The End Of All Crossroads

Where the TAXI makes a stop, to ponder upon which road mayhap be true

Category: World Politicks

Chemical weapons reports in Syria, exactly as warned

“American soldiers likely will be on ground in Syria, facing not just Assad’s army, but the Iranians and the Russian armies. The Russians already have about 100,000 soldiers in Syria. There have already been 40,000 deaths in Syria. Are you ready for four million?”

By Douglas J. Hagmann

4 December 2012: And so it begins, or should I say, so it continues. CNN is now reporting that an unnamed U.S. intelligence official claims that Assad’s Syrian forces are “combining chemicals that would be used to make deadly sarin gas for use in weapons to attack rebel and civilian populations.”

As I wrote here before in various reports pertaining to Benghazi, this was the plan all along and you are seeing it play out, albeit a bit behind schedule as Obama, Clinton and their national security advisers had to coordinate the Benghazi cover-up that few admitted existed and even fewer would report. Information about the use of chemical weapons, specifically gas, was detailed in the second part of my interview with an intelligence insider:

“One aspect of the weapons plan was to set up a false flag operation to make it appear that Assad used chemical weapons against his own people. Imagine the outcry from the civilized world to the news that Assad ‘gassed’ his own people. That would be an invitation to NATO and the West to openly intervene. Don’t forget about the timing of all of this. Two months before the elections, and time was running out. The job of taking out Assad was not yet complete. Such an event would quickly advance this agenda. By this time, however, being caught and placed in a rather unenviable position between Russia and the U.S., the Turkish consul general was in a ‘CYA, clean-up’ mode, assuring that none of the chemical weapons that might have still been in Libya were headed for Turkey.”

Now, because no one has stepped in to expose the big lie behind Benghazi, it is nearly certain that the U.S. and NATO will become involved. By not exposing the big lie, American soldiers likely will be on ground in Syria, facing not just Assad’s army, but the Iranians and the Russian armies. The Russians already have about 100,000 soldiers in Syria. There have already been 40,000 deaths in Syria. Are you ready for four million?

As I wrote before, the fuse for WW III has been lit. You are witnessing history playing out right before your very eyes. I mapped out their plan. Has anyone been paying attention?

SOURCE:
http://www.homelandsecurityus.com/archives/7215

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Entire Ukraine government resigns

“Ukrainian Prime Minister Mykola Azarov and the entire government resigned today in a surprise move after controversial elections as the economy teeters on the brink of recession.”

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3:46PM GMT 03 Dec 2012

The presidency said President Viktor Yanukovych had accepted Mr Azarov’s request to give up his post and become an MP, a move expected to be repeated by several cabinet ministers.

It remained unclear who would fill the powerful post of premier, with some analysts speculating it could go to a member of the elite close to Mr Yanukovych known as the “Family”.

“President Viktor Yanukovych accepted the resignation of Prime Minister Mykola Azarov, satisfying the demand of the latter,” the statement added.

The move cames as a new parliament prepares to meet after October 28 legislative elections which raised new concerns about democratic standards under Mr Yanukovych.

The ruling Regions Party appears to have retained control of the Verkhovna Rada with the help of independents despite a strong challenge from the opposition parties of boxer Vitali Klitschko and imprisoned ex-premier Yulia Tymoshenko.

OSCE observers slammed the polls as a setback for Ukraine, marred by the absence of Ms Tymoshenko who is serving a seven-year sentence on abuse of power charges she says were trumped up by Mr Yanukovych.

But economists also fear the country is entering troubled times and could be on the brink of a new recession that would see it seek billions of dollars in disbursements from an IMF standby package.

Ukraine’s economy contracted by 1.2 percent in the third quarter of this year, and several banks fear the country is heading for zero growth in 2012, not to mention a sharp devaluation of the local currency.

“This (the resignation) is linked to a number of economic challenges which Ukraine has fallen into thanks to this president and this government,” said opposition leader Arseniy Yatsenyuk.

A Russian-speaking bureaucrat mocked by many in Ukraine for his dry and humourless image, Mr Azarov took office in 2010 shortly after Mr Yanukovych defeated Ms Tymoshenko in a fiercely-contested presidential election.

Mr Azarov has always been seen as a close ally of Mr Yanukovych, but some analysts believe his power base has been undermined by the recent rise of a “Family” of close acquaintances of the president into top positions.

Possible successors to Mr Azarov could include First Deputy Prime Minister Valery Khoroshkovsky and National Bank chief Sergiy Arbuzov, analysts said.

mr Arbuzov, 36, is seen as a key member of the “Family” of Yanukovych allies.

His meteoric rise to one of the most important economic jobs in the country has raised eyebrows in Ukraine. He is a confidant of Mr Yanukovych’s increasingly powerful son Olexander, who is regarded as the Family kingpin.

“It is possible that this radical resignation makes sense; it is better to dissolve the government and appoint another one,” said Kostyantyn Bondarenko, head of the Ukrainian Politics Institute.

He said that resignation made sense for Mr Azarov, who was approaching the pension age of 65 and would have had to work on replacing a string of ministers had he stayed in power.

Mr Yanukovych has been criticised for concentrating ever more power around himself and allies since defeating the leaders of the pro-Western Orange Revolution in the 2010 polls.

Other candidates for prime minister could include national security chief Andriy Kluyev and deputy presidential chief of staff Iryna Akimova.

