Watchman Newsletter

Japanese Government Confirms Meltdown

Stratfor Global Intelligence (Link) (March 12, 2011)

Japan’s Nuclear and Industrial Safety Agency (NISA) said March 12 that the explosion at the Fukushima Daiichi No. 1 nuclear plant could only have been caused by a meltdown of the reactor core, Japanese daily Nikkei reported. This statement seemed somewhat at odds with Japanese Chief Cabinet Secretary Yukio Edano’s comments earlier March 12, in which he said “the walls of the building containing the reactor were destroyed, meaning that the metal container encasing the reactor did not explode.”

NISA’s statement is significant because it is the government agency that reports to the Agency for Natural Resources and Energy within the Ministry of Economy, Trade and Industry. NISA works in conjunction with the Atomic Energy Commission. Its role is to provide oversight to the industry and is responsible for signing off construction of new plants, among other things. It has been criticized for approving nuclear plants on geological fault lines and for an alleged conflict of interest in regulating the nuclear sector. It was NISA that issued the order for the opening of the valve to release pressure — and thus allegedly some radiation — from the Fukushima power plant.

Quake moved Japan by 8 feet: USGS

Google News (Link) - AFP (March 12, 2011)

Japan’s recent massive earthquake, one of the largest ever recorded, appears to have moved the island by about eight feet (2.4 meters), the US Geological Survey said.

“That’s a reasonable number,” USGS seismologist Paul Earle told AFP. “Eight feet, that’s certainly going to be in the ballpark.”

Friday’s 8.9 magnitude quake unleashed a terrifying tsunami that engulfed towns and cities on Japan’s northeastern coast, destroying everything in its path in what Prime Minister Naoto Kan said was an “unprecedented national disaster.”

The quake and its tectonic shift resulted from “thrust faulting” along the boundary of the Pacific and North America plates, according to the USGS.

The Pacific plate pushes under a far western wedge of the North America plate at the rate of about 3.3 inches (83 millimeters) per year, but a colossal earthquake can provide enough of a jolt to dramatically move the plates, with catastrophic consequences.

Column One: A win-win plan for Netanyahu

The Jerusalem Post (Link) - Caroline B. Glick (March 11, 2011)

The most effective way to defend Israel against Obama is to boldly assert, defend and implement a unilateral Israeli plan.

Prime Minister Binyamin Netanyahu is stuck between a diplomatic rock and a political hard place. And his chosen means of extricating himself from the double bind is only making things worse for him and for Israel.

Diplomatically, Netanyahu is beset by the Palestinian political war to delegitimize Israel and the Obama administration’s escalating hostility. That hostility was most recently expressed during President Barack Obama’s meeting with American Jewish leaders on March 1. Insinuating that Israel is to blame for the absence of peace in the Middle East, Obama scolded Jewish leaders, telling them to “search your souls” over Israel’s seriousness about making peace.

Obama’s newest threat is that through the so called Middle East Quartet, (Russia, the UN, the EU and the US), the administration will move towards supporting the Palestinian plan to declare statehood. That state would include all of Judea and Samaria, Gaza and eastern, southern and northern Jerusalem. Since it would not be established in the framework of a peace treaty with Israel, and since its leaders reject Israel’s right to exist, “Palestine” would be born in a de facto state of war with Israel.

To credit this threat, Obama has empowered the Quartet to supplant the US as the mediator between Israel and the Palestinian Authority.

How Israel could revolutionize the global energy sector

The Jerusalem Post (Link) - Dore Gold (March 11, 2011)

New data suggests Israel may not only have much larger gas resources than believed, but also the 3rd largest deposit of oil shale in the world.

Libyan oil accounts for less than 2 percent of world oil production, yet the revolt against Muammar Gaddafi has managed to shoot up the price of oil to more than $100 per barrel in the last month.

No one knows how long the internal instability in the Middle East will last, but according to the US Department of Energy, its share of the world’s total oil supply is expected to actually increase in the years ahead.

Simply, the world is using up the reserves of non-Middle East oil more quickly. Moreover, of the trillion barrels of proven reserves still left, according to the CIA roughly 800 billion barrels are to be found in the Middle East and North Africa, especially in Saudi Arabia, Iran and Iraq.

