Watchman Newsletter

Israeli envoys warned of Iranian revenge

YNet News (Link) - Itamar Eichner (December 10, 2010)

Israel’s envoys abroad have received a particularly alarming warning in recent days: “You may be targeted by Iran and Hezbollah as an act of revenge following the assassination of nuclear scientists in Tehran,” said a message sent from Jerusalem.

The warning was conveyed by Israeli security officials, alongside a request to take increased precautions, to all of the country’s emissaries abroad: Ambassadors and diplomatic staff, scientists and academics, and hundreds of representatives of Zionist organizations worldwide.

The fear of revenge attacks stems from the fact that Iran accuses Israel of assassinating two of its senior nuclear scientists and attempting to kill a third one.

Massive dark object ‘lurking on edge of solar system hurling comets at Earth’

Daily Mail UK (Link) (December 10, 2010)

A massive dark object may be lurking on the edge of our solar system, according to scientists.

Most comets that fly into the inner solar system seem to come from the outer region of the Oort cloud -  a region of icy dust and debris left over from the birth of the solar system.

The cloud starts from a point about 93 billion miles from the Sun and stretches for around three light years and contains billions of comets, most of them small and hidden.

Now new calculations suggest a large object that is up to four times as big as Jupiter could be responsible for sending them in our direction.

The scientists have analysed the comets in the Oort cloud and deduced that 25 per-cent of them would need a nudge by a body of at least Jupiter size before they changed orbit.

November federal budget deficit highest on record

Yahoo! News (Link) - AP - Martin Crutsinger (December 10, 2010)

The federal budget deficit rose to $150.4 billion last month, the largest November gap on record. And the government’s deficits are set to climb higher if Congress passes a tax-cut plan that’s estimated to cost $855 billion over two years.

The Treasury Department says November’s budget gap was 25 percent more than the deficit in November 2009. Much of last month’s jump, though, was due to a quirk of the calendar determining when benefit checks are mailed.

For the first two months of the current budget year, which began Oct. 1, the deficit totals $290.8 billion. That’s 2 percent less than for the same period a year ago. And economists had been estimating that the full-year deficit would decline after two years of record highs.

But analysts say the tax deal President Barack Obama reached with Republicans this week will give the 2011 budget year the largest deficit in history — $1.5 trillion, according to economists at JPMorgan Chase. It would mark the third straight year of trillion-dollar-plus deficits.

Under the tax-cut plan, JPMorgan economist Michael Feroli said he expects a $1.5 trillion deficit this year to be followed by a $1.2 trillion gap in 2012.

The 2009 deficit is the current all-time high, at $1.42 trillion. The second-highest deficit ever is the $1.29 trillion deficit for the 2010 budget year, which ended Sept. 30. †

Persecution Update

Steel On Steel - Donald McElvaney (December 9, 2010)

1. Muslim Mob in Egypt Firebombs Christian Homes, Businesses

2. Ethiopia Imprisons Christian Accused of Defacing Quran

3. Islamic Groups in Indonesia Demonstrate against Worship in Mall

4. Somali Teenage Girl Shot to Death for Embracing Christ

5. Christians Fear Civilian Casualties in Burma

6. Afghan Authorities Block Lawyer from Visiting Jailed Christian

Ron Paul, Author of ‘End the Fed,’ to Lead Fed Panel

Bloomberg (Link) - Phil Mattingly (December 9, 2010)

Representative Ron Paul, Texas Republican and author of “End the Fed,” will take control of the House subcommittee that oversees the Federal Reserve.

House Financial Services chairman-elect Spencer Bachus, an Alabama Republican, selected Paul, 75, to lead the panel’s domestic monetary policy subcommittee when their party takes the House majority next month, the committee chairman said today.

“This is the leadership team that crafted the first comprehensive financial reform bill to put an end to the bailouts, wind down the taxpayer funding of Fannie Mae and Freddie Mac, and enforce a strong audit of the Federal Reserve,” Bachus said in a statement.

Paul, in an interview last week, said he plans a slate of hearings on U.S. monetary policy and will restart his push for a full audit of the Fed’s functions.

“We are ready to hit the ground running, and I look forward to continuing our work in the next Congress,” Bachus said.

China Declares Christian ‘House Churches’ a ‘Cult,’ Advocacy Group Reports

CNS News (Link) - Patrick Goodenough (December 8, 2010)

China reportedly has launched a new crackdown on “house churches,” Protestant congregations that do not belong to the country’s state-sanctioned, “patriotic” church organization.

In an ominous development reported by the China Aid Association (CAA), a U.S.-based group that advocates for Chinese Christians, authorities allegedly have labeled the house church movement a “cult.”

