicious and dirty Arabs trying to sneak in and cut throats of small children in school?

We have already seen the stories about Iran’s planned “holocaust’ and how they are going to invade Israel, a technical impossibility” and set up gas chambers, start making soap and lamp shades out of Jews. If anything warns America that an attack is coming, hearing both “holocaust” and seeing Charles Schumer attacking a democratic president should be warning enough.

The rumors are that the weapons are in place in Europe and the US. “The usual suspects,” Arabs, Persians, Pakistanis, some kind of Islamic terrorist group has either been recruited, invented or is being thawed out. News stories are in place and with 9/11, film crews are ready to be onsite. Witnesses will be briefed, all to say, “yes it was an Arab dirty bomb, we saw them, Middle Eastern looking, they must have bought it from North Korea.”

That kind of story would hit the news within seconds from “stunned survivors” who will suddenly disappear, returning quickly to “you know where.”

Glenn Beck will cry.


Americans have the rare privilege of seeing the GOP, NRA, Fox News and the Tea Baggers aligned with 250 or is it 300 or 400, we aren’t sure, members of congress that have signed a letter promising to support Israel, in this case, against the interests of the United States. The names of those involved is difficult to find. A search of 100 stories on this subject has failed to give a list. Blog after blog is requesting the list of those who signed the letter but even Israeli papers don’t print it.

Sites claiming to list the members signing now show “FORBIDDEN” or “NO LONGER AVAILABLE.”

What we do know is that congress’s most liberal members, those most outspoken for gun control and all of those listed by the Tea Bag movements and GOP as the most liberal and “unpatriotic” of our politicians are now lined up with the supporters of Goldman Sachs and all, the most conservative and most liberal, are signed up against the President and the Pentagon, aligned with Israel.

For those with eyes to see and ears to hear, the entire “liberal” and “conservative” political hoopla of the last few years is turning out to be a subterfuge to keep Americans from uniting together to regain control of their own country, a control that, for awhile, ran our military, our intelligence services and even the oval office.

Now it runs only Congress, no party, just those addicted to AIPAC/Israeli funding more than allegiance to the United States of America.

What they may earn us through this “moral flexibility” and indifference to allegiance to their own country is another major terrorist attack. These same members of congress will receive the call, be told how to vote, what to say and exactly what they get in return, same as with Iraq.

Ah, the foibles of living in a democracy for sale to the highest bidder!

Bernanke Admits Printing $1.3 Trillion Out Of Thin Air
Bernanke Admits Printing $1.3 Trillion Out Of Thin Air
21 April 2010

By Greg Hunter

Fed Chairman Ben Bernanke admitted the central bank created $1.3 trillion out of thin air to buy mortgage backed securities. This shocking admission came from the Joint Economic Committee hearing on Capital Hill last week. I was dumbfounded when I saw Bernanke shake his head in the affirmative as Representative Ron Paul said, “Well, where did you get the money? You created this money. So you did monetize debt, and that went into the banking system.” I was amazed he admitted this. I looked up the original hearing on C-Span to make sure the clip was not edited. It was not.

What is even more shocking is I could not find a single mainstream news agency that covered this revelation. Congress just finished voting on the bitterly contested Obama health care bill that is supposed to cost nearly a trillion dollars over ten years. (Some contend it will be more than twice that amount.) The mainstream media doesn’t even bat an eye over the Fed creating $1.3 trillion in a little more than a year to buy worthless debt no one else will touch. I do not get it. I guess we could have asked the Fed to print up a trillion dollars to pay for health care and avoided that drawn out battle in Congress.

Then, Rep. Paul brings up printing another $105 billion to bailout Greece. Bernanke answers by saying, “. . . I think one of the agreements that the G20 leaders came up with was sort of a mutual commitment to put more money into the IMF as a way of addressing the financial crisis around the world. . .” Notice how Bernanke used the term “mutual commitment.” I think what that really means is an agreement between all the G-20 nations of a “mutual debasement of their currencies.” I think this is why gold has been rising in price around the globe. I have been saying for months that we are going to have some very big inflation. (Real inflation is already at 9.5% according to I wrote about this last November in a post called “The Fix Is In.”

I think Bernanke just opened the Fed playbook and revealed money will be printed to fix all financial problems. I don’t think he’s even trying to hide it anymore. Rep. Paul also brought up the big debt trouble coming soon with many, many bankrupt cities and states such as Los Angeles and California. I think they will all be bailed out one way or another by the printing press.

New York Fed President William Dudley seems to be on the same page as his boss. Dudley recently said, “The fact that our foreign indebtedness is for the most part denominated in our own currency is a huge advantage in the event the dollar were to come under significant downward pressure.” (Zero Hedge has a complete text of Dudley’s speech, click here) Is Dudley making a not so subtle hint about devaluing the U.S. dollar? Once again, I say yes.

Anyone with a savings account or money market denominated in dollars should be terrified. You have scrimped and saved only to have the Fed print money and devalue what you have worked so hard for! Inflation has been chosen for you by the Federal Reserve, and we the taxpayers can’t even audit its actions. Below is the video from the Joint Economic Committee Hearing last week. Watch for yourself Bernanke nod yes to printing $1.3 trillion [go to web page ]

Thursday, April 29, 2010

Jihadists in Iraq: Down For The Count?


Jihadists in Iraq: Down For The Count?
April 29, 2010 | 0856 GMT

Jihadists in Iraq: Down For The Count?

By Scott Stewart

On April 25, The Islamic State of Iraq (ISI) posted a statement on the Internet confirming that two of its top leaders, Abu Omar al-Baghdadi and Abu Ayub al-Masri, had been killed April 18 in a joint U.S.-Iraqi operation in Salahuddin province. Al-Baghdadi (an Iraqi also known as Hamid Dawud Muhammad Khalil al-Zawi), was the head of the ISI, an al Qaeda-led jihadist alliance in Iraq, and went by the title “Leader of the Faithful.” Al-Masri (an Egyptian national also known as Abu Hamzah al-Muhajir), was the military leader of the ISI and head of the group’s military wing, al Qaeda in Iraq (AQI).

Al-Masri replaced Abu Musab al-Zarqawi, who was killed in a U.S. airstrike in June 2006. Al-Zarqawi had alienated many Iraqi Sunnis with his ruthlessness, and al-Baghdadi is thought to have been appointed the emir of the ISI in an effort to put an Iraqi face on jihadist efforts in Iraq and to help ease the alienation between the foreign jihadists and the local Sunni population. Al-Masri, the leader of al Qaeda in Iraq and the military leader of the ISI, was considered the real operational leader of ISI/AQI efforts in Iraq.

STRATFOR viewed the initial announcement by Iraqi authorities of the deaths of the two leaders with a healthy degree of skepticism. After all, they had been declared dead before, only to later release statements on the Internet mocking the Iraqi government for making false claims. But the details provided in the April 19 press conference by Iraqi Prime Minister Nouri al-Maliki (complete with photos of the deceased) and the confirmation by the U.S. military helped allay those initial doubts. The recent admission by the ISI, which made a similar statement following the death of al-Zarqawi, has all but erased our doubts about the deaths.

But the ISI’s statement has raised some other questions. It claimed that the deaths of the two leaders would not affect the group’s operations in Iraq because new members had recently joined it. But when viewed in the context of other recent developments in Iraq, it appears that the operational capability of the ISI will indeed be affected — at least in the near future.
Recent Activity

The operation that resulted in the deaths of al-Baghdadi and al-Masri did not occur in a vacuum. Rather, it was a part of a series of operations targeting the ISI in recent months. The raids have come as a result of a renewed effort to counter the ISI following a resurgence in the group’s operations that included high-profile multiple-vehicle bombings directed against targets in central Baghdad on Aug. 19, 2009, Oct. 25, 2009, Dec. 8, 2009, and Jan. 25, 2010.

The raids that resulted in the deaths of the ISI leaders on April 18 were part of a chain of events that stretches back for months, and appear to be the result of the effective exploitation of intelligence gained in one raid used to conduct the next. For example, Iraqi Maj. Gen. Qasim Ata, the spokesman for the Baghdad Operations Command, told Al-Iraqiya TV on April 20 that the intelligence that led to the location of al-Baghdadi and al-Masri was obtained during the March 11, 2010, arrest of Manaf Abdul Raheem al-Rawi, the AQI commander in Baghdad. Iraqi government sources claim al-Rawi is the man responsible for planning the multiple-vehicle bombings in Baghdad. If so, he is another effective operational leader who has been taken out of the ISI/AQI gene pool.

Then, following the April 18 raid, Ahmad al-Ubaydi — aka Abu-Suhaib, whom Iraqi officials identify as the AQI military commander for the northern Iraqi provinces of Ninevah, Salahuddin and Kirkuk provinces — was killed April 20. The next day, Iraqi authorities located an improvised explosive device (IED) factory in western Anbar province and seized two vehicle bombs and some smaller IEDs. On April 22, the U.S. Army announced the arrest of a bombmaker in Anbar province. On April 23, Iraqi police arrested another AQI military leader in Anbar, Mahmoud Suleiman, who was reportedly found with several IEDs in his home. Also on April 23, an Iraqi police SWAT team reportedly killed two AQI leaders during a raid in eastern Mosul. They claimed that one of the AQI leaders, Yousef Mohammad Ali, was also a bombmaker. In recent days, dozens of other alleged AQI members have either surrendered or been arrested in Diyala, Mosul, Salahuddin and Basra.

