The article has been amended - Atol


Stimulating an economy out of a recession cannot work. This idea violates the law of physics that every action must have an equal and opposite reaction. Since the economy involves energy and the transfer of energy, this law applies just as it does with mechanical systems. It is not possible to have a wave-crest in the ocean without a wave-trough immediately thereafter from which water is drawn to create the crest. So it is with the economy. The wealth needed to create a "bubble" in the economy comes from borrowing future wealth, so there must, always, be a collapse in wealth following a bubble. It is not possible to prevent a collapse, without also preventing the bubble. Since, capitalists never wish to prevent bubbles, they are tied into an intrinsically unstable future of repeated bubbles and collapses, which grow in amplitude due to greed, until the currency collapses. The printing of fiat currency by the Federal Reserve, and borrowing from foreign sources to pay the interest to them on our own money to stimulate the economy and to stop a run on banks, transfers risk to the currency and will deepen the recession. In other words, we must prepare ourselves for a "run on our currency". A better plan would be to nationalize the Federal Reserve so that we no longer have to pay 6% interest on our own money that they create out of thin air and lend to us. That would generate an immediate 6% stimulus.
Daniel N Russell
Alaska (Feb 10,'09)


I am an admirer of Syed Saleem Shahzad's analysis and thoughts on Afghanistan, but in his recent article: Iran and the US: United over Afghanistan? [Feb 6] I have to disagree with him over what is termed non-military NATO [North Atlantic Treaty Organization] supplies. Supplying food and drink to the 40 occupying armies in Afghanistan is a military action. Opposing armies try to cut off one another's food supply. The British army in occupying India caused famine in many areas by destroying crops, grain and rice stores so as to starve resistance. Britain, when occupying Ireland during the 19th century did nothing to relieve the famine for the same reason, instead it took food out of the country under armed guard. It would be a foolish Iran that allowed vital food, clothing and toilet supplies to reach the occupation forces under the label of non-military supplies.
Wilson John Haire
London (Feb 9,'09)


[Re Pyongyang's heat-seeking threats, Feb 6] Are there war clouds gathering over the Korean peninsula? It certainly seems so. Today's Financial Times of London went as far as to advise the new Obama administration to seek a diplomatic direction in dealing with Pyongyang; for the alternative is the unthinkable - war. Donald Kirk is right in saying that positions have hardened, and tempers are short. South Korea's year-long needling of Kim Jong-il and company has resulted in reviving a cold war of hot words and even threats of resuming long-range missile testing. The new US Secretary of State Hillary Clinton has harsh words of warning for North Korea. And US Central Intelligence Agency Chief Leon Panetta did not have conciliatory words on North Korea's nuclear program when he testified before Congress. Kirk says that suddenly the clock has been turned back to 2006. What we have is not so much Alice in Wonderland territory but a tired script of some Hollywood B film with all the old hackneyed political theater and the same old stale cliches.
Mel Cooper
Singapore (Feb 9,'09)


US President Barack Obama deserves time and patience, as the task before him would make Sisyphus tremble. But his commitment to redoubling Bush's error in Afghanistan must make one pause; what part of "Graveyard of Empires" does Obama not comprehend? Nothing would please al-Qaeda more than to have 100,000 US troops tied down for 20 years chasing Osama Bin Laden's ghosts from cave to cave, draining blood and treasure America can ill afford while Obama defends his all-American and all-Christian credentials by being more terrophobic than his ... predecessor. Surely he must realize that Bin Laden is convinced he destroyed the USSR by bleeding them to death, and that the al-Qaeda czar sees repetition of that goal within his grasp now, with America floundering and prostrate from its capitalistic hangover. While the other European "allies" are scrambling to find ways out of the morass, Obama wants to be John Wayne leading the Marines onto Iwo Jima's volcanic beaches. And what timing too. Pakistan lets the Sam Walton of nuclear technology, Abdul Qadeer Khan, walk amongst us again (not that his "house arrest" was anything other than a sham for the US neo-conservatives.) Maybe Obama wants to have a side excursion to Kabul's east? If our new president doesn't get his own house in order, and soon, neither Afghanistan nor Pakistan nor North Korea will matter; the mushroom cloud you'll see over Washington will be the explosive rage of the 10% plus domestic unemployed whose dreams have been shattered forever. Remember Tip O'Neill's adage, Obama, and you'll be on the right path.
Hardy Campbell
Houston, Texas USA (Feb 9,'09)


Re False hope of protectionism Feb 6] Chan Akya makes some interesting points but fails to mention realities. Not all American products are deficient in quality. In fact, most American products are very good but they can't compete on US store shelves due to the market manipulation tactics of countries such as China. The Chinese government subsidizes energy, gives export tax credits to exporters (more subsidizes), confiscates land for industrial parks and builds them, and allows them to operate with little regard for environmental and labor standards. US companies would be sued or arrested for the flagrant business practices that China incorporates. In effect, cheap products from China are a form of blood diamonds only in a different form. As far as lowest cost product is concerned Mr Akya fails to mention the junk that China produces.
Andre Radnoti (Feb 9,'09)


