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Friday, April 13, 2012

The April 11, 2012 Event: cluster of large earthquakes rattle the globe from Indonesia to Mexico

April 12, 2012 – WORLD – A strong earthquake hit Mexico on Wednesday, shaking buildings and sending people running out of offices onto the streets of the capital Mexico City. The U.S. Geological Survey said the 6.5 -magnitude quake was centered on Mexico’s Pacific coast near Michoacan and struck fairly deep under the earth at 65 km or 40 miles. Prior to the Mexico earthquake, a powerful and shallow 5.9 struck near the Juan de Fuca tectonic plate off the coast of Oregon- indicating tectonic plates worldwide are being rattled by planetary seismic tension. 

Prior to Oregon earthquake, two massive 8.0+ magnitude earthquakes (8.6 and 8.2) struck the ocean floor off the north coast of Sumatra, Indonesia. As I warned in my book The Extinction Protocol, the power unleashed in these seismic events is growing. This is testament to the dangers and seriousness of the earth-changes facing us and how these events are unleashing more unbridled force with each successive eruption.  

The Indian Ocean strike-slip fault earthquakes are very unusual. As a matter of fact, I’ve never heard of a strike-slip lateral earthquake of this great a magnitude; especially under water. Preliminary assessment of the Indonesian quakes by U.S. geologists suggests one plate lurched past each other as much as 70 feet. San Andreas is a strike-slip, lateral- can we even imagine two sections of ground moving 70 feet near San Francisco? Had the force of the Sumatra quakes been unleashed upon San Andreas, the city would have been completely destroyed. Ironically, the largest surface displacement ever recorded in a lateral strike-slip fault was 21 feet and that was in the 1906 7.9 San Andreas earthquake. Just so we understand the significance of what transpired today; the Japanese March 11, 2011 earthquake move the ocean floor 79 feet sideways and 10 ft upwards, but today’s earthquakes happened in double 8.0+ magnitude sequence and moved the earth nearly as far. Worst, the seismic tension from the event ricocheted around the world and contributed to other earthquakes. 

On April 12, additional earthquakes hit the Gulf of California – a 6.2 and 6.9 magnitude earthquakes. The seismic tension appears to be far from over and now appears to be agitating the Pacific Plate subduction zones near Japan. 

The Extinction Protocol

How The European Central Bank Is Turning Spain Into Greece

As Spanish CDS surge and bonds shrug off the very recent gloss of a 'successful' Italian debt auction, the sad reality we pointed out this morning is the increasing dependence between Spanish banks, the sovereign's ability to borrow, and the ECB. As ING rates strategist Padhraic Garvey notes this morning, the bulk of the LTRO2 proceeds were taken down by Italian (26%) and Spanish (36% of the total) and the latter is even more dramatic given the considerably smaller size of Spanish banking assets relative to Italy. 

The hollowing out of the Spanish banking system, via encumbrance (ECB liquidity now accounts for 8.6% of all Spanish banking assets), is a very high number - on par with Greek, Irish, and Portuguese levels around 10% where their systems are now fully dependent on the ECB for the viability of their banks. His bottom line, Spain is not looking good here and while plenty of chatter focuses on theECB's ability to use its SMP (whose longer-term effectiveness is reduced due to scale at EUR214bn representing just 3% of Eurozone GDP), consider what happened in Greece! The ECB did not take a Greek haircut and so the greater the amount of Greek debt the ECB bought, the greater the eventual haircut the private sector was forced to take.  

By definition,every Spanish bond that the ECB buys in its SMP program increases the default risk that private sector holders are left with. Only outright QE, a promise not to default and a willingness to expand the ECBs balance sheet with ownership of the entire stock of Spanish debt if necessary (in the extreme) would be enough to cause a material positive effect from ECB intervention but it is clear from the massive compression in German yields (and weakness in Spain) that the market remains nervous amid an ongoing preference for core. Of course the cycle of crisis, as BNP noted, from crisis to complacency is becoming more chaotic and less sustainable.

