Global Research, January 7, 2009

“Bandits with planes …
came through the sky to kill children
and the blood of children ran through the streets
without fuss, like children’s blood.” (Pablo Neruda)

In a rare moment of honesty, the New York Times divulged the real motive behind the bombardment and invasion of Gaza. In Ethan Bronner’s article, “Israel Weighs Goal: Ending Hamas Rule, Rocket fire, or Both”, Israeli Vice Premier Haim Ramon said, “We need to reach a situation in which we do not allow Hamas to govern. That is the most important thing. If the war ends in a draw, as expected, and Israel refrains from reoccupying Gaza, Hamas will gain diplomatic recognition…No matter what you call it, Hamas will obtain legitimacy.”

According to the Times: “In addition, any truce would probably include an increase in commercial traffic from Israel and Egypt into Gaza, which is Hamas’s central demand: to end the economic boycott and border closing it has been facing. To build up the Gaza economy under Hamas, Israeli leaders say, would be to build up Hamas. Yet withholding the commerce would continue to leave 1.5 million Gazans living in despair.” (Israel Weighs Goal: Ending Hamas Rule, Rocket fire, or Both; Ethan Bronner)

If Israel wants to prevent Hamas from “obtaining legitimacy,” than the real objective of the invasion is to either severely undermine or topple the regime. All the talk about the qassam rockets and the so-called “Hamas infrastructure”, (the new phrase that is supposed to indicate a threat to Israeli security) is merely a diversion. What really worries Israel is the prospect that Obama will “sit down with his enemies”–as he promised during the presidential campaign–and conduct talks with Hamas. That would put the ball in Israel’s court and force them to make concessions. But Israel does not want to make concessions. They would rather start a war and change the facts on the ground so they can head-off any attempt by Obama to restart peace process.

Just days ago, Obama advisor, Zbigniew Brzezinski, said in a televised interview, that the last eight years proves that resolving the Palestinian/Israeli conflict is critical to US interests in the region. He added that the recent fighting shows that the two parties cannot achieve peace without US involvement. Brzezinski’s comments suggest that, at the very least, the Obama camp is considering low-level (secret?) talks with Hamas representatives. Every day that Hamas abstains from violence; its legitimacy as a political party grows and the prospect of direct negotiations becomes more likely. This is Israel’s worst nightmare, not because Hamas constitutes a real threat to Israeli security, but because Israel wants to install its own puppet regime and unilaterally impose its own terms for a final settlement. Neither Ehud Olmert or any of the candidates for prime minister have any intention of getting bogged down in another 8 years of fruitless banter like Oslo where plans for settlement expansion had to be concealed behind an elaborate public relations smokescreen. No way. The Israeli leadership would rather skip the pretense altogether and pursue their territorial aims openly as they have under Bush. And the goal is the same as always; to integrate the occupied territories into Greater Israel and leave the Palestinians trapped in bantustans. Negotiations just make that harder.

Ariel Sharon’s senior advisor, Dov Weisglass, clarified Israel’s position three years ago when he admitted, “The disengagement [from Gaza] is actually formaldehyde. It supplies the amount of formaldehyde that is necessary so that there will not be a political process with the Palestinians… this whole package that is called the Palestinian state has been removed from our agenda indefinitely.” “Formaldehyde”; that says it all. The point of the Israeli withdrawal from Gaza was to silence critics and to make it appear as though the Palestinians had achieved some type of statehood. It was a complete sham. Sharon believed that disengagement would stop foreign leaders from badgering him to sit down with the Palestinians and work out a mutually-acceptable agreement. He never expected that elections would throw a wrench in his plans and raise the credibility of Hamas to the extent that it has today. In the last two years, Hamas hasn’ t launched one suicide mission in Israel, which shows that it has abandoned the armed struggle and can be trusted to negotiate on its people’s behalf. That scares Israel, which is why they initiated hostilities. Now, they need to seal the deal by either removing Hamas before Obama is sworn in or face pressure from the new administration for dialogue. Meanwhile, Israeli troop movements indicate that a plan may be in place to divide Gaza into three parts, thus making it impossible for Hamas to rule.

The UK Guardian confirms that the invasion was really about regime change not rockets or Hamas infrastructure. According to the Guardian: “A couple of days into the assault on Gaza, Israel’s ambassador to the UN, Gabriela Shalev, said it would continue for ‘as long as it takes to dismantle Hamas completely’. Infuriated Israeli officials in Jerusalem warned her that such statements could set back the diplomatic offensive. Dan Gillerman, Israel’s ambassador to the UN until a few months ago, was brought in by the Foreign Ministry to help lead the diplomatic and PR campaign. He said that the diplomatic and political groundwork has been under way for months.

“This was something that was planned long ahead,” he said. “I was recruited by the foreign minister to coordinate Israel’s efforts and I have never seen all parts of a very complex machinery – whether it is the Foreign Ministry, the Defence Ministry, the prime minister’s office, the police or the army – work in such co-ordination, being effective in sending out the message.” In briefings in Jerusalem and London, Brussels and New York, the same core messages were repeated: that Israel had no choice but to attack in response to the barrage of Hamas rockets; that the coming attack would be on “the infrastructure of terror” in Gaza and the targets principally Hamas fighters; that civilians would die, but it was because Hamas hides its fighters and weapons factories among ordinary people.

Hand in hand went a strategy to remove the issue of occupation from discussion.” (UK Guardian, “Why Israel went to war in Gaza”)
The invasion was mapped out months ago, right down to the bullet points that were passed out to friends in the media. Nothing was left to chance. That said, the public relations campaign was on full display over the weekend when Israeli ground troops and armored divisions swept into Gaza unopposed. CNN had a coterie of ardent Zionists on hand to justify the invasion in a carefully scripted analysis of developments. Retired Brigadier Gen. David Grange accompanied the blatantly pro-Israel Wolf Blitzer saying that the IDF had been “lured” into Gaza by Hamas so that Hamas could execute its plan for “urban warfare”. Utter nonsense. Grange implied that the subsequent slaughter of civilians was the work of Hamas, not Israel. Even by CNN’s abysmal standards, this is new low.

