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- This week I found myself in rare agreement with Janet Yellen when she admitted that her economic predictions are likely to be wrong. Sadly, Yellen did not follow up her admission by handing in her resignation and joining efforts to end the Fed. An honest examination of the Federal Reserve’s record over the past seven years clearly shows that the American people would be better off without it.
- Following the bursting of the Federal Reserve-created housing bubble, the Fed embarked on an unprecedented program of bailouts and money creation via quantitative easing (QE) 1, 2, 3, etc. Not only has QE failed to revive the economy, it has further damaged the average American’s standard of living while benefiting the financial elites. None other than Donald Trump has called QE “a great deal for guys like me.”
- The failure of quantitative easing to improve the economy has left the Fed reluctant to raise interest rates. Yet the Fed does not want to appear oblivious to the dangers posed by keeping rates artificially low. This is why the Fed regularly announces that the economy will soon be strong enough to handle a rate increase.
- There are signs that investors are beginning to realize that the Fed’s constant talk of raising rates is just talk, so they are looking for investments that will protect them from a Fed-caused collapse in the dollar’s value. For example, the price of gold recently increased following reports of stagnant retail sales. An increased gold price in response to economic sluggishness may appear counterintuitive, but it is a sign that investors are realizing quantitative easing is not ending anytime soon.
- The increase in the gold price is not the only sign that investors are interested in hard assets to protect themselves from inflation. Recently a Picasso painting sold for a record 180 million dollars. This record may not last long, as an additional two billion dollars worth of art is expected to go on the market in the next few weeks.
- Another sign of the increasing concerns about the dollar’s stability is the growing interest in alternative currencies. Investing and using alternative currencies can help average Americans, who do not have millions to spend on Picasso paintings, protect themselves from a currency crisis.
- Congress should ensure that all Americans can protect themselves from a dollar crisis by repealing the legal tender laws.
- Congress should also take the first step toward monetary reform by passing the Audit the Fed bill. Unfortunately, Audit the Fed is not a part of the Federal Reserve “reform” bill that was passed by the Senate Banking Committee. Instead, the bill makes some minor changes in the Fed’s governance structure. These “reforms” are the equivalent of rearranging deck chairs as the Titanic crashes into the iceberg. Hopefully, the Senate will vote on, and pass, Audit the Fed this year.
- The skyrocketing federal debt is also a major factor in the coming economic collapse. The Federal Reserve facilitates deficit spending by monetizing debt. Congress should make real cuts, not just reductions in the “rate of growth,” in all areas. But it should prioritize cutting the billions spent on the military-industrial complex.
- Some say that eliminating the welfare-warfare state and the fiat currency system that props it up will cause the people pain. The truth is the only people who will feel any long-term pain from returning to limited, constitutional government are the special interests that profit from the current system. A return to a true free-market economy will greatly improve the lives of the vast majority of Americans.
05.25.15 – US must deploy thousands of troops to Iraq
- John McCain, the chairman of the US Senate Armed Services Committee, says the United States must deploy thousands of troops to Iraq to defeat the ISIL terrorist group, which captured the Iraqi city of Ramadi last week.
- McCain on Sunday said the Obama administration needs a more defined strategy to defeat the terrorist group and suggested “a number of thousands” of Americans could do the job.
- “We need to have a strategy,” he said told CBS News. “There is no strategy, and anybody that says that there is, I’d like to hear what it is, because it certainly isn’t apparent now, and right now.”
- McCain said Obama should adopt an aggressive strategy against ISIL similar to the one former President George W. Bush pursued during the Iraq war.
- “We had it won, the surge had succeeded,” he said. “George W. Bush at least at the guts to reverse and sponsor the surge, which we eventually then succeeded. I wish, I pray, that Barack Obama would do the same thing.”
- The ISIL terrorists, many of whom were initially trained by the CIA in Jordan in 2012 to destabilize the Syrian government, now control large parts of Syria and neighboring Iraq.
- The northern and western parts of Iraq have been in chaos since ISIL started its campaign of terror in early June 2014.
- The ISIL Takfiri group’s recent attacks on Ramadi, the capital of Anbar province, have forced approximately 25,000 people to flee the city, the United Nations says.
- According to an announcement on May 17 by Muhannad Haimour, the spokesman for the governor of Anbar, Ramadi has “fallen” to ISIL terrorists.
- In a TV interview that aired on Sunday, US Defense Secretary Ash Carter accused Iraqi security forces of lacking the will to fight against ISIL.