ECB dilemma / Bank liquidity

Latest central bank data (which comes out with a lag) shows that the 2nd 3yr LTRO was dominated by Spanish and Italian banks. Specifically we estimate that Spanish banks took down 36% and Italian banks took down 26% of the total. The larger takedown of Spanish banks here is significant as the size of its banking assets are lower than those of Italy, hence in proportional terms Spanish banks have shown the greatest need for 3yr LTRO cash.

On an on-going basis Spanish banks now take down some 316bn of ECB liquidity, which represents 8.6% of its banking assets. This is a very high number. By way of comparison Greek, Irish and Portuguese banks take down some 10% to 12% of their banking assets in ECB liquidity, and these systems are basically fully dependent on the ECB for the viability of their banks. Spanish banks are not far behind on this metric. The next worst are Italian banks with the liquidity takedown of 6.5% of their banking assets.

Bottom line, Spain is not looking good here. There has also been a warning shot aimed at Ireland from the ECB's Asmussen, who asserts that the current amount of liquidity support extended by the ECB and through ELA (additional liquidity support through the Irish Central Bank) "needs to be substantially reduced over time". He also warns that Ireland should be very careful on any deviation from the original promissory notes agreement, suggesting that any restructuring here should be preceded by reduced bank reliance on emergency liquidity assistance.

At the other extreme, Dutch banks take down a mere 0.4% of their banking assets in ECB liquidity, and latest data show German banks taking liquidity to the equivalent of 0.6% of their assets. We estimate that German banks took down 8% of the 2nd LTRO while the Dutch take down was significantly small. The French need for ECB liquidity is higher, with total ECB takedown running at 147bn, which represents 1.7% of its banking assets, and we estimate that French banks took down 12% of the 2nd 3yr LTRO.

In the past three weeks there has been evidence that the beneficial effects of the two 3yr LTROs are largely behind us, with spreads under widening pressure again. In the meantime there has been no evidence of ECB bond buying through its SMP program. While the SMP may be resumed and would have a positive impact, it could ultimately risk making things worse. Why? Consider what happened in Greece.The ECB did not take a Greek haircut. So greater is the amount of Greek bonds that the ECB bought, the greater was the size of the private sector haircut required in order to get to the 120% medium-term debt/GDP target.

A baseline assumption is that the same could happen in the future i.e. if there had to be, say a Spanish, restructuring (albeit unlikely) at some point in the future that the ECB would not share in the pain. By definition then, every Spanish bond that the ECB buys in its SMP program increases the default risk that private sector holders are left with. The SMP program has survived the Greek default event because the ECB did not take a haircut, but that action in itself has impaired the effectiveness of the SMP. Only outright QE, a promise not to default and a willingness to expand the ECBs balance sheet with ownership of the entire stock of Spanish debt if necessary (in the extreme) would be enough to cause a material positive effect from ECB intervention.

A more positive gloss has taken hold in the past few days, coinciding with Italy getting paper into the market yesterday amid a strong convergence theme for peripheral spreads to core. However, the fact that 2yr Schatz trade close to a single digit and that the 5yr area is trading so rich to the curve tells us that this market remains very nervous amid an ongoing preference for core.

Zero Hedge

'Syrian army kills three on second day of truce'

At least three protesters were shot dead by Syrian security forces on Friday on the second day of a nationwide ceasefire meant to restore peaceful political dialogue after 13 months of extreme violence, opposition activists said.

The shootings occurred as demonstrators rallied against President Bashar Assad, who has accepted the terms of the United Nations-brokered ceasefire which took effect on Thursday.

Syrians took to the streets across the country in small demonstrations after Friday's Muslim prayers, trusting that the two-day-old ceasefire would protect them from the army bullets that have frightened off peaceful protesters for months.

Activists said state security forces were out in strength to block streets in many cities to prevent protesters forming major anti-Assad rallies.

