Bill Blain: “Germany Is On Fire: How Long Until Bundesbank Demands Rate Hikes To Cool It?”

Blain’s Morning Porridge – November 27th 2017, submitted by Bill Blain of Mint Partners

Germany – not solved and likely to prove an even larger problem..

“El castillo, le torre yo soy, le espada que guarda el caudal.

Another massive shopping day – Cyber Monday. Let’s see if the declining footprint into US malls confirms the end of retail and tomorrow belongs to Amazon, Ebay and Tencent? Suspect so… (Personally, I’m furious as I bought a new evening suit recently and picked it up Friday to discover even a proper West-end tailor was having a “black Friday sale”. I won’t be going back there again!)

Looks like I got Germany wrong.

My predictions Angela Merkel would find herself trapped into a difficult minority or a convention defying second election look increasing unlikely as she is now threshing out a “Grand Coalition” CDU deal with the SDP. My “bad”.The membership of both parties apparently support it. I read a single member of her own party who dared to call for her resignation was subsequently booed down by the mob of enthusiastic Merkelistas.

The market is welcoming the news as far more positive for Germany than the earlier Jamaica Coalition, and positive for Europe as a reinvigorated Merkel will re-engage with Macron’s France to solve Europe’s many problems with sprinklings of German good-fairy dust.

Huh. I’ll reserve judgement. I suspect the path to a German coalition will remain fraught and distracting for some time to come. Moreover, although a new coalition will happen, I reckon that far from being positive, Germany is going to be one of the big negatives pulling down Europe next year. Everyone is talking about how strong European growth is – it’s not; across the soft-underbelly of the continent it’s anemic at best with massive unsolved youth unemployment. Except for Germany, European growth is positive, but constrained and lethargic.

In contrast, Germany is on fire – witness last week’s confidence numbers and the recent growth numbers. How long before the Bundesbank is demanding rate hikes to cool the overheated economy?

I suspect that far from Germany engaging closely with Macron’s European vision, self-interest will see Germany diverge further from Europe as political necessity dictate a harsh German line on further austerity and reform demands upon the rest of Europe. Banking Union is a non-starter before NPLs are sorted. Higher rates to suit Germany spell slowdown in Germany’s European satellites.

Meanwhile, reading through the stock picker comments this morning, none of them sound particularly convinced on further upside from here, but all report strong sentiment indicators as the buying wave continues. My colleague Steve Previs notes the VIX hit 8.56 on Friday – a record low.

I’m still struggling to understand just how the market remains so convinced to the upside. Sure, we’ve got growth and it’s been a strong year, but that’s never sustained. Financial gravity dictates a sell-back at some point.

The numbers this year have been spectacular – according to my Macro economist, Martin Malone, through 2017 risk assets (stocks, and residential real estate) have delivered some $23 trillion of upside. That’s incredible! Meanwhile, monetary and fiscal policy, economic growth and global fixed income (risk free bonds) have delivered $15 trillion. Global GDP has grown $5 trillion to $80 bn. (The value of Global Residential housing has added $10 trillion to $210 trillion!)

What’s not to like? The IMF has update growth projections twice, and the EIU (Economist Intel Unit) upgraded growth on Saturday.

But these gains also highlight risks. Can the $13 trillion gain in Global stocks be maintained – and would a correction tumble global sentiment? Full employment (at least outside Europe) will prove inflationary (I’ve attached Martin’s inflation driver chat!). And there are just so many things visible on the threat board from Saudi, China, Brexit, Washington and Oil. Perhaps it’s the things not yet on the threat boards we should worry about – the no-see-ums, like the hi-yield bond bubble!

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FX Weekly Preview: EUR Bursts Higher Again As Year-End Call For 1.2000 Return

Submitted by By Shant Movsesian and Rajan Dhall MSTA of FXdailyterminal.com

At the very start of the year, we recall the chorus of projections for EUR/USD to fall below parity, warranted by the euphoria over the Trump administration’s plans for a tax overhaul alongside the reform plans for healthcare, and allied to the assumption that Europe had too many headwinds to negotiate in order for underlying growth to impact significantly on the region.  Some were even calling for levels as low as 0.9500 and 0.9000.  Five months into the year and with the French elections voting in Emmanuel Macron, there was renewed confidence, and with recovery still pushing ahead, the shift in sentiment was near tidal as outside calls for 1.2000 became the consensus and hedge funds and money managers poured into the EUR across the board.  We saw EUR/CHF shaken out of its coma, with the SNB naturally welcoming the move back above 1.1000 and later 1.1500 – though as an aside, the Swiss central bank still believes the EUR is overvalued – the ECB are more worried about the speed of appreciation in the USD rate.

1.2000 achieved, it was not long before momentum kicked in and all and sundry were then looking for 1.2500, but all the while paying scant attention to time-frame, which is an all too forgotten metric in the markets these days.  The correction was due, and as we cited a few weeks back, it was a matter of where we based out, and this ranged from 1.1700 down to 1.1200 (ish) based on technical factors which we have tried to align with the US yield curve.  The Fed’s dot plot has eased off a touch, but the market has been significantly more downbeat, not least of all due to the multitude of obstacles standing in the way of tax reform first and foremost.  We will ignore the US equity markets, which seem to be running on their own rules at the present time, but the USD has naturally suffered, and by the sheer weighting in the USD index, the EUR has benefited the most. 

Looking at the Euro wide data on the leading economies, few can argue with the numbers, and with the likelihood of some of the key financial business migrating away from London, the prospects continue to look good for the continent.  Even so, the undercurrent of political fragmentation, which – let’s not forget – brought Marine Le Pen into the final vote, and the latest collapse in German coalition talks are all a recipe for potential instability, which at the very least should see an element of ‘discount’ in the EUR rate to some degree.  We also have the Italian elections next which are also a cause for some concern, as are those on NPLs within in a number of notable banks – not just in Italy. 

If we do push past 1.2000 next week, sellers will be looking to fade this on some of these factors, and we also have to factor in the Dec Fed hike, which is an opportunity for the FOMC not to miss as normalisation is still very much on the agenda, albeit slightly more gradual than before. 


Inflation is a worry across the globe, and we await the time when this near obsessive focus in the market fades away.  For not though, we get the latest CPI rate (Nov) on Thursday, with Germany and Spain releasing their prelim numbers the day before.  French, Spanish and Italian Q3 GDP numbers are also due out in the latter half of the week – all EU wide manufacturing PMIs on Friday.

In the US, standout is the Q3 GDP release on Wednesday with its latest revisions, and on Thursday, the core PCE index is expected to tick up, and is released at the same time as personal income and spending data.  US payrolls is released on Friday the week after, but the Nov manufacturing ISM is out at the end of next week, with the employment index having shown a healthy correlation to job numbers. 

Key data in Japan next week; not least of all the inflation numbers on Thursday, but the BoJ will be watching the core rates given the strong rise in Oil prices which should lift the headline.  As such, the JPY will stick to its funding status, and despite rumblings over persistent negative rates hurting banks as well as the huge asset buying fuelling an inflationary surge down the line, the price action suggests the market is not taking notice for now.  We can see this in evidence in the way EUR/JPY keeps bouncing back, while losses in USD/JPY have been pretty orderly.  

Good times for Sterling as the recent data run shows the economy is holding up.  No one – certainly not us – is suggesting a complete break down in EU talks will mean an outright collapse in the UK economy, but pushing GBP higher from current levels on an eventual stabilisation in Brexit and the consequent developments looks premature as yet.  Those buying the Pound on the interest rate perspective would also do well to book profits now, as this seems to be fading with the BoE looking for 2 more rate hikes in the next 3 years.  This looks to have been a clever communication ‘hedge’ of sorts, with Brexit to and fros always on hand to vindicate a change of heart within the MPC. 

On Brexit – the only driver of trade next week with no data on the schedule of note – the leading obstacle now standing in the way of progress to phase 2 talks on trade is the hard border issue in Ireland.  Northern Ireland will not entertain any differentiation in the agreement with the rest of Britain; more specifically the customs union.  With the Irish government itself dealing with internal issues which will dilute the decision making process, the deadline of the EU summit will be seriously tested – and we are being conservative here.  The divorce bill is still also an issue as the increased offer from PM May will likely be subject to concessions on trade – something which the EU have been not committal on so far, so there there is every reason to believe the optimism based rise in GBP could start to fade soon.  1.3400 and 1.3460 are key technical levels in Cable to watch out for, but in EUR/GBP we are already looking to the upper end of the range.  Clear 0.9050, and we could see some fresh upside traction developing. 

Trade negotiations for Canada – with the US and Mexico – are also hitting road-blocs, with the hard line drive by the US to implement measures to reduce their trade deficit the focal point for talks.  Naturally this would come up against resistance, and Canada’s Freeland was sanguine in her expectations as a result.  This does not seem to be having much of an impact on CAD, though nor is Oil price as it continues to try and push on to new highs. Rather the spot rate is now settling into a near term range with a slight skew to the upside based on fair value, which we continue to see in the 1.2500-1.2700 area.  The BoC have successfully reined in the hawkish market view on interest rates, so we are now back to data watching, and next week, we have Sep GDP and Nov payrolls to look to in Friday’s trading session.  USD sentiment will dictate until then, with support against the USD see at 1.2670.  Price action suggests a breach of this level will not yield much momentum just yet. 

Rate rises in Australia have also been priced out, but these were more so over the medium term.  2018 expectations were centred around the mid point of the year when the RBA would add another 25bps on rates, but slow wage growth and the CPI rate falling out of the central bank range have all but erased these projections.  The RBA ares still confident of economic pick up, but the market needs a little more to push AUD/USD materially higher from its recent lows, having based out ahead of 0.7500.  Next week we get some CapEx data on Thursday as well as credit numbers, which in the current light are attracting plenty of attention as does high household debt levels – a key concern in Canada also. 

Less focus on this in NZ, where private debt to GDP is less than 100% compared to 233% in Australia and 267% in Canada.  For comparison, the US is 200%.  Liquidity issues as well as economies to scale have been bypassed in the recent upside seen, which saw the spot rate breaching 0.7500, but we still have to look forward to the Labour led coalition policy intent, to see whether the NZD can outperform from current levels.  AUD/NZD is looking more intent on the downside these days.  Sub 1.0900 here could spark a return to much lower levels, which in turn could finally push NZD/USD back through 0.7000. 