- Although Iraqi soldiers “vastly outnumbered” ISIL militants in Ramadi, but they quickly withdrew last week without putting up much resistance from the capital of Anbar province, Carter told CNN.
- “What apparently happened was the Iraqi forces showed no will to fight. They were not outnumbered, and they vastly outnumbered the opposing force, and they failed to fight and withdrew from the site,” he said.
- Russia’s national payment card will come into operation by the end of the year, said Central Bank Deputy Chairman Olga Skorobogatova. It’s to ensure smooth electronic transactions in Russia hit by Western sanctions in 2014.
- The card will also operate abroad within a year, she said.
- “We plan that the national payment card will work in co-branding with four payment systems – Chinese UnionPay, Japan’s JCB and with international payment cards Visa and MasterCard,” Skorobogatova was cited as saying. She added that negotiations are underway with the countries of the Eurasian Economic Community, which are discussing options for cooperation of national payment systems.
- The first nationwide payment card is aimed to protect Russian cardholders and provide with constant payment transactions within the country. Outside the country it will be served by international systems, Skorobogatova said.
Some 210 million plastic bank cards have been already issued in Russia, far exceeding the population. By 2018, domestic cards will take 50-60 percent on the Russian market, according to the head of National Card Payment system Vladimir Komlev.
- Last year, Russian President Vladimir Putin signed a law to establish national payment card system (NPCS) after both Visa and MasterCard stopped servicing a number of Russian banks which came under US sanctions regarding Moscow’s position over the Ukraine crisis. Russian authorities also decided to establish a national payment card which would not operate only internally, but also abroad.
- Visa and MasterCard later signed an agreement to carry out card transactions via the NPCS processing center and settling through the Bank of Russia.
- Visa and MasterCard currently dominate the Russian market. In 2014, Visa’s market share in Russia reached 60 percent, whereas MasterCard’s was 35 percent.
- Britain is ramping up its military rhetoric, sending its biggest warship for NATO drills in the Baltic, right off the Russian coast, in this latest show of force. The drills kick off on June 5 and will last for two weeks.
- The helicopter carrier HMS Ocean is expected to reach Russia’s city of Kaliningrad sometime this week, carrying aboard about 80 Royal Marines who are to join other NATO troops in Poland, the Sunday Times reports.
- Named ‘Baltops 15,’ the games’ objective remains, as before, to test battle-readiness and in so doing continue to voice disapproval over the situation in Ukraine. The Baltic nations believe Russia poses a military threat to Europe and are using its alleged actions in Ukraine as pretext to show off their own military prowess and push for increased NATO presence in the region.
- The international fleet of vessels to take part in the games will include close to 50 warships and submarines, some of which will assemble as close as 50 miles to the Russian border, in the Gulf of Gdansk. Some other weapons featured in the games will be American B-52 nuclear bombers, which have stood for decades more as a symbol of Cold War readiness than anything else.
- The little space just off the Russian city of Kaliningrad is one of the country’s most heavily guarded – housing three air bases, thousands of soldiers and the Russian navy’s Baltic fleet, as well as being home to the command headquarters for all of Russia’s air and maritime intelligence missions in Europe.
- It’s also squeezed between two NATO members, neither of whom are big fans of Russia: Poland and Latvia.
- The Brits, together with the Americans and others will carry out an amphibious landing near the western Polish town of Ustka – the display is set to be the centerpiece of the games. The forces will storm a beach from HMS Ocean, under cover of Apache helicopter fire.
- The Sunday Times writes that regional military forces are forecasting not only Russian eyes on the exercises, but that the Russians will attempt to somehow disrupt them.
- The latest ratcheting up of tensions comes amid a Cold-War low in relations between Russia and NATO. Russia’s neighbors have been using every opportunity to condemn it in comments or otherwise show disapproval.
- Russia has been reacting with promises to ramp up security in Crimea.
- “Naturally, we will increase our forces in Crimea because NATO countries have stepped up their activities… in the immediate vicinity of our borders,” said Russia’s envoy to NATO, Aleksandr Grushko, in mid-May.
- He said Russia’s military boost falls in line with international treaties. “There is no ban in place prohibiting us to deploy weapons [in Crimea],” he added. His words follow NATO Secretary General Jens Stoltenberg’s statement made the previous day concerning the Alliance’s plans to increase military activity on its eastern European borders, with more air and sea patrols, amid non-stop exercises.
