The Libyan devils we don’t know

the independent

• By Oliver Wright
• Monday, 21 March 2011 at 4:22 pm

After Friday’s euphoria reality begins to set in.

MPs are getting their first chance to debate Britain’s involvement in Libya this afternoon and already there is concern being expressed about the strength of the coalition against Gaddafi and what the ‘end game’ of our involvement will be.

What is clear from listening to MPs in the debate is that while almost all broadly support idea of intervention – that support is shallow and could disappear quickly if events on the ground (or the air) start going wrong.

It is worth asking what the reaction of MPs and the public will be if an airstrike goes wrong and a significant number of civilians die at the hands of the coalition rather than Gaddafi.

Even within the Government there is private concern that while ministers and officials have “thought about” the consequences of military action in Libya they have not “thought it through”. Events of the ground have simply not allowed the time for such considered debate.

One organization illustrates this point neatly. The Libyan Islamic Fighting Group (LIFG) is a group of radical Islamists aligned with al-Qaeda who are based in and around Bengazi and form part of the internal opposition to the Gaddafi regime. They tried to assassinate him in 2005 and their members have been involved in the eastern uprising.

LIFG is a proscribed terrorist group as in the UK – after it emerged that they were big suppliers of suicide bombers in Iraq.

Now we’re on the same side.

Cameron may say there is no decent future for Libya with Gaddafi still in power – but it is far from clear there is a decent future for Libya if he is removed. Or a future that the West would want.

Libya: the West and al-Qaeda on the same side

Source: The Telegraph

Statements of support for Libya's revolution by al-Qaeda and leading Islamists have led to fears that military action by the West might be playing into the hands of its ideological enemies.

A Libyan rebel grimaces on the frontline near Sultan, south of Benghazi Photo: AP

By Richard Spencer, Tripoli 6:48PM GMT 18 Mar 2011

WikiLeaks cables, independent analysts and reporters have all identified supporters of Islamist causes among the opposition to Col Gaddafi's regime, particularly in the towns of Benghazi and Dernah.

An al-Qaeda leader of Libyan origin, Abu Yahya al-Libi, released a statement backing the insurrection a week ago, while Yusuf Qaradawi, the Qatar-based, Muslim Brotherhood-linked theologian issued a fatwa authorising Col Gaddafi's military entourage to assassinate him.

But they also agree that the leading roles in the revolution are played by a similar cross-section of society as that in Egypt next door – liberals, nationalists, those with personal experience of regime brutality and Islamists who subscribe to democratic principles.

The WikiLeaks cables, initially revealed by The Daily Telegraph and dating from 2008, identified Dernah in particular as a breeding ground for fighters in a number of causes, including Afghanistan and Iraq.

"The unemployed, disfranchised young men of eastern Libya have nothing to lose and are therefore willing to sacrifice themselves for something greater than themselves by engaging in extremism in the name of religion," the cables quoted a Dernah businessman as saying.

Col Gaddafi has pinpointed the rebels in Dernah as being led by an al-Qaeda cell that has declared the town an Islamic emirate. The regime also casts blame on hundreds of members of the Libyan Islamist Fighting Group released since the group renounced violence two years ago.

Although said by the regime to be affiliated to al-Qaeda, most LIFG members have focused only on promoting sharia law in Libya, rejecting a worldwide "jihad".

The man running Dernah's defences, Abdelkarim al-Hasadi, was arrested by US forces in Afghanistan in 2002, but says he does not support a Taliban-like state.

The rebels' political leadership there says it is secular.

The same goes for the wider leadership, whose membership claims to espouse largely liberal ideals.

In any future negotiations – should it come to dialogue or even victory – rebel spokesmen are likely to be politicians who were until recently senior figures in the regime itself.

The head of the opposition National Council, Mustafa Abdul Jalil was Col Gaddafi's justice minister until he defected at the start of the uprising.

That may not be as bad as it sounds – he was a law professor appointed to improve Libya's human rights record by Saif al-Islam Gaddafi when the colonel's son was leading Libya's westernisation drive, and had already clashed with longer-standing regime insiders.

The military chief, though, is Abdul Fattah Younis al-Obeidi, a former leader of Col Gaddafi's special forces who was his public security, or interior, minister until he went over to the rebels.

He has described Col Gaddafi as "not completely sane", and worked with the SAS during the now curtailed thaw in British-Libyan relations. But it is still ironic that the West is taking sides in a battle between the leader of a much hated regime and his former effective deputy.

The first barons of banking

Abu Dhabi Media Company FZLLC. http://www.thenational.ae/

Nobleman: Baron David de Rothschild, the head of the Rothschild bank. The Rothschilds have helped the British government since financing Wellington's army to fight the French in 1815. Galen Clarke / The National

Among the captains of industry, spin doctors and financial advisers accompanying British prime minister Gordon Brown on his fund-raising visit to the Gulf this week, one name was surprisingly absent. This may have had something to do with the fact that the tour kicked off in Saudi Arabia. But by the time the group reached Qatar, Baron David de Rothschild was there, too, and he was also in Dubai and Abu Dhabi.

Although his office denies that he was part of the official party, it is probably no coincidence that he happened to be in the same part of the world at the right time. That is how the Rothschilds have worked for centuries: quietly, without fuss, behind the scenes.

“We have had 250 years or so of family involvement in the finance business,” says Baron Rothschild. “We provide advice on both sides of the balance sheet, and we do it globally.”

The Rothschilds have been helping the British government – and many others – out of a financial hole ever since they financed Wellington’s army and thus victory against the French at Waterloo in 1815. According to a long-standing legend, the Rothschild family owed the first millions of their fortune to Nathan Rothschild’s successful speculation about the effect of the outcome of the battle on the price of British bonds. By the 19th century, they ran a financial institution with the power and influence of a combined Merrill Lynch, JP Morgan, Morgan Stanley and perhaps even Goldman Sachs and the Bank of China today.

In the 1820s, the Rothschilds supplied enough money to the Bank of England to avert a liquidity crisis. There is not one institution that can save the system in the same way today; not even the US Federal Reserve. However, even though the Rothschilds may have lost some of that power – just as other financial institutions on that list have been emasculated in the last few months – the Rothschild dynasty has lost none of its lustre or influence. So it was no surprise to meet Baron Rothschild at the Dubai International Financial Centre. Rothschild’s opened in Dubai in 2006 with ambitious plans to build an advisory business to complement its European operations. What took so long?

The answer, as many things connected with Rothschilds, has a lot to do with history. When Baron Rothschild began his career, he joined his father’s firm in Paris. In 1982 President Francois Mitterrand nationalised all the banks, leaving him without a bank. With just US$1 million (Dh3.67m) in capital, and five employees, he built up the business, before merging the French operations with the rest of the family’s business in the 1990s.

Gradually the firm has started expanding throughout the world, including the Gulf. “There is no debate that Rothschild is a Jewish family, but we are proud to be in this region. However, it takes time to develop a global footprint,” he says.