One person was killed as marchers tried to converge on a central square in the city of Hama. Security forces shot one person dead as worshipers left a mosque in the town of Nawa in the southern Deraa province, where the uprising began.

The group said earlier that Forces loyal to Assad fought rebels near the border with Turkey, the first clash since a UN-brokered ceasefire came into effect a day earlier.

According to the group, the fighting broke out in the northwestern province of Idlib, close to the border with Turkey, after army troops deployed to try to clear rebels out of the area.

Some of the gunmen pulled out when the shooting started, the group's director Rami Abdulrahman said. He said there were no immediate reports of casualties and the fighting appeared to have stopped.

The grassroots Local Coordination Committees said there had been heavy gunfire in the village of Kherbet Joz, close to the Turkish frontier. Dozens of tanks were deployed on the edge of the village, it said.

Abdulrahman said that Thursday's ceasefire, brokered by international mediator Kofia Annan, appeared to be holding in the rest of the country, but there was still no sign of any army withdrawal from urban centers, as called for by Annan.

Meanwhile, French President Nicolas Sarkozy said on Friday that he did not believe Assad's declaration of a ceasefire was sincere and that international observers should be deployed to monitor the situation in the country.

"I do not believe Bashar Assad is sincere," Sarkozy told news TV channel i>tele in an interview. "Sadly I do not believe this ceasefire."

Sarkozy, waging an uphill battle for re-election in a vote that opens on April 22, said he had discussed the issue with US President Barack Obama in a conference call on Thursday.

"I believe, and I discussed this yesterday afternoon with Barack Obama, that at the very least international observers must be deployed to establish what's going on," he said.

"I firmly believe the international community should live up to its responsibilities and create the conditions for (setting up) humanitarian corridors," he said.

Syrian opposition activists called mass protests for Friday to test a fragile, day-old ceasefire, and international pressure mounted for Damascus to comply fully with a UN-backed peace plan.

Sarkozy and Obama called on Syria on Thursday to adhere "scrupulously and without conditions" to a UN-backed plan to end the violence in the country.

Jerusalem Post

'Pay Day' Mayday! Bankers bait Brits into debt trap

Iraq rebuilding it's military as they rebuild Babylon...

Bible prophecy indicates that in the End Times, the nation we know today as the Republic of Iraq — known variously in Scripture as Babel, Bablyon, Babylonia, Mesopotamia and Shinar — will emerge as the global center of wealth, power and terrible evil. Eventually Iraq will pose a direct and existential threat to the State of Israel, particularly during the Tribulation.

Since the fall of Saddam Hussein and his regime in 2003, Iraq has not been a regional threat, much less a danger to Israel. Some have assumed, therefore, that Iraq would no longer play a major role in Middle Eastern or global affairs in the future. But such a conclusion would be a mistake. As I wrote about in my first non-fiction book, Epicenter, those who read, understand and believe Bible prophecy have been watching for Iraq to: 1) begin rebuilding its offensive military capability; 2) begin rebuilding its economy; 3) continue rebuilding the ancient city of Babylon into a major center of commerce and tourism.

Interestingly, all three developments are currently underway.


Now that the Iraqi government has forced the American military out of their country, they have embarked on a dramatic arms build-up, including the purchase of American weapons systems that could be used for offensive purposes in the future. Examples:

The Iraqis are buying 140 state-of-the-art American M1A1 combat tanks. “The Government of Iraq has purchased 140 tanks from the United States, all of which have arrived in Iraq,” reports an Iraqi business website. “131 of those tanks are already in the possession of the Iraqi Army. The nine remaining tanks are in Iraq, but in U.S. possession.”

The Iraqis are buying 36 advanced American F-16 fighter jets. “Israel is monitoring Iraq’s rearmament program, particularly Bahgdad’s acquisition of 36 Lockheed Martin F-16s, with some disquiet amid intelligence reports Iran is consolidating its influence in Iraq following the U.S. military withdrawal,” reports UPI. “Baghdad ordered the F-16 Block 52 multi-role Fighting Falcon jets — enough to equip the Iraqi air force’s first two fighter squadrons — in two 18-plane batches in 2011 at an estimated total cost of $7 billion.”

