Thursday, September 8, 2011
DUBLIN — Workers marched in Italy and Spain on Tuesday to protest planned spending cuts as new data confirmed fears of an economic slowdown across Europe.U.S. stocks also slid for the third straight day Tuesday, although they rose above the day’s lows in a late-afternoon rally. At the close, the Dow Jones industrial average was down 0.9 percent; the Standard & Poor’s 500-stock index, 0.7 percent; and the Nasdaq composite index, 0.3 percent.
Regional stock markets dropped for a third day, and some had lost about 10 percent of their value since Friday. After a sharp sell-off Monday to start the week, the Stoxx 50 index of euro-zone
“The Europeans face a difficult challenge, but we believe they have both the ability and the will to meet those obligations,” White House spokesman Jay Carney said, adding that President Obama and senior aides had been in regular consultations with European leaders.
Asian markets rebounded in Wednesday trading. Japan’s blue-chip Nikkei 225 index ended its morning session up 1.4 percent.
The market declines in Europe and the United States reflect widening concerns about the euro-area economy as governments battle a complicated and interconnected set of problems that have confounded them for nearly two years. Leading analysts have compared the situation to the months leading up to the 2008 collapse of Lehman Bros. and have warned that a fragile global economy could not stand another financial crisis of that magnitude.
But the sense of instability is clear, from the streets of capitals clogged with striking workers to the offices of central banks.
Officials at the Swiss National Bank surprised markets Tuesday by imposing a minimum exchange rate of 1.20 francs to the euro. The Swiss have been struggling to curb their soaring currency, which has become a haven amid jitters over the euro and which threatened the Swiss economy by driving up the price of the country’s exports.
Some analysts said they feared a disruption in currency markets if other nations take similar measures to keep their currencies from rising as the dollar and the euro slump.
The Swiss bank said it was prepared to buy “unlimited” amounts of foreign currency to support the minimum exchange rate. The Swiss franc fell nearly 8 percent against the euro for the day.
Also Tuesday, Greece’s finance minister sought to calm fears that his country was at serious risk of a second default, the Associated Press reported. Evangelos Venizelos pledged to speed up delayed reforms meant to trim the country’s bloated public sector, open tightly regulated professions to competition and kick-start an ambitious privatization plan.“Greece is not the pariah of the European Union. It is not a permanent sore and problem,” Venizelos told reporters. “It is an equal, competitive country that has a very serious problem regarding its public debt and fiscal deficit. We can and shall overcome this, but not without carrying out the structural reforms in full.”companies shed an additional 1.8 percent Tuesday.
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Librarians are used to scanning books, but the librarians themselves may be getting scanned if a local council in suburban Melbourne has its way.
The AM program has revealed that the City of Monash in Melbourne's south-east is planning to introduce vein scanning technology to track employees' work hours.
The council says it is still considering the plan and has made no definite decision yet, but the Australian Services Union says the council has confirmed it is planning to introduce the scanners in its libraries next month.
The union's assistant branch secretary Igor Grattan says members are concerned about the invasion of their privacy.
"They're concerned about where this information is going to be stored, what will happen with the information when they leave council, who owns the information, what's the legal ramifications," he said.
"What about staff who are under 18 years, what about their rights?"
Biometric technology like iris, fingerprint and vein scanning is big in the movies and it is set to come to a workplace near you soon.
Governments and companies already use biometric technology to check the identities of their staff and protect sensitive information, and supermarket giant Woolworths uses fingerprint scanners to clock staff work hours.
The vein scanners are made by Japanese company Hitachi, which has installed tens of thousands of them at ATMs in Japan.
The technology captures the vein patterns in a person's fingers and stores them as a template for future scans.
Victoria's privacy commissioner Helen Versey says she is surprised that a local council would use such technology.
"It sounds surprising that you would need it for a library, but again without knowing the facts of the case I wouldn't like to say definitely whether it would be a breach of the Information Privacy Act or not," Ms Versey said.
"If they're creating a database of their employees' biometrics then that does raise some significant issues in terms of data security."
The council refused to do an interview with AM, saying it was looking at the technology for use in libraries but had not decided to go ahead with it yet.
But Mr Grattan said the union got confirmation from the council that it is planning to install the scanners next month, affecting up to 100 library staff, including casuals.