An urbane man in his mid-60s, he says there is no single reason why the Rothschilds have been able to keep their financial business together, but offers a couple of suggestions for their longevity. “For a family business to survive, every generation needs a leader,” he says. “Then somebody has to keep the peace. Building a global firm before globalisation meant a mindset of sharing risk and responsibility. If you look at the DNA of our family, that is perhaps an element that runs through our history. Finally, don’t be complacent about giving the family jobs.”

He stresses that the Rothschild ascent has not been linear – at times, as he did in Paris, they have had to rebuild. While he was restarting their business in France, his cousin Sir Evelyn was building a British franchise. When Sir Evelyn retired, the decision was taken to merge the businesses. They are now strong in Europe, Asia especially China, India, as well as Brazil. They also get involved in bankruptcy restructurings in the US, a franchise that will no doubt see a lot more activity in the months ahead.

Does he expect governments to play a larger role in financial markets in future? “There is a huge difference in the Soviet-style mentality that occurred in Paris in 1982, and the extraordinary achievements that politicians, led by Gordon Brown and Nicolas Sarkozy, have made to save the global banking system from systemic collapse,” he says. “They moved to protect the world from billions of unemployment. In five to 10 years those banking stakes will be sold – and sold at a profit.”

Baron Rothschild shares most people’s view that there is a new world order. In his opinion, banks will deleverage and there will be a new form of global governance. “But you have to be careful of caricatures: we don’t want to go from ultra liberalism to protectionism.”

So how did the Rothschilds manage to emerge relatively unscathed from the financial meltdown? “You could say that we may have more insights than others, or you may look at the structure of our business,” he says. “As a family business, we want to limit risk. There is a natural pride in being a trusted adviser.”

It is that role as trusted adviser to both governments and companies that Rothschilds is hoping to build on in the region. “In today’s world we have a strong offering of debt and equity,” he says. “They are two arms of the same body looking for money.”

The firm has entrusted the growth of its financing advisory business in the Middle East to Paul Reynolds, a veteran of many complex corporate finance deals. “Our principal business franchise is large and mid-size companies,” says Mr Reynolds. “I have already been working in this region for two years and we offer a pretty unique proposition.

“We work in a purely advisory capacity. We don’t lend or underwrite, because that creates conflicts. We are sensitive to banking relationships. But we look to ensure financial flexibility for our clients.”

He was unwilling to discuss specific deals or clients, but says that he offers them “trusted, impartial financing advice any time day or night”. Baron Rothschilds tends to do more deals than their competitors, mainly because they are prepared to take on smaller mandates. “It’s not transactions were are interested in, it’s relationships. We are looking for good businesses and good people,” says Mr Reynolds. “Our ambition is for every company here to have a debt adviser.”

Baron Rothschild is reluctant to comment on his nephew Nat Rothschild’s public outburst against George Osborne, the British shadow Chancellor of the Exchequer. Nat Rothschild castigated Mr Osborne for revealing certain confidences gleaned during a holiday in the summer in Corfu.

In what the British press are calling “Yachtgate”, the tale involved Russia’s richest man, Oleg Deripaska, Lord Mandelson, a controversial British politician who has just returned to government, Mr Osborne and a Rothschild. Classic tabloid fodder, but one senses that Baron Rothschild frowns on such publicity. “If you are an adviser, that imposes a certain style and culture,” he says. “You should never forget that clients want to hear more about themselves than their bankers. It demands an element of being sober.”

Even when not at work, Baron Rothschild’s tastes are sober. He lives between Paris and London, is a keen family man – he has one son who is joining the business next September and three daughters – an enthusiastic golfer, and enjoys the “odd concert”. He is also involved in various charity activities, including funding research into brain disease and bone marrow disorders.

It is part of Rothschild lore that its founder sent his sons throughout Europe to set up their own interlinked offices. So where would Baron Rothschild send his children today?

“I would send one to Asia, one to Europe and one to the United States,” he said. “And if I had more children, I would send one to the UAE.”

UK's Brown: Now is the time to build global society

07:03 PM EST

LONDON (Reuters) - The international financial crisis has given world leaders a unique opportunity to create a truly global society, Britain's Prime Minister Gordon Brown will say in a keynote foreign policy speech on Monday.

In his annual speech at the Lord Mayor's Banquet, Brown -- who has spearheaded calls for the reform of international financial institutions -- will say Britain, the United States and Europe are key to forging a new world order.

"The alliance between Britain and the U.S. -- and more broadly between Europe and the U.S. -- can and must provide leadership, not in order to make the rules ourselves, but to lead the global effort to build a stronger and more just international order," an excerpt from the speech says.

Brown and other leaders meet in Washington next weekend to discuss longer term solutions for dealing with economic issues following a series of coordinated moves on interest rates and to recapitalize banks in the wake of the financial crisis.

"Uniquely in this global age, it is now in our power to come together so that 2008 is remembered not just for the failure of a financial crash that engulfed the world but for the resilience and optimism with which we faced the storm, endured it and prevailed," Brown will say in his speech on Monday evening.

"...And if we learn from our experience of turning unity of purpose into unity of action, we can together seize this moment of change in our world to create a truly global society."

According to a summary of the speech released by his office, Brown will set out five great challenges the world faces.

These are: terrorism and extremism and the need to reassert faith in democracy; the global economy; climate change; conflict and mechanisms for rebuilding states after conflict; and meeting goals on tackling poverty and disease.

Brown will also identify five stages for tackling the economy, starting with recapitalizing banks so they can resume lending to families and businesses, and better international co-ordination of fiscal and monetary policy.

He also wants immediate action to stop the spread of the financial crisis to middle-income countries, with a new facility for the International Monetary Fund, and agreement on a global trade deal, as well as reform of the global financial system.

"My message is that we must be: internationalist not protectionist; interventionist not neutral; progressive not reactive; and forward looking not frozen by events. We can seize the moment and in doing so build a truly global society."

(Reporting by Jodie Ginsberg; Editing by Janet Lawrence)

Russia welcomes Barack Obama with deployment of nuclear-capable missiles

The Kremlin gave Barack Obama a glacial welcome to the world stage when Dmitry Medvedev, the Russian president, ordered the deployment of nuclear-capable missiles on Nato's borders for the first time since the Cold War.

By Adrian Blomfield in Moscow telegraph.co.uk
Last Updated: 4:57PM GMT 05 Nov 2008

Mr Medvedev said he was ordering the deployment in retaliation to a missile defence shield that the United States wants to build in central Europe Photo: AP

A launcher of short-range Iskander missile rides in a column of Russian military vehicles Photo: AP

In what appeared to be a deliberate attempt to rattle the president-elect, Mr Medvedev said that short-range Iskander surface-to-surface missiles would be stationed in Russia's baltic exclave of Kaliningrad, which borders EU states Poland and Lithuania.

Delivering his most aggressively anti-American speech yet, Mr Medvedev said he was ordering the deployment in retaliation to a missile defence shield that the United States wants to build in central Europe by 2011.

In comments likely to unnerve the Obama camp, the Russian leader even hinted that he was prepared to use the missiles to destroy the shield, which is to be erected in Poland and the Czech Republic.

"I have approved a new configuration for the military forces of our country," Mr Medvedev said in his first ever annual address to the two houses of the Russian parliament. "To neutralise – if necessary – the anti-missile system, an Iskander missile system will be deployed in the Kaliningrad region."