Dear ajayxx, [letter dated February 4] The point of the article The contest for global domination, is not to debate the purity with which each side, East and West, applies their respective political and economic ideologies in practice, but rather to expose both sides for their rank hypocrisy in pretending not to be selfishly interested in dominating the globe, while they both cleverly attempt to accomplish just that. As such, you've allowed yourself to get sidetracked onto a "straw man" issue, for everyone knows that in practice neither side holds purely to their favored ideologies. The point, which I think you lost, is that even though such purity doesn't exist in practice, fundamental dissimilarity between the impure incarnations of the ideologies of East and West most certainly has existed, and that fundamental dissimilarity and incompatibility between liberal US-style capitalism and authoritarian Eastern-style statism has fueled a determined global rivalry over which side will hold sway. Part II of the article addresses the fact that both incarnations (the East's and the West's) are now rapidly becoming much less dissimilar, and what this means for the contest for world domination. As for any "propaganda" rooted within my analysis, as you insinuate in your letter, if you call my desire for the basic right of free speech, such as you and I are now exercising and enjoying, rather than being brutalized into silence under an authoritarian regime, "propaganda", then your definition of "propaganda" is unique, to say the least. I think any normal person prefers civil liberty to the state oppression of one's ideas and speech. I therefore encourage you to re-read the article without the purist approach. I think you may find it helpful.
W Joseph Stroupe (Feb 6,'09)


Hossein Askari's article, Wanted - a world central bank [Feb 5], advocates the establishment of one world bank to lord over all governments by issuing one world currency. I'm sorry, Mr Askari, but we've had a similar institution in the USA since 1913, called the Federal Reserve. It is not a government controlled or run agency, but determines monetary policy in secret then issues statements that are so opaque that one needs a lawyer to figure out just what the Fed said. Since 1913, the USA has been in one Great Depression - with another on the horizon - more than a few recessions, and been subject to the greatest fleecing of a people's money in the history of the world, such as mortgage-backed security (MBS) mess, all approved by the Fed. The Fed is planning on inflating it's way out of this huge mess, which won't work, but will make the USD equivalent to Zimbabwe's currency. Worthless. And you want to export this model of lunacy to the entire world? Sorry, but I'm not buying your hype about the need for a one world bank. That would only be one more way the wealthy elite would be able to control and at the same time, ransack what's left of the world's money.
Greg Bacon
Ava, Missouri USA (Feb 6,'09)


[Re Moscow, Tehran force the US's hand, Feb 5] The new Obama administration is carrying the dead-weight of US former president George W Bush's foreign policy. In this sense, Mr Bush's shortsighted approach to Iran and Russia as heir to a vast swath of Soviet Central Asian real estate has a disquieting effect on Washington's pursuit of its political, economic, and military objectives in Afghanistan. At the same time, Mr Bush's policy has given Tehran and Moscow the opportunity to throw a spanner in America's broader strategy to stay the resurgent Taliban's hand. M K Bhadrakumar, in his matchless and figurative fashion, puts his analysis in the way of a chess game. In light of the Taliban's dynamiting of a bridge through the Kyber Pass - which supplies North Atlantic Treaty Organization (NATO) troops in Afghanistan - Moscow has seized the moment to create havoc in its former Central Asian domains. It has put pressure on Kyrgzstan's president Kurmanbek Bakiyer to cancel the US lease of an airbase in his country because it has outlasted its original goals, and this is an immediate challenge to Obama to keep the airlanes and roadways open to supply Afghanistan. More money may dampen Bishkek's fervor; it is not the only former Central Asian Soviet republic willing to accept America's largesse. M K Bhadrakumar does not spell it out, but the US can push back in spite of Moscow's pressure, all the ex-Soviet Asian republics do not want to return to the ante bellum Cold War reliance on Moscow. As for Iran, the new US Secretary of State Hillary Clinton is hardly a week in office, so an opening toward Iran is not immediately forthcoming; still, with the increase in journalists and former American officials crisscrossing Iran, it is reasonable to suspect that broader channels of communication between Washington and Tehran will be welcome. The sooner the Obama administration can shed the Bush doctrine of extending NATO to Georgia and the Ukraine, setting up missile sites within easy range of Moscow, and distancing itself from the hardliners in the Pentagon and Foggy Bottom, the easier Russo-American relations will become. Mr Obama and Mrs Clinton have to move more swiftly in renewing contact with Teheran, and put away past racune. Opening the road to Tehran will ease the nuclear standoff, the more especially since reports are coming out of Iran, that it has little spent fuel. Opportunities are there. They must be seized. The time is over to play games. Nakamura Junzo
Guam (Feb 6,'09)