He said the council had originally intended to introduce the scanners at libraries, aquatic centres and aged care homes.
"At this stage, they've even said it's not going to be used down the depot at this stage so everything they say has got the 'at this stage'," he said.
"It was going to be the leisure centre and they've backed off from that, but I can give you a direct quote, it's recently brought to my attention that council intends to administer this system in the infrastructure services area," he told AM.
Another issue is where the biometric material will be stored and how secure it would be.
Security experts like Stephen Wilson from Lockstep Consulting warned there are risks.
"The risk is that you need a master copy, like a master scan, against which people are compared when they're coming and going. And the security of that master scan is absolutely critical," he said.
"The weakest link in any security system is usually a person - a database administrator holding the keys with access to these master copies is actually in a position of great power and influence and potentially is corruptible."
Mr Wilson says the data is valuable to organised crime.
"Electronic systems are becoming increasingly dependent and increasingly reliant on personal data," he said.
"So any data that I've got that defines somebody in terms of their drivers' licence or their credit card numbers or their home and address, that all adds up to a portfolio of information that is valuable to identity thieves."
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“We warn all enemies of this [Islamic] establishment and revolution not to think of any invasion, conspiracy or sedition against this religious establishment, because they would face a hard and crushing response from the brave fighters of this land,” Deputy IRGC Commander Lieutenant General Hossein Salami said on Wednesday, IRNA reported.
The commander hailed the vigilance of the Iranian nation and the country's leadership against enemy plots and scoffed at enemy attempts to harm the Islamic establishment in Iran as “unreachable dreams.”
“At the time, Iran's Islamic Revolution Guards Corps has organized its deterrent and martial prowess against the enemies of the establishment and the revolution, based on the most challenging and dangerous scenarios of threats,” he stated.
Salami said the IRGC was fully prepared under any circumstances, noting that the army decided its strategies and missions according to the threats from the country's enemies.
“In fact, the IRGC has prepared based on creativity, freedom of move and precise identification of sources of threat as well as the time and size of the threat,” he added.
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The U.S. economic outlook has "clearly" deteriorated this year, and the continued softness of economic indicators shows that the headwinds facing the country are even stronger than thought, Chicago Federal Reserve President Charles Evans said on Wednesday.
"Conditions still aren't much different from an economy still in recession ," Evans, speaking at a seminar in London said.
He said the Fed faced significant challenges in overcoming the obstacles left behind by the financial crisis.
Evans, a voting member on the Federal Open Market Committee , said he believed central banks should focus on medium- rather than short-term inflation as many short-term effects such as fluctuations in food and energy prices were beyond policy makers' reach.
Given how "truly badly" the U.S. was doing on the jobs front, the Fed should consider more aggressive action, he said.
He did not explicitly call for morequantitative easing or bond purchases but called for "strong action."
"I argue that the Fed should seriously consider actions that would add very significant amounts of policy accommodation," he said. "Such further policy accommodation does increase the risk that inflation could rise temporarily about our long-term goal of 2 percent," he said.
The Fed Open Market Committee said in August that it would continue to keep its benchmark interest rate low for at least through mid 2013, acknowledging that the recovery it had hoped for had so far failed to take shape.
The Fed ended a $600 billion Treasury bond-buying program at the end of June.
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“The Euro should not exist,” reads the first line of a note released by UBS Tuesday, which analyzes the possibility of an EU break-up and concludes that the costs are too high to bear, both for “strong” and “weak” European nations.
The cost of a peripheral secession would be about €9,500 to €11,500 per person the first year ($13,360 to $16,172), then €3,000 to €4,000 annually in coming years ($4,219 to $5,625) , according to UBS, along with a collapse of the domestic banking system, corporate and sovereign default, massive currency devaluation, and a fall in the volume of trade of about 50%.
The case for a “strong” country ala Germany isn’t as bad, but would still constitute a substantial blow to that economy, a collapse in the banking sector, and a complete loss of export-competitiveness.
Recurring sovereign debt problems in Europe have escalated beyond smallperipheral nations and currently jeopardize the existence of the whole Union, as Italy and Spain (the third and fourth largest economies within the block) have come under fire by bond vigilantes and now require ECB help. (ReadEurope’s QE? A Look At The ECB’s Purchases Of Italian Debt).