Although the Iskander is normally equipped with conventional warheads, it can be modified to carry a nuclear payload.

Russia has been threatening to move Iskander missiles to Kalinigrad since April last year, but until now no specific order had been given.

Mr Medvedev's speech had been postponed twice and commentators in Moscow say it is no accident that the Kremlin decided it should be delivered on the day the United States presidential election results were announced.

They suggested that Russia was deliberately attempting to test Mr Obama's mettle. Some analysts say that Kremlin hardliners are worried that the Democrat could seek to restore the notion of the United States as a "soft power" prepared to seek international consensus in its foreign policy.

For Kremlin hawks, such a policy could undermine their attempts to project the US as a threat to Russian sovereignty, thus undermining the justification for the authoritarian policies of Vladimir Putin, the country's powerful prime minister.

For much of his speech, President Medvedev, who was shoehorned into office by Mr Putin, sounded as abrasive as his predecessor at his most vituperative.

Seeking to cast Washington as the architect of the global financial crisis, he lashed out at the "erroneous, egotistical and sometimes even dangerous decisions of some members of the global community" – the traditional euphemism for the United States.

He also blamed the United States for August's war in the Caucasus, which saw Russia invade Georgia and destroy much of its infrastructure after the escalation of a conflict in a Moscow-backed breakaway region of the country.

The US, Mr Medvedev said, pursued a foreign policy that was "selfish, cannot stand criticism and prefers unilateral decisions." "The conflict in the Caucasus was used as a pretext for sending Nato warships to the Black Sea and then for foisting America's anti-missile systems on Europe," he told legislators.

The US sent naval vessels to the Black Sea after the August conflict ended to deliver humanitarian aid to Georgia. The ships have since left the area.

Breaking with tradition, Mr Medvedev failed to congratulate senator Obama on his victory. But he did urge the president-elect to take steps to improve US-Russia relations, which he said were badly damaged.

Ordinary Russians were sneering about the entire election, which was characterized in the frequently chauvinistic popular media as a contest between a senile grandfather and a black man of dubious credentials and intellect. American voters were portrayed as "popcorn and hamburger eating idiots" by one newspaper.

Several tabloids incorrectly reported that the main message of Mr Obama's final campaign speech was a call on young African Americans not to let their underpants show above the waistline of the jeans.

Many also questioned the US belief in democracy, claiming that it had plunged the world into turmoil.

"Russia does not need this Western operetta show," the Tvoi Dyen tabloid wrote. "We realised back in 1612, there is so much more important than difference of opinion."

EU Leaders Call for Global Currency

By Kurt Nimmo Oct 18, 2008, 08:27 Axis of Logic

Editor's Note: In September, 1990, as George Herbert Walker Bush spoke to a joint session of Congress about his plans for the first illegal US invasion of Iraq. It was during this speech that he made public the "fifth objective" of the illuminati during that period in his speech entitled, "Toward a New World Order". Their planned demolition of the economy this year has laid the groundwork for the empire's new global currency.

- Les Blough, Editor

---

"Certainly, the elite cooked up an appropriate global crisis, now they will engage in a full court press to establish a global currency and eventually a global government."

Saturday, Oct 18, 2008 - If we are to believe the Washington Post, French president and current EU leader Nicolas Sarkozy has pledged to save us from nameless “freewheeling bankers and traders” who get the blame for the current economic crisis.

Sarkozy, Gordon Brown, and EU honcho José Manuel Barroso are talking up an international summit to discuss an “urgent overhaul of the world’s financial architecture,” that is to say a new Bretton Woods to establish a brand spanking new international economic order. Sarkozy has managed to grab George Bush’s ear and he will travel to Washington on Saturday to lay the groundwork for a conference.

In 1944, 44 allied nations met at a resort in Bretton Woods, New Hampshire, to fiddle with monetary standards, fix exchange rates, and create the IMF and World Bank. “Launching a remake of this old model — particularly in such a short time, with so many new participants — would represent a daunting challenge at any time, but particularly during the twilight of the Bush presidency and the crisis that is still jolting banks and stock markets around the world,” reports the Post.

Sarkozy and the EU leaders would have us believe this new Bretton Woods will call for “globally coordinated regulation of the financial industry, elimination of tax havens and a compensation system in which traders are not rewarded for dangerous risk-taking,” among other things.

It was the demise of Bretton Woods in 1971, insists European Central Bank president Jean- Claude Trichet, that led to the abandonment of regulation and subsequent market turmoil. “The explosion of the first Bretton Woods in a way could be interpreted as a rejection of discipline,” said Trichet, reports Bloomberg.

Gordon Brown, the former Chancellor of the Exchequer, wants to fix that turmoil with a new spate of regulations aimed at international finance. On October 13 in London, Brown said “we must devise new rules for a world of global capital flows” just as the founders of Bretton Woods “devised rules for a world of limited capital flows.”

“We now have global financial markets but what we do not have is anything other than national and regional regulation and supervision,” Brown lamented from Brussels.

All of this is nonsense. It should be obvious by now the bankers engineered the current crisis in order to consolidate their hold on the global economy and all the talk about rogue traders, tax havens, and over-compensated executives is merely that — talk, or more specifically a sales pitch, a slick parlor trick devised to fool the commoners.

Glossed over in all the corporate media coverage is the global elite demand that a global currency be established. “Europe wants to present a blueprint for a new worldwide currency system,” reports the AFP in the video here.

“Another subject in tomorrow’s world is that of the great currencies,” Reuters reported Sarkozy musing on October 16. “How many should there be? What should the agreement between these great currencies be? Should we organize a discussion?”

Any discussion would be purely academic, as the ruling elite long ago decided to force a global currency down our throats. In fact, a global currency is at the very core of their plan to dominate the world. Control money and you control the destiny of states, you eliminate national sovereignty. “The control of money and credit strikes at the very heart of national sovereignty,” A.W. Clausen, president of Bank of America once observed.

As Georgetown professor and CFR historian Carroll Quigley noted, the goal of the banking families and their minions consists of “nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole… controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.”

It remains to be seen if the EU will realize its “solution” to the world economic crisis. In 2007, Robert Mundell, “the father of the euro,” noted that “international monetary reform usually becomes possible only in response to a felt need and the threat of a global crisis.”

Certainly, the elite cooked up an appropriate global crisis, now they will engage in a full court press to establish a global currency and eventually a global government.

http://www.infowars.com/?p=5387

Bretton Woods II: Will a New Financial-World Order Solve the Economic Crisis?

Posted on date: Oct 20, 2008

By J.D. Seagraves
Citizen Economists

On October 13, British Prime Minister Gordon Brown called for a new-world financial order. “We must create a new international financial architecture for the global age,” Brown said. “We must have a new Bretton Woods.”

Brown’s statement echoed the sentiments of French and EU president Nicolas Sarkozy, who on September 26 said, “We must rethink the financial system from scratch, as at Bretton Woods.”

So is a new “Bretton Woods” a good idea? Before we can answer that question, we need to take a look at the original Bretton Woods System, which was the world’s first fully negotiated international monetary order. What inspired global leaders to create it, and what ultimately led to its demise?