Britain’s HMS Ocean (Reuters / Ki Price)
- The US Director of National Intelligence James Clapper has ordered a review of cooperation between the National Security Agency (NSA) and the German intelligence agency BND, Bild newspaper reports.
- Citing an unnamed source in US intelligence, Bild says Clapper is unhappy with Berlin’s “inability to contain secret data”. According to the report, the Bundestag committee on investigating the recent secret service scandals handed some secret documents to the media.
For the US it is “more dangerous than what Snowden did,” Bild quoted the source as saying, referring to former NSA contractor Edward Snowden’s revelations of worldwide surveillance.
- Now, the US secret services are reviewing the areas in which cooperation with the BND can be reduced or ended altogether, the paper reports. Several joint projects have already been canceled, it says.
- Both the German government and the US embassy in Berlin refused to comment on the report.
- In April, German media reported that over the past decade, the BND helped NSA in spying all over Europe. The US agency sent its German colleagues so-called “selectors”, which included IP addresses, emails, and phone numbers guiding what targets must be spied on.
- One report suggested that the BND sends about 1.3 billion pieces of phone and text data to NSA per month.
- The public outrage over those allegations and the subsequent investigation cost Chancellor Angela Merkel about a third of her approval rating. In late April, her government was accused of lying to parliament saying it had no knowledge of Washington’s surveillance activities in Germany.
- The first rule of “Project Bookend” is that you don’t talk about “Project Bookend.”
- In retrospect, maybe the first rule should have been “you don’t accidentally e-mail ‘Project Bookend’ to a news agency”, because as the Guardian reports, one of its editors opened his inbox and was surprised to find a message from the BOE’s Head of Press Jeremy Harrison outlining the UK financial market equivalent of the Manhattan project.
- Project Bookend is a secret (or ‘was’ a secret) initiative undertaken by the BOE to study what the fallout might be from a potential ‘Brexit’, but if anyone asked what Sir Jon Cunliffe and a few senior staffers were up to, they were instructed to say that they were busy investigating “a broad range of European economic issues.”
- Here’s more from The Guardian:
- Bank of England officials are secretly researching the financial shocks that could hit Britain if there is a vote to leave the European Union in the forthcoming referendum.
- The Bank blew its cover on Friday when it accidentally emailed details of the project – including how the bank intended to fend off any inquiries about its work – direct to the Guardian.
- According to the confidential email, the press and most staff in Threadneedle Street must be kept in the dark about the work underway, which has been dubbed Project Bookend…
- MPs are now likely to ask whether the Bank intended to inform parliament that a major review of Britain’s prospects outside the EU was being undertaken by the institution that acts as the UK’s main financial regulator. Carney is also likely to come under pressure within the Bank to reveal whether there are other undercover projects underway.
- Officials are likely to have kept the project under wraps to avoid entering the highly charged debate around the EU referendum, which has jumped to the top of the political agenda since the Conservatives secured an overall majority. Many business leaders and pro-EU campaigners have warned that “Brexit” would hit British exports and damage the standing of the City of London.
- The email indicates that a small group of senior staff are to examine the effect of a Brexit under the authority of Sir Jon Cunliffe, who as deputy director for financial stability has responsibility for monitoring the risk of another market crash.
- Cunliffe also sits on the board of the City regulator, the Prudential Regulatory Authority.
- The email from Cunliffe’s private secretary to four senior executives, was written on 21 May and forwarded by mistake to a Guardian editor by the Bank’s head of press, Jeremy Harrison.
It says: “Jon’s proposal, which he has asked me to highlight to you, is that no email is sent to James’s team or more broadly around the Bank about the project.”
- It continues: “James can tell his team that he is working on a short-term project on European economics in International [division] which will last a couple of months. This will be in-depth work on a broad range of European economic issues. Ideally he would then say no more.”
* * *
- In sum: Mark Carney accidentally pulled a Coeure who intentionally pulled a Yellen.
- On the bright side for Carney, it looks like he’s making big strides when it comes to his goal of providing “greater transparency over [the BOE’s] decision-making.”
- On Thursday, we chronicled recent events in Syria including the fall of Palmyra to ISIS which has promptly led the mainstream media to decry the possibility that another ‘treasure of antiquity’ is set to be lost to barbarous black flag-flying militants. We also noted that the group’s latest “offensive” in Iraq, which supposedly culminated with the capture of Ramadi and control of a “strategic highway linking Iraq and Syria, and a haul of weapons abandoned by Iraqi forces,” sounds like a great excuse for Washington to send in a “tactical, contained group of troops.”
