Archive for category Politics

18 Nov 2009 – 1

Explosion of debt: Japan’s public debt could reach as much as 270% of GDP in the next two years. A bullet train is pictured speeding past Mount Fuji in Fuji city, west of Tokyo Photo: Reuters In a report entitled “Worst-case debt scenario”, the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.

Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of “deleveraging”, for years. “As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse,” said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.

Under the French bank’s “Bear Case” scenario, the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010. Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

(UK figures look low because debt started from a low base. Mr Ferman said the UK would converge with Europe at 130pc of GDP by 2015 under the bear case). The underlying debt burden is greater than it was after the Second World War, when nominal levels looked similar. Ageing populations will make it harder to erode debt through growth. “High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt,” it said.

Inflating debt away might be seen by some governments as a lesser of evils. If so, gold would go “up, and up, and up” as the only safe haven from fiat paper money. Private debt is also crippling. Even if the US savings rate stabilises at 7pc, and all of it is used to pay down debt, it will still take nine years for households to reduce debt/income ratios to the safe levels of the 1980s.

The bank said the current crisis displays “compelling similarities” with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.

SocGen advises bears to sell the dollar and to “short” cyclical equities such as technology, auto, and travel to avoid being caught in the “inherent deflationary spiral”. Emerging markets would not be spared. Paradoxically, they are more leveraged to the US growth than Wall Street itself. Farm commodities would hold up well, led by sugar.

Mr Fermon said junk bonds would lose 31pc of their value in 2010 alone. However, sovereign bonds would “generate turbo-charged returns” mimicking the secular slide in yields seen in Japan as the slump ground on. At one point Japan’s 10-year yield dropped to 0.40pc. The Fed would hold down yields by purchasing more bonds. The European Central Bank would do less, for political reasons.

SocGen’s case for buying sovereign bonds is controversial. A number of funds doubt whether the Japan scenario will be repeated, not least because Tokyo itself may be on the cusp of a debt compound crisis. Mr Fermon said his report had electrified clients on both sides of the Atlantic. “Everybody wants to know what the impact will be. A lot of hedge funds and bankers are worried,” he said.

“Debt levels risk another crisis” -2

High levels of government debt around the world remain the most likely trigger of the next economic downturn, the former chief economist of the International Monetary Fund has warned.

Harvard economics professor Ken Rogoff said that the level of debt major governments have taken on to tackle the financial crisis is of considerable concern must not go unnoticed. In a series of recent comments, Prof Rogoff cautions that countries like the US have been running up such significant national debts as a proportion of their total economies that there is the potential for default at some point in the future.

“There’s no question that the most significant vulnerability as we emerge from recession is the soaring government debt,” Prof Rogoff told Bloomberg. “It’s very likely that it will trigger the next crisis as governments have been stretched so wide.” His warning comes as the G20 leaders prepare to discuss President Barack Obama’s leaked plan to stimulate global growth by removing some of the previous imbalances, while at the same time ensuring that governments co-ordinate their fiscal stimulus exit strategies.

“Talk about a big bubble that really affects the global economy,” he said recently of the US’s deficit, which is expected to reach $1.84 trillion for the current fiscal year. That represents 13pc of estimated GDP – the highest level since the end of World War Two. “The huge run-up in government debt has led to patently unsustainable fiscal policies across a number of major countries. So far, the rest of the world’s been willing to finance it, primarily with savings from China and elsewhere, but if investors’ confidence is shaken, we might see the interest rates on long-term debt rising, and rising very sharply.”

Meanwhile Dominique Strauss-Kahn, the managing director of the International Monetary Fund, warned that one of the most important outcomes from the summit would be to ensure that major economies keep their economic recovery programmes in place so as to no slow the nascent global recovery. “Once the fire is out, there’s water everywhere, it has to be mopped up,” he said in an interview on French radio. “In Pittsburgh, we have to say, there are still fires to be put out we’ll see later how to do the mopping up.”

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Barack Hussein Obama in June, 2009 while

Acclaimed Hindu statesman Rajan Zed, in a statement in Nevada (USA), said that ‘karma’, the web of cause and effect and the rule of universal causality resulting from action, was first commented in ancient Satapatha Brahmana, and forms one of the basic principles of Hindu philosophy. The sum total of one’s actions, desires, feelings, and thoughts form one’s karma, which is a cosmic law of debit and credit for good and evil.

Greater love has no one than this, that one lay down his life for his friends. John (15:13)

Dispossession, Expansion and Paranoia: The Zionist Stratagem

“Anti-Semitism has grown and continues to grow, and so do I.”
– Theodore Herzl [1]

As a self-defined movement for the national ‘liberation’ of European Jews, Zionism had an anomalous relationship with its perennial Other, the Gentile nations, from whom it wanted the Jews to secede and become a distinct nation under a Jewish state.

The Zionists did not define Europe’s Gentile nations as the adversary they would have to oppose, and against whom they would struggle, to secure the rights of Jews to emerge as a distinct nation.

On the contrary, the Zionists would harness the strength of their perennial Other – their adversary – to gain their nationalist objective. Unlike nationalists who secede from a state or empire by drawing new borders, the Zionists did not demand any European territory; they planned to establish their Jewish state outside the borders of Europe.