It is common knowledge today that the EU was an ambitious project that idealistically sought to integrate Europe, socially, politically, and economically, but failed in taking into account internal imbalances.
The EU’s monetary policy was clearly dysfunctional, as low rates fueled asset bubbles in peripheral nations, which, as the EU-wide economy expanded, grew larger and larger. “Politicians generally fail to appreciate that economic threats can also wear a (temporarily) positive appearance, in the form of bubbles,” reads the UBS note. As the bubble began to pop, the underlying economic programs exploded in tandem.
As the gravity of Europe’s problems grew, commentators have begun speculating about the possibility of an EU break-up, either in the form of a country deciding to leave or being forced to leave by its peers. This essentially leaves two scenarios, which the UBS note takes into account: a “weak country” exit (Greece, Ireland, Portugal, for example), and a “strong country” exit (Germany, France, for example) We are going to focus on the former. (Read Risk Of Euro Break Up Higher Than Ever As Political Storm Hits In September).
As an aside, UBS’ analysts point to the legal difficulties of a member country leaving the Eurozone. The EU, constituted by a series of treaties including the Lisbon Treaty, the Maastricht Treaty, and the Rome Treaty, wasn’t built to deal with break-up, and doing so would require amending the treaties and face protracted political limbo. Sovereign nations, though, could unilaterally leave. So what would happen if, say, Greece left the Euro?
The costs of leaving the monetary union and establishing a new national currency (NNC) are huge, according to UBS. The first major hurdle would be a sovereign default. Secession from the EU would practically require a redenomination of foreign debt in NNC, so as to guarantee some sort of control over the debt. “This would constitute default in the eyes of most investors.” Default means billions in losses for EU banks, local banks, creditors and probably debtors around the globe.
Currency devaluation would be severe. While many have said a 15% to 20% devaluation would help weak countries gain competitiveness, the situation would be much more extreme: UBS estimates our “weak country” would see its currency fall by 60% (taking Argentina and the fall of the US monetary union in the ‘30s as precedents). This, in turn, would lead to a spike in the cost of capital.
“At a very conservative estimate, this would entail a 700bp risk premium surge. If the banking system is completely paralyzed then the cost of capital de facto increases an infinite amount. In the extreme paralysis of finance, capital is not available at any price.”
Rising capital costs would both take their toll on local firms, from large to small, and banks. Firms would collapse as funding dries up and the possibility of bringing in money from abroad becomes increasingly difficult(people have to accept the new NNC). The banking system would completely collapse. Investors will withdraw money en masse in response to the uncertainty surrounding the forcible revaluation of accounts into NNC. From the note:
Confronted with the obvious uncertainties surrounding the establishment of a NNC, the obvious response of anyone with exposure to the secessionist banking system is to withdraw money from the bank as quickly as possible. This could be done electronically – unless the government puts in place stringent capital controls. In that event, the wise depositor anticipating the creation of a NNC would withdraw their money in physical Euro form, pack it into a suitcase and head over the nearest international border – unless the government seals their borders to the movement of people. In that event, the sensible depositor would withdraw their money in physical Euro form, pack it into a suitcase and bury it in their garden. The only way that can be prevented is to shut the banking system entirely, or perhaps place a limit on the amount of withdrawals that can be made over the transition period.
The costs of recapitalizing the banking system would probably be borne by depositors. In Argentina, the government enforced the conversion of dollar accounts into pesos “at the old official exchange rate” and then devalued against the dollar. Along with an expected bank run, the depositors in our weak country would see their accounts’ value fall by 60% in the case of 60% devaluation, according to UBS. (Read Euro Banks Stocking Up On Dollars To Avoid Liquidity Squeeze).
Trade would completely break down as well, as a forced devaluation wouldn’t be met by a host of idle trading partners willing to accept NNC-denominated goods that are 60% cheaper. It would be reasonable to expect a 60% tariff in response to a 60% depreciation of the NNC, a response the European Commission “explicitly alludes to,” according to UBS, bringing trading volumes down by about 50%.
