Monday, March 26, 2012
Fidel Castro - The Roads Leading to Disaster
Reflections By Fidel Castro
From: "Information Clearing House" March 23, 2012
This Reflection could be written today, tomorrow or any other day without the risk of being mistaken. Our species faces new problems. When 20 years ago I stated at the United Nations Conference on the Environment and Development in Rio de Janeiro that a species was in danger of extinction, I had fewer reasons than today for warning about a danger that I was seeing perhaps 100 years away. At that time, a handful of leaders of the most powerful countries were in charge of the world. They applauded my words as a matter of mere courtesy and placidly continued to dig for the burial of our species.
It seemed that on our planet, common sense and order reigned. For a while economic development, backed by technology and science appeared to be the Alpha and Omega of human society.
Today, everything is much clearer. Profound truths have been surfacing. Almost 200 States, supposedly independent, constitute the political organization which in theory has the job of governing the destiny of the world.
Approximately 25,000 nuclear weapons in the hands of allied or enemy forces ready to defend the changing order, by interest or necessity, virtually reduce to zero the rights of billions of people.
I shall not commit the naïveté of assigning the blame to Russia or China for the development of that kind of weaponry, after the monstrous massacre at Hiroshima and Nagasaki, ordered by Truman after Roosvelt’s death.
Nor shall I fall prey to the error of denying the Holocaust that signified the deaths of millions of children and adults, men or women, mainly Jews, gypsies, Russians or other nationalities, who were victims of Nazism. For that reason the odious policy of those who deny the Palestinian people their right to exist is repugnant.
Does anyone by chance think that the United States will be capable of acting with the independence that will keep it from the inevitable disaster awaiting it?
In a few weeks, the 40 million dollars President Obama promised to collect for his electoral campaign will only serve to show that the currency of his country is greatly devaluated, and that the US, with its unusual growing public debt drawing close to 20 quadrillion, is living on the money it prints up and not on the money it produces. The rest of the world pays for what they waste.
Nor does anyone believe that the Democratic candidate would be any better or worse than his Republican foes: whether they are called Mitt Romney or Rick Santorum. Light years separate the three characters as important as Abraham Lincoln or Martin Luther King. It is really unheard-of to observe such a technologically powerful nation and a government so bereft of both ideas and moral values.
Iran has no nuclear weapons. It is being accused of producing enriched uranium that serves as fuel energy or components for medical uses. Whatever one can say, its possession or production is not equivalent to the production of nuclear weapons. Dozens of countries use enriched uranium as an energy source, but this cannot be used in the manufacture of a nuclear weapon without a prior complicated purification process.
However, Israel, with the aid and cooperation of the United States, manufactured nuclear weaponry without informing or accounting to anybody, today not admitting their possession of these weapons, they have hundreds of them. To prevent the development of research in neighbouring Arab countries, they attacked and destroyed reactors in Iraq and Syria. They have also declared their aim of attacking and destroying the production centres for nuclear fuel in Iran.
International politics have been revolving around that crucial topic in that complex and dangerous part of the world, where most of the fuel that moves the world economy is produced and supplied.
The selective elimination of Iran’s most eminent scientists by Israel and their NATO allies has become a practice that motivates hatred and feelings of revenge.
The Israeli government has openly stated its objective to attack the plant manufacturing Iran’s enriched uranium, and the government of the United States has invested billions of dollars to manufacture a bomb for that purpose.
On March 16, 2012, Michel Chossudovsky and Finian Cunningham published an article revealing that “A top US Air Force General has described the largest conventional bomb – the re-invented bunkers of 13.6 tones – as ‘fantastic’ for a military attack on Iran.
“Such an eloquent comment on the massive killer-artefact took place in the same week that President Barack Obama appeared to warn against ‘easy words’ on the Persian Gulf War.”
“…Herbert Carlisle, deputy chief of staff for US Air Force operations […] added that probably the bomb would be used in any attack on Iran ordered by Washington.
“The MOP, also referred to as ‘The Mother of All Bombs’, is designed to drill through 60 metres of concrete before it detonates its massive bomb. It is believed to be the largest conventional weapon, non-nuclear, in the US arsenal.”
“The Pentagon is planning a process of wide destruction of Iran’s infrastructure and massive civilian victims through the combined use of tactical nuclear bombs and monstrous conventional bombs with mushroom-shaped clouds, including the MOABs and the larger GBU-57A/B or Massive Ordnance Penetrator (MOP) that exceeds the MOAB in destructive capacity.
“The MOP is described as ‘a powerful new bomb that aims straight at subterranean Iranian and North Korean nuclear facilities. The giant bomb –longer than 11 persons shoulder to shoulder, or more than 6 metres from end to end’.”
I ask the reader to excuse me for this complicated military jargon.
As one can see, such calculations arise from the supposition that the Iranian combatants, numbering millions of men and women well-known for their religious zeal and their fighting traditions, surrender without firing a shot.
In recent days, the Iranians have seen how US soldiers occupying Afghanistan, in just three weeks, urinated on the corpses of killed Afghans, burned copies of the Koran and murdered more than 15 defenceless citizens.
Let us imagine US forces launching monstrous bombs on industrial institutions, capable of penetrating through 60 metres of concrete. Never has such an undertaking ever been conceived.
Not one word more is needed to understand the gravity of such a policy. In that way, our species will be inexorably led towards disaster. If we do not learn how to understand, we shall never learn how to survive.
As for me, I harbour not the slightest doubt that the United States is about to commit and lead the world towards the greatest mistake in its history.
