Question: Money and the Inevitable Collapse of the Dollar

Assalamulaikum warahmatullahi wabarakatuhu:

Bayt al Mal - Ummayyad Period

I received the following question about a week ago and wanted to wait to see which class won the vote before I answered it. As the poll is closed, our initial course offering will be “Shariah Compliant Economics – Paradigm Shift or Neo-Imperialism?” inshallah. Therefore I am posting a very abstract and dynamic response to a question about fiat and intrinsic money below. I am doing this in order to set a background behind the specific course discussions.  As I work on the syllabus I ask those of you that plan on joining the class to read the response, follow the links, key word search unfamiliar terms, and pose additional comments and questions in the comments section as you do. Several of the things I have stated are controversial and I welcome criticism from all angles for the sake of arriving at the truth. It is important to stimulate discussion in this direction and debate can be quite useful:

As Imam aDhahabi stated,

“Debate is justified only to unveil truth, so that the more knowledgeable should impart knowledge to the less knowledgeable, and to stimulate a weaker intellect.” 

And Imam al-Shaaf’I reported,

“I never talked with someone but sincerely wished that Allah guard him, protect him from sin and misdeed, and guide him; and I never debated with someone but sincerely wished that we would come upon truth, regardless of whether he or I should be the one to think of it first.”

It is in this spirit that the following report is issued responding to the question:

While I understand that the following question is not particularly easy to answer, I think it is important for us to address in furthering the worldwide Islamic Awakening.

Question: Given the inevitable collapse of the dollar, what practical steps can be taken to promote the worldwide adoption of a Gold and Silver standard (Dinar and Dirham) as oppose to the continued use of baseless FIAT money such as the Chinese Yuan or the Japanese Yen, and how can we convince the rest of the world to do so?

Response (link to pdf here):

Your question is one that is of extreme import and in order to address it so that there can be benefit for all those exploring the issue, I would like to take some time to lay out the type of platform that is already being developed from several circles in the world, to advance the cause of a “ribaa-free economic order,” and the primary conceptions that must be added or are missing from the call as it exists in the now.

Food Stamp Usage Hits New High Of 43.2 Million

World food prices enter 'danger territory' to reach record high

(Source) UN food price index rises for sixth month in a row to highest since records began in 1990

Soaring prices of sugar, grain and oilseed drove world food prices to a record in December, surpassing the levels of 2008 when the cost of food sparked riots around the world, and prompting warnings of prices being in "danger territory".

An index compiled monthly by the United Nations surpassed its previous monthly high – June 2008 – in December to reach the highest level since records began in 1990. Published by the Rome-based Food and Agriculture Organisation (FAO), the index tracks the prices of a basket of cereals, oilseeds, dairy, meat and sugar, and has risen for six consecutive months.

Abdolreza Abbassian, FAO economist, told the Guardian: "We are entering a danger territory." But he stressed that the situation was not yet as bad as 2008.

Sugar and meat prices are at record levels, while cereal prices are back at the levels last seen in 2008, when riots in Haiti killed four people and riots in Cameroon left 40 dead.

Abbassian warned prices could rise higher still, amid fears of droughts in Argentina and floods in Australia and cold weather killing plants in the northern hemisphere.

"There is still room for prices to go up much higher, if for example the dry conditions in Argentina tend to become a drought, and if we start having problems with winterkill in the northern hemisphere for the wheat crops," Abbassian said.

Prices have been rising steadily but Abbassian said that by now he had been expecting food prices to start to fall because many poorer countries had good harvests last year.

But this has not happened after unpredictable weather caused a poor wheat crop in Russia. Last year European wheat prices doubled, US corn prices rose more than 50% and US soybean prices jumped more than 30%.

The current floods in Australia have the potential to affect prices for commodities such as sugar and cane growers are warning of production problems for up to three years. Wheat supplies are expected to be affected – Australia is the fourth-largest wheat exporter – and the country is also the largest exporter of coking coal, production of which is also being affected by the floods.

At the same time demand from emerging countries such as China and India has been strong.