The media has worked in concert with the IDF throughout, spinning a rationale from whole cloth and cheerleading from every available soapbox. But recent polls show that the public has remained skeptical. Anti-Israel protests have sprung up in capitals across the world, and support for Israel is at its nadir. . Many people are simply shocked to see the most advanced, technological weaponry in the world being used in densely populated areas where collateral damage is bound to be heavy. It just makes Israel look like a bully while the media looks like an enabler. So far, the war has been a public relations catastrophe. Over 500 Palestinians have been killed and 2,400 wounded in a debacle of Biblical proportions. Every day, new photographs circulate on the internet showing the carnage produced by the steady bombardment. On Monday, the IDF killed two more Palestinian families, in two separate incidents. The mother, father and eight children were killed when their house was bombed by an American made F-16 early Monday morning. Another family in the Shati refugee camp, west of Gaza City, was butchered when their home was struck by a shell from an Israeli ship off the coast. The civilian toll continues to balloon with no end in sight.

Here’s how one Gaza resident summed up the bombing in an interview with an AP journalist: “The Israeli forces attack everywhere. They have gone crazy. The Gaza Strip is just going to die … it’s going to die. We were sleeping. Suddenly we heard a bomb. We woke up and we didn’t know where to go. We couldn’t see through the dust. We called to each other. We thought our house had been hit, not the street. What can I say? You saw it with your own eyes. What is our guilt? Are we terrorists? I don’t carry a gun, neither does my girl. What does Israel want? There’s no medicine. No drinks, no water, no gas. We are suffering from hunger. They attack us. Can it be worse than this?” All of Gaza has been traumatized.

The “invasion”–which is a word none of the Israeli-centric media dares to use–(Israel “entered” Gaza) is the equivalent of rampaging through a concentration camp. (similar to the massacre at Sabra and Shatilla) Still, newspapers, like the New York Times, provide cover for the attack by referring to Hamas “bases” within Gaza. In truth, there are no bases nor military installations of any kind. It’s just more lies. They have no army, no navy, and no air force. The only threat that Gaza poses to Israel is its people’s unshakable commitment to end the occupation.

On CNN, Alan Dershowitz and other prominent Zionists defend the invasion in their most polished, lawyerly prose, but the public remains unconvinced. What observers are seeing on the internet is the broken bodies of children pulled from the rubble of their homes and the terrifying explosions in a city that languishes in complete darkness. Nothing Dershowitz says can match the imagery splattered minute by minute on the screen. Israel has bombed mosques, ambulances, bridges, tunnels, even a terrorist girls dormitory. Since when is a girl’s dormitory part of “Hamas infrastructure”? Five sisters and their mother were blow apart as they sat peacefully in their own living room. Does Dershowitz really believe he can elicit sympathy for the perpetrators of these crimes? American support for Israel is being tested; and that support is quickly eroding.

War is a blunt instrument for achieving one’s political objectives, and the costs can be enormous for winner and loser alike. If Israel manages to incite Hamas to the point where they deploy suicide bombers to Tel Aviv or Jerusalem then, perhaps, attitudes will shift in Israel’s favor. It is impossible to predict. But, clearly, retaliation with suicide missions would be the worst possible strategy for Hamas at this point. Israel has lost the moral high-ground, but one suicide bomber can change all that in a flash. Besides, the bombings alienate the people who sympathize with the Palestinian cause and make it harder for them to be openly supportive. The only people who benefit from suicide missions are the right-wing fanatics within the Israeli political establishment. Every Israeli civilian that’s killed just strengthens the Likudniks and their ilk.

ENDING THE CEASEFIRE: Who’s to blame?
The media has made a big issue of the fact that Hamas ended its ceasefire with Israel just days before the bombardment of Gaza. But as Johann Hari points out in his article “The True Story Behind this War Is Not The One Israel Is Telling” Hamas offered to maintain the ceasefire if Israel agreed to lift the blockade.

According to Hari:
“The core of the situation has been starkly laid out by Ephraim Halevy, the former head of Mossad. He says that while Hamas militants – like much of the Israeli right-wing – dream of driving their opponents away, “they have recognized this ideological goal is not attainable and will not be in the foreseeable future.” Instead, “they are ready and willing to see the establishment of a Palestinian state in the temporary borders of 1967.” They are aware that this means they “will have to adopt a path that could lead them far from their original goals” – and towards a long-term peace based on compromise…..Halevy explains: “Israel, for reasons of its own, did not want to turn the ceasefire into the start of a diplomatic process with Hamas.”

Why would Israel act this way? The Israeli government wants peace, but only one imposed on its own terms, based on the acceptance of defeat by the Palestinians. It means the Israelis can keep the slabs of the West Bank on “their” side of the wall. It means they keep the largest settlements and control the water supply. And it means a divided Palestine, with responsibility for Gaza hived off to Egypt, and the broken-up West Bank standing alone. Negotiations threaten this vision: they would require Israel to give up more than it wants to. But an imposed peace will be no peace at all: it will not stop the rockets or the rage. For real safety, Israel will have to talk to the people it is blockading and bombing today, and compromise with them. (Johann Hari, “The True Story Behind this War Is Not The One Israel Is Telling”)

Hari’s article further confirms our basic thesis that the aggression in Gaza has nothing to do with terrorism, security, or Hamas infrastructure. In fact, Hamas appears to be ready to settle for much less than they originally hoped for. In this particular case, all they wanted was a promise from Israel to end the blockade, but Israel refused. Collective punishment of Palestinians has become a habit, like smoking or taking drugs. Israel can do what it wants. If it decides to cut off the food and medicine to 1.5 million people or bomb them into oblivion; no one can stop them. The UN and Washington just roll over and play dead. Why should they negotiate; they can do whatever they want. The world is their apple.