Ukrainian parliament speaker Volodymyr Lytvyn said that a decision on the composition of the new government could be taken on December 13 or 14 after the new parliament convenes.

The ministers will remain in their posts until a new government is formed, the presidency said.

It also noted that under Ukrainian law, whenever the prime minister resigns the entire government must do so.

The presidency explained the mass resignation by saying that Mr Azarov had decided to take up a parliamentary seat rather than staying on as prime minister.

Under Ukrainian law, deputies have to cease their former work in order to take up their seats in parliament.

Along with Mr Azarov, a number of other ministers were elected to parliament including Deputy Prime Minister Sergiy Tigipko and Economy Minister Petro Poroshenko.

SOURCE:
http://www.telegraph.co.uk/news/worldnews/europe/ukraine/9719263/Entire-Ukraine-government-resigns.html

Our Collapsing Economy and Currency

“Is the “fiscal cliff” real or just another hoax? The answer is that the fiscal cliff is real, but it is a result, not a cause. The hoax is the way the fiscal cliff is being used.”

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December 1, 2012

The fiscal cliff is the result of the inability to close the federal budget deficit. The budget deficit cannot be closed because large numbers of US middle class jobs and the GDP and tax base associated with them have been moved offshore, thus reducing federal revenues. The fiscal cliff cannot be closed because of the unfunded liabilities of eleven years of US-initiated wars against a half dozen Muslim countries–wars that have benefitted only the profits of the military/security complex and the territorial ambitions of Israel. The budget deficit cannot be closed, because economic policy is focused only on saving banks that wrongful financial deregulation allowed to speculate, to merge, and to become too big to fail, thus requiring public subsidies that vastly dwarf the totality of US welfare spending.

The hoax is the propaganda that the fiscal cliff can be avoided by reneging on promised Social Security and Medicare benefits that people have paid for with the payroll tax and by cutting back all aspects of the social safety net from food stamps to unemployment benefits to Medicaid, to housing subsidies. The right-wing has been trying to get rid of the social safety net ever since Franklin D. Roosevelt constructed it, out of fear or compassion or both, during the Great Depression.

Washington’s response to the fiscal cliff is austerity: spending cuts and tax increases. The Republicans say they will vote for the Democrats’ tax increases if the Democrats vote for the Republican’s assault on the social safety net. What bipartisan compromise means is a double-barreled dose of austerity.

Ever since John Maynard Keynes, economists have understood that tax increases and spending cuts suppress, not stimulate, economic activity. This is especially the case in an economy such as the American one, which is driven by consumer spending. When spending declines, so does the economy. When the economy declines, the budget deficit rises.

This is especially the case when an economy is weak and already in decline. A declining economy means less sales, less employment, less tax revenues. This works against the effort to close the federal budget deficit with austerity measures. Instead of strengthening the economy, the austerity measures weaken it further. To cut unemployment benefits and food stamps when unemployment is high or rising would be to provoke social and political instability.

America: The Food Stamp Nation

Bread Lines of the Modern Era– The Great Recession
IF all EBT recipients shopped at only Walmart Super Centers for ALL their SNAP benefits, then this is how the Bread Line would look each month– 14,588 people.
There are 3051 Walmart Super Centers in USA and 44,510,598 participants in SNAP (2011), making the average SNAP line at each Walmart at 14,588 people.
The Modern Era’s Bread Lines are not visible because the business is handled discreetly through EBT Cards.
According to this Food Stamps report pg 16-17, Walmart receives half of all SNAP dollars in Oklahoma.
Walmart is the largest retailer in America.
Short Facts:
47% of Food Stamp participants are children.
78.6% of all SNAP participants are in metropolitan areas.
93.2% of all SNAP benefits go to US citizens.
Only 4% are self-employed.
(CLICK IMAGE FOR SOURCEPAGE)

Some economists, such as Robert Barro at Harvard University, claim that stimulative measures, the opposite of austerity, don’t work, because consumers anticipate the higher taxes that will be needed to cover the budget deficit and, therefore, reduce their spending and increase their saving in order to be able to pay the anticipated higher taxes.

In other words, the Keynesian effort to stimulate spending causes consumers to reduce their spending. I don’t know of any empirical evidence for this claim.

Regardless, the situation on the ground at the present time is that for the majority of people, incomes are stretched to the limit and beyond. Many cannot pay their bills, their mortgages, their car payments, their student loans. They are drowning in debt, and there is nothing that they can cut back in order to save money with which to pay higher taxes.

Many commentators are complaining that Congress will refuse to face the difficult issues and kick the can down the road, leaving the fiscal cliff looming. This would probably be the best outcome. As the fiscal cliff is a result, not a cause, to focus on the fiscal cliff is to focus on the symptoms rather than the disease.

The US economy has two serious diseases, and neither one is too much welfare spending.

One disease is the offshoring of US middle class jobs, both manufacturing jobs and professional service jobs such as engineering, research, design, and information technology, jobs that formerly were filled by US university graduates, but which today are sent abroad or are filled by foreigners brought in on H-1B work visas at two-thirds of the salary.

The other disease is the deregulation, especially the financial deregulation, that caused the ongoing financial crisis and created banks too big to fail, which has prevented capitalism from working and closing down insolvent corporations.

The Federal Reserve’s policy is focused on saving the banks, not on saving the economy. The Federal Reserve is purchasing not only new Treasury bonds issued to finance the more than one trillion dollar annual federal deficit but also the banks’ underwater financial instruments, taking them off the banks’ books and putting them on the Federal Reserve’s books.