In other words, the Zionists were offering to execute what any state facing secessionist demands would have embraced quite avidly: the Jewish ‘secessionists’ would sail away from Europe and establish their state in the Middle East, well-removed from Europe.

This was a novel approach to national liberation.

As a first step, the Zionists proposed to liberate Jews from European persecution by arranging for their exodus from Europe. This had always been the dream of European anti-Semites: to cleanse their landscape of Jewish presence. Over the past thousand years, different states in Europe had periodically attempted this voiding of Jews through forced conversions, pogroms, expulsions, and segregating Jews from Gentiles.

The Zionists were now proposing to purge Europe of its Jews on a scale never attempted before, and without the inconvenience of disturbing the peace. It was a contract that Europe’s anti-Semites would have difficulty turning down. Indeed, the Zionists fully expected the anti-Semites to give them whatever help they needed to effect the Jewish exodus.

The Zionists were counting on this help; it was indispensable for the completion of their project. The second step in the Zionist plan was to seize control of Palestine, open it up to Jewish colonization, and, when the Jewish colons had gained sufficient demographic mass in Palestine, they would convert it into a Jewish state, preferably without the natives. The Zionists could not undertake this step without the help of European powers.

This was a clever stratagem: quite original to Zionism.

The Zionists sought to convert an impossible nationalism – with little prospect of ever achieving its goal inside Europe – into a settler-colonial project. In addition, they would convert the Jews’ erstwhile adversaries into strategic partners. The Zionists expected to persuade at least one European power to play the part of ‘mother country’ to the Jewish colons in Palestine.

It appeared that the Zionists were going to outperform Moses of Jewish tradition. Moses too had chosen to liberate the Hebrews of ancient Egypt by marching them out of Egypt into Canaan, where they would establish their own state. There were important differences, however, between the two plans.

The Zionists did not seek divine help, but they would receive help from the anti-Semites. Moses had divine help but his plan was opposed by the Egyptians. The Egyptians could not have agreed to Moses’ long march because he was running away with their property – their Hebrew slaves. In Europe, on the other hand, the Jews owned considerable property – banks, bank accounts, factories, houses, lands – that they would leave behind.

Clearly, the Zionists were offering the Europeans an attractive deal. Help us create a Jewish settler-state in Palestine: and we will solve your Jewish problem, free you from Jewish competition, free you of the Jewish presence, and you can have all their property we leave behind. This Jewish property was another gift the Zionists offered to Europe’s anti-Semites.

To Europe’s anti-Semites, the deal was irresistible. In fact, some of them would think they could kill two birds with the Zionist stone. They would get rid of the Jews, and renew the Crusades against the Muslims.

Of course, there were complications. States do not get into deals without considering all the costs. The great powers with an interest in the Middle East knew that backing the Zionist plan would mean war against the Ottomans. It would also mean perpetual war against the Muslims, since this was an egregious injustice against them and a deep violation of their historical space. That is why the great powers balked.

It was World War I that changed the calculus. When the Ottomans joined the war on the side of Germany, the Allied Powers – Britain, France and Russia – decided to dismantle the Ottoman empire. Even then, there was little interest in the Zionist plan – despite intense Zionist lobbying.

Two factors turned the tide in 1917. In Britain, a new cabinet had taken office in December 1916 with at least five strongly pro-Zionist ministers, including the prime minister, David Lloyd George. In addition, the war had been going badly for the Allied Powers on the eastern and western fronts.

Now more than ever before, Zionist lobbying became a formidable force. The Zionists lobbied Britain, Germany, and the US for their support of Zionist goals. They made sure that their lobbying of one power was known to others: thus forcing them to compete for the support which the Zionists promised them in their war effort.

The Zionists promised to bring the US more fully into the war, to keep Russia in the war, and to mobilize the resources of world Jewry on the side of the power that would support their cause. It did not matter if the Zionists could deliver these promises: the European leaders were convinced they could.

At this point, all the pro-Zionist forces converged – anti-Semitism, Christian Zionism, Crusader zeal, racism, national interests, and, above all, Zionist lobbying – to place the power of the British empire behind the Zionists.

By late October 1917, after many months of maneuvers, the Zionists and the British finally agreed upon a statement that would signal British commitment to Zionism. On November 2 1917, this statement was delivered by Lord Balfour – British foreign secretary – in a letter to Lord Rothschild, a distinguished leader of Britain’s Jewish community.

This was the Balfour Declaration: this was the document that would formalize a new – and for the most part, irreversible – partnership between Western Jews and the West, joined, pitted, in expanding wars against the Islamic world.

During the nineteenth century, when Britain and France competed to control the land bridge of the Levant, each sought to lure the Jews into their scheme to create a Jewish protectorate in Palestine. The Jews then quietly rejected these overtures: they could sense that a Jewish state in Palestine would be a trap.

Starting in 1897, when the European powers had lost interest in this colonial scheme, it was the Zionists who revived it. Their hubris was so great, they were willing to ignore the hazards of their plan. No doubt, the Zionists did overcome these hazards: and their successes have been stunning.

But Zionist successes have not helped to establish a political equilibrium in the Middle East. On the contrary, they have been deeply destabilizing. I Zionist victories over existing foes produce new ones, harder to defeat than those they replace.

Israeli buldozer versus