ISMAIL HANIYEH: “We do not wish to throw the Jews into the sea”.
“Oh…who will stop the windmills in my head?
Who will remove the knives from my heart?
Who will kill my poor children…?
In order that they do not…grow up in the red
furnished apartments…” (“Ending” by Amal Dunqul; translated by Angry Arab News Service)

On Monday, Israeli warplanes bombed the offices of a man who has helped to save the lives of more Jews than anyone in the Knesset. That man is Palestinian Prime Minister Ismail Haniyeh. Haniyeh has supported the ban on suicide missions which has lasted for more than two years despite the blockade of food, medicine, fuel, and electrical power to the Gaza Strip and despite the daily bombings, incursions, arrests, assassinations and countless other humiliations associated with occupation. Hundreds of Israeli civilians are alive today because Haniyeh and his Hams colleagues abandoned the armed struggle and entered politics. On Friday, Israeli spokeswoman, Major Avital Leibovich, announced that “Hamas leaders were also marked men. We have defined legitimate targets as any Hamas-affiliated target.” That means that Haniyeh is now on Israel’s hit list.

In a February 2006 interview with the Washington Post, Haniyeh dispelled many of the lies circulating in the western media about Hamas. He said that he wanted to see an end the “vicious cycle of violence” and vehemently denied the claim that “Hamas is committed to destroying Israel”. He said, “We do not have any feelings of animosity toward Jews. We do not wish to throw them into the sea. All we seek is to be given our land back, not to harm anybody….We are not war seekers nor are we war initiators. We are not lovers of blood. We are oppressed people with rights.”

Wa Post: “Would Hamas recognize Israel if it were to withdraw to the ’67 borders?”
Haniyeh: “If Israel withdraws to the ’67 borders, then we will establish peace in stages… We will establish a situation of stability and calm which will bring safety for our people.
Wa Post: “Do you recognize Israel’s right to exist?”
Haniyeh: “The answer is to let Israel say it will recognize a Palestinian state along the 1967 borders, release the prisoners and recognize the rights of the refugees to return to Israel. Hamas will have a position if this occurs.”

Wa Post: “Will you recognize Israel?”
Haniyeh: “If Israel declares that it will give the Palestinian people a state and give them back all their rights, then we are ready to recognize them.” Haniyeh’s answers are straightforward and rational. He asked for nothing that isn’t already required under existing United Nations resolutions; a return to the 1967 borders, basic human rights, and settlement of the final status issues. An agreement could be facilitated tomorrow if Israel was willing to conform to international law. Instead, Israel has chosen to invade Gaza. For 60 years it has employed the same failed strategy.

Haniyeh again:
“Israel’s unilateral movements of the past year will not lead to peace. These acts — the temporary withdrawal of forces from Gaza, the walling off of the West Bank — are not strides toward resolution but empty, symbolic acts that fail to address the underlying conflict. Israel’s nearly complete control over the lives of Palestinians is never in doubt, as confirmed by the humanitarian and economic suffering of the Palestinians since the January elections.”

“We want what Americans enjoy — democratic rights, economic sovereignty and justice. We thought our pride in conducting the fairest elections in the Arab world might resonate with the United States and its citizens. Instead, our new government was met from the very beginning by acts of explicit, declared sabotage by the White House. Now this aggression continues against 3.9 million civilians living in the world’s largest prison camps. America’s complacency in the face of these war crimes is, as usual, embedded in the coded rhetorical green light: “Israel has a right to defend itself.”

Haniyeh’s efforts for reconciliation are doomed. Israel will not bargain or compromise. The Israeli state is driven by an ideology which requires continuous expansion and subjugation. There’s nothing Haniyeh can do to change that. The answer to the present crisis lies within Zionism itself, the philosophical underpinning of Jewish nationalism. In his recent article, “Israel’s Righteous Fury and its Victims in Gaza”, Ilan Pappe, the chair in the Department of History at the University of Exeter, explains Zionism in terms of its effect on Israeli policy vis a vis the invasion of Gaza:

“There are no boundaries to the hypocrisy that a righteous fury produces. The discourse of the generals and the politicians is moving erratically between self-compliments of the humanity the army displays in its “surgical” operations on the one hand, and the need to destroy Gaza for once and for all, in a humane way of course, on the other. This righteous fury is a constant phenomenon in the Israeli, and before that Zionist, dispossession of Palestine. Every act whether it was ethnic cleansing, occupation, massacre or destruction was always portrayed as morally just and as a pure act of self-defense reluctantly perpetrated by Israel in its war against the worst kind of human beings. In his excellent volume The Returns of Zionism: Myths, Politics and Scholarship in Israel, Gabi Piterberg explores the ideological origins and historical progression of this righteous fury.

Today in Israel, from Left to Right, from Likud to Kadima, from the academia to the media, one can hear this righteous fury of a state that is more busy than any other state in the world in destroying and dispossessing an indigenous population. It is crucial to explore the ideological origins of this attitude and derive the necessary political conclusions form its prevalence. This righteous fury shields the society and politicians in Israel from any external rebuke or criticism. But far worse, it is translated always into destructive policies against the Palestinians. With no internal mechanism of criticism and no external pressure, every Palestinian becomes a potential target of this fury. Given the firepower of the Jewish state it can inevitably only end in more massive killings, massacres and ethnic cleansing.

