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    Front Page
    

Bernanke takes one more gamble

United States Federal Reserve chairman Ben Bernanke's decision to cut key interest rates one more time was always in the cards. More astonishing was the scant concern he showed towards the inflationary risks inherent in his actions over the past few months, risks that food riots make clear are already a harsh reality in the world beyond the US. - Julian Delasantellis (May 1, '08)

   Fed cuts rate to 2.0 percent, keeps options open (AFP)

Economy takes US center stage
A major new survey finds that oil prices and other economic issues are edging out foreign policy concerns on the US public's worry list. Seventy percent of respondents say they worry "a lot" about soaring energy costs, and the survey's aptly named "Anxiety Indicator" shows that 84% worry about the way things are going for the US. - Jim Lobe (May 1, '08)


Fed may want inflation
US Federal Reserve chairman Ben Bernanke continues to cut interest rates, even as concerns grow at home and abroad at rising prices across swathes of the global economy. Despite public pronouncements to the contrary, it is possible the Fed chief sees more pros than cons for the US in the inflation he risks stoking. - Axel Merk (May 1, '08)


The heat is on Muqtada
The fierce battle raging in Baghdad's Sadr City between Muqtada al-Sadr's Mahdi Army and United States and Iraqi forces has claimed more than 1,000 lives over the past few weeks. What is not clear is the motive behind the offensive against the Shi'ite militia. It could be the Americans, trying to nip in the bud any united front between Muqtada and Sunnis. Or the Iranians, wanting to eliminate a potential thorn in their side. Either way, Muqtada has a fight on his hands. - Sami Moubayed (May 1, '08)

    Sadr City fight fuels Iraq bloodshed in April (AFP)


Al-Qaeda searches for unity in Iraq
A series of messages from al-Qaeda deputy Ayman al-Zawahiri and its chief in Iraq, Abu Hamza al-Mujahir, indicates al-Qaeda is pulling out all the stops to try to prevent the Sunni Iraqi mujahideen from militarily winning the war but then losing the political spoils because of disunity. - Michael Scheuer (May 1, '08)


China's pride versus Western prejudice
The Chinese government did not expect the Olympic Games to be politicized to the extent they have been and the result is a big loss for Beijing. It has also damaged the image of China's "harmonious society" and prompted a new wave of Chinese nationalism. Many Chinese now feel, for the first time in many years, antagonized by Western ideology. - Da Wei (May 1, '08)


   Protests at Carrefour stores in China (AFP)

India raises a toast to Iran
In a clear reference to the United States, Delhi has asserted that India and Iran "are perfectly capable of managing all aspects of their relationship", and is solidifying a number of agreements previously stalled with Tehran, mostly related to energy. The economic imperatives are obvious, but there are also compelling political reasons. - Siddharth Srivastava (May 1, '08)


Local democracy pains in Indonesia
Two disputed results from last year's local elections in Indonesia highlight a lack of neutrality in the institutions tasked with protecting the integrity of elections. In the run-up to general elections next year, this is a growing concern. - Jacqueline Hicks (May 1, '08)


Women at the temple door
While women are barred from Hindu temples in other parts of India, women in the city of Pune are studying the priesthood at two schools and conducting ceremonies. It started when the casual attitude of male priests became too much for the faithful to bear, and female priests are now preferred. - Gagandeep Kaur (May 1, '08)



Push comes to shove in Afghanistan
In his latest assessment, US President George W Bush admits it's going to be a "long struggle" in Afghanistan (this after seven years of fighting the Taliban). US Marines, fresh in the country, are venturing into uncharted territory, while more coalition troops are being deployed. For the Taliban, having made space for themselves in their strategic backyard in Pakistan through dubious peace deals, a new battle has now begun. - Syed Saleem Shahzad (Apr 30, '08)

US's Pakistan policy under fire
Appeals are growing in the United States for the George W Bush administration to reassess its "war on terror" and Pakistan's place in it. In particular, US policymakers are being asked to place more confidence in Islamabad's plans to make deals with tribal leaders, even though these play into the hands of the Taliban. - Jim Lobe (Apr 30, '08) 
 