- Not 24 hours later, a suicide bomber detonated inside a Saudi mosque and as expected, the culprit was none other than ISIS. Here’s The NY Times:
- The Islamic State extremist group claimed responsibility Friday for a suicide bombing during midday prayer at a Shiite mosque in eastern Saudi Arabia. The Saudi Health Ministry said at least 21 people had been killed and more than 120 others injured.
- It appeared to be the first official claim of an attack inside the kingdom by the Islamic State, which has seized control of much of Syria and Iraq.
- The group attributed the attack to a new unit, the Najd Province, named for the central region of Saudi Arabia around Riyadh…
- At the same time, Saudi Arabia’s participation in the American-led military campaign in Iraq and Syria against the Sunni extremists of the Islamic State has raised fears of a backlash from its sympathizers at home. Thousands of
- Saudis have traveled to join the Islamic State, which follows a puritanical school of Islam that scholars say is similar to that of Saudi Arabia.
- Leaders of the Islamic State have called with increasing vehemence for their supporters to carry out attacks in the kingdom, accusing its leaders of hypocrisy. Saudi Arabia’s leaders and clerics deny any similarity between their understanding of Islam and that of the Islamic State.
There you have it. ISIS has now purportedly opened a franchise in Riyadh which, as we said on Friday, seems like as good an excuse as any to expand Decisive Storm because after all, if you’re Saudi Arabia, the barbarians are nearly at the gates.
- As you can see, there are now plenty of excuses to put boots on the ground first in Iraq, and then in Syria. Put simply: if there was ever an opportune time to play the ISIS card on the way to ousting Assad and securing a route for Qatari natural gas to flow to Europe thus breaking Gazprom (and Putin’s) stranglehold, this is surely it.
- Indeed, the media propaganda machine is kicking into high gear. Take the following graphic from The Times for instance, which depicts a giant globe with highlights on “countries with groups that have pledged allegiance to ISIS”:
- The above makes it look like ISIS has launched a Naziesque blitzkrieg on the way to invading multiple countries. This, of course, is completely absurd. There are a lot of groups who can claim membership in a lot of countries meaning that we could produce a lot of these maps if we wanted to, but it wouldn’t mean that any of said groups were on the verge of a Napoleonic global conquest.
- But reality never got in the way of a good story which is why we were not at all surprised to read this from Bloomberg:
- Islamic State’s seizure of Ramadi has revived a debate in the Obama administration about whether to send a limited number of U.S. military specialists to Iraqi battlefields to target airstrikes on the extremists…
- Conducting precision airstrikes that avoid civilian casualties is more difficult without spotters using laser designators and other tools to guide them, particularly in and around cities, said a State Department official who spoke under ground rules requiring anonymity.
- A U.S. airstrike in November against a different extremist group in Syria killed two children and wounded two adults, the Defense Department reported Thursday…
- While the issue of spotters has been raised before, no recommendation to deploy the specialists known as joint terminal attack controllers, or JTACs, has reached the president, according to the official.
- Obama described the fall of Ramadi as a “tactical setback,” and White House officials downplayed the prospect that he might order any major policy shift in its aftermath.
- “Those who are calling on a change in strategy, I would encourage them to be specific,” White House spokesman Josh Earnest told reporters in Washington on Thursday. “And I don’t think that they will find either a lot of support on the part of the American people for a large-scale deployment of military resources to essentially re-invade Iraq or invade Syria.”
- A decision to send air controllers wouldn’t necessarily clash with his comment because their numbers would be small, and several military authorities are saying that’s an option the president should consider…
- On Capitol Hill Thursday, retired General Jack Keane, a former vice chief of staff of the Army, said deploying JTACs, also called forward air controllers, could quickly shift the balance against Islamic State by making its fighters more vulnerable to U.S. and coalition air attacks…
- “Seventy-five percent of the sorties we are currently running with our attack aircraft come back without dropping bombs, mostly because they cannot acquire the target or cannot properly identify the target,” he said. “Forward air controllers fix that problem.”
Carefully worded trial balloons don’t get much better than that. You see, the problem is that we are accidentally killing innocent children on our bombing runs and that’s if we’re lucky enough to be able to drop any bombs at all which apparently we only do a quarter of the time, and the whole “problem” could be “fixed” by deploying a couple of “spotters” with laser pointers.
- We’ll leave it to readers to determine if, kind of like “plumbing” means “unions” at WalMart, “spotters” actually means “Delta Force” at The White House but whatever the case, once the US military starts the “spotting” we imagine mission creep will kick in in very short order.