The self-righteousness is a powerful act of self-denial and justification. It explains why the Israeli Jewish society would not be moved by words of wisdom, logical persuasion or diplomatic dialogue. And if one does not want to endorse violence as the means of opposing it, there is only one way forward: challenging head-on this righteousness as an evil ideology meant to cover human atrocities. Another name for this ideology is Zionism and an international rebuke for Zionism, not just for particular Israeli policies, is the only way of countering this self-righteousness.” (“Israel’s Righteous Fury and its Victims in Gaza”, Ilan Pappe)

It wouldn’t make a bit of difference if Hamas surrendered tomorrow and handed-over all its weapons to Israel, because the problem isn’t Hamas; it’s Zionism, the deeply-flawed ideology which leads to bombing children in their homes while clinging to victim-hood. Ideas have consequences. Gaza proves it.

Mike Whitney is a frequent contributor to Global Research. Global Research Articles by Mike Whitney

The Federal Reserve has bluntly refused a request by a major US financial news service to disclose the recipients of more than $2 trillion of emergency loans from US taxpayers and to reveal the assets the central bank is accepting as collateral. Their lawyers resorted to the bizarre argument that they did so to protect ‘trade secrets.’ Is the secret that the US financial system is de facto bankrupt? The latest Fed move is further indication of the degree of panic and lack of clear strategy within the highest ranks of the US financial institutions. Unprecedented Federal Reserve expansion of the Monetary Base in recent weeks sets the stage for a future Weimar-style hyperinflation perhaps before 2010.

On November 7 Bloomberg filed suit under the US Freedom of Information Act (FOIA) requesting details about the terms of eleven new Federal Reserve lending programs created during the deepening financial crisis. The Fed responded on December 8 claiming it’s allowed to withhold internal memos as well as information about ‘trade secrets’ and ‘commercial information.’ The central bank did confirm that a records search found 231 pages of documents pertaining to the requests.

The Bernanke Fed in recent weeks has stepped in to take a role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program (TARP). The difference between a Fed bailout of troubled financial institutions and a Treasury bailout is that central bank loans do not have the oversight safeguards that Congress imposed upon the TARP. Perhaps those are the ‘trade secrets the hapless Fed Chairman,Ben Bernanke, is so jealously guarding from the public.

Coming hyperinflation?
The total of such emergency Fed lending exceeded $2 trillion on Nov. 6. It had risen by an astonishing 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA. They did so knowing that on the following day a dramatic shock to the financial system would occur because they, in concert with the Bush Administration, had decided to let it occur.

On September 15 Bernanke, New York Federal Reserve President, Tim Geithner, the new Obama Treasury Secretary-designate, along with the Bush Administration, agreed to let the fourth largest investment bank, Lehman Brothers, go bankrupt, defaulting on untold billions worth of derivatives and other obligations held by investors around the world. That event, as is now widely accepted, triggered a global systemic financial panic as it was no longer clear to anyone what standards the US Government was using to decide which institutions were ‘too big to fail’ and which not. Since then the US Treasury Secretary has reversed his policies on bank bailouts repeatedly leading many to believe Henry Paulson and the Washington Administration along with the Fed have lost control.

In response to the deepening crisis, the Bernanke Fed has decided to expand what is technically called the Monetary Base, defined as total bank reserves plus cash in circulation, the basis for potential further high-powered bank lending into the economy. Since the Lehman Bros. default, this money expansion rose dramatically by end October at a year-year rate of growth of 38%, has been without precedent in the 95 year history of the Federal Reserve since its creation in 1913. The previous high growth rate, according to US Federal Reserve data, was 28% in September 1939, as the US was building up industry for the evolving war in Europe.

By the first week of December, that expansion of the monetary base had jumped to a staggering 76% rate in just 3 months. It has gone from $836 billion in December 2007 when the crisis appeared contained, to $1,479 billion in December 2008, an explosion of 76% year-on-year. Moreover, until September 2008, the month of the Lehman Brothers collapse, the Federal Reserve had held the expansion of the Monetary Base virtually flat. The 76% expansion has almost entirely taken place within the past three months, which implies an annualized expansion rate of more than 300%.

Despite this, banks do not lend further, meaning the US economy is in a depression free-fall of a scale not seen since the 1930’s. Banks do not lend in large part because under Basle BIS lending rules, they must set aside 8% of their capital against the value of any new commercial loans. Yet the banks have no idea how much of the mortgage and other troubled securities they own are likely to default in the coming months, forcing them to raise huge new sums of capital to remain solvent. It’s far ‘safer’ as they reason to pass on their toxic waste assets to the Fed in return for earning interest on the acquired Treasury paper they now hold. Bank lending is risky in a depression.

Hence the banks exchange $2 trillion of presumed toxic waste securities consisting of Asset-Backed Securities in sub-prime mortgages, stocks and other high-risk credits in exchange for Federal Reserve cash and US Treasury bonds or other Government securities rated (still) AAA, i.e. risk-free. The result is that the Federal Reserve is holding some $2 trillion in largely junk paper from the financial system. Borrowers include Lehman Brothers, Citigroup and JPMorgan Chase, the US’s largest bank by assets. Banks oppose any release of information because that might signal ‘weakness’ and spur short-selling or a run by depositors.

Making the situation even more drastic is the banking model used first by US banks beginning in the late 1970’s for raising deposits, namely the acquiring of ‘wholesale deposits’ by borrowing from other banks on the overnight interbank market. The collapse in confidence since the Lehman Bros. default is so extreme that no bank anywhere, dares trust any other bank enough to borrow. That leaves only traditional retail deposits from private and corporate savings or checking accounts.

