Tuesday, May 20, 2008

War for the Dollar

Political analysts are not pondering over whether the US would hit Iran for its nuclear ambitions; WHEN are they going to hit – is the only real question that remains. Is a war imminent? You bet it is.

The popular notion that the American public is war fatigued may not mean anything when it comes to government policies. Even though the US is a democracy, Washington doesn’t go by referendums on every major issue. Sometimes the popular perception can be way too wrong – didn’t most American politicians think Iraq had WMDs?

George Bush has been very subdued by his own war standards – in recent times. Maybe there is a good reason for this uneasy lull in War politics. The Democratic Party is too busy contesting the primaries to nominate the next president; the republicans are waiting to know whether it will be Obama or Hillary.

America has a history of being pro-war; every time their economy has faced a major recession – they have relied on a war to bail them out. American politicians are more or less aligned with the ‘big money businesses in the US’. The corporate giants – banks, oil companies, auto-makers and other industry giants have all their say thanks to the ‘grip’ they have over the US polity.

McCain is a born-again pro-war believer. Hillary, in fact, has threatened to obliterate Iran. Only Obama has been pussy-footing to win the liberal votes – claiming he’ll engage in a dialogue with Iran. The American presidential election, or lets say the nomination of Obama could hasten the war.

I’ll come back to the American domestic angle a little later. But, first, let us look at what China is thinking. Chayakada finds the Chinese position on Iran very interesting. Zhang Zhaozhong, assistant director of Military Logistics and Military Equipment Department, National Defense University, China, writes:
Iran still takes a hard-line on the nuclear issue under the UN Resolution 1747. But its rejection against any inspection by the International Atomic Energy Agency (IAEA) will be very dangerous and increase the possibility of 'sensitive occurrences'. As a result, the room for communication is shrinking.

The United Nations adopted the Resolution 1747 last month, urging Iran to implement previous resolutions and increasing sanctions. This resolution, together with the previous one, 1737, is a fair decision designed to secure the world peace, take Iran's demand into account and fence off the nuclear proliferation. It was not adopted under the pressure of the US. So it must be respected.

China has expressed its position. China insists that the international law be observed and the nuclear proliferation be avoided. It is also against the abuse of force on the issue. China votes for the two UN resolutions. It has also tried to persuade Iran and US to solve the issue through diplomatic ways.

Once a war breaks out, Israel will be the first to get engaged. In that case, Arabic countries will not stand by. Is the Third World War looming? Nobody knows how many countries will be involved if such things happen. The Middle East will be in a total mess.

If Iran chooses to stick to its hardliner policy till the deadline specified by the UN Resolution 1747, it will have to face the consequence. What tough measures will be taken is not sure. But the US may resort to some kind of force.
You really don’t have to read between those lines. The message is very clear – China is in favour of the UN resolutions on Iran. Oh yes! We know what that means.

The US clearly doesn’t have the troops to win a war in Iran or in any other part of the world. All they can do is rely on heavy air strikes – as Hillary said, obliterate Iran. The human casualty and the cost of such a war to humanity are going to be of epic proportions. Still, there seems to be an inertia that is building up for a major war.

The US and India were to sign a Nuclear deal – the 1-2-3 agreement. Government of India has been reluctant to sign because of the pressures from the Leftist and Communist parties in India – who support the central government. The opposition to the 1-2-3 agreement is purely based on vote-bank politics; these parties would like to consolidate the Muslim vote. The communists are not descendants of a non-violent social philosophy; their history is filled with violent actions whenever they deemed it suitable for their own gains. That small village, Nandigram, in Bengal, witnessed such brutal violence and killing – backed by state law and order machinery and the lawless Marxist party killers – is a sad example of the violent heritage of the communist and left parties in India.

The congress party, which is at the helm in New Delhi, seems absolutely clueless on how to govern the nation or its economy. India needs energy to sustain its current growth, and like it or not, Nuclear energy is one of the options India has already taken decades ago. As the communists try to portray it, India is not an Iran, contemplating on Nuclear energy for civilian use. India has nuclear reactors supplying electricity to furl its economy.

What we really don’t know much about the nuclear agreement with the US is – what does the US get in return? Is it support to its new military expeditions? India was almost ready to send troops to Iraq; they backed out in the end due to domestic political pressure. Chayakada’s overwhelming feeling is that in return for the nuclear help from the US, India will support the US with troops.