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Chinese Stock Rout Resumes As Top Fund Sees “High Probability” Of Bond Carnage

In early November, we discussed how commentators were become disturbed by the sell-off in Chinese government bonds after the Party Congress, which saw yields rise to 4.0%. The anomaly was that yields in less-liquid, unsecured Chinese corporate bonds had barely moved. Some sleuthing on the part of the Wall Street Journal discovered that the most likely explanation was that redemptions in China’s shadow banking sector, especially in the infamous $4 trillion Wealth Management Products (WMP), meant that cash needed to be raised…quickly. Highly liquid government bonds were the easiest option. Furthermore, retaining the higher-yielding corporate bonds was handy in meeting the guaranteed returns in the WMP Ponzi schemes.

The relative stability in corporate bond yields was short-lived, with the Chinese bond sell-off spreading to the corporate sector as November progressed. Besides the post-Congress focus on deleveraging, the mainstream explanation was that investors were differentiating between good and bad credits ahead of more than $1 trillion of local bonds maturing in 2018-19. The spin was positive as it would lead to capital being channeled more productively.

Needless to say, this was not how we viewed it. From our perspective, it looked like the emergence of cascading sell-offs within Chinese financial markets which have been abused by excessive leverage and Ponzi characteristics. Recent plunges in Chinese equities have strengthened our conviction. Indeed, as the new trading week opened, equities were hit again, as we pointed out last night and as Bloomberg observes this morning:

After taking a breather in the wake of a battering Thursday, Chinese shares resumed their decline Monday, with some previously high-flying consumer and technology companies among the hardest hit. The CSI 300 Index of large-cap stocks was down 1.3 percent as of the mid-day trading break, with ZTE Corp. and BOE Technology Group Co. both falling more than 6 percent…“Institutional investors are choosing to cash in toward year-end as valuations are near historic highs and market sentiment deteriorated after official media targeted Moutai,” said Shen Zhengyang, Shanghai-based analyst at Northeast Securities Co. He said the market “lacks steam” for further gains.

The CSI 300 finished the session down 1.3%, deepening a 6.8 percent decline posted in the final three sessions of last week, and reflecting disappointment that on Monday the PBOC provided no net liquidity to the system.

“The slides continue as blue chips have gained significantly this year,” said Shao Rui, analyst at Shanghai Securities Co. “The tighter liquidity conditions prompt institutional investors to lock in their profits.” After injecting a net 150 billion yuan last week, the central bank’s additions via open-market operations matched maturities Monday, suggesting cash supply will remain tight. China’s 12-month interest-rate swaps climbed for the first time in three sessions.

The consumer discretionary index fared even worse, falling 2.1 percent as BYD weighed. The Shanghai Composite Index lost 0.9 percent and the Shenzhen benchmark dropped 1.6 percent, with losses accelerating through the afternoon. What was notable is that for the second time in one week, the Chinese national team was not there to rescue investors with buying in the last hour of trading.

While the sell-off in Chinese equities is unnerving, our primary focus remains on conditions in credit markers in China and Hong Kong. After the Chinese open, we highlighted the tightness of credit in the Hong Kong interbank market, where 1-month HKD HIBOR spiked to its highest level since December 2008.

In this increasingly fragile environment, the portfolio manager who runs China’s best-performing bond fund sees a “high probability” that the rout in corporate bond markets will get worse in 2018. According to Bloomberg.

It’s been the worst month for China’s local corporate notes in two years. And it might just be the start, as the nation’s top bond fund manager says yield premiums could rise further in 2018. President Xi Jinping is stepping up efforts to trim the world’s largest corporate debt burden, after emerging even more powerful from the Communist Party’s twice-a-decade congress in October. Financial institutions are hoarding cash amid expectations the government will announce more measures to curb leverage, and that is pushing up borrowing costs in the money market.

“There is a high probability that credit spreads will widen next year given that there hasn’t been any improvement in the tight liquidity,” said Zhang Qinghua, general manager of fixed-income fund investment at E Fund Management Co. His E Fund Stable Value Bond-A fund has returned 15 percent, the best among fixed-income funds in China with more than 3 billion yuan ($454 million) of assets that are tracked by Bloomberg data.

Policy makers must walk a fine line. Bond market pain has already spilled over into equities, as rising borrowing costs tarnish corporate balance sheets. Economic growth could also be jeopardized if deleveraging sparked a rash of defaults. For now things appear under control. While two more firms missed bond deadlines recently, there have been only about 21 note defaults this year compared with 29 for all of 2016.

The 31 basis-point rise in the AAA corporate bond spread this month is the biggest increase since March 2015. Zhang sees further deleveraging measures by the Chinese authorities triggering a rise in the number of defaults.

Despite those market moves, the government is rolling out more deleveraging measures. Financial regulators this month proposed sweeping rules to curb risks in the country’s $15 trillion of asset-management products. The government is still focused on preventing financial risks and curbing leverage, as economic slowdown looks limited, according to Zhang. Closure of zombie companies may accelerate next year and some individual companies’ credit events are unavoidable. However, overall credit risks are declining because of improving profits and declining leverage ratios, he said.

While we agree with Zhang’s outlook for corporate bonds, we are less confident about his upbeat stance on Chinese equities.

Convertible bonds will outperform government and corporate securities next year because listed companies’ profit growth may remain high, boosting attractiveness of equity assets, according to Zhang. “Liquidity may also flow from the cooling property market to the equity market next year, supporting better performance of the equity market,” said Zhang.

Our sense is that the cascading, “snap sell-offs”, such as the one seen overnight in China, are going to get worse before they get better, and equities will increasingly be drawn into the mix.

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Pyrrhic Victory – Prosecutor Finds 36 Guilty For The Stock Exchange Crash In 1999

An Athens Appellate Court Prosecutor has found 36 people guilty for the infamous “Athens Stock Exchange Crash of 1999” that caused thousands of small investors to have lost their life savings.

As KeepTalkingGreece.com reports, it has taken 18 years for an Athens Appellate Court Prosecutor, Athina Theodoropoulou, to find guilty 36 individuals implicated in the affair – including stockbrokers, investors, and shipowners.

The accused had been previously tried on fraud charges and money laundering, but at the time the three-member appellate court of Athens, with different members on the bench, had unanimously declared all of the accused innocent on all counts.

The case was re-opened by the Areios Pagos, Greece’s Supreme Court, as the judges believed that the acquittal lacked sufficient legal justification.

They ordered that the case be retried from scratch.

According to prosecutor Theodoropoulou, the first court erroneously concluded that there were no damages incurred by those charged.

She said that the aim of the accused was to create an artificial image of the market, by cultivating a climate of investor prosperity and long-term stability.

“Afterwards, the system collapsed because the bloated stock prices were artificial,” she said.

 

“With your machinations, you undermined the law of the free market by pushing up stock prices to levels that they normally never would have reached,” she said, asserting that clear deception was involved.

 

“The price on the stock market board was not the ‘just’ value, as the accused falsely created it by injecting their stock packages into the market,” the prosecutor stated.

Crash scandal

In September, 1999, after a dizzying seven-year climb to nearly 6500 points, the Greek stock market suddenly experienced a sudden decline that ended only four years later, after huge numbers of small investors had lost their life savings on the bourse.

Within three years, by September 2002, the Greek stock market’s capitalization had lost 136 billlion euros in value.

Countless families were entirely destroyed financially.

The then Pasok government of Costas Simitis, with finance minister Yannos Papantoniou, had consistently and openly urged Greeks to invest, even going as far as to predict that the market would to soar.

The stock value of many bogus companies soared, with the owners pocketing the gains and investing nothing in the company.

Many critics viewed the crash as the greatest financial scandal in Greek history.

Judicial investigation into the ASE crash, the so-called “stock market bubble”, began in 1999 and ended in 2009 with charges against 67 defendants. IThe proceedings before the Three-Member Cassation Court of Appeal are continuing with speeches by the defendants’ lawyers.

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“Sweet Dreams” – Elon Musk’s Periodic Reminder Of The Coming AI Apocalypse

Elon Musk just gave people a powerful and eerie visual related to his belief that Artificial Intelligence (AI) could usher in a SkyNet style apocalypse where the machines take over and kill us all. In a talk given last July, Musk said, “I keep sounding the alarm bell but until people see robots going down the street killing people, they don’t know how to react because it seems so ethereal."

On Sunday Musk took to twitter to vividly illustrate his point, retweeting a creepy viral video which showcases the DARPA-funded Boston Dynamics "Atlas" military robot's astounding ability to do a back flip – something which researchers have called "bonkers" for the shocking and unexpected compounding leaps in development of humanoid robot technology that Atlas represents. 

Image result for elon musk ai image

Musk commented on the original "we dead" tweet with the ominous warning: "This is nothing. In a few years, that bot will move so fast you'll need a strobe light to see it. Sweet dreams…" 

And he followed with another tweet accompanied by the 90's hip-hop song "Regulate" emphasizing his oft-repeated message that AI is a "public risk" that must be regulated: "Got to regulate AI/robotics like we do food, drugs, aircraft & cars. Public risks require public oversight. Getting rid of the FAA wouldn’t make flying safer. They’re there for good reason."

In a recent Rolling Stone interview Musk told Neuralink staff after showing them a documentary on AI, “Maybe there's a five to 10 percent chance of success [of making AI safe].” He's long emphasized that governments need to "proactively" regulate and monitor advances in artificial intelligence before it's too late, as the technology poses "a fundamental existential risk for human civilization."

Rolling Stone's summation of Musk's words to the Neuralink crew points out that, "the problem with building something that's smarter than you is … that it's smarter than you. Add to that the fact that AI has no remorse, no morality, no emotions – and humanity may be in deep shit. This is the good son's second chance against the remorseless father he couldn't change."

He further admitted to the group that he invested in DeepMind – the British AI research company acquired by Google in 2014 – with the aim of keeping an eye on Google’s development of AI. "There's a lot of risk in concentration of power. So if AGI [artificial general intelligence] represents an extreme level of power, should that be controlled by a few people at Google with no oversight?" Musk told Rolling Stone. 

