No Questions Asked

I have been concerned about the US economy for quite some time. What is most alarming about the situation, however, is the inability of the American public to look at the hard facts and to acknowledge that there is a problem. The ostrich method does not work — we cannot continue to bury our heads in the bargains found in shopping malls, despite what the president says. The economy is not the only problem we need to fix, but it may very well be the most pressing.

Wake up America. The government is stealing your rights, your money, your property, your freedom to pursue happiness.

U.S. Banks Brace for Storm Surge as Dollar and Credit System Reel

By now, you’ve probably seen the photos of the angry customers queued up outside of Northern Rock Bank waiting to withdraw their money. This is the first big run on a British bank in over a century. It’s lost an eighth of its deposits in three days. The pictures are headline news in the U.K. but have been stuck on the back pages of U.S. newspapers. The reason for this is obvious. The same Force 5 economic-hurricane that just touched ground in Great Britain is headed for America and gaining strength on the way.

Fears of dollar collapse as Saudis take fright

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

“This is a very dangerous situation for the dollar,” said Hans Redeker, currency chief at BNP Paribas.

“Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States,” he said.

The Saudi central bank said today that it would take “appropriate measures” to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg.

As a close ally of the US, Riyadh has so far tried to stick to the peg, but the link is now destabilising its own economy.

The Fed’s dramatic half point cut to 4.75pc yesterday has already caused a plunge in the world dollar index to a fifteen year low, touching with weakest level ever against the mighty euro at just under $1.40.

There is now a growing danger that global investors will start to shun the US bond markets. The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.

Mortgage woes ‘exceed forecasts’

Losses from sub-prime mortgages have far exceeded “even the most pessimistic estimates”, US Federal Reserve chairman Ben Bernanke has said. His comments to a US finance committee come two days after the Fed cut base interest rates to 4.75% from 5.25%.

The rate cut was made “to help forestall some of the adverse effects on the broader economy”, he said.

That, along with pumping cash into the financial system, aimed to counter “significant market stress” he said.

Mr Bernanke was appearing before the House Committee on Financial Services.

AMERICA’s elder statesman of finance, Alan Greenspan, has shaken the White House by declaring that the prime motive for the war in Iraq was oil.

In his long-awaited memoir, to be published tomorrow, Greenspan, a Republican whose 18-year tenure as head of the US Federal Reserve was widely admired, will also deliver a stinging critique of President George W Bush’s economic policies.

However, it is his view on the motive for the 2003 Iraq invasion that is likely to provoke the most controversy. “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,” he says.

Greenspan also criticized Bush’s economic policy.

Bush’s failure to curb spending was “a major mistake” and that Republican congressmen were “feeding at the trough”. “The Republicans in Congress lost their way,” he says. “They swapped principle for power. They ended up with neither. They deserved to lose [the 2006 congressional election].”

“My biggest frustration remained the president’s unwillingness to wield his veto against out-of-control spending,” Greenspan writes. “Not exercising the veto power became a hallmark of the Bush presidency . . . To my mind, Bush’s collaborate-don’t-confront approach was a major mistake.”

I have suspected that oil was the reason for the war, but dismissed it because oil seemed too obvious and stupid a goal. However, if Greenspan, a long time Republican Washington insider believes it, then perhaps it is true. Evidence is certainly mounting.

The biggest question that faces us all now is, how will we prevent the administration from launching another unjust, immoral war. There are few things more evil than killing innocents for money and power.

The administration is clearly planning an attack on Iran.

Bush setting America up for war with Iran

Senior American intelligence and defence officials believe that President George W Bush and his inner circle are taking steps to place America on the path to war with Iran, The Sunday Telegraph has learnt.

Pentagon planners have developed a list of up to 2,000 bombing targets in Iran, amid growing fears among serving officers that diplomatic efforts to slow Iran’s nuclear weapons programme are doomed to fail.

Pentagon and CIA officers say they believe that the White House has begun a carefully calibrated programme of escalation that could lead to a military showdown with Iran.

Two former CIA officers say the president squelched top-secret intelligence, and a briefing by George Tenet, months before invading Iraq. By Sidney Blumenthal

Sep. 06, 2007 | On Sept. 18, 2002, CIA director George Tenet briefed President Bush in the Oval Office on top-secret intelligence that Saddam Hussein did not have weapons of mass destruction, according to two former senior CIA officers. Bush dismissed as worthless this information from the Iraqi foreign minister, a member of Saddam’s inner circle, although it turned out to be accurate in every detail. Tenet never brought it up again.

Nor was the intelligence included in the National Intelligence Estimate of October 2002, which stated categorically that Iraq possessed WMD. No one in Congress was aware of the secret intelligence that Saddam had no WMD as the House of Representatives and the Senate voted, a week after the submission of the NIE, on the Authorization for Use of Military Force in Iraq. The information, moreover, was not circulated within the CIA among those agents involved in operations to prove whether Saddam had WMD.

On April 23, 2006, CBS’s “60 Minutes” interviewed Tyler Drumheller, the former CIA chief of clandestine operations for Europe, who disclosed that the agency had received documentary intelligence from Naji Sabri, Saddam’s foreign minister, that Saddam did not have WMD. “We continued to validate him the whole way through,” said Drumheller. “The policy was set. The war in Iraq was coming, and they were looking for intelligence to fit into the policy, to justify the policy.”

Now two former senior CIA officers have confirmed Drumheller’s account to me and provided the background to the story of how the information that might have stopped the invasion of Iraq was twisted in order to justify it. They described what Tenet said to Bush about the lack of WMD, and how Bush responded, and noted that Tenet never shared Sabri’s intelligence with then Secretary of State Colin Powell. According to the former officers, the intelligence was also never shared with the senior military planning the invasion, which required U.S. soldiers to receive medical shots against the ill effects of WMD and to wear protective uniforms in the desert.

Instead, said the former officials, the information was distorted in a report written to fit the preconception that Saddam did have WMD programs. That false and restructured report was passed to Richard Dearlove, chief of the British Secret Intelligence Service (MI6), who briefed Prime Minister Tony Blair on it as validation of the cause for war.

What is Bush being told about Iran? Obviously the US is preparing some sort of military action against Iran. The questions are: why and what can we do to stop it?