The question then is, when would India sign the deal?

There has been pressure on India with the situation in Tibet – and China looking peeping over the wall. That pressure wasn’t enough for the Prime Minister of India to sign the deal. Now, India faces another major problem – rising food and oil price – especially Oil. At 129 US dollars a barrel, oil has travelled a long way from 18$ a barrel in 2002.

The US currency has been struggling in the international market due to various reasons, poor fiscal policies of the Federal Reserve to money laundering. It is no secret that the US dollar is the most favoured currency for launderers. If the next war is going to be fought by the Americans, it will not be for OIL, it will be a war for the DOLLAR. The world economy banks on dollar; weak dollar is a catastrophe for many nations.

This week the Indian rupee hit a 13-month low; the Indian economy is in real danger of crashing. Software can’t feed people; India needs to strengthen its rural economy which takes care of agricultural production. Any growth can only be fuelled with energy. No nuclear deal, oil price shooting up, India just cannot afford to wait and watch.

Chayakada suspects the tipping point for India is 150$ a barrel of oil. At that point India will have to act. India will sign the nuclear deal and send troops (we have abundant manpower anyway!) to where the US wants us to.

Iranian administration has been playing into the hands of American spin doctors for the last few years. Given their tough stance on nuclear inspections, Iran is fast losing global support. What Iran also did recently was to move their oil trading out of the dollar basket – further hitting the struggling dollar.

The GCC countries, with the exception of Kuwait, have stayed loyal to the US Dollar over the last one year – in spite of widespread rumours that they’ll all abandon the greenback. Kuwait removed the US$ currency peg, which definitely did not make Washington too happy.

Iran is definitely a potential US target. Now that China too seems to have taken a neutral position, there is nothing that is going to stop the Americans if India commits troops for this adventure. Anything that would bring the oil price down will have widespread world support. A quick war in the region, which brings the price of oil down to 50$ a barrel will be trumpeted as a success by the Bush administration as a victory of their government’s policies. Every American will then be happy, notwithstanding it was 18$ a barrel just before the Iraq war.

The high oil price cannot be blamed on India and China. Global oil supply is already higher than demand so if OPEC pumped more it would not reduce the price, Iraq's Oil Minister Hussain al-Shahristani said on Monday.
"There is more oil in the market than consumers want," Shahristani told Reuters. "What is driving up prices is an increase in speculative funds. An increase in production by OPEC countries would not really change the scenario -- it would not affect the price."

Speculative funds – the same funds which are driving up the food grain price. Chayakada cannot speculate whether Sovereign funds are playing in the food futures and oil futures. It might be in the interest of some sovereign funds to indulge in such dirty games for certain. There is more money to be made – and no stopping them. If a Middle Eastern sovereign fund indulges in oil futures trading… they get to fix the price of what they produce – OIL.

International Herald Tribune reports:
World Bank President Robert Zoellick cautioned that the funds will continue to raise international concern as countries question whether their investments are driven by the search for profit or by political interests that could threaten national security.

The United States and the European Union have pushed sovereign funds to provide greater disclosure about their investment strategies and are backing an initiative by the International Monetary Fund and the Paris-based Organization for Economic Cooperation and Development to develop a voluntary set of best practices for the investment vehicles.
If there is an iota of truth that sovereign funds are operating in the oil market – pushing the price up – they better watch out. Uncle Sam will come down heavily on them; If America is going to fight to save the dollar – all countries which have their currency pegged to the $ will end up supporting US action. Plus, if it means cheaper oil, why wouldn’t India or China send troops to secure energy.

Oil producing nations cannot ignore the global warning – higher the oil price – higher the risk.

  1. http://www.india-defence.com/
  2. http://www.antiwar.com/justin/?articleid=12755
  3. http://english.peopledaily.com.cn/200704/29/eng20070429_370883.html
  4. http://www.iht.com/articles/2008/05/21/business/21oil.php
  5. http://www.iht.com/articles/2007/06/19/business/insider.php
  6. http://www.iht.com/articles/ap/2008/05/19/business/ME-FIN-Mideast-Sovereign-Funds.php
  7. http://www.bloomberg.com/apps/news?pid=20601091&sid=aIoSB3xCBk08&refer=india
  8. http://politicalpakistan.blogspot.com/2007/05/rich-and-infamous.html

Thursday, April 24, 2008

Black and White Democratic Party

Who will be the winner in the fight between two democrats -- front-runner Obama and underdog Hillary -- in the race to be the democratic presidential nominee? One of them, most likely Obama, will emerge the winner.