There have even been unconfirmed reports that Izzat al-Douri was captured April 25. Al-Douri, the “king of clubs” in the U.S. military’s 2003 deck of most-wanted Iraqis and who has a $10 million bounty on his head, was a vice president of Iraq under Saddam Hussein and an important insurgent leader.

In late March, progress was also made against AQI in Mosul. Several suspects were arrested or killed, and among the latter were major AQI figures Khalid Muhammad Hasan Shallub al-Juburi, Abu Ahmad al-Afri and Bashar Khalaf Husayn Ali al-Jaburi.

This type of rapid, sequential activity against jihadists by U.S. and Iraqi forces is not a coincidence. It is the result of some significant operational changes that were made in 2007 in the wake of the American surge in Iraq. The then-commander of the Joint Special Operations Command (JSOC), Gen. Stanley McChrystal, was instrumental in flattening hierarchies and reducing bureaucratic inefficiencies in both intelligence and special operations forces activities inside Iraq in order to create a highly integrated and streamlined organization. The result was the capability to rapidly plan and execute special operations forces raids based on actionable intelligence with a limited shelf life — and then to rapidly interrogate any captives, quickly analyze any material of intelligence value seized and rapidly re-task forces in a series of follow-on operations. The resulting high tempo of operations was considered enormously successful and a key factor in the success of the surge, and recent developments in Iraq appear to be a continuation of this type of rapid and aggressive activity.

Such operations not only can produce rapid gains in terms of capturing and killing key targets, they also serve to disrupt and disorient the enemy. According to Iraqi Maj. Gen. Qasim Ata, AQI is currently in disarray and panic, and he believes that the organization is also facing money problems, since it reportedly has been in contact with al Qaeda prime in an attempt to secure financial assistance. This stands in stark contrast to the 2005 letter in which al Qaeda No. 2 Ayman al-Zawahiri asked AQI leader al-Zarqawi for funding. At that time there was a large flow of men and money into Iraq, but it now appears that AQI is facing some financial difficulties. Following the recent raids in which senior operational commanders and bombmakers have been captured or killed, it also appears that the group may also be facing some leadership and operational-expertise difficulties.

As STRATFOR has previously noted, leadership is a critical factor in the operational success of a militant group. Without skilled leadership, militant groups lose their ability to conduct effective attacks, particularly ones of a sophisticated nature. Leadership, skill and professionalism are the factors that make the difference between a militant group wanting to attack something — i.e., its intent — and the group’s ability to successfully carry out its intended attack — i.e., its capability. The bottom line is that new recruits simply cannot replace seasoned operational commanders, as the ISI suggested in its statement.

Although it might seem like a simple task to find a leader for a militant group, effective militant leaders are hard to come by. Unlike most modern militaries, militant groups rarely invest much time and energy in leadership development training. To compound the problem, the leader of a militant group needs to develop a skill set that is quite a bit broader than most military leaders. In addition to personal attributes such as ruthlessness, aggressiveness and fearlessness, militant leaders also must be charismatic, intuitive, clever and inspiring. This last attribute is especially important in an organization that seeks to recruit operatives to conduct suicide attacks. Additionally, an effective militant leader must be able to recruit and train operatives, enforce operational security, raise funds, plan operations and then methodically execute a plan while avoiding the security forces constantly hunting the militants down.

Of course, not every leadership change is disastrous to a militant group. Sometimes a new leader breathes new life and energy into an organization (like Nasir al-Wahayshi in Yemen), or the group has competent lieutenants able to continue to operate effectively after the death of the leader (like AQI after the death of al-Zarqawi). But the current environment in Iraq, where numerous individuals have been rapidly and sequentially killed or captured, makes this sort of orderly leadership replacement more difficult.

Therefore, it will be important to watch the ISI carefully to see who is appointed as the group’s new emir and military commander. (In practical terms, the emir may be easier to replace than the military commander, especially if the former is just a figurehead and not a true operational commander.) The group may have had a clear chain of command and competent, designated successors who have survived the recent operations. But if not, the leadership vacuum at the top could result in infighting over control, or result in an ineffective leader assuming control. The jury is still out, but with the recent successes against the ISI, there is a very good chance that it may take some time for the group to regain its footing. This, of course, is the objective of the up-tempo operations recently seen in Iraq. Effective counterterrorism programs seek to keep the militants (and especially their leaders) off balance by killing or capturing them while also rolling up the lower levels of the group. Militants scrambling for their lives seldom have the opportunity to plan effective attacks, and sustained pressure makes it difficult for them to regain the offensive.

Like operational leaders, competent bombmakers are not easy to replace. They also need to possess a broad set of skills and require a great deal of training and practical experience to hone their skills. A master bombmaker is a rare and precious commodity in the militant world. Therefore, the bombmakers recently arrested in Iraq could prove to be almost as big a loss to AQI as the operational leaders.

When we discussed the resurgence of the ISI/AQI back in October, we noted that at that time they had retained a great deal of their capability and that they were able to gather intelligence, plan attacks, acquire ordnance, build reliable IEDs and execute spectacular attacks in the center of Baghdad against government ministry buildings. We also discussed how the polarization surrounding the election in Iraq was providing them an opportunity to exploit. That polarization has continued in the wake of the elections as the factions jockey for position in the new government, but the extent of the damage done to the jihadists through the loss of so many commanders and operatives may not allow the successors of al-Masri and al-Baghdadi to take advantage of the situation before their window of opportunity closes.

We will be watching the jihadists in Iraq carefully in the coming months to see if they can regroup and retain their operational capability. The big question is: Will the recent operations against the ISI/AQI merely serve as another temporary setback like the killing of al-Zarqawi, or do they portend something more long-term for the future of the organization? The ISI/AQI has proved to be resilient and resourceful in the past, but we are not sure they have the ability to bounce back this time.

Three Points of View: The United States, Pakistan and India


Three Points of View: The United States, Pakistan and India
April 28, 2010 | 0857 GMT

Baghdad Politics and the U.S.-Iranian Balance

By Peter Zeihan

In recent weeks, STRATFOR has explored how the U.S. government has been seeing its interests in the Middle East and South Asia shift. When it comes down to it, the United States is interested in stability at the highest level — a sort of cold equilibrium among the region’s major players that prevents any one of them, or a coalition of them — from overpowering the others and projecting power outward.

One of al Qaeda’s goals when it attacked the United States in 2001 was bringing about exactly what the United States most wants to avoid. The group hoped to provoke Washington into blundering into the region, enraging populations living under what al Qaeda saw as Western puppet regimes to the extent that they would rise up and unite into a single, continent-spanning Islamic power. The United States so blundered, but the people did not so rise. A transcontinental Islamic caliphate simply was never realistic, no matter how bad the U.S. provocation.

Subsequent military campaigns have since gutted al Qaeda’s ability to plot extraregional attacks. Al Qaeda’s franchises remain dangerous, but the core group is not particularly threatening beyond its hideouts in the Afghan-Pakistani border region.

As for the region, nine years of war have left it much disrupted. When the United States launched its military at the region, there were three balances of power that kept the place stable (or at least self-contained) from the American point of view. All these balances are now faltering. We have already addressed the Iran-Iraq balance of power, which was completely destroyed following the American invasion in 2003. We will address the Israeli-Arab balance of power in the future. This week, we shall dive into the region’s third balance, one that closely borders what will soon be the single largest contingent of U.S. military forces overseas: the Indo-Pakistani balance of power.
Pakistan and the Evolution of U.S. Strategy in Afghanistan

U.S. strategy in Afghanistan has changed dramatically since 2001. The war began in the early morning hours — Pakistan time — after the Sept. 11 attacks. Then-U.S. Secretary of State Colin Powell called up then-Pakistani President Gen. Pervez Musharraf to inform him that he would be assisting the United States against al Qaeda, and if necessary, the Taliban. The key word there is “inform.” The White House had already spoken with — and obtained buy-in from — the leaders of Russia, the United Kingdom, France, China, Israel and, most notably, India. Musharraf was not given a choice in the matter. It was made clear that if he refused assistance, the Americans would consider Pakistan part of the problem rather than part of the solution — all with the blessings of the international community.

Three Points of View: The United States, Pakistan and India
(click here to enlarge image)

Islamabad was terrified — and with good reason; comply or refuse, the demise of Pakistan was an all-too-real potential outcome. The geography of Pakistan is extremely hostile. It is a desert country. What rain the country benefits from falls in the northern Indo-Pakistani border region, where the Himalayas wring moisture out of the monsoons. Those rains form the five rivers of the Greater Indus Valley, and irrigation works from those rivers turn dry areas green.

Accordingly, Pakistan is geographically and geopolitically doomed to perpetual struggle with poverty, instability and authoritarianism. This is because irrigated agriculture is far more expensive and labor-intensive than rain-fed agriculture. Irrigation drains the Indus’ tributaries such that the river is not navigable above Hyderabad, near the coast — drastically raising transport costs and inhibiting economic development. Reasonably well-watered mountains in the northwest guarantee an ethnically distinct population in those regions (the Pashtun), a resilient people prone to resisting the political power of the Punjabis in the Indus Basin. This, combined with the overpowering Indian military, results in a country with remarkably few options for generating capital even as it has remarkably high capital demands.

Islamabad’s one means of acquiring breathing room has involved co-opting the Pashtun population living in the mountainous northwestern periphery of the country. Governments before Musharraf had used Islamism to forge a common identity for these people, which not only included them as part of the Pakistani state (and so reduced their likelihood of rebellion) but also employed many of them as tools of foreign and military policy. Indeed, managing relationships with these disparate and peripheral ethnic populations allowed Pakistan to stabilize its own peripheral territory and to become the dominant outside power in Afghanistan as the Taliban (trained and equipped by Pakistan) took power after the Soviet withdrawal.

