Vacations, Ignorance and Bliss

Aaaah yes, summertime. The endless repeats on TV and the news as the sheeple are lulled into the false sense of security that all is well in the world. Nothing new ever happens until the new school year starts up again and along with it a nagging need for distraction. Returning from my yearly summertime hiatus away from these fine internets, I'm pleased to report that the status quo has been maintained once again, making it possible for us to enjoy our vacation time. Having landed on my feet again here in sunny Spain, browsing the news from the past month is eerily similar to leafing through the TV guide lineup of summer reruns making it so much easier to understand the circular nature of news. A top ten for y'all:

1) End of the financial crisis. That's right it's over. At least in Canada where the governor of the Bank of Canada declared, "We're on track for the recovery both in Canada and globally". The Canadians are looking at a 1.3% rise in GDP this quarter. It's hard not to agree when the reason we got into that mess were the actions of banks and non-bank (at the time) entities such as Goldman Sachs. All must be good when they declare profits of $3.44 billion this quarter, while others such as HSBC and Barclays pull in over £6 billion in six months. Aaah, feel so much better again. No weapons of mass destruction here. And the bonuses are because bank employees are like footballers and movie stars. What's that you say? Nothing has changed structurally to make the problem go away, and in fact conditioned have improved for those same institutions to make even more money because they have less competition and more government leeway to do crazy stuff like this? And there not even sorry? My dad says housing prices are going up again on the west coast, so all must be ok.

2) The death of US health care reform, sold as the only hope to pay for the bailout of the above crisis. Well, the parallel to the tactic used in the 90's to derail the last big push is far too obvious, the disinformation too painful. Really, many Americans equate a socialized health care system with eugenics.

3) The Clinton-era flashback above leads straight to North Korea. Kim Jong-Il is crazy! No?? Again, sorry, Really? Is it necessary to make the news so transparently circular? Bill coulda bombed them in '93, didn't, now he negotiates for the release of reporters. Ah yes, the old rewarding children for bad behaviour gambit. Lucky America likes bombing other countries.

4) The world is still safer due to western help in Afghanistan. Did I say change the channel? This rerun is boring. Well, it's not as big as Iraq anymore but while the new NATO boss pushes for more European help most Americans - oops, there I go again, US bashing - of the world are still blissfully unaware of the ease with which this could have been avoided. Books not bombs. Everyone should just head up to Mongolia to check this out to remember what war and hegemony used to be all about

5) Mongolia to the Chinese. What's that, Chinese are being executed. Is it Tiananmen? No, Uighurs, well away from Beijing. They're Muslims and not as pretty as those Iranian girls, so who really cares I guess?!

6) Political unrest in Latin America. Honduras this time. Yes, I know, America once again in a no-win situation. Do something, don't. Hmmm, how did they get there?

7) The G8 is still in charge of guiding the world towards a better future (?!), with or without Italy apparently.

8) Myanmar, Aung San Su Kyi on trial. Probably seems old hat even to her, having been in jail off and on for over 20 years now. The Nobel Peace Prize laureate in 1991, after having won elections the previous year for which the military threw her in jail, is this time accused of having a man swim out to the island where she was held to warn her that "her life was in danger". In a country that moves their capital to avoid scutiny, anything can happen. A most bizarro world we live in, the junta can just keep her in jail indefinitely, until she becomes "Nelson Mandela figure" at which time, well, something will happen. What the?

9) Planes still crash, celebrities die. Look it up. It happens. Oh yeah, plus hot weather plus no water equals fire! Whether you're in Spain, BC, California or Australia. Wait a minute, it could be anywhere! I'm I the only one to notice the pattern here, and the fact (yes, fact) that these events are not only getting more common, but also more intense. Heck, even Camrose, just south of my home town of Edmonton, got into the news due to freak storms trying to kill country music fans. A small increase in the intensity of common storms and POW!

10) Wacked out nationalists like to blow people up. Back to back ETA bombs to celebrate 50 years of killing innocent people. OK, so I like Spain, but really, why the regional nationalism? It's really messed up. Right up there with religion and right wing fanatics in my book of things I dislike. I love the Basques and Patxaran, spent a lot of time up there, they are a different people, but killing people never solved anything. One could argue that they have too much autonomy, or too little (as in their own country). The merry-go-round will keep going until we run out of tickets. Replace Basque with Palestinian or Kurd minus the rights and you get the circular, interchangeable picture.

I know, I know, I've missed a bunch. Life, the news is a kaleidoscope of events, all twirling to form an image one snap shot at a time, one vantage point at a time. But really, do I care that there are cops in Massachusetts who still hate black guys but love beer? That the last communists lost out in Moldova? It was just twitter practice for the non election in Iran. And yes, there's a lot more to say about the death spiral in American politics, but who cares anymore, it'll either be Palin or Obama in 2012! So what if Saakashvili could still light a fuse under Russia or if there are Russian subs sitting off New York? Makes one long for the days when technology would just wipe us all out. Or, it makes one look forward to Labour Day, fall, autumn when the real fun starts. Global food riots, woohooo!

