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Diego Garcia Natives Fight to Return to Island

Forcibly Exiled Nearly 40 Years Ago, Diego Garcia Natives Fight to Return to Island Home Now Used as Key US Military Outpost

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The demise of the dollar
By Robert Fisk
6 October 2009
lLink

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Video below related

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What Not Being Able To Buy Oil In Dollars Means
By Ian Welsh Oct 08, 2009
Link

The big news this week on the financial front was the Independent’s claim that Gulf Arabs and France, Japan, Russia and Japan were planning to move from buying oil in dollars to buying it in a basket of currencies, including gold and a new universal currency shared by the Gulf nations.

Buying oil in dollars is one of the foundations of the dollar’s role as the world’s primary reserve currency. Because the the dollar is the world’s primary reserve currency Americans have been able to borrow money for significantly less than other countries are able to. This has both made America more prosperous, and through the perverse incentives of cheap money, helped lead to the high indebtedness of American citizens and the financial crisis.

In addition, buying oil in dollars is one of the things which allowed strong dollar policies to drive the price of oil down. Making dollars extremely scarce in the 80’s and nineties was one key factor leading to a price per barrel under $20. Oil prices started their rise upwards after Greenspan’s Federal Reserve let loose the money spigot in the Asian crisis and the Long Term Capital fiasco. Greenspan essentially never took his foot off the pedal from that point onwards, and oil prices soared, until last year at one point they were over $150/barrel.

So one consequence of going off the dollar is that a major benefit of the strong dollar play is taken off the table, and the US loses its ability to control the price of oil. Since at this time, contrary to what the Feds are saying, a strong dollar play isn’t in the cards (the US needs to borrow way too much money) that’s not a big deal in the short run—in the long run it is.

But buying oil in dollars isn’t the only thing that underpins the dollar as the world’s reserve currency and to understand what buying oil in something other than dollars would mean we need to understand what else makes, or perhaps more accurately, made, the dollar so important.

Technological Revolutions: Remember the internet boom of the nineties? Remember the way that money flooded in from the rest of the world to buy up internet stocks? Sure, most of them turned out to be worthless, but some didn’t. When the US was the nation most likely to create the next technological revolution you needed dollars so that when it occurred you could buy in on the ground floor. Whether microcomputers in the 80’s or the internet in the 90’s, odds were that America was going to create the next big tech. So foreigners needed to be in the dollar.

At this point the US is the undisputed leader in almost nothing except military tech. As expected, US dominance of the arms sales market continues to increase, but the US can’t live on weapon sales alone. In most other fields, including telecom, the internet, large chunks of biotech, renewable energy, ground transportation and so on the US now lags other modern economies.

The structure of the US economy, with a few large oligopolistic firms dominating the market in key fields needn’t necessarily mean no technological advances, after all Japan and Korea certainly have high concentrations of large firms, but US firms such as the telecom giants essentially don’t engage in research, don’t believe in upgrading infrastructure more than they have to and are rent seeking corporations—they provide an inferior product to a captive audience (as with insurance companies) knowing that Americans have no other options. If they fail, they expect the US government to bail them out with huge subsidies.

This structure means that the US, is unlikely to be the home of the next great technological revolution. The next tech reveolution could happen in the US, with the right policies, but the Obama administration has not engaged in those policies, instead spending trillions on propping up failed business models.

Consumers of Last and Main Resort: For decades now Americans have bought a ton of consumer goods, from cars to electronics to clothes. As time went by, more and more of these goods were bought from foreign countries, and more and more of it was bought on credit. America and Americans have been the engine of development for Japan, the Asian Tigers, and most recently, China. China, Japan and Korea, in particular, used mercantalist policies—that is to say they generally used trade barriers to protect their internal economy and subsidies to help their exports. China’s main trade barrier and subsidy is its massive interventions to keep the Yuan cheap against the dollar, an intervention which has amounted to as much as 10% of China’s GDP.