Finally, along with a corporate default, we would face civil unrest and a society tipped into chaos, as unemployment spikes and people are left without basic necessities, much like in Argentina back in 2001-2002. A very rough estimate leads UBS’ analysts to estimate secession would cost each person in that country €9,500 to €11,500 per person the initial year. “These are conservative estimates. The economic consequences of civil disorder, break-up of the seceding country, etc, are not included in these costs,” warn the analysts.
Despite much talk of the possibility of a break up, if UBS’ analysts are right, “conservative” estimates show that secession is pretty much a death wish for any small European nation. The situation for a large country is similarly prohibitive. No one wants riots, looting, and long-term poverty. No one wants a repeat of Argentina back in 2002. (The video below shows what the situation was like in Argentina as the crisis hit).
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BERLIN (Reuters) - Anger at Greece's failure to meet fiscal targets that are a condition for its international bailout is nearing breaking point in Berlin and other European capitals, with senior politicians now talking openly about the possibility of Athens exiting the euro zone.
Horst Seehofer, the head of the Bavarian Christian Social Union (CSU), was the first prominent figure in Germany to suggest publicly that Greece might eventually be forced to leave the 17-nation single currency bloc in an interview in the Bild newspaper on Wednesday.
But he was expressing what many lawmakers and ministers in the German capital have been whispering behind closed doors for weeks, according to well-informed sources.
German Finance Minister Wolfgang Schaeuble has ramped up his rhetoric since "troika" inspectors from the European Union, International Monetary Fund and European Central Bank suspended talks on payment of a new aid tranche to Greece last week due to backsliding on its deficit targets.
And the Dutch prime minister said in a proposal published on Wednesday that fiscal violators who refused to give up sovereignty over their budgets to a new European "discipline" czar should leave the bloc.
"Countries which are not prepared to be placed under administratorship can choose to use the possibility to leave the euro zone," Mark Rutte said in the proposal which was sent to parliament.
The troika inspectors are due to return to Athens next week, but their abrupt departure has reinforced the feeling in northern Europe that Greece's government is simply unwilling to take the draconian steps required to meet the conditions of the 110 billion euro bailout they sealed in May 2010.
In July, European leaders were forced to come up with a second package of roughly equal size for Greece because the first one proved too small. But that second package, due to be ratified by national parliaments in the coming months, is now in danger.
"A debate about a second program for Greece is, in view of the difficulties in the current program for Greece -- paying out the next tranche - very premature," Schaeuble told parliament in a speech on Thursday.
Earlier he called the situation "serious" and said it was "up to Greece as to whether it can fulfill the conditions that are necessary for membership in the common currency."
German Chancellor Angela Merkel rebuffed talk of a Greek exit earlier this week, warning of a dangerous "domino effect" were the bloc's weakest member to leave.
There is no legal framework for a country leaving the currency zone and the costs of an exit could far outweigh the pain of staying in.
"As things stand, secession is highly costly and very difficult, and expulsion is impossible," UBS economist Stephane Deo wrote in a note this week.
He likened the euro zone to the "Hotel California" in the hit 1977 song by rock band The Eagles, which includes the line: "You can check out any time you like, but you can never leave."
UBS said the consequences of a weak country exiting would include sovereign default, corporate default, the collapse of the banking system and of international trade.
It estimated the costs per person in an exiting country at 9,500 to 11,500 euros in the first year -- or 40 to 50 percent of gross domestic product (GDP).
A senior EU official told Reuters that a euro zone exit was inconceivable, because of the turmoil that would ensue.
"No, because if you get 17 minus one, you'll end up with 17 minus four, five, six or eight," the official said. "The euro zone is not a cafe where you go in and you go out. The financial and monetary interdependence is so big, so strong.. that the fate of one member creates problems for all of the others."
He added: "I can assure you that Germany is as convinced as I am that leaving the euro zone is no option at all for anybody."
But Greece's failure to meet its targets has raised serious questions about whether weak euro zone countries have sufficient incentive to reform and is an acute, growing source of concern in Berlin.
What incentive does a country like Greece have to meet incredibly tough targets in the face of fierce domestic public anger if it knows that its partners in the euro zone can't afford to let it collapse financially and allow it to leave?
"If sovereigns in the Euro area believe that they are either too large or too interconnected to be allowed to fail, then there is a significant moral hazard problem," David Mackie, an economist at J.P. Morgan, wrote in a note on Thursday.