Abbassian played down concern that the rising food prices could cause fresh riots, as happened two years ago when the price of cereals was largely the cause of the problem, along with a dramatic spike in the price of oil. He noted that another rise in the oil price – currently around $95 a barrel – could exacerbate the problem. While oil is rising in price, and forecasters are suggesting it could hit $100, it is still well below the $145 peak it reached in July 2008 on a wave of buying by international speculators.

The FAO food index hit 215 points last month, up from 206 in November, to break the 213.5 registered in June 2008. It shows a dramatic rise in prices for food in a decade. In 2000 the index stood at 90 and did not break through 100 until 2004.

Economists are on guard for spikes in inflation around the world that might force up interest rates, which in the developed world are at historically low levels as a result of the banking crisis.

Julian Jessop, chief international economist at Capital Economics, said: "The upward pressure on inflation this year from the recent surge in the cost of agricultural commodities will be much greater than that from the pick-up in oil prices".

Jessop said the price of oil was rising largely as result of demand caused by a rebound in global industrial activity. "In contrast, the surge in agricultural food prices is largely a consequence of supply shocks, such as droughts in major wheat producing countries. These have been compounded by speculative pressures."

Imran Khan: If The War On Terror Was Working We Should Have Seen A Decline In Terrorism!

Sarkozy Visits Obama as Part of Campaign to Blunt Dominance of the Dollar

source French President Nicolas Sarkozy is bringing his campaign to blunt the dollar’s dominance as a reserve currency to the White House.

The French leader may find U.S. President Barack Obama unwilling to budge at their Jan. 10 meeting on giving up the dollar’s role and offer little in the way of alternatives.

Sarkozy, who this year holds the presidency of both the Group of Eight industrial economies and the wider G-20, has made re-jiggering the monetary system one of his priorities, along with controlling volatility in commodity prices. The European debt crisis that has rocked the euro isn’t on his G-20 agenda.

“In the absence of a new crisis, there is no incentive for the U.S. to move away from a U.S. dollar-centric system,” Chile’s Finance Minister Felipe Larrain said at a conference in Paris on Jan. 6. “We are in a state of flux in the international monetary system. The problem is that we don’t really have a perfect substitute.”

A Sarkozy aide who briefed reporters said the meeting isn’t designed to yield decisions. Sarkozy has also met in recent months with the heads of China, India and Germany. The French plan to organize a series of “seminars” on monetary issues and say specifics won’t be presented until a G-20 summit in the Mediterranean resort of Cannes Nov. 3-4.

French officials say their goal isn’t to dethrone the dollar. They want to open a debate to reflect changes since the 1944 Bretton Woods conference established the U.S. currency’s role. Sarkozy and Finance Minister Christine Lagarde have said the dollar’s prominence contributed to the financial crisis by encouraging global imbalances.

‘Single-Currency World’

“Without defending or questioning the role of any specific currency, we can see that new economies have come to the fore during this recent crisis, and yet we have a world which for the time being is a single-currency world,” Lagarde said Jan. 6. “We need reserves that are surer and more stable.”

The dollar declined to as low as $1.6038 against the euro in July 2008 and rose to $1.1877 in June 2010.

One-month implied volatility on the euro versus the dollar has averaged 14 percent since the collapse of Lehman Brothers Holdings Inc. in September 2008, reaching a record 29 percent in October of that year. That compares with an average of 9.7 percent in the previous 10 years. The reading was 13.5 percent yesterday.

Sarkozy, who arrives in Washington from Martinique and Guadeloupe with his wife Carla Bruni-Sarkozy, will provide more details of G-20 plans at a Jan. 24 press conference in Paris.

‘Close Allies’

“The two leaders will discuss French leadership this year of the G-8 and G-20 and how to strengthen the global economic recovery and create jobs,” White House spokesman Tommy Vietor said. “As close allies, the presidents will also review the situations in Afghanistan, Lebanon, Iran, Ivory Coast, Sudan and Middle East Peace efforts.”

As his G-20 presidency approached last year, Sarkozy backed off from criticizing the dollar and also dropped earlier disapprovals about China’s yuan peg.

