Watchman Newsletter

Anti-US Violence Spreads Across Mideast Region

Israel National News (Link) - Chana Ya’ar and AFP (September 13, 2012)

Anti-American violence is spreading across the Middle East, with mobs rioting at US missions in Tunisia, Sudan and Morocco.

Hundreds of protesters rioted outside the U.S. embassy in Tunisia on Wednesday night. Police in the capital of Tunis were forced to fire teargas canisters at the mob when some 300 rioters stormed the American embassy compound. The rioters, however, were pushed back. Up to that point, the demonstration had been relatively peaceful, with demonstrators brandishing black and white Salafi Muslim banners.

Throughout the Middle East, United States embassies have been warning American citizens to avoid crowded places, and to “remain alert at all times.” Even demonstrations that appear to be peaceful “can turn suddenly violent,” the embassy alert warned citizens living in Arab countries throughout the region.

The Fuse is Lit: European Perils

Mcalvany Financial (Link) (May 21, 2012)

With the acceleration of economic and monetary events here is the first of 3 short films in 2012. Our focus is the US dollar, notably its status as the world’s reserve currency. The monetary greed and mountains of debt in recent years has deeply impaired the dollar’s justification to hold this prestigious and privileged position. We believe the US dollar’s tenure as the world’s reserve currency is rapidly approaching its end. We first explore the EU in that context. The fuse is lit! †

24 Signs That We Are Getting Dangerously Close To A Major War In The Middle East

The American Dream (Link) (February 6, 2012)

Is 2012 the year when we will see a major war in the Middle East? For years we have heard about rising tensions in the Middle East, and for years we have heard politicians express concerns about Iran’s nuclear program, but now things really do seem to be reaching a boiling point. In just the past few days, the U.S. government has imposed tough new sanctions on Iran and has totally shut down the U.S. embassy in Syria.

The truth is that we are getting dangerously close to a major war in the Middle East. So will Israel strike Iran at some point in the next few months? Will the U.S. military intervene in the rapidly escalating conflict inside of Syria? If a major war does erupt, it could send the price of oil skyrocketing and there is the potential that the war could broaden very quickly.

Hezbollah has already indicated that it will side with Syria, and there is always the potential that Hamas could as well. Russia and China have both stated that they are completely opposed to military action by the United States against Iran and Syria, and they have even hinted that they would possibly even help defend those countries. As the nations of the world take sides, there is even the potential that we could see World War III develop. Let us hope that it never comes to that, but with the world as unstable as it is right now, you never know what may happen.

What makes war so much more likely now is that nobody has shown any signs of backing down.

Warning Signs That We Should Prepare For The Worst

The Economic Collapse Blog (Link) (January 18, 2012)

The warning signs are all around us. All we have to do is open up our eyes and look at them. Almost every single day there are more prominent voices in the financial world telling us that a massive economic crisis is coming and that we need to prepare for the worst. On Wednesday, it was the World Bank itself that issued a very chilling warning. In an absolutely startling report, the World Bank revised GDP growth estimates for 2012 downward very sharply, warned that Europe could be on the verge of a devastating financial crisis, and declared that the rest of the world better “prepare for the worst.” You would expect to hear this kind of thing on The Economic Collapse Blog, but this is not the kind of language that you would normally expect to hear from the stuffed suits at the World Bank. Obviously things have gotten bad enough that nobody is even really trying to deny it anymore. Andrew Burns, the lead author of the report, said that if the sovereign debt crisis gets even worse we could be looking at an economic crisis that could be even worse than the last one: “An escalation of the crisis would spare no-one. Developed- and developing-country growth rates could fall by as much or more than in 2008/09.” Burns also stated that the “importance of contingency planning cannot be stressed enough.” In other words, Burns is saying that it is time to prepare for the worst. So are you ready?

But of course it isn’t just the World Bank that is warning about these things. The chorus of voices that is warning about the next great financial crisis just seems to grow by the day.