There are a few off-notes in the music played by Kent Ewing in his "New steps in the Sino-American dance" [Feb 5]. US President Obama has been forthright in admitting to the economic downturn as "of our own making". He mentioned Chinese yuan manipulation to court labor during his campaign and Treasury Secretary Geithner echoed it to court the US Congress. Such is common and "excusable" in "democratic" politics. State Secretary Hillary Clinton urged full engagement with China to signal more than just trade issues. On "human rights", Ewing should cry for Iraq and Gaza instead. On Tibet, it will remain a Chinese province. All outsiders can do is to instigate and finance occasional protests or riots, or provide token support for the Dalai Lama as the French president has done. On Taiwan, unification is the ultimate, unrelenting goal of China and ethnic Chinese worldwide. So apart from the economy, other issues such as North Korea, Iran, etc will be the main topics of Clinton's upcoming courtesy call at Beijing.
Seung Li (Feb 6,'09)


Kent Ewing's article "New steps in the Sino-American dance New steps in the Sino-American dance [Feb 6] has elements in it that are now outdated, and the content of the article tilts too much towards China. The $800 billion bailout bill now going through Congress, which has a good chance of winning, carries the loaded title of "made in America". The world has already reacted negatively to this label on the package, which if enacted would kickstart many basic industries such as the US steel and metals, insurance, cement, plastics and rubber industries all the way to our retail industry and add thousands of more jobs than promised. This bailout comes directly out of the US taxpayer's pocket and we want our money to give jobs to our citizens and business to our industries. Such a move will drastically alter Sino/US trade.The "made in America" ethos unique or new to the US, especially when India banned Chinese toys, mainly to give Indian toy makers a chance. Add to this the series of dangerous and shoddy products China was exporting to the world, before the economic crisis, does not hold well with the US consumer. In Mr Ewing's article it states "While anti-China rhetoric may play well in the US Congress and an American populace seeking a bogeyman ... Chinese analysts regard this initial fumbling as a sign of Obama's naivete and inexperience in foreign affairs." The article adds that Beijing has held up Premier Wen Jiabao's "tour of confidence" in Europe as an shining example of diplomacy. What I would like to know is when should the US' "naive" president take lessons from China on diplomacy? Before or after the shoe was thrown at Wen in Cambridge? as for giving advice on trade lets start with a level playing field once China floats its yuan.
Chrysantha Wijeyasingha
Clinon, USA (Feb 6,'09)


[Re China warns against protectionism, Feb 4, 2009] The impression I get from Asia Times Online is that China is Little Red Riding Hood being victimized by the big bad wolves in the West. The correct analogy is that China is a Little Red Perpetrator getting the bashing it deserves.
Andre Radnoti (Feb 6,'09)
That's not what our letter writers from China say - ATol


[Re China's tide of migrant labor turns
Feb 4] China officially puts the migrant unemployed at about 20 million, or 15.3% of 130 million migrant workers. The number will grow as China's economy slips into a downward spiral mimicking the global recession. Without work, the migrant workers will return to rural villages which China's rapid industrial growth and export economy have left far behind. Prime Minister Wen Jiabao, in his interview with the Financial Times of London, has tried to put a happier face on China's economic misfortunes. He spoke at length on the government's stimulus package which, he hopes, will keep the economy above the sustainable growth goal of 7%. The $600 billion stimulus may jump-start China's economy, but the $30 billion allocation to the Agricultural Bank of China appears niggardly for a sector which has greatly contributed to the army of migrant workers whose ranks are swelling the unemployed. So, the question is how are you going to keep them on the farm after they've seen Zhenzhen or Shanghai? Already the Chinese government has taken a defensive tone fearing social unrest and backlash. Will they return to chairman Mao Zedong's policy to bring industry and the modern world to the countryside rather than have massive internal emigration to the traditional economic zones of growth on the seaboard?
Mel Cooper
Singapore (Feb 5,'09)


[Re The contest for global domination, Feb 4] In today's, just like all past empires, the fall comes when they became too obsessed with global domination. To achieve their ends, these empires over-extended their militaries, squandered their treasuries, angered their neighbors and wearied their citizens. Their failures came from within. The outside forces only give them a nudge.
Wendy Cai
USA (Feb 5,'09)