That intervention has left China with a huge number of dollars denominated assets. In effect the Chinese loaned America the money to consume Chinese goods, which simultaneously made American manufactured goods uncompetitive which meant that manufacturing employment in American dropped like a rock while new factories opened in China rather than the US. In exchange for the money they loaned America, China industrialized. Even if they don’t get most of the money back (and they won’t) it was a good deal for them. As for Americans, well, Americans were able to live above their means—those who didn’t lose their jobs, anyway.

Many countries export a lot to the US. While US consumers have pulled back significantly, they still consume a lot. There is, as yet, no replacement for the US consumer. China and other countries may wish there was, but there isn’t.

The American Security Product: One of the main reasons other countries were willing to, in effect subsidize the US, for decades, is that it provided the common security product—against the Soviets, then against real rogue nations, and always against pirates.

In particular, America’s navy is as large as the next 13 navies combined. The US was responsible for keeping the world’s shipping lines open, and it was the core of the NATO hammer when a problem needed to be dealt with (for example, Serbia in the late nineties.)

But lately the US hasn’t been delivering the product in a way that the rest of the world appreciates. Most of “old” Europe (ie. the countries with money and power) opposed it. So did most of Asia. So did America’s allies in the Middle East. Once in Iraq, the US couldn’t be defunded for fear of Iraq splintering, but now that it’s clear the US is leaving anyway, the possibility exists.

And then there’s the Somali pirates. Because most of the US navy was occupied with the wars in Afghanistan, Pakistan and Iraq, the Somali pirates got completely out of hand and the US Navy didn’t do anything about it for a long long time. When the issue was finally dealt with, the US navy was only one of a number of navies doing so. The US let it get out of control, and then wasn’t key to fighting it.

Now that the US no longer protects very well against the Soviets, rogue nations or pirates, and now that joint naval operations are how the Somali pirates are being dealt with, the rest of the world is wondering whether it’s worth paying for a US military which doesn’t do what they want it to do. Only the Afghan war, which has elite support in Europe (though not popular) makes some think that perhaps the US is worth keeping on as the world’s policeman.

Buying Key Technologies Required Dollars: Yet another reason folks wanted to have lots of dollars and access to dollars was that you needed dollars to buy certain goods. For decades the only good commercial jet liners were Americans. Key computer technologies needed to be bought in dollars. Intellectual property needed to be bought in dollars. The best military technology had to be (and still has to be) bought in dollars. And so on. The US wasn’t just home to the next technological revolution, it was home to all the good things you wanted to buy and which you couldn’t buy in your currency.

This is, with a few exceptions, no longer true. The Europeans and Japanese can sell you most high end capital goods. There is no real difference between Airbus and Boeing products (though both are essentially 30 year old technology). The Chinese can and will sell you middle and low end goods for less than America. You don’t need dollars to buy most of what you need and want, and if something comes up really worth buying (say General Motors) well, if you’re someone who really wants it, like the Chinese, you just won’t be allowed to buy it anyway. (The Chinese would have loved to buy GM.)

A Safe Haven For Money and For You: For decades, if you wanted a safe place to put your money and put it to work, the US was probably the best. It was the most stable, it was impossible it could be conquered even if there was a World War III, it was the largest and could absorb the most money. Likewise, if things went really bad in your country, it was a great place to flee to.

The financial crisis put the wisdom of placing your money in the US in question. Bush era immigration and travel policies, not rescinded by the Obama administration, put the utility of the US as a safe haven in question as well. And yet, to an extent, the US retains at least the first role, because there is simply no other country available. Europe did not avoid the financial crisis, China doesn’t allow that much investment in the country and is an unsafe place to put money, and so on. So the US retains some safe haven appeal. At the same time, however, foreign elites have become far more uneasy about the idea and want a different option. And for themselves, they’d rather vacation, have their second homes and educate their children in Europe.