Some of these voices were profiled in a Bloomberg article the other day entitled “Apocalypse How? Dire ’12 Forecasts.” The following is just a sampling of quotes from that article....

Israeli conflict becomes major issue in GOP debate

WorldNet Daily (Link) - Drew Zahn (December 11, 2011)

Earlier this week, Newt Gingrich told an Isreali TV station the Palestinians are an “invented” people out to destroy Israel, a statement that prompted significant disagreement between the candidates in this weekend’s GOP debate on whether it is better to exercise “truth” or “prudence” in the Middle East.

When asked about the comment, Gingrich was completely unapologetic for his controversial remarks.

“Somebody ought to have the courage to tell the truth,” Gingrich insisted. “[The Palestinian power groups Fatah and Hamas] are terrorists. They teach terrorism in their schools. They have textbooks that say, ‘If there are 13 Jews and 9 Jews are killed, how many Jews are left?’ We pay for those textbooks through our aid money. It’s fundamentally time for somebody to have the guts to stand up and say, ‘Enough lying about the Middle East.’”

He went on to say, “Is what I said factually correct? Yes. Is it historically true? Yes. … The fact is, the Palestinian claim to a right of return is based on a historically false story. Somebody ought to have the courage to go all the way back to the 1921 League of Nations mandate for a Jewish homeland, point out the context in which Israel came into existence, and ‘Palestinian’ did not become a common term until after 1977. This is a propaganda war in which our side refuses to engage. … You’re not going to win in the long run if you’re afraid to stand firm and stand for the truth.”

Ron Paul Warns of Coming Global Meltdown

Nolan Chart (Link) - Jake Morphonios (December 10, 2011)

In Des Moines, Iowa, Congressman Ron Paul gave a stark warning: “The world is facing a major, major crisis. I personally believe it’s worse than anything that’s ever existed in the world before.” The Republican presidential candidate delivered his grim economic message on the Iowa campaign trail, warning of a global financial meltdown if drastic measures aren’t quickly taken to get on top of the U.S. debt problem.

“As a physician, let me tell you, what we do with our economy, with our money, the monetary system, with the spending and the inflating, it’s very similar to treating a drug addict by just giving him another fix, not getting him off the drug,” he said to employees of Principal Financial. “The drug of spending and borrowing and printing money and deficit just delays the inevitable.” Dr. Paul said that the US addiction to debt is like an alcoholic with a failing liver who refuses to save himself by changing his bad habits.

The Texas congressman expressed dismay that other Republican presidential candidates have treated the crisis so lightly, supporting fed plans to simply print more money and try to “kick the can down the road.”

“Cataloguing Palestinian Duplicity”

Palestinian Media Watch (Link) (December 9, 2011)

“Just this week an important new book [Deception] arrived that details in exhaustive fashion the duplicity of the PA, under President Mahmoud Abbas, in speaking to the West of its recognition of Israel while at the same time spreading hate speech and glorifying terrorists at home.” [The Jewish Week, Dec. 6, 2011]

Palestinian Media Watch director Itamar Marcus, Nobel Laureate Elie Wiesel, and human rights leader Robert L. Bernstein hosted a press conference Tuesday launching Deception: Betraying the Peace Process.

Authors Itamar Marcus and Nan Jacques Zilberdik document numerous breaches in the Palestinian Authority’s commitments to recognize Israel, to cease hate incitement and to reject violence and terror - requirements established by the international community and accepted by the PA.

The authors and human rights leaders warned that the hate speech and incitement against Israel by PA leaders is the fundamental impediment to achieving peace.

