MEDIA ROOTS – Released nationwide on Friday, the documentary film Barack Obama: 2016 is not only highly critical of President Obama’s job performance, it again raises the question of who he is and what his view of America is in the world. While the film does not offer many certainties about the president’s potential second term in office, it does use his previous actions as a device for telling a story that many Americans may not be familiar.

The film, distributed by Rocky Mountain Pictures, is written and directed by Dinesh D’Souza and based on his book The Roots of Obama’s Rage. It is very open about its conservative approach, which allows the viewer to set aside any perceived spin and focus on the information presented. Some ideas about the president’s past would excite conspiracy theorists as the production makes clear there are many more questions than there are answers.

After a brief description of his own youth in India, D’Souza begins his narrative with a brief comparison of his own life and that of Mr. Obama. Born, having graduated from college, and married in the same years as each other, the two lives appear at first quite parallel. What shapes their youth more than anything is their immigration to the United States and, in particular, their Ivy League education.

But what Mr. D’Souza cannot relate to is having not been brought up with a father. He does, however, appear to make an honest effort in learning the developmental psychology of such abandonment during childhood by interviewing a specialist and a former co-worker of his mother. Additionally, he uses Obama’s own words – literally Obama’s voice from the book-on-tape – from the book Dreams from my Father, to help paint a picture of an upbringing that often felt empty. But because of his mother’s compassion, “Barry” did have several male influences throughout his upbringing and it is this subject matter that seems to interest D’Souza the most. Who were these men and how come so little is known about them?

The film goes on to explore several of these relationships. As a young boy in Indonesia, Obama’s stepfather Lolo Soetoro may have helped foster a free spirit and as a young man in Chicago, Obama worked with Weather Underground’s Bill Ayers and listened to radical sermons delivered by Reverend Jeremiah Wright. But it’s his childhood mentor, Frank Marshall Davis, which seems to be of particular influence on his development while remaining virtually unknown to most Americans. After a closer examination into this relationship, one might develop a keen insight into what is yet to come for the United States.

Two comedies, one theme

Game Change, released by HBO in March, confirmed what every rational American already knows: Sarah Palin is about as adept at managing a family as she is at answering basic questions from the press. While the film was officially denounced by both Senator McCain and Governor Palin, it was endorsed by one of Senator McCain’s former senior advisers and appeared to be a way for the Republican establishment to reconcile its 2008 campaign blunder. It hardly challenged viewers perceptions of the right wing and provided very little insight into future GOP strategy.

The Campaign has been in theaters for almost a month and offers viewers a slapstick parody of the election process. Distributed by Warner Brothers, the film provides a non-partisan approach to politics but does reinforce the corporate media establishment by providing several product placements of cable news networks. Many television pundits made cameo appearances including Chris Matthews and Ed Schultz of MSNBC, Wolf Blitzer and Piers Morgan of CNN, and Bill Mahr of HBO. (Interestingly enough, many of these personalities seem to have close ties to the White House. Mahr made news earlier this year after donating one million dollars to the Obama re-election campaign while Schultz claims he would donate to the president if he could.)

Political films released during campaign seasons will continue to leave an impression on the minds of voters and nonvoters alike. But as the left-right paradigm begins to lose traction with an increasingly alert citizenry, it is still uncertain if this same awareness will be applied when considering the corporate media establishment. For if citizens continue to consume political comedies produced by this entity just prior to an election, then their laughter will most likely translate into increased apathy of the electoral process and the elite will remain in control.

Oscar Mosko for Media Roots.

Photo provided by Flickr user Osipowa.

MEDIA ROOTS — Noted economist and syndicated TV show host, Max Keiser has studied, and reported on, the global economy for decades. He looks at financial systems according to the mathematical laws of systems analysis and occasionally discusses the warning signs of impending economic collapse. On last Friday’s episode of The Alex Jones Show, Keiser discussed the looming collapse of global markets. With the Congressional Budget Office having echoed Keiser’s prediction of “fiscal tighenting” yesterday, it appears the former stock-trader is again on the mark.

“I’m saying that there is a 90% chance of collapse by next April, but it could happen at any time between now and April,” Keiser reported on August 17. “You have to look at [the global economy] in terms of the way a systems analyst would look at any complicated system. Every time you add more to the system the complexity doesn’t rise in a linear fashion, it rises exponentially. So every time the Fed puts on more quantitative easing, every time investment banks bail out some other investment bank, every time more derivatives are released into the system, you don’t go from, let’s say, 700 trillion notional value derivatives to 800 trillion in a linear way. You have to think of it in terms of this global quadrillion to two quadrillion derivative soufflé being encumbered with, exponentially, more risk. This is classic systems analysis.”

This nation’s economy has been growing in complexity, exponentially, since 1971 when the U.S. dollar was taken off the gold standard. “The game here is to try to pick where it starts, what is the trigger, and to study it in terms of how the economies rattle and roll, as a result of this complete and utter systemic breakdown,” continued the founding host of The Keiser Report, a biweekly program, that aired its 330th episode yesterday.

Could Japan trigger the global economic collapse?

Keiser looks to the economy of Japan as a “weakest link” and a possible trigger for systemic collapse. He says what turned his eye toward Japan was the recent announcement that the second biggest buyer of U.S. Treasury debt is no longer China. Keiser explains, “America is the biggest buyer of its own debt. But taking the second spot is Japan. China is walking away from the table.”

Keiser continues, “Japan has always been under the treasury of America’s thumb. They will do whatever America says. And now they are the number two biggest buyer [sic] of US Treasury bonds. But that is extremely dangerous because their economy itself is a tinderbox, probably the weakest, most fragile economy in the world—after the Fukushima disaster, after 20 years of the zombie economy and the zombie banks. But now they are supporting America. Japan, the zombie economy, is supporting the American economy, to give you an idea how fragile the system is.”

“There is no avoiding the collapse. There is no remedy for the collapse.”

He then predicts civil unrest and a generational civil war. Therefore, the government is preparing for civil unrest, long anticipated by the John Warner National Defense Authorization Act of 2007, which rewrote federal law to allow deployment of the military, specifically, in cases of “economic collapse.”

After describing our evolving “hard gulag” situation in this country with private prison systems increasing capitalization, expecting 20-50 million more inmates in the near future, Keiser defines a new type of dystopia he calls a “soft gulag,” where citizens give up more freedoms—such as facial recognition—in exchange for deals on consumer goods.

Tom Ball and Oskar Mosco for Media Roots

Photo provided by Flickr user Stacy Herbert

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Max Keiser recently appeared on The Alex Jones Show to discuss the imminent financial collapse of global markets. (Also, see his Guns and Butter radio broadcast below.)

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August 22, 2012

GUNS AND BUTTER — “You don’t know which snowflake is going to start the avalanche. You know that the system is under such stress that it will only take one more snowflake to start the avalanche, that the system, itself, is under extreme stress right now. It cannot take even one bit more of systemic complication, you know, exponential increase in system complication. So, we’re at that pre-avalanche phase.”

Bonnie Faulkner (c. 1:15): “I’m Bonnie Faulkner. Today on Guns and Butter: Max Keiser. Today’s show: ‘Countdown to Currency Collapse.’

“Max Keiser is a financial analyst, television and radio host, journalist, and entrepreneur. He is host of the biweekly The Keiser Report with Stacy Herbert on RT. His co-host was Stacy Herbert of the weekly radio talk show on Resonance 104.4 FM in London and is host of On the Edge on Press TV. He produces documentary films covering markets for Al Jazeera’s People & Power series and is a frequent guest on Al Jazeera English and France 24. Max Keiser is creator of PirateMyFilm, an alternative media funding mechanism, that supports the creative commons.

“Max Keiser: Welcome.”

Max Keiser (c. 2:13): “Always a pleasure to speak with you, Bonnie.”

Bonnie Faulkner (c. 2:15): “It’s been a year since we last spoke, Max. At that time, you had just returned from Greece. And we spoke about the crisis there. A lot has happened in the past year. Let’s start with fraud. Bring us up to date on the latest in financial fraud. What’s been going on?”

Max Keiser (c. 2:37): “Well, the number of frauds are increasing. And they’re getting bigger.

“At HSBC, they’re implicated in a multi-hundred-billion-dollar money laundering scandal for Mexican drug cartels.

“There’s also Barclays. They’re involved with the multi-hundred-trillion-dollar LIBOR rigging scandal.

“JPMorgan was caught fiddling their books in London on this recent two- and then five-billion-dollar error. So, the list goes on and on.

“Standard Chartered, now fined a few hundred million dollars for money laundering for Iran.

“Just about every single one of the so-called too-big-to-fail banks is involved in a multi-hundred billion dollar scandal of some type. So, the level of fraud is increasing. The numbers are getting bigger. The response from regulators around the world is still a big nothing, a big silence.”

