Neither Ukraine or Israel leaders want peace.

 INTERNAL CONFLICTS AND SABOTAGE OF PEACE PLANS

TRUMP NEEDS TO BE MORE ASSERTIVE 

It is clear that the EU led by the Uk still do not want an end to the Ukraine war, or at least not without their financial interests being protected. That and division in the U.S. administration makes any solution impossible.

While we see Steve Witkoff conducting extensive talks both with Russia and Iran we see both internal and external attempt to sabotage these negotiations. Keith Kellogg the supposed Ukraine envoy seems to be more an envoy of the Uk than the U.S. His proposal to allow France and the Uk to occupy everything west of the Dnieper river in Ukraine, a de facto NATO occupation of western Ukraine, a proposal that will never be acceptable to Russia or even Ukraine. Trump needs to either reign this guy in or eliminate his position as he is not an asset to the situation.

Trump needs to end military aid to Ukraine, including U.S. personnel on the ground, it is all counter productive and will just continue the death and destruction.

As for Israel, it is clear that Netanyahu does not want any negotiations with Iran, but only the complete submission of Iran. While Witcoff is negotiating, Netanyahu's position is the complete destruction of all nuclear facilities and even the possession of Uranium, the destruction of all long range missiles and the de facto disarmament of Iran. Then to top it off, he hoped that the U.S. would implement the "Libyan plan", which by the way is the same tactic that John Bolton used to collapse any talks with North Korea. 

The "Libyan plan" was  the strategy that was used to destroy Libya. Promise Libya and Gadhafi that if they give up any nuclear options then all will be well. Gadhafi complied and even allowed western oil companies access to the oil, then a civil war was commenced, paid for with western money, air support from NATO was provided and the eventual killing of Gaddafi and the complete destruction of Libya. A destruction that continues today with tribal conflict and chaos.

Trump should end the supply of offense weapons to Israel. Israel continues to expand into Syria and is now concerned about push back by Tunkey, who is not going to allow Israel to control Syria.  At the same time, you hear calls in Israel to preemptively strike Egypt because it has extended troops into the Sinai, Egyptian territory. 

Internal division in Israel is growing with hundreds of IDF soldiers signing a petition in protest and Hamas has not been weakened even after the death of 70,000 civilians. It will not take much to ignite this situation with an all out war that the United States will be expected to rescue and possibly not win.

This situation brought about by small counties, who hope to use the power of their allies to save them when they could not engage in unlimited war without their support. All negotiation, all hope of settlement is discarded with the hope of someone else destroying their enemies. The principle of an eye for eye and a tooth for a tooth cannot be conducted with nuclear powers, The global economic and political stability is at risk.

MIDDLE EAST CHAOS part 1 Iran

HOW DID WE GET HERE?

MIDDLE EAST CHAOS  Part 1

IRAN

The Middle East, while an area of unrest for decades, has reached an unprecedented time of violence and instability. This did not just come about by bad luck, but by a series of poor diplomatic decisions and interventions by Western powers and the desire by Islamic leaders for an Islamic Government or Caliphate.

We will try to be as brief as possible and still provide an objective background for this subject.

We must keep in mind that 85% of the Muslim world population is Sunni (mostly in southeast Asia) and 15% is Shia. This split can be traced back to the death of the Prophet. It was a dispute over who the successor should be...the Sunnis believed Abu Bakr was the most qualified to succeed as caliph by consensus of the community.  The Shias believed succession should go to the closest blood relative Ali Ibn Abi Talib. This was the beginning of the divide that has led to wars and disputes for  over 1300 years. While Sunni and Shia Muslims have lived side by side, intermarried, and fought along side each other for long periods of time, there often comes a period when a fight for supremacy erupts. The desire for a Caliphate or Islamic government is espoused by both sects of Islam, neither side would be happy with the rule of the other.

Iran is approximately 95% Shia, Azerbaijan 90%, Iraq 75%, Bahrain 70%,  also large minorities in Yemen, Syria, Kuwait, Saudi Arabia, Pakistan, Afghanistan and Lebanon. The rest of the Middle East and North Africa, as well as Asia, are Sunni. The population of Shias could be 30% in the Middle East. While their differences started over succession, there are also other differences in their beliefs. We are giving this information as it is important background for understanding the Middle East situation, but this could be a very long subject in itself.

While Iran has been able to remain an independent country for over 2 millennium,  it has had a continuing interaction with both Britain and Russia, sometimes in conflict and sometimes in cooperation. Georgia, Armenia  and Azerbaijan were once part of Persia, but were ceded to Russia in the 19th Century. Much of the early trade in Iran was controlled by Britain. During WW2 Iran tried to remain independent, but eventually was occupied by British, Russian and American troops.