Thus, the Americans were ordering the Pakistanis on Sept. 12, 2001, to throw out the one strategy that allowed Pakistan to function. Pakistan complied not just out of fears of the Americans, but also out of fears of a potentially devastating U.S.-Indian alignment against Pakistan over the issue of Islamist terrorism in the wake of the Kashmiri militant attacks on the Indian parliament that almost led India and Pakistan to war in mid-2002. The Musharraf government hence complied, but only as much as it dared, given its own delicate position.

From the Pakistani point of view, things went downhill from there. Musharraf faced mounting opposition to his relationship with the Americans from the Pakistani public at large, from the army and intelligence staff who had forged relations with the militants and, of course, from the militants themselves. Pakistan’s halfhearted assistance to the Americans meant militants of all stripes — Afghan, Pakistani, Arab and others — were able to seek succor on the Pakistani side of the border, and then launch attacks against U.S. forces on the Afghan side of the border. The result was even more intense American political pressure on Pakistan to police its own militants and foreign militants seeking shelter there. Meanwhile, what assistance Pakistan did provide to the Americans led to the rise of a new batch of homegrown militants — the Pakistani Taliban — who sought to wreck the U.S.-Pakistani relationship by bringing down the government in Islamabad.
The Indian Perspective

The period between the Soviet collapse and the rise of the Taliban — the 1990s — saw India at a historical ebb in the power balance with Pakistan. The American reaction to the Sept. 11, 2001, attacks changed all that. The U.S. military had eliminated Pakistan’s proxy government in Afghanistan, and ongoing American pressure was buckling the support structures that allowed Pakistan to function. So long as matters continued on this trajectory, New Delhi saw itself on track for a historically unprecedented dominance of the subcontinent.

But the American commitment to Afghanistan is not without its limits, and American pressure was not sustainable. At its heart, Afghanistan is a landlocked knot of arid mountains without the sort of sheltered, arable geography that is likely to give rise to a stable — much less economically viable — state. Any military reality that the Americans imposed would last only so long as U.S. forces remained in the country.

The alternative now being pursued is the current effort at Vietnamization of the conflict as a means of facilitating a full U.S. withdrawal. In order to keep the country from returning to the sort of anarchy that gave rise to al Qaeda, the United States needed a local power to oversee matters in Afghanistan. The only viable alternative — though the Americans had been berating it for years — was Pakistan.

If U.S. and Pakistan interests could be aligned, matters could fall into place rather quickly — and so they did once Islamabad realized the breadth and dangerous implications of its domestic insurgency. The five-year, $7.5 billion U.S. aid package to Pakistan approved in 2009 not only helped secure the arrangement, it likely reflects it. An unprecedented counterinsurgency and counterterrorism campaign conducted by the Pakistani military continues in the country’s tribal belt. While it has not focused on all the individuals and entities Washington might like, it has created real pressure on the Pakistani side of the border that has facilitated efforts on the Afghan side. For example, Islamabad has found a dramatic increase in American unmanned aerial vehicle strikes tolerable because at least some of those strikes are hitting Pakistani Taliban targets, as opposed to Afghan Taliban targets. The message is that certain rules cannot be broken without consequences.

Ultimately, with long experience bleeding the Soviets in Afghanistan, the United States was inherently wary of becoming involved in Afghanistan. In recent years, it has become all too clear how distant the prospect of a stable Afghanistan is. A tribal-ethnic balance of power overseen by Pakistan is another matter entirely, however. The great irony is that such a success could make the region look remarkably like it did on Sept. 10, 2001.

This would represent a reversal of India’s recent fortunes. In 10 years, India has gone from a historic low in the power balance with Pakistan to a historic high, watching U.S. support for Pakistan shift to pressure on Islamabad to do the kinds of things (if not the precise actions) India had long clamored for.

But now, U.S. and Pakistani interests not only appear aligned again, the two countries appear to be laying groundwork for the incorporation of elements of the Taliban into the Afghan state. The Indians are concerned that with American underwriting, the Pakistanis not only may be about to re-emerge as a major check on Indian ambitions, but in a form eerily familiar to the sort of state-militant partnership that so effectively limited Indian power in the past. They are right. The Indians also are concerned that Pakistani promises to the Americans about what sort of behavior militants in Afghanistan will be allowed to engage in will not sufficiently limit the militants’ activities — and in any event will do little to nothing to address the Kashmiri militant issue. Here, too, the Indians are probably right. The Americans want to leave — and if the price of departure is leaving behind an emboldened Pakistan supporting a militant structure that can target India, the Americans seem fine with making India pay that price.

Somali Pirates Say They Are Subsidiary of Goldman Sachs

By Barry Ritholtz - April 26th, 2010, 3:40PM
Could Make Prosecution Difficult, Experts Say

NORFOLK, VIRGINIA – (The Borowitz Report) Eleven indicted Somali pirates dropped a bombshell in a U.S. court today, revealing that their entire piracy operation is a subsidiary of banking giant Goldman Sachs.
There was an audible gasp in the courtroom when the leader of the pirates announced, “We are doing God’s work. We work for Lloyd Blankfein.”
The pirate, who said he earned a bonus of $48 million in dubloons last year, elaborated on the nature of the Somalis’ work for Goldman, explaining that the pirates forcibly attacked ships that Goldman had already shorted.
“We were functioning as investment bankers, only every day was casual Friday,” the pirate said.
The pirate acknowledged that they merged their operations with Goldman in late 2008 to take advantage of the more relaxed regulations governing bankers as opposed to pirates, “plus to get our share of the bailout money.”
In the aftermath of the shocking revelations, government prosecutors were scrambling to see if they still had a case against the Somali pirates, who would now be treated as bankers in the eyes of the law.
“There are lots of laws that could bring these guys down if they were, in fact, pirates,” one government source said. “But if they’re bankers, our hands are tied.” More here.

The Borowitz Report
"There is no greater hindrance to growth than belief" - Mitchell Chefitz

Saturday, April 24, 2010

The Devaluation of the USdollar

The Devaluation of the USdollar

By Jim Willie CB, Kitco, 04/23/10

Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

The need is urgent. The recognition is broad. Supply & Demand of American debt paper demand price adjustment. The USGovt avoids the topic actively. The billboard fact of the matter, as USCongressional politicians like to say, is that the USDollar must be take a downward revaluation of significant magnitude in order to even begin to offer a semblance of equilibrium and balance. Natural forces are aligned against those in power who resist the adjustment. Imbalances are too magnificent. They invite continued global revolt and financial insurrection.

Coming out of the once revered New York Fed, a site marked by Goldman Sachs pathways, is William Dudley. The New York Fed is hardly a bastion of leadership or integrity these days, not after its prominent role in producing a Wall Street meltdown from unbridled bond fraud in the last few years, complete with September 2008 climax. Dudley hints of big USDollar devaluation, from a sideways message. The US bankers have very limited options, given the perverse systemic insolvency, and the sluggish if not moribund economy. Goldman Sachs alumnus William Dudley hints at the endgame, rather than Exit Strategy, involving a steep USDollar devaluation. He seems to concede the near permanent near 0% official interest rate. Dudley spoke of FOREX pressure to push the USDollar exchange rate down. Whether it is planned or forced upon them, the US$ is heading lower and Dudley seems to acknowledge the fact. The endgame is inevitable, due to colossal deficits, huge unfunded obligations, and the desperate need to stimulate the moribund USEconomy. He might even be implicitly urging Americans to stop saving. Dudley lays out the failed effects of monetary policy when he said, "What I would like to do today is to explain in some detail the logic underlying this expectation that economic conditions will warrant exceptionally low levels of the federal funds rate for an extended period. There has to be a further demand impulse, be it a decline in household saving rates, a rise in business investment relative to profits, a further expansion of fiscal stimulus, or an improvement in the net trade balance via an increase in exports relative to imports. The fact that our foreign indebtedness is for the most part denominated in our own currency is a huge advantage in the event the dollar were to come under significant downward pressure."

Prospects look bleak for the USGovt finances, which must greatly devaluate the USDollar and accept lower value for its sovereign debt in the form of USTreasurys. Action must be taken, if not from higher long-term interest rates, then from a lower US$ exchange rate. In fact, a higher interest rate imposes damage to foreign creditors and Wall Street speculators, surely to USEconomy participants. It raises USGovt borrowing costs too. But a US$ devaluation harms foreign creditors and USEconomy participants from higher import costs, higher commodity prices. The US$ devaluation spares Wall Street the most pain, which can short the US DX index with advanced notice and insider information, their speciality. Worse, the USDollar must be devalued according to the federal guarantees for mortgage agency debt (see Fannie Mae & Freddie Mac) and credit derivative backstops (see JPMorgan and AIG, but also Fannie Mae). Implications to gold are immediate and powerful, once monetization is no longer hidden. Gold is ready for a quantum jump upward in price.


Jim Rickards is cited in the Hat Trick Letter at times. As senior managing director for market intelligence at Omnis, he commands respect. His viewpoint is usually high level but effective, without too many details, but with aggregate arguments containing much credibility and legitimate force. He describes the gold market, the USDollar, the debt situation in the United States, and the Chinese angle. He begins with a preface. The perverse aspect of the USDollar is that since it is the global reserve currency, its USGovt debt is not priced like a Third World debt security, with interest rate near 10%. Instead, the near 0% rate creates unsustainable forces in the credit market, while it encourages a global revolt against the USDollar. The adjustment process will propel the Gold price much higher, multiples higher.