Bonnie Faulkner (c. 3:43): “Now, I never completely understood the LIBOR scandal—banks fixing interbank lending rates. I mean, haven’t they always done this?”

Max Keiser: “Well, it’s a question of trading on the advance information. They fix the rate. But they are telegraphing their machinations to the market ahead of time to trade on that inside information.”

Bonnie Faulkner: “Well, now what about this MF Global and John Corzine with people’s money in their own private accounts just disappearing. Has anything happened with that at all?”

Max Keiser (c. 4:19): “Well, the John Corzine story at MF Global is really introducing a new chapter in all this ‘cos as you point out, money was directly taken out of segregated customer accounts—over a billion dollars.

“Corzine, himself, his defence is that money simply ‘vaporised.’ That’s the word he used. And that has held up. No regulatory agency is questioning his defence the money simply ‘vaporised.’ He has no idea where it went. And, now, the new scuttlebutt is he’s starting a new hedge fund. So, John Corzine is up and running. He’s starting a new hedge fund, back in business. And his crimes, along with Jamie Dimon at JPMorgan, are just being swept under the rug.”

Bonnie Faulkner (c. 5:15): “Yes, I did read that he was going to start a new hedge fund. I mean how can he do that? There’s no law anymore, I guess.”

Max Keiser: “Well, he’s a made man. You know he’s a former governor of New Jersey. He’s former head of Goldman Sachs. He’s part of the inner circle of the global financial mafia. He’s untouchable.”

Bonnie Faulkner: “Right. And what do you think about this Facebook IPO fiasco?”

Max Keiser: “This is a—I think it’s pretty interesting because on Wall Street for years there have been the notorious bucket jobs, as peddled in, usually, penny stocks. And it’s a really kind of an unseemly side of Wall Street, that’s operated, really, since Wall Street’s been around.

“And the pump and dump scam is [where] the insiders buy up a bunch of some company with very dubious prospects. And then they start calling people up to get them to buy into this ‘amazing’ story. And [insiders] sell out their stock at a much higher price to the new investors. And then, once [insiders] stop selling their stock, the market collapses and investors are [left] holding worthless stock.

“So, here, this is the first $104-billion-dollar pump and dump scam. Facebook’s business prospects are dubious. There’s not really much of a model there. You had the likes of [Democrat president] Barack Obama putting his arm around Mark Zuckerburg in the White House promoting this pump and dump scam. The insiders, as the stock crossed in valuation from $30 billion, $40 billion, $50 billion, etcetera, all the way up to $100 billion, all the way up to the IPO, the insiders were dumping, including Zuckerberg.

“So, the insiders, the venture capitalists, they’ve sold out. They’ve made billions of dollars. The people, who ended up buying in to this at $38 dollars a share on the IPO, they are the suckers. They are the victims. They got—the stock has been dumped on to them. And it’s a classic pump and dump scam. It’s unusual because you have never seen one ever—I don’t think there’s ever been one—a $100-billion-dollar pump and dump scam. That’s certainly novel.

“But the underlying story here is a classic penny stock Wall Street pump and dump scam.”

Bonnie Faulkner (c. 7:42): “I didn’t realise that Zuckerberg had been dumping his stock.”

Max Keiser: “Oh, sure. He’s raised over a billion dollars in cash.”

Bonnie Faulkner: “Well, now, do you think this was intended as a big scam right from the beginning?”

Max Keiser: “Well, by what I’m saying is, it’s one of many tried and true scams, that Wall Street uses to sucker people out of there money. It’s called a pump and dump scam. It’s one of many types of scams. And the people who’re behind it, when they organise it, they begin to begin the story, the narrative to this they do so with full knowledge that they are engaged in a fraudulent activity—the same thing with Groupon, the same thing with Zynga.

“Oh, by the way, all three of those companies are all pump and dump scams: Zynga, Groupon, and Facebook. And, collectively, in the last three months, shareholders have lost over $62 billion dollars. And all three of those companies share Ernst & Young, as their auditor. And that brings up another aspect to this racketeering, that’s going on because there’s several components to the racket. There’s the Wall Street banks. There’s the auditors, that are involved. Then there’s the hedge funds. Then there’s the rating agencies. Then there is mainstream financial media, like CNBC.

“But the auditor’s role is that they sign off on  books, that characterise things, such as losses as revenue. So, in the case of Zynga, they were generating losses, but they mark it as revenue. I mean that’s what the auditor does. They are very corrupt and they are part of this mafia racket.”

Bonnie Faulkner (c. 9:32): “Right. So, there’s fraud in all of these accounting firms. I mean I’m reminded of Arthur Andersen. I think they went under, didn’t they?”

Max Keiser: “Well, Enron—Arthur Andersen was Enron’s accountant—they were engaged in massive fraud and hiding tens of billions of dollars’ worth of liabilities. Then, when it was exposed, they went out of business. But the remaining Big Four (or Big Five, whatever they’re down to now), they have not changed their practices at all. They’ve only gotten more egregious in their outrageous accounting misconduct because they’ve been very aggressive in getting Congress to change laws, modify laws, bring in new laws, to strengthen their stranglehold with this mafia approach. So, they’ve gotten much worse.”

Bonnie Faulkner (c. 10:23): “How important or dangerous is this continuing financial fraud? Is it something, that’s always going on? Or do you see this as a real shift, as a break down in the financial system, itself?”

Max Keiser: “The financial system started to break down in the 1970s and it’s just been getting worse. And it’s been accelerating, in terms of its breakdown.

“I just wanted to you give you a good reference here. Francine McKenna, who’s a former, one of the big accountants, writes for Forbes, and she has a great story here about Groupon, Facebook, Zynga. And they share the same accountant—Ernst & Young is the accountant.

“But the system—you asked, how much damage is this doing to the system?—it’s approaching to a point now where the system is now so overloaded with fraud and derivatives, which are desperately trying to cover over this fraud. That we are kind of rapidly approaching a point of a global financial breakdown, that would be far in excess of what we saw in 2008.”

Bonnie Faulkner (c. 11:52): “Right. And what in your opinion is keeping the stock market afloat? I mean they’re—what?—12-, 13,000, still. And, yet, I keep reading that the average investor has lost confidence in it. What’s keeping this all floating?”

Max Keiser (c. 12:11): “Well, 86% of the volume on the New York Stock Exchange are computers trading with other computers. They’re not humans.

“And the computers are programmed, using algorithms, to make massive amounts of trade. They’re funded with off-balance accounts, that are not officially on anyone’s books. And those values are basically you know ephemeral. It’s a hologram generated by computer trading, high-frequency trading, algorithmic trading, just to keep the value of the presumed collateral on these banks at a level, that they can continue their operations. That is unsustainable. And we see it breaking apart. We see these flash crashes, that are occurring, where Knight Capital blew up in 45 minutes, lost $440 million dollars in five minutes because an algorithmic trading robot blew up. So—and these are happening with greater frequency, with bigger numbers. So, that’s what we’re heading for.

“We have a systemic collapse. You’ll have a multi-trillion-dollar flash crash affecting the financial markets, that will occur, like the Enron situation, quite rapidly. And the system will be irreparably damaged.”  

Bonnie Faulkner: “Now, when we talk about a systemic collapse, particularly, of the financial system. And it’s all tied together now. As you’ve stated, things are much worse now than in 2008. How do you see this happening? Nobody’s got a crystal ball. But at some point, the system’s gonna give away, isn’t it? I mean is the whole thing gonna come crashing down? People have been predicting this for a long time. But somehow it just keeps continuing.”

Max Keiser (c. 14:11): “Well, the people, who have been predicting different scenarios, they’ve been predicting, you know, different versions of this story, and with different outcomes, and different timelines. But it’s important to remember that the basic timeline is still very much in place over the last five to ten years.

“The markets are coming unglued. The income gaps are widening dramatically. The potential for civil unrest, the actual civil unrest, is increasing sharply. The amount of contortionist monetary policies required to cover the gaping holes of the system are becoming more extreme. So, you have programmes, like quantitative easing manoeuvres.

“So, all these things are coming together. And, though, the timing of it—I’ve gone on record as saying that by April of 2013 you’ll have this global collapse. You’ll have at the outset now probably in April of 2013, when they do the taxes. For the U.S., there will be a remarkable shortfall in taxes. And U.S. government paper will be downgraded pretty sharply.

(c. 15:34) “But what it looks like is the currencies, the major currencies of the world—the dollar, the euro, the yen, the Chinese RMB—collapse. Like we saw a currency fall in Argentina; like we saw a currency collapse in Iceland; as we’ve seen in the central Asian collapse of the ‘90s. But there’s a global synchronous currency collapse.

“Now, when I say currencies, I do not include gold and silver. Gold and silver, of course, would be the opposite trade, the opposite of this. This is where the smart money is moving now.