Normally, debt monetization of this amount results in rising inflation, but the money that the Federal Reserve is creating in its attempt to manage the public debt and the banks’ private debt is hung up in the banking system as excess reserves and is not finding its way into the economy. The banks are too busted to lend, and consumers are too indebted to borrow.

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However, the debt monetization poses a second threat that is capable of biting the US economy and consumer living standards very hard. Foreign central banks, foreign investors in US stocks and financial instruments, and Americans themselves observing the Federal Reserve’s continuous monetization of US debt cannot avoid concern about the dollar’s value as the supply of ever more dollars continues to pour out of the Federal Reserve.

Already there is evidence of central banks and individuals moving out of dollars into gold and silver bullion and into other currencies of countries that are not hemorrhaging debt and money. According to John Williams of Shadowstats.com, the US dollar as a percentage of global holdings of reserve assets has declined from 36.6% in 2006 to 28.7% in 2012. Gold has increased from 10.5% to 12.8% and other foreign currencies except the euro increased from 38.4% to 44.4%.

Russia, China, Brazil, India, and South Africa intend to conduct trade among themselves in their own currencies without use of the dollar as reserve currency. The EU countries conduct their trade with one another in euros, and although not reported in the US media, Asian countries are discussing a new common currency for trade among themselves.

The world is abandoning the use of the dollar to settle international accounts, and the demand for dollars is falling as the Federal Reserve increases the supply of dollars.

This means that the price of the dollar is threatened.

Concern over the dollar means concern over dollar-denominated financial instruments such as stocks and bonds. The Chinese hold some $2 trillion in US financial instruments. The Japanese hold about $1 trillion in US Treasuries. The Saudis and the oil emirates also hold large quantities of US dollar financial instruments. At some point the move away from the dollar also means a move away from US financial instruments. The dumping of US stocks and bonds would destabilize US financial markets and wipe out the remainder of US wealth.

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As I have previously written, the Federal Reserve can create new money with which to purchase the dumped financial instruments, thus maintaining their prices. But the Federal Reserve cannot print gold or foreign currencies with which to buy up the dollars that foreigners are paid for their US stocks and bonds. When the dollars in turn are dumped, the exchange value of the dollar will collapse, and US inflation will explode.

The onset of hyperinflation can be as sudden as the collapse of a currency’s exchange value.

The real crisis facing the US is the impending collapse of the US dollar’s foreign exchange value. The US dollar’s value in relation to silver and gold has already collapsed. In the past ten years, gold’s price in US dollars has increased from $250 per ounce to $1,750 per ounce, an increase of $1,500. Silver’s price has risen from $4 per ounce to $34 per ounce. These price rises are not due to a sudden scarcity of gold and silver, but to a flight from the dollar into the two forms of historical money that cannot be created with the printing press.

The price of oil has risen from $20 a barrel ten years ago to as high as $120 per barrel earlier this year and currently $90 a barrel. This price rise has come about despite a weak world economy and without any supply restrictions other than those caused by the attempted US occupation of Iraq, the Western assault on Libya, and the self-harming Western sanctions on Iran, impacts most likely offset by the Saudis, still Washington’s faithful puppet, a country that pumps out its precious life fluid in order to save the West from its own mistakes. The moronic neoconservatives wish to overthrow the Saudi Arabian government, but what more faithful servant has Washington ever had than the Saudi royal house?

What can be done? For a number of years I have pointed out that the problem is the loss of US employment, consumer income, GDP, and tax base to offshoring. The solution is to reverse the outward flow of jobs and to bring them back to the US. This can be done, as Ralph Gomory has made clear, by taxing corporations according to where they add value to their product. If the value is added abroad, corporations would have a high tax rate. If they add value domestically with US labor, they would face a low tax rate. The difference in tax rates can be calculated to offset the benefit of the lower cost of foreign labor.

As all offshored production that is brought to the US to be marketed to Americans counts as imports, relocating the production in the US would decrease the trade deficit, thus strengthening belief in the dollar. The increase in US consumer incomes would raise tax revenues, thus lowering the budget deficit. It is a win-win solution.

The second part to the solution is to end the expensive unfunded wars that have ruined the federal budget for the past 11 years as well as future budgets due to the cost of veterans’ hospital care and benefits. According to ABC World News, “In the decade since the Sept. 11, 2001 terrorist attacks on the World Trade Center, 2,333,972 American military personnel have been deployed to Iraq, Afghanistan or both, as of Aug. 30, 2011 [more than a year ago].” These 2.3 million veterans have rights to various unfunded benefits including life-long health care. Already, according to ABC, 711,986 have used Veterans Administration health care between fiscal year 2002 and the third-quarter of fiscal year 2011. http://abcnews.go.com/Politics/us-veterans-numbers/story?id=14928136#1

The Republicans are determined to continue the gratuitous wars and to make the 99 percent pay for the neoconservatives’ Wars of Hegemony while protecting the 1 percent from tax increases.

The Democrats are little different.

No one in the White House and no more than one dozen members of the 535 member US Congress represents the American people. This is the reason that despite obvious remedies nothing can be done. America is going to crash big time.

And the rest of the world will be thankful. America along with Israel is the world’s most hated country. Don’t expect any foreign bailouts of the failed “superpower.”