In 2010, the Iraqis embarked on a $13 billion weapons spending spree. “Iraq is preparing to buy as much as $13 billion in American arms and military equipment, a huge order of tanks, ships and hardware that U.S. officials say shows Iraqi-U.S. military ties will be tight for years to come,” reported USA Today. “‘It helps to build their capabilities, first and foremost; and second, it builds our strategic relationship for the future,’ said Army Lt. Gen. Michael Barbero, the ranking U.S. officer responsible for training and advising Iraq forces.”

Now that the war of liberation is over and most of Iraq has been pacified and stabilized from the terrorist insurgency, Iraq’s economy is not only growing but is poised for hyper-growth. Analysts expect Iraq’s GDP to grow by more than 9% annually for the next few years, and expect Iraq’s oil production to nearly triple by 2017.
“Iraq’s gross domestic product is expected to grow by an average rate of at least 9.4 percent annually between 2012 and 2016 as the oil-producing country benefits from larger windfalls in oil revenues, a senior central bank official said [in February],” reports Reuters. ”Iraq, which has the fourth-biggest oil reserves in the world, is currently producing around 2.9 million barrels per day (bpd). Iraq’s oil minister said last year he expected production to reach between 8-8.5 million bpd by 2017.”
Some analysts within the Iraqi Planning Ministry believe Iraq could reach a 47% growth rate by 2017, once the oil starts flowing fast and furious.
More and more major international companies are signing deals to do business in Iraq — see this intriguing list published by Reuters, published in December 2011.
In 2011, ExxonMobil — the world’s largest oil company — signed a major deal to help develop the oil industry in Iraq’s northern region of Kurdistan. Despite the fact being mired in some political controversy, the deal is likely to be fully ratified in the not-too-distant future.
Also in 2011, Royal Dutch Shell signed a $17 billion deal to help Iraq develop its enormous lucrative oil industry in its southern regions.
In 2010, the Iraqi government ratified four other major oil deals.


Largely overlooked by Westerners is the fact that the government of Iraq is moving forward with plans to protect the archaeological remains of the ancient City of Babylon, in preparation for building a modern city of Babylon. As I wrote in 2009, the project — originally started by the late Saddam Hussein — is aimed eventually at attracting scores of “cultural tourists” from all over the world to see the glories of Mesopotamia’s most famous city. What’s more, the Obama Administration has actually helped contribute U.S. taxpayer dollars to “The Future of Babylon Project” through the State Department’s budget. Read more at the World Monuments Fund website for the rebuilding Babylong project.

In 2011, I noted that the New York Times had published an intriguing article on Iraqi efforts to preserve, protect, restore and then rebuild the ancient city of Babylon and make it a draw for tourists, with U.S. taxpayer assistance. TheTimes reports that a modern Babylon museum will open later this month. Times’ reporter Steven Lee Myers also posted a fascinating four minute video walking through some of the rebuilt ruins of Babylon, and explaining Iraqi efforts to protect and restore numerous Biblical sites.

“The Babylon project is Iraq’s biggest and most ambitious by far, a reflection of the ancient city’s fame and its resonance in Iraq’s modern political and cultural heritage,” the Times reported, noting that “in November, the State Department announced a new $2 million grant to begin work to preserve the site’s most impressive surviving ruins. They include the foundation of the Ishtar Gate, built in the sixth century B.C. by Nebuchadnezzar’s father, Nabopolassar, and adorned with brick reliefs of the Babylonian gods Marduk and Adad.”