The battle between the first black man and the first woman trying to be an American president is an interesting one. What is also interesting is that they don't seem to be representing the same party. The more the two candidates battle it out, the more democratic party suffers.

The democratic votes have been polarised on racial lines. In the recent critical poll in Pennsylvania, Obama took 92 per cent of the African American vote - as he is considered to be black enough. That Hillary won with a 10% margin tells us that the White votes have gone to the white woman.

Obama's claim that he is an 'unifier' is too hollow. The two candidates have gone about campaigning as if they are from two different parties, as if they are two independent candidates. And lately, their campaign has produced results to show that democrats are voting either for a black or for a white. Ladies and gentlemen - this is not a battle to strengthen democracy.

The headless democratic party has allowed two of its candidates to run an independent campaign, completely ignoring the realities of two-party politics in the US. Chayakada finds Obama not too convincing -- America can't make a U-turn from Bush-Cheney policies overnight. Even if Obama becomes the president, he can't pull out troops from Iraq the very next day.

From a strategic point of view, America needs to be in the Middle East to ensure energy/oil supplies. OIL - Iraq, Iran... America can't get out of it.

Los Angeles times reports that Obama has been taking money from Oil executives. In a campaign advertisement he said he took no money from oil companies.

Sen. Barack Obama continued accepting donations from oil company executives and employees last month even as he aired ads in which he stated he took no oil company money, his campaign finance reports show.

Obama has taken at least $263,000 from oil company executives, family members and employees since entering the presidential race last year, including $46,000 last month. At least $140,000 has come in chunks of between $1,000 and $2,300, the maximum permitted under federal law.

Texas oil executive Robert L. Cavnar of Milagro Exploration and his wife, Gracie, have helped the Illinois Democrat raise at least another $50,000 by helping host a fundraiser earlier in the campaign.

Other oil industry donors have included Sinclair Oil President Ross Matthews of Texas and John B. Hess, chairman of Hess Corp., a New York-based oil producer and retailer with operations worldwide. Hess, who has given to other presidential candidates, including Sen. John McCain, gave $2,300 to Obama last year, as did his wife, Susan. Hess gave $14,000 to Obama's Senate run in 2003.
I am a big fan of Bruce Springsteen - but I cannot agree with him endorsing Obama even when the primaries aren't over. If Hillary and Obama have been going around like independent candidates, why not endorse Ralph Nader? At least the man is honest, liberal, and anti-big-money!

Hillary represents 'the firm' - the status quo, and that's her problem. Obama is the one who claims that he doesn't represent the DC politics, hence he needs to be under the microscope a great deal more than anyone else.

Everything could be possibly wrong with what happens in DC - lobbying, oil money, sex scandals, corruption, inside job, crime - you name it. But, then, America is voting for the president to be in the Middle of DC politics. Democratic party is very much there in the Congress and Senate - they are a part of the American political system - good or bad.

Obama, even being a senator, somehow is trying to claim a moral high ground - that he is above the DC politics. If he disowns the DC politics, he must first resign as a Senator and also from the democratic party - and then contest as an independent like Ralph Nader.

If Obama thinks he is not a part of the Washington DC politics, that he is not going to play the games they all play - then he is a black sheep in the democratic party.

Like it or not, Hillary is not being a hypocrite in this issue. She is part of the political game that goes on in DC - she hasn't disowned it. She is very much in the democratic party too.

America is ripe for a revolution, of course. Billions of dollars have disappeared or made a vanishing act. Most of the US dollars can now be found in China thanks to the massive imports. Billions have been exploded and lost in Iraq - defence contractors and suppliers have made billions of profit. And worse, US Dollar is the preferred currency for money launderers.

America needs to recover its dollars. America needs to be powerful - not as a military bully but as an economic powerhouse of innovation and technology. The world is suffering today - thanks to Bush/Cheney rule - there are food shortages, energy shortages and what not. This world needs a strong America.