BRIC-A-BRAC

Sometimes it's tough to take the media filter glasses off. We live in a world where all the important information is brought to us thanks to these internets, pity the fools that have to rely on the idiot box. So how is it that the most obvious of patterns are impossible to discern? The collage painted by the press should allow us to see the world how it really is, yet we miss the most obvious. Self-fulfilling prophecies such as last week's BRIC meeting spring to mind as the media simply brushed over the fact that the 4 nations that make up 43% of the world's population met last week to try to chart a mutually beneficial path through the future. The G8 will meet next month and there will be wall to wall reporting yet a group formed by the prediction of a Wall Street analyst gets swept under the carpet.

Reuters declares: Much-Trumpeted BRIC Summit Ends Quietly. "BRIC" is an acronym for Brazil, Russia, India and China, the world's four major developing countries. Jim O'Neill, global head of economic research at Goldman Sachs, first started the idea of BRIC in 2001. While it's obvious today thanks to the economic growth of these countries, which averaged 10.7% from 2006-8, it was only the idle talk of an analyst predicting the economic world of 2050, when the four countries would together pass the G7 in size. Since then we've watched the US economy lead an implosion of western economic power as these four nations have made strategic manoeuvers to position themselves to be exactly what we knew they'd be, the masters of our world. With Brazil and Russia pumping out the raw resources, China and India will consume the world.

The June 16 summit in the Russian Urals city of Yekaterinburg marked a huge step toward BRIC cooperation as a group. The fact that they have now met formally is story enough, but at the same time, the Russian city hosted another meeting, this a more formal grouping, the SCO, Shanghai Cooperation Organization (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, with Iran, India, Mongolia and Pakistan as observer states). Even more interestingly, both India and Iran took part at the most senior level as the Indian Prime Minister Manmohan Singh and Iranian president Mahmoud Ahmadinejad attended. Yes, just days after the election in Iran, Mahmoud was there, yet we barely heard a whisper of the meetings as his nation's spiral towards revolution captured our attention along with David Letterman's 14-year old rape inciting. Background buzz as we stumble towards a real new world order.

While BRIC countries account for 15 percent of the $60.7 trillion global economy, China is the world's largest holder of U.S. Treasuries with $767.9 billion while Russia holds around $400 billion in their foreign reserves. More importantly, Russian President Dmitry Medvedev has made proposals on giving a greater role to the International Monetary Fund's Special Drawing Rights that echo ideas from Chinese central bank chief Zhou Xiaochuan. China, Russia and Brazil have pledged to help capitalize the IMF as they seek more influence at the fund. Together, the BRIC have a 15-percent share of the world economy and a 42-percent share of global currency reserves. Last week Brazil and Russia joined China in announcing they would shift some $70 billion (50 billion euros) of reserves into multicurrency bonds issued by the International Monetary Fund. Tiring of the inequity of the system, Brazil, for example is the world's 10th largest economy, but has just 1.38 percent of the IMF board's votes, compared to 2.09 percent for Belgium, an economy one-third the size, they are starting to make noise about changing it.

Navel gazing is far more interesting as it seems more important whether or not Obama, and America, are doing enough, or meddling too much in the Iran election quagmire. The future is just the Heisenberg uncertainty principle at work, que sera, sera, plus there's the Jon and some chick thing to worry about, or Letterman. America has put the BRIC on the path to controlling the world, why would they need to worry about where the road goes? Of course looking forward to the year 2050 involves a myriad of uncertainties, it seems forecasts for when the combined BRIC GDP will pass the G7's are being revised with every new report, from 2050 to 2045 to 2032, sure to change again due to the current financial crisis. Of course they'll be potholes on the road to cooperation, not the least of which will be inter-BRIC conflict, particularly between China and Russia as they vie for dominance in Asia. China announced plans at the SCO summit to give $10 billion of loans to Central Asia, upstaging traditional power Russia whose promises of aid have not been fully delivered amid the financial crisis. But India's economy is projected to be 90% of the US while China will have grown to 130% by the year 2050. Not only will the BRIC dwarf the G7 in global importance, but the N11 (harder to make an acronym for an 11 nation group: Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam. Maybe BEIIKMNPPTV) will rival the economic size of the present elite 7 nations.

Notice how all these numbers assume unlimited resources to achieve growth. There will be a far more interesting chess game played with a more level economic table. China locks up resources in African nations without any of those human rights strings attached. Russia is circling the arctic, winning the new polar race. Markets are necessary too, and the US is sure to remain an important one, making killing the greenback a double edged sword, especially for China. Comments by Russian President Dmitry Medvedev questioning the dollar's role pushed down the U.S. currency by 0.9 percent against other key units, thereby hurting the value of China's investments. Baby steps towards independence from the west and the dollar will be the key word, but they'll add up quicker than you think.

When First We Practice To Deceive - Lies Part 2

Everything has to be paid for though in the end. Or does it? If there were only something that could keep investors interested in buying dollars... Of course it's oil, having replaced gold and completed the transition of the dollar, a fiat currency, into a quasi-backed currency. Of course you need people to trust that this will continue and that dollars will always be needed. Thus the boom and bust cycle of the past century, with the battle for oil at it's centre and war as it's engine.