And Musk's instincts appear to be correct, as DeepMind itself proudly defines its purpose on its website as follows: "We’re on a scientific mission to push the boundaries of AI." Such personal monitoring of the industry is what Musk referenced in a previous talk in July when he said, "I have exposure to the most cutting-edge AI and I think people should be really concerned about it." 

Meanwhile, it appears that Musk's "sweet dreams" tweet regarding DARPA/Boston Dynamics' back flipping humanoid military robot hints at the future possibility that such a mind-numbingly advanced and capable machine is a prime example of just the type of robot, when equipped with AI, that will do us all in. As one researcher, commenting on the significance of the pre-back flip/post-back flip threshold, characterizes:

But I think we're in a new robotic age now. There was a time before Atlas could do backflips, back when robots were for factories, bomb disposal, vacuuming, and the occasional gimmick, and none of the useful ones were humanoids. Now we're living in an era where humanoid robots are apparently as agile as we are. So what will they be used for? It’s time to get out the popcorn.

Or ask Musk might point out, it will be too late to get out the popcorn as it will already be "lights out/sweet dreams" on the end of humanity from the moment such a super bot comes online and goes conscious.

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Forget About Catalonia And Brexit, The Next European Black Swan Could Be Transylvania

Via ValueWalk.com,

Over the past 100 years, the borders in Central and Eastern Europe have been redrawn time and time again, often leaving groups of people separated from their home country by new borders. Although land often changed hands relatively peacefully, suddenly finding one-selves as an ethnic minority in a new country was bound to lead to tension and resentment.

While these resentments may reveal real disenfranchisement of ethnic minorities in Central Europe, politicians, especially populist figures, have seized on the outsider narratives inherent in the diaspora experience.

As the April 2018 election approaches in Hungary, Prime Minister Viktor Orban has been reaching out to the Hungarian minority in Romania, drawing criticism from Romanian leaders, while his supporters insist he is trying to lend his support Hungarians everywhere.

Rooted in History

Tensions between Romania and Hungary can be traced back to World War I and the Treaty of Trianon.

Although the Treaty of Trianon ended hostilities between the Allied Powers and the Kingdom of Hungary, the peace came at a great price to the Austro-Hungarian successor state. Hungary lost 2/3rd of its population and territory, leaving the former imperial hub landlocked in the heart of Central Europe. Most of its territory was ceded to Yugoslavia, Czechoslovakia, and Romania, as well as Austria, Italy, and Poland. Romania was granted the entire region of Transylvania, where an estimated 1.3 million ethnic Hungarians reside, making Hungarians Romania’s largest minority.

The loss of such a large chunk of territory and population would certainly leave its mark on national memory. Recently in Hungary, politicians have been revitalizing this narrative.


By derivative work: CoolKoon (talk)
Hungary1910-1920.png: The original uploader was Fz22 at English Wikipedia
(Original text: fz22 (talk)) – Hungary1910-1920.png, CC BY-SA 3.0, Link

Speaking on the June 4th anniversary of the Treaty of Trianon, Jànos Làzàr, Minister of the Hungarian Prime Minister’s Office, called on the beneficiaries of the treaty to apologize, insisting, “Trianon was a diktat, a historic injustice against a nation. The entire western world is indebted to Hungary.”

Lazar was careful to say that Hungary does not advocate for the redrawing of borders, rather they merely mean to ensure that the rights of minority Hungarians are protected everywhere. Romania has not taken it that way. The Romanian authorities used words like “provocative” and “dangerous” to describe the Hungarian government’s treatment of the issue.

Diaspora Politics

This isn’t the first time Lazar has intervened on behalf of Hungarians in Romania. Last spring, Lazar interceded in the case of an ethnic Hungarian brewer, Andras Lenard, in Romania who was being pressed by Heineken. Heineken was suing the upstart brewer claiming that their names, although different languages, were too similar. Hungarian politicians reacted by calling for a boycott of Heineken products as well as proposing legislation to ban the use of the Heineken red star as a communist symbol. Heineken responded by dropping the charges against Lenard.

The intervention of Hungary on behalf Lenard reflects a larger government policy of considering the Hungarian minority in Romania as Hungarians. In 2010, the Orban government expanded Hungary’s citizenship laws, making ethnic Hungarians in neighboring countries eligible for citizenship and therefore voting privileges. As the 2018 parliamentary elections appear on the horizon, Hungarian Prime Minister Viktor Orban has been encouraging Hungarians in other Central European countries to register to vote.


By The Independent – http://ift.tt/2BgAwpk (Jump to 391)
The Independent, (New York), June 14, vol. 98, 1919, p. 391 (Primary source, if any, not cited), Public Domain, Link

Orban’s critics claim that he is merely trying to leverage the 1 million eligible voters in Romania to attain a coveted 2/3rd majority in parliament for his Fidesz party. Fidesz is just two seats away from a majority that would allow them to make constitutional changes. Considering that in the 2014 elections 95% of the vote from citizens domiciled outside of Hungary went to the Fidesz party, mobilizing the Transylvanian vote is of key importance to the Orban administration. The fact that Orban may be able to mobilize thousands of votes in the diaspora is a sign that minority protection in Central Europe is an issue that should not be overlooked.

Orban doesn’t just encourage the dual-national Hungarian minority in Romania to vote in Hungarian elections, drawing further criticism from Romanian figures. In a trip to Transylvania just before the 2016 Romanian elections, Orban stirred angst against the government, claiming that the government is failing to help the ethnic Hungarians. Orban went as far as to say that the Romanian government lacks respect for the Hungarian minority. He urged them to vote in their own best interest in the elections.

Romanian critics of Orban have accused him of trying to meddle in their politics. Former President Traian Basescu even called for the removal of the Hungarian ambassador from Romania.

ReConnect Transylvania

ReConnect Hungary is a birthright program for Canadian and American young adults of Hungarian heritage. The program aims to help Hungarians in North America forge a sense of Hungarian patriotism through travel in the region and volunteer opportunities. Interestingly, the study trip is not limited to the country of Hungary, rather participants visit Hungary, as well as the Hungarian Diaspora in Serbia, Ukraine, or Slovakia to witness, “how young Hungarians outside Hungary are maintaining their identity and traditions.”

As of 2017 the program offers a three month long ReConnect Transylvania program. Participants in this program will spend 3-6 months working with an NGO in Transylvania to “discover the deepest layers of being Hungarian.” ReConnect Hungary also now offers a week long extension on the original two week long ReConnect Hungary program to explore Hungarian culture in Transylvania. By including the Diaspora in the discussion about Hungarian culture, this private-public partnership builds a concept of a Hungarian nation that traverses accepted borders.

ReConnect Hungary is part of a larger trend called diaspora tourism. Proponents of the trend argue that it cultivates a sense of cultural heritage abroad and encourages tourism, while critics claim local leaders are using it to manipulate foreign nationals.

Cultivating strong national identity abroad can be a powerful tool, and not just in dual-citizens. Hungary has already seen some success in this regard. In 1987 the Hungarian Human Rights Foundations, comprising of second generation American citizens, successfully lobbied congress for the removal of Romania’s Most Favored Nation status. The lobbying efforts were in response to the human rights violations of Ceau?escu’s communist regime, as well as specific abuses of the Hungarian population in Romania.

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Which Europeans Carry The Most Cash?

How much cash do you have in your wallet right now?

Historically, it has been found that the amount of cash people carry is a key indicator of their use of cash. According to research from the European Central Bank, people in the eurozone carried an average of €65 in their wallets in 2016.

Infographic: Which Europeans Carry The Most Cash?  | Statista

You will find more statistics at Statista

As Statista's Niall McCarthy notes, on a country by country basis, Germans tended to carry the most cash on average, €103.

People in Luxembourg had an average of €102 in their wallets while Austrians had €89.

People in France and Portugal had the least on average with €32 and €29 respectively.

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Geert Wilders: “It’s Time To Drain The Swamp… In Europe”

Authored by Geert Wilders via The Gatestone Institute,

  • Our democracies in the Western half of Europe have been subverted. Their goal is no longer to do what the people want. On the contrary, our political elites often do exactly the opposite. Our parliaments promote open-door policies that the majority of the people reject. Our governments sell out sovereignty to the EU against the will of the people. Our rulers welcome ever more Islam, although the majority of the people oppose it.
  • Our democracies have become fake democracies. They are multi-party dictatorships, ruled by groups of establishment parties…. The establishment parties control everything, not just the politicians in their pay, but also the top brass of the civil service, the mainstream media, even the courts…. They call us "populists" because we stand for what the people want. They even drag us to court.
  • We need to show that Europe's streets are our streets, that we want to stay who and what we are, and do not want to be colonized by Islam. Europe belongs to us!

Next month, I will be visiting Prague, the capital of the Czech Republic. I have been invited to speak to a group of Czech patriots. The Czechs are a freedom loving people. In 2011, on the occasion of the 100th birthday of Ronald Reagan, they named a street in Prague after this great American president and freedom fighter.

This fact reminded me of a shameful event in my home town of The Hague, the seat of the Dutch Parliament and the government of the Netherlands. Look for a Ronald Reagan Street in The Hague and you will find none. A proposal in 2011 to name a street in The Hague after Reagan ran into fierce political opposition. Leftist parties, such as Labor, the Greens and the liberal D66 party, argued that naming a street in honor of Reagan would "do the image of the city no good." The whole affair ended in a disgraceful political compromise. Last year, a short stretch of a local bicycle path was named the "Reagan and Gorbachev Lane".

This anecdote is indicative of the difference between East and West in Europe. We can see the same difference in the attitude of their ruling elites towards Islam, the new totalitarianism that is threatening Europe today. In the East, political leaders oppose Islam; in the West, they surrender.

Islam has already gained a strong foothold in Western Europe. Its streets have come to resemble the Middle East, with headscarves everywhere. Parts of Western Europe, such as the Schilderswijk district in The Hague, the Molenbeek borough in Brussels, the banlieues [suburbs] of Paris, Birmingham in Britain, the Rosengård area in Malmö, Sweden, and many other neighborhoods, have become hotbeds of Islamic subversion.