“The central banks are buying gold. China is very aggressively buying gold. Smart hedge funds, like John Paulson, increased their gold. Soros is increasing his gold. ‘Cos they know what’s about to happen. They know we’re at the end game now. So, they wanna have the only thing, that’s been good money for the last 5,000 years—gold and silver.”

Bonnie Faulkner: “I’m speaking with financial analyst and broadcast journalist Max Keiser. Today’s show: ‘Countdown to Currency Collapse.’ I’m Bonnie Faulkner. This is Guns and Butter.

“So, when you say you see the system breaking down April 2013, you’re basing that on when U.S. taxes are due, correct?”

Max Keiser (c. 16:58): “I think that’ll be the—if the system is still around by then, I project that that remarkable shortfall come April next year will be, if there needs to be a trigger, yet, to fire to cause this global meltdown—that would be the trigger. And that would be the time frame.”

Bonnie Faulkner: “You know it’s interesting because a lot of people I know who barely have any money at all are getting these letters from the IRS and the Franchise Tax Board after them for these little bits of money. And I’ve just noticed this in the last month. So—I don’t know—are they going after the little guy? It’s kind of nutty.”

Max Keiser (17:46): “Well, this is predictable. And it’s historically predictable. They’re broke. They’re looking for any money they can. They’re broke. The government is completely broke. There’s no economic scenario, that you can imagine or create, that would pay off U.S. government debt. It just mathematically can’t happen under a so-called world scenario.

“There’s only two outcomes. One is a default on the debt. That would be an utter collapse. Or, two, hyperinflation, or a currency collapse, which is what I think is gonna be the outcome.

“I think they will attempt to inflate their way out of this debt, by allowing the dollar and other currencies to collapse in hyperinflationary endgame. And that’s coming.”

Bonnie Faulkner (c. 18:46): “Well, if you see a collapse in fiat currency, how is that gonna look? I mean what would happen?”

Max Keiser: “The price of gas would be $15 dollars a gallon. And groceries would be $2-, $3-, $400 dollars for a bag of groceries.”

Bonnie Faulkner (c. 19:08): “So, when you’re talking about hyperinflation, like something like what occurred in pre-World War Germany.”

Max Keiser: “Right. Exactly.”

Bonnie Faulkner: “What about global debt and U.S. debt, in particular? A lot of economists think that because the U.S. government prints its own money and that the dollar is the world government reserve currency, that the U.S. government can stimulate the economy and create an economic recovery by creating a new New Deal (i.e., putting money into infrastructure, reconstruction, hiring people, etcetera).

“Do you see an FDR-type New Deal scenario as a possible fix?”

Max Keiser (c. 19:49): “At the time of the New Deal, the U.S. was the world’s biggest creditor. Now, the U.S. is the world’s biggest debtor. And they simply don’t have any room for that. You know, right now, the biggest buyer of U.S. debt is the U.S. government. Up until recently, the second biggest buyer was China. Now, it’s Japan. China is dumping their U.S. debt, as are various other global creditors.

“You can’t finance debt with more debt infinitely. It just doesn’t work that way. It’s like inventing an anti-gravity machine or something. It’s not gonna happen. So, you can’t make the comparison really. If you want to make the comparison, say, to another period of time, the crash of the period of the ‘20s and of the Depression, if you get go back and draw the right conclusions from that period of time.

“You know the Depression was caused primarily by the run up in speculation on Wall Street in the ‘20s. And you had the crash of ’29. The recovery was, really, the number one contributor to its recovery were the reforms, that were put in place by FDR, and also the Pecora Commission, that was in place, that went ahead and prosecuted bankers and put many, many bankers in jail, and brought in things like Glass-Steagall, and FDIC, etcetera.  

“And, now, the crisis today is we have the same problem. Wall Street speculation creates this enormous bubble in derivatives, that crashed in 2007. And the solution is similar. You need to reform the banks, if you want to recover from the resultant Depression, which is the result of the banking speculation. But we’re nowhere near that. There’s no Pecora Commission. There’s no bankers going to jail. There’s nothing.

“So, there’s no hope of any kind of recovery until you learn the lessons from the crash of the Depression of the ‘20s and ‘30s.

“A stimulus programme based on issuing more fiat currency, that simply gives bankers more leeway to commit more fraud is, you know, throwing gasoline onto the fire. You don’t wanna give stimulus, print money, and to have it circulate through Wall Street, so that they can leverage that up another ten or fifteen times, create another five or ten trillion dollars of unsustainable debt. And then make simply the result a crash that much worse.

“But I don’t think we’re gonna even have the opportunity to try that experiment because I believe we’re in the last 35 weeks of the timeline, before we get the global fiat currency obliteration. So, there won’t be any time, really. It’ll be a moot point in six months.”

Bonnie Faulkner (c. 22:51): “So, you’re saying that you think that the systemic fraud, this time around—as opposed to the Depression era—is much, much worse and, actually, the banks control the government, rather than vice versa, right?”  

Max Keiser (c. 23:06): “Well, I’m not necessarily saying it’s worse. I’m saying that there’s been no response. In the ‘30s there was a response. Banksters were put into jail.”

Bonnie Faulkner: “Right.”

Max Keiser: “Here, there’s been no response at all.”

Bonnie Faulkner: “Exactly.”

Max Keiser: “So, until there’s been a response, then expect more of the same.”

Bonnie Faulkner: “Now, how do you see the next nine months going? It looks pretty bleak. What do you think is gonna trigger this whole thing—the inflation of the currency?”

Max Keiser: “Well, that’s an interesting point. Then you get more into a grey, fuzzy area: What, ultimately, will be the trigger?

“I think, at the worst, at the outset of this timeline, I’m saying tax receipts April 2013 is gonna be the ultimate trigger, if there is no trigger between now and then.

“But, before that, you could get something like Japan, [which] is extremely fragile. They’ve got GDP: over 200%. They’ve got, now, demographically, a horrible situation, where, instead of being allowed to finance their debt internally, they’ve got a whole generation, that’s pulling money out of the retirement systems. So, that’s essentially collapsing. And they’re a big part of this global, globalised, financialised, transactionalised world.

“So, that could be the trigger, there. And, right at the moment, that’s my—I’m kind of looking at that pretty closely. I think that what’s happening in Japan could be the trigger to set this up.

“But it could come from a number of different sources.

“In South Africa, you know, they had these huge labour riots and the government responded by murdering many, many people. South Africa, of course, is very key on the global commodity business—gold, platinum business. If that spreads to gold–mining in South Africa, some nationalisation wave occurs across the commodity sector, that could be the possibility. There are other possibilities. Any one of those could be the trigger.

“You don’t know which snowflake is going to start the avalanche. But you know that the system is under such stress that it will only take one more snowflake to start the avalanche. But the system, itself, is under extreme stress right now. It cannot take, you know, even one bit more or systemic complication, exponential increase in system complication. And, so, we’re at that pre-avalanche phase.”

Bonnie Faulkner (c. 25:41): “And, now, you mention Japan, as a possible trigger because why? Japan is the second-largest buyer of U.S. debt?”

Max Keiser: “Well, the yen is a currency, that everyone has flocked into, as a safe haven trade. And, so, there’s a tremendous amount of money locked up in Japan right now with the idea that the economy is relatively stable with other G20 economies.

“But it looks as though that is about to reverse itself and the country will not be seen as a safe haven anymore, which would precipitate outflows, many, many, many trillions out-flowing. And then that would be the beginning of this avalanche.”

Bonnie Faulkner (c. 26:29): “Well, now, let’s say that the system, which is teetering, really does crash in some fashion. What else do you think that that would look like?

“I’ve done shows on the militarisation of the local police departments. Obviously, the U.S. has the most advanced technological weaponry. We’ve got a huge prison-complex industry going on here.

“Do you see a martial law type scenario? What do you think might it look like?”

Max Keiser (c. 27:05): “Well “Well, first of all, in terms of one or the other attributes, aside from hyperinflation, you’d have bank, so-called, holidays. So, banks would shut down. So, this would make it very difficult to fund operations. You know in 2008 we had that situation where the credit lines amongst the top banks in the world froze. And they couldn’t get money from each other. They couldn’t lend to each other. There was a complete freezing up of the global system.

“So, imagine this more comprehensively with ATMs running out of money.

“Already, in Europe we see instances—for example, here in France—the limits, that you can take out of your bank, using an ATM card, have been reduced. So, that’s kind of a soft run on the bank. So, the banks can simply say you can only take out a hundred dollars a day. Then, a week later, they’ll say you can only take out $50 dollars during the course of the day.

“In Britain, recently, you had two banks go through multi-day systemic failures where people couldn’t get their money. They couldn’t move their money. They couldn’t pay their bills.

“So, the system, again, is highly stressed. And that would be what it looks like. You can’t get money in the machine. You’re completely without money.

“You know, we’ve seen this in Argentina. And we’ve seen this before.