 

SOURCE:
http://www.paulcraigroberts.org/2012/12/01/our-collapsing-economy-and-currency/

Russia will back Egyptian efforts to end Israeli aggression: Putin

Russian President Vladimir Putin says his country will back Egyptian efforts to put an end to the Israeli aggression in the besieged Gaza Strip.

 


In a telephone conversation with Egyptian President Mohamed Morsi on Friday, Putin said Russia planned to support Cairo’s efforts directed at normalizing the situation in the Palestinian territory, the Kremlin said in a statement.

The remarks come after Egypt’s Prime Minister Hisham Qandil visited the Gaza Strip on Friday, where he urged the world leaders to stop Tel Aviv’s attacks.

Qandil promised to intensify Egypt’s efforts to “stop this aggression and achieve a lasting truce.”

On Thursday, President Morsi also condemned the Israeli aggression as “unacceptable” and warned it could lead to instability in the region.

Some 25 people have been killed and more than 250 others injured in the new wave of attacks since November 14.

The Israeli regime frequently carries out airstrikes and other attacks on the Gaza Strip, saying the acts of aggression are being conducted for defensive purposes. However, in violation of international law, disproportionate force is always used and civilians are often killed or injured.

MAM/HMV

 

SOURCE:
http://www.presstv.ir/detail/2012/11/16/272661/russia-to-back-egypt-against-israel-putin/

Clashes over Internet rules to mark Dubai meeting

“More than 900 proposed regulatory changes have been proposed, but details have not been made public. Broad consensus is needed to adopt any items — the first major review of the U.N.’s telecommunications protocols since 1988, well before the Internet age.”

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By BRIAN MURPHY
— Dec. 3 8:50 AM EST

DUBAI, United Arab Emirates (AP) — The U.N.’s top telecommunications overseer sought Monday to quell worries about greater Internet controls emerging from global talks in Dubai, but any attempts for major Web regulations will likely face stiff opposition from groups led by a high-powered U.S. delegation.

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The 11-day conference, seeking to update codes last reviewed when the Web was virtually unknown, highlights the fundamental shift from tightly managed telecommunications networks to the borderless sweep of the Internet.

Some at the Dubai conference, including a 123-member U.S. delegation with envoys from tech giants such as Google Inc. and Microsoft Corp., worry that any new U.N. oversight could be used by nations such as China and Russia to justify further tightening of Web blocks and monitoring.

“Love the free and open Internet? Tell the world’s governments to keep it that way,” said a message on the main search page of Google.com with a link for comments directed to the Dubai conference, which opened Monday.

The agenda for the gathering of more than 1,900 participants from 193 nations covers possible new rules for a broad range of services such as the Internet, mobile roaming fees and satellite and fixed-line communications. Questions include how much sway the U.N. can exert over efforts such as battling cyber-crimes and expanding the Internet into developing nations.

The secretary-general of the U.N. International Telecommunications Union, Hamadoun Toure, said that accusations that the meeting could limit Web freedoms are “completely untrue” and predicted only “light-touch” regulations.

“Many countries will come to reaffirm their desire to see freedom of expression embedded in this conference,” he told reporters.

But the head of the American contingent, Ambassador Terry Kramer, said the U.S. would propose taking all Internet-related discussions off the table and concentrating on already regulated services such as phone networks.

“What we don’t want to do is bring in all the private networks, the Internet networks, the government networks, etc.,” he told The Associated Press. “That opens the door to censorship.”

The outcome of the Dubai gathering is far from certain.

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More than 900 proposed regulatory changes have been proposed, but details have not been made public. Broad consensus is needed to adopt any items — the first major review of the U.N.’s telecommunications protocols since 1988, well before the Internet age.

The gathering is also powerless to force nations to change their Internet policies, such as China’s notorious “Great Firewall” and widespread blackouts of political opposition sites in places including Iran and the Gulf Arab states. Last week, Syria’s Internet and telephone services disappeared for two days during some of the worst fighting in months to hit the capital, Damascus.

Kramer told reporters last week in Washington that all efforts should be made to avoid a “Balkanization” of the Internet in which each country would impose its own rules and standards that could disrupt the flow of commerce and information.

“That opens the door … to content censorship,” he said.

The International Trade Union Confederation, representing labor groups in more than 150 countries, claimed a bloc that includes China, Russia and several Middle East nations seeks to “pave the way for future restrictions on both Internet content or its users.”

“It is clear that some governments have an interest in changing the rules and regulations of the Internet,” the confederation said in statement Monday.

Another battle that will likely take place in Dubai is over European-backed suggestions to change the pay structure of the Web to force content providers — such as Google, Facebook Inc. and others — to kick in an extra fee to reach users across borders.

“Potentially, the content developers — they could be Googles, they could be universities — would end up being charged potentially to have traffic sent abroad,” said Kramer in Dubai. “Either way, you slow down Internet traffic and you actually exacerbate the digital divide, the income divide, because you have a lot of people who are accessing things for free.”

Advocates of the changes say the money raised could pay to expand broadband infrastructures in developing countries.

Toure said he hoped for a “landmark” accord on trying to bring broadband Internet to developing countries. “The Internet remains out of reach for two-thirds of world’s people,” said Toure, who is from Mali.

The U.N. telecommunications agency dates back to 1865, when the telegraph revolutionized the speed of information. Over the decades, it has expanded to include telephone, satellite and other advances in communications.