"This has clearly been an issue with the ongoing under performance in Greece, and it became apparent in Italy in August regarding ECB bond purchases. But the music for this dance may be about to stop. The departure of the troika from Athens last week suggests a high level of frustration about what Greece is delivering, and there are now serious doubts about the disbursement of the sixth tranche of the original bailout package."
Giant Sucking Sound Part 2? The NAFTA Of The Pacific Will Soon Allow Millions More American Jobs To Be Shipped Overseas
Look, it is not really that complicated. If you are a giant U.S. corporation, you can either make stuff here, or you can make stuff overseas where it is far, far less expensive to do so.
To greedy corporate executives, there are a lot of advantages to moving operations out of the country....
*It is legal to pay slave labor wages in many of these other countries. After all, why pay an American worker 10 or 20 times as much as a worker on the other side of the globe?
*In many of these other countries you do not have to provide any health care for workers.
*In many of these other countries there are virtually no environmental controls to worry about.
*In many of these other countries there are virtually no labor standards to worry about.
*In many of these other countries you only have to deal with a fraction of the "red tape" that you have to deal with in the United States.
By merging our economies with the economies of societies that are far different from our own, we have created a "race to the bottom" that is incredibly destructive to the U.S. economy.
In Vietnam, one dollar an hour is considered to be a very good wage.
So how do you plan to compete against that?
These "free trade agreements" are direct assaults on the big, juicy paychecks of American workers.
If you do not know about the Trans-Pacific Partnership, you need to get educated.
The following is a basic introduction to the TPP from Wikipedia....
The Trans-Pacific Partnership (TPP), also known as the Trans-Pacific Strategic Economic Partnership Agreement, is a multilateral free trade agreement that aims to further liberalise the economies of the Asia-Pacific region; specifically, Article 1.1.3 notes: “The Parties seek to support the wider liberalisation process in APEC consistent with its goals of free and open trade and investment.” The original agreement between the countries of Brunei, Chile, New Zealand and Singapore was signed on June 3, 2005, and entered into force on May 28, 2006. Five additional countries – Australia, Malaysia, Peru, United States, and Vietnam – are negotiating to join the group.
Apparently, one of the goals of the TPP is to reduce all trade tariffs among member nations to zero by the year 2015. The proponents of "free trade" are absolutely thrilled.
We have all enjoyed the flood of cheap products from overseas. It is nice to pay a little bit less for things.
But these cheap prices have come at a very high cost. We are literally destroying the American economy. If you walk into just about any store today and you start turning over products, you will find that almost all of them are made out of the country.
If our middle class jobs keep getting shipped overseas, our prosperity is going to vanish. If the American people allow this to continue, the standard of living of American workers is going to continue to fall toward the level of workers in third world countries.
Arthur Stamoulis, the executive director of Citizen Trade Campaign recently had the following to say about why he is opposed to this new free trade agreement....
"They’ve shipped our jobs overseas. They’ve reduced the tax base, they’ve driven down the wages and benefits for the jobs that are left. We’ve had enough"
As you can see from the chart below, we have seen a massive decline in manufacturing jobs in the United States over the last few decades....
It is absolutely amazing that the Obama administration continues to tout more "free trade" agreements as a way to increase employment in the United States.
Sadly, nearly half the country is still going to run out and vote for the guy in the next election.
Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.
So the answer is to ship even more of our jobs overseas?
Apparently the Obama administration actually believes that we don't want those jobs. The following is what U.S. Trade Representative Ron Kirk told Tim Robertson of the Huffington Post recently....
Let's increase our competitiveness... the reality is about half of our imports, our trade deficit is because of how much oil [we import], so you take that out of the equation, you look at what percentage of it are things that frankly, we don't want to make in America, you know, cheaper products, low-skill jobs that frankly college kids that are graduating from, you know, UC Cal and Hastings [don't want], but what we do want is to capture those next generation jobs and build on our investments in our young people, our education infrastructure.
Can you believe that nonsense? He believes that there are things that "we don't want to make in America"?
Why is nobody calling for him to resign immediately?
Manufacturing jobs have traditionally been high paying jobs that can support middle class families.
But now we are losing millions of those jobs and the Obama administration simply does not care.
Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.