Iran-US talks await new leadership era
It is unlikely that either the George W Bush administration or hardliners in Tehran will initiate serious bilateral talks prior to the US presidential elections in November. The prospect of dialogue with Iran seems plausible after the vote, but only if the next US president is willing to risk strengthening President Mahmud Ahmadinejad's hand before Iran's 2009 presidential polls. (Apr 30, '08)


THE MOGAMBO GURU
At the center of a flood of debt
Look out any US window and the view is nothing but a sea of unpaid bills, with all that subprime mortgage panic a drop in the ocean of woes facing a low-IQ nation that thinks it can painlessly borrow and inflate its way out of any debt. It can't. And if you want to survive the threat of drowning like your neighbors, sell everything and buy that golden lifeboat. (Apr 30, '08)

Iran holds key to India's energy insecurity
In terms of its energy needs, India has woken to the simple fact that nearly all roads lead to Tehran, both as a source of energy as well as an outlet for other countries' energy exports to India. This could be the first step in a whole gamut of economic, trade, cultural, political and even security cooperation. - Kaveh L Afrasiabi (Apr 29, '08)

THE BEAR'S LAIR
Oil in 2012: $200 or $50?
The US broad money supply by one measure has increased at an annual rate above 30% for most of this year. Maintained, that could triple prices within four years and oil would look moderate at US$200 a barrel, with gold hitting $2,000. Good sense by the US Fed and politicians might save the day, or a full-scale revolt by bond dealers. - Martin Hutchinson (Apr 29, '08)


China intensifies war against splittism
The Hu Jintao administration has intensified its efforts to suppress and contain "splittists" in Tibet and Xinjiang allegedly in cahoots with "anti-China elements overseas" - and it is using nationalistic sentiments to help achieve its goal. Significantly, Communist Party and state authorities have called for a people's-war-style crusade to round up "conspirators" and "traitors". - Willy Lam (Apr 29, '08)

SUN WUKONG
Moving markets and mountains
The new overseer of China's financial affairs was barely in office before polishing his "Mr Fix It" reputation by turning around the plummeting stock markets. Curbs on refinancing by listed companies are expected to be Wang Qishan's next mountain-moving stroke. All very impressive - but his is still a visible hand that would be better not seen. - Wu Zhong (Apr 29, '08) 

CAMPAIGN OUTSIDER
Doubting Obama
Senator Hillary Clinton's campaign keeps raising questions about rival Senator Barack Obama. Rather than complain about Clinton's tactics or the tone for the contest, it's time for the frontrunner for the Democratic presidential nomination to rediscover his mojo. - Muhammad Cohen (Apr 28, '08)

Brains, not brawn, in Afghanistan
The audacious attack in Kabul on Sunday on Afghan President Hamid Karzai and other dignitaries is another salvo in the Taliban's new phase of targeted missions, rather than direct confrontation with the North Atlantic Treaty Organization's war machine. In return, NATO, as evidenced by two important recent successes against the insurgency, is becoming smarter, rather than relying on "smart" bombs. - Syed Saleem Shahzad (Apr 28, '08)

Syria bristles at US charges
Washington's accusations that Syria and North Korea cooperated on a nuclear site that was allegedly destroyed by an Israeli air strike last September, are being laughed off in Damascus as another "convenient inaccuracy". The charge would be downright funny if it didn't come with the dangerous potential of mushrooming into war, as happened when Iraq was accused of developing weapons of mass destruction. - Sami Moubayed (Apr 28, '08)

India, China hold G8 options
European leaders such as British Premier Gordon Brown and President Nikolas Sarkozy of France are pushing for India and China to sign up for full membership of the rich nations' club known as the Group of Eight. But their counterparts in New Delhi and Beijing have good reason to hold back. - Sreeram Chaulia (Apr 28, '08)

DISPATCHES FROM AMERICA
Selling the president's general
Just as President George W Bush's favorite general, David Petraeus, was given another promotion by being nominated as head of US Central Command, revelations broke of the Pentagon's extensive propaganda operation to embed retired military officers in the mainstream US media. The two events - and the "surge" in Iraq - are inextricably linked. - Tom Engelhardt (Apr 28, '08)