“But, as far as what it looks like on the social—what The Economist magazine would call—the social cohesion. You know they ran a story two or three years ago they called The Social Cohesion Index, where they tried to predict which countries would be the least fun places to be during such an event. And my general rule of thumb is you don’t wanna be anywhere with a lot of tanks, soldiers, guns, and prisons. Try to stay away from those areas.

“So, certainly, in the U.S., you have a lot of soldiers, guns, and prisons now. And that’s not a good place to be. I’m not there for this reason. So, that would be a good rule of thumb. If you see a lot of drones, cops, guns, tanks, soldiers. Try to stay away from those areas.”

Bonnie Faulkner (c. 29:29): “Yeah, no kidding.”

“I’m speaking with financial analyst and broadcast journalist Max Keiser. Today’s show: ‘Countdown to Currency Collapse.’ I’m Bonnie Faulkner. This is Guns and Butter.”

“Well, I understand that you’re planning a move to Great Britain. Now, isn’t Great Britain pretty much right up their with the police state scenarios?”

Max Keiser: “Well, as a media figure it’ll be interesting to see how that plays out. Of course, you’ve got the Julian Assange story playing out where Julian Assange, a journalist, has now taken on the biggest governments in the world. And, so far, he’s doing quite well.

“So, Britain is becoming a really interesting place, and not only for journalists’ rights, but also ground zero for global banking fraud. So, all the biggest bank frauds of the last ten years have gone through Britain, gone through the City of London, whether it’s AIG, MF Global, JPMorgan’s London Whale, Bernie Madoff, the Royal Bank of Scotland, HSBC, Barclays. They all go through London. It’s really the epicentre of the global bank fraud market. And, as we cover bank fraud, as kind of the thing, that we cover, we decided that since we’re heading into the endgame, we wanted to be in a front-row seat ‘cos the whole City of London is about to blow up. We want to be there, cover it, and give a first-hand account of that.”

Bonnie Faulkner (c. 31:02): “Boy, I’ll say. But do you ever feel that your safety is at risk, or not?” 

Max Keiser: “I don’t have any fear of that. And I’ll tell you why. There was a poll done recently, asking people if they knew who Jamie Dimon was. 66% have absolutely no idea. So, if our work has in some way educated people about the people, that are abusing them, then there might be some risk. But, since 66% of the population or more have absolutely no idea how they are being abused, then the banksters, who are doing the abusing, don’t really care.”

Bonnie Faulkner: “Oh, I see. So, they feel that everyone is so uneducated that who cares if they’re being exposed.”

Max Keiser (c. 31:53): “Yeah, they are not at any risk. There’s no possibility of them being penalised or facing any kind of jail time. So, they are too busy spending their money, having fun. You know? They’ve got yachts to make payments on and vacations to go on. They’re not under any threat whatsoever. I doubt any of them even know I exist.” 

Rush Transcript by Felipe Messina for Media Roots and Guns and Butter (Please check back soon for complete transcript)

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MEDIA ROOTS — Instead of the run of the mill faceless accusations of ‘The 1% are oppressing the 99%’ research organization Project Censored has compiled a valuable list with names and faces of some of the world’s biggest earners and financial elites.  

Project Censored also characterizes a particular sect of these financial elitists as the ‘Global Economic Super Entity’, the biggest movers and shakers of the world economy. The assertion is made that NATO is now simply an arm of the financial elite global corporate class, a defacto ‘world police force’ to make sure the money keeps flowing as planned. A lot of interesting points are raised with ample documentation contained herein.  

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PROJECT CENSORED – The Occupy Movement has developed a mantra that addresses the great inequality of wealth and power between the world’s wealthiest 1 percent and the rest of us, the other 99 percent. While the 99 percent mantra undoubtedly serves as a motivational tool for open involvement, there is little understanding as to who comprises the 1 percent and how they maintain power in the world. Though a good deal of academic research has dealt with the power elite in the United States, only in the past decade and half has research on the transnational corporate class begun to emerge.[i]

Foremost among the early works on the idea of an interconnected 1 percent within global capitalism was Leslie Sklair’s 2001 book, The Transnational Capitalist Class.[ii] Sklair believed that globalization was moving transnational corporations (TNC) into broader international roles, whereby corporations’ states of orgin became less important than international argreements developed through the World Trade Organization and other international institutions. Emerging from these multinational corporations was a transnational capitalist class, whose loyalities and interests, while still rooted in their corporations, was increasingly international in scope.

Sklair writes:
The transnational capitalist class can be analytically divided into four main fractions: (i) owners and controllers of TNCs and their local affiliates; (ii) globalizing bureaucrats and politicians; (iii) globalizing professionals; (iv) consumerist elites (merchants and media). . . . It is also important to note, of course, that the TCC [transnational corporate class] and each of its fractions are not always entirely united on every issue. Nevertheless, together, leading personnel in these groups constitute a global power elite, dominant class or inner circle in the sense that these terms have been used to characterize the dominant class structures of specific countries.[iii]

Estimates are that the total world’s wealth is close to $200 trillion, with the US and Europe holding approximately 63 percent. To be among the wealthiest half of the world, an adult needs only $4,000 in assets once debts have been subtracted. An adult requires more than $72,000 to belong to the top 10 percent of global wealth holders, and more than $588,000 to be a member of the top 1 percent.  As of 2010, the top 1 percent of the wealthist people in the world had hidden away between $21 trillion to $32 trillion in secret tax exempt bank accounts spread all over the world.[iv] Meanwhile, the poorest half of the global population together possesses less than 2 percent of global wealth.[v] The World Bank reports that, in 2008, 1.29 billion people were living in extreme poverty, on less than $1.25 a day, and 1.2 billion more were living on less than $2.00 a day.[vi] Starvation.net reports that 35,000 people, mostly young children, die every day from starvation in the world.[vii] The numbers of unnecessary deaths have exceeded 300 million people over the past forty years. Farmers around the world grow more than enough food to feed the entire world adequately. Global grain production yielded a record 2.3 billion tons in 2007, up 4 percent from the year before—yet, billions of people go hungry every day. Grain.org describes the core reasons for ongoing hunger in a recent article, “Corporations Are Still Making a Killing from Hunger”: while farmers grow enough food to feed the world, commodity speculators and huge grain traders like Cargill control global food prices and distribution.[viii] Addressing the power of the global 1 percent—identifying who they are and what their goals are—are clearly life and death questions.

It is also important to examine the questions of how wealth is created, and how it becomes concentrated. Historically, wealth has been captured and concentrated through conquest by various powerful enities. One need only look at Spain’s appropriation of the wealth of the Aztec and Inca empires in the early sixteenth century for an historical example of this process. The histories of the Roman and British empires are also filled with examples of wealth captured.

Once acquired, wealth can then be used to establish means of production, such as the early British cotton mills, which exploit workers’ labor power to produce goods whose exchange value is greater than the cost of the labor, a process analyzed by Karl Marx in Capital.[ix] A human being is able to produce a product that has a certain value. Organized business hires workers who are paid below the value of their labor power. The result is the creation of what Marx called surplus value, over and above the cost of labor. The creation of surplus value allows those who own the means of production to concentrate capital even more. In addition, concentrated capital accelerates the exploition of natural resources by private entrepreneurs—even though these natural resources are actually the common heritage of all living beings.[x]

In this article, we ask: Who are the the world’s 1 percent power elite? And to what extent do they operate in unison for their own private gains over benefits for the 99 percent? We will examine a sample of the 1 percent: the extractor sector, whose companies are on the ground extracting material from the global commons, and using low-cost labor to amass wealth. These companies include oil, gas, and various mineral extraction organizations, whereby the value of the material removed far exceeds the actual cost of removal.

We will also examine the investment sector of the global 1 percent: companies whose primary activity is the amassing and reinvesting of capital. This sector includes global central banks, major investment money management firms, and other companies whose primary efforts are the concentration and expansion of money, such as insurance companies.

Finally, we analyze how global networks of centralized power—the elite 1 percent, their companies, and various governments in their service—plan, manipulate, and enforce policies that benefit their continued concentration of wealth and power.

The Extractor Sector: The Case of Freeport-McMoRan (FCX)

Freeport-McMoRan (FCX) is the world’s largest extractor of copper and gold. The company controls huge deposits in Papua, Indonesia, and also operates in North and South America, and in Africa. In 2010, the company sold 3.9 billion pounds of copper, 1.9 million ounces of gold, and 67 million pounds of molybdenum. In 2010, Freeport-McMoRan reported revenues of $18.9 billion and a net income of $4.2 billion.[xi]

The Grasberg mine in Papua, Indonesia, employs 23,000 workers at wages below three dollars an hour. In September 2011, workers went on strike for higher wages and better working conditions. Freeport had offered a 22 percent increase in wages, and strikers said it was not enough, demanding an increase to an international standard of seventeen to forty-three dollars an hour. The dispute over pay attracted local tribesmen, who had their own grievances over land rights and pollution; armed with spears and arrows, they joined Freeport workers blocking the mine’s supply roads.[xii] During the strikers’ attempt to block busloads of replacement workers, security forces financed by Freeport killed or wounded several strikers.