To replace wholesale deposits with retail deposits is a process that in the best of times will take years, not weeks. Understandably, the Federal Reserve does not want to discuss this. That is clearly also behind their blunt refusal to reveal the nature of their $2 trillion assets acquired from member banks and other financial institutions. Simply put, were the Fed to reveal to the public precisely what ‘collateral’ they held from the banks, the public would know the potential losses that the government may take.

Congress is demanding more transparency from the Federal Reserve and US Treasury on its bailout lending. On December 10 in Congressional hearings by the House Financial Services Committee, Representative David Scott, a Georgia Democrat, said Americans had ‘been bamboozled,’ slang for defrauded.

Hiccups and Hurricanes
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would meet congressional demands for transparency in a $700 billion bailout of the banking system. The Freedom of Information Act obliges federal agencies to make government documents available to the press and public.

In early December the Congress oversight agency, GAO, issued its first mandated review of the lending of the US Treasury’s $700 billion TARP program (Troubled Asset Relief Program). The review noted that in 30 days since the program began, Henry Paulson’s office had handed out $150 billion of taxpayer money to financial institutions with no effective accountability of how the money is being used. It seems Henry Paulson’s Treasury has indeed thrown a giant ‘tarp’ over the entire taxpayer bailout. Further adding to the troubles in the world’s former financial Mecca, the US Congress, acting on largely ideological grounds, shocked the financial system when it refused to give even a meager $14 billion emergency loan to the Big Three automakers-General Motors, Chrysler and Ford.

While it is likely that the Treasury will extend emergency credit to the companies until January 20 or until the newly elected Congress can consider a new plan, the prospect of a chain-reaction bankruptcy collapse of the three giant companies is very near. What is being left out of the debate is that those three companies account for a combined 25% of all US corporate bonds outstanding. They are held by private pension funds, mutual funds, banks and others. If the auto parts suppliers of the Big Three are included, an estimated $1 trillion of corporate bonds are now at risk of chain-reaction default. Such a bankruptcy failure could trigger a financial catastrophe which would make what has happened since Lehman Bros. appear as a mere hiccup in a hurricane.

As well, the Federal Reserve’s panic actions since September, by their explosive expansion of the monetary base, has set the stage for a Zimbabwe-style hyperinflation. The new money is not being ‘sterilized’ by offsetting actions by the Fed, a highly unusual move indicating their desperation. Prior to September the Fed’s infusions of money were sterilized, making the potential inflation effect ‘neutral.’

Defining a Very Great Depression
That means once banks begin finally to lend again, perhaps in a year or so, that will flood the US economy with liquidity in the midst of a deflationary depression. At that point or perhaps well before, the dollar will collapse as foreign holders of US Treasury bonds and other assets run. That will not be pleasant as the result would be a sharp appreciation in the Euro and a crippling effect on exports in Germany and elsewhere should the nations of the EU and other non-dollar countries such as Russia, OPEC members and, above all, China not have arranged a new zone of stabilization apart from the dollar.

The world faces the greatest financial and economic challenges in history in coming months. The incoming Obama Administration faces a choice of literally nationalizing the credit system to insure a flow of credit to the real economy over the next 5 to 10 years, or face an economic Armageddon that will make the 1930’s appear a mild recession by comparison.

Leaving aside what appears to have been blatant political manipulation by the present US Administration of key economic data prior to the November election in a vain attempt to downplay the scale of the economic crisis in progress, the figures are unprecedented. For the week ended December 6 initial jobless claims rose to the highest level since November 1982. More than four million workers remained on unemployment, also the most since 1982 and in November US companies cut jobs at the fastest rate in 34 years. Some 1,900,000 US jobs have vanished so far in 2008.

As a matter of relevance, 1982, for those with long memories, was the depth of what was then called the Volcker Recession. Paul Volcker, a Chase Manhattan appendage of the Rockefeller family, had been brought down from New York to apply his interest rate ‘shock therapy’ to the US economy in order as he put it, ‘to squeeze inflation out of the economy.’ He squeezed far more as the economy went into severe recession, and his high interest rate policy detonated what came to be called the Third World Debt Crisis. The same Paul Volcker has just been named by Barack Obama as chairman-designate of the newly formed President’s Economic Recovery Advisory Board, hardly grounds for cheer.

The present economic collapse across the United States is driven by the collapse of the $3 trillion market for high-risk sub-prime and Alt-A home mortgages. Fed Chairman Bernanke is on record stating that the worst should be over by end of December. Nothing could be farther from the truth, as he well knows. The same Bernanke stated in October 2005 that there was ‘no housing bubble to go bust.’ So much for the predictive quality of that Princeton economist. The widely-used S&P Schiller-Case US National Home Price Index showed a 17% year-year drop in the third Quarter, trend rising. By some estimates it will take another five to seven years to see US home prices reach bottom. In 2009 as interest rate resets on some $1 trillion worth of Alt-A US home mortgages begin to kick in, the rate of home abandonments and foreclosures will explode. Little in any of the so-called mortgage amelioration programs offered to date reach the vast majority affected. That process in turn will accelerate as millions of Americans lose their jobs in the coming months.

John Williams of the widely-respected Shadow Government Statistics report, recently published a definition of Depression, a term that was deliberately dropped after World War II from the economic lexicon as an event not repeatable. Since then all downturns have been termed ‘recessions.’ Williams explained to me that some years ago he went to great lengths interviewing the respective US economic authorities at the Commerce Department’s Bureau of Economic Analysis and at the National Bureau of Economic Research (NBER), as well as numerous private sector economists, to come up with a more precise definition of ‘recession,’ ‘depression’ and ‘great depression.’ His is pretty much the only attempt to give a more precise definition to these terms.