“We have to update the international monetary system for the 21st century,” Sarkozy said at the G-20 summit in Seoul in November. At the World Economic Forum in Davos a year ago, he said: “We can’t have on one hand a multipolar world and on the other hand a single reserve currency” and said “there will be no return to financial and economic order if we allow currency disorder to continue.” He’d made similar comments in August 2009 to ambassadors gathered in Paris for their annual meeting.

De Gaulle Echoes

Sarkozy’s agenda echoes policies dating to the 1960s, when Charles de Gaulle converted much of France’s dollar reserves into gold, accelerating events that led the U.S. in 1971 to abandon the gold standard and usher in an era of floating rates.

“Having the international economic system in the 21st century dependent on the currency of a single country is an anomaly,” Nobel Prize-winning economist Joseph Stiglitz said in an interview in Paris Jan. 6. “But a multi-currency reserve system could be even more unstable as central banks shift from one to another.”

Sliglitz said he favors a system based on supra-national currencies such as the International Monetary Fund’s Special Drawing Rights, though that would require many changes to how SDRs are issued and used which the U.S. may oppose.

“Greater reserve use of the SDR has a very big challenge: you have to have an expanded use of SDRs,” said Chile’s Larrain. “I’m skeptical the SDR can play a much larger role in a short period of time.”

Larrain said a gradual slide away from a reserve use of the dollar is more likely, noting that the dollar’s share of world central bank reserves fell to 61 percent from 71 percent in a decade, with the euro accounting for most of the switch.

Sarkozy will be accompanied in Washington by Lagarde and by Foreign Minister Michele Alliot-Marie.

His wife plans a lunch with first lady Michelle Obama.

Inside Story - 'Bring us sugar!'

I

U.S. teenager tortured in Kuwait and barred re-entry into the U.S.

source Glenn Greenwald (updated below)  Gulet Mohamed is an 18-year-old American citizen whose family is Somalian.  His parents moved with him to the U.S. when he was 2 or 3 years old, and he has lived in the U.S. ever since.  In March, 2009, he went to study Arabic and Islam in Yemen (in Sana'a, the nation's capital), and, after several weeks, left (at his mother's urging) and went to visit his mother's family in Somalia, staying with his uncle there for several months.  Roughly one year ago, he left Somalia and traveled to Kuwait to stay with other family members who live there.  Like many teenagers who reach early adulthood, he was motivated in his travels by a desire to see the world, to study, and to get to know his family's ancestral homeland and his faraway relatives.

At all times, Mohamed traveled on an American passport and had valid visas for all the countries he visited.  He has never been arrested nor -- until two weeks ago -- was he ever involved with law enforcement in any way, including the entire time he lived in the U.S.

Approximately two weeks ago (on December 20), Mohamed went to the airport in Kuwait to have his visa renewed, as he had done every three months without incident for the last year.  This time, however, he was told by the visa officer that his name had been marked in the computer, and after waiting five hours, he was taken into a room and interrogated by officials who refused to identify themselves.  They then handcuffed and blindfolded him and drove him to some other locale.  That was the start of a two-week-long, still ongoing nightmare during which he was imprisoned for a week in an unknown location by unknown captors, relentlessly interrogated, and severely beaten and threatened with even worse forms of torture.

Mohamed's story was first reported this morning by Mark Mazzetti in The New York Times, who spoke with Mohamed by telephone, where he is currently being held in a deportation center in Kuwait.  I also spoke with Mohamed this morning, and my 50-minute conversation with him was recorded and can be heard on the recorder below.  Mazzetti did a good job of describing Mohamed's version of events.  He writes that during his 90-minute conversation, "Mr. Mohamed was agitated as he recounted his captivity, tripping over his words and breaking into tears."

That was very much my experience as well.  It may be difficult at times to understand all of what Mohamed recounts because he is emotionally distraught in the extreme, but it's nonetheless very worth listening to what he has to say, at the very least to portions of it.  Mohamed says he was repeatedly beaten with a stick on the bottom of his feet and his palms, hit in the face, and hung from the ceiling.  He also says his captors threatened him with both the arrest of his mother and electric shock, and told him that he should forget his family.