And at last, back to oil: Of course, the final and in some ways most important reason for the dollar’s reserve currency status is that oil was sold in dollars. This is a result of a decades long understanding between the key Gulf States, Saudi Arabia and America that the US both underwrote their security and could knock them over any time it wanted. In exchange for America’s security umbrella and help in maintaining their regimes, oil was priced in dollars. When they became rich in the 70s, their money flooded primarily through US banks.

Indeed, in prior years, every time an OPEC nation talked about going off the dollar as the currency for buying oil, rumor has it that the Saudis were the ones to spike the move.

Oil is the most important commodity in the world. Ultimately all economies are underpinned by oil. Oil is also the most important military resource. With oil your army can move and fight. Without it, it can’t. In many ways WWII was fought for oil and with oil, and the powers with the oil defeated those which didn’t have it.

Which brings us back to the US military product. As long as oil is priced in dollars, the US military can always function at full capacity, because if push comes to shove, the US can always just print more dollars.

If oil is not priced in dollars, then certain US access to oil is removed—both for the military and for the civilian population. Sure, the US can still print more dollars, but if oil isn’t priced in dollars, well, print too much and you may get inflation, even hyperinflation. And if the oilarchies don’t approve of a particular military action, well, they can make it much more expensive.

Are the Dollar’s Days as Reserve Currency Over?

No. They aren’t. But they are numbered. They aren’t over because other nations still need the US consumer. Until the Chinese manage to create a domestic consumer society, both they and other countries can’t cut themselves lose from the US consumer. What they will do, and what they are doing, is trying to manage how much the US borrows and to take away the US ability control the world’s money supply. They will still have to keep the US propped up for the time being, because in so doing they are propping up themselves. And remember always that Chinese citizens aren’t like Americans. Take their jobs or their land or their hope and they get violent—very violent. They have, do and will fight both the police and the military. China’s elites know that if they don’t keep economic growth coming, their heads could literally wind up rolling.

In addition, while no one is happy with the US security product, the fact is that no one can really replace it. The European military is not strong enough, and their navy does not have the projection ability. Likewise with the Chinese military, who in any aren’t trusted half as much as the Europeans, though their moral flexibility is appreciated by many regimes, who still understand you don’t invite China to station large number of troops in your country if you have half a brain.

Likewise, there is simply no replacement for the US as a haven of last resort. China’s currency and investment controls make it unsuitable. Europe managed its financial affairs no better than the US over the last decade, although they seem to have learned the regulatory lessons marginally better than the US. If you need a place to store your money, and put it to work, the US may not look good, but neither does anyone else who is large enough to absorb large amounts of money.

The key break point, the end of the dollar hegemony, will come when the Chinese are able to move to a consumer economy. At that point, the Chinese will no longer need America as consumers, and they will let the Yuan float. The devastation this will wreck on the US economy is hard to overstate. Standards of living will crash. In the long run, being forced to live within its means, and no longer having to compete against massively subsidized foreign goods may turn out to be good for the US, but that won’t make you feel better as your effective income collapses or you lose your job.

This is probably two economic cycles out. We’re talking 12 to 16 years. So there’s time yet. Probably.

So what does oil not being priced in dollars mean to me now?

Less money for everything. The US will not be able to afford as large a stimulus as it should have. It will mean borrowing costs higher than they would otherwise have been and more restricted credit (sure, theoretical interest rates may be low, but can you get a loan at those rates?) Oil prices, and gas prices will be more volatile for the US than they were before, which is saying something.

And other countries will get more oil, relatively speaking. Which means they will get more growth. They will receive more investment from the oilarchies, and the US will receive less. Relatively speaking the US economy will not be as good as it was. This is a marginal effect, but marginal effects add up.

This is, in short, not good news. You won’t be able to say “I lost my job because oil isn’t priced in dollars” but it will be true for some people. Lower wages, more restricted credit, and more restricted government policy will be the price paid for the massive incompetence which lead to this moment.

And yet this does have a silver lining. Both for other countries who deserve to be able to pay in their own currencies and for America and Americans, who need to learn to live within their means, to emphasize production again rather than consumption and who need to wean off of oil as much as possible in any case.