What he came up with was first the official NBER definition of recession: Two or more consecutive quarters of contracting real GDP, or measures of payroll employment and industrial production. A depression is a recession in which the peak-to-bottom growth contraction is greater than 10% of the GDP. A Great Depression is one in which the peak-to-bottom contraction, according to Williams, exceeds 25% of GDP.

In the period from August 1929 until he left office President Herbert Hoover oversaw a 43-month long contraction of the US economy of 33%. Barack Obama looks set to break that record, to preside over what historians could likely call the Very Great Depression of 2008-2014, unless he finds a new cast of financial advisers before Inauguration Day, January 20. Required are not recycled New York Fed presidents, Paul Volckers or Larry Summers types. Needed is a radically new strategy to put virtually the entire United States economy into some form of an emergency ‘Chapter 11’ bankruptcy reorganization where banks take write-offs of up to 90% on their toxic assets, that, in order to save the real economy for the American population and the rest of the world. Paper money can be shredded easily. Not human lives. In the process it might be time for Congress to consider retaking the Federal Reserve into the Federal Government as the Constitution originally specified, and make the entire process easier for all. If this sounds extreme, perhaps revisit this article in six months again.

F. William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order (Pluto Press) and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca). His newest book, Full Spectrum Dominance: Totalitarian Democracy in the New World Order (Third Millennium Press) is due out early in 2009.

By Michel Chossudovsky

Global Research, January 4, 2009

The aerial bombings and the ongoing ground invasion of Gaza by Israeli ground forces must be analysed in a historical context. Operation "Cast Lead" is a carefully planned undertaking, which is part of a broader military-intelligence agenda first formulated by the government of Prime Minister Ariel Sharon in 2001:

"Sources in the defense establishment said Defense Minister Ehud Barak instructed the Israel Defense Forces to prepare for the operation over six months ago, even as Israel was beginning to negotiate a ceasefire agreement with Hamas."(Barak Ravid, Operation "Cast Lead": Israeli Air Force strike followed months of planning, Haaretz, December 27, 2008)

It was Israel which broke the truce on the day of the US presidential elections, November 4: "Israel used this distraction to break the ceasefire between itself and Hamas by bombing the Gaza strip. Israel claimed this violation of the ceasefire was to prevent Hamas from digging tunnels into Israeli territory. The very next day, Israel launched a terrorizing siege of Gaza, cutting off food, fuel, medical supplies and other necessities in an attempt to “subdue” the Palestinians while at the same time engaging in armed incursions.

In response, Hamas and others in Gaza again resorted to firing crude, homemade, and mainly inaccurate rockets into Israel. During the past seven years, these rockets have been responsible for the deaths of 17 Israelis. Over the same time span, Israeli Blitzkrieg assaults have killed thousands of Palestinians, drawing worldwide protest but falling on deaf ears at the UN." (Shamus Cooke, The Massacre in Palestine and the Threat of a Wider War, Global Research, December 2008)

Planned Humanitarian Disaster

On December 8, US Deputy Secretary of State John Negroponte was in Tel Aviv for discussions with his Israeli counterparts including the director of Mossad, Meir Dagan. "Operation Cast Lead" was initiated two days day after Christmas. It was coupled with a carefully designed international Public Relations campaign under the auspices of Israel’s Foreign Ministry.

Hamas’ military targets are not the main objective. Operation "Cast Lead" is intended, quite deliberately, to trigger civilian casualities. What we are dealing with is a "planned humanitarian disaster" in Gaza in a densly populated urban area. The longer term objective of this plan, as formulated by Israeli policy makers, is the expulsion of Palestinians from Palestinian lands:

"Terrorize the civilian population, assuring maximal destruction of property and cultural resources… The daily life of the Palestinians must be rendered unbearable: They should be locked up in cities and towns, prevented from exercising normal economic life, cut off from workplaces, schools and hospitals, This will encourage emigration and weaken the resistance to future expulsions" Ur Shlonsky, quoted by Ghali Hassan, Gaza: The World’s Largest Prison, Global Research, 2005)

"Operation Justified Vengeance"

A turning point has been reached. Operation "Cast Lead" is part of the broader military-intelligence operation initiated at the outset of the Ariel Sharon government in 2001. It was under Sharon’s "Operation Justified Vengeance" that F-16 fighter planes were initially used to bomb Palestinian cities. "Operation Justified Vengeance" was presented in July 2001 to the Israeli government of Ariel Sharon by IDF chief of staff Shaul Mofaz, under the title "The Destruction of the Palestinian Authority and Disarmament of All Armed Forces".

"A contingency plan, codenamed Operation Justified Vengeance, was drawn up last June [2001] to reoccupy all of the West Bank and possibly the Gaza Strip at a likely cost of "hundreds" of Israeli casualties." (Washington Times, 19 March 2002). According to Jane’s ‘Foreign Report’ (July 12, 2001) the Israeli army under Sharon had updated its plans for an "all-out assault to smash the Palestinian authority, force out leader Yasser Arafat and kill or detain its army".