He still does not know why he was detained and beaten, nor does he know what is happening to him now.  Indeed, although Mazzetti writes that he was detained and beaten by Kuwait captors, Mohamed actually has no idea who was responsible, and told me that at least some of the people interrogating him spoke English.  He has been told that he will be deported back to the U.S., but is now on a no-fly list and has no idea when he will be released.  American officials told Mazzetti that "Mr. Mohamed is on a no-fly list and, for now at least, cannot return to the United States."  He's been charged with no crime and presented with no evidence of any wrongdoing.

This event is significant for multiple reasons, many of them obvious.  The questions Mohamed was repeatedly asked -- including two days ago by American embassy officials and FBI agents who visited him in the detention facility -- focused on whether he knew Anwar al-Awlaki, the American cleric in Yemen who has become an obsession of the Obama administration, as well as why he went to Yemen and Somalia.  Kuwait is little more than a subservient American protectorate, and the idea that they would do this to an American citizen without the American government's knowledge, if not its assent and participation, is implausible in the extreme.  That much of the information they sought from Mohamed is of particular interest to the U.S. Government only bolsters that likelihood.

Independent of all that, the U.S. Government has an obligation to protect its own citizens.  Mohamed described to me how both embassy officials and the FBI expressed zero interest in the torture to which he had been subjected during his detention.  The U.S. Government has said nothing about this matter, and refused to comment about Mohamed's treatment to The New York Times. 

All of this underscores the rapidly expanding powers the U.S. Government and law enforcement agents within the country are seizing without a shred of due process.  For the government to put an American citizen on the no-fly list while he's traveling outside the U.S. is tantamount to barring him from entering his own country -- a draconian punishment, involuntary exile, meted out without any due process.  In June, the ACLU filed a lawsuit on behalf of several citizens and legal residents who -- like Gulet Mohammed -- have been literally stranded abroad and barred from returning with no hearing, simply by being placed secretly on the no-fly list.  Add to that the growing seizures of the laptops and other electronic equipment of American citizens re-entering the country without any warrants -- or even yesterday's ruling from the California Supreme Court that police officers can search and seize someone's cell phone without a warrant when arresting them -- and (even leaving aside the administration's ongoing due-process-free prison camps and assassination programs) these are pure police state tactics.

The Bush-era torture scandal was as much about its use of torture-administering allies as it was the torture regime which the U.S. itself created.  In the face of these credible allegations -- just listen to this American teenager talk and assess how credible he is -- the Obama administration, at the very least, has the obligation to inform the public about whether this is true, what its role was, if any, and what it's doing to investigate and protest this abuse of its own citizen.

My discussion with Mohamed can be heard by clicking PLAY on the recorder below.  I'm posting it in its entirety without edits, except for the last minute or so where we discussed how we came to speak, information I'm withholding at his request:

UPDATE:  Mohamed's family has now secured a lawyer for him, Gadeir Abbas of the Council on American-Islamic Relations, who has written aletter to the DOJ raising all the right questions and demanding all the right assistance.  Nobody should have to ask the government to provide this form of assistance to an American citizen under these circumstances.

Algeria, Tunisia unrest exposes frustrations

PARIS, Jan 07, 2011 (AFP) - Violent protests that have erupted in Algeria and Tunisia expose frustrations over the economy and a moribund political elite that have in particular angered young graduates, analysts say.

The spreading of the unrest to Algeria after weeks of protests in Tunisia could also be due to widespread use of the Internet in the region, an analyst told AFP, as two Tunisian bloggers were arrested Thursday amid fresh protests.

The two countries -- as well as their partner in the Maghreb region, Morocco -- share the common trait of having economies unable to offer a place for their young graduates in the job market, economist Driss Benali told AFP.

"In these three countries, there have been efforts in the area of education but they did not think of ways to integrate young graduates into the community, an integration that happens through employment," said the professor from Rabat's Mohammed V University.

The protests have been led by youths, with unemployed graduates central to demonstrations in Tunisia linked to jobs and living costs and supported by high school students, unionists and lawyers.

The unrest, rare in tightly controlled Tunisia, has left four people dead: two during demonstrations and two suicides.