But it will hurt.

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Warmonger Wins Peace Prize
by Paul Craig Roberts
Link

It took 25 years longer than George Orwell thought for the slogans of 1984 to become reality.

"War is Peace," "Freedom is Slavery," "Ignorance is Strength."

I would add, "Lie is Truth."

The Nobel Committee has awarded the 2009 Peace Prize to President Obama, the person who started a new war in Pakistan, upped the war in Afghanistan, and continues to threaten Iran with attack unless Iran does what the US government demands and relinquishes its rights as a signatory to the non-proliferation treaty.

The Nobel committee chairman, Thorbjoern Jagland said, "Only very rarely has a person to the same extent as Obama captured the world’s attention and given its people hope for a better future."

Obama, the committee gushed, has created "a new climate in international politics."

Tell that to the 2 million displaced Pakistanis and the unknown numbers of dead ones that Obama has racked up in his few months in office.  Tell that to the Afghans where civilian deaths continue to mount as Obama’s "war of necessity" drones on indeterminably.

No Bush policy has changed. Iraq is still occupied. The Guantanamo torture prison is still functioning. Rendition and assassinations are still occurring. Spying on Americans without warrants is still the order of the day.  Civil liberties are continuing to be violated in the name of Oceania’s "war on terror."

Apparently, the Nobel committee is suffering from the delusion that, being a minority, Obama is going to put a stop to Western hegemony over darker-skinned peoples.

The non-cynical can say that the Nobel committee is seizing on Obama’s rhetoric to lock him into the pursuit of peace instead of war.  We can all hope that it works.  But the more likely result is that the award has made "War is Peace" the reality.

Obama has done nothing to hold the criminal Bush regime to account, and the Obama administration has bribed and threatened the Palestinian Authority to go along with the US/Israeli plan to deep-six the UN’s Goldstone Report on Israeli war crimes committed during Israel’s inhuman military attack on the defenseless civilian population in the Gaza Ghetto.

The US Ministry of Truth is delivering the Obama administration’s propaganda that Iran only notified the IAEA of its "secret" new nuclear facility because Iran discovered that US intelligence had discovered the "secret" facility.  This propaganda is designed to undercut the fact of Iran’s compliance with the Safeguards Agreement and to continue the momentum for a military attack on Iran.

The Nobel committee has placed all its hopes on a bit of skin color.

"War is Peace" is now the position of the formerly antiwar organization, Code Pink.

Code Pink has decided that women’s rights are worth a war in Afghanistan.

When justifications for war become almost endless—oil, hegemony, women’s rights, democracy, revenge for 9/11, denying bases to al Qaeda and protecting against terrorists—war becomes the path to peace.

The Nobel committee has bestowed the prestige of its Peace Prize on Newspeak and Doublethink.

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Captured U.S. Soldier Forgotten By Main Stream Media

Link

09-09-30bergdahl

A call to U.S. Army Central Command in Tampa, Fla., last week yielded no news on the status of Pfc. Bowe Bergdahl, a Hailey resident apparently captured by Taliban militants on July 2.

Nonetheless, people across the country continue to pray for Bergdahl and make inquiries about whether the military has made any progress in locating him. Lacking news from national media outlets, people from places such as Oklahoma, Texas and Vermont have called the Express in search of information about Bergdahl.


The circumstances that led to Bergdahl’s capture remain uncertain.

Bergdahl was raised in Blaine County, near Hailey. He is a member of the 1st Battalion, 501st Parachute Infantry Regiment, 4th Brigade Combat Team, 25th Infantry Division, based at Fort Richardson, Alaska.

He entered the Army in June 2008 and went through basic training in Fort Benning, Ga.

Bergdahl is currently the only U.S. soldier held captive in Afghanistan.

Bergdahl’s official military status changed from “whereabouts unknown” to “missing/captured” on July 15 after a 28-minute online video showed him sitting cross-legged in front of a low table and a white sheet while being interviewed by his captors.