The Monetary Role of Gold

By 1900, most Western European nations had evolved from centrally planned monarchies to pseudo-capitalist republics. This resulted in the heyday of the International Gold Standard, in which market economies of the West engaged in relatively free trade, facilitated by the ultimate global currency of gold.

Gold, according to Austrian economist Carl Menger, emerged as money millennia ago. In fact, gold’s monetary nature predates the existence of the nation-state. It is “real money” in the sense that no one has to be forced to accept it: they do so willingly. And thus, gold presents a problem for nation-state governments—they can’t manipulate it as easily as paper money.

True, nation-states dating back to the Roman Empire and before have attempted to make money a state institution through the implementation of “monetary policy.” The chief tactics of these ancient states were coin clipping and debasement (mixing cheap alloys in with gold) and forcing people under “legal tender” laws to accept devalued coins at full face value. These monetary tricks ultimately led to the ruination of numerous empires throughout history, with the Romans being neither the first nor the last.

The End of the International Gold Standard

Fast-forwarding 150 decades or so, the nation-states of the early 20th century were in a similar bind: they couldn’t finance the wars they wanted to fight under the strictness of a gold standard. “War,” after all, as Randolph Bourne said, “is the health of the state,” as it lends itself to an intense concentration of government power. But early twentieth-century bureaucrats found it difficult or impossible to fund wars through taxation without inspiring domestic revolts. The other option—printing money—wasn’t feasible under a gold standard, since each paper note had to be backed by real gold. So what were war-makers to do?

What aggressive governments did do, time and time again, was temporarily suspend the convertibility of notes. Typically under a gold standard, individuals could trade in a fixed number of dollars (or pounds or francs, etc.) for an ounce of gold. To make war, governments would simply print up extra notes and all money unconvertible for the duration of the conflict—and then devalue their currencies after the war. European nations did this countless times, and the U.S. suspended convertibility during the Civil War, World War I and World War II. But then the Allied nations of that final conflict had a better idea: why not do away with the International Gold Standard once and for all and inflate without limit?

The Creature from Bretton Woods, NH

Unfortunately for them, nation-states had not yet developed the means of social control necessary to impose fiat currencies on the world. So instead, global leaders did the next best thing—they abandoned the too-restrictive International Gold Standard in favor of a new monetary order: the Bretton Woods System.

For three weeks in July of 1944, 730 delegates from all 44 World War II Allies met in Bretton Woods, New Hampshire, as part of the UN’s Monetary and Financial Conference. By the time they were done, they had created the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD). These entities—created by “democratic nations” with no democratic approval—would be the enforcers of the new world-financial order.

Ostensibly, the IMF and IBRD were supposed to facilitate “free trade.” In truth, just like modern “free trade” agreements, the IMF and IBRD inhibited and indeed prohibited truly free trade and, instead, created rules to promote government-managed and controlled trade.

Regardless, if we can believe the architects of the post-war order, Bretton Woods was intended to end the protectionist currency manipulation that occurred under the International Gold Standard. Under the gold standard, a country with a trade deficit could simply revalue its currency relative to gold, thereby encouraging exports and discouraging imports. But under Bretton Woods, all member nations had to “peg” their currencies to a weight of gold, plus or minus 1 percent.

The Death of Bretton Woods I

The U.S. dollar, however, had a different role under Bretton Woods: it would take the place of gold and serve as the world’s reserve currency. Only the U.S. dollar could be converted to gold (at $35 an ounce), and only foreign central banks could do the converting. Following Frank D. Roosevelt’s draconian Gold Confiscation Act of 1933, private ownership of gold was banned in the U.S. and remained illegal into the 1970s.

When Bretton Woods was set up, the U.S. held about 60% of world gold reserves. However, beginning with the New Deal, the ever-expanding federal government had quite an appetite and, like empires of old, preferred to fund its growth via monetary trickery instead of taxation. Thus, the government’s central bank—the always eager-to-inflate Federal Reserve—created far more dollars than there were ounces of gold backing them.

This led to an old-fashioned bank run. Foreign governments were smart enough to know there wasn’t enough gold to back all of the dollars in circulation, so they raced to redeem their dollars while they still could. By 1970, the U.S. held just 16% of world gold reserves.

Clearly, the system was unsustainable, so on August 15, 1971, President Nixon “closed the gold window” and reneged on America’s promise to redeem paper dollars in gold, severing the U.S. dollar’s 179-year tie to gold and converting the greenback into a full-fledged fiat currency.

The Birth of Bretton Woods II?

It’s said that the nations that came together for Bretton Woods I all shared a belief in “capitalism.” Austrian economists would scoff at this notion. One of the primary architects of the Bretton Woods System and the notorious IMF was John Maynard Keynes, a Fabian socialist and advocate for central planning in a “mixed economy.” Keynes attended Bretton Woods on behalf of the UK and argued for a world central bank issuing fiat notes known as “bancos.” The U.S., then a creditor nation, resisted. Now, of course, the United States—the world’s biggest and most broke debtor—would have no such leverage.

World leaders are meeting next month to talk about the possibility of setting up a new Bretton Woods System. If these leaders share a common belief, you can be sure it isn’t in capitalism, and you can bet all the fiat money in the world that gold will not play a role in Bretton Woods II. A much more likely scenario is that John Maynard Keynes will finally get his wish, 64 years later, and we’ll have a world central bank and the beginnings of true global government. Everything else Keynes advocated has failed so miraculously and led to so much misery, one can only imagine how bad life under the “banco” might be.

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ECB's Nowotny Sees Global `Tri-Polar' Currency System Evolving

By Jonathan Tirone

Oct. 19 (Bloomberg) -- European Central Bank council member Ewald Nowotny said a ``tri-polar'' global currency system is developing between Asia, Europe and the U.S. and that he's skeptical the U.S. dollar's centrality can be revived.

``What I see is a system where we have more centers of gravity'' Nowotny said today in an interview with Austrian state broadcaster ORF-TV. ``I see for the future a tri-polar development, and I don't think that there will be fixed exchange rates between these poles.''

The leaders of the U.S., France and the European Commission will ask other world leaders to join in a series of summits on the global financial crisis beginning in the U.S. soon after the Nov. 4 presidential election, President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Barroso said in a joint statement yesterday.

Nowotny said he was ``skeptical'' when asked whether the Bretton Woods System of monetary policy, set up after World War II and revised in 1971, could be revived to aid global currency stability. The U.S. meeting should aim to strengthen financial regulation, define bank capital ratios and review the role of debt-rating agencies.

European leaders have pressed to convene an emergency meeting of the world's richest nations, known as the Group of Eight, joined by others such as India and China, to overhaul the world's financial regulatory systems. The meetings are to include developed economies as well as developing nations.

`Real Economy'

Bush, 62, has cautioned that any revamping must not restrict the flow of trade and investment or set a path toward protectionism. The G8 nations are Britain, Canada, France, Germany, Italy, Japan, Russia and the United States. The U.S. hasn't committed itself to the sweeping terms of Europe's agenda, White House press secretary Dana Perino said yesterday.

Sarkozy wants the G8 to consider re-anchoring their currencies, the hallmark of the 1944 Bretton Woods agreement that also gave birth to the International Monetary Fund and World Bank.