Use gold dinar for trade, urges Dr Muhattir bin Muhammad

LANGKAWI, Wednesday 15 December 2010 (Bernama) -- Global trade should have reverted to the use of gold dinar following the decline in the value of the US dollar, said former prime minister, Tun Dr Mahathir Mohamad.

He said since the price of gold was difficult to fall, it was suitable for use worldwide compared with the US dollar now.

"At one time, US$35 was equal to one ounce of gold. But today, it is worth US$1,400, meaning the US dollar has already depreciated.

"That's the problem with fiat currency ... it devalues quickly and by very much. Gold never devalues like that.

"So, when you buy and sell using gold dinar, you get the real value," he told reporters after delivering his keynote address at the 2nd Langkawi Islamic Finance and Economics Conference, which ended here today.

On the gold dinar in Kelantan, he said, it was not suitable to be used as legal tender but for import and export.

Dr Mahathir said Islamic countries should use Islamic financial system to help poor Islamic nations.

"Although there are rich and poor Islamic countries, there must be a balance. We use Islamic finance to invest in the poor Islamic countries and help make them rich," he said.

He said it was important Islamic system grew by itself and the countries use it to benefit the Islamic countries.

"The Islamic financial system will grow when we are successful. Nowadays, we see that non-Muslims are using Islamic banking," he said.

Speculators in Iraqi Dinar Face Importation Risk with Paper Currency

*** NOTE:- As more evidence that American Militarism is a means of old-fashioned plunder and rape and that good old soldiers serving in the military are more like modern mercenaries - here is a short article on the Iraqi Dinar - of course the business press is not ashamed to admit that  thousands of soldiers and contractors while killing a few million souls, were also speculating on the nation's currency. I have personally talked to many vets that are waiting for stability in the Iraqi state as they investments in stocks and the currency. What a wonderful way to motivate more rape, more slaughter, and more ruthless rolling over a foreign nation - All in the Name of Democracy!

"The formation of a government in Iraqi last week has re-energized speculators in the Iraqi Dinar" says David Pratt of U.S. Dinar Bank who cautions people that while these recent events are encouraging, people should heed the statements made by the Iraqi Ministry of Finance ?? Iraqi Customs does not permit the entry of IQD currency and will confiscate funds, and that FedEx is not permitted to handle and deliver IQD currency in or out of Iraq?.

San Diego, CA (PRWEB) December 29, 2010

"The formation of a government in Iraqi last week has re-enrgized speculators in the Iraqi Dinar" says David Pratt of U.S. Dinar Bank who cautions people that while these recent events are encouraging, people should heed the statements made by the Iraqi Ministry of Finance ?? Iraqi Customs does not permit the entry of IQD currency and will confiscate funds, and that FedEx is not permitted to handle and deliver IQD currency in or out of Iraq?.

While thousands of U.S. Servicemen, and contractors in Iraqi purchased paper Dinar in anticipation of what appears to be an impending revaluation, they may have overlooked the fact that Iraq currency is a national currency only to be used and handled within the Republic of Iraq and not to be used, circulated, or handled internationally in any way.

According to David Pratt, of US Dinar Bank,http://www.usdinarbank.com, "the statements above illustrate a major risk to investors owning the paper currency of Iraq and it may affect their capability to redeem it at any given time in the future?. He further states that Americans are free to have a bank account and purchase Dinar without taking those Dinar out of Iraq and be compliant with the regulations of the Iraqi government.

News Analysis-Sudan Referendum

Playing God in the Middle East

(source) by Michael Brenner

We are now in the 10th year of the first decade of the 'war on terror.' So the inevitable anniversary assessments are beginning to appear. Iraq reappraisals specifically are back in vogue. They favor the drawing of balance sheets. Most will be skewed in an alchemic attempt to put the face of success on an unmitigated disaster. Even a more tempered approach at calculating cost/benefits, though, leaves something missing -- something of paramount importance. It is the effects on Iraqis themselves. Not Iraqis in the abstract, not as figures in a statistical tabulation of sects. Rather, as flesh and blood and feeling persons. Frankly, most of the discourse about Iraq from day one has had a disengaged quality to it. That is the norm for dominant powers on the world stage, and for the seminar strategist. That was not always the norm by which Americans referenced war and violence abroad in the 20th century when we truly believed in our proclaimed ideals.