Islam's totalitarian nature cannot be denied. The command to murder and terrorize non-Muslims is in the Koran. Islam's prophet Muhammad was a mass murderer and a pedophile. Those who leave Islam supposedly deserve death. And everyone who criticizes Islam and exposes what it actually says, ends up like me: on an Islamic death list.

In the past decades, Islam has entered Western Europe with the millions of immigrants from Islamic countries. Now, the European Union wants to distribute third-world immigrants over all the 28 EU member states. The nations in Central and Eastern Europe reject the EU plans to impose permanent and mandatory relocation quotas for all EU member states. They warn about the dilution of their identity, which is not Islamic, but Judeo-Christian and humanist — rooted in the legacy of Jerusalem, Athens and Rome; not Mecca.

Hungarian Prime Minister Viktor Orbán has denounced the EU's pro-immigration agenda as a means to eradicate the culture and Christian identity of Hungary. Czech President Miloš Zeman is an outspoken opponent of immigration and the Islamification of the Czech Republic. Slovak Prime Minister Robert Fico has said that "Islam has no place in Slovakia" and warns that "migrants change the character of our country." Polish Prime Minister Beata Szyd?o staunchly defends Poland's refusal to accept the EU-imposed immigration quotas. "We are not going to take part in this madness," she says. In the Eastern part of Europe, anti-Islamification and anti-mass migration parties see a surge in popular support.

Resistance is growing in the West, as well. This year, we have seen my party, the Party for Freedom (PVV), become the second-largest party in the Netherlands. This is a great achievement in a country with 13 parties in Parliament. In France, Marine Le Pen made it to the second round in the French presidential elections and her party, the Front National, got more votes than ever. In Austria, the FPÖ became the second biggest party. In Germany, the patriots of the AfD forced their way into the Bundestag.

Geert Wilders, leader of the Party for Freedom (PVV), casts his vote in The Hague during the Dutch general election that made his the second-largest party in the Netherlands, on March 15, 2017. (Photo by Carl Court/Getty Images)

However, the political elites in the West do all they can to keep the winners of the elections from power. Last month, in my country, the Netherlands, a new government coalition consisting of no less than four parties was formed. Because they stubbornly refused to talk to PVV, it took the political elites a record seven months to put together a coalition. They preferred to take in D66, the party which had denied Ronald Reagan his street in The Hague, and still they were only able to form a government with a majority of just one single seat in Parliament.

Our democracies in the Western half of Europe have been subverted. Their goal is no longer to do what the people want. On the contrary, our political elites often do exactly the opposite. Our parliaments promote open-door policies that the majority of the people reject. Our governments sell out sovereignty to the EU against the will of the people. Our rulers welcome ever more Islam, although the majority of the people oppose it.

Our democracies have become fake democracies. They are multi-party dictatorships, ruled by groups of establishment parties. They wheel and deal, often selling away the principles for which they have been elected. The establishment parties control everything, not just the politicians in their pay, but also the top brass of the civil service, the mainstream media, even the courts. Parties such as mine are excluded from coalition talks. They call us "populists" because we stand for what the people want. They even drag us to court.

Three decades ago, the countries in Central Europe witnessed a Velvet Revolution: Democratic, political and peaceful. They took to the streets. They decided that enough was enough. Thanks to their Velvet Revolution, they have leaders today who truly represent the people and who are not afraid to stand up for their nation and its identity.

We, in Western Europe, can learn lessons from the Velvet Revolution in the East. We, too, urgently need to make clear that enough is enough. In Western Europe, too, it is time to drain the swamp and to drive the elites from power. Peaceful and democratic, but thorough. We have to make our so-called democratic systems truly democratic again. The political actors should no longer be the professional politicians alone. The crisis is existential. It is time for every man and woman to do his and her duty. Because the survival of our nations itself is at stake.

We, too, have to make it very clear that we no longer want to take part in the madness of leaders, who sell out their country to the EU institutions in Brussels, and the madness of the EU elites, who sell out our continent to mass-immigration and Islam. That is why the PVV will demonstrate in the streets of Rotterdam on January 20th. We need to show that Europe's streets are our streets, that we want to stay who and what we are, and do not want to be colonized by Islam. Europe belongs to us!

via http://ift.tt/2AaOKuF Tyler Durden

Satoshi Secrets & Why Nearly 4 Million Bitcoins Are “Lost” Forever

Authored by Jeff John Roberts and Nicolas Rapp via Fortune.com,

Just as gold bars are lost at sea or $100 bills can burn, bitcoins can disappear from the Internet forever.

When all 21 million bitcoins are mined by the year 2040, the actual amount available to trade or spend will be significantly lower.

According to new research from Chainalysis, a digital forensics firm that studies the bitcoin blockchain, 3.79 million bitcoins are already gone for good based on a high estimate – and 2.78 million based on a low one. Those numbers imply 17% to 23% of existing bitcoins, which are today worth around $9,000 each, are lost.

While others have speculated about the number of lost bitcoins, the Chainalysis findings are significant because they rely on a detailed empirical analysis of the blockchain, where all bitcoin transactions are recorded.

As the graphic above shows, Chainalysis’s conclusions rely on segmenting the existing bitcoin supply based on age and transaction activity. For some segments, the company used statistical sampling to determine the amount lost.

The segment “Mined Coins” reflects bitcoins mined in 2017 (which are presumed not to be lost), while “transactional” refers to those that have moved or spent in the last year—very few of which are lost. Likewise, the category of “Strategic Investors,” who have held their bitcoins for 1-2 years represent a very small share of the losses.

Here’s the data in another format, which shows how “Out of circulation” bitcoins – those mined 2-7 years ago and belonging to long-time investors known as “hodlers” – and those from the early days of bitcoin in 2009 and 2010 account for the vast majority of the lost coins:

These figures reflect bitcoins that are truly lost, and not hacked or otherwise stolen – in these cases, of course, the bitcoin is not lost since the thief has control of them.

Note the numbers above are based on the high estimate, and that the low estimate, which is based on only a 30% loss in “hodler” coins, puts the number of lost bitcoins at 2,767,468. Also, both estimates make a critical assumption that coins belonging to bitcoin’s inventor, Satoshi, are gone for good (more on that below).

In the future, more bitcoins will be lost. But the rate at which they disappear will be much lower than in the past since, now that they’re so valuable, people will be more vigilant about keeping track of them (unlike this poor fellow out who threw away a hard drive with the key to 7,500 bitcoins). Meanwhile, there is a question of whether the Chainalysis findings mean bitcoin is more scarce than people assume—or if the market has already priced the missing coins into the currency’s current value.

“That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity,” said Kim Grauer, Senior Economist at Chainalysis. “Yet the market has adapted to the actual demand and supply available – just look at exchange behavior. Furthermore, it is well known monetary policy procedure to lower or increase fiat reserves to impact exchange rates. So the answer is yes and no.”

Lost Bitcoins and the Secret of Satoshi

Chainalysis, whose clients include the IRS and Europol, has made a name for itself in the bitcoin world because of its abundant data and sophisticated study of blockchain wallets. Law enforcement agencies rely on the company to provide detailed insights into who owns the currency and how it moves around.

Chainalysis’s overall methodology is confidential, but a spokesperson shared certain details about how the company assesses which bitcoins are lost. An important clue comes when there is a “fork” in the blockchain, such as the one this summer which led to the creation of a bitcoin clone known as Bitcoin Cash. Such events can lead to the owners of wallets that have been inactive for years to conduct a transaction, providing an opportunity for statistical analysis.

These sort of clues help inform the Chainalysis figure for the “hodler” category – wallets belonging to people who got into bitcoin before it hit the big time, and which represent the biggest source of uncertainty as to whether bitcoins are lost or just being hoarded.

As for the 2% of “‘transactional” bitcoins that Chainalysis determined to be gone, the company says this is based on scraping the Internet for reports of lost coins. It added that the estimate of such losses, which can arise from a misdirected transaction or the loss of a private key through death or carelessness, is not based on statistical extrapolation and will be refined further in coming years.

Finally, there’s the question of what became of the bitcoins belonging to Satoshi, the pseudonymous creator of the crypto-currency, who has not been not been heard from since 2011. Chainalysis says wallets associated with Satoshi represent about 1 million bitcoins (the company will provide a more specific figure later this year), and that its model assumes that those coins—which date from a time when it was easy to mine 50 bitcoin with a laptop—are gone forever. This assumption is a big one and, if it proves to be incorrect, the number of circulating bitcoins could suddenly increase significantly and deliver a shock to the market.

Fortune asked Chainalysis about what was most surprising about the lost bitcoin findings.

“Firstly, we floated our findings to a few people and they all had different reactions about how surprising the figure was. But what I found most surprising/interesting was how when you unpack what it means to be “lost” things get even more confusing.” Grauer said.

via http://ift.tt/2n5dlvW Tyler Durden

Thanksgiving 2017 – David Stockman Explains Why There Is No Peace On Earth

Authored by David Stockman via Contra Corner blog,

After the Berlin Wall fell in November 1989 and the death of the Soviet Union was confirmed two years later when Boris Yeltsin courageously stood down the red army tanks in front of Moscow's White House, a dark era in human history came to an end.

The world had descended into what had been a 77-year global war, incepting with the mobilization of the armies of old Europe in August 1914. If you want to count bodies, 150 million were killed by all the depredations which germinated in the Great War, its foolish aftermath at Versailles, and the march of history into the world war and cold war which followed inexorably thereupon.

To wit, upwards of 8% of the human race was wiped-out during that span. The toll encompassed the madness of trench warfare during 1914-1918; the murderous regimes of Soviet and Nazi totalitarianism that rose from the ashes of the Great War and Versailles; and then the carnage of WWII and all the lesser (unnecessary) wars and invasions of the Cold War including Korea and Vietnam.

We have elaborated more fully on this proposition in "The Epochal Consequences Of Woodrow Wilson's War", but the seminal point cannot be gainsaid. The end of the cold war meant world peace was finally at hand, yet 26 years later there is still no peace because Imperial Washington confounds it.

In fact, the War Party entrenched in the nation's capital is dedicated to economic interests and ideological perversions that guarantee perpetual war; they ensure endless waste on armaments and the inestimable death and human suffering that stems from 21st century high tech warfare and the terrorist blowback it inherently generates among those upon which the War Party inflicts its violent hegemony.