"Bloodshed Justification"

The "Bloodshed Justification" was an essential component of the military-intelligence agenda. The killing of Palestinian civilians was justified on "humanitarian grounds." Israeli military operations were carefully timed to coincide with the suicide attacks: The assault would be launched, at the government’s discretion, after a big suicide bomb attack in Israel, causing widespread deaths and injuries, citing the bloodshed as justification. (Tanya Reinhart, Evil Unleashed, Israel’s move to destroy the Palestinian Authority is a calculated plan, long in the making, Global Research, December 2001, emphasis added)

The Dagan Plan

"Operation Justified Vengeance" was also referred to as the "Dagan Plan", named after General (ret.) Meir Dagan, who currently heads Mossad, Israel’s intelligence agency. Reserve General Meir Dagan was Sharon’s national security adviser during the 2000 election campaign. The plan was apparently drawn up prior to Sharon’s election as Prime Minister in February 2001. "According to Alex Fishman writing in Yediot Aharonot, the Dagan Plan consisted in destroying the Palestinian authority and putting Yasser Arafat ‘out of the game’." (Ellis Shulman, "Operation Justified Vengeance": a Secret Plan to Destroy the Palestinian Authority, March 2001):

"As reported in the Foreign Report [Jane] and disclosed locally by Maariv, Israel’s invasion plan — reportedly dubbed Justified Vengeance — would be launched immediately following the next high-casualty suicide bombing, would last about a month and is expected to result in the death of hundreds of Israelis and thousands of Palestinians. (Ibid, emphasis added) The "Dagan Plan" envisaged the so-called "cantonization" of the Palestinian territories whereby the West Bank and Gaza would be totally cut off from one other, with separate "governments" in each of the territories. Under this scenario, already envisaged in 2001, Israel would:

"negotiate separately with Palestinian forces that are dominant in each territory-Palestinian forces responsible for security, intelligence, and even for the Tanzim (Fatah)." The plan thus closely resembles the idea of "cantonization" of Palestinian territories, put forth by a number of ministers." Sylvain Cypel, The infamous ‘Dagan Plan’ Sharon’s plan for getting rid of Arafat, Le Monde, December 17, 2001)

From Left to Right: Dagan, Sharon, Halevy

The Dagan Plan has established continuity in the military-intelligence agenda. In the wake of the 2000 elections, Meir Dagan was assigned a key role. "He became Sharon’s "go-between" in security issues with President’s Bush’s special envoys Zinni and Mitchell." He was subsequently appointed Director of the Mossad by Prime Minister Ariel Sharon in August 2002. In the post-Sharon period, he remained head of Mossad. He was reconfirmed in his position as Director of Israeli Intelligence by Prime Minister Ehud Olmert in June 2008.

Meir Dagan, in coordination with his US counterparts, has been in charge of various military-intelligence operations. It is worth noting that Meir Dagan as a young Colonel had worked closely with defense minister Ariel Sharon in the raids on Palestinian settlements in Beirut in 1982. The 2009 ground invasion of Gaza, in many regards, bear a canny resemblance to the 1982 military operation led by Sharon and Dagan.

It is important to focus on a number of key events which have led up to the killings in Gaza under "Operation Cast Lead":

1. The assassination in November 2004 of Yaser Arafat. This assassination had been on the drawing board since 1996 under "Operation Fields of Thorns". According to an October 2000 document "prepared by the security services, at the request of then Prime Minister Ehud Barak, stated that ‘Arafat, the person, is a severe threat to the security of the state [of Israel] and the damage which will result from his disappearance is less than the damage caused by his existence’". (Tanya Reinhart, Evil Unleashed, Israel’s move to destroy the Palestinian Authority is a calculated plan, long in the making, Global Research, December 2001. Details of the document were published in Ma’ariv, July 6, 2001.).

Arafat’s assassination was ordered in 2003 by the Israeli cabinet. It was approved by the US which vetoed a United Nations Security Resolution condemning the 2003 Israeli Cabinet decision. Reacting to increased Palestinian attacks, in August 2003, Israeli Defense Minister Shaul Mofaz declared "all out war" on the militants whom he vowed "marked for death."

"In mid September, Israel’s government passed a law to get rid of Arafat. Israel’s cabinet for political security affairs declared it "a decision to remove Arafat as an obstacle to peace." Mofaz threatened; "we will choose the right way and the right time to kill Arafat." Palestinian Minister Saeb Erekat told CNN he thought Arafat was the next target. CNN asked Sharon spokesman Ra’anan Gissan if the vote meant expulsion of Arafat. Gissan clarified; "It doesn’t mean that. The Cabinet has today resolved to remove this obstacle. The time, the method, the ways by which this will take place will be decided separately, and the security services will monitor the situation and make the recommendation about proper action." (See Trish Shuh, Road Map for a Decease Plan, www.mehrnews.com November 9 2005

The assassination of Arafat was part of the 2001 Dagan Plan. In all likelihood, it was carried out by Israeli Intelligence. It was intended to destroy the Palestinian Authority, foment divisions within Fatah as well as between Fatah and Hamas. Mahmoud Abbas is a Palestinian quisling. He was installed as leader of Fatah, with the approval of Israel and the US, which finance the Palestinian Authority’s paramilitary and security forces.

2. The removal, under the orders of Prime Minister Ariel Sharon in 2005, of all Jewish settlements in Gaza. A Jewish population of over 7,000 was relocated. "It is my intention [Sharon] to carry out an evacuation – sorry, a relocation – of settlements that cause us problems and of places that we will not hold onto anyway in a final settlement, like the Gaza settlements…. I am working on the assumption that in the future there will be no Jews in Gaza," Sharon said." (CBC, March 2004)

The issue of the settlements in Gaza was presented as part of Washington’s "road map to peace". Celebrated by the Palestinians as a "victory", this measure was not directed against the Jewish settlers. Quite the opposite: It was part of the overall covert operation, which consisted in transforming Gaza into a concentration camp. As long as Jewish settlers were living inside Gaza, the objective of sustaining a large barricaded prison territory could not be achieved. The Implementation of "Operation Cast Lead" required "no Jews in Gaza".

3. The building of the infamous Apartheid Wall was decided upon at the beginning of the Sharon government. (See Map below).

4. The next phase was the Hamas election victory in January 2006. Without Arafat, the Israeli military-intelligence architects knew that Fatah under Mahmoud Abbas would loose the elections. This was part of the scenario, which had been envisaged and analyzed well in advance.