[Re The contest for global domination, Feb 4] It's useful to keep in mind that history, while offering a reasonable guide to the future, is also being made as humanity progresses. A couple of notable differences exist between the Cold War-era and the present-day East-West contest that engender hope for a better intermediate future. For one thing, the Cold War pitted die-hard communism against pure-bred capitalism, with no shades of grey in between and with almost no intermingling of economic activities between the two camps. The current situation is considerably different; both sides are gradually moving toward the middle, nolens volens, with significant overlap in economic interests. From the geopolitical standpoint, a compromise between East and the West also seems probable, not because of a sudden urge by major world leaders to attain noble aspirations, but due instead to the reality of greater parity among major powers. (Lest we forget, the US-led West was able to run amuck in the post-Soviet Union largely because of the absence of any meaningful opposition.) As the East continues to rise and the West continues its decline, the current Act II in the East-West struggle will likely go on for another decade or so, concluding with the realization of a more multipolar world order. Act III, which may last for decades, likely will be characterized by relatively non-violent interplays among the neoteric superpowers. When that balance of power is inevitably upset eventually, a new period of violence and tumult, much like the one experienced during the past century, will unfortunately be replayed. That, however, is a challenge for posterity. In the here and now, the world is witnessing a level of globalization never before seen in human history. As such, novel paradigms of thinking should prove invaluable as we peer anxiously into the future.
John Chen
USA (Feb 5,'09)


[Re The contest for global domination, Feb 4] W Joseph Stroupe's analysis is marred by his inability to recognize the propaganda from his own side of the argument. While the US may promote liberal capitalism and liberal democracy, he seems not to recognize that it in fact practices neither. The best description of the US/global economic system would be corporatism - as [Italian dictator Benito] Mussolini defined it - or military Keynesianism as others have chosen to define it, while noting that it is a perversion of Keynesian ideas. Equally, US democracy has been well defined by [former US presidential candidate] Ralph Nader as a corporate-indentured two-party dictatorship, that's a pretty fair description of the reality. Thus the rest of Stroupe's analysis is fatally flawed by his initial failure - or is this yet another propaganda piece?
ajayxx (Feb 5,'09)


[Re Taliban ideology echoes across the valley, Feb 2] Dear Syed Saleem Shahzad, I cannot tell you how much I enjoyed reading your four-part series about and with the Taliban. Truly a very remarkable piece of journalism. Thank you very much for such quality work. I will make one comment. The Taliban will not fade, despite the "war on terror". It is an ideology and a way of living. If the Taliban movement is to be quenched, it has to start with grassroots education, jobs and security for poor people. None is of this is forthcoming in the near future. Sadly, the "war on terror" will linger for decades to come. Again, thank you very much for such a wonderful series. May The Merciful Allah be with you until the end of time.
Stephani-no (Feb 4,'09)


[Re Taliban ideology echoes across the valley, Feb 2] I would like to compliment Syed Saleem Shahzad for his four articles covering the state of things in North-West Frontier Province and the Swat region of Pakistan. Full of rare insights and good reporting, they were absolutely first-rate.
Ravindra Joshi
India (Feb 4,'09)


The article Beijing strikes out against Tibet [Feb 1], by Antoaneta Bezlova, seems very biased. It attacks China's efforts to eradicate Tibetan culture, but dismisses outright Chinese allegations that gross human-rights abuses that occurred under the ancient regime of the Dalai Lama. These allegations have even been substantiated by members of the Tibetan exile community (see Tashi Tsering's entry in the book China Remembers, Zhang Lijia & Calum MacLeod eds). It seems that the article's author makes the all-too-common mistake by Western Tibet-supporters of criticizing China's human-rights abuses while dismissing Tibetan human-rights abuses. I consider Asia Times Online one of the more objective news publications out there, so I would like to see more objectivity on the topic of Tibet.
Wesley
Charlottesville, Virginia (Feb 4,'09)


Dear Spengler, I have some good news for you. In case you missed it, our papers recently told us about a lady who gave birth to octuplets, adding them to the six children she has at home. Moreover, she is trying hard to become a celebrity, hoping to cash in on her 15 minutes of fame (I heard that $2 million is her opening bid). Think like an entrepreneur. Make money. Have babies. Your message is finally getting through to us. Congratulations!
A Boersch
Colorado, USA (Feb 4,'09)