SOURCE:

State Department Spent 4.5 Million for Embassy Art, Had No Money for Benghazi Security

December 2, 2012 By Daniel Greenfield

Remember Benghazi only happened because the State Department had no money for security. And the military had no money for planes. And Obama had no money for his campaign and had to rush to Vegas to fundraise with Beyonce.

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Things that the State Department did have money for? Mosque renovations, promoting environmental awareness in Baghdad, and 4.5 million for Art in Embassies.

The New York Times reported in 2009 that Art in Embassies spends about $4.5 million a year for permanent art acquisitions; chief curator Virginia Shore said at the time that artists and dealers support the program via favorable pricing; for the embassy in Beijing, an outlay of $800,000 yielded works with an appraised value of $30 million.

So… maybe we can sell some of that as a profit and pay for bodyguards. Or we could just hand out medals to the artists in exchange for favorable pricing. Yes, let’s do that.

On Friday, Secretary of State Hillary Clinton will give the U.S. State Department Medal of Arts to five artists who have shown “an enduring commitment” to the effort: Jeff Koons, Cai Guo-Qiang, Shahazia Sikander, Kiki Smith and Carrie Mae Weems.

It’s the first time the award has been given – and its future will likely depend on whether Clinton’s successors want to make it a tradition.

Let’s make it a tradition. Even if we have to strip security from all our embassies in war zones. This stuff, unlike human life, is really important.

There is of course a certain irony in that Clinton ordered the arrest and imprisonment of the Mohammed filmmaker, but is now honoring “controversial” artists who may offend Christianity, but don’t offend Islam.

Like every regime, the Obama regime has artists that it honors and artists that it imprisons. And the artists that it hands out medals too, like their Soviet counterparts, are delegitimized by their placement as the pet artists of a repressive regime.

Kiki Smith, one of the artists honored by Secretary of State Clinton, offended Catholics with pieces such as, “Virgin Mary,” a female figure stripped of her skin, with her tissues and muscles exposed. Another exhibit features Mary Magdalene growing fur on her body.

If Kiki Smith had depicted Mohammed that way, she would be in hiding and maybe in prison, depending on how many embassies Muslims burned afterward. But since she depicted a religion that Obama and his cronies hate, she’s getting her art placed in embassies and getting a medal instead. That is how things work in repressive regimes.

And just as a reminder that this isn’t art, it’s regime propaganda, here’s one of the “paintings” from the Art in Embassies exhibit in Stockholm. “Paul Rusconi, Barack Obama, 2008.” Sold for $20,000. You can see it up above. The new symbol of America. But I offer my own “artistic” take on Rusconi’s piece. One that might be better representative of what America under Obama truly stands for.

 

SOURCE:
http://frontpagemag.com/2012/dgreenfield/state-department-spent-4-5-million-for-embassy-art-had-no-money-for-benghazi-security/#.ULxDReZGDuE.email

Goodbye Petrodollar, Hello Agri-Dollar?

Submitted by Tyler Durden on 11/24/2012 09:50 -0500

When it comes to firmly established, currency-for-commodity, self reinforcing systems in the past century of human history, nothing comes close to the petrodollar: it is safe to say that few things have shaped the face of the modern world and defined the reserve currency as much as the $2.3 trillion/year energy exports denominated exclusively in US dollars (although recent confirmations of previously inconceivable exclusions such as Turkey’s oil-for-gold trade with Iran are increasingly putting the petrodollar status quo under the microscope). But that is the past, and with rapid changes in modern technology and extraction efficiency, leading to such offshoots are renewable and shale, the days of the petrodollar “as defined” may be over. So what new trade regime may be the dominant one for the next several decades? According to some, for now mostly overheard whispering in the hallways, the primary commodity imbalance that will shape the face of global trade in the coming years is not that of energy, but that of food, driven by constantly rising food prices due to a fragmented supply-side unable to catch up with increasing demand, one in which China will play a dominant role but not due to its commodity extraction and/or processing supremacy, but the contrary: due to its soaring deficit for agricultural products, and in which such legacy trade deficit culprits as the US will suddenly enjoy a huge advantage in both trade and geopolitical terms. Coming soon: the agri-dollar.

But first, some perspectives from Karim Bitar on CEO of Genus, on what is sure to be the biggest marginal player of the agri-dollar revolution, China, whose attempt to redefine itself as a consumption-driven superpower will fail epically and very violently, unless it is able to find a way to feed its massive, rising middle class in a cheap and efficient manner. But before that even, take note of the following chart which takes all you know about global trade surplus and deficit when narrowed down to what may soon be that all important agricultural (hence food) category, and flips it around on its head.

Karim Bitar on China:

Structurally, China is at a huge disadvantage as it accounts for 20% of the world’s population, but only 7% of arable land. Compare that with Brazil which has the reverse of those ratios. What that does for a country like China is to incentivise the adoption of technification. Let’s look at their porcine market, which represents 50% of global production and consumption. In China, to slaughter roughly 600 mn pigs per year, which is about six times the demand in the US, they have a breeding herd of about 50 mn animals. In the US, the comparable number is only about 6 mn so there is a huge productivity lag.

Owing to its structural disadvantages, China is much more focused on increasing efficiency. For that, it needs to accelerate technification. So, we’re seeing a whole series of government incentives at a national level, a provincial level and a local level, focusing on the need to move toward integrated pork production because that’s a key way to optimise total economics, both in terms of pig production, slaughtering, processing and also actually taking the pork out into the marketplace.