With Hamas in charge of the Palestinian authority, using the pretext that Hamas is a terrorist organization, Israel would carry out the process of "cantonization" as formulated under the Dagan plan. Fatah under Mahmoud Abbas would remain formally in charge of the West Bank. The duly elected Hamas government would be confined to the Gaza strip.

Ground Attack

On January 3, Israeli tanks and infantry entered Gaza in an all out ground offensive:

"The ground operation was preceded by several hours of heavy artillery fire after dark, igniting targets in flames that burst into the night sky. Machine gun fire rattled as bright tracer rounds flashed through the darkness and the crash of hundreds of shells sent up streaks of fire. (AP, January 3, 2009)

Israeli sources have pointed to a lengthy drawn out military operation. It "won’t be easy and it won’t be short," said Defense Minister Ehud Barak in a TV address. Israel is not seeking to oblige Hamas "to cooperate". What we are dealing with is the implementation of the "Dagan Plan" as initially formulated in 2001, which called for:

"an invasion of Palestinian-controlled territory by some 30,000 Israeli soldiers, with the clearly defined mission of destroying the infrastructure of the Palestinian leadership and collecting weaponry currently possessed by the various Palestinian forces, and expelling or killing its military leadership. (Ellis Shulman, op cit, emphasis added)

The broader question is whether Israel in consultation with Washington is intent upon triggering a wider war. Mass expulsion could occur at some later stage of the ground invasion, were the Israelis to open up Gaza’s borders to allow for an exodus of population. Expulsion was referred to by Ariel Sharon as the "a 1948 style solution". For Sharon "it is only necessary to find another state for the Palestinians. -‘Jordan is Palestine’ – was the phrase that Sharon coined." (Tanya Reinhart, op cit)

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Engaging story of the Slumdog Millionaire
By RAMA GAIND
 

Slumdog Millionaire is the engaging, but heart-rendering story of an 18-year-old orphan from the slums of Mumbai who scales the heights of success after winning 20 million rupees on the Indian version of the television game show Who Wants To Be A Millionaire?
This film not only captivates and amazes, but surprises as you watch the story of what keeps Jamal Malik (Dev Patel) going, his reason to survive and cope. It is called love.
Based on a book, Q & A by Vikas Swarup, it is directed by award-winning British filmmaker Danny Boyle (Trainspotting, 28 Days Later) and the screenplay is by Simon Beaufoy, the Oscar-nominated writer of The Full Monty.
The film won the 2008 Cadillac People’s Choice Award at the Toronto Film Festival and has received four Golden Globe nominations for best film drama, director, screenplay and for its soundtrack by top Bollywood composer A.R. Rahman. There’s also serious talk of 2009 Academy Award nominations.
In Slumdog Millionaire, Danny Boyle does not embellish the facts: he tells it like it is. This is a resourceful commentary on Indian society intertwined with a fairytale romance which sees Jamal in search of his childhood sweetheart Latika (Freida Pinto). It’s also a tale of Jamal living by his wits together with his older brother Salim (Madhur Mittal).
Jamal is an underpriviledged street child who is accused of cheating as a contestant on the show. To obnoxious police officers, led by Irrfan Khan, he recounts his life’s journey from rubbish tips, pick pocketing and running scams at the Taj Mahal before he goes on to gain unbelievable riches.
As demonstrated by the sometimes comical, but mostly heartbreaking scenes of Jamal’s childhood, the authenticity is derived from the need to show madness and energy of Mumbai
Even the banter between Jamal and the smarmy show host Prem Kumar (Anil Kapoor) are scene-stealers. It is Prem who invites a police inquiry, finding it hard to believe that an uneducated boy could know all the answers.
Jamal’s voyage features notorious encounters with child slavery, sexual abuse, call centres and criminal gangs, but throughout Boyle adds respectability to heighten reality in what is often disturbing material.
A.R. Rahman’s musical score meshes well with the acting for an outcome that is pure magic, including the uplifting dance scene at the end of the movie, which is a fitting ode to Bollywood. Boyle said it just felt “natural” to include this song.
Much of the film was made on location in Mumbai, including the Chhatrapati Shivaji Terminus, the train station where dozens of people were killed or injured in November 2008 after several coordinated terrorism attacks in the city.
Through ‘Slumdog’, Boyle provides an extraordinary insight into the colossal Indian melting pot where traditional divisions collide – of the poor rising to match the rich.
One of the underlying themes of the film is to celebrate Mumbai and its spirit, which certainly carries more pathos and a whole new message after 26/11.
 

ACT Australian Democrats president, Darren Churchill says he is appalled by the Federal government’s lack of leadership over Israel’s invasion of Gaza.

Last week, Israel launched attacks on civilian targets in Gaza killing more than 300 Palestinians, including women and children and injuring 1000 others. Today, Israeli tanks and infantry rolled into Gaza as a full scale offensive began.

Mr Churchill has called on acting Prime Minister Julia Gillard to show some leadership. “How far does this obscenity of war have to go before the Australian government speaks out and condemns it?” queried Mr Churchill

“The targets have not been military ones. They have been police, hospitals, mosques and universities. These are innocent people!” said Mr Churchill. “It’s a violation of International Law to attack police when they are not involved in military activities”

“The beginning of the current problems is that Gaza has been strangled for some time by an Israeli blockade.” Mr Churchill continued. “Israel’s blockade of Gaza for the last two years means that injured Palestinians will die because of lack of medical supplies.”

“These are blatant abuses of human rights. Australia must condemn the attacks. We must condemn the invasion.”

“Australia must stand up for humanity, justice and truth. War is the ultimate obscenity. The action taken by Israel is obscene! It is time for the Rudd-Gillard government to show some leadership on this important issue of international human rights.” Mr Churchill concluded.

Darren Churchill
ACT Democrats President
[email protected]
Tel: 0412 196 473