America is being deindustrialized at warp speed and most Americans don't even understand what is happening.
Look, even if U.S. firms wanted to stay in the United States and try to compete, they face almost insurmountable obstacles....
*Many foreign nations deeply and directly subsidize national industries and the U.S. government lets them get away with it. That puts our industries at a vast disadvantage.
*The United States has the highest corporate tax rate in the world. That puts our corporations at a vast disadvantage.
*Many foreign nations do not require businesses to provide health care for their employees. That puts our businesses at a vast disadvantage.
*Many foreign nations impose very little regulation on businesses. That puts businesses in the United States at a vast disadvantage. In the U.S., we have some of the most restrictive regulations in the world.
The truth is that even the "next generation jobs" and the "green jobs" that Obama keeps talking about are rapidly leaving the country.
For example, the third-largest producer of solar panels in the United States, Evergreen Solar, is leaving America.
Evergreen is shutting down its factory in Massachusetts, laying off 800 American workers and moving production over to China.
A recent New York Times article explained why Evergreen is making this move....
Evergreen, in announcing its move to China, was unusually candid about its motives. Michael El-Hillow, the chief executive, said in a statement that his company had decided to close the Massachusetts factory in response to plunging prices for solar panels. World prices have fallen as much as two-thirds in the last three years — including a drop of 10 percent during last year’s fourth quarter alone.Chinese manufacturers, Mr. El-Hillow said in the statement, have been able to push prices down sharply because they receive considerable help from the Chinese government and state-owned banks, and because manufacturing costs are generally lower in China.
We are losing the "jobs of the future" and Obama is doing nothing about it.
Last year, more than half of all the solar panels in the world were made in China.
China is absolutely killing us on the global economic stage and Obama does not even seem to think that it is a problem.
The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.
Not only that, the United States now spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
So don't listen to any of the nonsense that Obama is spouting about creating jobs.
Not that most of the Republicans are putting forward any good ideas either.
The reality is that our politicians have lied to us. Globalism is absolutely destroying our economy.
Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe? Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts of $110 billion.
We are losing ground in almost every industry that you could name. Even the "jobs of tomorrow" are mostly being created overseas.
Andy Grove, the former CEO of Intel, says that our advanced technology companies are creating far more jobs overseas than they are in the United States....
Some 250,000 Foxconn employees in southern China produce Apple's products. Apple, meanwhile, has about 25,000 employees in the U.S. That means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods, and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology (STX), and other U.S. tech companies.
When is someone going to wake up America? If we are even losing "advanced technology" jobs, then what kind of jobs are going to be left?
In 2002, the United States had a trade deficit in "advanced technology products" of $16 billion with the rest of the world. In 2010, that number skyrocketed to $82 billion.
Needless to say, that is not a good trend.
Our politicians promised us that the "global economy" would mean more jobs and more prosperity for us.
Well, that was obviously a giant lie.
Today, if you gathered together all of the unemployed people in the United States, they would make up the 68th largest country in the world.
If we allow all of this "free trade" nonsense to continue, our unemployment nightmare is going to continue to get worse and even more of our formerly great cities will end up looking like total hellholes just like Detroit does.
Sadly, virtually all of our politicians in both political parties are in favor of these "free trade" agreements. In fact, most of them are pushing these kinds of agreements as one of the "solutions" to our problems.
The U.S. economy is being dismantled and deindustrialized right in front of your eyes.
If you plan on speaking out, you better do it now because it is almost too late to stop what is being done.
It is up to you America.
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NEW YORK - Iran's much-delayed Russian-built nuclear power plant in Bushehr went on line on September 4, heralding a new era for the country that promises even greater national investment in nuclear energy in the coming years, irrespective of whatever external pressures come to bear on Tehran.
The reactor's connection to the national grid is one thing. Quite another is its connection to a whole nation's collective psyche, identity and pride, repeatedly bruised over a decade-long delay - which is why the political and symbolic significance of this new development requires close scrutiny.
In a word, the agony of potential defeat over an important national project that dates back to before the revolutionary era (1979) and the tumults of the Iran-Iraq war in the 1980s (when the plant under construction was repeatedly bombed) has now been replaced with a sense of relief and the satisfaction that adversaries including the United States government failed to halt Iran's march toward nuclear power.