In short, there was a virulent threat to peace still lurking on the Potomac after the 77-year war ended. The great general and president, Dwight Eisenhower, had called it the “military-industrial complex” in his farewell address, but that memorable phrase had been abbreviated by his speechwriters, who deleted the word “congressional” in a gesture of comity to the legislative branch.

So restore Ike’s deleted reference to the pork barrels and Sunday afternoon warriors of Capitol Hill and toss in the legions of beltway busybodies that constituted the civilian branches of the cold war armada (CIA, State, AID etc.) and the circle would have been complete. It constituted the most awesome machine of warfare and imperial hegemony since the Roman legions bestrode most of the civilized world.

In a word, the real threat to peace circa 1991 was that Pax Americana would not go away quietly in the night.

In fact, during the past 26 years Imperial Washington has lost all memory that peace was ever possible at the end of the cold war. Today it is as feckless, misguided and bloodthirsty as were Berlin, Paris, St. Petersburg, Vienna and London in August 1914.

Back then a few months after the slaughter had been unleashed, soldiers along the western front broke into spontaneous truces of Christmas celebration, singing and even exchange of gifts. For a brief moment they wondered why they were juxtaposed in lethal combat along the jaws of hell.

The truthful answer is that there was no good reason. The world had stumbled into war based on false narratives and the institutional imperatives of military mobilization plans, alliances and treaties arrayed into a doomsday machine and petty short-term diplomatic maneuvers and political calculus. Yet it took more than three-quarters of a century for all the consequential impacts and evils to be purged from the life of the planet.

The peace that was lost last time has not been regained this time for the same reasons. Historians can readily name the culprits from 100 years ago, such as the German general staff's plan for a lightening mobilization and strike on the western front called the Schlieffen Plan or Britain's secret commitments to France to guard the North Sea while the latter covered the Mediterranean.

Since these casus belli of 1914 were criminally trivial in light of all that metastisized thereafter, it might do well to name the institutions and false narratives that block the return of peace today. The fact is, these impediments are even more contemptible than the forces that crushed the Christmas truces one century ago.

Imperial Washington – Global Menace

There is no peace on earth today for reasons mainly rooted in Imperial Washingtonnot Moscow, Beijing, Tehran, Damascus, Mosul or Raqqah. The former has become a global menace owing to what didn't happen in 1991.

What should have happened is that Bush the elder should have declared "mission accomplished" and slashed the Pentagon budget from $600 billion to $200 billion; demobilized the military-industrial complex by putting a moratorium on all new weapons development, procurement and export sales; dissolved NATO and dismantled the far-flung network of US military bases; slashed the US standing armed forces from 1.5 million to a few hundred thousand; and organized and led a world disarmement and peace campaign, as did his Republican predecessors during the 1920s.

Unfortunately, George H.W. Bush was not a man of peace, vision or even mediocre intelligence. He was the malleable tool of the War Party, and it was he who single-handedly blew the peace when he plunged America into a petty arguement between the impetuous dictator of Iraq and the gluttonous Emir of Kuwait that was none of our business.

By contrast, even though liberal historians have reviled Warren G. Harding as some kind of dumbkopf politician, he well understood that the Great War had been for naught, and that to insure it never happened again the nations of the world needed to rid themselves of their huge navies and standing armies.

To that end, he achieved the largest global disarmament agreement ever during the Washington Naval conference of 1921, which halted the construction of new battleships for more than a decade.

And while he was at it, President Harding also pardoned Eugene Debs. So doing, he gave witness to the truth that the intrepid socialist candidate for president and vehement anti-war protestor, who Wilson had thrown in prison for exercising his first amendment right to speak against US entry into a pointless European war, had been right all along.

In short, Warren G. Harding knew the war was over, and the folly of Wilson's 1917 plunge into Europe's bloodbath should not be repeated at all hazards.

Not George H.W. Bush. The man should never be forgiven for enabling the likes of Dick Cheney, Paul Wolfowitz, Robert Gates and their neocon pack of jackals to come to power—-even if he has denounced them in his bumbling old age.

Even more to the point, by opting not for peace but for war and oil in the Persian Gulf in 1991 he opened the gates to an unnecessary confrontation with Islam and nurtured the rise of jihadist terrorism that would not haunt the world today save for forces unleashed by George Bush's petulant quarrel with Saddam Hussein.

We will momentarily get to the 45-year old error that holds the Persian Gulf is an American Lake and that the answer to high old prices and energy security is the Fifth Fleet. Actually, the answer to high oil prices everywhere and always is high oil prices—–a truth driven home in spades again two years ago when the Brent oil price plunged below $35 per barrel.

But first it is well to remember that there was no plausible threat anywhere on the planet to the safety and security of the citizens of Springfield MA, Lincoln NE or Spokane WA when the cold war ended.

The Warsaw Pact had dissolved into more than a dozen woebegone sovereign statelets; the Soviet Union was now unscrambled into 15 independent and far-flung Republics from Belarus to Tajikistan; and the Russian motherland would soon plunge into an economic depression that would leave it with a GDP about the size of the Philadelphia SMSA.

Likewise, China's GDP was even smaller and more primitive than Russia's. Even as Mr. Deng was discovering the PBOC printing press that would enable it to become a great mercantilist exporter, an incipient threat to national security was never in the cards. After all, it was 4,000 Wal-Marts in America upon which the prosperity of the new red capitalism inextricably depended and upon which the rule of the communist oligarchs in Beijing was ultimately anchored.

No Islamic Or Jihadi Terrorist Threat Circa 1990

In 1991 there was no global Islamic threat or jihadi terrorist menace at all. What existed under those headings were sundry fragments and deposits of middle eastern religious, ethnic and tribal history that were of moment in their immediate region, but no threat to America whatsoever.

The Shiite/Sunni divide had co-existed since 671AD, but its episodic eruptions into battles and wars over the centuries had rarely extended beyond the region, and certainly had no reason to fester into open conflict in 1991.

Inside the artificial state of Iraq, which had been drawn on a map by  historically ignorant European diplomats in 1916, for instance, the Shiite and Sunni got along tolerably well. That's because the nation was ruled by Saddam Hussein's Baathist brand of secular Arab nationalism.

The latter championed law and order, state driven economic development and politically apportioned distribution from the spoils of the extensive government controlled oil sector. To be sure, Baathist socialism didn't bring much prosperity to the well-endowed lands of Mesopotamia, but Hussein did have a Christian foreign minister and no sympathy for religious extremism or violent pursuit of sectarian causes.

As it happened, the bloody Shiite/Sunni strife that plagues Iraq today and functions as a hatchery for angry young jihadi terrorists in their thousands was unleashed only after Hussein had been driven from Kuwait and the CIA had instigated an armed uprising in the Shiite heartland around Basra. That revolt was brutally suppressed by Hussein's republican guards, but it left an undertow of resentment and revenge boiling below the surface.

Needless to say, the younger Bush and his cabal of neocon warmongers could not leave well enough alone. When they foolishly destroyed Saddam Hussein and his entire regime in the pursuit of nonexistent WMDs and ties with al-Qaeda, they literally opened the gates of hell, leaving Iraq as a lawless failed state where both recent and ancient religious and tribal animosities are given unlimited violent vent.

Likewise, the Shiite theocracy ensconced in Tehran was an unfortunate albatross on the Persian people, but it was no threat to America's safety and security. The very idea that Tehran is an expansionist power bent on exporting terrorism to the rest of the world is a giant fiction and tissue of lies invented by the Washington War Party and its Bibi Netanyahu branch in order to win political support for their confrontationist policies.

Indeed, the three decade long demonization of Iran has served one over-arching purpose. Namely, it enabled both branches of the War Party to conjure up a fearsome enemy, thereby justifying aggressive policies that call for a constant state of war and military mobilization.

When the cold-war officially ended in 1991, the Cheney/neocon cabal feared the kind of drastic demobilization of the US military-industrial complex that was warranted by the suddenly more pacific strategic environment. In response, they developed an anti-Iranian doctrine that was explicitly described as a way of keeping defense spending at high cold war levels.

And the narrative they developed to this end is one of the more egregious Big Lies ever to come out of the beltway. It puts you in mind of the young boy who killed his parents, and then threw himself on the mercy of the courts on the grounds that he was an orphan!

To wit, during the 1980s the neocons in the Reagan Administration issued their own fatwa again the Islamic Republic based on its rhetorical hostility to America. Yet that enmity was grounded in Washington’s 25-year support for the tyrannical and illegitimate regime of the Shah, and constituted a founding narrative of the Islamic Republic that was not much different than America's revolutionary castigation of King George.

That the Iranians had a case is beyond doubt. The open US archives now prove that the CIA overthrew Iran’s democratically elected government in 1953 and put the utterly unsuited and megalomaniacal Mohammad Reza Shah on the peacock throne to rule as a puppet in behalf of US security and oil interests.

During the subsequent decades the Shah not only massively and baldly plundered the wealth of the Persian nation; with the help of the CIA and US military, he also created a brutal secret police force known as the Savak. The latter made the East German Stasi look civilized by comparison.

All elements of Iranian society including universities, labor unions, businesses, civic organizations, peasant farmers and many more were subjected to intense surveillance by the Savak agents and paid informants. As one critic described it:

Over the years, Savak became a law unto itself, having legal authority to arrest, detain, brutally interrogate and torture suspected people indefinitely. Savak operated its own prisons in Tehran, such as Qezel-Qalaeh and Evin facilities and many suspected places throughout the country as well. Many of those activities were carried out without any institutional checks.

Ironically, among his many grandiose follies, the Shah embarked on a massive civilian nuclear power campaign in the 1970s, which envisioned literally paving the Iranian landscape with dozens of nuclear power plants.

He would use Iran’s surging oil revenues after 1973 to buy all the equipment required from Western companies – and also fuel cycle support services such as uranium enrichment – in order to provide his kingdom with cheap power for centuries.