- The US Senate passed a controversial “fast-track” trade bill in a 62-37 vote on Friday. It is a key part of President Barack Obama’s pivot to Asia, which aims to counter China’s rising economic and diplomatic power via the Trans-Pacific Partnership (TPP).
- The bill will now head to the House of Representatives for a vote early next month, where it is expected to face a tougher showdown.
- If passed by the House, the fast-track bill will give Obama the power to negotiate trade pacts with other countries and submit them to Congress without lawmakers being able to introduce amendments to them.
- But some House Democrats have expressed worry about the bill’s impact on jobs and the environment, while some conservatives oppose giving the White House more power.
Senate votes 62-37 to pass trade fast track bill. A hard-fought win for Pres Obama. But prospects in the House even more difficult.
— Mark Knoller (@markknoller) May 23, 2015
- The Senate ended debate on the bill on Thursday in a 62-38 vote, pushing it to the forefront of Friday’s agenda. Obama called that vote “a big step forward.”
- In a close 51-48 vote Friday, senators rejected an amendment that would’ve mandated any future trade bills to feature penalties against countries that manipulate the value of their currency in order to sell products overseas at lower prices.
- The chamber also rejected an amendment by Sen. Elizabeth Warren (D-Mass.) that would have prevented approval of the TPP if it included an Investor-State Dispute Settlement system, which gives multinational corporations the ability to fight regulations in other countries. Liberals have railed against the ISDS, arguing that it would allow companies to undermine US laws.
- Meanwhile, another amendment that would’ve required Congress to approve of any additional country that wants to join the TPP in the future.
The main aim of fast-track, which would initially have a three-year term, is to implement the Trans-Pacific Partnership – a trade deal that would link 40 percent of the world’s economy.
- Along with the United States, 11 other countries have taken part in TPP negotiations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The deal would exclude China and serve to counter its growing economic and diplomatic influence in the Asia-Pacific region.
- The proposed partnership has been a source of intense debate in Washington and throughout the United States – and Obama’s Democrats are divided on the matter.
- Those in favor of the partnership include big businesses, Congressional Republicans, and President Obama himself.
- “TPP is good for American businesses and American workers…we will make the case on the merits as to why it will open up markets for American goods, American exports, and create American jobs,” Obama said in a statement on April 28.
- But those against TPP – including labor unions and the Tea Party – say the deal would put American manufacturing jobs at risk.
05.22.15 – BRICS trample US in South America
- It started in April with a rash of deals between Argentina and Russia during President Cristina Kirchner’s visit to Moscow.
- And it continues with a $53 billion investment bang as Chinese Premier Li Keqiang visits Brazil during the first stop of yet another South American commercial offensive – complete with a sweet metaphor: Li riding on a made in China subway train that will ply a new metro line in Rio de Janeiro ahead of the 2016 Olympics.
- Where is the US in all this? Nowhere; little by little, yet inexorably, BRICS members China – and in a smaller measure, Russia – have been no less than restructuring commerce and infrastructure all across Latin America.
- Countless Chinese commercial missions have been plying these shores non-stop, much as the US did between World War I and II. In a key meeting in January with Latin American business leaders, President Xi Jinping promised to channel $250 billion for infrastructure projects in the next 10 years.
- Top infrastructure projects in Latin America are all being financed by Chinese capital – except the Mariel port in Cuba, whose financing comes from Brazil’s BNDES and whose operation will be managed by Singaporean port operator PSA International Pte Ltd. Construction of the Nicaragua canal – bigger, wider and deeper than Panama’s – started last year by a Hong Kong firm, to be finished by 2019. Argentina, for its part, clinched a $4.7 billion Chinese deal for the construction of two hydroelectric dams in Patagonia.
- Chinese Premier Li Keqiang (L) and Brazil’s President Dilma Rousseff look on before a meeting at the Planalto Palace in Brasilia, May 19, 2015 (Reuters / Ueslei Marcelino)Chinese Premier Li Keqiang (L) and Brazil’s President Dilma Rousseff look on before a meeting at the Planalto Palace in Brasilia, May 19, 2015 (Reuters / Ueslei Marcelino)
- Among the 35 deals clinched during Li’s visit to Brazil, there was financing worth $7 billion for Brazil’s oil giant Petrobras; 22 Brazilian Embraer commercial jets to be sold to Tianjin Airlines for $1.3 billion; and a raft of agreements involving top iron ore producer Vale. Chinese investment might go some way into overhauling Brazil’s appalling network of roads, railways and ports; airports are in slightly better condition due to upgrades prior to the World Cup last year.