The implications for Israel of the West’s growing dependence on Middle Eastern oil are troubling, for obvious reasons. Yet there are two new developments in our energy sector that could well offset these trends and eventually alter our standing in the world, especially with respect to Europe.

Deputy FM: Gaza smuggling on the rise amid Mideast unrest

Haaretz (Link) - AP (March 10, 2011)

The deputy foreign minister said on Thursday that arms smuggling from Egypt into the Gaza Strip has grown following the unrest in the Arab world.

Deputy Foreign Minister Danny Ayalon says Israel has observed “increased activity” in Gaza. He accused militants of “trying to take advantage of the uncertainties in the region to booster their capabilities to attack Israeli cities and Israeli citizens.”

Ayalon says explosives and terrorists are also being smuggled to the strip. Gaza militants have fired thousands of rockets at Israel in recent years.

Since the Egyptian revolution brought down longtime leader Hosni Mubarak, many have questioned whether the longstanding peace treaty between Israel and Egypt will still stand.

Special: After years of neglect, Israel must prepare for possible Egyptian threat

YNet News (Link) - Alex Fishman (March 10, 2011)

For almost 30 years, the Israeli government did not ask the IDF what it possesses vis-à-vis the Egyptian front, what it needs, how much time it will take to prepare, and how much it will cost. For some 30 years, the political leadership did not demand to see plans with timetables and priorities in case of a strategic revolution on the Egyptian front. For 30 years, the politicians – and also the army – stuck their heads in the sand, knowingly and deliberately degenerating our capabilities vis-à-vis the Egyptians.

Minimizing the military capabilities on this front can be explained as a natural, appropriate process and part of the fruit of peace. Following the Camp David Accords, the clear instructions were to avoid any activity that could be interpreted by the Egyptians as provocative and aggressive, including the gathering of intelligence. However, erasing the knowledge accumulated for years in respect to the Egyptian theater is unforgivable.

The loss of knowledge is not measured by huge budgets, brigades and planes. It’s about people and work groups that preserve capabilities such as combat doctrines and intelligence information. This know-how is the basis for embarking on a military buildup, the day such order is given. Yet much time has passed since the days where the IDF was intimately familiar with Egyptian officers and every unit entering or leaving the Sinai.

Saudi Arabia: “Day of Rage” Friday, oil prices spike, witness says gunfire at protest

The Washington Post (Link) - Elizabeth Flock (March 10, 2011)

A day before protesters planned to take to the streets for an anti-government “Day of Rage” rally in Saudi Arabia’s capital, there were conflicting reports of Saudi police firing shots at protesters in the eastern city of Qatif.

An Interior Ministry spokesman said Saudi police fired over the heads of protesters after they attacked policemen, according to Reuters.

Three people were injured during the protest, one of them a policeman, the spokesman told reporters. He did not say how the injuries were caused.

AP reported that one witness, a Shiite activist in Qatif, 12 miles north of Dammam and 240 miles from the capital, said gunfire and stun grenades were fired by police at several hundred protesters marching in the city streets. The witness also claimed to see at least one demonstrator injured.

Should We Be Alarmed That The Biggest Bond Fund In The World Has Dumped All Of Their U.S. Treasury Bonds?

The Economic Collapse Blog (Link) (March 10, 2011)

Bill Gross, the manager of the biggest bond fund in the world, has forgotten more about bonds than most of us will ever learn. That is why the big move that PIMCO has just made is so unsettling. At one time PIMCO held more U.S. government debt than any other bond fund on the globe, but now news has come out that they have gotten rid of all their U.S. government-related securities. So should we be alarmed? For months Gross has been warning that the bull market in bonds is coming to an end, and now it looks like he is putting his words into action. Gross has often publicly decried the rampant government spending that has been going on over the last several years, and apparently he has seen enough. He is taking his ball and he is going home. This really is a stunning move by PIMCO. Gross must really believe that something fundamental has shifted. Gross didn’t get to where he is today by being stupid. But so far world financial markets are taking this news in stride. Nobody seems all that alarmed that the largest bond fund in the world has dumped all of their U.S. Treasuries. But with world financial markets in such a state of chaos right now, shouldn’t we all take note when one of the biggest players in the game makes such a bold move?