Freeport has come under fire internationally for payments to authorities for security. Since 1991, Freeport has paid nearly thirteen billion dollars to the Indonesian government—one of Indonesia’s largest sources of income—at a 1.5 percent royalty rate on extracted gold and copper, and, as a result, the Indonesian military and regional police are in their pockets. In October 2011, the Jakarta Globe reported that Indonesian security forces in West Papua, notably the police, receive extensive direct cash payments from Freeport-McMoRan. Indonesian National Police Chief Timur Pradopo admitted that officers received close to ten million dollars annually from Freeport, payments Pradopo described as “lunch money.” Prominent Indonesian nongovernmental organization Imparsial puts the annual figure at fourteen million dollars.[xiii] These payments recall even larger ones made by Freeport to Indonesian military forces over the years which, once revealed, prompted a US Security and Exchange Commission investigation of Freeport’s liability under the United States’ Foreign Corrupt Practices Act.

In addition, the state’s police and army have been criticized many times for human rights violations in the remote mountainous region, where a separatist movement has simmered for decades. Amnesty International has documented numerous cases in which Indonesian police have used unnecessary force against strikers and their supporters. For example, Indonesian security forces attacked a mass gathering in the Papua capital, Jayapura, and striking workers at the Freeport mine in the southern highlands. At least five people were killed and many more injured in the assaults, which shows a continuing pattern of overt violence against peaceful dissent. Another brutal and unjustified attack on October 19, 2011, on thousands of Papuans exercising their rights to assembly and freedom of speech, resulted in the death of at least three Papuan civilians, the beating of many, the detention of hundreds, and the arrest of six, reportedly on treason charges.[xiv]

On November 7, 2011, the Jakarta Globe reported that “striking workers employed by Freeport-McMoRan Copper & Gold’s subsidiary in Papua have dropped their minimum wage increase demands from $7.50 to $4.00 an hour, the All-Indonesia Workers Union (SPSI) said.”[xv] Virgo Solosa, an official from the union, told the Jakarta Globe that they considered the demands, up from the (then) minimum wage of $1.50 an hour, to be “the best solution for all.”

Workers at Freeport’s Cerro Verde copper mine in Peru also went on strike around the same time, highlighting the global dimension of the Freeport confrontation. The Cerro Verde workers demanded pay raises of 11 percent, while the company offered just 3 percent.

The Peruvian strike ended on November 28, 2011.[xvi] And on December 14, 2011, Freeport-McMoRan announced a settlement at the Indonesian mine, extending the union’s contract by two years. Workers at the Indonesia operation are to see base wages, which currently start at as little as $2.00 an hour, rise 24 percent in the first year of the pact and 13 percent in the second year. The accord also includes improvements in benefits and a one-time signing bonus equivalent to three months of wages.[xvii]

In both Freeport strikes, the governments pressured strikers to settle. Not only was domestic militrary and police force evident, but also higher levels of international involvement. Throughout the Freeport-McMoRan strike, the Obama administration ignored the egregious violation of human rights  and instead advanced US–Indonesian military ties. US Secretary of Defense Leon Panetta, who arrived in Indonesia in the immediate wake of the Jayapura attack, offered no criticism of the assault and reaffirmed US support for Indonesia’s territorial integrity. Panetta also reportedly commended Indonesia’s handling of a weeks-long strike at Freeport-McMoRan.[xviii]

US President Barack Obama visited Indonesia in November 2011 to strengthen relations with Jakarta as part of Washington’s escalating efforts to combat Chinese influence in the Asia–Pacific region. Obama had just announced that the US and Australia would begin a rotating deployment of 2,500 US Marines to a base in Darwin, a move ostensibly to modernize the US posture in the region, and to allow participation in “joint training” with Australian military counterparts. But some speculate that the US has a hidden agenda in deploying marines to Australia. The Thai newspaper The Nation has suggested that one of the reasons why US Marines might be stationed in Darwin could be that they would provide remote security assurance to US-owned Freeport-McMoRan’s gold and copper mine in West Papua, less than a two-hour flight away.[xix]

The fact that workers at Freeport’s Sociedad Minera Cerro Verde copper mine in Peru were also striking at the same time highlights the global dimension of the Freeport confrontation. The Peruvian workers are demanding pay rises of eleven percent, while the company has offered just three percent. The strike was lifted on November 28, 2011.[xx]

In both Freeport strikes, the governments pressured strikers to settle. Not only was domestic militrary and police force evident, but also higher levels of international involvement. The fact that the US Secretary of Defense mentioned a domestic strike in Indonesa shows that the highest level of power are in play on issues affecting the international corporate 1 percent and their profits.

Public opinion is strongly against Freeport in Indonesia. On August 8, 2011, Karishma Vaswani of the BBC reported that “the US mining firm Freeport-McMoRan has been accused of everything from polluting the environment to funding repression in its four decades working in the Indonesian province of Papau. . . . Ask any Papuan on the street what they think of Freeport and they will tell you that the firm is a thief, said Nelels Tebay, a Papuan pastor and coordinator of the Papua Peace Network.”[xxi]

Freeport strikers won support from the US Occupy movement. Occupy Phoenix and East Timor Action Network activists marched to Freeport headquarters in Phoenix on October 28, 2011, to demonstrate against the Indonesian police killings at Freeport-McMoRan’s Grasberg mine.[xxii]

Freeport-McMoRan (FCX) chairman of the board James R. Moffett owns over four million shares with a value of close to $42.00 each. According to the FCX annual meeting report released in June 2011, Moffett’s annual compensation from FCX in 2010 was $30.57 million. Richard C. Adkerson, president of the board of FCX, owns over 5.3 million shares. His total compensation in was also $30.57 million in 2010 Moffett’s and Adkerson’s incomes put them in the upper levels of the world’s top 1 percent. Their interconnectness with the highest levels of power in the White House and the Pentagon, as indicated by the specific attention given to them by the US secretary of defense, and as suggested by the US president’s awareness of their circumstances, leaves no doubt that Freeport-MacMoRan executives and board are firmly positioned at the highest levels of the transnational corporate class.

Continue Reading The Global 1%: Exposing the Transnational Ruling Class at Project Censored

MEDIA ROOTS – The criminal trial for my alleged resisting arrest was again delayed this morning after prosecutors demanded access to a video that captured the aftermath of the March 25 detainment when I defied an unlawful order by a US Park Police offcier to put away my video camera. The trial showed increased public interest with several additional pedicab operators in attendance in court this morning for the outcome of the trial will heavily influence the future of this green mode of transport on the National Mall.

Citizen journalists, while lawfully protected by the Constitution, continue to be harassed – and occasionally detained – by many officers of the law for recording them during their duties. I was fortunate enough to be invited to the studios of Russia Today yesterday to discuss how citizen journalists’ rights continue to be marginalized yet how affective their work is at holding law enforcement accountable.

Oskar Mosco

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Liz Wahl and Oskar Mosco discuss the plight of citizen journalists.

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Syria and Iran

MEDIA ROOTS —Never before has the relationship between Iran and Syria been tested as it will be in the ensuing weeks and months. Syria’s story is rippling through the media as the situation on the ground changes by the hour. Right now, Iran and Syria stand confidently alongside Russia who is moving quickly to advance diplomacy and military assets into the region. Over millennia of shared history, Iran and Syria have been connected and disjoined. Currently, the Middle-East polarization brings them together to defend self-determination, individual and regional sovereignty and the right to a full nuclear fuel cycle. Media Roots contributor Chris Martin offers part two of this Media Roots original on the Iranian Neighborhood. In part one, Martin discussed the role of Israel and the permanent five.

Iran has strengthened it’s presence in Iraq–thanks to foreign imposed regime change, Iranian Shi’ite influence has penetrated Iraqi government institutions. Syria lies geographically west of Iraq and east of Israel, thus Syria and Iraq could be central theaters of war. Israel, America and Europe remain perched atop the slippery slope of war as Syria, Iran, Palestine, Southern Lebanon, Russia and China brace themselves for impact. The Western war hawk gazes upon Syria knowing Iran relies upon the geography of Syria as both a forward operating base and supply conduit.

Indeed the history between Syria and Iran spans back several millennia, but the current relationship emanates from the ashes of early 20^th century French and British imperialism. In 1920, Faisal I of the Hashemite family established the independent pan-Arab Kingdom of Syria to unify Sunni and Shia Muslims. European imperialists far from home had other uses in mind and the military muscle to clumsily occupy. Faisal I fled the French mandate assault, landing in the bosom of the British where he was summarily made the British King of Iraq. Together, France and Britain were carving up Syria, Lebanon, Iraq and Israel into various slices of occupation. The cloak of international consensus and impetus was once again deployed in the form of a League of Nations to administer and control the Middle-East, “until such time as they are able to stand alone.”