The current financial crisis, in which European governments have pledged at least 1.3 trillion euros ($1.7 trillion) to guarantee loans and take stakes in lenders, should be ``under control'' by mid-2009, Nowotny said. The economy will suffer longer.

``What comes then, unfortunately in parallel, will be the problems for the real economy,'' Nowotny said. ``The growth rate in 2009 will be significantly below what we have in 2008.''

He predicted gross domestic product growth around 1 percent in Austria next year.

To contact the reporters on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net

G-7 unsuited to global crisis - World Bank

http://cnnmoney.mobi/money/business/economy/detail/97289
October 06 2008: 02:43 PM EDT

The Group of Seven industrialized countries is outmoded and should be replaced with a new entity that would include growing economies in Asia and Latin America, World Bank President Robert Zoellick said Monday.

He said the financial crises roiling markets in the United States and Europe are an alarm for the world and demonstrate the need for a broader-based system to handle them.

"The G-7 is not working," he said. "We need a better group for a different time. For financial and economic cooperation, we should consider a new steering group including Brazil, China, India, Mexico, Russia, Saudi Arabia and South Africa and the current G-7."

Russia set to join

The G-7 brings together the United States, Canada, Britain, France, Germany, Italy and Japan. When Russia joins the group for political discussions, it becomes the G-8.

Speaking before weekend meetings of the bank and its sister institution, the International Monetary Fund, Zoellick said the new group would not be a G-14.

"We will not create a new world simply by remaking the old," he said. "It should be numberless, flexible, and over time, it could evolve" to fit changing circumstances, including new emerging powers, while serving as a network for frequent interaction.

"We need a Facebook for multilateral economic diplomacy," Zoellick said in a speech to the Peterson Institute for International Economics in Washington, referring to the social networking site.

"These rising powers need to be heard," he said. "They want to know what their role will be in making the new rules for the global economy. Having demonstrated their competitive success, these rising powers are suspicious that the more established stakeholders will hold them back, whether through old rules of trade and finance or new rules for climate change and the environment."

Economics on global agenda

The G-7 was formed in 1976 to bring together finance ministers from member countries who meet several times a year to discuss economic matters. Besides Zoellick, other officials in developed and developing countries have called for the G-7 to become more representative of the global economy.

Zoellick said the IMF, the World Bank and perhaps the World Trade Organization could help support the new group by identifying emerging problems, supplying analyses, suggesting solutions and drawing on "our own broader membership to propose coalitions to address issues."

The World Bank and the IMF were established in the World War II's last days to stabilize the international economy. They now have 185 member nations.

Zoellick, a former U.S. diplomat, trade negotiator and business executive, said economic multilateralism needs to be redefined beyond its traditional focus on trade and finance. He said energy, climate change and stabilizing fragile and post-conflict states are economic issues and not just part of the global dialogue on security and development.

Developing countries

Turning to developing countries, Zoellick warned that the financial crisis could be a tipping point for many of them.

"Deceleration of growth and deteriorating financing conditions will trigger business failures and possibly banking emergencies," he said. "As is always the case, the most poor are the most defenseless."

Putin Suggests U.S. Provocation in Georgia Clash

By CLIFFORD J. LEVY
NEW YORK TIMES

Published: August 28, 2008

MOSCOW — As Russia struggled to rally international support for its military action in Georgia, Vladimir V. Putin, the country’s paramount leader, lashed out at the United States on Thursday, contending that the White House may have orchestrated the conflict to benefit one of the candidates in the American presidential election.

Mr. Putin’s comments in a television interview, his most extensive to date on Russia’s decision to send troops into Georgia earlier this month, sought to present the military operation as a response to brazen, cold war-style provocations by the United States. In tones that seemed alternately angry and mischievous, he suggested that the Bush administration may have tried to create a crisis that would influence American voters in the choice of a successor to President Bush.

“The suspicion would arise that someone in the United States created this conflict on purpose to stir up the situation and to create an advantage for one of the candidates in the competitive race for the presidency in the United States,” Mr. Putin said in an interview with CNN.

He added, “They needed a small victorious war.”

Mr. Putin did not specify which candidate he had in mind, but there was no doubt that he was referring to Senator John McCain, the Republican. Mr. McCain is loathed in the Kremlin because he has a close relationship with Georgia’s president, Mikheil Saakashvili, and has called for imposing stiff penalties on Russia, including throwing it out of the Group of 8 industrialized nations.

Mr. Putin offered scant evidence to support his assertion, and the White House called his comments absurd. But they underscored the depth of the rift between Moscow and Washington over the Georgia crisis, which flared three weeks ago when the Georgian military tried to reclaim a breakaway enclave allied with Russia. They also suggested that the Russian leader was deeply concerned about the possibility that Mr. McCain, widely viewed here as having a strong bias against Russia, could become president.

Only last spring, Mr. Putin, the president at the time, held a summit meeting with Mr. Bush in which the two expressed personal affection for each other and sought to smooth over tensions in the bilateral relationship.

Russia has been struggling to persuade the outside world to back its action in Georgia. On Thursday, China and four other countries meeting with Russia for the annual summit meeting of the Shanghai Cooperation Organization, a security alliance, declined to back Russia’s military action in a joint communiqué.

Mr. Putin’s interview came after his protégé, President Dmitri A. Medvedev, spoke to several foreign news outlets this week as part of a concerted move by the Kremlin to counter Georgia’s public relations offensive in the international media. Mr. Medvedev’s tone was less harsh, though he also criticized the West.

On Thursday, Mr. Putin, now prime minister, also said Russian defense officials believed that United States citizens were in the conflict area supporting the Georgian military when it attacked the separatist region of South Ossetia.

“Even during the cold war, during the time of tough confrontation between the Soviet Union and the United States, we have always avoided direct clashes between our civilians, let alone our servicemen,” Mr. Putin said. “We have serious reasons to believe that directly, in the combat zone, citizens of the United States were present.”

“If the facts are confirmed,” he added, “that United States citizens were present in the combat zone, that means only one thing — that they could be there only on the direct instruction of their leadership. And if this is so, then it means that American citizens are in the combat zone, performing their duties, and they can only do that following a direct order from their leader, and not on their own initiative.”

In Washington, the White House spokeswoman, Dana M. Perino, dismissed Mr. Putin’s remarks. “To suggest that the United States orchestrated this on behalf of a political candidate just sounds not rational,” she said.

She added, “It also sounds like his defense officials who said they believe this to be true are giving him really bad advice.”

A senior Russian defense official, Col. Gen. Anatoly Nogovitsyn, said at a news conference in Moscow on Thursday that Russian forces had found a United States passport in a ruined building near Tskhinvali, the capital of South Ossetia. The position, he said, had been occupied by Georgian Interior Ministry forces.

“What was the gentleman’s purpose of being among the special forces and what he is doing today, I so far cannot answer,” General Nogovitsyn said, holding up what he said was a color copy of the passport. He said members of the Georgian unit had been killed, and the building destroyed.