Obama's revolution can wait. America should recover soon for the sake of the global economy. One way of doing it is not by taking oil money but by taking steps to reduce the oil price. Even if it means, putting together a coalition of nations to pump more oil out of Iraq.

On the issue of Iran too, Obama's pacifist politics won't make the cut. America needs a president who will bring the oil price down to 35 dollars a barrel, and a president who will ensure Dollar is at par with Euro. It may take another war, but it has to be done.

Suddenly McCain looks like a better option, in spite of me being an anti-republican.

I want India to sign the Nuclear deal and a defence pact with the US. I want India to support US in the war against reducing oil price. India has taken a soft position with regard to China and also towards Opec countries and Iran - when not a single country in the group gives India what we need - Cheaper Oil.

Going back to the elections in the US, Robert D. Novak, in his op-ed column, Trouble Ahead for Obama, writes: "Democratic politicians today see no viable alternative to Obama as their nominee. Their hard assessment is that Clinton clawing her way to the nomination could mean 25 percent McCain support from a radically depleted African American turnout -- a prescription for disaster."

When Pennsylvania exit polls came out late Tuesday afternoon showing a lead of 3.6 points for Hillary Clinton over Barack Obama, Democratic leaders who desperately wanted her to end her candidacy were not cheered. They were sure that this puny lead overstated Obama's strength, as exit polls nearly always have in diverse states with large urban populations. How is it possible, then, that Clinton, given up for dead by her party's establishment, won Pennsylvania in a 10-point landslide? The answer is the dreaded "Bradley effect."

Prominent Democrats only whisper when they compare Obama's experience, the first African American with a serious chance to be president, with what happened to Los Angeles Mayor Tom Bradley a quarter-century ago. In 1982, exit polls showed Bradley, who was black, ahead in the race for governor of California, but he ultimately lost to Republican George Deukmejian. Pollster John Zogby (who predicted Clinton's double-digit win Tuesday) said what practicing Democrats would not: "I think voters face to face are not willing to say they would oppose an African American candidate."

If there really is a Bradley effect in 2008, Zogby sees November peril for Obama in blue states. John McCain could win not only in Pennsylvania but also in Michigan, Wisconsin and Minnesota, and he can retain Ohio for the Republicans. There seems to be no way Clinton can overtake Obama in delegates and the popular vote. For unelected superdelegates to deprive Obama of the nomination would so depress African American general election voting that the nomination would be worthless for her. In a year when all normal political indicators point to Republican defeat on all fronts, the Democratic Party faces deepening difficulties whether Obama is nominated or rejected.

Obama hit a low in Pennsylvania, despite clouds over Clinton's credibility and her husband's dysfunctional campaigning. Popular freshman Sen. Bob Casey, a pro-life and pro-gun Catholic, was Obama's faithful surrogate but proved to be no help. Exit polls showed Obama losing 70 percent of Catholics, 58 percent of white Protestants and 62 percent of gun owners. Clinton carried union members, people who earn between $15,000 and $75,000 annually, and those without a college degree. Obama was saved from total disaster in Pennsylvania by winning 92 percent of the African American vote, but the reverse of the racial divide was Clinton's support from whites, especially white working women.

For the first time, Democratic loyalists not necessarily committed to Clinton are wondering whether the party's system for picking a nominee is the problem. If caucuses were eliminated and only primaries were used, Obama's 130-delegate lead would turn into an advantage of 45 delegates for Clinton. The bigger problem is proportional representation, which replaced the kind of winner-take-all system that enabled Republicans to get their nominee on Super Tuesday, Feb. 5. Without the reforms enacted by Democrats during the decade after the party's 1968 fiasco, Clinton might have clinched the nomination by now.

Pennsylvania exit polls project a massive defection by Clinton voters (with 32 percent of them saying they would be "satisfied" only if she is the nominee). Many of these disaffected Democrats surely will be reconciled to Obama. Indeed, McCain privately warns key supporters to be prepared for a massive, if temporary, falloff in the polls once these unhappy Democrats return after Obama is nominated. But not all will return, and that is Pennsylvania's warning to the Democratic Party.

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Friday, April 11, 2008

Livin' In The Future

Even Bob Dylan would be proud of writing something like this:

My faith's been torn asunder, tell me is that rollin' thunder
Or just the sinkin' sound of somethin' righteous goin' under?

Buy Springsteen's latest Album: Magic