[Re Turkish snub changes Middle East game, Feb 3] Not too much can be made of the dust-up between Turkey's Prime Minister Recep Tayyip Erdogan and Israel's President Shimon Peres at Davos. Mr Erdogan's short but targeted words on Israel's aggression against innocent Gazans lanced an abscess of inflamed issues affecting the 60-year political and military relationship between the two countries. Finger-pointing and raising his voice to the Turkish prime minister did more to underscore Erdogan's judgment that Peres' outburst was proof positive of guilt for the killing and maiming of unarmed Palestinian children and women during Israel's 21-day war in the Gaza Strip. It is rare to see Peres lose his "cool" in public, but Erdogan's 56 words did knock the Israeli president off his high horse of moral indifference and dispassionate self-control. His lack of composure contributed to the power and the morally justifiable words of the Turkish prime minister. The moderator of the session where this kerfuffle took place, the Washington Post journalist and writer and television personality David Ignatius, added more fuel to the fire by allowing Peres to speak beyond his allotted time and then denying Erdogan a brief rebuttal, and consequently he walked out of the session in a huff. Ignatius' gaucheness made the fiery exchange of words headline news around the world, and brought Erdogan much praise for his outrage at Israel's lack of humanity. Shimon Peres immediately recognized his political blunder; he immediately telephoned Erdogan to apologize. Graciously, the Turkish prime minister accepted it, adding that he was incensed more with Ignatius' behavior; yet, he could not refrain from telling Peres that "nobody can even speak to [an ally] so loudly and in front of the international community". As M K Bhadrakumar observes, Peres' snit cast a darker cloud over already fragile Turkish-Israeli ties. Nonetheless, these ties will not suffer long-term from the contretemps a Davos. Mr Bhadrakumar speaks of the rise of Turkey as a neo-Ottoman power. Is it wise to characterize Turkey thus? It may play well today, but should relations sour with the Arab world, the long memory of hurts and wrongs from centuries of Ottoman rule in the arc of Arabs living in Iraq to Algeria will surge with a vengeance. A little less poetry is called for. Turkey straddles two worlds, and will play that role as it deems is in its interest. Israel, on the other hand, has much fence-mending to do with Turkey. Its recent aggression in Gaza has shown its moral weakness and its growing political isolation.
Nakamura Junzo
Guam (Feb 4,'09)


China's belatedly increased contribution to United Nations (UN) peacekeeping activities is welcomed by most but feared by some, as revealed in China spreads its peacekeepers [Feb 3] by Bates Gill and Chin-Hao Huang. All the verbiage comes to light when the authors suggest close scrutiny to "deflect Chinese activities contrary to US interests", meaning that when UN and US interests collide, China is to blame.
Seung Li (Feb 4,'09)


[Re Beijing wants it both ways in space , Feb 3] Just why should nations play by the rules set by the US, Peter J Brown? The world has been forced to do that and is now broke.
Tang (Feb 4,'09)


While Henry C K Liu and M K Bhadrakumar remain the reason for coming back faithfully to Asia Times Online, I am utterly shocked at the growing stridency of some of the authors on all things Russian. My hope was that ATol, with its fine-tuned understanding of the Asian continent, would not succumb to parroting Western politics without offering a larger variety of views. The article by Robert M Cutler, Rouble teeters on slippery slope [Jan 28], is only marginally an economic analysis. It is primarily a political pamphlet, well recognizable in form and content. The author raises to the level of a thriller his expectations that Russia would "suppress brutally popular demonstration against economic hardships", and in the best style of fabled Kremlinologists wonders if this would be the beginning of the end of "Putinism"! And today, the story continues, this time by John Helmer, Russia in outer darkness . [Feb 2] What abject nonsense! And this from an economist. One does not have to be a specialist to note that the Russian political organization of provinces, and the manner in which they select/elect/confirm governors or mayors, has nothing to do with the world financial crisis, or its repercussions on Russia. Right there, one is tempted to stop reading, and consign this type of political economy to where it belongs - typical Russophobe rant. Resisting the urge to do just so, and find a better use for my time, I endured and read it to the end. The writer, in his inimitable zeal, claims that in Russia there is no banking and state audit system. Really! And that there is no accountability to parliament or parliament accountability to voters! And because Russia's provincial governors are appointed and not elected, there is no political gravity? Some logic! Does the author really believe that the US and UK population actually knows who makes decisions? In the US, the huge nearly trillion-dollar bailout of the financial system is a total mystery. We do not have any idea what really happened to the "disappearing" billions from the investment banks in the first place, nor will we ever know what the bailout money has/will be used for. The application for the money consisted of name, address, amount required and the signature of the authorized representative. We know that it is the politics behind the scenes that will determine what happens to the money. And the money in question does not come from the reserves, but is an additional debt on top of the untold trillions we already owe ... It is not a new phenomenon, and it transcends US administrations. US and European policy is to prevent Europe from getting into mutually beneficial deals with Russia. That has limited many a lucrative prospect in energy, pipeline construction, transportation and space collaboration. In the past, Europe was kept in line by the constant string of "with-us-or-against-us" stratagems deployed by US diplomacy. From the Balkans crisis in the 1990s that strengthened the North Atlantic Treaty Organization and the US, to the missile shield, Kosovo, war crimes tribunals, etc. Europe has been forced to toe the line and keep the peace with the trans-Atlantic patron. As one German diplomat put it, " ... for us [Europe], it is the US or chaos, for others it is US and chaos." The virtual bombardment of bad news from and about Russia has reached fever pitch. It does not really matter what is going on in Russia. What matters is that the Western and Asian audiences are bombarded by distorted news. But who is being fooled here? Russia has large reserves of energy - the commodity everybody in the world still needs. It is the only country that has published the criteria for financial assistance to corporations that cannot refinance their debts in the West. This is not a bailout of toxic assets, as is the case (presumably) in the US and the European Union. Russia also published all the corporations that met the criteria, subject to negotiations. The state is using its own reserves, not borrowed money, to support this refinancing. The taxpayer, represented by the state, becomes an investor. For that reason, many corporations may end up being disappointed. If they do not like the deal courtesy of public funds, they can always go to the world's financial markets and try to get a better deal. They are not forced by the bad state to do anything at all. Russia has made a wise choice to let the rouble slide in a controlled manner. The Russian rouble and stock market are currently grossly undervalued. However, there are benefits to the Russian economy. By letting the rouble slide, Russia is making imports more expensive, and exports cheaper. The trauma of the stock market is caused by the speculative capital getting repatriated to dollars. And the continued resulting weakness should force companies to find better ways to do business. Go-go times are over, and not just in Russia. However, Russia's macro-economic outlook is strong. Russia is spending reserves on two fronts: refinancing the foreign debts of Russian companies and boosting the budget. The refinancing will bring Russia income, as the newly refinanced sector will be paying interest to Russian banks, not to the West. And the taxpayer will not only get the share of the interest income, but also the share in the ownership of those corporations, cutting a little bit into the obscene profits of the oligarchs. Poor dears! Again, unlike in the 1990s, Russia has the money to help with the refinancing, and is in a position to choose the ventures that help the Russian economy ... As European cities get trashed and the police response is getting more brutal by the day, to talk about economic hardships in Russia is to ignore the gravity of the situation worldwide .... And if the Mogambo Guru is right, the future of gold, silver and oil looks bright. And in Russia, oil is cheap and in abundance. This is why we are bombarded with the "Putinism", and the "lack of auditing", and the "fears of instability", to ensure that Asian money stays in the money-losing bonds and does not migrate into grossly underpriced commodities. And in the meantime, the mysteriously invisible billions in Western "bailouts" based on borrowed Asian money can roam the globe snapping up vulnerable commodity assets at fire-sale prices ... Russia has plenty of room for maintaining stability, and stability will be in short supply around the globe. This is why media-based economic warfare against Russia is all noise and a giant toothless bite.
Bianca
Alexandria, USA (Feb 3,'09)