The Chinese government is important as a customer to us because of its clarity of vision on food security. It has seen the Arab Spring, and it is cognisant of the strong socio-political implications of higher food prices. Pork prices could account for about 25% of the CPI, so it knows it can be a major issue. It’s because of all these pressures, that China is more focused on responding to the food challenge. It’s a sort of a burning platform there.

…Take milk production in China and India. China is basically trying to leapfrog and avoid small-scale farming by adopting a US model. In the US, you tend to have very large herds. Today about 30% of US milk production is from herds of 2,000 plus, and we expect that to reach 60% within the next five years. Today in China, there are already several hundred dairy herds of over 1,000. However in India, there’ll be less than 50. The average dairy herd size is closer to five, so it’s very fragmented. So the reality is that a place like China, because of government policies, subsidies and a much more demanding focused approach to becoming self-sufficient, has a much greater ability to respond to a supply challenge rapidly.

The problem for China, and to a lesser extent India, however one defines it, is that it will need increasingly more food, processed with ever greater efficiency for the current conservative regime to be able to preserve the status quo, all else equal. And for a suddenly very food trade deficit-vulnerable China, it means that the biggest winners may be Brazil, the US and Canada. Oh and Africa. The only question is how China will adapt in a new world in which it finds itself in an odd position: a competitive trade disadvantage, especially its primary nemesis: the USA.

So for those curious how a world may look like under the Agri-dollar, read on for some timely views from GS’ Hugo Scott-Gall.

Meaty problems, simmering solutions

What potential impacts could a further re-pricing of food have on the world? Why might food re-price? Because demand is set to rise faster than supply can respond. The forces pushing demand higher are well known, population growth, urbanisation and changing middle class size and tastes. In terms of economic evolution, the food price surge comes after the energy price surge, as industrialisation segues into consumption growth (high-income countries consume about 30% more calories than low income nations, but the difference in value is about eight times). Here, we are keenly interested in how the supply side can respond, both in terms of where and how solutions are found, and who is supplying them. We are drawn towards an analogy with the energy industry here: the energy industry has invested heavily in efficiency, and through innovation, clusters of excellence, and access to capital has created solutions, the most obvious of which are renewable energy and shale. The key question for us is, can and will something similar happen in food?

It’s hard to argue that the ingredients that sparked energy’s supply-side response are all present in the food supply chain. In food, there’s huge fragmentation, a lack of coordination, shortages of capital in support industries (infrastructure) and only pockets of isolated innovation. We suspect that the supply-side response may well remain uncoordinated and slower than in other industries. But things are changing. Those who disagree with Thomas Malthus will always back human ingenuity. As well as looking at where the innovators in the supply chain are (from page 10), and where there are sustainably high returns through IP (e.g., seeds, enzymes etc.), we need to think about the macro and micro economic impacts of higher food prices, and soberingly, the geo-political ones.

Slimming down

Could the demand destruction that higher energy prices have precipitated occur in food? There are some important differences between the two that make resolving food imbalances tougher. Food consumption is very fragmented and there is less scope for substitution.

Changing eating habits is much harder than changing the fuel burnt for power. And, ultimately, food spend is less discretionary that energy, i.e., the scope for efficient consumption is more limited and consumers will not (and cannot) voluntarily delay consumption, let alone structurally reduce it. This means that higher food prices, especially in economies where food is a greater portion of household spending, will lead to either lower consumption of discretionary items or a reduced ability to service debt (with consequent effects on asset prices). When oil prices spiked in the late 1970s, US consumers spent c.9% of their income on energy vs. an average of 7% over the previous decade. And yet, the total savings rate rose by c.2% as they overcompensated on spending cuts on other items. 2007-09 saw a similar phenomenon too. Even the most cursory browse through history shows that high food costs can act as a political tinderbox (so too high youth unemployment), and we believe there is a degree of overconfidence with regard to the economic impact of food prices in the West: food costs relative to incomes may look manageable, but when there is no buffer (i.e., a minimal savings rate) then there are problems. Food spend as a percentage of total household consumption expenditure is a relatively benign 14% in the US, versus c.20% for most major European nations and Japan. This rises to c.40% for China and 45% for India. Of course, as wages rise, the proportion of food within total consumption expenditure falls, but that is only after consumption hits a ceiling. Currently, India and China consume about 2,300 and 2,900 calories per capita per day, compared to a DM average of about 3,400. If the two countries eat like the West, then food production must rise by 12%. And if the rest of the world catches up to these levels then that number is north of 50%.

The scramble for Africa’s eggs

In terms of ownership of resources, food, like energy, can be broken into haves and have-nots. While there are countries that have been successful without resources, it is quite clear that inheriting advantages (in this case good soil, climate and water) makes life easier. But that, of course, is only half the battle; what is also required is organisation, capital, education and collaboration to make it happen. Take Africa. It has 60% of the world’s uncultivated land, enviable demographics and lots of water (though not evenly distributed). Basic infrastructure, consolidation of agricultural land and minimal use of fertilisers and crop protection could do wonders for agricultural output in the region. But that’s easier said than done. Several African economies also need better access to information, education, property rights and access to markets and capital. Put another way, it needs better institutions. If Africa does deliver over the coming decades, rising food prices will alter the economics of investing in the region. The next scramble for Africa should be about food (while it is about hard commodities now and in the late 19th century it was about empire size). Fertiliser consumption has a diminishing incremental impact on yields, but Africa (along with several developing economies elsewhere) is far from touching that ceiling. Currently, Africa accounts for just 3% of global agricultural trade, with South Africa and Côte d’Ivoire together accounting for a third of the entire continent’s exports. But if the world wants to feed itself then it needs Africa to emerge as an agricultural powerhouse.