It was three years ago that US Secretary of State Hillary Clinton explicitly pressured Moscow not to complete the Bushehr power plant as long as Iran had not complied with United Nations demands to suspend controversial nuclear activities, above all uranium enrichment. Much has happened since then and US-Russia relations have cooled considerably, casting a shadow on the prospects of concerted action regarding Iran's nuclear program.
Last Wednesday, ardently pro-Israel French President Nicolas Sarkozy warned of pre-emptive strikes against Iran due to missile and nuclear programs, partially exonerated by a new report by the International Atomic Energy Organization (IAEA) on Friday that expressed increased concerns about the "possible existence in Iran of past or current undisclosed nuclear related activities".
Citing a steam of credible intelligence reports from "many member states," conceived as "extensive and comprehensive", the IAEA report set the stage for further Iran-bashing initiatives at the upcoming meeting of the agency's board of governors - on September 12, the same date slated for the official ceremony at Bushehr - that could trigger more action against Iran at the United Nations later this year.
Both Ali Larijani, the powerful speaker of Iran's parliament (Majlis) and Fereydoon Abbasi, the head of Iran's Atomic Energy Organization, have labeled the IAEA report as "double-edged". Alongside increased concerns, the report confirmed the absence of evidence of any diversion of declared nuclear material and, equally important, its admission that Iran had expanded cooperation by allowing a recent high-level inspection of facilities including the heavy water reactor under construction in Arak, and had also "provided extensive information on its current and future R&D [research and development] work on advanced centrifuges".
Abbasi, in an extensive interview with a Tehran news agency, said, "If the atomic agency shows that it is not under pressure by the countries opposed to Iran, we can cooperate even more." Abbasi said that Iran's preconditions for nuclear negotiations had changed and while Tehran was still studying the recent Russian "step-by-step" proposal, under no circumstances would it be willing to compromise its "nuclear rights".
Iran's envoy to the IAEA, Ali Asghar Soltanieh, on the other hand has questioned the credibility and authenticity of information on Iran fed to the IAEA by other countries. After all, the IAEA as its previous chief, Mohammad ElBaradei, repeatedly stated that the agency lacked the "means and the manpower" to "independently confirm" the authenticity of foreign intelligence reports on Iran. ElBaradei's view is obviously not an issue of concern for his successor, Yukiya Amano, who has discounted the possibility of disinformation on Iran.
Clearly, to claim that "many member states" have credible information suggesting that Iran is engaged in clandestine nuclear weapons program, when even the top US intelligence officials shy away from such strong statements and important countries such as Russia are willing to go on record professing ignorance of any viable information suggesting Iranian proliferation, indicates that something is amiss.
"The IAEA report's reference to intelligence from several countries is misleading," says a Tehran University political science professor, who spoke to the author on the condition of anonymity. "The reason being that we are usually dealing with a 'wolf pack' consisting of the US, Israel and France and England, the latter two usually behaving as information clearing house for Israel. Therefore, it is really disingenuous on Mr Amano's part to claim that many members are giving him credible information. It is really starting to sound like reading a cheap detective novel."
Whether hyped up or not, the Iran nuclear threat remains a real issue of concern to Western governments and some of Iran's (Arab) neighbors, including Saudi Arabia, a source of virulent anti-Iran announcements nowadays.
Turkey's recent consent to the US bid to station anti-missile radar on its soil close to Iranian territory also warrants a sustained Iranian counter-effort at confidence-building with the IAEA, which is why a positive Iranian response to the Russian proposal to end the impasse over negotiations is key.
The so-called "Lavrov plan", named after Sergei Lavrov, Russia's foreign minister, was submitted to Tehran last month and calls on Iran to expand its cooperation with the IAEA, envisaging a scenario in which for every proactive Iranian step to resolve any outstanding issues with the body, the international community would grant Iran limited concessions, such as freezing some sanctions.
For sure, along with Moscow's final delivery of its promise to complete the Bushehr power plant, an Iranian nod to the nuclear proposal could go a long way to cementing future Russian-Iran nuclear cooperation. Better late than never, Russia has given cause for national joy in Iran and this may mean more nuclear contracts with Tehran; this at a time when the West knows only the language of coercion and threats against Iran.
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