When the war broke out, the United States had about 130 military trainers in Georgia preparing Georgian troops for service in Iraq. The American Embassy in Tbilisi said these trainers were not involved in the fighting; about 100 remain and are assisting with the delivery of aid to Georgia that is arriving on military planes and ships.

General Nogovitsyn said the passport was in the name of Michael Lee White of Texas, but gave no information on whether Russians believed that he was a member of the United States military. The United States Embassy in Georgia told The Associated Press that it had no information on the matter.

Mr. Putin said in the CNN interview that Russia had thought that the United States would prevent Georgia from attacking South Ossetia, but suggested that he now believed that the Bush administration encouraged Mr. Saakashvili to send in his military.

“The American side in fact armed and trained the Georgian Army,” Mr. Putin said. “Why hold years of difficult talks and seek complex compromise solutions in interethnic conflicts? It’s easier to arm one of the sides and push it into the murder of the other side, and it’s over. It seemed like an easy solution. The thing is, it turns out that it’s not always so.”

The Georgia conflict has become a flash point in the United States presidential campaign, with Senator McCain assailing what he refers to as “revanchist Russia” and asserting that he is far more qualified to handle such a crisis than the Democratic candidate, Senator Barack Obama.

Mr. McCain has long been friendly with Mr. Saakashvili, who has said he talks to Mr. McCain regularly. Mr. McCain’s top foreign policy adviser, Randy Scheunemann, has worked as a lobbyist on behalf of the Georgian government, and Mr. McCain’s wife, Cindy, traveled to the Georgian capital, Tbilisi, this week on a humanitarian aid mission.

All these ties, combined with Mr. McCain’s criticism of Russia, have earned him a kind of notoriety in Moscow. When Parliament passed a resolution this week urging that Russia recognize the independence of the two breakaway enclaves, some lawmakers not only praised the courage of the South Ossetians, but also threw a few barbs at Mr. McCain.

Medvedev: We're not afraid of Cold War

Youtube
With the Russian parliament backing the independence of the breakaway republics of Abkhazia and South Ossetia, President Dmitry Medvedev gives his views on the issue in an exclusive interview with RT.

Full text of this interview is here: http://www.russiatoday.com/news/news/...

U.S., Russian Ships Square Off in Black Sea

Ian Traynor
The Guardian
August 27, 2008

US and Russian warships took up positions in the Black Sea today in a risky war of nerves on opposing sides of the Georgia conflict.

With the Russians effectively controlling Georgia's main naval base of Poti, Moscow also dispatched the Moskva missile cruiser and two smaller craft on "peacekeeping" duties at the port of Sukhumi on the coast of Abkhazia, the breakaway region that the Kremlin recognised as independent yesterday.

The Americans, wary of escalating an already fraught situation, cancelled the scheduled docking in Poti of the US Coast Guard vessel, the Dallas, and instead sent it to the southern Georgian-controlled port of Batumi, 200km (124 miles) from the Russian ships, where it delivered humanitarian aid.

"Let's hope we don't see any direct confrontation," said Dmitri Peskov, the spokesman for the Russian prime minister, Vladimir Putin, as the Russians challenged the US policy of using military aircraft and ships to deliver relief supplies.

"The decision to deliver aid using Nato battleships is something that hardly can be explained," said Peskov. "It's not a common practice."

He said Russian naval forces were taking "some measures of precaution" around the Black Sea as the worsening dispute caused by Russia's recognition of Abkhazia and South Ossetia independence brought strong criticism from the key European countries most reluctant to sever relations with Russia.

The German chancellor, Angela Merkel, spoke to President Dmitri Medvedev today, the first western leader to talk to the Kremlin since Medvedev announced the recognition of the two secessionist regions of Georgia. She made it plain she had voiced her strong disapproval to the Russian leader.

"I made clear above all that I would have expected that we would talk about these questions in [international] organisations before unilateral recognition happened," she said. "There are several UN Security Council resolutions in which the territorial integrity of Georgia was stressed, which Russia also worked on."

The French foreign minister, Bernard Kouchner, said Russia had broken international law and, along with other senior European officials, worried that Russia's decision to redraw Georgia's borders would encourage Moscow to act similarly with other former parts of the Soviet Union such as Ukraine.

"We cannot accept these violations of international law ... of a territory by the army of a neighboring country," he said.

Germany and France, who opposed the US and Britain in April in blocking Georgian negotiations to join Nato, have been the most reluctant to punish Russia for the Georgian conflict of the past three weeks and are desperate to try to revive the Russia-Georgia peace plan mediated by the French president, Nicolas Sarkozy, a fortnight ago.

Paris and Berlin agree the unilateral recognition of Abkhazia and South Ossetia by Russia left the peace plan ineffectual. A summit of EU leaders in Brussels on Monday is to ponder Europe's options.

With mounting warnings of western economic or trade sanctions against Russia, an EU official admitted that threats to block Russian membership of the World Trade Organisation (WTO) were meaningless. The push for Russian admission being driven not by Moscow but by western business interests keen to tap the large Russian market, he said.

Peskov warned that trade sanctions against Moscow would hurt the west as much as Russia.

He admitted that South Ossetia, a mountainous region of 70,000 people, would struggle to establish itself as an independent state, but stressed that Russia's constitution made it possible for Russia to expand.

"My country will extend the arm of cooperation and friendship to ease the transition period [for South Ossetia]," he said.

EU officials complained that Moscow was seeking to control the distribution of international relief. EU aid officials were demanding entry to the Russian controlled regions, but were being barred unless they handed over the aid to the Russian authorities for distribution.

'NATO whitewash and rearm criminal regime of Georgia'

YOUTUBE _ RUSSIA TODAY
Russia's Foreign Minister Sergei Lavrov has commented on the result of Tuesday's NATO Foreign Ministers meeting in Brussels.

Russian General Says Georgia May Commit False Flag Terror Attacks

Paul Joseph Watson
Prison Planet
Monday, August 18, 2008

Deputy Chief of the Russian General Staff Anatoly Nogovitsyn warns that Georgia may be planning to commit false flag terror attacks by using mercenaries dressed in Russian uniforms, as Russia moved to guard sensitive infrastructure against terrorist attacks.

In a news briefing on Monday, he said: “I cannot rule out that they might use mercenaries with Slavic appearance for a provocation, clad in the uniform of Russian servicemen, in order to commit subversive acts both on Ossetian and Russian territory.”

In response to the threat, Russia has stationed troops around the Inguri Hydroelectric Plant, viewed as a potential target.

Nogovitsyn’s warning that Georgia may resort to subversion in order to enhance its well-groomed image of being the victim of a war that it started with the horrific bombardment of civilian targets in South Ossetia on August 8th, arrives amidst more examples of pro-Georgian western media bias.

Following in the footsteps of the BBC, Rupert Murdoch’s Sky News used footage of the South Ossetian capital, Tskhinvali in ruins after the Georgian assault and claimed it was the Georgian town of Gori after it was attacked by the Russians.

In reality, 70% of Tskhinvali was destroyed, whereas Gori suffered relatively little damage according to a United Nations aid convoy.