A decade and a half of Syrian revolution ensued, culminating in the return of Faisal’s original appointment President Hashim al-Atassi under the treaty of independence. Short lived as French legislators refused support and the gyrations of World War II would find the Vichy French themselves occupied by Germany. Syrian nationalists with the “help” of the ever-present British forced the French to evacuate and gain independence in 1946. A two decade chain-reaction of military coups ensued, including a brief union with Egypt. Syria was boiling with internal struggle as the Baathist party entrenched itself and the Syrian Golan Heights were surrendered to Israel in the Six Day War of 1967.

In 1970, Alawite General Hafez al-Assad led the Corrective Revolution demanding a permanent constitution, women’s rights, liberalized economy, domestic inclusion of non-Baathist groups and alliances with Jordan and Saudi Arabia. Through the revolution, general al-Assad ascended to the Syrian Presidency where he ushered in a Syrian constitution in 1973. With oil discoveries, President al-Assad opened Syria to foreign investment and invested in industry, infrastructure, education and medicine, while consolidating central government power under Shia Alawite Baathist leadership.

The Soviets invested in the Syrian regime, helping them build dams and strengthen their military. Subsequently, the country became a regional symbol of independence from British and French imperialist designs. But the Alawite Shia running Syria faced an internal threat more grave than the floundering British and French imperialists: the Muslim Brotherhood, comprised of Sunni Muslims, began an assassination campaign against the ruling Shia Alawite Baathist. In February 1982, Assad ordered the Syrian Army to attack the Syrian town of Hama. More than 30,000 people were killed including thousands of Syrian soldiers and Muslim Brotherhood militants. As a result, Assad moved to tighten his inner circle as evidenced by hundreds of extrajudicial executions of opponents.

President Hafez al-Assad subsequently developed a state sponsored cult of personality campaign, which was adopted by his son and successor–Bashar al-Assad. University of Damascus graduate, army doctor, military academy graduate –Bashar al-Assad took charge of the Syrian occupation of Lebanon. In 2000, Bashar al-Assad ascended to the Syrian Presidency where he tentatively remains today. Bashar al Assad’s Syria is now at the tipping point of international military intervention and regime change as Iran and Russia stand ready to aid the Syrian ally.

Syria and Iran’s Multi-dimensional Relationship

In the first dimension, you find Syria more than 70% Sunni Muslim and Iran more than 90% Shia Muslim. This religious divide is currently irrelevant as the minority Syrian Alawite (>15% total population) share Shia Islam with Iran and cling to power. It can be said that Iran has the hearts and minds of Syria’s ruling Shia minority but only the disdain of the Syrian Sunni masses.

In the second dimension, Syria has always been an Iranian tentacle to influence Lebanon. This opaque relationship has yielded a battle hardened and entrenched Hezbollah fighting force in South Lebanon, which is heavily dependent upon Iranian hardware, training and intelligence. Conversely, over reaching Syrian-Iranian influence in Lebanon opened the door for international condemnation as the assassination of Lebanese Prime Minister Rafiq Hariri was blamed on Syria, precipitating the Cedar Revolution and the epic withdrawal of Syrian troops.

In the third dimension, Syria supported Iran in the Iran-Iraq war. It was the only Arab State to support Iran, which reaped the rewards of Iranian adoration but marked the beginning of strained Syrian regional and international relationships. The founder of the Islamic Republic of Iran, Ayatollah Khomeini, openly expressed his desire to export the Islamic revolution to all Muslim countries. Other Arab states poured their support behind Iraq, fearing Iran would destabilize their own constituency.

In yet another dimension, Syria participated in the wars against Israel in 1948 and 1967, losing more than 500 square miles of territory to Israel known as the Golan Heights. This festering open-sore attracts and internally justifies the Iranian anti-Zionist agenda. The Golan Heights volcanic plateau has been extensively settled by Israel and strategically provides Israel with one-third of its water. In 1981, Israel extended its civil law to the occupied territory and this was condemned by United Nations Resolution 497 as an illegal violation of Syrian sovereignty.

Today, the international community is in a tug-of-war over Syria. The Supreme Leader of Iran, Ayatollah Ali Khamenei, insists the Syrian protests are the machinations of America and Israel. This sentiment is shared across the Iranian power structure as both Iran’s Revolutionary Guard and Parliament have condemned the Syrian uprising as an ongoing American attempt at regime change. Conversely, Iran is anonymously accused of supplying Syria with equipment to put down protests, including techniques on Internet surveillance, drone aircraft and lethal material for riot control. Other reports identify Iran Quds force 3^rd in command, Mohsen Chizari, as the individual in charge of training Syrian security services and Iranian snipers are allegedly deployed in Syria to assist the crackdown on protests.

Media manipulation is in full bloom as the battle for public support is waged. Iran insists Syria is being destabilized to serve the Zionist agenda, while the West insists Syria is experiencing an internal revolt ignited by the cinders of the Arab spring. Media aligned with both sides fervently pushes their version of reality. The central banking cabal is whipping the politicians, diplomats and their media slaves to move the international war machine. What emanates from the stinking bowels of media spin is conditioning for the masses. In small pulsating doses the Western mass is coaxed and lulled into support for action against one side of a “civil war.” A civil war induced and now purportedly saved by foreign intervention. As with all human wars the bankers stand to gain, while humanity loses collective dignity, individual life and another opportunity to cooperate.

The Middle-East endures two continuing ailments. The clash of Shia and Sunni Islam across the Middle-East is at the core of regional disunity, which allows opportunity for imperialist penetration of regional sovereignty. The stale imperialist mandates that created the British-Israeli outpost and the borders across the region are toxic. Iran has always considered Syria as a forward theater for placing the building blocks of war and shares the blame for regional trans-national manipulation. Religious tolerance and respect of sovereignty remains the moral and ethical high road and the key to peace in the Middle-East.

Turkey and Iran

Until recently, the rise of Turkish Prime Minister Recep Tayyip improved ties with Iran. Turkey’s increasingly hard line against Israel and Syria has paralyzed the expansion of trust with Iran. Now Iran is walking a diplomatic tight-rope, favoring the Turkish position against Israel but blaming Syrian civil unrest on Turkish collusion with Zionist and Western imperialist powers. Perhaps most damaging to Turkish-Iranian relations is the decision of Turkey to host a NATO missile shield capable of limiting an Iranian counter-attack, should Israel attack Iranian nuclear facilities. The relationship between Turkey and Iran runs through Syria and Israel and untangling the diplomacy to find neutrality and peace will be monumentally difficult and remains fragile by the hour.

In 2005, the Turkish Prime Minister visited Israel to advance economic ties. In 2007, this visit was reciprocated by Israeli President Shimon Peres visiting Turkey to set a precedent as the first Israeli leader to address the parliament of a predominately Muslim nation. A series of ensuing events significantly soured the relationship between Turkey and Israel, much to the pleasure of Iran.

The 2008-2009 Israel-Gaza atrocity leaving 1,300 Palestinian human beings dead placed the Israeli President on the defensive, who reminded Turkey that if rockets had hit Istanbul they would have reacted similarly. Turkey’s Prime Minister fired back under duress that Israeli actions in Gaza were barbaric.  He shouted, “I find it very sad that people applaud what you (Peres) have said because you know how to kill people.”

In hindsight, an ominous premonition as Israel would conduct a bloody maritime raid on an international flotilla attempting to bring humanitarian supplies to the blockaded and besieged Palestinians. On May 31, 2010 a ship named Mavi Marmara was stormed by Israeli commandos leaving eight Turkish citizens dead. The raid was condemned as “disproportionate” and “brutal” by the United Nations Human Rights Council. Turkey recalled its ambassador to Israel and summoned the Israeli ambassador to explain the “state sponsored terrorism.”

Turkey’s Prime Minster furthered the alignment with Iran when he described Israel as “the main threat to regional peace,” and called for Israeli nuclear facilities to come under International Atomic Energy Agency inspection. He and the Brazilian President Lula da Silva met in Tehran to secure Iranian uranium enrichment outsourcing contracts to alleviate sanctions on Iran. The Turkish-Iranian dovetail concerning the Israel-Palestine issue was summarized by Turkey’s Foreign minister saying, “Enough is enough. The longer the Palestinian-Israeli issue remained unresolved, the greater the price peoples of the region, including Turkey, pay. Israelis should decide on what they want… Israel has failed to convey any positive message…but continues to build new settlements and make provocative statements…the existing status quo cannot exist anymore. Palestinians deserve their own state.”

Recep Tayyip Erdrogan 

This non-collaborative alignment with Iran against Israel is starkly contrasted by Turkey’s rapidly disintegrating relationship with Iran’s number one regional ally –Syria. What started out as Turkish objections to Syrian methods of quelling civil unrest, complaints about the flow of refugees into Turkey and the killing of Syrian refugees on Turkish soil is now teetering on all out war. Syria shot down a Turkish F-4 Phantom reconnaissance aircraft just last week.