Evolution Securities Warns Of “Total Carnage And Meltdown” As European Bank Sales Of CDS On European Sovereign Debt Soar

Zero Hedge (Link) - Tyler Durden (December 9, 2011)

As much as we hate to say it, Europe is now without a shadow of a doubt the new AIG, only this time such heretofore considered insane (in retrospect) activities as doubling down to infinity on ones TBTF status are out in the public record for all to see. At least AIG conducted Joe Cassano’s “made in London” $2.7 trillion bet on home prices never dropping in the shadows of Curzon 1. Whereas two days ago we made it clear [16]how the unwind of trillions in rehypothecated securities could be the avalanche that buries first Europe and then the world, we explicitly excluded the impact of synthetic products such as CDS. Now it is time to bring the picture full circle, and put CDS front and center. As Bloomberg reports,

“BNP Paribas SA, France’s biggest bank, sold a net 1.5 billion euros ($2 billion) of credit- default swaps on the nation’s sovereign debt, according to data compiled by the European Banking Authority. UniCredit SpA, Italy’s biggest lender, and Banca Monte dei Paschi SpA are net insurers of more than 500 million euros each of their government’s bonds, and Oesterreichische Volksbanken AG, the Austrian lender which has yet to pay interest on 1 billion euros of state aid received in 2009, has guaranteed a net 839 million euros of its national debt, EBA data show.” (EBA source - link [17]).

For those confused by the above, here is the explanation: European banks, in order to generate modest cash flow from collecting on the pariodic interest premiums owed to them in order to plug increasingly large capital shortfall holes that otherwise would simply keep growing ever larger, have sold and continue to sell massive amounts of default protection on their very own host countries! As a reminder, it was precisely this that destroyed AIG when the illusion of the credit bubble burst.

Egypt and the Idealist-Realist Debate in U.S. Foreign Policy

Stratfor Global Intelligence (Link) - George Friedman (December 6, 2011)

The first round of Egyptian parliamentary elections has taken place, and the winners were two Islamist parties. The Islamists themselves are split between more extreme and more moderate factions, but it is clear that the secularists who dominated the demonstrations and who were the focus of the Arab Spring narrative made a poor showing. Of the three broad power blocs in Egypt — the military, the Islamists and the secular democrats — the last proved the weakest.

It is far from clear what will happen in Egypt now. The military remains unified and powerful, and it is unclear how much actual power it is prepared to cede or whether it will be forced to cede it. What is clear is that the faction championed by Western governments and the media will now have to accept the Islamist agenda, back the military or fade into irrelevance.

One of the points I made during the height of the Arab Spring was that the West should be careful of what it wishes for — it might get it. Democracy does not always bring secular democrats to power. To be more precise, democracy might yield a popular government, but the assumption that that government will support a liberal democratic constitution that conceives of human rights in the European or American sense is by no means certain. Unrest does not always lead to a revolution, a revolution does not always lead to a democracy, and a democracy does not always lead to a European- or American-style constitution.

Israel and Syria brace for regional war between mid-Dec. 2011 and mid-Jan 2012

DEBKAfile (Link) (December 5, 2011)

The actions and words of Israeli Prime Minister Binyamin Netanyahu and Syrian ruler Bashar Assad in the last 72 hours indicate they are poised for a regional war, including an attack on Iran, for some time between December 2011 and January 2012.

In their different ways, both have posted road signs to the fast-approaching conflict as DEBKAfile’s Middle East sources disclose:

1. Saturday, Dec. 3, Syria staged a large-scale military exercise in the eastern town of Palmyra, which was interpreted by Western and Israeli pundits as notice to its neighbors, primarily Turkey and Israel, that the uprising against the Assad regime had not fractured its sophisticated missile capabilities.

DEBKAfile’s military sources advise attaching more credibility to the official Damascus statement of Sunday, Dec. 4: “The Syrian army has staged a live-fire drill in the eastern part of the country under war-like circumstances with the aim of testing its missile weaponry in confronting any attack.”

Iran says downed US drone; threatens response ‘outside our borders’

YNet News (Link) - Reuters (December 4, 2011)

Iran’s military said on Sunday it had shot down a US reconnaissance drone aircraft in eastern Iran, a military source told state television.