“The American reconstruction team has refurbished a modern museum on the site, as well as a model of the Ishtar Gate that for decades served as a visitors’ entrance. Inside the museum is one of the site’s most valuable relics: a glazed brick relief of a lion, one of 120 that once lined the processional way into the city. The museum, with three galleries, is scheduled to open this month, receiving its first visitors since 2003. And with new security installed, talks are under way to return ancient Babylonian artifacts from the National Museum in Baghdad. The fate of Babylon is already being disputed by Iraqi leaders, with antiquities officials clashing with local authorities over when to open it to visitors and how to exploit the site for tourism that, for the most part, remains a goal more than a reality. Even now they are clashing over whether the admission fee should go to the antiquities board or the provincial government.”

Joel Rosenberg

27 Statistics About The European Crisis That Are Almost Too Crazy To Believe

The economic crisis in Europe continues to get worse and eventually it is going to unravel into a complete economic nightmare.  All over Europe, national governments have piled up debts that are completely unsustainable.  But whenever they start significantly cutting government spending it results in an economic slowdown.  So politicians in Europe are really caught between a rock and a hard place.  They can't keep racking up these unsustainable debts, but if they continue to cut government spending it is going to push their economies into deep recession and their populations will riot.  Greece is a perfect example of this.  Greece has been going down the austerity road for several years now and they are experiencing a full-blown economic depression, riots have become a way of life in that country and their national budget is still not anywhere close to balanced.  Americans should pay close attention to what is going on in Europe, because this is what it looks like when a debt party ends.  Most of the nations in the eurozone have just started implementing austerity, and yet unemployment in the eurozone is already the highest it has been since the euro was introduced.  It has risen for 10 months in a row and is now up to 10.8 percent.  Sadly, it is going to go even higher.  As economies across Europe slide into recession, that is going to put even more pressure on the European financial system.  Most Americans do not realize this, but the European banking system is absolutely enormous.  It is nearly four times the size that the U.S. banking system is.  When the European banking system crashes (and it will) it is going to reverberate around the globe.  The epicenter of the next great financial crisis is going to be in Europe, and it is getting closer with each passing day.
The following are 27 statistics about the European economic crisis that are almost too crazy to believe....
#1 The Greek economy shrank by 6 percent during 2011, and it has been shrinking for five years in a row.
#2 The average unemployment rate in Greece in 2010 was 12.5 percent.  During 2011, the average unemployment rate was 17.3 percent, and now the unemployment rate in Greece is up to 21.8 percent.
#3 The youth unemployment rate in Greece is now over 50 percent.
#4 The unemployment rate in the port town is Perama is about 60 percent.
#5 In Greece, 20 percent of all retail stores have closed down during the economic crisis.
#6 Greece now has a debt to GDP ratio of approximately 160 percent.
#7 Some of the austerity measures that have been implemented in Greece have been absolutely brutal.  For example, Greek civil servants have had their incomes slashed by about 40 percent since 2010.
#8 Despite all of the austerity measures, it is being projected that Greece will still have a budget deficit equivalent to 7 percent of GDP in 2012.
#9 Greece is still facing unfunded liabilities in future years that are equivalent toapproximately 800 percent of GDP.
#10 In the midst of all the poverty in Greece, several serious diseases are making a major comeback.  The following comes from a recent article in the Guardian....