The Syrian air defense system near the city of Latakia is also the site of an Iranian funded Syrian military installation. This military facility is close in proximity to the Russian naval base at Tartus and the entire area hosts the NATO missile shield. However, no collusion between Syria and Iran has been reported in the downing of the Turkish F-4 aircraft. The unarmed aircraft did violate Syrian airspace and did crash in Syrian territorial waters, yet Turkey is adamant in clarifying the attack occurred over international waters. Syria is acknowledging justified responsibility noting the aircraft crossed into Syrian airspace and was not known to be Turkish.

Syrian foreign ministry spokesman Jihad Makdissi said, “Syria was merely exercising its right and sovereign duty and defense…There is no enmity between Syria and Turkey, but political tension (exists) between the two countries…What happened was an accident and not an assault as some like to say, because the plane was shot while it was in Syrian airspace and flew over Syrian territorial waters.” Turkey’s Foreign Minister has asked for Iranian support in convincing Syria to apologize and compensate the country of Turkey. Since Turkey’s official accusation of Syrian aggression, their relationship has deteriorated.

Turkey’s decision to host a NATO radar system to track missiles launched from Iran was regarded by Iran as a breach of trust. Iran views the missile shield as a Western effort to protect Israel should Iran decide to retaliate for Israeli strikes on Iranian nuclear facilities.

Iran Supreme Leader Ayatollah Ali Khamenei suggested Turkey should rethink its Syrian policies and the NATO defense shield, but Turkey continues to insist the missile defense system secures Europe and Turkey consistent with NATO goals. In November 2011, the head of the Iranian Guard’s aerospace division threatened to strike the NATO missile shield in Turkey if other countries attacked Iran. Indeed, Turkey and Iran are currently enduring the most strain between the two countries in modern history.

The relationship between Turkey and Iran depends upon their individual relationships with their neighbors. It is hard to imagine Turkey abandoning NATO to fight a war against Israel and equally as hard to imagine Iran sitting idly by should Turkey strike Syria. What is horribly conceivable is Iran lashing out against Turkey should the entire region descend into the madness of war. Thus, Turkey-Iran relations are ominous.

Saudi Arabia and Iran

The relationship between Shi’ite dominated Iran and Sunni dominated Saudi Arabia has always been strained by sectarian differences. Clerics from both countries denounce the others beliefs. Sunni Muslims believe that a group of Muhammad’s prominent companions gathered after his death and elected Muhammad’s father-in-law, Abu Bakr Siddique, as the first of four Caliphs of Islam. Shia Muslims believe Muhammad’s cousin and son-in-law Ali ibn Abi Talib is the rightful successor to Muhammad. Volatile discourse, tense diplomacy and even violence have been the result of interaction between Shia Iran and Sunni Saudi Arabia.

In the early 20th century Iran and Saudi Arabia jousted diplomatically over various Persian Gulf islands, settling peacefully on ownership and waterway rights. The relationship shifted as Iran’s military began to modernize and then radically changed as the Islamic Revolution of Iran went into full swing in 1979. In 1987, Supreme Leader Ayatollah Khomeini declared that “these vile and ungodly Wahhabis, are like daggers which have always pierced the heart of the Muslims from the back,” and announced that Mecca was in the hands of “a band of heretics.” This was ensued by attacks on Shi’ite holy sites and Hajj pilgrims in Saudi Arabia and attacks on Saudi diplomats in Tehran.

The Iraqi invasion of Kuwait in 1990 shifted the relationship between Saudi Arabia and Iran. Both were opposed to the use of force to resolve regional conflict, Iran even backed United Nations sanctions against Iraq. In 1991, the stage was set for restoration of diplomatic ties between Saudi Arabia and Iran. The resumption of diplomatic ties witnessed several visits of high level dignitaries, yet every time the relationship began to warm incidents with shades of false-flag would intervene.

Following the thaw of 1991 the Hajj pilgrimage was expanded for Iranians visiting Mecca, for a period of five years the relationship took incremental steps in a positive direction. On June 23, 1996 American military barracks in Dhahran were bombed, killing military personnel and wounding hundreds of civilians. America immediately blamed Iran but was unable to provide proof significant enough to stunt the budding Iranian-Saudi relationship.

In 1997, the Organisation of the Islamic Conference witnessed regional Arab partners warming to Iran, which was followed by a Saudi delegation visiting Iran and Iranian President Khattami visiting Saudi Arabia. This led to a series of cooperative agreements that culminated in the Saudi-Iranian security agreement of 2001. While Saudi Arabia and America have been allies for sixty years, Saudi Arabia claims to walk a neutral line when it comes to American policy regarding Iran. In 2007, the controversial Iranian President Ahmadinejad accepted the invitation of King Abdullah to visit Saudi Arabia and the trip signaled a strengthening relationship.

This all came crashing down in 2009 when in the shadow of Secretary of State Clinton, Saudi Foreign Minister al-Faisal stated, “the threat posed by Iran demanded a more immediate solution than sanctions.” A statement quickly denounced by Iranian officials, but one that set the Saudi-Iranian relationship back twenty years. In late 2011, Attorney General Eric Holder accused Iran of planning to assassinate the Saudi-Arabian ambassador to the United States. To date, very little public information is available on this allegation and it appears on the surface to be consistent with the American agenda to keep Saudi Arabia and Iran at arms length.

Two weeks ago, the Organization of the Petroleum Exporting Countries met to resolve the differences between Iran and Saudi-Arabia with respect to oil production. Iran would like lower production and higher prices, while Saudi-Arabia would like to serve the tightening of Western oil sanctions by increasing production to stagnate or drop prices. A compromise was reached by agreeing to maintain the status quo of 30 million barrels a day. Saudi-Arabia shares the Persian Gulf with Iran and could be attacked by Iran should Iran perceive Saudi collusion with the Western agenda. Yet, Saudi-Arabia is well armed by America and will likely support any power opposing Iran.

Palestine and Iran

Palestine-Iran relations have shifted on several occasions. Before the Iranian revolution of 1979, the Shah of Iran was engrossed in maintaining good diplomatic relations with Britain, America and Israel. During this time the Palestinian Liberation Organization (PLO) maintained training camps in Lebanon to train Iranian opposition. Only days after the 1979 revolution occurred, PLO chief Yasser Arafat visited Iran and was handed the keys to the former Israeli embassy.

A tenuous relationship was then formed between Iranian leader Ayatollah Khomeini and Yasser Arafat. Khomeini opposed the PLO pan-Arab agenda and was rebuffed by Arafat when he asked that the PLO be modeled after the Islamic revolution. The relationship was severely strained when Arafat supported Iraq during the Iran-Iraq war and disintegrated when Arafat renounced terrorism and called for peace talks with Israel in 1988.

In 2000, Middle-East peace talks held at Camp David in America collapsed. This restored Iranian support of Palestine as evidenced in 2002, when Israel seized a ship carrying 50 tons of weapons from Iran to Gaza, Palestine. In 2004, Yasser Arafat died and a year later Israel withdrew its occupation of Gaza, which ushered in a democratically elected Hamas government. Foreign aid for Palestine quickly diminished and Iran stepped in with substantial aid to avoid Hamas bankruptcy.

The current relationship between Iran and Palestine depends upon which Palestine is being discussed. In January 2006, the Hamas party won democratic legislative elections over the long standing Palestinian Fatah party. The sovereign election results have never been challenged and are internationally accepted as legitimate. However, Israel, America, Canada and Europe all froze financial assistance declaring Hamas a terrorist organization. Hamas leader Khaled Meshaal, survivor of a 1987 Israeli assassination, and Fatah leader Mahmoud Abbas would meet in Mecca, Saudi Arabia in February 2007 to form the Palestinian national unity government.

The newly elected Hamas party would place Ismail Haniyeh as Prime Minister of the Palestinian unity government. On June 7, 2007 the Battle of Gaza was unleashed as Hamas asserted military control over the Gaza strip and forced Fatah out. Fatah leader and Palestinian President, Mahmoud Abbas, declared a state of emergency and dissolved the national unity government. Fatah leader Abbas dismissed the democratically elected Haniyeh and appointed Salam Fayyad to head a new “independent” government that has no Fatah or Hamas members but is supported by Fatah, Israel and America.

Under Palestinian law, the President may dismiss a sitting Prime Minister, but can only appoint a replacement with the approval of the Palestinian Legislative Council. The law clearly states the outgoing Prime Minster, Ismail Haniyeh, heads a caretaker government. The Palestinian Legislative Council never approved the appointment of Salam Fayyad and several prominent Palestinian constitutional lawyers have publicly declared the appointment of Fayyad illegal. Fragmentation of the Palestinian unity government across party lines evolved into geographical separation, as Hamas continues to govern the Gaza strip and Fatah controls the West Bank. Currently, the two regimes are referred to as the Palestinian National Authority and each considers itself as the legitimate Palestinian government. The stench of modern imperialism is thick in the air as America nakedly facilitates and condones an illegal regime change–in lieu of democracy.