Mohamed Reza Shah Pahlavi ascended to the throne in 1941.The British owned Anglo-Iranian Oil Co. and extracted and marketed Iranian oil. When WW2 ended, Iran set out to modernize the country. While the Shah vowed to act as a constitutional monarchy, he increasingly involved himself in governmental affairs and engaged in manipulation of the political process and opposed or thwarted the Prime Ministers.  In 1951 the Iranian Parliament voted to nationalize the oil industry, controlled by Britain. Dr. Muhammad Mosaddegh was elected prime minister after the assassination of his predecessor. Britain responded with threats and sanctions and tried unsuccessfully to move the US under Truman to take action against Mosaddegh.  By 1952 Mosaddegh was becoming more dictatorial and demanded control of the military. The Shah refused and Mosaddeq resigned. He was reinstated after riots demanded he return. He then conducted a national referendum to dissolve parliament. The Shah fled to Baghdad.

Mossadegh, an aging, eccentric academic, was immensely popular with people. He was a nationalist, not a communist, although he had some support of the communists. In 1953 when Eisenhower became president, the British and others were able to convince Washington that Mosaddegh was about to align Iran with the USSR. The Army, loyal to the Shah,  with help from the CIA and Britain overthrew and arrested Mosaddeq. This coup earned the USA and Britain the lasting hatred of large sectors of the Iranian public. Mosaddegh remains a folk hero of Iranian Nationalism.

The Shah took advantage of the politics of the cold war. He was a ally of the west, and friendly to Israel. He initiated reforms including land reform, extending voting rights to women and eliminating illiteracy. There was opposition to these reforms by Shia clerics and supporters of the status quo. The Shah responded by suppressing and persecuting his opposition through his security and intelligence organization, SAVAK, which used tactics including arbitrary arrest, imprisonment, exile and torture. Israel was accused of helping the Shah organize SAVAK.

The Ayatollah Khomeini was exiled to Iraq from Iran in 1965. He moved to France in 1978. He was an opponent of the Shah and preached an absolutist theocratic rule.  His ideas where propagated into Iran by books and cassettes smuggled into Iran. The Shah, suffering from cancer left Iran on Jan. 16. 1979. He appointed Shapour Bakhtiar as Prime Minister. Bakhtiar was unable to keep order, and invited Khomeini back to Iran. Khomeini returned on February 1, 1979. Mass purges began, with many executions, including four military generals. In March a referendum was held, with only one form of government on the ballot, an Islamic Republic, and was approved by 98% of voters in non-secret elections.

Executions were expanded, Kurds, Arabs, Turkomans and other minorities demanded autonomy. Suppression of most rights was the rule and a free press and expression were forbidden. The Sunni neighbors were fearful of a spread of this ideology. The new government allowed the American embassy to be overrun and hostages to be taken. Boycotts and sanctions were imposed by the west. Neighboring countries were being subverted by propaganda from Iran. Economic conditions were deteriorating in Iran. This was the beginning of the chaos that was to follow.

Iranians that I knew in the early 1980's could not return home and their families could not leave.  They detested the reign of the Shah and the excesses of SAVAK, but feared that their lives would be short if they attempted to return home.

PART 2 TO FOLLOW

Originally published 12/8/2015

Is the globalist philosophy dead?

 CAN VOLUNTARY COOPERATION REPLACE TOTAL CONTROL?

WE ARE INDEED AT THE CROSSROADS OF HISTORY

I suspect that most everyone would agree that the world is in a state of flux, economically and politically. As yet we do not know what the outcome will actually look like.

The American revolution was a turning point in global history. Before American independence there was only one system and it was Feudalism, it prevailed everywhere in one form or another, from benevolent dictators to not so benevolent, but it was a system of the aristocracy and the peasant class. Much of your life was determine by your birth, if not part of the aristocracy, you were in reality a slave in one form or another.

The American experiment, with all its flaws, was the greatest social success story in human history. Limited government and the freedom to rise from poverty to high places governed by your own ingenuity and perseverance, truly a system of opportunity. It was attempted to be copied in many places and was the hope of many countries around the world. I suspect that the use of a constitution that is not easily amended was what has allowed America to last as long as it has.

The next social revolution that raced around the world was Socialism, a promise of equality for all, guaranteed through democratic action and enforced by the state. The philosophy was born in the mid 1800's and found full implementation in the founding of the Soviet Union in 1917. Many believed it was a system of utopia that would be the future worldwide. The western world soon adopted much of the basics of socialist thought and through democratic action hoped to demand and enforce equality of result by the power of the state. The bigger the state, the less freedom and opportunity seemed to be the result. A result that conflicts with the natural character and instincts of human behavior.