Taliban bitten by a snake in the grass
Over the past few months, attacks in Khyber Agency in Pakistan by the Taliban and their al-Qaeda associates on supplies destined for the Western coalition in Afghanistan have proved highly successful. Despite operating in unfamiliar and unfriendly territory, the Taliban managed to obtain a foothold through a tribal leader, seemingly outwitting US intelligence. Then things went horribly wrong, and the Khyber operation is in tatters. - Syed Saleem Shahzad (Apr 25, '08)

CHAN AKYA
Western excess is
the Earth killer

The problem with people trying to save the world, as intended by this week's Earth Day, is that everyone has different living standards and objectives. What will benefit the environment is a reduction in excessive consumption by Europe and the US, not a reversal of Asian progress. (Apr 25, '08)

THE ROVING EYE
Hillary, the war chick
It was a silly question to begin with, but Democratic hopeful Hillary Clinton jumped in boots and all, saying if she were US president and Iran attacked Israel with nuclear weapons, she would "obliterate" Iran. Clinton's positioning spells Imperial Washington in all its glory - and hubris. - Pepe Escobar (Apr 25, '08)

SPENGLER

Rice, death and the dollar
For developing countries whose currencies track the US dollar and whose purchasing power declines along with the American unit, catastrophe looms. So China, for example, is exchanging its depreciating reserves of the greenback for things of value, notably rice, with frightening consequences for dependent countries and deadly consequences for American foreign policy. (Apr 21, '08)
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The twilight of
irredeemable debt

Debts used to be considered obligations and issuance of irredeemable debt a crude form of fraud. This is now ignored by courts and academics alike. But banks will eventually learn there is no way to rid the system of poisonous bad debt by creating more. - Antal E Fekete


COMMENT
Sanctions and rights -
the odd couple

The use of trade sanctions to promote human rights is inconsistent - imposed on Cuba, not on China - and their value unproven. It is not known if enhanced protection boosts trade, or if increased trade leads governments to improve human rights. Yet the dearth of information has not stopped policymakers from wedding the two.
 

 THE MOGAMBO GURU

Banking on a house of cards
Investors in Swiss bank UBS have found out the hard way that putting your cash in the hands of investment management "professionals" is as good a way as any to ensure you get back less than you put in. Now just wait and see what happens to American banks ... and then to American shares ... and houses, and bonds. Doomed? Absolutely.

CREDIT BUBBLE BULLETIN
The meaning of stage II
The return of confidence and greed to the financial markets is persuading even seasoned strategists that the worst of the financial crisis is behind us. Yet distortions in the US and global economies remain and will continue as authorities risk global financial and economic catastrophe to sustain the unsustainable. The countdown to stage II of the crisis has started. (Apr 28, '08)
Doug Noland reviews the previous week's events each Monday.

MARKET RAP
The calm before the storm?
China's reduction of a stock transaction tax energized a local market that was edging closer to a decline as precipitous as the 50% slide seen over the past six months. Survival of the optimism in Shanghai and elsewhere in Asia may depend on the US Federal Reserve's thoughts, to be aired next week. (Apr 25, '08)
R M Cutler runs his eye over the ups and downs in the week's markets



Reading comments ... regarding the April 30 article Oil in 2012: $200 or $50? by Mr Martin Hutchinson brought much laughter to our household in Canada. Environmentalists are holding up America's vast oil resources? This is a ridiculous notion. The country that practices rendition and torture is afraid to go after a few environmentalists? ...
Bob Van den Broeck
Canada
   Go to Letters to the Editor




1. India raises a toast to Iran

2. Bernanke takes one more gamble

3. China's pride versus Western prejudice

4. The heat is on Muqtada

5. Fed may want inflation

6. Economy takes US center stage

7. Push comes to shove in Afghanistan

8. Banking on a house of cards

9. The twilight of irredeemable debt

(24 hours to 11:59 pm ET, May 1, 2008)




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