Higher up the production curve is China, which has been industrialising its agriculture as it seeks to move towards self sufficiency. Power consumed by agricultural machinery has almost doubled over the last decade, while the number of tractors per household has tripled, driving per hectare output up by an average of more than 20% over the same period.

Even so, in just the last 10 years China has gone from surplus to deficit in several meat, vegetable and cereal categories. So a lot more needs to be done, and a shortage of water could also prove to be an impediment, especially in some of its remote areas.

The power of the pampas

With significant surpluses in soybeans, maize, meat and oilseeds, Brazil and Argentina have led the Latin American continent in terms of food trade. Current surpluses are 6x and 3x 2000 levels, versus only a 30% increase in the previous decade, and are rising. A key impediment to boosting exports is infrastructure. Food has to travel a long way just to reach the port, and then further still to reach other markets. Forty days is possibly acceptable for iron ore to reach China on a ship from Brazil, but that would prevent several perishable food items from being exported. And hence, solution providers in terms of durability, packaging, refrigeration and processing will be in demand. Also, while you could attribute a lot of the agricultural success of LatAm economies to good conditions, they have also benefitted from the adoption of agricultural innovation. For instance, more than a third of crops planted in the region are as seeds that are genetically modified, versus more than 45% in the US and about 12% in Asia. Genetically modified crops are not new. They provide solutions to some of the most frequent constraints on agricultural yields (resistance to environmental challenges including drought and more efficient absorption of soil nutrients, fertilisers and water) or add value by enhancing nutrient composition or the shelf life of the crop. And while the adoption of GM crops and seeds is far from wholehearted, particularly in Europe, it’s most certainly a key part of the solution in economies that are set to face a more severe food shortage.

The last mango in Paris?

Europe’s deficit/surplus makes for interesting reading. Seventeen of the 27 EU countries face a food trade deficit, and yet, the EU overall recorded a surplus (barely) in 2010 for only the second time in the last 50 years (see chart). Broken down further, the UK is the largest food importer, followed by Germany and Italy, while the Netherlands and France lead exports thanks to their very large processing industries. If Europe’s future is one of relative economic decline, then reduced purchasing power when bidding for scarce food resources is an unappetising prospect. Therefore, it needs all
the innovative solutions it can muster, or import substitution will have to increase. It’s important to note that being in overall surplus or deficit can mask variety at the category level, i.e., Europe is a net importer of beef, fruit & vegetables, and corn, while its exports are helped by alcohol and wine specifically. Japan, in particular, is very challenged. It is the only country in the preceding table to show a deficit in every single food category.

We conclude our trip around the world in North America. Large-scale production, access to markets, a home to innovation
and favourable regulation has meant that the US (and Canada) continues to dominate some of the key agricultural resources such as soybeans, corn, fodder, wheat and oilseeds. Put this self sufficiency together with the medium-term potential for energy self sufficiency and relatively good demographics (better than China), and a rosier prognosis for the US, versus the rest of the Western world and parts of Asia, begins to fall into place.

Agri-dollars on the rise

Before we conclude, we need to devote a few lines to the geo-political and macro economic consequences of higher food prices. It’s likely that countries will act increasingly strategically to secure food supply, and that protections (e.g., high export tariffs) may well rise. It is also likely that there are special bi-lateral deals to access stable and secure food supply.

This could obviously damage the integrity of the WTO-sponsored system. Another consequence might be the emergence of agri-dollars, in the same way that petro-dollars emerged in the 1970s. This may seem far fetched (the value of the world’s energy exports is US$2.3 tn compared to US$1.08 tn for agriculture) but it’s important to think through the consequences. The big exporters, especially those with the scope to grow their output, may well have sustainable surpluses that can be reinvested into their economies (or extracted by a narrow part of society). Similarly, the consequence of being a net importer will be an effective tax on consumption: disposable income in the US would jump if oil was US$25/bbl.

As we have said, we would expect the big gainers of a meaningful rise in food prices in real terms to be Brazil, the US and Canada, while Japan, South Korea and the UK would face challenges. The top chart is important: look how China’s surplus has turned to deficit. What will happen if the Chinese middle class swells as it is expected to? And that’s the rub; what we have been used to in terms of food’s importance is set to change. How food moves around the world is likely to change, and the flow of currency around the world will also likely be impacted.

 

SOURCE:
http://www.zerohedge.com/news/2012-11-24/goodbye-petrodollar-hello-agri-dollar

Russia urges united action against Israeli aggression

Moscow has called on the Arab League and the Middle East Quartet comprising Russia, the European Union (EU), UN, and US, to work together to end frequent Israeli aggressions against the Palestinians.

“The Quartet needs…to work together with the Arab League representatives and work out solutions together…to restart Israeli-Palestinian talks,” Russian Foreign Minister Sergei Lavrov said on Friday.

Lavrov made the remarks after at least one Palestinian was killed and seven others were injured by Israeli fire in the southern Gaza Strip despite an Egypt-mediated ceasefire agreement between the two sides on Wednesday.