“Iran’s military has downed an intruding RQ-170 American drone in eastern Iran,” Iran’s Arabic-language Al Alam state television network quoted the unnamed source as saying.

“The spy drone, which has been downed with little damage, was seized by the Iranian armed forces.”

The source said Iran’s response to the downed US drone’s violation of its airspace will not be limited to the country’s borders.

“The Iranian military’s response to the American spy drone’s violation of our airspace will not be limited to Iran’s borders any more,” Iran’s Arabic language Al Alam television quoted the military source as saying, without giving details.

Clinton presses Netanyahu to release frozen Palestinian tax funds

Haaretz (Link) - Barak Ravid (November 23, 2011)

U.S. Secretary of State Hillary Clinton phoned Prime Minister Benjamin Netanyahu Monday night and demanded that he release Palestinian tax revenue that Israel has frozen for more than a month after UNESCO accepted the Palestinians as a member.

A senior U.S. official and an Israeli source familiar with details of the conversation say Clinton called Netanyahu after messages relayed to him in recent weeks on the tax money were not answered positively.

The Prime Minister’s Office confirmed that Clinton called but said the subject was new sanctions that the United States would impose on Iran.

Israel holds $100 million in Palestinian Authority tax revenue collected in October as part of economic agreements between the two sides. Should the freeze continue through the end of November, the sum will reach $200 million.

According to the Israeli source, Netanyahu rejected Clinton’s request, saying he lacks a majority in the cabinet on the issue.

Abbas Going for Broke, Gunning for Unity with Hamas

Israel National News (Link) - Tzvi Ben Gedalyahu (November 20, 2011)

Palestinian Authority Chairman Mahmoud Abbas is to meet with Hamas leaders in Cairo Thursday to sum up a unity deal based on “resistance,” a Palestinian Authority state based on the temporary 1949 Armistice Lines and non-recognition of Israel.

Abbas, head of the rival Fatah faction, formally signed a formal unity agreement with Hamas in May, but it quickly became nothing more than a ceremonial act following disagreements.

The failure of the Palestinian Authority to gain admittance as a full member in the United Nations has been a game-changer. Following the American and Israel decision to cut off funds to the PA after it won membership on the U.N.’s UNESCO agency, Abbas has made it clear he considers the Obama administration an obstacle to his plans for Palestinian Authority statehood.

Spokesmen for Hamas and Abbas have confirmed this week’s meeting will be full of substance as Abbas had apparently decided to bank on Asian and pro-Arab countries in Europe to give him the diplomatic backing he has lost with the United States.

A Scary Prediction for the Collapse of Paper Money

The Globe and Mail (Link) - Neil Reynolds (November 15, 2011)

What should U.S. Federal Reserve chairman Ben Bernanke do next? London-based economist Detlev Schlichter says, succinctly: “Abdicate.” What should U.S. President Barack Obama do next? Mr. Schlichter says, succinctly: “Abdicate.” With Mr. Schlichter, you aren’t left with much doubt about his position. He says the world’s major currencies are destined to crash. “The dollar, the euro and the yen are locked in a race to the bottom,” he writes on his website, papermoneycollapse.com. The only question is which one crashes first.

Mr. Schlichter argues that we are only part of the way through the market meltdown – and that the worst is still to come. How much worse? Considerably worse, he says, than the Great Depression.

U.S. industrial production is 12 times higher now than it was in 1929, he says; but the amount of U.S. dollars in circulation is 200 times higher.

The U.S. net debt was 150 per cent of GDP in 1973, when then-president Richard Nixon took the country off the gold standard; yet its net debt reached a record high in 2010: 370 per cent. The United States will fall further, Mr. Schlichter insists, because it has further to fall.