Who controls the food supply controls the people; who controls the energy can control continents; who controls money can control the world - Henry Kissinger

Gallipoli was an early British loss in WWI trying to secure access to the oil fields of Baku (1/5 of the world supply at the time). I know that most textbooks claim that war was ignited by the assassination of Archduke Ferdinand, but in reality it was due to British fear of a German Berlin to Baghdad railway giving them land access to the oil of the region. Things haven't changed much for the past 100 years of the reign of oil as the lies leading up to the Iraq invasion have been exposed, the objective clear. Things aren't looking so good for the plan as the price per barrel of crude rockets to weekly new highs with talk of 'peak oil' which could cause a greater disaster than war; people getting out of their car...

The British may have deviously beat the rest to most of the Arabian peninsula after WWI, but it was America that grabbed the then unknown gem of the region, Saudi Arabia. The Brits, and by default much of the world they controlled, also put themselves immensely into debt with Wall Street to pay for the war. JP Morgan and the rest got rich on the spoils, with onerous demands on not only the vanquished Germans, helping ensure WWII, but the Brits too. While the British managed to maintain control over much of the Middle East until the next war could be fought, such conglomerates as Royal Dutch Shell and the Anglo-Persian Oil Company that became the Anglo-Iranian Oil Company and is now British Petroleum(BP) rose to power. Of course WWII had many causes, but not the least of which was the oil embargo imposed by the US on Japan, at the time it was reliant on the Americans for 80% of their oil. The end of the war brought us the Bretton Woods accords which sealed American hegemony for the next 30 years by linking the U$ to gold, and creating the IMF, World Bank and "managed" free trade through GATT. At the time the US held most of the world's gold reserves, so all was good with big business on Wall Street. The Marshall Plan to rebuild western Europe also gave a huge boost to the oil companies as it ensured growing demand for crude.

The American relationship with Saudi Arabia has proven crucial ever since the government of Ibn Saud was recognized by the US in 1931. Standard Oil began searching for oil in the 30's and by 1938, the Arabian American Oil Company, later to become Aramco, first struck the black gold in commercial quantities. The relationship has had a long and winding path, but both countries have played each other for their own interests; the Saudi's needing protection, and the American's needing cheap oil. Thanks to Bretton Woods, the dollar was as good as gold, and people bought it for almost 30 years. Predictably however, America printed more dollars than there was gold to back it, which worked until the French and a few others began demanding the US pay back gold for dollars it brought to the US Treasury. Of course they couldn't pay and on August 15th, 1971 Nixon ended the repayment of gold, in essence declaring insolvency. Needing to do something, the US along with money managers struck a deal with OPEC, of which Saudi Arabia was a founding member, to exclusively price oil in US dollars in return for American guarantees to protect the kingdoms of the Persian Gulf against the threat of invasion or domestic coup. At the same time, the price of oil was allowed to increase from about $3.50 to $39.50 so the oil producing nations could buy American debt. source - The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets (Cornell Studies in Political Economy)

Like kids in a candy store the US government had been on a spending spree, particularly under LBJ. Claiming that America could afford both guns and butter, he escalated the war in South-East Asia and launched the Great Society movement. By 1979, gold had skyrocketed to over $800/ounce and interest rates reached 21% to fight inflation. The only way to safeguard dollar hegemony is military threat, and the 80's brought us rapid growth in military spending under Reagan. The petrodollar-recycling system allows the Federal Reserve to effortlessly expand global credit to enforce US financial control and continue massive debt-financing to pay for US military control. If petrodollar-recycling begins to break down, then financial and military control will also begin to decline. When Saddam Hussein began demanding payment for oil in euros in 2000, the US had him removed. To pay for it, the US simply has to print more money, which can continue as long as people are willing to buy dollars, which is why the fashionable lie of the past few weeks is that the US is committed to a strong dollar and will fight inflation. As long as people buy it, the cycle will be allowed to continue, and, if McBush is elected in the fall, US troops can take out the next threat, Tehran. But will it stop there, the axis of oil includes Iran, Venezuela and Russia. Could Caracas be next, or how about Moscow? When great powers begin to decline, they almost invevitably resort to war and beligerency, thereby accelerating their demise. Source - The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000

Of course oil politics has had it's obvious fallout. The radical Islamic movement was born out of resentment of American influence in the Middle and Near East, while at the same time returning immense financial benefits to big business. However, these benefits have also given rise to a thirst for ever greater returns, greed. We are witnessing what can only be called a commodity shock as oil and other resources, most importantly the food we eat, are seeing prices rise out of control and the main culprit is price speculation. As the G8 meeting wrapped up in Osaka yesterday, news of an Italian plan for regulation of this market leaked out. Of course the US and British opposed it as this would be seen as putting constraints on the free market system, the main pillar that globalization is built on. Sounds like part III of lies will have to wait until the next post.