- The star of the whole show is undoubtedly the proposed $30 billion, 3,500 kilometer-long, Atlantic-Pacific mega-railway, that is slated to run from the Brazilian port of Santos to the Peruvian Pacific port of Ilo via Amazonia. Logistically, this is a must for Brazil, offering it a Pacific gateway. Winners will inevitably be commodity producers – from iron ore to soya beans – exporting to Asia, mostly China.
- The Atlantic-Pacific railway may be an extremely complex project – involving everything from environmental and land rights issues to, crucially, the preference for Chinese firms every time Chinese banks deliberate on extending lines of credit. But this time, it’s a go. The usual suspects are – what else – worried.
- Watch the geopolitics
Official Brazilian policy, since the Lula years, has been to attract top Chinese investment. China is Brazil’s top trading partner since 2009; it used to be the US. The trend started with food production, now it moves to investment in ports and railways, and the next stage will be technology transfer. The BRICS New Development Bank and the China-led Asian Infrastructure Investment Bank (AIIB), of which Brazil is a key founding member, will definitely be part of the picture.
- The problem is this massive trade/commerce BRICS interplay is intersecting with a quite convoluted political process. The top three South American powers – Brazil, Argentina and Venezuela, which also happen to be Mercosur members – have been facing repeated “destabilization” attempts by the usual suspects, who routinely denounce the foreign policy of Presidents Dilma Rousseff, Cristina Kirchner and Nicolas Maduro and yearn for the good ol’ days of a dependent relationship with Washington.
- With different degrees of complexity – and internal strife – Brasilia, Buenos Aires and Caracas are all simultaneously facing plots against their institutional order. The usual suspects don’t even try to dissimulate their near total diplomatic distance from the South American Top Three.
- Venezuela, under US sanctions, is considered a threat to US national security – something that does not even qualify as a bad joke. Kirchner has been under relentless diplomatic assault – not to mention US vulture funds targeting Argentina. And with Brasilia, relations are practically frozen since September 2013, when Rousseff suspended a visit to Washington in response to the NSA spying on Petrobras, and herself personally.
- And that leads us to a crucial geostrategic issue – so far unresolved.
- NSA spying may have leaked sensitive information on purpose to destabilize the Brazilian development agenda – which includes, in the case of Petrobras, the exploration of the largest oil deposits (the pre-salt) found so far in the young 21st century.
- The Petrobras headquarters in Rio de Janeiro (Reuters / Sergio Moraes)The Petrobras headquarters in Rio de Janeiro (Reuters / Sergio Moraes)
- What is unraveling is so crucial because Brazil is the second-biggest economy in the Americas (after the US); it is the biggest Latin American commercial and financial power; it hosts the former second-biggest development bank in the world, BNDES, now overtaken by the BRICS bank; and it also hosts the biggest corporation in Latin America, Petrobras, also one of the world’s top energy giants.
- The hardcore pressure against Petrobras comes essentially from US shareholders – who act like the proverbial vultures, bent on bleeding the company and profit from it, allied with lobbyists who abhor Petrobras’s status as the priority explorer of the pre-salt deposits.
- In a nutshell, Brazil is the last great sovereign frontier against unbounded hegemonic domination in the Americas. The Empire of Chaos had to be annoyed.
- Ride the continental wave
The constantly evolving strategic partnership of the BRICS nations has been met by Washington circles not only with incredulity but fear. It’s virtually impossible for Washington to do real damage to China – but much “easier”, comparatively, in the case of Brazil or Russia. Even though Washington’s wrath targets essentially China – which has dared to do deal after deal in the former “America’s backyard”.
- Once again, the Chinese strategy – as much as the Russian – is to keep calm and carry a “win-win” profile. Xi Jinping met with Maduro in January to do – what else – deals. He met with Cristina Kirchner in February to do the same – just as speculators were about to unleash another attack against the Argentine peso. Now there’s Li’s visit to South America.
- Needless to say, trade between South America and China continues to boom. Argentina exports food and soya beans; Brazil the same, plus oil, minerals and timber; Colombia sells oil and minerals; Peru and Chile, copper, and iron; Venezuela sells oil; Bolivia, minerals. China exports mostly high-value-added manufactured products.