At the time of the Revolution, the first of these plants at Bushehr was nearly complete, but the whole grandiose project was put on hold amidst the turmoil of the new regime and the onset of Saddam Hussein’s war against Iran in September 1980. As a consequence, a $2 billion deposit languished at the French nuclear agency that had originally obtained it from the Shah to fund a ramp-up of its enrichment capacity to supply his planned battery of reactors.

Indeed, in this very context the new Iranian regime proved quite dramatically that it was not hell bent on obtaining nuclear bombs or any other weapons of mass destruction. In the midst of Iraq's unprovoked invasion of Iran in the early 1980s the Ayatollah Khomeini issued a fatwa against biological and chemical weapons.

Yet at that very time, Saddam was dropping these horrific weapons on Iranian battle forces – some of them barely armed teenage boys – with the spotting help of CIA tracking satellites and the concurrence of Washington. So from the very beginning, the Iranian posture was wholly contrary to the War Party’s endless blizzard of false charges about its quest for nukes.

However benighted and medieval its religious views, the theocracy which rules Iran does not consist of demented war mongers. In the heat of battle they were willing to sacrifice their own forces rather than violate their religious scruples to counter Saddam’s WMDs.

Then in 1983 the new Iranian regime decided to complete the Bushehr power plant and some additional elements of the Shah’s grand plan. But when they attempted to reactivate the French enrichment services contract and buy necessary power plant equipment from the original German suppliers they were stopped cold by Washington. And when the tried to get their $2 billion deposit back, they were curtly denied that, too.

To make a long story short, the entire subsequent history of off again/on again efforts by the Iranians to purchase dual use equipment and components on the international market, often from black market sources like Pakistan, was in response to Washington’s relentless efforts to block its legitimate rights as a signatory to the Nuclear Nonproliferation Treaty (NPT) to complete some parts of the Shah’s civilian nuclear project.

Needless to say, it did not take much effort by the neocon “regime change” fanatics which inhabited the national security machinery, especially after the 2000 election, to spin every attempt by Iran to purchase even a lowly pump or pipe fitting as evidence of a secret campaign to get the bomb.

The exaggerations, lies, distortions and fear-mongering which came out of this neocon campaign are truly disgusting. Yet they incepted way back in the early 1990s when George H.W. Bush actually did reach out to the newly elected government of Hashemi Rafsanjani to bury the hatchet after it had cooperated in obtaining the release of American prisoners being held in Lebanon in 1989.

The latter was self-evidently a pragmatist who did not want conflict with the United States and the West; and after the devastation of the eight year war with Iraq was wholly focused on economic reconstruction and even free market reforms of Iran's faltering economy.

It is one of the great tragedies of history that the neocons managed to squelch even George Bush's better instincts with respect to rapprochement with Tehran.

So the prisoner release opening was short-lived—especially after the top post at the CIA was assumed in 1991 by Robert Gates. He was one of the very worst of the unreconstructed cold war apparatchiks who looked peace in the eye, and elected, instead, to pervert John Quincy Adams' wise maxim by searching the globe for monsters to fabricate.

In this case the motivation was especially loathsome. Gates had been Bill Casey's right hand man during the latter's rogue tenure at the CIA in the Reagan administration. Among the many untoward projects that Gates shepherded was the Iran-Contra affair that nearly destroyed his career when it blew-up, and for which he blamed the Iranian's for its public disclosure.

From his post as deputy national security director in 1989 and then as CIA head Gates pulled out all the stops to get even. Almost single-handedly he killed-off the White House goodwill from the prisoner release, and launched the blatant myth that Iran was both sponsoring terrorism and seeking to obtain nuclear weapons.

Indeed, it was Gates who was the architect of the demonization of Iran that became a staple of War Party propaganda after the 1991. In time that morphed into the utterly false claim that Iran is an aggressive would be hegemon that is a fount of terrorism and is dedicated to the destruction of the state of Israel, among other treacherous purposes.

That giant lie was almost single-handedly fashioned by the neocons and Bibi Netanyahu's coterie of power-hungry henchman after the mid-1990s. Indeed, the false claim that Iran posses an “existential threat” to Israel is a product of the pure red meat domestic Israeli politics that have kept Bibi in power for much of the last two decades.

But the truth is Iran has only a tiny fraction of Israel's conventional military capability. And compared to the latter's 200 odd nukes, Iran has never had a nuclear weaponization program after a small scale research program was ended in 2003.

That is not merely our opinion. It's been the sober assessment of the nation's top 17 intelligence agencies in the official National Intelligence Estimates ever since 2007. And now in conjunction with a further study in conjunction with the nuclear accord that will straight-jacket even Iran's civilian program and eliminate most of its enriched uranium stock piles and spinning capacity, the IAEA has also concluded the Iran had no secret program after 2003.

On the political and foreign policy front, Iran is no better or worse than any of the other major powers in the Middle East. In many ways it is far less of a threat to regional peace and stability than the military butchers who now run Egypt on $1.5 billion per year of US aid.

And it is surely no worse than the corpulent tyrants who squander the massive oil resources of Saudi Arabia in pursuit of unspeakable opulence and decadence to the detriment of the 30 million citizens which are not part of the regime, and who one day may well reach the point of revolt.

When it comes to the support of terrorism, the Saudis have funded more jihadists and terrorists throughout the region than Iran ever even imagined.

Myth Of The Shiite Crescent

In this context, the War Party’s bloviation about Iran’s leadership of the so-called Shiite Crescent is another component of Imperial Washington's 26-year long roadblock to peace. Iran wasn't a threat to American security in 1991, and it has never since then organized a hostile coalition of terrorists that require Washington's intervention.

Start with Iran's long-standing support of Bashir Assad's government in Syria. That alliance that goes back to his father’s era and is rooted in the historic confessional politics of the Islamic world.

The Assad regime is Alawite, a branch of the Shiite, and despite the regime’s brutality, it has been a bulwark of protection for all of Syria’s minority sects, including Christians, against a majority-Sunni ethnic cleansing. The latter would surely have occurred if the Saudi (and Washington) supported rebels, led by the Nusra Front and ISIS, had succeeded in taking power.

Likewise, the fact that the Bagdhad government of the broken state of Iraq——that is, the artificial 1916 concoction of two stripped pants European diplomats (Messrs. Sykes and Picot of the British and French foreign offices, respectively)——–is now aligned with Iran is also a result of confessional politics and geo-economic propinquity.

For all practical purposes, the Kurds of the northeast have declared their independence; and the now "liberated" western Sunni lands of the upper Euphrates have been physically and economically destroyed—- after first being conquered by ISIS with American weapons dropped in place by the hapless $25 billion Iraqi army minted by Washington’s departing proconsuls.

Accordingly, what is left of Iraq is a population that is overwhelmingly Shiite, and which nurses bitter resentments after two decades of violent conflict with the Sunni forces. Why in the world, therefore, wouldn’t they ally with their Shiite neighbor?

Likewise, the claim that Iran is now trying to annex Yemen is pure claptrap. The ancient territory of Yemen has been racked by civil war off and on since the early 1970s.  And a major driving force of that conflict has been confessional differences between the Sunni south and the Shiite north.

In more recent times, Washington’s blatant drone war inside Yemen against alleged terrorists and its domination and financing of Yemen’s governments eventually produced the same old outcome. That is, another failed state and an illegitimate government which fled at the 11th hour, leaving another vast cache of American arms and equipment behind.

Accordingly, the Houthis forces now in control of substantial parts of the country are not some kind of advanced guard sent in by Tehran. They are indigenous partisans who share a confessional tie with Iran, but which have actually been armed by the US.

And the real invaders in this destructive civil war are the Saudis, whose vicious bombing campaign against civilian populations controlled by the Houthis are outright war crimes if the word has any meaning at all.

Finally, there is the fourth element of the purported Iranian axis—–the Hezbollah controlled Shiite communities of southern Lebanon and the Bekaa Valley.  Like everything else in the Middle East, Hezbollah is a product of historical European imperialism, Islamic confessional politics and the frequently misguided and counterproductive security policies of Israel.

In the first place, Lebanon was not any more a real country than Iraq was when Sykes and Picot laid their straight-edged rulers on a map. The result was a stew of religious and ethnic divisions—-Maronite Catholics, Greek Orthodox, Copts, Druse, Sunnis, Shiites, Alawites, Kurds, Armenians, Jews and countless more—– that made the fashioning of a viable state virtually impossible.

At length, an alliance of Christians and Sunnis gained control of the country, leaving the 40% Shiite population disenfranchised and economically disadvantaged, as well. But it was the inflow of Palestinian refugees in the 1960s and 1970s that eventually upset the balance of sectarian forces and triggered a civil war that essentially lasted from 1975 until the turn of the century.

It also triggered a catastrophically wrong-headed Israeli invasion of southern Lebanon in 1982, and a subsequent repressive occupation of mostly Shiite territories for the next eighteen years. The alleged purpose of this invasion was to chase the PLO and Yassir Arafat out of the enclave in southern Lebanon that they had established after being driven out of Jordan in 1970.

Eventually Israel succeeded in sending Arafat packing to north Africa, but in the process created a militant, Shiite-based resistance movement that did not even exist in 1982, and which in due course became the strongest single force in Lebanon’s fractured domestic political arrangements.

After Israel withdrew in 2000, the then Christian President of the county made abundantly clear that Hezbollah had become a legitimate and respected force within the Lebanese polity, not merely some subversive agent of Tehran:

“For us Lebanese, and I can tell you the majority of Lebanese, Hezbollah is a national resistance movement. If it wasn’t for them, we couldn’t have liberated our land. And because of that, we have big esteem for the Hezbollah movement.”[

So, yes, Hezbollah is an integral component of the so-called Shiite Crescent and its confessional and political alignment with Tehran is entirely plausible. But that arrangement—-however uncomfortable for Israel—–does not represent unprovoked Iranian aggression on Israel’s northern border.

Instead, it’s actually the blowback from the stubborn refusal of Israeli governments—–especially the rightwing Likud governments of modern times—–to deal constructively with the Palestinian question.

In lieu of a two-state solution in the territory of Palestine, therefore, Israeli policy has produced a chronic state of war with nearly half the Lebanese population represented by Hezbollah.

The latter is surely no agency of peaceful governance and has committed its share of atrocities. But the point at hand is that given the last 35 years of history and Israeli policy, Hezbollah would exist as a menacing force on its northern border even if the theocracy didn't exist and the Shah or his heir was still on the Peacock Throne.