[Re Davos under fire, Feb 2] This year's World Economic Forum at Davos, Switzerland, with its various international heads of state and personalities, is like Chaucer's House of Fame, a parody of itself in the years of "irrational exuberance". Its ambiance had an acid taste of a free market capitalism gone rancid. Speakers zeroed in on the US as number one suspect for the deepening global worldwide recession which has infected every country. Little was said of the old slavish imitation of the American economic model which when times were good blackened balance sheets. Criticism from non-governmental organizations, democratic-socialist lawmakers, peasant and workers, and citizens group had an easier time being heard. However, criticism, critical or capricious, brought no concerted program of action of how to turn the growing recession around. Dreamers who call for a post-capitalist future are hardly within easy grasp of power. So, the question of how to tame the wild horses of free market capitalism remains and will stay where it is today: top of the agenda.
Nakamura Junzo
Guam (Feb 3,'09)


[Re Taliban ideology echoes across the valley, Feb 2] This has been an excellent series on Pakistan and Afghanistan by Syed Saleem Shahzad. He is there on the ground and has good contacts, and is apparently trusted by those who resist the US/European Union axis. What we get in the Western media is pure propaganda. The UK media call the Afghan population the enemy, despite the fact that it is the UK which is part of the occupation of Afghanistan. Large parts of Afghanistan are called lawless territories or bandit country, when they are very much within the laws of the resistance forces. So, keep on enlightening us, Syed Saleem Shahzad.
Wilson John Haire
London (Feb 3,'09)


[Re Taliban ideology echoes across the valley, Feb 2] It was interesting to read Syed Saleem Shahzad's interview with Haji Muslim Khan. Throughout the interview, Mr Khan made references to "Islamic law", "Islamic system", "Islamic education". I wish Syed Saleem Shahzad had asked him whose Islam is Mr Khan talking about? Is it Shi'ite Islam or Sunni Islam? Is it the Islam of the modernists, Barelvis or the Deobandis? Is it Sufi, Salafi, Wahhabi, Maliki, Shafi, Hanbali or Hanafi Islam? I would be very interested to read Mr Khan's response to that question.
Amir Ali (Feb 3,'09)