“Russia ’s TV channel Zvezda, which has five camera crews working in Tskhinvali, aired the same footage two days before, on Monday,” reports Pravda. “Sky News showed its report with no sound, whereas the people showed in the Russian report could be heard speaking Russian and Ossetian languages. The crying people shown in the report were heard cursing Georgian President Saakashvili for destructions and manslaughter.”

After the controversy came to light yesterday, the Sky News clip was quickly pulled from You Tube.

In addition, CNN last week showed Georgian forces attacking Russian civilians in Tskhinvali, the provincial capital of South Ossetia, but then claimed it showed Russians attacking Georgians in the Georgian town of Gori.

A 12-year-old American girl who was caught up in the brutal assault by Georgia on South Ossetia attempted to tell the truth about who the real aggressors were during a live Fox News interview, but she was quickly silenced by the host.

Western media coverage of the conflict has reflected a virulently pro-Georgia bias since the very start, once again proving that the press is not independent, but simply a mouthpiece for the same Anglo-American power structure for whom Georgia is merely another client state.

Georgia is a U.S. Project - Russian FM

Russia Today
Friday, Aug 15, 2008

Russian Foreign Minister Sergey Lavrov has criticised Georgia’s relationship with the U.S. in the aftermath of the trouble in South Ossetia. In a news conference he addressed a wide range of issues surrounding the future of the Caucasus region including Abkhazia, the role of the U.S. and media coverage of the conflict.

“The repercussions of blood spilled in the Caucasus will last for centuries, not decades. We can now start counting centuries from August 8, 2008,” he said.

“It’s an open secret – Western analysts have been writing about it, that the current Georgian leadership is a special project of the United States. And of course it must be hurtful to see a protégé making such a sleazy performance.”

Saakashvili Defends the “New World Order” On Glenn Beck

Kurt Nimmo
Infowars
August 12, 2008

At one minute, five seconds into the clip here from Glenn Beck’s neocon propaganda hour, we hear the sock puppet Saakashvili make reference to the New World Order. According to Saakashvili, he is not concerned so much for his own personal safety, he is more worried about the “region,” in other words the little globalist and NATO fiefdoms carved out of the corpse of the former Soviet Union, only the latest additions to the New World Order.

Saakashvili actually uses this phrase, same as George Bush Senior, Bill Clinton, Gary Hart, and other minions of the globalist elite. Of course, Saakashvili is no Bush or Clinton, in fact he is little more than a rag doll that will be thrown on the growing pyre after he outlives his usefulness. He is but another disposable Mafia don and one low on the criminal syndicate’s totem pole. One day he is on Glenn Back telling brazen lies, the next he may share the fate Ngo Dinh Diem, assassinated in the back of an APC because he was no longer of any use to the United States in Vietnam. Misha the useful tool will undoubtedly become a footnote in short order. In the meantime, he takes his marching orders from the neocons and their musical chair fellows, the neolibs.

As Paul Craig Roberts notes, Saakashvili is a product of NED and the neocons. “Back in the Reagan years the National Endowment for Democracy was created as a cold war tool. Today the NED is a neocon-controlled agent for US world hegemony. Its main function is to pour US money and election-rigging into former constituent parts of the Soviet Union in order to ring Russia with American puppet states,” writes Roberts, who should know as a former member of the Reagan administration. “The neoconservative Bush Regime used the NED to intervene in Ukrainian and Georgian internal affairs in keeping with the neoconservative plan to establish US-friendly and Russia-hostile political regimes in these two former constituent parts of Russia and the Soviet Union.”

Roberts tells us the neocons are criminally insane and along with “the Israeli-occupied American media” are pushing “the innocent world toward nuclear war.” Glenn Beck, always an eager little servant, helps this lunatic effort by providing Saakashvili with a corporate media platform to spew his nonsense and lies. Beck, of course, simply does what he is told.

Saakashvili’s usage of the term “New World Order” provides us with more evidence of who is actually calling the shots in Georgia — not the Georgians, but the ruling elite. Saakashvili owes his ascendancy to NED and USAID and the “entire panoply of ‘democracy promoting’ devices” plied by the globalists as an alternate way to overthrow governments.

“During the late 1970s there was new thinking at the highest levels of the U.S. foreign policymakers, and they reconsidered whether these ugly murderous military dictatorships of the 1970s were really the best way to preserve U.S. interests in these countries,” writes former CIA officer Philip Agee. “This new thinking led to the establishment in 1983 of the National Endowment for Democracy. They had chosen the German pattern in which the major political parties in Germany have foundations financed by the federal government. They did more or less the same thing with the establishment of the NED as a private foundation – there is really nothing private about it, and all its money comes from the Congress.”

“A lot of what we [NED] do today was done covertly 25 years ago by the CIA,” boasts Allen Weinstein, a UNESCO globalist. Mr. Weinstein should know, as he was chosen to serve as acting president of NED in 1983 when it was taking over CIA duties of subversion and subterfuge.

It make sense that Capo Bastone Saakashvili, the throughly disposable underling to the international banking crime syndicate, would appear on Beck. After all, the Operation Mockingbird corporate media is a wholly owned subsidiary of the CIA, an effort launched out of the psychological warfare labs of the Office of Policy Coordination and the Office of Special Operations with gobs of money diverted from the Marshall Plan back in the day. Beck is simply the latest manifestation of this ongoing disinformation and propaganda campaign, never mind the complete if not absurd transparency of the effort to portray the grubby little Saakashvili as a democrat.

US hampering Russian peace efforts – Putin

August 11, 2008, 15:11
RussiaToday

The Prime Minister has accused Washington of undermining Russia’s attempts to restore peace in the South Ossetian conflict zone. Vladimir Putin said a decision by the US military to fly 800 Georgian soldiers from Iraq to Georgia showed America was ‘trying to get in the way’. In a stinging attack on the US, Putin told government ministers: "It's a pity that some of our partners, instead of helping, are trying to get in the way”.

He said the US was using “its military transport aircraft to relocate Georgia's military contingent from Iraq virtually into the conflict zone”.

He also voiced his frustration at the inability of Russia's western partners to adequately assess the situation in South Ossetia.

“I’m amazed by their skills at seeing black as white, of portraying aggressors as victims and of blamimg the real victims for the consequences of the conflict.

Putin also accused the West of double standards when it comes to judging war crimes.

“As we all know, Saddam Hussein was hanged for burning down several Shiite villages. But now suddenly the situation is different. The Georgian leaders who in a matter of hours wiped out ten Ossetian villages, who ran over children and the elderly with tanks, who burned civilians alive, those people have to be protected,” he said.


Meanwhile, American Joe Mestas, who witnessed days of shelling, has said U.S. and Georgian leaders are responsible for the violence that has killed 2,000 people in the region. He told RT that Washington will have to answer for the violence.

“I thought that since U.S. is supporting Georgia there would be some control over the situation in South Ossetia and that there would be a peaceful solution to the conflict. But what is happening there now it’s not just war, but war crimes. George Bush and [Georgian president] Mikhail Saakashvili should answer to the crimes that are being committed – the killing of innocent people, running over by tanks of children and women, throwing grenades into cellars where people are hiding,” Mestas said.

“The war is when military fight against military. But the Georgian army is killing innocent civilians. This is genocide,” he added.