Social guarantees seem to also stifle the natural instinct to strive for excellence and soon this experiment began to fail. Many found no emotional payback in their occupation and turned to past times and sometimes alcohol and drugs for some semblance of reward.

One must wonder if those who really pushed socialism believed in it or was it just another path to dependence and back to the original system of Feudalism with a new name. 

We all witnessed the unraveling of the Soviet system, a remarkable accomplishment that occured from intentional action by those who understood that it had not future. 

Whether we want to acknowledge it or not, we are now watching the unraveling of the western Democratic socialist experiment. It is under assault from its own excesses of unsustainable debt, a lack of incentive and a declining work ethic. The result of guaranteed sustenance without the incentive or internal demand to excel.

We are also seeing the rejection of the idea of world socialism which is what the idea of global governance really was. It was also a huge step back to world Feudalism, were you may be guaranteed sustenance in exchange for liberty and opportunity.  

We have seen the emergence of some new hybrid systems that at present seem to be thriving, but the danger is, as the present order unravels, that we choose some new hope of utopia in basically a new Feudal system.

When is DOGE going to examine pentagon?

 ASKING FOR $1 TRILLION BUDGET WITH NO AUDIT

TRUMP RISKS HIS CREDIBILITY

We now hear that the Trump administration is asking for another increase in the defense budget. The pentagon needs an audit, not another increase, the defense budget is already near 5x any of the U.S. competitors and still seems to be unable to keep up with the supply of weapons it is supplying to proxy forces around the world. Proxy forces that may still plunge us into WW3 at any moment.

Trump was easily led astray by the bureaucrat generals he nominated in his first administration, they were successful in forcing the squandering of his priorities. Any increase in defense spending will cause a big blowback after the effort to expose waste and fraud in other departments. I suspect the biggest waste and fraud is occuring in the pentagon budget and does not add to national security, but just blows up the budget and puts the country into more debt.

We have been bombarded with a constant narrative of the dangers of Russian and Chinese aggression and at the same time the narrative of the United States has turned them from economic competitors into enemies, they, in their national interest, feel they need to prepare for war with the United States. Now that they feel it necessary to build up their militaries, we have another excuse to spend more on defense, without any accountability for the defense department for 30 years.

It seems Trump has now fallen into the same narrative trap of Biden, threaten everyone with war in the hope that they submit to U.S. hegemony. An economic and military hegemony that is over and the sooner that the leaders of the west admit to that reality the sooner that prosperity and peace can be possible. 

History has shown that when nations continually threaten war and build up their militaries, their predictions will inevitably become true. With a change of administration many saw hope of a change of direction, if that does not happen, then prepare for disaster, both economic and militarily.

It's all about the debt. Is Trump hastening the inevitable?

 CHINA UNVEILS NEW YUAN BASED PAYMENT SYSTEM

MULTIPOLAR ECONOMIC SYSTEM ACCELERATES

It is without a doubt that dramatic changes are coming to the global economic and  political system. One must wonder if the Trump administration believes it is better to rip the Band-Aids off and hasten these changes so stability and new realities can be absorbed. It is most definitely a work in progress and I doubt anyone knows what the real outcome will be.

Much of this has to do with the unsustainable and growing U.S. debt. Each point of interest rate cost the U.S. $1 billion in interest. It seems the hope was to drive the yield down on treasury debt and lessen the interest problem on $9 Trillion of debt maturing this year, Over $27 Trillion in the next 3 years. Historically a lower stock market sends investors into the bond market and lowers yields, it does not seem to be working. Foreign investors especially China can sell their large holdings and drive interest rates up, and that may be what is happening.

While Trump's analysis of the tariffs and trade barriers is correct, the cure may be much more difficult if attempted with the whole world at one time. Negotiations with the EU, Canada and Mexico are the easy ones, China and the east may feel it is time to decouple from the U.S. completely and the time may be now.  This would put massive pressure on U.S. retailers to find enough products to service their customers. Maybe the Trump administration just wants to get the move to a multipolar economic system over as quickly as possible?

Yesterday China announced the introduction of a rival to the swift payment system, based on the Chinese currency that will be able to consummate transactions in 7 seconds and cost 98% less than the swift system. Many believe the use of the Chinese currency, yet another fiat currency, will only be temporary. It is anticipated that this system will be adopted by the BRICS group and the Gulf countries. It will be a move away from the dollar. It could capture over 40% of the world's market. Some question if the U.S. could freeze the sale of U.S. bonds in a similar fashion as was done to the Russian assets. Any such move would be the instant end of the U.S. dollar.