The following are points made by Rickards in synopsis, elaborated upon by my commentary. He explains that obviously not enough gold & silver exists to cover the physical demand if holders of paper certificates in unallocated accounts demand delivery. He refers to the now open admissions that 100:1 leverage is used in gold inventory management at the metals exchanges. For every gold ounce in inventory, 100 gold ounces are claimed in futures contracts held. The fractional practice mimics the commercial banks with reserves and loans outstanding, a shared lethal flaw. For banks, they admit their fractional banking practice, but not the gold bankers who appear to run a criminal syndicate. Most likely only a small fraction of claims could be covered with the practical physical supply available, Rickards admits. Cash settlement would have to be enforced in the majority of cases. The terms of cash settlements would not be advantageous, to say the least. In fact, he omits to mention that the widespread policy used since December in London has been for cash settlement of long gold futures contracts, with a 25% bonus. That item was mentioned three months ago by the Jackass, and confirmed at the CFTC hearings.

The price of forced cash settlement, to relieve and unwind the huge undisclosed leverage, would be set as of a record date, limited the effect of a run on gold & silver. Rickards points out the failure to properly reward paper gold investors with such settlement dictums. Months of settlement would take place, even as the gold & silver prices zoom upward. That redemption price would be much less than the current physical price, which would continue to run higher apart from the defaulted settlement of the paper claims process. In other words, the settlement in cash would be both a contract violation of owning physical metal and a denial that claims the best price, basic contract fraud, a technicality Rickards spares the exchanges in accusation. There is more here than meets the eye, based upon technicalities. If holding metal holdings are in an unallocated account, they are likely to be considered an unsecured creditor position and used with banker discretion (read: leased & sold). The fractional banking techniques have been revealed, laden with risk. The 100:1 leverage is reckless no matter what commodity or asset it involves, leaving little room for error. The gold bankers are in a bind of their own making.

Move to the impact on the USDollar and the official US debt obligations. In no way can the existing real USGovt debt be paid off without inflating the currency in which the debt is held, even to the point of hyper-inflation. Rickards regards the risk as unavoidable, since valuation of a national currency must eventually reflect its fundamentals. Furthermore, if the USFed's mortgage assets were marked to market, the USFed itself would be declared insolvent (a point made months ago by the Hat Trick Letter, confirmed by Rickards). Anything involving paper claims payable in USDollars (stocks, bonds) is a 'Rope of Sand' in his words, a complete illusion that is fraught with risk. A $5500 gold price per ounce would be sufficient to back up the money supply (M1) as an alternative to hyper-inflation and an inflationary issuance of the currency. Either powerful price inflation is permitted, or a five-fold rise in the Gold price is permitted, in his opinion. A great point!! The pressures are unavoidable, and alternative directions might not exist. He presents a gold target price is $5000 to $10,000 per troy ounce in current issue USDollars. The break point will be when the US debt can no longer be rolled over, from REPOs or formal USTreasury auctions. He does not make the comparison. This is the typical Third World debt risk factor, which US Presidents (like Clinton & Bush II) and USFed Chairmen (like Greenspan & Bernanke) ignored for years. The Rubin Doctrine calls for putting off today's crisis by mortgaging the future. At the pace seen, the USGovt will not be in any position to finance its debt or honor its future obligations without taking drastic action on the backing or nature of the currency. Debt must be discounted via the US$ currency in denomination.

The gold picture in China has turned powerfully positive for the Gold price, in the view of Rickards. China needs about 4000 tonnes of gold for a proper reserves ratio, but only has 1000 tonnes today in possession. China cannot fulfill this goal even by taking all of its domestic production for the next 10 years. They wish to take the IMF gold from pledges, but political resistance is clear. They wish not to push up the Gold price from open market accumulation in gigantic volumes. He overlooks that official Chinese gold ownership extends far beyond the Peoples Bank of China and Sovereign Wealth Funds. My sources tell of the Chinese owning 3x to 5x more gold than 'Officially' proclaimed, something either overlooked or ignored by Rickards. The Chinese people are showing a strong preference to hold gold personally, not as part of lunatic funds managed and corrupted by fund managers as in the West. Their public purchase investment is mammoth, a major element of global gold demand, outlined in the Hat Trick Letter. The Chinese do not favor or manage Exchange Traded Funds, the greatest single device in the last ten years to control, corrupt, and negate the public demand factor. The ETFunds lately are accused of being price control devices. The StreetTracks GLD fund by under sharp criticism in particular.

From 1950 to 1980, Rickards mentions how the USTreasury gold supply declined from 20,000 to 8000 tonnes, basically moving a large amount from the United States to Europe, where the elite reside who control the US central bank. The Chinese are frustrated that they cannot obtain sufficient gold at reasonable prices as Europe did. Beijing leaders wish to survive the currency wars and the reworking of international finance. Private ownership of gold is of paramount importance to their entire society at all levels of power. Rickards believes that holding investor gold in a bank correlates the investor to the banking system, and puts the investor at the mercy of the banker whims, the very risks which must be avoided. These are the points made by Rickards.


My response is one merged with the thoughts of Aaron Krowne of the Morgage Lender Implode website that branched into other imploding entities like home builders. He is an informal trusted colleague. The Rickards argument contains two major oversights. One cannot call them so much flaws as important points not mentioned, maybe overlooked, but certainly important. My focus has been steadily on the second point, the grotesque extension to debt through obligations beyond what Rickards describes. Permit Krowne to make the points, which will be elaborated upon.

Aaron Krowne said, "Rickards is extremely generous on two points: (1) that the USGovt actually has 8000 tonnes of real non-debased gold, (2) that M1 is a useful numerator against which to measure dollar solvency, given the USGovt's short-term liabilities. Even just at the federal, public, acknowledged level, these liabilities already well exceed M1. Then start adding in Fannie & Freddie obligations, AIG, other bailout obligations, the general deficit spending, state & local government obligations, and the picture darkens considerably." Notice the term non-debased gold to mean not tungsten bars with gold plating.

The debt that must eventually be monetized is not just its partial reflection in the money supply, but all federally guaranteed debt. The commitment of USGovt debt must go beyond running federal debt total, and into nationalization of agency debt and credit derivative risk. They must be factored also into the USDollar and Gold price. So far, it has not in any scintilla or meaningful way. Thus the destabilizing events to come in a US$-based monetary crisis. Check the recent colossal Fannie Mae losses, funded by the USGovt. Check the recent colossal AIG losses, funded by the USGovt. Check, if you could, the ongoing recent colossal JPMorgan losses from credit derivatives, funded by the USGovt. The complexity of the fraud has become a cross between a tragedy and comedy. The monetization of USTreasurys is obvious to any analyst or auditor with any professional skill. The official USGovt bond inventory has in recent months contained an unusual suspect ledger item with the 'Household' category. The April Hat Trick Letter contains much more information on the fires burning possibly out of control on credit derivatives, a point raised in the last article about Dangerous Signposts, namely the long-term interest rates and the crude oil price.

The conclusion is that grossly insufficient gold exists to back the USGovt debts, and those debts must include USGovt obligations to direct funds into the nationalized Black Holes, thus resulting in tremendous extraordinary pressure for a significant USDollar devaluation. The cutting edge is the ongoing endless outsized USTreasury auctions. To call it a heavy weight of oversupply is a gross under-statement. It is 20 tonnes of bricks dumped on the 3-bedroom house from a construction crane, which itself might soon be subject to bank repossession. This is where the pressure is exerted. This is where the monetization relieves the pressure. This is the area next exposed, for both overwhelming debt issuance in supply, and hidden monetization revealed.


Events in the last few weeks have conspired to create a powerfully explosive environment, one hostile to currencies in general, the USDollar in particular, and favorable to the Gold price. Major changes have occurred in the psychology of the gold market. Slowly over time, and with much unmasking in the last month, the gold market is being perceived as yet another scheme run by Wall Street and London bankers. The gold market has in all likelihood very low inventory, huge inherent risk, but protection offered by government authorities. The Gold price has begun to rise despite the USDollar holding its ground against very weak alternative currencies. The primary locus of foreign revolt against the impaired US ship at sea, might be the Gold price. It is both the nexus and weak link in the defense of fiat paper money.

The MACD (moving average convergence divergence) cyclical indicator shows great promise with an upward bias. The moving averages in general have offered support, the 100-day MA (in red) and the 200-day MA (in green) showing upward trends. The major change in gold psychology is apparent to the alert observers, soon to the entire investor community. A reversal pattern is evident, from the Dubai and Greek debt response in January, February, and March. The reversal Cup & Handle contains a positive strong neckline, a loud bullish signal. A perverse benefit given the USDollar early in 2010 will be seen soon as a loan of goodwill to be paid back in full, amidst the backdrop of alleged Wall Street fraud.


The Euro Central Bank and Bank of England held interest fixed in the last couple weeks, amidst the Greek crisis. The EuroCB is trapped, just like the USFed. Europe is trapped by sovereign debt. England is trapped by its federal debt and need for stimulus. The United States is trapped by mortgage debt and its own federal debt, as well as need for stimulus. The Australians saw fit to hike by 25 basis points, a world apart, as commodity prices remain firm. The European Central Bank left its benchmark interest rate at a record low of 1.0% for the 11th month in a row. Recession, sovereign debt to the South, and the need for stimulus are the dominant themes for continued accommodation. The spread between Greek and German debt is widening, in fact worse than the first glimmer of the credit crisis a few months ago. The Greek Govt 10-year bond yield went over 4.4% points above the German Bund benchmark, the highest level ever since the Euro currency was launched in 1999. Adding stress to strain, the Greek 2-year bond spread has moved up 1.2% in consistent manner. A key point was made in bank policy by Trichet. The EuroCB head told the European Parliament that so-called collateral crisis measures will not be abandoned at the end of 2010 as originally planned. The EuroCB will continue to accept lower rated government bonds as collateral from banks. It will swap garbage for government backed debt securities, but soon no more US$-based toxic bonds. Watch the Credit Default Swap data and one can see the next target nation might be France, not Italy and Spain as many analysts have anticipated.