- A key development to watch in the immediate future is the Transul project, which was first proposed at a BRICS conference last year in Rio. It boils down to a Brazil-China strategic alliance linking Brazilian industrial development to partial outsourcing of metals to China; as the Chinese increase their demand – they are building no less than 30 megalopolises up to 2030 – that will be met by Brazilian or Sino-Brazilian companies. Beijing has finally given its seal of approval.
- So the long-term Big Picture remains inexorable; BRICS and South American nations – which converge in the Unasur (The Union of South American Nations) – are betting on a multipolar world order, and a continental process of independence.
- It’s easy to see how that is oceans away from a Monroe doctrine.
- Yemeni hackers have allegedly released thousands of top secret Saudi Arabia documents, including spies’ identities, after gaining “full control” of over 3,000 computers and servers belonging to Riyadh’s Foreign, Interior and Defense Ministries.
- The Yemen Cyber Army group claims it not only has the addresses, phone numbers and emails of top Saudi diplomats, Foreign Ministry staff, secret agents and army personnel, but also got hold of classified files and correspondence of senior Riyadh officials with other countries and governments since early 1980s.
- “We have gained access to the Saudi Ministry of Foreign Affairs (MOFA) network and have full control over more than 3,000 computers and servers, and thousands of users. We also have access to the emails, personal and secret information of hundreds of thousands of their staff and diplomats in different missions around the world,” the hackers informed in a statement cited by the Iranian semi-official Fars news agency.
- “We publish only few portions of the vital information we have, just to let them know that ‘truly the flimsiest of houses is the spider’s house’,” the hackers’ statement alleged.
— RT (@RT_com) May 22, 2015
- The Yemen Cyber Army has pledged that “portions of the visa secret information, thousands of documents from the Saudi Foreign Ministry automation system and secret emails will be published gradually so as to keep Saudi puppets always in fear of their identity disclosure.
- “We have the same access to the Interior Ministry (MOI) and Defense Ministry (MOD) of which the details will be published in near future” the hacking group added. According to Fars, the group has also warned that it would soon cause greater damage on the Riyadh government if it refrains from attacking “Muslims in Yemen,” adding, “Do not blame anyone but yourself and expect greater harms.”
— RT (@RT_com) 11 мая 2015
- Yemen Cyber Army first made headlines in mid-April when it hacked the website of a London-based daily newspaper al-Hayat in protest at Riyadh’s ‘invasion’ of Yemen. According to a statement left on AlHayat’s website, which also run a photo of the Lebanese Hezbollah leader Seyed Hassan Nasrallah, the hackers wanted “to support Yemen revolution.”
- In a bid “to warn all Pro-Saudi or pan-Arabs accept Yemen Revolution and join us against your dictators”, the Yemeni group had also reportedly leaked the names of the paper’s readers and subscribers.
- Last week a Saudi Arabian-led coalition resumed airstrikes against Yemen’s Houthi militia, shortly after the expiry of a five-day ceasefire which was introduced to allow delivery of food, fuel and medication to those caught in the conflict. The bombardment resumed despite UN calls to extend the humanitarian pause.
- In September, Houthi rebels took control of the capital, Sanaa, ousting Sunni President Abd-Rabbu Mansour Hadi, who fled to Saudi Arabia.
- According to UN humanitarian agency UNHCR, as of mid-May 1,849 people had been killed and 7,394 others injured in the Yemeni conflict, since the Saudi-led air campaign began in late March. The escalating humanitarian crisis has already left millions short of food and fuel.
- Clashes are reported in central Kiev where crowds of protesters are rallying against the economic crisis and the soaring cost of private loans. Local media say several people have tried to break into the Ukrainian parliament.
- Four policemen and two protesters were reportedly injured in the clashes, as protesters blocked the exits of the parliament building.
- The so-called “Financial Maidan” crowd is demanding that the parliament approves the law on restructuring private loans in foreign currency, which would convert people’s debts into national currency at pre-crisis levels.
- The protesters have set fire to car tires and attempted to break into the parliament building. Riot police have so far been able to hold them back.
— RT (@RT_com) May 21, 2015
- Life News however reports several activists did manage to get into the building, spreading banners with their demands and shouting in approval of those deputies that voted for the restructuring bill.
- Earlier, the parliament failed to approve the second reading of a law that would allow borrowers to pay their loans back in hryvnas, at a rate of about 5 hryvnas to the dollar. The current exchange rate is about 20 hryvnas to the dollar, as Ukraine faces a deep financial crisis. The bill will now go through one more reading in the parliament.