In short, there is no alliance of terrorism in the Shiite Crescent that threatens American security. That proposition is simply one of the Big Lies that was promulgated by the War Party after 1991; and which has been happily embraced by Imperial Washington since then in order to keep the military/industrial/security complex alive, and justify its self-appointed role as policeman of the world.

Washington's Erroneous View That The Persian Gulf Should Be An American Lake – The Root Of Sunni Jihaddism

Likewise, the terrorist threat that has arisen from the Sunni side of the Islamic divide is largely of Washington's own making; and it is being nurtured by  endless US meddling in the region's politics and by the bombing and droning campaigns against Washington's self-created enemies.

At the root of Sunni based terrorism is the long-standing Washington error that America’s security and economic well-being depends upon keeping an armada in the Persian Gulf in order to protect the surrounding oilfields and the flow of tankers through the straits of Hormuz.

That doctrine has been wrong from the day it was officially enunciated by one of America’s great economic ignoramuses, Henry Kissinger, at the time of the original oil crisis in 1973. The 42 years since then have proven in spades that its doesn’t matter who controls the oilfields, and that the only effective cure for high oil prices is the free market.

Every tin pot dictatorship from Libya’s Muammar Gaddafi to Hugo Chavez in Venezuela to Saddam Hussein, to the bloody-minded chieftains of Nigeria, to the purportedly medieval Mullahs and fanatical Revolutionary Guards of Iran has produced oil—-and all they could because they desperately needed the revenue.

For crying out loud, even the barbaric thugs of ISIS milk every possible drop of petroleum from the tiny, wheezing oilfields scattered around their backwater domain. So there is no economic case whatsoever for Imperial Washington’s massive military presence in the middle east, and most especially for its long-time alliance with the despicable regime of Saudi Arabia.

The truth is, there is no such thing as an OPEC cartel——virtually every member produces all they can and cheats whenever possible. The only thing that resembles production control in the global oil market is the fact that the Saudi princes treat their oil reserves not much differently than Exxon.

That is, they attempt to maximize the present value of their 270 billion barrels of reserves, but ultimately are no more clairvoyant at calibrating the best oil price to accomplish that than are the economists at Exxon or the IEA.

The Saudis over-estimated the staying power of China’s temporarily surging call on global supply; and under-estimated how rapidly and extensively the $100 per barrel marker reached in early 2008 would trigger a flow of investment, technology and cheap debt into the US shale patch, the Canadian tar sands, the tired petroleum provinces of Russia, the deep offshore of Brazil etc. And that’s to say nothing of solar, wind and all the other government subsidized alternative source of BTUs.

Way back when Jimmy Carter was telling us to turn down the thermostats and put on our cardigan sweaters, those of us on the free market side of the so-called energy shortage debate said the best cure for high oil prices is high prices. Now we know.

So the Fifth Fleet and its overt and covert auxiliaries should never have been there—–going all the way back to the CIA’s coup against Iranian democracy in 1953.

But having turned Iran into an enemy, Imperial Washington was just getting started when 1990 rolled around. Once again in the name of “oil security” it plunged the American war machine into the politics and religious fissures of the Persian Gulf; and did so on account of a local small potatoes conflict that had no bearing whatsoever on the safety and security of American citizens.

As US ambassador Glaspie rightly told Saddam Hussein on the eve of his Kuwait invasion, America had no dog in that hunt.

Kuwait wasn’t even a country; it was a bank account sitting on a swath of oilfields surrounding an ancient trading city that had been abandoned by Ibn Saud in the early 20th century.

That’s because he didn’t know what oil was or that it was there; and, in any event, it had been made a separate protectorate by the British in 1913 for reasons that are lost in the fog of diplomatic history.

Likewise, Iraq’s contentious dispute with Kuwait had been over its claim that the Emir of Kuwait was “slant drilling” across his border into Iraq’s Rumaila field. Yet it was a wholly elastic boundary of no significance whatsoever.

In fact, the dispute over the Rumaila field started in 1960 when an Arab League declaration arbitrarily marked the Iraq–Kuwait border two miles north of the southernmost tip of the Rumaila field.

And that newly defined boundary, in turn, had come only 44 years after a pair of English and French diplomats had carved up their winnings from the Ottoman Empire’s demise by laying a straight edged ruler on the map. So doing, they thereby confected the artificial country of Iraq from the historically independent and hostile Mesopotamian provinces of the Shiite in the south, the Sunni in the west and the Kurds in the north.

In short, it did not matter who controlled the southern tip of the Rumaila field—–the brutal dictator of Baghdad or the opulent Emir of Kuwait. Not the price of oil, nor the peace of America nor the security of Europe nor the future of Asia depended upon it.

The First Gulf War – A Catastrophic Error

But once again Bush the Elder got persuaded to take the path of war. This time it was by Henry Kissinger’s  economically illiterate protégés at the national security council and his Texas oilman Secretary of State. They falsely claimed that the will-o-wisp of “oil security” was at stake, and that 500,000 American troops needed to be planted in the sands of Arabia.

That was a catastrophic error, and not only because the presence of crusader boots on the purportedly sacred soil of Arabia offended the CIA-trained Mujahedeen of Afghanistan, who had become unemployed when the Soviet Union collapsed.

The 1991 CNN glorified war games in the Gulf also further empowered another group of unemployed crusaders. Namely, the neocon national security fanatics who had mislead Ronald Reagan into a massive military build-up to thwart what they claimed to be an ascendant Soviet Union bent on nuclear war winning capabilities and global conquest.

All things being equal, the sight of Boris Yeltsin, Vodka flask in hand, facing down the Red Army a few months later should have sent them into the permanent repudiation and obscurity they so richly deserved. But Dick Cheney and Paul Wolfowitz managed to extract from Washington’s pyric victory in Kuwait a whole new lease on life for Imperial Washington.

Right then and there came the second erroneous predicate. To wit, that “regime change” among the assorted tyrannies of the middle east was in America’s national interest.

More fatally, the neocons now insisted that the Gulf War proved it could be achieved through a sweeping interventionist menu of coalition diplomacy, security assistance, arms shipments, covert action and open military attack and occupation.

What the neocon doctrine of regime change actually did, of course, was to foster the Frankenstein that utlimately became ISIS. In fact, the only real terrorists in the world which threaten normal civilian life in the West are the rogue offspring of Imperial Washington’s post-1990 machinations in the middle east.

The CIA trained and armed Mujahedeen mutated into al-Qaeda not because Bin Laden suddenly had a religious epiphany that his Washington benefactors were actually the Great Satan owing to America’s freedom and liberty.

His murderous crusade was inspired by the Wahhabi fundamentalism loose in Saudi Arabia. This benighted religious fanaticism became agitated to a fever pitch by Imperial Washington’s violent plunge into Persian Gulf political and religious quarrels, the stationing of troops in Saudi Arabia, and the decade long barrage of sanctions, embargoes, no fly zones, covert actions and open hostility against the Sunni regime in Bagdad after 1991.

Yes, Bin Laden would have amputated Saddam’s secularist head if Washington hadn’t done it first, but that’s just the point. The attempt at regime change in March 2003 was one of the most foolish acts of state in American history.

The younger Bush’s neocon advisers had no clue about the sectarian animosities and historical grievances that Hussein had bottled-up by parsing the oil loot and wielding the sword under the banner of Baathist nationalism. But Shock and Awe blew the lid and the de-baathification campaign unleashed the furies.

Indeed, no sooner had George Bush pranced around on the deck of the Abraham Lincoln declaring “mission accomplished” than Abu Musab al-Zarqawi, a CIA recruit to the Afghan war a decade earlier and small-time specialist in hostage-taking and poisons, fled his no count redoubt in Kurdistan to emerge as a flamboyant agitator in the now disposed Sunni heartland.

The founder of ISIS succeeded in Fallujah and Anbar province just like the long list of other terrorist leaders Washington claims to have exterminated. That is, Zarqawi gained his following and notoriety among the region’s population of deprived, brutalized and humiliated young men by dint of being more brutal than their occupiers.

Indeed, even as Washington was crowing about the demise of Zarqawi, the remnants of the Baathist regime and the hundreds of thousands of demobilized Republican Guards were coalescing into al-Qaeda in Iraq, and their future leaders were being incubated in a monstrous nearby detention center called Camp Bucca that contained more than 26,000 prisoners.

How a US prison camp helped create ISIS

As one former US Army officer, Mitchell Gray, later described it,

You never see hatred like you saw on the faces of these detainees,” Gray remembers of his 2008 tour. “When I say they hated us, I mean they looked like they would have killed us in a heartbeat if given the chance. I turned to the warrant officer I was with and I said, ‘If they could, they would rip our heads off and drink our blood.’ ”

 

What Gray didn’t know — but might have expected — was that he was not merely looking at the United States’ former enemies, but its future ones as well. According to intelligence experts and Department of Defense records, the vast majority of the leadership of what is today known as ISIS, including its leader, Abu Bakr al-Baghdadi, did time at Camp Bucca.

 

And not only did the US feed, clothe and house these jihadists, it also played a vital, if unwitting, role in facilitating their transformation into the most formidable terrorist force in modern history.

 

Early in Bucca’s existence, the most extreme inmates were congregated in Compound 6. There were not enough Americans guards to safely enter the compound — and, in any event, the guards didn’t speak Arabic. So the detainees were left alone to preach to one another and share deadly vocational advice.

 

…….Bucca also housed Haji Bakr, a former colonel in Saddam Hussein’s air-defense force. Bakr was no religious zealot. He was just a guy who lost his job when the Coalition Provisional Authority disbanded the Iraqi military and instituted de-Baathification, a policy of banning Saddam’s past supporters from government work.

 

According to documents recently obtained by German newspaper Der Spiegel, Bakr was the real mastermind behind ISIS’s organizational structure and also mapped out the strategies that fueled its early successes. Bakr, who died in fighting in 2014, was incarcerated at Bucca from 2006-’08, along with a dozen or more of ISIS’s top lieutenants.

The point is, regime change and nation building can never be accomplished by the lethal violence of 21st century armed forces; and they were an especially preposterous assignment in the context of a land rent with 13 century-old religious fissures and animosities.