Over 160 Palestinians, including women and children, were killed and about 1,200 others were injured in the Israeli attacks on Gaza that were carried out during the eight-day period starting November 14.

In retaliation, the Palestinian resistance fighters fired rockets and missiles into Israeli cities, killing at least five Israelis.

The Russian minister had also on November 15 lashed out at the Middle East Quartet for its failure to establish peace in the region.

Israel frequently carries out airstrikes and other attacks on the Gaza Strip, saying the acts of aggression are being conducted for defensive purposes. However, in violation of international law, disproportionate force is always used and civilians are often killed and injured.

The attacks rage on while Israel keeps up its crippling blockade on Gaza, which it imposed on the enclave in 2007.

MAM/HMV/SS

SOURCE:
http://www.presstv.ir/detail/2012/11/23/274150/russia-urges-united-action-against-israel/

After nearly 200 years, Mexico may make the name official

SPOILER:

Have ye ever wondered why is the country “United States of America” called so?
Have ye ever wondered what does exactly “Washington DISTRICT OF COLUMBIA” mean – and how it DOES work?

So please, take yer time and search it. I’ll comment my thoughts about it at a later time.

Ah, and while searching: don’t forget that ye con configure the timescope of yer research, so that ye can find older sources which later were ‘remasterised’. For a clean search, try duckduckgo.com.

-x-x-x-x-x-x-x-x-x-x-

By Rafael Romo, Senior Latin American Affairs Editor
November 23, 2012 — Updated 1652 GMT (0052 HKT)

(CNN) — It’s the one fact about Mexico that you probably didn’t know. The country’s name is not really Mexico, at least not officially. After gaining independence from Spain in 1821, Mexico officially became the “United Mexican States.”

The American independence movement had inspired Mexican leaders of that era and since Mexico, in fact, also was a territory composed of states, the name stuck and became official in 1824.

But the reality is the official name is used only by Mexican officials who deal with diplomatic protocol and official documents pertaining to international relations. For the rest of Mexicans — and the world — the country is simply known as Mexico.

That’s why outgoing Mexican President Felipe Calderon on Thursday sent to the Mexican Congress a piece of legislation to change the country’s name officially to simply Mexico.

Calderon, a conservative president better known for his war on drug cartels and organized crime, is literally in his last days in office. Enrique Pena Nieto, who was elected in July, takes office on December 1.

It’s still too early to know if the new Mexican Congress will quickly act on Calderon’s bill or tackle other more pressing matters like security and the economy.

In announcing his decision to propose officially changing his country’s name, Calderon said Thursday the name United Mexican States was originally taken because back in 1824 the United States of America was an example of democracy and liberty for the new independent nations in the Americas.

“It’s time that we Mexicans retake the beauty and simplicity of our motherland’s name: Mexico. (It’s) a name that we use when chanting or singing, a name that identifies us throughout the world and that makes us proud,” Calderon said.

“Mexico” is a word first used by the Aztecs in their original nahuatl language. The indigenous tribe founded a city called Tenochtitlan in the valley now occupied by the modern Mexico City. That original city was conquered by the Spanish in 1521.

Mexico gained its independence from Spain in 1821. In Spanish, Mexicans pronounce the “x” in Mexico as a hard “h.”

SOURCE: http://edition.cnn.com/2012/11/22/world/americas/mexico-name-change/index.html

Reflexions – I

The contemporary individual is led to believe that it is endowed with the freedom of its own expressiveness while being sociable among many other beings of Nature – but is blinded by the glare of the constant, attractively shiny trails that consumerism of commercial society lays upon its natural environment: the TV; the radio; the magazine; the newspaper.

The word. Religion.

It is gradually deprived, in fact, of its own freedom to exercise and employ as much as the motor and mental skills bequeathed to it since before its birth. With this collective blindness, winged rampant silence resonates above and below the shroud of the invalid who stood behind before the end of this rat race.

The Palestinians, the ‘rebels’; soldiers. You and me. We are all innocent angels in a war in which you and I – and we all – subsist. And, worse, we finance.

Every deposit, every service, every transaction – and more: even at the time which your money, that thing made by unbacked paper used to trade for objects from the material or ‘divine’ realms, is supposedly untouched – it is charged, taxed and insured by the mercantile system: either by the bureaucracy or by the supposedly free enterprise – which, in fact, is nothing more than huge, leviathanic transoceanic plutocracy conglomerates of bellicose bureaucrats, parasitary privatizers and monarchical masons.

And who would benefit from the whole process of the mercantile profit system – and/or its total collapse? Well, the ones that for so long Fed this very system. We’re talking about generations of people unrelated to you that, in turn, not only created all possible forms of interaction inbetween the natural world and you – both now increasingly artificial – but also remould and reshape the processes of social interactions throughout the Planet all long the eons – and worse, subverting It by validating all the supposed merits and pretenses of the System using thus the Academy; the Sciences; the Philosophies so that the mercantile system processes never break definitely.

Each of us have a brief idea of at least some of what I wrote, and I have faith and hope that every day, across the globe, people actually reflect upon all that – gradually stripping off partisan, religious, political , sectarian, extremist labels and -isms.

You people need to start waking up. This is but even much more serious – and infinitely greater than what’s demonstrated here. This text is just a draft of an idea for a post, I’ll improve it alongtime.