The incidence of HIV/Aids among intravenous drug users in central Athens soared by 1,250% in the first 10 months of 2011 compared with the same period the previous year, according to the head of Médecins sans Frontières Greece, while malaria is becoming endemic in the south for the first time since the rule of the colonels, which ended in the 1970s.
#11 The unemployment rate in Spain is now up to 23.6 percent.
#12 The youth unemployment rate in Spain is now over 50 percent.
#13 The total value of all toxic loans in Spain is equivalent to approximately 13 percent of Spanish GDP.
#14 The GDP of Spain is about 1.4 trillion dollars.  The three largest Spanish banks have approximately 2.7 trillion dollars in assets and they are all on the verge of failing.
#15 Home prices in Spain fell by 11.2 percent during 2011.
#16 The number of property repossessions in Spain rose by 32 percent during 2011.
#17 The ratio of government debt to GDP in Spain will rise by more than 11 percent during 2012.
#18 On top of everything else, Spain is dealing with the worst drought it has seen in 70 years.
#19 The unemployment rate in Portugal is up to 15 percent.
#20 The youth unemployment rate in Portugal is now over 35 percent.
#21 Banks in Portugal borrowed a record 56.3 billion euros from the European Central Bank in March.
#22 It is being projected that the Portuguese economy will shrink by 5.7 percent during 2012.
#23 When you add up all forms of debt in Portugal (government, business and consumer) the total is equivalent to approximately 360 percent of GDP.
#24 Youth unemployment in Italy is up to 31.9 percent - the highest level ever.
#25 Italy's national debt is approximately 2.7 times larger than the national debts of Greece, Ireland and Portugal put together.
#26 If you add the maturing debt that the Italian government must roll over in 2012 to the projected budget deficit, it comes to approximately 23.1 percent of Italy's GDP.
#27 Italy now has a debt to GDP ratio of approximately 120 percent.
So why hasn't Europe crashed already?
Well, the powers that be are pulling out all their tricks.
For example, the European Central Bank decided to start loaning gigantic mountains of money to European banks.  That accomplished two things....
1) It kept those European banks from collapsing.
2) European banks used that money to buy up sovereign bonds and that kept interest rates down.
Unfortunately, all of this game playing has also put the European Central Bank in a very vulnerable position.
The balance sheet of the European Central Bank has expanded by more than 1 trillion dollars over the past nine months.  The balance sheet of the European Central Bank is now larger than the entire GDP of Germany and the ECB is now leveraged 36 to 1.
So just how far can you stretch the rubberband before it snaps?
Perhaps we are about to find out.
The European financial system is leveraged like crazy right now.  Even banking systems in countries that you think of as "stable" are leveraged to extremes.
For example, major German banks are leveraged 32 to 1, and those banks are holding a massive amount of European sovereign debt.
When Lehman Brothers finally collapsed, it was only leveraged 30 to 1.
You can't solve a debt crisis with more debt.  But the European Central Bank has been able to use more debt to kick the can down the road a few more months.
At some point the sovereign debt bubble is going to burst.
All financial bubbles eventually burst.
What goes up must come down.
Right now, the major industrialized nations of the world are approximately 55 trillion dollars in debt.
It has been a fun ride, but this fraudulent pyramid of risk, debt and leverage is going to come crashing down at some point.
It is only a matter of time.
Already, there are a whole bunch of signs that some very serious economic trouble is on the horizon.
Hopefully we still have a few more months until it hits.
But in this day and age nothing is guaranteed.
What does seem abundantly clear is that the current global financial system is inevitably going to fail.
When it does, what "solutions" will our leaders try to impose upon us?
That is something to think about.
Economic Collapse