We Are in ‘Worse Situation’ Than in 2008: Roubini

CNBC (Link) - Catherine Boyle (September 2, 2011)

The world’s developed economies are trapped at the “stall speed” of low growth and need to have greater fiscal stimulus and less austerity to kick-start growth, leading economist Nouriel Roubini told CNBC Friday.

Speaking at the Ambrosetti Forum on the shores of Lake Como, near Milan, Roubini said in an interview: “We are in a worse situation than we were in 2008. This time around we have fiscal austerity and banks that are being cautious.”

Roubini, known for his bearish views on the world economy, thinks that there is a 60 percent chance of a second recession imminently. Economic data of recent weeks presents a mixed picture.

On Thursday, the US government announced that jobless claims dropped by 11,000 to 409,000 last week. Friday’s employment report in the US is expected to show a gain of only 75,000 nonfarm jobs during August, with the unemployment rate steady at 9.1 percent.

Recent surveys point to slumping business and consumer confidence across the developed world.

25 Signs That The Financial World Is About To Hit The Big Red Panic Button

Economic Collapse Blog (Link) - Michael (August 31, 2011)

Most of the worst financial panics in history have happened in the fall. Just recall what happened in 1929, 1987 and 2008. Well, September 2011 is about to begin and there are all kinds of signs that the financial world is about to hit the big red panic button. Wave after wave of bad economic news has come out of the United States recently, and Europe is embroiled in an absolutely unprecedented debt crisis. At this point there is a very real possibility that the euro may not even survive. So what is causing all of this? Well, over the last couple of decades a gigantic debt bubble has fueled a tremendous amount of “fake prosperity” in the western world. But for a debt bubble to keep going, the total amount of debt has to keep expanding at an ever increasing pace. Unfortunately for the global economy, sources of credit are starting to dry up. That is why you hear terms like “credit crisis” and “credit crunch” thrown around so much these days. Without enough credit to feed the monster, the debt bubble is going to burst. At this point, virtually the entire global economy runs on credit, so when this debt bubble bursts things could get really, really messy.

Nations and financial institutions would never get into debt trouble if they could always borrow as much money as they wanted at extremely low interest rates. But what has happened is that lending sources are balking at continuing to lend cheap money to nations and financial institutions that are already up to their eyeballs in debt.

For example, the yield on 2 year Greek bonds is now over 40 percent. Investors don’t trust the Greek government and they are demanding a huge return in order to lend them more money.

Pentagon Report Exposes China Menace

Human Events (Link) - Robert Maginnis (August 31, 2011)

A new Pentagon report indicates China’s sustained military investments are destabilizing and exposes the Marxist giant’s global ambitions. The free world had better wake up to the security threat posed by this hegemonic menace.

Last week the Pentagon issued its annual report to Congress, which warns, “China’s rise as a major international actor is likely to stand out as a defining feature of the strategic landscape of the early 21st century.”

But the report “mischaracterizes and minimizes that threat,” according to Steve Mosher, a social scientist who worked in China and is author of numerous books on the country. The report “does a disservice to the truth,” Mosher said.

The truth about China’s emerging global threat becomes obvious when Beijing’s intentions, behavior and military modernization are properly exposed.

Bernanke Blames Lawmakers for Economic Woes

Christian Post (Link) - Joseph Perkins (August 26, 2011)

Federal Reserve Chairman Ben Bernanke said today that the weakened state of the U.S. economy is attributable, in large part, to the dysfunctional process by which the nation’s lawgivers make fiscal decisions.

“The quality of economic policy-making in the United States will heavily influence the nation’s long term prospects,” he told an audience of central bankers, economists and academics attending an economics conference in Jackson Hole, Wyo., hosted annually by the Federal Reserve Bank of Kansas City.

The Fed chief’s remarks were much anticipated by the financial communities here and abroad, which wondered whether Bernanke would offer a hint of a major new Fed initiative, as he did at last year’s conference.