To illuminate the point, here are some too readily slighted facts. 100,000 - 150,000 Iraqis are dead as the consequence of our invasion and occupation. That is the conservative estimate. Untold thousands are maimed and orphaned. 2 million are uprooted refugees in neighboring lands. Another 2 million are displaced persons internally. The availability of potable water and electricity is somewhat less than it was in February 2003. The comparable numbers for the United States would be 1.1 - 1.6 million dead; an equal number infirmed; 22 million refugees eking out a precarious existence in Mexico and Canada; 22 million displaced persons within the country. We did not do all the killing and maiming; we did most of the destruction of infrastructure. To all these tragedies we are accessories before and during the fact.

Digits make less of an impact on us than observed reality. That is always the case. And very few have been in a position to see the human effects of our actions first hand -- or even secondhand given censorship on filming casualties. So let me suggest a couple of ways to approximate that experience.

Step one. Go to your nearest cemetery; read and count the tombstones up to ten. Do that ten times, then multiply by a thousand. Try visualizing only half that number since it is in the nature of all of us to diminish drastically the affect and identity with those who are not part of our community.

Step two: go to RFK stadium, imagine it full. Do that 3 times and then imagine them all -- men, women and children -- in their graves. Repeat the exercise -- this time imagine them hobbling on one leg, lying crippled or blind on a cot in a cinderblock house. Imagine them as Americans -- men, women and children -- who placed USA stickers on their cars, chanted USA! USA! watching the Olympics, eating hot dogs and drinking Coke. Imagine them now six feet under. Imagine them all as the victims of an invasion and occupation by Iraqi Muslims who were deceived by their lying leaders who hid their own dark purposes.

An occupation that featured the likes of L. Ahmed Chelabi IV and run amok Bashi Bazouks. Imagine that these altruistic Iranians keep a Vice-Regal Embassy on the banks of the Potomac, giant airbases scattered around the country, and 550,000 troops (proportional) -- all out of concern for our health and safety. Parting is such sweet sorrow. Imagine your counterparts in Baghdad now drawing up balance sheets.

Step three: go back to the study and reconstruct your own Iraq balance sheet.

Does this imply that pacifism is the only ethically acceptable conduct? No -- but it does give us a better fix on the true meaning of our shameful adventure in Iraq. Moreover, keep in mind that the Iraqis never gave us permission to do those things to them. We willfully imposed ourselves on them, did so based on the accusation of a fabricated threat that never existed.

Who assigns value in the equation to the dead, the maimed, the orphaned, the distressed, the uprooted? Who assigns value to being free of Saddam's police? Who distributes the values among Shia, Sunnis, Kurds, Christians and Turcomen? Who decides on the relevant time frame? Who determines what constitutes sufficient evidence to support any of these judgments?

Who has the right, the authority, the legitimacy to do this? To do so before the event? To do so after the event in a post hoc justification of the acts that produced these effects?

Who is prepared to reach a definitive judgment? Is it God? Or is it those who instigated and supported those actions in the self-righteous conceit that they were acting as His surrogate? Personally, I place myself in neither category.

"Let humanity be the ultimate measure of all that you do" is a Confucian admonition meant to guide the behavior of officials. America today pays it scant regard.

Opinion: Acknowledging political Islam

source The US has historically supported suppressive secular regimes in the Middle East, a policy with obvious shortcomings.

Robert Grenier

"Regimes that fight, survive."

The words were those of a senior member of the Washington Institute for Near East Policy (WINEP), the "house" think-tank of AIPAC, the pro-Israel US lobbying organisation. Spoken at a scholarly conference in 1992, they were meant as a reproach to people like me, who argued that an ageing generation of autocratic leaders in the Middle East risked facilitating the rise of a wave of violent, anti-democratic Islamists unless they were willing to accommodate the aspirations of the seemingly more democratically-inclined Islamists in their midst.