The stream of events in the last four years casts extremely bad light on the US financial system, soon to reflect lower value. The subprime mortgage bonds were not isolated in damage done or loans gone bad. The prime mortgages, the Option ARMs, the second mortgages, the commercials, they almost all sport delinquencies and defaults that rival the subprimes. Details are shown in the last few Hat Trick Letter reports. The TARP Fund remains unresolved except by limp efforts by the USCongress, which now attempts to at least achieve disclosure of what the $700 billion or $500 remaining billion went. The US Supreme Court appears to be running interference for the US Federal Reserve, in blocking legal attempts to force disclosure of the USFed balance sheet, and disclosure of the TARP Fund disbursements. The overseas wars involve their own black eyes, what with $50 billion missing from the Iraq Reconstruction Fund. The nationalizations of Fannie Mae and American Intl Group took place amidst widespread controversy, both in mortgage bonds and credit derivatives. The Credit Default Swap, an invention of Wall Street, has come under fire. It is being blamed for some distress in the European Govt debt markets. The CDSwap contract is under fire inside the United States even more so.

Financial reform initiatives might actually tighten their grip of power and control. One of the most funny, yet tragically true assessments in the last few years about the financial engineering topic came from former USFed Chairman Paul Volcker. He said the only meaningful contribution by the financial sector in the last 20 years was the automatic teller machine. He has been marginalized, if not silenced, since he made critical remarks, as part of his counsel to reinstate the Glass Steagal Act that separates large financial sectors.

In the following weeks we will see how much Goldman Sachs earned from their own legal challenges. In fact, a source informs me that his legal beagles regard the Paulson Abacus case as perhaps the weakest of all potential fraud cases against GSax. It might be rejected by the courts. GSax will not escape the lawsuits, but might face criminal charges. Watch the Germans, who are angry at being defrauded. Germany seems in many ways to act as the spearhead to dislodge control by Anglo-American sources. The Goldman Sachs fraud case, and cases to follow, will render severe damage to the image of the USDollar, the USTreasury, and the USGovt leadership that is dominated by the GSax alumni. My belief is that the fraud charges have opened Pandora's Box, for other complaints, other lawsuits, even class action lawsuits to be handled in federal court. The whiff of Pandora will be next seen in Germany from a broad swift response.

The crushing weight of lost integrity is vast. My suspicion is that the greatest impact from the Goldman Sachs stream of lawsuits and felony charges, complete with potential restitution attempts, will be on the USDollar and not the GS stock price or its balance sheet. What comes next is the survival reactions by nations under deep distress, weakend by sluggish if not moribund economies, weakened by exported toxic bonds from Wall Street, weakened by Credit Default Swap attacks from power centers, weakened by years of accepted USTreasurys as legitimate payment for exported finished products, weakened by broad usage of the USDollar within their banking system. The Jackass maintains a firm conviction that the first few nations that break ranks from the USDollar embrace will become the leading nations in the next chapter. A shock this way comes, from a Paradigm Shift in progress, recognized across the world, but not in the United States or England. A sudden USGovt-led devaluation could come soon, ordered by the United States banking and government leaders. It might turn out to be a vain arrogant maneuver to achieve instant stability, to maintain strongarm control, and to attempt to prevent creditor abandonment.

A grand backfire comes, since numerous platforms and paper support beams can no longer bear the weight of US insolvency and charges of widespread US fraud. A grand backlash comes. My best sources warn to expect flash events. Either the US will attempt to control the sudden rash of events, or foreign sources (dominated by US creditors) will pull the rug from under the US-UK controllers, who are fast losing control and credibility. The next victim front & center is information flow. The stream of negative news implies some degree of lost control of information itself, a vital ingredient to confidence, perception, and illusions. These factors combine to invite a global response. It will be felt and realized eventually in the USDollar. The Euro is nowhere near as weak and fraught with insolvency as the USDollar, or burdened by fraud charges. Time will prove this out.


From subscribers and readers:

At least 30 recently on correct forecasts regarding the bailout parade, numerous nationalization deals such as for Fannie Mae and the grand Mortgage Rescue.

"I think that your newsletter is brilliant. It will also be an excellent chronicle of these times for future researchers."
(PeterC in England)

"I have been a futures trader for over 30 years and have subscribed to numerous investment newsletters over the years. Your newsletter is the one I have subscribed to for the longest period of time and have gotten the most value from."
(DebraS in Kansas)

"Thanks for the quality of the information you put forth in your newsletter. I read a lot of newsletters, blogs, and financial sites. The accuracy of your information has been second to none over the past couple of years."
(MikeP in Missouri)

"You seem to have it nailed. I used to think you were paranoid. Now I think you are psychic!"
(ShawnU in Ontario)

Jim Willie CB
Editor of the "HAT TRICK LETTER"
Hat Trick Letter
April 21, 2010


Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 24 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at . For personal questions about subscriptions, contact him at

Deadly airborne fungus in Oregon set to spread

Deadly airborne fungus in Oregon set to spread
The new, rare strain has killed 1 in 4 infected, researchers say

By Charles Q. Choi
updated 3:12 p.m. PT, Thurs., April 22, 2010

A deadly, airborne new strain of fungus has emerged in Oregon. It has killed nearly one out of four known affected people so far and might also attack animals ranging from dogs to dolphins. And it is likely to spread, researchers now warn.

The new strain known as VGIIc of the fungus Cryptococcus gattii not only targets humans but has also proven capable of infecting dogs, cats, alpacas, sheep and elk. Other strains have even infected porpoises.

Although it can spread to mammals, it does not jump from animal to animal. Instead, people and other animals get it from inhaling spores released by samples of the fungus that infect trees.

"It's in the environment, and we're exposed to the environment," researcher Edmond Byrnes III of Duke University Medical Center told LiveScience. "And the environmental range of this has been expanding."

Potential to spread
While scientists aren't sure how the highly infectious or virulent fungus emerged in Oregon, they caution the new strain now looks set to expand to California and other neighboring areas.

"This novel fungus is worrisome because it appears to be a threat to otherwise healthy people," Byrnes said. "Typically, we more often see this fungal disease associated with transplant recipients and HIV-infected patients, but that is not what we are seeing yet."

Symptoms can appear two or more months after exposure. Most people never develop symptoms, but those infected may have a cough lasting weeks, sharp chest pain, shortness of breath, headache related to meningitis, fever, nighttime sweats and weight loss. In animals the symptoms are a runny nose, breathing problems, nervous system problems and raised bumps under the skin.

Treatment requires months to years of antifungal medications, and even surgery to remove the large masses of the fungus known as cryptococcomas that can develop in the body. So far it cannot be prevented, as there is no vaccine.

Origin unknown
The fungus C. gattii was originally linked with eucalyptus trees in tropical and subtropical climates. It first caused an outbreak in temperate climes on Vancouver Island in 1999 that has now spread into Washington and Oregon, where it infects local trees. This earlier strain, VGIIa/major, has killed nearly 9 percent of 218 patients.

After comparing the genes of the new VGIIc strain from Oregon with others, researchers suggest the new strain most likely arose recently, parallel to the outbreak that began on Vancouver Island. So far it has killed five out of 21 patients analyzed in the United States, a nearly 25 percent mortality rate. Lab studies with immune cells and with live mice revealed it is extremely virulent — that is, it can cause severe disease.

Determining the exact origin of the VGIIc strain has proven difficult. Investigations so far have failed to find it in Oregon soil, water or trees. It may have arrived from abroad or originated locally, researchers said.

Because this fungus had been confined to the tropics until now, researcher Wenjun Li at Duke University speculated that environmental changes might be responsible for the evolution and emergence of these new strains.

"We are trying to put together the evolutionary story of where these types come from by closely studying the genetics of all samples possible," explained researcher Yonathan Lewit at Duke University Medical Center.

It remains uncertain why VGIIc and VGIIa/major are more virulent than other strains. One possibility, given how this fungus can reproduce sexually, new hypervirulent combinations of genes emerged due to sex. The researchers also noted that cell components known as mitochondria in these strains could adopt a distinctive tube shape. Since mitochondria help generate energy in cells, it is possible these strains are more energetic, "but that's just speculation right now," Byrnes said.

When it comes to a public response to outbreaks of these strains, "public health officials in that area have formed a working group with state epidemiologists from all those states in the Pacific Northwest," Byrnes noted. "It's important that public awareness expand on this."

The scientists detailed their findings online April 22 in the journal PLoS Pathogens.
Health officials say airborne fungus spreading
April 22: Researchers at Duke University Medical Center release laboratory photos of a potentially fatal airborne fungus that has been spreading in Oregon.'s Dara Brown reports.