In Inflationism, the bane of capitalism[Feb 2], Doug Noland says "banking when done well is a legitimate - as well as invaluable - business". If he includes as "legitimate" the creation of credit (ie, money) - and almost all of the world's money is credit, I am afraid I must disagree. If there is shared point of view in the wide spectrum of opinion represented by the columnists of Asia Times Online, it is that the process of creating and managing the world's money supply is badly broken. So when Noland says "Fearing systemic collapse, it's been my view that there has been no real alternative other than our government taking a major role in our post-bubble financial and economic lives." The thoughtful and attentive ATol reader must ask "why"? In their article, Dust off the Chicago Plan [Sep 17, 2008], Hossein Askari and Noureddine Krichene suggest one such alternative. The Chicago Plan was the product of a group of the nation's top economists including Irving Fisher from Yale, author of 100% Money - a book written to explain the Chicago Plan to the general public. The group was formed to study the causes of the Great Depression and propose remedies to insure such an economic catastrophe would not happen again. Unfortunately, such a catastrophe is in the process of unfolding - and for strikingly similar reasons to those generally agreed to be responsible for the Great Depression. Fisher was not hostile to legitimate banking or the Federal Reserve as an institution. What he and the Chicago Plan economists did oppose for both technical and ethical reasons was the practice of basing the nation's money supply on the private-sector creation of that money as credit - "checkbook money" - using fractional-reserve banking techniques. The technical objection was that a debt-based money supply was vulnerable to erratic swings in the wrong direction as changing business conditions compelled banks to call in loans and stop making new ones to conform to the reserve requirements of sound (sic) fractional-reserve banking practices. (The current financial system implosion is the result of bank capital requirements imposed by the Bank for International Settlements, not reserve requirements which have been rendered basically non-existent by numerous legal and procedural evasions. After all, one of the principle goals of the Federal Reserve System was to reduce the reserve requirements of member banks to the absolute practical minimum.) Perhaps it is more accurate to describe Fisher's objections to the private creation of money as grounded in equity and sound public policy than ethics. The prerogative of creating a nation's money is an enormous privilege. In addition to conveying title to much of society's wealth in exchange for little more than a few keystrokes to enter the claim into the bank's ledgers, the ability to control a nation's money probably also conveys effective control of its government. In any event, if the government were to benefit directly from the money creation process, it might be possible to greatly reduce or even eliminate the need for income taxes. There are other proposals for monetary reform which appear to possess at least the logical possibility of improving upon the status quo. See for example Ellen Brown's book Web of Debt or her articles on the web and at her site http://webofdebt.com. Brown's proposal, as I understand it, would preserve the practice of fractional reserve banking but restore the benefits of creating money to the government and hence, presumably, the public at large. Brown effectively advocates the nationalization of the banking system that would be a requirement for public control over and benefit from government creation of credit, ie, for all practical purposes, the creation of 'money'. There is one genre of proposals for monetary reform, frequently found on the pages of ATol and elsewhere that merits discussion because it is likely not to work. That is a return to some form of gold standard or commodity-based money. The thinking seems to be that some kind of automatic scheme can be devised that will keep politicians honest and permit the population at large to remain in a state of ignorant bliss regarding money (or in the case of the Mogambo Guru, intoxicated bliss). This seems unlikely. Preceding the Great Depression the US was on the 'gold standard'. This in no way prohibited the same kind of rampant greed and manipulation at the core of the current economic meltdown. The principle argument of "gold-bugs" is that a return to the "gold standard" would somehow produce stability in the value of the dollar. A cursory examination of monetary history should be enough to prove this has not been the case. A stable currency is, indeed, an essential requirement for a rationally functioning free market - price based system, just as we can not arbitrarily change the length of a unit of measure such as the foot to suit our immediate requirements. (See Frederick Soddy's Wealth, Virtual Wealth and Debt for one of the best discussions of money I've found.) And in this respect, the monetarist / gold-bug criticism of Keynesian economics would appear to be justified to the extent it countenances the use of monetary as opposed to fiscal policies as a macroeconomic tool. There would appear to be no substitute for an informed public - a task which reformers such as Zarlenga and Brown have begun and one to which ATol could give a powerful boost. In any event, it is past time for critics of the present monetary and banking system to make common cause. There are any number of proposals for 'something different'. Almost all of them would be an improvement on the status quo. Change may be difficult but there is an alternative to systemic collapse of the real economy.
Steven (Feb 3,'09)


As a several-year devotee of Asia Times Online, I, along with a select number of others based on my reading letters to the editor referencing Spengler, have had our say on his/her commentaries. With the publication of his latest, Who are the 'extraordinary' Muslims? [Feb 2] and the dilemmas ushered by a new world order, is the time not right to posit to ATol the almost imperative need to supplement Spengler's fixation with a corresponding one oriented, say to the Jews?
Armand De Laurell (Feb 3,'09)


Spengler's last article Who are the 'extraordinary' Muslims? [Feb 2] contains several typos which significantly impede one's ability to enjoy it.
Thomas Andrews (Feb 3,'09)