But there was no such hint today, which signaled to conference attendees that there will be no third round of bond-buying by the Fed, which purchased more than $2.5 trillion in longer term securities during two previous rounds of “quantitative easing,” the most recent of which ended this past June.

Quake rocks Washington area, felt on East Coast

Yahoo! News (Link) - AP - Bob Lewis (August 23, 2011)

The most powerful earthquake to strike the East Coast in 67 years shook buildings and rattled nerves from South Carolina to Maine on Tuesday. Frightened office workers spilled into the streets in New York, and parts of the White House, Capitol and Pentagon were evacuated.

There were no immediate reports of deaths, but fire officials in Washington said there were at least some injuries.

The National Cathedral said its central tower and three of its four corner spires were damaged, but the White House said advisers had told President Barack Obama there were no reports of major damage to the nation’s infrastructure, including airports and nuclear facilities.

The U.S. Geological Survey said the quake registered magnitude 5.8 and was centered 40 miles northwest of Richmond, VA.

Obama set to beat Bush debt-aggregation record

Hot Air (Link) - Ed Morrissey (August 23, 2011)

In 31 months of Barack Obama’s presidency, according to the Treasury and CBS News, the US has added $4 trillion to its national debt. That approaches the presidential record set by George W. Bush of $4.9 trillion, but there’s a catch to that. Bush set that record in two terms — in 96 months:

The latest posting by the Treasury Department shows the national debt has now increased $4 trillion on President Obama’s watch.

The debt was $10.626 trillion on the day Mr. Obama took office. The latest calculation from Treasury shows the debt has now hit $14.639 trillion.

It’s the most rapid increase in the debt under any U.S. president.

The national debt increased $4.9 trillion during the eight-year presidency of George W. Bush. The debt now is rising at a pace to surpass that amount during Mr. Obama’s four-year term.

Let’s cast this by month rather than by year. Bush added an average of $51 billion a month to the national debt. In his 31 months in office, Obama has added to the national debt at an average monthly rate of $129 billion. That is 152% more per month than Obama’s predecessor.

Why this is the moment Libya’s Islamic extremists have prayed for

Daily Mail (Link) - John R. Bradley (August 23, 2011)

As Tripoli fell to anti-Gaddafi rebel forces, the euphoria that erupted in some parts of the city was matched only by that which broke out among Middle East pundits in the West.

The fall of the Libyan capital represents a clear victory for freedom over tyranny, they tell us, and a new country — defined by an enthusiastic embrace of democracy, pluralism and representative government — will emerge.

However, we have been here twice before in the Middle East in recent months. First, when Tunisia’s strongman, Zine El-Abidene Ben Ali, fled Tunis, and then when Egypt’s dictator Hosni Mubarak vacated the presidential palace in Cairo.

Seven months on, both countries are as authoritarian as ever. The Islamists have hijacked the popular uprisings there. And little evidence of a popular thirst for democracy can be found.

In Tunisia, a paltry 16 per cent of eligible voters had bothered to register before an initial deadline for doing so passed last month.

Israeli-Arab Crisis Approaching

Stratfor Global Intelligence (Link) - George Friedman (August 22, 2011)

In September, the U.N. General Assembly will vote on whether to recognize Palestine as an independent and sovereign state with full rights in the United Nations. In many ways, this would appear to be a reasonable and logical step. Whatever the Palestinians once were, they are clearly a nation in the simplest and most important sense — namely, they think of themselves as a nation. Nations are created by historical circumstances, and those circumstances have given rise to a Palestinian nation. Under the principle of the United Nations and the theory of the right to national self-determination, which is the moral foundation of the modern theory of nationalism, a nation has a right to a state, and that state has a place in the family of nations. In this sense, the U.N. vote will be unexceptional.