Though family, friends and the Pentagon deliberately kept Bergdahl’s identity secret for nearly three weeks after the BBC reported a U.S. soldier missing July 2, the government was forced to reveal his name when the video appeared. Bergdahl’s identification tags were displayed in the video, which officials believe was made about July 14.

U.S. Navy Capt. Jack Hanzlik, public affairs officer for U.S. Central Command, responded to a call from the Idaho Mountain Express last week, saying there was no news on Bergdahl’s status. Hanzlik reported to Lt. Col. Tim Marsano, public affairs officer for the Idaho National Guard, who forwarded the information to the Mountain Express.

“He said there is no news from his standpoint,” said Marsano, who has been in regular contact with the Bergdahl family since the soldier’s capture.

Marsano said he will notify the Mountain Express if he receives official notice of a change to Bergdahl’s status.

“The Bergdahl family is very grateful for the outpouring of support from the local community and by well-wishers across the country,” Marsano said.

Following Bergdahl’s capture, mobile television vehicles descended upon Hailey for several days, providing national coverage of the soldier’s plight. The New York Times covered the story, as well as several national TV networks.

At that time, conflicting stories circulated concerning the circumstances that led to Bergdahl’s capture. The U.S. military reported that he left his military base near Patika, Afghanistan, with three Afghan soldiers before being captured. Bergdahl’s captors said he was taken after lagging behind while on patrol.

Hailey Police Chief Jeff Gunter, who has known Bergdahl all his life, said he is monitoring the situation in Afghanistan closely and, like everyone else in Bergdahl’s hometown, is waiting for news.

“In the news, you see that there are some possible cooperative agreements between the U.S. and Pakistan with regard to dealings with the Taliban,” Gunter said. “We will just continue to pray for our armed forces and for the quick and prompt return of Bowe.”

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Do NOT Let Your Child Get Flu Vaccine -- 9 Reasons Why
Link

Why-You-Should-NOT-Vaccinate-Your-Children-Against-the-Flu-This-Season.

This year it is more important that you protect your children and loved ones from the flu vaccines than influenza itself.

In his article published on LewRockwell.com, Bill Sardi details 18 reasons why you should not vaccinate your children against the flu this season. Here are nine of them:

  1. The swine flu is simply another flu. It is not unusually deadly.

  2. This is the first time both seasonal and pandemic flu vaccines will be administered. Both seasonal flu and swine flu vaccines will require two inoculations. This is because single inoculations have failed to produce sufficient antibodies. This is an admission that prior flu vaccines were virtually useless. Can you trust them this time?

  3. Adjuvants are added to vaccines to boost production of antibodies but may trigger autoimmune reactions. Some adjuvants are mercury (thimerosal), aluminum and squalene. Why would you sign a consent form for your children to be injected with mercury, which is even more brain-toxic than lead?

  4. This is the first year mock vaccines have been used to gain FDA approval. The vaccines that have been tested are not the same vaccines your children will be given.

  5. Over-vaccination is a common practice now in America. American children are subjected to 29 vaccines by the age of two. Meanwhile, veterinarians have backed off of repeat vaccination in dogs because of observed side effects.

  6. Modern medicine has no explanation for autism, despite its continued rise in prevalence. Yet autism is not reported among Amish children who go unvaccinated.

  7. Researchers are warning that over-use of the flu vaccine and anti-flu drugs like Tamiflu and Relenza can apply genetic pressure on flu viruses and then they are more likely to mutate into a more deadly strain.

  8. Most seasonal influenza A (H1N1) virus strains tested from the United States and other countries are now resistant to Tamiflu (oseltamivir). Tamiflu has become a nearly worthless drug against seasonal flu.

  9. Public health officials are irresponsible in their omission of any ways to strengthen immunity against the flu. No options outside of problematic vaccines and anti-flu drugs are offered, despite the fact there is strong evidence that vitamins C and D activate the immune system and the trace mineral selenium prevents the worst form of the disease.

For even more reasons -- 18 in all -- please review the full article on LewRockwell.com.

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