In fact, the wobbly, synthetic state of Iraq was doomed the minute Cheney and his bloody gang decided to liberate it from the brutal, but serviceable and secular tyranny of Saddam’s Baathist regime. That’s because the process of elections and majority rule necessarily imposed by Washington was guaranteed to elect a government beholden to the Shiite majority.

After decades of mistreatment and Saddam’s brutal suppression of their 1991 uprising, did the latter have revenge on their minds and in their communal DNA?  Did the Kurds have dreams of an independent Kurdistan that had been denied their 30 million strong tribe way back at Versailles and ever since?

Yes, they did. So the $25 billion spent on training and equipping the putative armed forces of post-liberation Iraq was bound to end up in the hands of sectarian militias, not a national army.

In fact, when the Shiite commanders fled Sunni-dominated Mosul in June 2014 they transformed the ISIS uprising against the government in Baghdad into a vicious fledgling state in one fell swoop. It wasn’t by beheadings and fiery jihadist sermons that it quickly enslaved dozens of towns and several million people in western Iraq and the Euphrates Valley of Syria.

ISIS Is Washington's Frankenstein

Its instruments of terror and occupation were the best weapons that the American taxpayers could buy. That included 2,300 Humvees and tens of thousands of automatic weapons, as well as vast stores of ammunition, trucks, rockets, artillery pieces and even tanks and helicopters.

And that wasn’t the half of it. The newly proclaimed Islamic State also filled the power vacuum in Syria created by its so-called civil war. But in truth that was another exercise in Washington inspired and financed regime change undertaken in connivance with Qatar and Saudi Arabia.

The latter were surely not interested in expelling the tyranny next door; they are the living embodiment of it. Instead, the rebellion was about removing Iran’s Alawite/Shiite ally from power in Damascus and laying gas pipelines to Europe across the upper Euphrates Valley.

In any event, ISIS soon had troves of additional American weapons. Some of them were supplied to Sunni radicals by way of Qatar and Saudi Arabia. More came up the so-called “ratline” from Gaddafi’s former arsenals in Benghazi through Turkey. And still more came through Jordan from the “moderate” opposition trained there by the CIA, which more often than not sold them or defected to the other side.

So that the Islamic State was Washington’s Frankenstein monster became evident from the moment it rushed upon the scene 18 months ago. But even then the Washington war party could not resist adding fuel to the fire, whooping up another round of Islamophobia among the American public and forcing the Obama White House into a futile bombing campaign for the third time in a quarter century.

But if bombing really worked, the Islamic State would be sand and gravel by now. Indeed, as shown by the map below, it is really not much more than that anyway.

The dusty, broken, impoverished towns and villages along the margins of the Euphrates River and in the bombed out precincts of Anbar province do not attract thousands of wannabe jihadists from the failed states of the middle east and the alienated Muslim townships of Europe because the caliphate offers prosperity, salvation or any future at all.

What recruits them is outrage at the bombs and drones being dropped on Sunni communities by the US air force; and by the cruise missiles launched from the bowels of the Mediterranean which rip apart homes, shops, offices and mosques containing as many innocent civilians as ISIS terrorists.

The truth is, the Islamic State was destined for a short half-life anyway. It was contained by the Kurds in the north and east and by Turkey with NATO’s second largest army and air force in the northwest. And it was surrounded by the Shiite crescent in the populated, economically viable regions of lower Syria and Iraq.

So absent Washington’s misbegotten campaign to unseat Assad in Damascus and demonize his confession-based Iranian ally, there would have been nowhere for the murderous fanatics who pitched a makeshift capital in Raqqa to go. They would have run out of money, recruits, momentum and public acquiesce in their horrific rule in due course.

But with the US Air Force functioning as their recruiting arm and France’s anti-Assad foreign policy helping to foment a final spasm of anarchy in Syria, the gates of hell have been opened wide. What has been puked out is not an organized war on Western civilization as Hollande so hysterically proclaimed in response to the mayhem in Paris.

It was just blowback carried out by that infinitesimally small salient of mentally deformed young men who can be persuaded to strap on a suicide belt.

Needless to say, bombing wont stop them; it will just make more of them.

Ironically, what can stop them is the Assad government and the ground forces of its Hezbollah and the Iranian Revolutionary Guard allies. Its time to let them settle an ancient quarrel that has never been any of America’s business anyway.

But Imperial Washington is so caught up in its myths, lies and hegemonic stupidity that it can not see the obvious.

And that is why a quarter century after the cold war ended peace still hasn’t been given a chance and the reason that horrific events like November's barbarism in Paris still keep happening.

Even the so-called "inspired" terrorists like the pair who attacked San Bernardino emerge episodically because the terror that the American military visits upon Muslim lands is actually what inspires them. After all, whatever the Koran has to say about purging the infidel, it inspired no attacks on American soil until Imperial Washington went into the regime change and military intervention business in the middle east.

Another False Demon – Putin's Russia

At the end of the day there now exists a huge irony. The only force that can effectively contain and eventually eliminate the Islamic State is the so-called Shiite Crescent – the alliance of Iran, Baghdad, Assad and Hezbollah.

But since they are allied with Putin's Russia, still another unnecessary barrier to peace on earth comes into play.

The fact is, there is no basis whatsoever for Imperial Washington's relentless campaign against Putin, and Washington-NATO's blatant intervention in Ukraine.

Contrary to the bombast, jingoism, and shrill moralizing flowing from Washington and the mainstream media, America has no interest in the current spat between Putin and the coup that unconstitutionally took over Kiev in February 2014.

For several centuries the Crimea has been Russian; for even longer, the Ukraine has been a cauldron of ethnic and tribal conflict, rarely an organized, independent state, and always a meandering set of borders looking for a redrawn map.

Like everything reviewed above, the source of the current calamity-howling about Russia is the Warfare State–that is, the existence of vast machinery of military, diplomatic and economic maneuver that is ever on the prowl for missions and mandates and that can mobilize a massive propaganda campaign on the slightest excitement.

The post-1991 absurdity of bolstering NATO and extending it into eastern Europe, rather than liquidating it after attaining “mission accomplished”, is just another manifestation of its baleful impact. In truth, the expansion of NATO is one of the underlying causes of America’s needless tension with Russia and Putin’s paranoia about his borders and neighbors. Indeed, what juvenile minds actually determined that America needs a military alliance with Slovenia, Slovakia, Bulgaria and Romania, and now Montenegro!

So the resounding clatter for action against Russia emanating from Washington and its house-trained media is not even a semi-rational response to the facts at hand; its just another destructive spasm of the nation’s Warfare State and its beltway machinery of diplomatic meddling, economic warfare and military intervention.

Memo To Obama: It’s Their Red Line

Not only does Washington’s relentless meddling in the current Russian- Ukrainian food fight have nothing to do with the safety and security of the American people, it also betrays woeful disregard for the elementary facts of that region’s turbulent and often bloody history.

In fact, the allegedly “occupied” territory of Crimea was actually annexed by Catherine the Great in 1783, thereby satisfying the longstanding quest of the Russian Czars for a warm-water port. Over the ages Sevastopol then emerged as a great naval base at the strategic tip of the Crimean peninsula, where it became home to the mighty Black Sea Fleet of the Czars and then the commissars.

For the next 171 years Crimea was an integral part of Russia—a span that exceeds the 166 years that have elapsed since California was annexed by a similar thrust of “Manifest Destiny” on this continent, thereby providing, incidentally, the United States Navy with its own warm-water port in San Diego.

While no foreign forces subsequently invaded the California coasts, it was most definitely not Ukrainian and Polish rifles, artillery and blood which famously annihilated The Charge Of The Light Brigade at the Crimean city of Balaclava in 1854; they were Russians defending the homeland from Turks, Europeans and Brits.

And the portrait of the Russian “hero” hanging in Putin’s office is that of Czar Nicholas I—whose brutal 30-year reign brought the Russian Empire to its historical zenith, and who was revered in Russian hagiography as the defender of Crimea, even as he lost the 1850s war to the Ottomans and Europeans.

At the end of the day, it’s their Red Line. When the enfeebled Franklin Roosevelt made port in the Crimean city of Yalta in February 1945 he did at least know that he was in Soviet Russia.

Maneuvering to cement his control of the Kremlin in the intrigue-ridden struggle for succession after Stalin’s death a few years later, Nikita Khrushchev allegedly spent 15 minutes reviewing his “gift” of Crimea to his subalterns in Kiev in honor of the decision by their ancestors 300 years earlier to accept the inevitable and become a vassal of Russia.

Self-evidently, during the long decades of the Cold War, the West did nothing to liberate the “captive nation” of the Ukraine—with or without the Crimean appendage bestowed upon it in 1954. Nor did it draw any red lines in the mid-1990’s when a financially desperate Ukraine rented back Sevastopol and the strategic redoubts of the Crimea to an equally pauperized Russia.

In short, in the era before we got our Pacific port in 1848 and in the 166-year interval since then, our national security has depended not one wit on the status of the Russian-speaking Crimea.

That the local population has now chosen fealty to the Grand Thief in Moscow over the ruffians and rabble who have seized Kiev is their business, not ours.

The real threat to peace is not Putin, but the screeching sanctimony and mindless meddling of Susan Rice and Samantha Power. Obama should have sent them back to geography class long  ago——-and before they could draw anymore new Red Lines.

The one in the Ukraine has been morphing for centuries among the quarreling tribes, peoples, potentates, Patriarchs and pretenders of a small region that is none of our damn business.

The current Ukrainian policy farce emanating from Washington is not only a reminder that the military-industrial-beltway complex is still alive and well, but also demonstrates why the forces of crony capitalism and money politics which sustain it are so lamentable. The fact is, the modern Warfare State has been the incubator of American imperialism since the Cold War, and is now proving itself utterly invulnerable to fiscal containment, even in the face of a $19 trillion national debt.

So 101 years after the Christmas truces along the Western Front there is still no peace on earth. And the long suffering American taxpayers, who foot the massive bills generated by the War Party's demented and destructive policies, have no clue that Imperial Washington is the principal reason.

via http://ift.tt/2jonDSN Tyler Durden