However, when the United Nations votes on Palestinian statehood, it will intersect with other realities and other historical processes. First, it is one thing to declare a Palestinian state; it is quite another thing to create one. The Palestinians are deeply divided between two views of what the Palestinian nation ought to be, a division not easily overcome. Second, this vote will come at a time when two of Israel’s neighbors are coping with their own internal issues. Syria is in chaos, with an extended and significant resistance against the regime having emerged. Meanwhile, Egypt is struggling with internal tension over the fall of President Hosni Mubarak and the future of the military junta that replaced him. Add to this the U.S. withdrawal from Iraq and the potential rise of Iranian power, and the potential recognition of a Palestinian state — while perfectly logical in an abstract sense — becomes an event that can force a regional crisis in the midst of ongoing regional crises. It thus is a vote that could have significant consequences.

Syria mobilizing troops for conflict with U.S., NATO

WorldNet Daily (Link) - Aaron Klein (August 21, 2011)

Syrian President Bashar Assad is taking military measures to prepare for a possible U.S.-NATO campaign against his regime, WND has learned.

While Assad struck a conciliatory tone in an interview today with his state-run television network, he also instructed the Syrian military to be prepared for an air or ground campaign if the international community determines his pledges of reform are not enough.

Last week, WND first reported Turkey secretly passed a message to Damascus that if it does not implement major democratic reforms, NATO may attack Assad’s regime, according to Egyptian security officials.

The Egyptian security officials said the message was coordinated with NATO members, specifically with the U.S. and European Union.

Pentagon prepares for economic warfare

The Australian (Link) - Helen Rumbelow (August 20, 2011)

The guests were assembled in the Warfare Analysis Laboratory, surrounded by uniformed officers from the highest levels of the Pentagon and a dizzying array of screens normally used to simulate nuclear world war.

The gentlemen were called to order and the games began.

“If you imagine the war room in Dr. Strangelove, you’re not far off,” says participant James Rickards.

Yet this was no traditional battle game, but rather the Pentagon’s first economic war game, and the authorities are loath to talk about it.

Economic war? It sounds preposterous. Except it gets less so with every dollar of debt run up by the US.

Behind the scenes, the military are worried about the market. For who owns much of this debt? China, the US’s most powerful rival and threat. And that makes America vulnerable to a new kind of bloodless but ruthless war.

Netanyahu to Clinton: No apology to Turkey

YNet News (Link) - Attila Somfalvi (August 17, 2011)

Prime Minister Benjamin Netanyahu announced on Wednesday that Israel will not apologize to Turkey over the 2010 flotilla incident, despite an earlier demand by US Secretary of State Hillary Clinton to do so.

Clinton spoke with Netanyahu, asking Israel to apologize to Turkey for killing nine of its citizens aboard the Gaza-bound Mavi Marmara ship in May 2010. However, Netanyahu made it clear that given the current situation in the Middle East, Israel will not issue an apology.

Later on Wednesay, Turkish Prime Minister Tayyip Erdogan said it would be impossible for Turkish-Israeli ties to improve unless Israel apologised and paid compensation for the killing of the nine Turks.

Turkey’s Foreign Minister Ahmet Davutoglu told a news conference in Istanbul that “if the Palmer Report does not contain an apology, both sides and the United States know what we will do.” He did not elaborate.

“Israel is facing a choice: deeper relations with Turkey or open a gap with the Turkish state that will not be overcome very easily,” he said.

Re-Examining the Arab Spring

Stratfor Global Intelligence (Link) - George Friedman (August 15, 2011)

On Dec. 17, 2010, Mohammed Bouazizi, a Tunisian street vendor, set himself on fire in a show of public protest. The self-immolation triggered unrest in Tunisia and ultimately the resignation of President Zine El Abidine Ben Ali. This was followed by unrest in a number of Arab countries that the global press dubbed the “Arab Spring.” The standard analysis of the situation was that oppressive regimes had been sitting on a volcano of liberal democratic discontent. The belief was that the Arab Spring was a political uprising by masses demanding liberal democratic reform and that this uprising, supported by Western democracies, would generate sweeping political change across the Arab world.