Узнаём старый добрый Киев. Возле здания Рады жгут шины, кидают дымовые шашки и лупят друг друга палками. Ностальгия. pic.twitter.com/l4xQTqxUdE
— Новости. Как есть (@nourlnews) May 21, 2015
- Several MPs have tried to calm the crowd down. Borislav Bereza from the Right Sector ultranationalist party told the crowds “the situation [with the law] was manipulated.”
- The “Financial Maidan” movement has been active for several months in Kiev, with demonstrations near the parliament and the National Bank. Their demands include refunds for those with deposits in banks hit worst by the crisis.
- They also demand resignation of the country’s Prime Minister Arseny Yatsenyuk and Finance Minister Natalya Yaresko.
- At least 11 “Financial Maidan” activists were into their fourth day of a hunger strike next to the parliament building Thursday. One of them has been taken to hospital.
- Among the slogans the protesters are shouting is the infamous “Out with the gang!” heard numerous times during the 2013-14 Maidan uprising against President Yanukovich and his government, which eventually brought the current officials to power.
- At the end of the day, several dozen people were still near the parliament building, preparing to stay there for the night.
- The NSA and its spying partners wanted to hack into smartphones via Google and Samsung App stores and infect them with spyware. The revelations came from a top secret document released by NSA whistleblower Edward Snowden.
- The surveillance project wanted to implement a spying system called XKEYSCORE, which would be able to identify smartphone traffic flowing across internet cables and then track down smartphone connections to the app servers, which were operated by Google and Samsung. The information was released Wednesday to CBC News in Canada and the Intercept.
- The aim was then to infect every app listed in the store with malware, in a project codenamed IRRITANT HORN. Users of the Google Play Store and Samsung App Store would then download the infected apps, thus making it easier for the NSA and its partners to spy smartphone users around the globe.
— Ryan Gallagher (@rj_gallagher) May 21, 2015
- This would give them the chance to access emails, texts, web history, call records, videos, photos and other files stored on them.
- “What they are clearly looking for are common points, points where thousands, millions of internet users actively engage in, knowing that if they can find ways to exploit those servers, they will be privy to huge amounts of data about people’s internet use, and perhaps use bits and pieces of that to make correlations,” Michael Geist, an internet law expert at the University of Ottawa, told CBC News.
- The program was the brainchild of the “Five Eyes” alliance, which includes the US, Canada, the UK, New Zealand and Australia. The team worked on these projects during workshops held in Australia and Canada between November 2011 and February 2012. They said it was necessary to combat terrorism.
- “All of this is being done in the name of providing safety and yet … Canadians or people around the world are put at risk,” Geist said.
- Previous documents leaked by Snowden have shown that the Five Eyes alliance had designed spyware for iPhones and Android smartphones. However, it was never clear how the agencies intended to get the malware onto the phones in the first place.
- According to material received by the Intercept, the agencies did not just want to use app stores to infect smartphones with spyware. They were also eager to find ways to hijack them as a way of sending “selective misinformation to the targets’ handsets” as part of so-called “effects” operations that are used to spread propaganda or confuse adversaries. Moreover, the agencies wanted to gain access to companies’ app store servers so they could secretly use them for “harvesting” information about phone users.
— Colin Freeze (@Colinfreeze) May 21, 2015
The app stores targeted were located in France, Switzerland, the Netherlands, the Bahamas, Morocco, Cuba and Russia.
- The NSA and their allies also targeted the UC Browser, which is a popular app used to surf the internet in Asia. Although relatively unknown in Europe, its reach across Asia meant that it was used by half a billion smartphone users. The Five Eyes agencies were able to discover a privacy flaw in its security, which leaked its users’ phone numbers, SIM card numbers and details about the device to servers in China.
— insane code (@poa_cruel_news) May 17, 2015
- According to Citizen Lab director Ron Deibert, the breach that was discovered in the UC Browser not only left millions of users open to the surveillance of the NSA and its partners, but could have also potentially been used by criminal hackers to access sensitive information.
- “Of course, the security agencies don’t [disclose the information],” Deibert said. “Instead, they harbor the vulnerability. They essentially weaponize it.” Taking advantage of weaknesses in apps like UC Browser “may make sense from a very narrow national security mindset,” Deibert added, “but it’s at the expense of the privacy and security of hundreds of millions of users worldwide,” the Intercept reported.
- The Intercept contacted all of the Five Eyes agencies for comments regarding the allegations.
- The British agency Government Communications Headquarters (GCHQ) said that its work was “carried out in accordance with a strict legal and policy framework, which ensures that our activities are authorized, necessary and proportionate.”
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