Gross believes that interest rates on U.S. Treasuries are way too low right now and that they will start going up when the Federal Reserve ends the current round of quantitative easing in June. Gross has indicated that if interest rates on U.S. Treasuries go up high enough, PIMCO might get back in.

EU paralysis drives fresh bond rout

Telegraph UK (Link) - Ambrose Evans-Pritchard (March 9, 2011)

Portugal edged closer to the brink yesterday, having to pay almost 6pc to raise two-year debt. The yield on 10-year bonds briefly surged to 7.8pc after the Chinese rating agency Dagong downgraded the country’s debt to BBB+.

“These levels of interest rates are not sustainable over time,” said Carlos Costa Pina, secretary of the Portuguese Treasury, blaming the latest upset on the lack of a coherent EU debt strategy rather any failing by Portugal to deliver on austerity.

Mr Costa Pina rebuffed calls by leading economists in Portugal for an EU-IMF bail-out rather than drawing out the agony. “It is not justified. Portugal doesn’t need external help, it needs urgent measures by the EU to restore market confidence.”

East-West military gap rapidly shrinking-report

Reuters (Link) - Peter Apps (March 8, 2011)

Western cuts and swiftly rising defence spending in emerging economies are redrawing the global strategic map, a leading think-tank said on Tuesday, with the danger of conflicts between states also rising.

In its annual Global Military Balance report, the London-based International Institute for Strategic Studies (IISS) said the shift in economic power was already beginning to have a real military effect and closing any strategic gap.

“Western states’ defence budgets are under pressure and their military procurement is constrained,” said IISS director general John Chipman. “But in other regions -- notably Asia and the Middle East -- military spending and arms acquisitions are booming. There is persuasive evidence that a global redistribution of military power is under way.”

Netanyahu to PA: Sit Down and Talk Already!

Israel National News (Link) - Hillel Fendel (March 7, 2011)

Prime Minister Binyamin Netanyahu explained succinctly on Sunday why the negotiations with the PA have gone nowhere. He answered a question during the joint press conference he held with visiting Chilean President Sebastián Piñera.

The questioner asked about the lack of direct negotiations between Israel and the PA, implying that Israel could do more to get them going. Netanyahu answered as follows:

“Well, we’ve been calling for direct negotiations from day one of this government.

“On day one, we called for direct negotiations.

“On day two, I made a speech in Bar Ilan University calling for two states for two peoples.

“On day three, we removed about 400 checkpoints, earth barriers, and other things to facilitate the growth of the Palestinian economy.

“On day four, we agreed to a ten-month moratorium on new construction in the settlements, something that no government did for 18 years before that.

“On day five, we agreed to an extension of that moratorium by three months.

“Unfortunately, everything that we did, these five things, were met with no response by the Palestinian Authority. They just placed preconditions and terms, every way to avoid sitting down and discussing peace. They tried to go around the peace negotiations.

US farmers fear the return of the Dust Bowl

The Telegraph UK (Link) - Charles Laurence (March 7, 2011)

There is not much to be happy about these days in Happy, Texas. Main Street is shuttered but for the Happy National Bank, slowly but inexorably disappearing into a High Plains wind that turns all to dust. The old Picture House, the cinema, has closed. Tumbleweed rolls into the still corners behind the grain elevators, soaring prairie cathedrals that spoke of prosperity before they were abandoned for lack of business.

Happy’s problem is that it has run out of water for its farms. Its population, dropping 10 per cent a year, is down to 595. The name, which brings a smile for miles around and plays in faded paint on the fronts of every shuttered business – Happy Grain Inc, Happy Game Room – has become irony tinged with bitterness. It goes back to the cowboy days of the 19th century. A cattle drive north through the Texas Panhandle to the rail heads beyond had been running out of water, steers dying on the hoof, when its cowboys stumbled on a watering hole. They named the spot Happy Draw, for the water. Now Happy is the harbinger of a potential Dust Bowl unseen in America since the Great Depression.

‘It was a booming town when I grew up,’ Judy Shipman, who manages the bank, says. ‘We had three restaurants, a grocery, a plumber, an electrician, a building contractor, a doctor. We had so much fun, growing up.’ Like all the townsfolk, she knows why the fun has gone. ‘It’s the decline in the water level,’ she says. ‘In the 1950s a lot of wells were drilled, and the water went down. Now you can’t farm the land.’