It is now more than six months since the beginning of the Arab Spring, and it is important to take stock of what has happened and what has not happened. The reasons for the widespread unrest go beyond the Arab world, although, obviously, the dynamics within that world are important in and of themselves. However, the belief in an Arab Spring helped shape European and American policies in the region and the world. If the assumptions of this past January and February prove insufficient or even wrong, then there will be regional and global consequences.

Palestinians set date for UN statehood bid

YNet News (Link) - AFP (August 13, 2011)

The Palestinians will present their bid for membership of the United Nations on September 20, Palestinian Foreign Minister Riyad Al-Malki told AFP on Saturday.

“Palestinian president Mahmoud Abbas will personally present the request to UN Secretary General Ban Ki-moon... at the opening of the sixty-sixth session,” on September 20, Malki said.

Abbas “will insist on this historic initiative and Ban Ki-moon will present the request to the Security Council,” the foreign minister added.

Malki noted that the Palestinian Authority chose September because Lebanon, which will hold the presidency of the Security Council, would be in a strong position to push the bid forward.

“Lebanon will hold the presidency of the Security Council in September and this will help us because the president of the council has special prerogatives, which is crucial,” he said.

‘Palestinians set date for statehood showdown at UN’

The Jerusalem Post (Link) - Gil Shefler (August 13, 2011)

The Palestinians set September 20th as the date for the much-anticipated vote over Palestinian statehood at the United Nations, according to AFP.

Palestinian Foreign Minister Riyad al-Malki informed UN Secretary-General Ban Ki-Moon that Palestinian Authority President Mahmoud Abbas will ask the international community to recognize Palestine as a sovereign state on the first day of the annual opening gathering at UN headquarters in New York.

“Abbas will personally present the request to UN Secretary General Ban Ki-moon... at the opening of the sixty-sixth session,” he was quoted as saying by the French news wire. “[Abbas] will insist on this historic initiative and Ban Ki-moon will present the request to the Security Council.”

The announcement cast aside speculation that the Palestinians might quietly step back from their bid for statehood in response to mounting international pressure against it.

Global Economic Downturn: A Crisis of Political Economy

Stratfor Global Intelligence (Link) - George Friedman (August 9, 2011)

Classical political economists like Adam Smith or David Ricardo never used the term “economy” by itself. They always used the term “political economy.” For classical economists, it was impossible to understand politics without economics or economics without politics. The two fields are certainly different but they are also intimately linked. The use of the term “economy” by itself did not begin until the late 19th century. Smith understood that while an efficient market would emerge from individual choices, those choices were framed by the political system in which they were made, just as the political system was shaped by economic realities. For classical economists, the political and economic systems were intertwined, each dependent on the other for its existence.

The current economic crisis is best understood as a crisis of political economy. Moreover, it has to be understood as a global crisis enveloping the United States, Europe and China that has different details but one overriding theme: the relationship between the political order and economic life. On a global scale, or at least for most of the world’s major economies, there is a crisis of political economy. Let’s consider how it evolved.

A National Debt Of $14 Trillion? Try $211 Trillion

NPR (Link) (August 6, 2011)

When Standard & Poor’s reduced the nation’s credit rating from AAA to AA-plus, the United States suffered the first downgrade to its credit rating ever. S&P took this action despite the plan Congress passed this past week to raise the debt limit.

The downgrade, S&P said, “reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”

It’s those medium- and long-term debt problems that also worry economics professor Laurence J. Kotlikoff, who served as a senior economist on President Reagan’s Council of Economic Advisers. He says the national debt, which the U.S. Treasury has accounted at about $14 trillion, is just the tip of the iceberg.

“We have all these unofficial debts that are massive compared to the official debt,” Kotlikoff tells David Greene, guest host of weekends on All Things Considered. “We’re focused just on the official debt, so we’re trying to balance the wrong books.”