Fidel Castro Ruz - March 21, 2012
China Shops While American Investors Drop
By Neeraj Chaudhary, Investment Consultant with Euro Pacific Capital
Unquestionably there has been a significant change in investor sentiment since the crash of 2008. The 50% decline in stock prices in 2008-2009 combined with the financial sector bailouts, the "Flash Crash" of 2010, and the continued demonization of our leading financial institutions, has helped shatter the public's faith in Wall Street. With U.S. stock markets essentially flat over the past 13 years (despite occasional heart-stopping volatility), many investors may have decided that long term equity investments are just no longer worth the risk.
It is important to realize however that this sentiment is not universal. On the other side of the world, the Chinese are showing no such hesitancy. There is mounting evidence to suggest that the Chinese government is in the midst of a voracious buying spree in which they are actively snapping up productive assets around the world. What do they know that we don't?
Data shows that in recent years U.S. investors have pulled money out of stock focused mutual funds and have instead piled into assets that at least appear to be less risky, such as bonds and money markets. When one considers the large unresolved problems that currently overhang the market, such as the Greek debt negotiations, the U.S. elections, and the perennial problems in the Middle East, one can understand the concerns that are keeping them on the sidelines.
Although these investors may be somewhat insulated from market volatility the protection comes at a very high price. With near 0% interest rates, bond investors are consistently losing to inflation (for more on how inflation robs you of your purchasing power. The world's central bankers - led by the Fed - have created a landscape where the shaky ground of the markets is surrounded by the quicksand of deteriorating cash. Investors have seemingly nowhere to run. But China seems undeterred.
A scant 10 years ago, China joined the WTO and began her rise to prominence on the world economic stage. Though today China possesses over $3 trillion in foreign exchange reserves, in 2001 Chinese reserves were estimated at a relatively paltry $200 billion. China has accumulated these funds by keeping her currency cheap, and socking away trade surpluses to the tune of hundreds of billions of dollars per year. And although the stash is growing, the Chinese are not simply sitting on this pile. They have been one of the leading global investors, strategically buying international assets that fit its growth plans. There is every reason to suspect that these trends will continue and accelerate.
For the first few years after her accession to the WTO, China was content to simply pile up foreign exchange reserves, accumulating both US Treasury bonds and agency (Fannie and Freddie) securities. Being risk-averse, and considering them the safest assets in the world, the Chinese were content to earn the lower interest income that these investments offer.
But in the past few years, China began to recognize that their savings were losing value in real terms. Beginning in 2007, they made the strategic decision to protect themselves from inflation by diversifying out of US dollar-denominated financial assets, and into the hard assets she required to grow her economy.
The volume of deals has been breathtaking, and the tempo is accelerating. According to the Heritage Foundation - which publishes the only publicly available, comprehensive dataset of large Chinese investments and contracts worldwide beyond Treasury bonds - Chinese foreign investment has gone off the charts:
- In 2007, Chinese sovereign wealth funds and state-owned enterprises bought stakes in or signed long-term contracts with at least 35 different firms for an investment total of almost $43 billion
- In 2008, the Chinese signed at least 57 deals worth a total of nearly $74 billion
- In 2009 - in the wake of the global financial crisis, and with virtually every investor in the world pulling back and hoarding cash - China signed another 76 deals worth $76 billion
- 2010 was the biggest year by dollar volume: 98 separate transactions totaling $110 billion
- Last year was the biggest year by number of deals, 111 investments for $94 billion
By geography, the Chinese first went shopping in Asia, picking up $115B worth of assets in their backyard. Then, choosing to ignore the niceties of international sanctions, the Chinese turned their attention to Africa and the Middle East, where they have plunked down at least $111B of capital. After that, they came to our front door in the Western Hemisphere, to the tune of $88B. Europe is home to $52B of Chinese capital. Australia is the largest single country investment, representing 10% of investment at $43B.
And they're not done yet. According to recent media reports, the Chinese are currently planning to deploy another $300 billion into "aggressive" investments. The trend is crystal clear. While some investors hold out, trying to time the market, China is buying up everything they can get their hands on.
But perhaps even more interesting than what is going on in the glare of the public spotlight is what is being done in private. In addition to its massive disclosed investments, China has begun to execute a parallel strategy in secret. With respect to gold, China kept a large scale purchase program under wraps for a full five years until 2009 when China's State Administration of Foreign Exchange (SAFE) announced it had spent the previous five years buying gold in small lots. Then, in April of that year, they publicly announced that they had acquired 500 tons of gold, and transferred it to the People's Bank of China. At current market prices, this single transaction is valued at nearly $28 billion.
One of the biggest questions that investors should ask themselves now is where the Chinese might decide to spend its considerable sums that continue to languish in debt instruments. There are reasons to expect that large scale purchases by the Chinese could support asset prices in whatever sector they decide to target.
If the trend of publicly disclosed and secret Chinese transactions continues, and if other developing markets holding piles of like valued U.S. treasury debt follow suit, the world could soon wake up to an even more intense kind of shaking, one where prices for agriculture, energy, and precious metals are continually increasing, and investors seeking apparent safety in dollars have instead lost wealth in real terms.
So as U.S. investors drift away from equity and commodity based assets in hopes of finding safety, they should in fact pay more attention to activities of those countries that will likely drive global markets for years to come. China is gearing up for what they hope will be a long period of economic expansion. American investors would be wise to take notice.
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To find out which economies we think stand to benefit from China's expansion, see the latest edition of Euro Pacific's Global Investor Newsletter.
Neeraj Chaudary is an Investment Consultant with Euro Pacific Capital. Opinions expressed are those of the writer and may or may not reflect those held by Euro Pacific Capital, or its CEO, Peter Schiff.
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