A movement to which we referred in those days as "political Islam" was gaining momentum throughout the region, and there was much disagreement among Western scholars and government practitioners as to how - or indeed whether - to accommodate it. The language of political opposition in the region, then as now, was overwhelmingly Islamic; the question was whether there were any useful distinctions to be made among the various Islamist currents, and whether any would permanently accept a democratic model - or instead adhere, as many feared, to a doctrine of "one man, one vote, one time."

Choosing suppression over justice

WINEP, then as now, was generally representative of right-leaning political opinion in Israel, and this case was no exception. One of the more influential voices from that quarter belonged to Binyamin Netanyahu, who argued at the time that there was a clear alignment of interests between Israel and the secular regimes of the surrounding Arab states.

The Islamist trends beginning to menace the latter were echoed in newly-ascendant Islamic-inspired Palestinian organisations such as Hamas and Palestinian Islamic Jihad, which posed the greatest threat to Israel. The secular Arab regimes, according to this line of thinking, should therefore find it in their interest to make peace with Israel and isolate the Islamists, both in Palestine and elsewhere, rather than allowing Islamic oppositionists to exploit a growing identification between Islam and Arab nationalism, and to use popular anti-Israeli sentiment to engulf both Israel and the Arab regimes alike.

Therefore, my WINEP friend argued - in suitably coded language - the Arab regimes should employ against the Islamists the repression so successfully employed by Israel in thwarting the Palestinians' popular resistance to occupation during the first Intifada: "Regimes that fight, survive."

The issues of the day were most starkly represented in Algeria, where a moderate Islamist opposition led by the Islamic Salvation Front (FIS) had made rapid democratic inroads, only to be brutally repressed in early 1992 by the Algerian army, just when it was on the verge of winning an overwhelming majority in the Algerian National Assembly. The muted response of the US and other Western powers to this military coup gave testament to their fear of the Islamist wave, and the primacy in their thinking of practical over ideological considerations.

The Ascent of Money - Niall Ferguson - Chimerica

Since the 1990s, once risky markets in Asia, Latin America and eastern Europe have become better investments than the UK or US stock market. The explanation is the rise of ‘Chimerica’, the economic marriage of China and the United States. But does it make sense for poor Chinese savers to lend to rich American spenders?

Networks of US Empire and Realignments of World Powers

by James Petras
Al-Jazeera, CCUN, January 3, 2011

Imperial states build networks which link economic, military and political activities into a coherent mutually reinforcing system. This task is largely performed by the various institutions of the imperial state. Thus imperial action is not always directly economic, as military action in one country or region is necessary to open or protect economic zones. Nor are all military actions decided by economic interests if the leading sector of the imperial state is decidedly militarist.

Moreover, the sequence of imperial action may vary according to the particular conditions necessary for empire building. Thus state aid may buy collaborators; military intervention may secure client regimes followed later by private investors. In other circumstances, the entry of private corporations may precede state intervention.

In either private or state economic and/or military led penetration, in furtherance of empire-building, the strategic purpose is to exploit the special economic and geopolitical features of the targeted country to create empire-centered networks. In the post Euro-centric colonial world, the privileged position of the US in its empire-centered policies, treaties, trade and military agreements is disguised and justified by an ideological gloss, which varies with time and circumstances. In the war to break-up Yugoslavia and establish client regimes, as in Kosovo, imperial ideology utilized humanitarian rhetoric. In the genocidal wars in the Middle East, anti-terrorism and anti-Islamic ideology is central. Against China, democratic and human rights rhetoric predominates. In Latin America, receding imperial power relies on democratic and anti-authoritarian rhetoric aimed at the democratically elected Chavez government.

The effectiveness of imperial ideology is in direct relation to the capacity of empire to promote viable and dynamic development alternatives to their targeted countries. By that criteria imperial ideology has had little persuasive power among target populations. The Islamic phobic and anti-terrorist rhetoric has made no impact on the people of the Middle East and alienated the Islamic world. Latin America’s lucrative trade relations with the Chavist government and the decline of the US economy has undermined Washington’s ideological campaign to isolate Venezuela.The US human rights campaign against China has been totally ignored throughout the EU, Africa, Latin America, Oceana and by the 500 biggest US MNC (and even by the US Treasury busy selling treasury bonds to China to finance the ballooning US budget deficit).