Spanish bailout 'impossible' for eurozone, says prime minister Mariano Rajoy

Mr Rajoy said it was "not possible to rescue Spain" but insisted his country did not need a Greek-style international bail-out anyway.

"To talk about a bail-out for Spain at the moment makes no sense," he told reporters. "Spain is not going to be rescued; it's not possible to rescue Spain, there's no intention to, it's not necessary and therefore it's not going to be rescued."

Despite his comments, the Madrid bourse fell and the yields on the country's benchmark bonds remained stubbornly high. While other European markets soared on Thursday following strong gains in America, Spain's Ibex index lost 0.5pc.

Politicians in Rome tried to counter the markets' view that Italy was in the same predicament as Spain.

Vittorio Grilli, Italy's deputy finance minister, said "markets are very nervous" but added: "We cannot talk about a derby between Italy and Spain."

Italy managed to raise €4.88bn (£4.03bn) at a bond auction but only by paying a markedly higher price. The bulk of the bonds - €2.88bn - were sold at a yield of 3.89pc, up from 2.76pc at an auction on March 14.

Analysts at Bank of America Merrill Lynch said: "Although Spain and Italy face very different economic and fiscal issues, their yields are largely moving in tandem."

Meanwhile, the Greek unemployment rate rose to 21.8pc, according to fresh figures from the national statistics office. During 2011, the average annual jobless rate soared to 17.7pc from 12.5pc the year before, revealing the toll of the crisis and resulting austerity measures that have seen one-in-10 jobs destroyed. One-in-five Greeks is now jobless, including 50.8pc of those aged under 25. The rate is twice as high as the eurozone average.

Christine Lagarde, the boss of the International Monetary Fund (IMF), also warned that Europe's rescue mechanisms were not enough to restore confidence to global markets but said the IMF could provide a "global firewall".

Speaking in Washington on Thursday, Ms Lagarde, who is seeking to raise $500bn (£313.4bn) in extra funds for the IMF from the G20, warned risks to the global economy "remain high; the situation fragile".

"We need a broader approach – and a stronger global firewall – if we are to push back this crisis. The IMF can help. But to be as effective as possible, we need to increase our resources."

The Telegraph

Russia May Consider Establishing Private Military Companies

Russia may create private military companies and possibly use them for missions abroad. Prime Minister and President-elect Vladimir Putin mentioned this possibility after he delivered his report on the government’s performance in 2011 to the State Duma. Many countries have such companies, but the issue needs to be carefully considered given the specific circumstances of Russia.

Indirect instruments of government influence

The possibility of using private military companies (PMCs) as a tool of Russian influence abroad was raised by A Just Russia deputy Alexei Mitrofanov.

“I believe that such companies are a way of implementing national interests without the direct involvement of the state,” Putin replied. “Yes, I think we could consider this option.”

What exactly is meant by this, given the wealth of international experience in this area and how could it be implemented in the reality of today’s Russia?

20th century mercenaries

One of the previous attempts to use such “indirect tools of influence” nearly led to the appearance of two semi-piratic states in Africa in the 1960s: copper-rich Katanga, which declared independence from Congo in 1960 and rejoined it only after UN intervention in 1963, and Biafra, which seceded from Nigeria in 1967 and was reincorporated into it in 1970.

The colonial powers, which were leaving Africa at the time, needed an additional instrument for stabilizing the continent. Initially European mercenaries, hired by local governments, were used to fight the guerrillas.

However, they were also hired to overthrow the “wrong” governments, which they did quickly and usually at night, so that the TV crews which arrived at the site in the morning saw only beaming locals armed with heavy weaponry.

Some of these stories ended in embarrassment. Colonel Bob Denard, a French soldier and mercenary who had fought in Katanga, and his group of mercenaries escaped by the skin of their teeth when they tried to overthrow the leftist president of Benin in 1977. But Denard’s other missions, for example in the Comoros, were completed quite successfully.

Mercenaries were based in white-dominated southern Africa, including Rhodesia during Ian Smith’s term as prime minister and South Africa when it was ruled by the Boers. When the international community took harsh measures against the mercenaries, including by adopting the UN Mercenary Convention, the vacuum was filled by private military companies, hired by African governments to ensure “systemic security under difficult conditions.” The best known of these was Executive Outcomes, which operated in South Africa and was dissolved in late 1998 as a legal entity, but not as a community of mercenaries.

By the mid-1990s, PMCs could choose from a vast number of retired military professionals in NATO countries after the end of the Cold War. The number of Soviet servicemen, in particular pilots and engineers, on hire in the air forces of African countries went up sharply, too.

The demand for the services of PMCs increased as conflicts and even local wars flared up on the periphery of the former Soviet zone of influence, and African regimes started fighting over their countries’ meager resources.


Western governments readily used PMCs to resolve a growing number of such problems. The market was dominated by retired U.S. and British colonels, who discreetly worked hand in glove with their governments and security services. Private military companies mushroomed and soon became the key element of the presence of the wealthiest countries in the hot spots around the world.

If the golden age of mercenaries was in the 1960s in Congo, then Iraq and Afghanistan in the 2000s can be considered the platinum age. Mercenaries were paid mind-boggling daily rates of $1,000, $1,500 and more for operations in the conflict zones, approximately seven times more than U.S. military forces with comparable qualifications.