The next big question is what is going to replace the dollar as the world's reserve currency. The almost non stop rise in the Gold price indicates that the amassing of gold by central banks is in anticipation of a new currency, backed by gold. At this point only speculation, but much of the funding for these gold purchase has been selling of U.S. debt. 

It seems this tariff business is more than just a rebalancing of trade issues, but a potential trigger to accelerate the move to new multipolar economic and political spheres of influence, no longer dominated by the U.S. and its allies.

Trump announces new negotiations with Iran in Oman.

 TRUMP SAYS DIRECT HIGH LEVEL

WHY DID NETANYAHU COME TO WASHINGTON?

Yesterday saw a press conference with Benjamín Netanyahu and Donald Trump. It was a little anticlimactic because it did not seem to have any news except that Trump announced talks will begin In Oman with Iran and the USA. Trump also did not agree to eliminate tariffs on Israel, only stating that there would be a whole new tariff regime and that Israel received a lot of aid from the USA.

One must wonder why Netanyahu came to Washington? Maybe we will never know, but it seems that whatever was decided has not been revealed.

At least it seems no war with Iran is imminent in the next week. It is clear that both the U.S. and Iran do not want war, but it seems that some of the demands by the U.S. for some sort of total disarmament of Iran will never be acceptable. Some are saying that the U.S. will now be content on some sort of nuclear agreement without talking about long range missiles. It seems we will see some conclusion soon, one way or the other.

War with Iran, will have very serious negative consequences for the global economy, it will very likely draw more combatants into taking sides and will not have a quick decisive conclusion.The surrounding countries have all denied aid or the use of bases or air space for an attack on Iran. It has very high risk of major escalation with high losses for all who engage in such an attack.

The situation in Israel needs some kind of resolution and there seems little on the horizon. The Houthis are still launching missiles even after a billion dollar attack by the USA, depleting its limited supply of missiles. The Houthis, who it has been revealed have its own missile manufacturing ability, say they will continue until there is an end to the dying in Gaza. No one seems to know what the plan is with the IDF claiming they have only neutralized 30% of the Hamas tunnels and other defenses. That would indicate that the hope of eliminating Hamas has a long way to go. 

Is this whole affair becoming another long term game of attrition, rather than short quick military action. While the toll on Palestinians and Houthis is great it is also damaging the economy and social situation in Israel. Yet there still are no viable serious solutions being offered by anyone. 

Will eventual exhaustion by all be necessary, before there is any hope of any real solution. 

Why financial readjustment is imperative now?

 DOLLAR PRIVILEGE IS COMING TO AN END

U.S. NEEDS TO PREPARE TO LIVE WITHIN ITS MEANS

The world is in the midst of a change in the balance of the world's economic system. It is happening, and adjustments will be made whether from willful action or from catastrophic uncontrolled events.  For the United States, the unrivaled western leader, post WW2, it is going to be a painful and difficult process. 

With the rise of competing economic powers worldwide the privilege of the United States having its currency as the worlds reserve currency, is coming to an end, it is already in the process of losing that status, and it is not going to be reversed. 

At the end of WW2 the dollar was considered "As good as gold", but slowly it has been abused and diluted until it is a shadow of its former self. It has only continued because there is not at the present an alternative. The dollar not long ago was used for over 80 of global transactions, now it hovering near 50%. 

The reserve currency dollar allowed the United States to engage in a deficit spending binge that has now become 30% of the budget, it is going to collapse and it is inevitable. 

This weekend I listened to a CNN analyst who claimed the United States is the richest and most powerful economy in the world, he listed the Gross domestic product, the increase in living standards and a lot of statistics to back up his claim, except for 1, he never mentioned the debt or the now fixed annual deficits. 

Here is an interesting statistic, the total of bank deposits in the U.S., is $17.9 Trillion. The Total IRA balance is $15.2 trillion and the total 401 K balance is $9.9 Trillion. This is a total of $42. Trillion and that was before the decline of last week. The Federal debt is now $37 Trillion. That would leave a positive balance of $5 Trillion. The reality is, it would take the combined balance of all savings and pension investments to pay off this debt. For some reason no one ever considers that this country is living on debt and much of the prosperity is circular paper transactions of questionable financial instruments, not wealth producing activity.

Now that we are coming to a financial reckoning that expanding the debt is going to come to an end, a major readjustment needs to be made.  

To simplify the formula, spending needs to be reigned in and real wealth producing income needs to be increased. It will take cooperative effort from Americans to accomplish this or the alternative will be something similar that happened when the Soviet Union collapsed, pensions evaporated, government benefits of all types ended and the result was poverty and chaos that took 20 years of effort to recover.

The change and readjustment is coming, it is inevitable, and yes it will be in your lifetime, unless you are leaving very soon.