Friday, April 23, 2010

Dirty Bombs Revisited: Combating the Hype


Dirty Bombs Revisited: Combating the Hype
April 22, 2010 | 0854 GMT

Dirty Bombs Revisited: Combating the Hype

By Scott Stewart
Related Link

* Debunking Myths About Nuclear Weapons and Terrorism

As STRATFOR has noted for several years now, media coverage of the threat posed by dirty bombs runs in a perceptible cycle with distinct spikes and lulls. We are currently in one of the periods of heightened awareness and media coverage. A number of factors appear to have sparked the current interest, including the recently concluded Nuclear Security Summit hosted by U.S. President Barack Obama. Other factors include the resurfacing rumors that al Qaeda militant Adnan El Shukrijumah may have returned to the United States and is planning to conduct an attack, as well as recent statements by members of the Obama administration regarding the threat of jihadist militants using weapons of mass destruction (WMD). A recent incident in India in which a number of people were sickened by radioactive metal at a scrap yard in a New Delhi slum also has received a great deal of media coverage.

In spite of the fact that dirty bombs have been discussed widely in the press for many years now — especially since the highly publicized arrest of Jose Padilla in May 2002 — much misinformation and disinformation continues to circulate regarding dirty bombs. The misinformation stems from long-held misconceptions and ignorance, while the disinformation comes from scaremongers hyping the threat for financial or political reasons. Frankly, many people have made a lot of money by promoting fear since 9/11.

Just last week, we read a newspaper article in which a purported expert interviewed by the reporter discussed how a dirty bomb would “immediately cause hundreds or even thousands of deaths.” This is simply not true. A number of radiological accidents have demonstrated that a dirty bomb will not cause this type of death toll. Indeed, the panic generated by a dirty bomb attack could very well result in more immediate deaths than the detonation of the device itself. Unfortunately, media stories hyping the threat of these devices may foster such panic, thus increasing the death toll. To counter this irrational fear, we feel it is time once again to discuss dirty bombs in detail and provide our readers with a realistic assessment of the threat they pose.
Dirty Bombs Defined

A dirty bomb is a type of radiological dispersal device (RDD), and RDDs are, as the name implies, devices that disperse a radiological isotope. Depending on the motives of those planning the attack, an RDD could be a low-key weapon that surreptitiously releases aerosolized radioactive material, dumps out a finely powdered radioactive material or dissolves a radioactive material in water. Such surreptitious dispersal methods would be intended to slowly expose as many people as possible to the radiation and to prolong their exposure. Unless large amounts of a very strong radioactive material are used, however, the effects of such an exposure will be limited. People are commonly exposed to heightened levels of radiation during activities such as air travel and mountain climbing. To cause adverse effects, radiation exposure must occur either in a very high dose over a short period or in smaller doses sustained over a longer period. This is not to say that radiation is not dangerous, but rather the idea that the slightest amount of exposure to radiation causes measurable harm is not accurate.

By its very nature, the RDD is contradictory. Maximizing the harmful effects of radiation involves maximizing the exposure of the victims to the highest possible concentration of a radioisotope. When dispersing the radioisotope, by definition and design the RDD dilutes the concentration of the radiation source, spreading smaller amounts of radiation over a larger area. Additionally, the use of an explosion to disperse the radioisotope alerts the intended victims, who can then evacuate the affected area and be decontaminated. These factors make it very difficult for an attacker to administer a deadly dose of radiation via a dirty bomb.

It is important to note that a dirty bomb is not a nuclear device, and no nuclear reaction occurs. A dirty bomb will not produce an effect like the nuclear devices dropped on Hiroshima or Nagasaki. A dirty bomb is quite simply an RDD that uses explosives as the means to disperse a radioactive isotope, and the only blast effect will be from the explosives used to disperse the radioisotope. In a dirty bomb attack, radioactive material not only is dispersed, but the dispersal is accomplished in an obvious manner, and the explosion immediately alerts the victims and authorities that an attack has taken place. The attackers hope that notice of their attack will cause mass panic — in other words, the RDD is a weapon of fear and terror.

The radioisotopes that can be used to construct an RDD are fairly common. Even those materials considered by many to be the most likely to be used in an RDD, such as cobalt-60 and cesium-137, have legitimate medical, commercial and industrial uses. Organizations such as the International Atomic Energy Agency warn that such radioisotopes are readily available to virtually any country in the world, and they are almost certainly not beyond the reach of even moderately capable non-state actors. Indeed, given the ease of obtaining radiological isotopes and the ease with which a dirty bomb can be constructed, we are surprised that we have not seen one successfully used in a terror attack. We continue to believe that it is only a matter of time before a dirty bomb is effectively employed somewhere. Because of this, let’s examine what effectively employing a dirty bomb means.
Dirty Bomb Effectiveness

Like a nonexplosive RDD, unless a dirty bomb contains a large amount of very strong radioactive material, the effects of the device are not likely to be immediate and dramatic. In fact, the explosive effect of the RDD is likely to kill more people than the device’s radiological effect. This need for a large quantity of a radioisotope not only creates the challenge of obtaining that much radioactive material, it also means that such a device would be large and unwieldy — and therefore difficult to smuggle into a target such as a subway or stadium.

In practical terms, a dirty bomb can produce a wide range of effects depending on the size of the improvised explosive device (IED) and the amount and type of radioactive material involved. (Powdered radioisotopes are easier to disperse than materials in solid form.) Environmental factors such as terrain, weather conditions and population density would also play an important role in determining the effects of such a device.

Significantly, while the radiological effects of a dirty bomb may not be instantly lethal, the radiological impact of an RDD will in all likelihood affect an area larger than the killing radius of the IED itself, and will persist for far longer. The explosion from a conventional IED is over in an instant, but radiation released by a RDD can persist for decades unless the area is decontaminated. While the radiation level may not be strong enough to affect people exposed briefly in the initial explosion, the radiation will persist in the contaminated area, and the cumulative effects of such radiation could prove very hazardous. (Here again, the area contaminated and the ease of decontamination will depend on the type and quantity of the radioactive material used. Materials in a fine powdered form are easier to disperse and harder to clean up than solid blocks of material.) In either case, it will be necessary to evacuate people from the contaminated area, and people will need to stay out of the area until it can be decontaminated, a process that could prove lengthy and expensive.

Therefore, while a dirty bomb is not truly a WMD like a nuclear device, we frequently refer to them as “weapons of mass disruption” or “weapons of mass dislocation” because they may temporarily render contaminated areas uninhabitable. The expense of decontaminating a large, densely populated area, such as a section of London or Washington, is potentially quite high. This cost would also make a dirty bomb a type of economic weapon.
Historical Precedents

The world has not yet witnessed a successful dirty bomb attack by a terrorist or militant group. That does not necessarily mean that militant groups have not been interested in radiological weapons, however. Chechen militants have perhaps been the most active in the realm of radioactive materials. In November 1995, Chechen militants under the command of Shamil Basayev placed a small quantity of cesium-137 in Moscow’s Izmailovsky Park. Rather than disperse the material, however, the Chechens used the material as a psychological weapon by directing a TV news crew to the location and thus creating a media storm and fostering public fear. The material in this incident was thought to have been obtained from a nuclear waste or isotope storage facility in the Chechen capital of Grozny.

In December 1998, the pro-Russian Chechen Security Service announced it had found a dirty bomb consisting of a land mine combined with radioactive materials next to a railway line frequently used to transport Russian troops. It is believed that Chechen militants planted the device. In September 1999, two Chechen militants who attempted to steal highly radioactive materials from a chemical plant in Grozny were incapacitated after carrying the container for only a few minutes each; one reportedly died. This highlights another difficulty with producing a really effective dirty bomb: The strongest radioactive material is dangerous to handle, and even a suicide operative might not be able to move and employ it before being overtaken by its effects.

Still, none of these Chechen incidents really provided a very good example of what a dirty bomb detonation would actually look like. To do this, we need to look at incidents where radiological isotopes were dispersed by accident. In 1987, in Goiania, Brazil, a tiny radiotherapy capsule of cesium chloride salt was accidentally broken open after being salvaged from a radiation therapy machine left at an abandoned health care facility. Over the course of 15 days, the capsule containing the radioisotope was handled by a number of people who were fascinated by the faint blue glow it gave off. Some victims reportedly even smeared the substance on their bodies. The radiation was then dispersed by these people to various parts of the surrounding neighborhood, and some of it was even taken to nearby towns. In all, more than 1,000 people were contaminated during the incident and some 244 were found to have significant radioactive material in or on their bodies. Still, only four people died from the incident, and most of those who died had sustained exposure to the contamination. In addition to the human toll, the cleanup operation in Goiania cost more than $100 million, as many houses had to be razed and substantial quantities of contaminated soil had to be removed from the area.

In a more recent case involving a scrap dealer, this time in a slum outside New Delhi, India, eight people were admitted to the hospital because of radiation exposure after a scrap dealer dismantled an object containing cobalt-60. The material apparently arrived at a scrap shop March 12, and the owner of the shop was admitted to the hospital April 4 suffering from radiation-poisoning symptoms (again another case involving prolonged exposure to a radiation source). The radiation source was found at the scrap yard April 5 and identified as cobalt-60. Indian authorities hauled away eight piles of contaminated scrap. The cleanup operation was easier in the Indian incident, since the radioactive material was in metallic form and found in larger pieces rather than in powdered form seen in the cesium in Goiania. Intriguingly, a nearby scrap shop also was found to be contaminated April 16, but it appears from initial reports that the second site was contaminated by a second radioactive source that contained a weaker form of cobalt-60. Though we are watching for additional details on this case, so far, despite the long-term exposure to a potent radioactive source, no deaths have been reported.

At the other end of the spectrum from the Goiania and New Delhi accidents is the 1986 Chernobyl nuclear disaster in northern Ukraine, when a 1-gigawatt power reactor exploded. It is estimated that more than one hundred times the radiation of the Hiroshima bomb was released during the accident — the equivalent of 50 million to 250 million grams of radium. More than 40 different radioisotopes were released, and there was a measurable rise in cesium-137 levels across the entire European continent. No RDD could ever aspire to anything close to such an effect.