CIA accuses Pakistan of 'backing militants'

WASHINGTON (AFP) — A senior CIA official this month confronted Pakistani officials over ties between the country's intelligence service and militants in the tribal areas, The New York Times reported Wednesday.

Citing defense and intelligence sources, the Times said that the trip by agency deputy director Stephen Kappes demonstrated a harder line being taken against Pakistani ties to those responsible for the surge of violence in Afghanistan, including militant Maulavi Jalauddin Haqqani.

Earlier this year, the US military pressed for Pakistani troops to hit the Haqqani network in the tribal areas.

"It was a very pointed message saying, 'Look, we know there's a connection, not just with Haqqani but also with the other bad guys and ISI, and we think you could do more and we want you to do more about it," a senior US officials told the Times, referring to Pakistan's Inter Services Intelligence agency.

The daily said the meeting could be a sign that the relationship between the Central Intelligence Agency and Pakistan's ISI "may be deteriorating".

A US official said there was no evidence of official Pakistani support of Al-Qaeda, but there was "genuine and longstanding concerns about Pakistan's ties to the Haqqani network, which of course has ties to Al-Qaeda."

The report comes after premier Yousuf Raza Gilani met with US President George W. Bush in Washington and urged him not to act "unilaterally" against militants in Pakistan's lawless tribal zones.

Gilani insisted Monday that Pakistan was committed to fighting extremists.

Pakistan's fledgling government caused concern in Washington by launching talks with militants soon after beating allies of US-backed President Pervez Musharraf in elections in February.

Militants kidnapped 30 troops and police in northwestern Pakistan's Swat Valley on Tuesday, a day after killing three intelligence officials, threatening a shaky truce in the region.

Is White House Blocking Search for Bin Laden?

Pentagon Would Use Special Forces to Nab Bin Laden in Pakistan, New York Times Says

By MARTHA RADDATZ
June 30, 2008 ABC News

The Pentagon has drafted a secret plan that would send U.S. special forces into the wild tribal regions of Pakistan to capture or kill Osama bin Laden and his top lieutenants, but the White House has balked at giving the mission a green light, The New York Times reported today.

New leaked reports have exposed U.S. covert operations in the Middle East.

The Bush administration, which has seven months left in its term, gave the go-ahead for the military to draw up the plan to take the war on terror across the Afghan border and into the mountains of Pakistan where bin Laden is believed to be hiding, according to the newspaper.

Intelligence reports have concluded that bin Laden has re-established a network of new training camps, and the number of recruits in those camps has risen to as many as 2,000 in recent months from 200 earlier this year.

Although the special forces attack plan was devised six months ago, infighting among U.S. intelligence agencies and among White House offices have blocked it from being implemented, the Times reported.

The Bush team would like to leave office next January having put bin Laden, the man behind the Sept. 11 attacks, behind bars or in his grave.

But sending U.S. forces into Pakistan would be controversial and risky. The rugged mountain area is populated by bin Laden sympathizers, hurting the chances that such a raid could succeed. It would also trigger a diplomatic outcry from the Pakistani government.

The United States has conducted a series of aerial drone attacks on Taliban and al Qaeda leaders in Pakistan, killing several key Qaeda figures and narrowly missing bin Laden's deputy, Ayman Zawahiri, in one strike. But an attack earlier this month killed several Pakistani border guards instead and has made Pakistan less willing to allow U.S. strikes on its territory.

The Taliban of Pakistan, who are close al Qaeda allies, have grown alarmingly stronger in Pakistan's lawless border areas and threatened the regional capital of Peshawar last week.

Pakistan's new coalition government, which has made a series of truces with the militants in recent months, was forced over the weekend to launch an offensive to push the militants back from the outskirts of Peshawar.

Pakistan called the operation a success, even though none of the heavily armed militants in the area were reported killed.

Pakistan announced Sunday that Bush had invited Pakistani Prime Minister Yousaf Raza Gilani to Washington next month. High on that visit's agenda is the question of whether Pakistan can restrain the Taliban by itself or whether the United States could decide to take action in the tribal areas.

A separate report said the Bush administration has also begun a "major escalation of covert operations against Iran ... to destabilize the country's religious leadership."

The charge was made by veteran journalist Seymour Hersh in the current issue of The New Yorker magazine.

Israeli official says attack on Iran 'unavoidable'

Olmert deputy tells newspaper sanctions not slowing Iran's nuclear work

Reuters

updated 9:44 a.m. ET June 6, 2008

JERUSALEM - An Israeli attack on Iranian nuclear sites looks “unavoidable” given the apparent failure of sanctions to deny Tehran technology with bomb-making potential, one of Prime Minister Ehud Olmert’s deputies said Friday.

“If Iran continues with its program for developing nuclear weapons, we will attack it. The sanctions are ineffective,” Transport Minister Shaul Mofaz told the mass-circulation Yedioth Ahronoth newspaper.

“Attacking Iran, in order to stop its nuclear plans, will be unavoidable,” said the former army chief who has also been defense minister.

It was the most explicit threat yet against Iran from a member of Olmert’s government, which, like the Bush administration, has preferred to hint at force as a last resort should U.N. Security Council sanctions be deemed a dead end.

Defiance
Iran has defied Western pressure to abandon its uranium enrichment projects, which it says are for peaceful electricity generation rather than bomb-building. The leadership in Tehran has also threatened to retaliate against Israel — believed to have the Middle East’s only atomic arsenal — and U.S. targets in the Gulf for any attack on Iran.

Mofaz also said in the interview that Iranian President Mahmoud Ahmadinejad, who has called for Israel to be wiped off the map, “would disappear before Israel does.”

A spokesman for Prime Minister Ehud Olmert did not address Mofaz’s comments directly but said that “all options must remain on the table” and said more could be done to put financial pressure on Tehran.

“Israel believes strongly that while the U.N. sanctions are positive, much more needs to be done to pressure the regime in Tehran to cease its aggressive nuclear program,” spokesman Mark Regev said.

“We believe the international community should be considering further tangible steps such as embargoing refined petroleum headed for Iran, sanctions against Iranian businessmen traveling abroad, tightening the pressure on Iranian financial institutions and other such steps,” he added.

Mofaz’s remarks came as he and several other senior members of Olmert’s Kadima Party prepare for a possible run for top office should a corruption scandal force the Israeli prime minister to step down.

Party rival
Iranian-born Mofaz has been a main party rival of the Israeli prime minister, particularly following the 2006 elections when Olmert was forced to hand the defense portfolio to Labor, his main coalition partner, at Mofaz’s expense.

Mofaz, who is also designated as a deputy prime minister, has remained privy to Israel’s defense planning. He is a member of Olmert’s security cabinet and leads regular strategic coordination talks with the U.S. State Department.

Israeli planes destroyed Iraq’s nuclear reactor in 1981.

A similar Israeli sortie over Syria last September razed what the U.S. administration said was a nascent nuclear reactor built with North Korean help. Syria denied having any such facility.

Independent analysts have questioned, however, whether Israel’s armed forces can take on Iran alone, as its nuclear sites are numerous, distant and well-fortified.

Copyright 2008 Reuters. Click for restrictions.

URL: http://www.msnbc.msn.com/id/24998146/