Iran was keen to support this new usurper of Western imperialism and Hamas became a favored son. Fatah remains on Western life support and is legally illegitimate and increasingly insignificant without popular Palestinian support. In a recent interview, a Hamas political leader named Salah Barawil surprisingly said, “If there is a war between [the] two powers, Hamas will not be a part of such a war…Hamas is not part of military alliances in the region. Our strategy is to defend our rights.” Hamas formerly based out of Damascus, Syria has trimmed its “proxy” status with Iran given the deterioration of Syria. Iran has since retaliated by cutting off funding to Hamas.

Also, Iran has no relationship with the Western sponsored West Bank Fatah party and as mentioned, has severed its ties with the Gaza based Hamas party. This about face on Hamas’ part benefits Israel in any potential regional war as Hamas and Fatah are the closest in proximity to Israel and are expected to serve the Iranian master. Hamas has continued to defy the Iranian and Syrian axis by refusing to hold rallies supporting the beleaguered Syrian Assad regime. In February 2012, Hamas and Fatah reluctantly signed the Hamas-Fatah Doha agreement. The plan called for joint elections in May 2012, which have yet to materialize.

Of all the nations mentioned in this article Palestine is the most important, because the Middle-East region pivots according to the circumstances on the ground in Palestine. The fate of Palestine is in the hands of a world that does not universally recognize its sovereignty, and the area surrounding Jerusalem has been in flux for more than three-millennia. Iran views Israel as the occupier of Palestine and rejects a two state solution, and President Ahmadinejad has called for a referendum for the Palestinian population to determine the type of government of any future Palestinian state, while reiterating that establishment of a Palestinian state alongside Israel would “never mean an endorsement of the Israeli occupation.”

Lebanon and Iran

Lebanese history predates recorded history – spanning back 7000 years. The Phoenicians maintained their maritime culture in the East Mediterranean for 2500 years from roughly 3000 – 539 BC. Attacked and ruled by Macedonia, Persia, Egypt and many others Lebanon’s geographical location has placed it in the crossfire of war for millennia. As a result Lebanon enjoys significant religious diversity. Largely a Maronite Christian territory it also includes many Greek Orthodox, Druze, Shia and Sunni Muslim citizens.

Ruled by the Ottoman Empire for four centuries, Lebanon on the heels of World War I became part of the French Mandate of Syria and Lebanon. France formed the Lebanese Republic in 1926 as a democratic republic with a parliamentary system. Lebanon gained independence in 1943 when France was attacked and occupied by Germany. The remaining French command, referred to as the Vichy French Army, allied with the Germans and allowed Germany to attack regional British interests during the Anglo-Iraqi war. This led to an attack of the French mandate by Britain and allies, most notably the Australians.

From this independence came Lebanon’s unwritten National Pact. The National Pact required Maronites to not seek western intervention and accept Lebanon as an Arab affiliated country; likewise the Muslims were required to abandon the desire to unite with Syria. Further it divided the seats of power among the various religious groups; the President would always be Maronite, the Prime Minister would be Sunni Muslim, the President of the National Assembly would be Shia Muslim, the Deputy Speaker of the Parliament and Deputy Prime Minister would be Greek Orthodox and the Chief of the General Staff would be Druze.

A period of relative tranquility and prosperity was realized from the withdrawal of French troops in 1946 to the beginning of the Lebanese civil war in 1975. From 1975 to 1990 over 200,000 Lebanese civilians died, upwards of a million were wounded and another million fled the country and conflict. Adding fuel to the fire and changing the Lebanese demographic dramatically, hundreds of thousands of Palestinian refugees fled Palestine as the Israeli occupation deepened. These refugees were armed by the PLO and were significant enough in number to wield a veto in Lebanese politics. This sparked an internal arms race among all Lebanese factions.

As the Lebanese civil war came to a close in 1990, Lebanon would again enjoy a period of relative tranquility and prosperity. Reconstruction of the country was done in such a way that it serves as a model for any country devastated by a civil war catastrophe. As reconstruction was coming to a close and tourism reached peaks never before seen, a war between the Lebanese Hezbollah and Israel broke out in 2006.

Southern Lebanon borders Israel and is the main stomping ground of the Shia Muslim political and military party –Hezbollah. Some allege Hezbollah was created by Iran as a proxy force positioned on the Israeli border. Having emerged in 1982 during the Lebanese civil war, Hezbollah fighters received training and equipment from the Iranian revolutionary guard.

In February 2005, the Prime Minister of Lebanon was assassinated and investigations pointed towards Syria. This led to significant political and military flux known as the Cedar Revolution, culminating in the withdrawal of 14,000 Syrian troops from Lebanon. Four members of Hezbollah were indicted by a United Nations tribunal for involvement in the assassination, while Hezbollah maintains the Israeli Mossad carried out the assassination to dislodge Syria from Lebanon. Several other anti-Syrian politicians and investigators were assassinated in the ensuing months and the incidents remain an open wound.

On July 12, 2006 Hezbollah killed and kidnapped Israeli soldiers to be used as leverage for prisoner exchange. Israel reacted sternly with artillery and airstrikes on civilian infrastructure and Hezbollah countered with thousands of Katyusha rockets fired deep into Israeli territory. Hezbollah dug in with hardened positions on the Lebanese side of the border and fought a guerilla war against Israeli infantry with some “success.” Hezbollah has rearmed since hostilities ceased, expanding its arsenal of rockets with the help of Syria and Iran. Most of its rocket arsenal is either Iranian or Russian and Syria is widely regarded as the main supplier if only the main supply route.

In 2008, after a quasi-successful defense of Lebanon’s southern border in the 2006 conflict, Hezbollah would control eleven of thirty Lebanese cabinet seats. In August 2008, Lebanon’s new cabinet unanimously approved Hezbollah’s right to exist as an armed organization headed by its Secretary General, Hassan Nasrallah. Despite the integration of Hezbollah into the Lebanese government many Western powers still label Hezbollah as a terrorist group.

Iran via Syria and the Lebanese Hezbollah remain on the northern border of Israel ready to defend should Lebanon come under attack. It is the assertion of many military and diplomatic experts that this border area will become a major battlefield should Israel launch a pre-emptive strike on Iran. Hezbollah leader Hassan Nasrallah has also backed off from statements suggesting Hezbollah would support Iran in the event of an Israeli attack. In a Beirut, Lebanon newspaper Nasrallah said, “There is speculation about what would happen if Israel bombed Iran’s nuclear facilities…I tell you that the Iranian leadership will not ask Hezbollah to do anything. On that day, we will sit, think and decide what we will do.” This may be a feint in reaction to Israel’s warning that it will strike Hezbollah if Iran attacks Israel.

Iran and Lebanon are partially allied; to the extent Hezbollah entirely controls the South of Lebanon. The Lebanese Hezbollah continues to maintain close relations with both Iran and Syria. Many Lebanese were displeased with the excessive Israeli destruction of their newly rebuilt country and will not support Hezbollah or Iran. It is quite likely that Lebanon’s partial allegiance with Iran will suck the country back into its familiar state of civil war. The implications of an Israeli strike on Iranian nuclear facilities will engulf the entire region and Lebanon will be the first to suffer.

The entire region remains a tinder box waiting for an ample spark. If the Syrian downing of a Turkish jet won’t ignite the region, certainly an Israeli strike on Iran’s nuclear infrastructure will set off a catastrophic fire. On June 28, 2012 America will increase sanctions to include Iranian oil clients and the European Union is set to embargo Iranian oil on July 1, 2012. Iran is keeping one foot in the door insisting on rapid lifting of existing international sanctions and recognition of Iran’s right to domestically enrich uranium. Western powers insist on the complete opposite and the gluttony of war seems imminent.

The story of the Iranian Neighborhood keeps revisiting a central thread. European imperialism in the Iranian neighborhood saturates relationships with decades of malcontent. France and Britain are predominately responsible for the creation of modern, Israel, Syria, Lebanon and Iraq. America has to decide if it desires to keep watering the roots of terrorism by supporting failed European imperialist endeavors. America is a war machine with a foreign policy hi-jacked by civilian think tanks, the central banking cabal and perverted war-mongering corporate dollars. America should practice some independence and distance itself from Euro-imperialism.

Part three of this three part feature on the Iranian Neighborhood will take a look at the neighborhood through snapshots of allegiance with contiguous countries such as Jordan, Egypt, Armenia, Azerbaijan, Turkmenistan, Afghanistan, Pakistan, Iraq and Kuwait. Join us again at Media Roots for the exclusive conclusion of this in depth analysis of the Iranian Neighborhood.

Chris Martin for Media Roots

Photo provided by Juan Cole