Chernobyl wrought untold suffering, and estimates suggest that it may ultimately contribute to the deaths of 9,000 people. But many of those affected by the radiation are still alive more than 20 years after the accident. While STRATFOR by no means seeks to downplay the tragic human or environmental consequences of this disaster, the incident is instructive when contemplating the potential effects of a dirty bomb attack. In spite of the incredible amounts of radioactive material released at Chernobyl, only 31 people died in the explosion and immediate aftermath. Today, 5.5 million people live in the contaminated zone — many within or near the specified EU dosage limits for people living near operational nuclear power plants.

It is this type of historical example that causes us to be so skeptical regarding claims that a small dirty bomb will cause hundreds or even thousands of deaths. Instead, the most strategic consequences of this sort of destruction are economic. By some estimates, the Chernobyl disaster will ultimately cost well in excess of $100 billion. Again, in our opinion, a dirty bomb should be considered a weapon of disruption — one that will cause economic loss, but would not cause mass casualties or any real mass destruction.
Fighting Panic

Analytically, based upon the ease of manufacture and the historical interest by militants in dirty bombs — which ironically may in part be due to the way the RDD threat has been hyped — it is only a matter of time before militants successfully employ one. Since the contamination created by such a device can be long-lasting, more rational international actors probably would prefer to detonate such a device against a target outside their own country. In other words, they would lean toward attacking a target within the United States or United Kingdom rather than the U.S. or British embassies in their home country.

And since it is not likely to produce mass casualties, a dirty bomb attack would likely be directed against a highly symbolic target — such as one representing the economy or government — and designed to cause the maximum amount of disruption at the target site. Therefore, it is not out of the question to imagine such an attack aimed at a target such as Wall Street or the Pentagon. The device would not destroy these sites, but would limit access to them for as long as it took to decontaminate them.

As noted above, we believe it is possible that the panic caused by a dirty bomb attack could well kill more people than the device itself. People who understand the capabilities and limitations of dirty bombs are less likely to panic than those who do not, which is the reason for this analysis. Another important way to help avoid panic is to carefully think about such an incident in advance and to put in place a carefully crafted contingency plan for your family and business. Contingency plans are especially important for those who work in proximity to a potential dirty bomb target. But they are useful in any disaster, whether natural or man-made, and something that should be practiced by all families and businesses. Such knowledge and planning provide people with the ability to conduct an orderly and methodical evacuation of the affected area. This allows them to minimize their exposure to radioactivity while also minimizing their risk of injury or death due to mass hysteria. For while a dirty bomb attack could well be messy and disruptive, it does not have to be deadly.

Thursday, April 22, 2010

Will Karzai get the Diem treatment?