The article was garbled in parts and has been corrected. - ATol


[Re Chinese state media goes global, Jan 29] Chrysantha Wijeyasingha's letter [Jan 30] is incorrect in its claim that China's plan to expand its media coverage will fail because it is government-controlled. The US media practically controls the world's opinions by its scale of operations. More and more of the West's media outlets are just mouthpieces for their governments and they often fail to verify the news given out by spokesmen during news briefings. CNN and BBC are subtly brainwashing the people of the world by their presence in every corner of the globe. It is important for emerging countries like China to have a huge media network to counter-balance Western cultural hegemony. China can and should report the news before other media distort it. Let's leave it to the readers and audience to decide if they want to believe them or not.
Wendy Cai
USA  (Feb 2,'09)


[Re Biden may hold unclenched Iranian hand, Jan 30] United States President Barack Obama is keeping all options open, not excluding the military recourse to action, in dealing with Iran, and rumor has it that he is preparing a letter to Tehran favoring diplomatic engagement. If this is so, the pieces of the puzzle that M K Bhadrakumar has assembled may fall into place at the 45th Munich Conference on Security Policy. Vice President Joseph Biden will attend and one wonders what may transpire if he meets, more than likely away from public eyes, a "very high ranking personality from Tehran". The American media has played up Iranian President Mahmud Ahmadinejad's grandstanding, such as his demand for an apology for the wrong Washington has done to his country for the last 60 years. Obama is intent in changing the very narrow and self-defeating policies of his predecessor; he sees the larger picture, and in his mental image of Central Asia, read Afghanistan, Iran has a real role to play. The new American president has political capital to spend on Iran; if he strikes while the iron hot, Washington and Tehran will reap dividends. Of course, the nuclear issue remains problematic, but it is a matter that can be worked out on a parallel track. Were Washington able to unfreeze relations with Tehran, the European Union and Russia and China will fall into line. A detente, not necessarily cordiale, will ease the US exit from Iraq, provide Washington with a freer hand in Afghanistan, and the spillover will possibly calm the turbulent waters in Pakistan. Thus, Munich promises much in Bhadrakumar's analysis.
Nakamura Junzo
Guam (Feb 2,'09)


[Re Swat Valley: Whose war is this?, Jan 30] Dear Syed Saleem Shahzad, I still watch the offshore media, (especially Asia Times Online), for information on events from the Caucasus through Central Asia, Iran, India, Pakistan and especially Afghanistan. In my opinion, this region is where it's all going to happen - an end to imperial intervention into the affairs of the majority. So tell those so called "militants/terrorists/insurgents" whenever you see them, that I regard them as freedom fighters and I wish them all the best.
Keith E Leal
Canada (Feb 2,'09)


The sky is falling. Locusts, frogs and fiery hail consume us. Is that the four horsemen I see on the horizon? The red-ink tide flooding our daily news flows from the economic meltdown, while climate change, approaching asteroids and a date with Mayan doom make us all want to stay in bed for a very long time. I have a plan. It would require a quantum leap in technology, but I have abundant faith in American ingenuity and desperation. We build a time machine, start a war with the United States of 1949, get defeated, and begin rebuilding with 1940s US gold-backed currency. Infrastructure is rebuilt, our banks are restructured and run by former US president Harry Truman-types, and the US of 1949 eagerly buys up all of our shoddy modern products while defending us with their troops, and we proceed down our happy path of delusion and fantasy about how the world (even a past world) owes us a living. Or we could use this nifty time travel gadget to fix all the major boo-boos of capitalism, the imperialism and pseudo-democracy that have wrecked America over the last 100 years. But where to start? If president Woodrow Wilson and his megalomaniacal obsession with democratizing the world is avoided by making him lose in 1912, a Franklin Delano Roosevelt with his manipulation of propaganda and truth will inevitably follow, and if not him, a Richard Nixon or Lyndon Johnson or Ronald Reagan is waiting in the wings with their own hallucinations about America's god-given right to rule the universe. The machine would be really, really busy, inevitably breaking down and having to be replaced with a cheaper version, naturally made in China, because by then all the American time machine factories have moved there. Oh wait! We can go back to 1972 and convince Nixon that helping China build its industrial base against the Russians isn't such a hot idea after all, thus crippling the Chinese ability to cheaply mass produce things like time machines. But if the time machines aren't made in China, how do we buy one to go back in the first place and tell Nixon he's helping cut the America of 2009's throat? I'm confused by this dilemma, but not nearly as confused as how Obama can give billions to discredited capitalists ready to head for the exit doors with their pockets stuffed with free taxpayer booty. What, Barack? Did you think those losers on Wall Street had been replaced with the financial wizards of the 1980s? That would require a time machine. Ask China if they can sell you one. Hardy Campbell
Houston, Texas (Feb 2,'09)


I would like to congratulate you on the running of such an excellent website. Your articles are always very relevant and factual and I take great pleasure in following them - even though I keep sending you critical letters from time to time. Sorry about that!
Tafhim Kiani (Feb 2,'09)


January Letters