Beijing used the same term when it outlawed the Falun Gong meditation movement in 1999, a move that ushered in a major, ongoing crackdown against the Falun Gong that has brought China worldwide censure.

Citing secret information “from more than one reliable source” inside China, CAA said Tuesday the campaign against house churches ordered by the Communist Party Politburo was launched on December 1.

Chinese security officials “have been notified to collect information about house churches throughout the country and turn these reports in to their superiors,” it said. “A long ‘blacklist’ of church leaders and influential believers reportedly has been drawn up.”

U.S. fiscal health worse than Europe’s: China adviser

Reuters (Link) - Zhou Xin, Simon Rabinovitch and Kevin Yao (December 8, 2010)

The U.S. dollar will be a safe investment for the next six to 12 months because global markets are focused on the euro zone’s troubles but America’s fiscal health is worse than Europe’s, an adviser to the Chinese central bank said on Wednesday.

Li Daokui, an academic member of the central bank’s monetary policy committee, said that U.S. bond prices and the dollar would fall when the European economic situation stabilized.

“For now, market attention is still on Europe and for the coming 6-12 months, it will not shift to the United States,” Li said, when asked about U.S. President Barack Obama’s plan to extend tax cuts for all Americans.

“But we should be clear in our minds that the fiscal situation in the United States is much worse than in Europe. In one or two years, when the European debt situation stabilizes, attention of financial markets will definitely shift to the United States. At that time, U.S. Treasury bonds and the dollar will experience considerable declines.”

Peace talks are officially dead: It’s time for Plan B

The Jerusalem Post (Link) - Ami Kaufman (December 8, 2010)

As expected, the negotiations between Israel and the Palestinians are now six feet under. On Monday night, Israeli and US officials confirmed that the Obama administration is abandoning its effort to renew the freeze on settlement building in the West Bank. As the NY Times reported:

“After three weeks of fruitless haggling with the Israeli government, the Obama administration has given up its effort to persuade Prime Minister Benjamin Netanyahu to renew an expired freeze on the construction of Jewish settlements for 90 days, two senior officials said on Tuesday.

“The decision leaves Middle East peace talks in limbo, with the Palestinians refusing to resume negotiations absent a settlement freeze and the United States struggling to find another formula to bring them back to negotiations. It is the latest setback in what has proved to be a tortuous engagement for President Obama.”

TORTUOUS INDEED. And now that the talks have officially failed, the region is once again on the verge of dangerous and violent times. Before things spiral out of control, now is the time for Obama to embrace this failure and move on to the only step that can save the two-state solution, playing the Wild Card: endorsing Palestinian unilateralism.

EU scraps bank secrecy to catch cross-border tax evaders

EU Observer (Link) - Valentina Pop (December 8, 2010)

EU finance ministers on Tuesday (7 December) agreed to remove bank secrecy as a reason for blocking cross-border tax fraud investigations, in a bid to find fresh resources for cash-strapped state coffers.

“Tax evaders can no longer exploit bank secrecy as an excuse,” EU taxation commissioner Algirdas Semeta said after the meeting.

He called the deal “a huge step forward in the fight against tax evasion and tax fraud in the EU” at a time when budgets are under huge pressure amid the widespread drive to bring down public deficits.

The agreement will introduce time limits for national tax authorities to answer requests for information on citizens or businesses and parameters for the “automatic” exchange of information.

It’s Official: Freeze Deal has Failed

Israel National News (Link) - Maayana Miskin (December 7, 2010)

Talks between the United States and Israel over the possibility of a second ban on construction for Jews living east of the 1949 armistice line have failed. On Tuesday night, politicians from both countries will publicly admit that the freeze deal will not work, according to Channel 2 news.

Israel banned Jews in Judea, Samaria and much of Jerusalem from building any new structures, or additions to existing homes, for 10 months in an attempt to bring the Palestinian Authority to the negotiating table.

PA leaders ignored the gesture for several months, then began talks as the construction freeze drew to a close – and demanded that the freeze continue. When construction resumed – solely within the city limits of existing Israeli towns - they left talks and have not returned.

America the Precarious

The Trumpet (Link) - Robert Morley (December 7, 2010)

Twenty-one thousand loans—$3.3 trillion worth: That is what it took in terms of hard currency for the Federal Reserve to stop the financial meltdown of the United States. Yet where has this huge amount of money gotten America? Is the system fixed? Or is the Fed’s latest disclosure actually evidence that the economy is far more precarious than anyone admits?