April 16, 2010 EIR International 39

April 7—Outside of Afghanistan, President Hamid
Karzai has two formidable enemies—Pakistan and
Britain. What has kept him in power and out of harm’s
way, during these eight-plus years of war in Afghanistan,
is the protection of the United States. However,
the breakout of acrimonious relations between Kabul
and Washington in recent months makes one wonder
how long Washington will be willing to continue providing
full protection to the Afghan President. The
latest news, that the White House may disinvite Karzai,
who is scheduled to visit Washington next month, is an
indication that Washington is no longer interested in
further discussions with Kabul.
The good news, is that while every Tom, Dick, and
Harriet associated with the Obama Administration, who
wears the garb of an Afghan expert, blames Karzai and
his “corrupt administration” for the eight-plus years of
mess, the so-called “search” for an alternative leader to
replace him has not yet turned up any viable candidates.
With the advent of the Obama Administration, and
induction of Obama’s Af-Pak envoy, Richard Holbrooke,
into the Afghan theater, Karzai began to come
under pressure. Although Washington never made
transparent what its plans were for Afghanistan, Karzai
was nonetheless pressured to accept them. As the security
situation worsened, with the insurgents gaining
control of more and more territory by pushing the U.S.
and NATO-led troops onto their bases, and maintaining
security of major towns, Washington and NATO headquarters
in Brussels became increasingly reckless, killing
Afghans by the hundreds, and identifying all of
them as “Taliban.”
Random Killing of Pushtuns, Alienation
of Karzai
Those killings, however, did not go off well with
Karzai, a Pushtun, and created intense mistrust of him
among the majority of his fellow Pushtuns. Kabul repeatedly
spoke out against killing of the innocents, but
it was to no avail. In retaliation, Washington heaped
blame on Karzai, blaming his “corrupt” administration
for all the ills and misfortunes. However, no one
talked about why and how opium production in Afghanistan
multiplied 25-fold from 2001 to 2007, under
the watch of the British and U.S. troops, bringing in
oodles of cash to all and sundry, including the socalled
Taliban and al-Qaeda insurgents battling and
winning ground rapidly against the foreign troops.
This was “business as usual” in Afghanistan
throughout 2006-09. A noticeable shift began to emerge
with the Jan. 28, 2010 London Conference, which was
attended by high-level diplomats from almost 70 countries.
What came out of that conference, was a tacit
agreement among the participants, under pressure from
Karzai’s enemy, Britain, that called for reconciliation
with some “good Taliban,” with the intent of bringing
them in to share power in Kabul. How that would be
achieved, remained a big question mark, but, Karzai
got the message. For Karzai, the options left to him at
that point were: to hand over power to the “good Taliban,”
and leave Afghanistan to spend the rest of his
life in exile; or, to fight back, and somehow gain the
confidence of a majority of the Pushtun community, a
small fraction of which supports the Taliban—“good”
or “bad.”
Following the London Conference, Karzai visited
Riyadh, where he spoke to Saudi King Abdullah, a
strong proponent of bringing the Taliban to power,
and Islamabad, where he met the Pakistani Army
chief. Gen. Ashfaq Parvez Kayani, who made no bones
about the fact that the arrival of the Taliban in Kabul
would provide Islamabad, once more, with an opportunity
to set up Afghanistan as its “strategic depth” to
counter any potential Indian plan to invade Pakistan.
Karzai realized that he will have to buck the tide, and
‘Khuda Hafez,’ Hamid Karzai
The Farsi phrase means, “May God protect you,” and is usually said at leavetaking.
Ramtanu Maitra reports, and warns: Don’t forget Ngo Dinh Diem!
40 International EIR April 16, 2010
go for the second option.
Prior to his visit to Pakistan, Karzai invited
Iranian President Mahmoud Ahmadinejad
to Kabul, on the heels of a trip there
by U.S. Defense Secretary Robert M. Gates.
Gates was still in Afghanistan on March 10
when the Iranian President predicted, from
Tehran, that American efforts in Afghanistan
would fail. Later, at a news conference with
Karzai at the Presidential Palace, Ahmadinejad
charged that the United States was using
the excuse of fighting “terrorists that they
themselves created, supported, and financed,”
to maintain its occupation of Afghanistan.
This visit of Ahmedinejad did not go over
well in Washington. Only two days before it, ,
Gates told reporters, while traveling to Kabul
for his own talks with Karzai, that Iran was
“playing a double game in Afghanistan.”
“They want to maintain a good relationship
with the Afghan government,” Gates said.
“They also want to do everything they possibly
to can to hurt us, or for us not to be successful.”
He said he believed that Iran was
providing money and “some low level of support”
to the Taliban in Afghanistan. Asked
about those comments by Gates, Ahmadinejad responded:
“What are you doing in this region? You are
12,000 kilometers away from here, your country is the
other side of the world. And what are you doing here?
This is a serious question.”
Karzai’s China and Iran Gambit
Karzai’s next move was to embark on his first-ever
visit to China, where he found a warm reception. Chinese
President Hu Jintao and the Afghan President
signed three deals on March 24, which covered economic
cooperation, technical training, and preferential
tariffs for some Afghan exports to China. China is
seen as a key player in an international coalition seeking
to secure and rebuild Afghanistan, particularly
after U.S. troops pull out, analysts said, adding that
Beijing is striving to help boost security and revive the
economy in Afghanistan. It was earlier reported that
the state-owned China Metallurgical Group promised
to invest a record US$3 billion in Aynak, one of the
world’s largest copper mines, south of Kabul. Afghan
Foreign Minister Zalmai Rassoul told China Daily on
March 24 that China has contributed tremendously to
Afghan economic development, especially in infrastructure
“There are some security issues. We are trying to
deal with it, and I hope the security situation will allow
Chinese investment to operate without any risks,” Rassoul
said. Afghanistan is heavily dependent on international
aid, but its government hopes the vast reserves of
minerals will provide the key to eventual financial independence,
Rassoul added.
Gong Shaopeng, a professor in international politics
at China Foreign Affairs University, said the major
goal of the Afghan government is to revitalize the
country’s economy. He said China’s step-by-step aid
has helped stabilize the country and provide job opportunities.
“We have helped Afghanistan rebuild facilities
damaged by the war, like roads and canals,” he
Subsequently, Karzai antagonized his Western allies
further, when he joined leaders from the region to cel-
U.S. Army/Spc. Michael Zuk
Afghan President Hamid Karzai doesn’t have many good options left, since
the January London Conference, where a tacit agreement was reached, that
the “good Taliban,” should be brought into a power-sharing arrangement
in Kabul.
April 16, 2010 EIR International 41
ebrate the first festival of the International Day of
Nawrooz, held in celebration of the Persian New Year
in Tehran on March 27. Leaders from Iran, Tajikistan,
Turkmenistan, Iraq, the Turkish deputy prime minister,
and senior representatives from 20 other countries attended.
Thanking leaders of the regional countries for
taking part in the festival, Iranian Foreign Minister
Manouchehr Mottaki said that celebrations at the regional
level were first observed in 2008 in Dushanbe,
Tajikistan, with the participation of the foreign ministers
from Afghanistan, Iran, and Tajikistan. The following
year, he said, it was celebrated more gloriously
in Afghanistan’s northern city of Mazar-e-
Sharif. President Karzai was among the
speakers on that important day and expressed
the hope that 2009 would be a year
of peace, stability, and progress for Afghanistan.
On March 30, 2010, under the cover of
darkness, U.S. President Barack Obama
made a surprise visit to Kabul. Before he departed,
also after sundown, Obama had a
long talk with Karzai. While the discussion
was not made public, reports indicate that
Obama made clear that he was highly displeased
with the Afghan President’s performance.
On the substance of this quarrel, the
Washington Post, in its lead editorial on
April 6, said that Obama has been pressuring
Karzai “to crack down on the rampant
corruption in his government, especially in
the southern provinces where U.S. troops
are trying to break the hold of the Taliban.”
The White House also resisted Karzai’s attempt
to exclude UN representatives from
the election commission. The Afghan President’s
claim of electoral interference, according
to the Post, although perhaps
prompted by that pressure, is not credible;
his steps toward initiating negotiations with
insurgent leaders appear premature, at best,
the editorial concluded.
It is evident that it was the substance of
his discussions with the U.S. President that
enraged Karzai. On April 1, addressing the
Independent Election Commission (IEC),
Karzai lashed out against Washington’s accusations
against him, that he had committed vote fraud in his
reelection last October. He said: “There is no doubt
that the fraud was very widespread, but this fraud was
not committed by Afghans, it was committed by foreigners.
. . . This fraud was committed by Galbraith,
this fraud was committed by Morillon, and this fraud
was committed by embassies.” Karzai was referring to
Peter W. Galbraith, the deputy United Nations special
representative to Afghanistan at the time of the election,
and the person who helped reveal the fraud, and
Philippe Morillon, the chief election observer for the
European Union.
DoD/USAF Master Sgt. Jerry Morrison
Defense Secretary Robert Gates told reporters, while traveling to Kabul for
talks with Karzai, that Iran was “playing a double game in Afghanistan.”
“They want to do everything they possibly can to hurt us, or for us not to be
successful.” He is being interviewed on Afghan television, in this December
2009 photo.
42 International EIR April 16, 2010
Karzai’s Principal Enemies: Britain
and Pakistan
Later in the speech, Karzai accused the Western coalition
fighting against the Taliban of being on the verge
of becoming invaders—a term usually used by insurgents
to refer to American, British, and other NATO
troops fighting in Afghanistan. “In this situation, there
is a thin curtain between invasion and cooperation/assistance,”
said Karzai, adding that if the perception
spread that the Western forces were invaders, and the
Afghan government their mercenaries, the insurgency
“could become a national resistance.”
That speech, particularly the formulation that implied
that the insurgency could become a national resistance,
got Washington’s goat. There was a hue and cry
in the U.S. capital, where Obama Administration officials
expressed dismay at the “outrageous” allegations
by a “corrupt” Afghan administration. But Karzai was
in no mood to back down.
Three days later, on April 4, Karzai, visiting his
home town, Kandahar, the seat of Pushtun royalty and
the birthplace of the Taliban, spoke to local parliamentarians,
chastising the U.S. for “interference” in
Afghanistan’s politics. His statements centered chiefly
on attacking the U.S. and its NATO allies, as well as
parliament itself, warning that if the parliament didn’t
assent to his takeover of the Electoral Complaints
Commission, it would give the impression that Afghanistan
was dominated by the West, thereby granting
legitimacy to the Taliban. Some parliamentarians
present say that Karzai even threatened to join the insurgency.
President Karzai is not only fighting back, but has
put himself at a great personal risk. Unless he is able to
garner quick support from China, Iran, and Russia—the
three major nations in the immediate vicinity not antagonistic
to him—he will be the main target of a
number of recognized, and not-so-well-recognized,
killers gunning for him.
His principal threat comes from Britain and Pakistan.
He has crossed swords, over the years, with the
British. To begin with, London never liked the appointment
to the Presidency of an Afghan Pushtun close to
the United States and India. In 2005, Karzai spoke out
against the explosion of opium production in southern
Afghanistan’s Helmand province, accusing the British
troops stationed there of allowing the large-scale growth
of opium production.
He expelled two British MI6 agents on Dec. 27,
2007, on charges that they posed a threat to national
security. Afghan government officials said the decision
to expel them was taken at the behest of the CIA, after
the two agents were caught funding Taliban units. One
of the agents, Mervyn Patterson, worked for the United
Nations, while the other, Michael Semple, worked for
the European Union. Both were alleged Afghan specialists
who had been operating in the country for over
20 years; that means they must have been interacting,
on behalf of London, with the al-Qaeda and Taliban
leaders there. The London Times wrote that, when Patterson
and Semple were arrested, they were in possession
of $150,000 cash, which was to be given to Taliban
commanders in Musa Qala, in the opium-infested
Helmand province.
An unnamed Afghan government official told the
London Sunday Telegraph at the time, that “this warning”—
that the men had been financing the Taliban for
at least ten months—“came from the Americans, who
were not happy with the support being provided to the
Taliban. Washington gave the information to our intelligence
services, who ordered the arrests,” the
source added, “The Afghan government would never
have acted alone to expel officials of such a senior
level. This was the information that was given to the
NDS [National Directorate of Security] by the Americans.”
In 2006, U.S. military commanders in Afghanistan
had loudly protested the British decision, in a deal with
local tribal leaders, to withdraw troops from Musa Qala,
opening the door for a Taliban takeover of the region.
Michael Semple has since been laundered, and currently
holds a fellowship with the Carr Center for
Human Rights Policy at Harvard’s Kennedy School. He
is now in the seminar circuit of various American think
tanks, proffering his “expertise” on issues concerning
insurgency, reconciliation, and political developments
in Afghanistan.
In addition to throwing out the two MI6 agents,
Karzai also drew the wrath of the British Empire establishment
when, in January 2008, he turned down the
joint effort of Washington and London to appoint Lord
Paddy Ashdown as the UN’s super-envoy to Afghanistan.
Ashdown, a “liberal” and a “democrat,” who wears
his vainglorious feudal title on his shirtsleeves, was
ready to pinch-hit for London and Washington, which
had begun to look increasingly like colonial powers
April 16, 2010 EIR International 43
trying to occupy Afghanistan and further
undermine the “duly elected”
The second powerful threat to
Karzai emanates from Pakistan.
Karzai has reiterated over the years,
the existence of a tacit agreement between
Pakistani intelligence, the ISI,
and the insurgents. He has claimed,
over and over again, that the insurgents,
who have committed terrorist
acts inside Kabul, had the fingerprints
of Pakistan’s ISI. He has also insisted,
on a number of occasions, that the insurgents
were not only sheltered
inside Pakistan, but also protected. It
is widely known that Karzai is intensely
hated by a section of the Pakistani
military, and by the political
grouping close to both the Pakistani
Taliban and Saudi Arabia.
Moreover, the Pakistani Army
may conclude that Karzai, developing
an independent base among a
large section of the Pushtun community, may prevent
the Pakistan-backed Taliban from gaining control in
Kabul. Also, Karzai is close to India, and his coming
to power on his own strength will necessarily allow a
larger Indian presence in Afghanistan in the future. On
the other hand, if Karzai can bring both China and
Iran, in full force, into Afghanistan, Pakistan will have
to give the elimination of Karzai a second thought.
The Elimination of Ngo Dinh Diem
It is evident that Islamabad has strong reasons to
eliminate Hamid Karzai. If one jogs one’s memory, it is
not difficult to fathom that the scenario developing in
Afghanistan, vis-รก-vis Karzai, is not much different
from what occurred during the Vietnam War. On Nov.
2, 1963, South Vietnamese President Ngo Dinh Diem,
who years earlier was eulogized by Washington’s policymakers
and American media as the “demigod” and
“savior,” was removed, and killed a day later, along
with his brother, Nhu Dinh Diem, his close collaborator,
by a military coup carried out by Gen. Duong Van
Minh. The coup was carried out hours after Diem met
with President Kennedy’s envoy, Henry Cabot Lodge,
and Adm. Harry D. Felt.
According to The Pentagon Papers, Vol. 2, “Washington
was deeply concerned about Diem’s unpopularity
and was confronted with the following choices: The
choices were: (1) continue to plod along in a limited
fashion with Diem—despite his and Nhu’s growing unpopularity;
(2) encourage or tacitly support the overthrow
of Diem, taking the risk that the GVN (Government
of the Republic of Vietnam, or, South Vietnam)
might crumble and/or accommodate to the VC (Viet
Cong); and (3) grasp the opportunity—with the obvious
risks—of the political instability in South Vietnam
to disengage.
“The first option was rejected because of the belief
that we [Washington—ed.] could not win with Diem-
Nhu. The third was [sic] very seriously considered a
policy alternative because of the assumption that an independent,
non-communist SVN [South Vietnam] was
too important a strategic interest to abandon—and because
the situation was not sufficiently drastic to call
into question so basic an assumption. The second course
was chosen mainly for the reasons the first was rejected—
Vietnam was thought too important; we wanted
to win; and the rebellious generals seemed to offer that
prospect. . . .”
U.S. National Archives
South Vietnamese President Ngo Dinh Diem was killed in a 1963 U.S.-backed coup.
There are lessons to be learned here.