Outsourcing of U.S. mercenaries became especially flagrant during the wars in Iraq and Afghanistan. By the end of the 2000s, the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan said in its report to Congress that the ratio of “the contractor workforce” to U.S. military forces in these countries was roughly 1-to-1.

The contractor workforce soon developed close relations with suppliers and service companies, who fought each other over the most lucrative contracts on offer from the new weak Iraqi and Afghan governments. Western governments find it difficult to conduct operations in the combat zones without “a contract workforce,” which is another word for mercenaries whose losses are of no concern to anyone apart from their direct employers and who can be assigned the most delicate missions. If they are caught red-handed, they are on their own — there is no government flag to protect them.

Private military companies resurfaced in Libya in 2011 in their traditional form – as trained fighters and instructors of the rebels, who still only managed to break the resistance of the pro-Gaddafi forces after six months of NATO air raids and a ground operation led by troops from Britain, Qatar, the UAE and possibly France.

PMCs in Russia

The establishment of private military companies in Russia is a possibility, according to what Putin has said. But there are many nuances bound up in its implementation.

The point at issue is not how to control the “contract workforce,” which will not be officially employed by the state. Control magically becomes possible when the government needs the contract workforce to exert indirect influence on its behalf. After all, PMCs are not private street kiosks or garages.

Much more interesting is the question of what form the PMCs will take in the specific conditions pertaining to Russia. There is a limited market for their services after all and so they will have to rely heavily on major Russian corporations – in other words state energy concerns. They will be hired above all to protect the infrastructure and production areas of these corporations in Russia and abroad.

Another possible area for their deployment could be to help implement Eurasian integration, which is changing the CIS space and increasing Russia’s presence in some unstable post-Soviet republics, primarily in Central Asia but also possibly in the self-proclaimed Caucasus republics of Abkhazia and South Ossetia.

Russian PMCs could be also used in Afghanistan, whose pseudo-stability has closely tied the interests of NATO with those of Moscow.

The deployment of additional troops there may be difficult due to local problems and political losses, but the use of the contract workforce could smooth off some rough edges.

At the same time, PMCs could be a good way to offer retired servicemen new employment opportunities at a time when Russia’s Defense and Interior Ministries are planning to reduce their workforces.

RIA Novosti

Gerald Celente: The Empire is Collapsing

NATO says monitoring tension in Turkey-Syria border

NATO said on Thursday that it was concerned about an incident on the Turkish-Syrian border this week that caused casualties on the Turkish side of the frontier, after Turkish Prime Minister Recep Tayyip Erdoğan said Turkey could seek NATO's help if similar incidents occur.

Two Turkish nationals and two Syrians were injured in a refugee camp in Kilis province when Syrian forces fired across the border during clashes with opposition fighters that reportedly had attempted to seize control of the border gate and then fled to Turkey. Erdoğan called the incident a border violation and said Turkey would pursue measures under international law in response, raising prospects of military retaliation.

On Wednesday, he further said that “NATO has responsibilities to protect the Turkish border according to Article 5.” The premier was referring to the fifth article of the alliance's treaty stating that an attack against one NATO member shall be considered an attack against all members.

Carmen Romero, a NATO spokeswoman, expressed concern over the incident and said Thursday that the military alliance is “monitoring the situation very closely and will continue to do so.”

The NATO spokeswoman, however, said Turkey did not ask the Alliance for help in dealing with Syria’s cross-border attacks.

She underlined that NATO "takes it very seriously protecting its members."

Foreign Minister Ahmet Davutoğlu said Turkey, a NATO member, could seek help from the military alliance if there are future violations.

Turkey's powerful army is capable of dealing with a threat from Syria, but Turkey could benefit from the alliance's advanced missile defense systems. However, Turkey is unlikely to take any unilateral military action unless there is a direct and strong provocation from Syria.

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