The Federal Reserve finally made available details concerning its massive Wall Street bailout, corporate bailout, and—as it turns out—foreign central bank bailout. Although everyone knew the Fed went to extremes to prop up the banking system during the tense days of 2008, few knew just how far it had actually gone.

Yet the significance is lost on far too many people.

“What’s the big deal? Nothing really, at this point,” writes Charlie Low, forum editor for St. Louis’s Washington University Student Life paper. The list of recipients is mostly what one would expect, he says. And the money has mostly been paid back and with some interest too.

It’s a non-story, he argues.

Unfortunately, Low’s understanding of the financial crisis is far too typical of the highly opinionated, but woefully ignorant American student.

Actually, the Fed’s disclosure is a big deal—a very big deal. That is why the Federal Reserve fought so hard for two years to keep it secret.

Catch-and-release of Taliban fighters in Afghanistan angers troops

Washington Examiner (Link) - Sara A. Carter (December 6, 2010)

More than 500 suspected Taliban fighters detained by U.S. forces have been released from custody at the urging of Afghan government officials, angering both American troops and some Afghans who oppose the policy on the grounds that many of those released return to the battlefield to kill NATO soldiers and Afghan civilians.

And those numbers understate the problem, military officials say. They do not include suspected Taliban fighters held in small combat outposts or other forward operating bases throughout the region who are released before they ever become part of the official detainee population.

An Afghan official who spoke on condition of anonymity said that President Hamid Karzai’s government has personally sought the release of as many as 700 suspected Taliban fighters since July, including some mid-level leaders. “Corruption is not just based on the amount of money that is wasted but wasted lives when Taliban return only to kill more NATO forces and civilians,” said the official, who opposes what he considers corruption in the Karzai administration.

China’s credit bubble on borrowed time as inflation bites

The Telegraph (Link) - Ambrose Evans-Pritchard (December 5, 2010)

The Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trade trades for 2011. This is a new twist.

It warns that the Communist Party will have to puncture the credit bubble before inflation reaches levels that threaten social stability. This in turn may open a can of worms.

“Many see China’s monetary tightening as a pre-emptive tap on the brakes, a warning shot across the proverbial economic bows. We see it as a potentially more malevolent reactive day of reckoning,” said Tim Ash, the bank’s emerging markets chief.

Officially, inflation was 4.4pc in October, and may reach 5pc in November, but it is to hard find anybody in China who believes it is that low. Vegetables have risen 20pc in a month.

The Communist Party learned from Tiananmen in 1989 how surging prices can seed dissent. “Inflation is a redistributive mechanism in favour of the few that can protect living standards, against the large majority who cannot. The political leadership cannot, will not, take risks in that regard,” said Mr Ash.

RBS recommends credit default swaps on China’s five-year debt. This is not a forecast that China will default. It is insurance against the “fat tail risk” of a hard landing, with ramifications across Asia.

A world with no one in charge

The Washington Post (Link) - Robert D. Kaplan (December 5, 2010)

Currency wars. Terrorist attacks. Military conflicts. Rogue regimes pursuing nuclear weapons. Collapsing states. And now, massive leaks of secret documents. What is the cause of such turbulence? The absence of empire. During the Cold War, the world was divided between the Soviet and U.S. imperial systems. The Soviet imperium - heir to Kievan Rus, medieval Muscovy and the Romanov dynasty - covered Eastern Europe, the Caucasus and Central Asia and propped up regimes in Africa, the Middle East and Latin America. The American imperium - heir to maritime Venice and Great Britain - also propped up allies, particularly in Western Europe and East Asia. True to the garrison tradition of imperial Rome, Washington kept bases in West Germany, Turkey, South Korea and Japan, virtually surrounding the Soviet Union.

The breakup of the Soviet empire, though it caused euphoria in the West and led to freedom in Central Europe, also sparked ethnic conflicts in the Balkans and the Caucasus that cost hundreds of thousands of lives and created millions of refugees. (In Tajikistan alone, more than 50,000 people were killed in a civil war that barely registered in the U.S. media in the 1990s.)

The Soviet collapse also unleashed economic and social chaos in Russia itself, as well as the further unmooring of the Middle East. It was no accident that Iraqi President Saddam Hussein invaded Kuwait less than a year after the Berlin Wall fell, just as it is inconceivable that the United States would have invaded Iraq if the Soviet Union, a staunch patron of Baghdad, still existed in 2003. And had the Soviet empire not fallen apart or ignominiously withdrawn from Afghanistan, Osama bin Laden never would have taken refuge there and the attacks of Sept. 11, 2001, might not have happened. Such are the wages of imperial collapse.