SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Pastimes : NNBM - SI Branch -- Ignore unavailable to you. Want to Upgrade?


To: lurqer who wrote (22163)1/28/2003 3:33:13 AM
From: stockman_scott  Respond to of 104218
 
This guy makes a lot of sense to me...
_____________________________________________________

***Daniel Ellsberg answers questions on Iraq

ellsberg.net

Weblog Entry

January 23, 2003

Daniel Ellsberg answers questions on Iraq for Metall (Germany Metalworkers Union newspaper) and Freitag

1. "What threat does Iraq now pose or could pose in the future to essential US objectives in the Middle East or globally?"

No threat at all, so long as Saddam is not faced with overthrow or death by attack or invasion. Saddam has been weakened by a decade of sanctions, contained and deterred by the readiness and even strong desire of the US to attack Iraq on any excuse. Unattacked, he poses no threat at all to his neighbors or the US. To call him "the number one danger to US security and interests" is not just questionable, it's absurd. On any reasonable list of outstanding dangers, he isn't on the list.

This would remain true even if he acquired more gas and biological weapons than he may now have (or could soon have), and even if he acquired nuclear weapons! He would be better equipped to deter unprovoked attack than now, but to a reasonable opponent his ability to deter attack should be strong now (see below). But invading Iraq, however desirable in the eyes of American oil-men, is not an "essential" US objective. Otherwise, it is absurd to say that it is less feasible to contain or deter Saddam, even armed with nuclear weapons, from aggression than to seek to do the same with Stalin, Mao or the two Kims.

If he is attacked with the prospect of overthrow and death, that's another matter. Then he goes up near the top of the list, given his probable willingness to launch nerve gas on invading US troops (produced under bombing, if necessary; Scott Ritter believes he can and will do this, though he believes that Iraq has no such weapons operational now), his possible ability to launch such weapons on Israel (Ritter believes he has no delivery ability for this now, given the effectiveness of past inspections, but perhaps he's wrong), and the likelihood that he would give such weapons or their precursors to Al Qaeda or other terrorists as a legacy (not otherwise). The first two contingencies have a strong possibility of evoking US (or Israeli) first-use of nuclear weapons. That might arise also from a strong city-fighting defense of Baghdad, with large US casualties and stalemate.

2. "What, in your opinion, are the objectives of the Bush administration in pursuing its current policy toward Iraq?"

(a) oil.

(b) oil.

(c) oil.

(d) US elections: distraction and rally-round-the-President in November 2002 and November 2004; and with the hope of

(e) shifting American Jews from the Democrats to the Republicans, semi-permanently, by total backing of Sharon's (Greater Israel) policy, while gratifying the Christian Right by the same policy, in their current alliance with Likud and Likud-supporters in the US, reflecting the Christian Right's bizarre apocalyptic beliefs (about the necessary in-gathering of Jews in Israel as a precursor to Armageddon: at which time, incidentally, the Jews either convert, belatedly, or are doomed along with other unbelievers).

Control of Iraq's oil, by US occupation, is seen as instrumental to a number of other desiderata by the oilagarchy that is the dominant influence on US foreign policy: control of the rest of the oil reserves of the Middle East and the Caspian: Iran, Saudi Arabia, etc.; this to the end, not only of assuring access to cheap oil for the American market but to control the oil needed by Germany, Japan, China, etc., as a basis for all kinds of diplomatic and economic leverage; direct profits from development and sale of oil and gas in the region; assurance of the regime of petrodollars, to sustain the US economy.

3. "How united is the administration/Bush government about this war?"

Not united at all. Large parts of the government—unprecedentedly large, in dissent from White House policy—indicate great skepticism, reservations, even fear of the risks of the policy. Unprecedented leaks about the plans and about internal dissent indicate that large parts, perhaps large majorities, of the State Department (not only Powell), the CIA and the JCS do not believe in the necessity or prudence or even legitimacy of this war, and do not want it. That doesn't mean they won't obey orders and do their part for the President when he orders it. It does mean that a journalistic search for heroes who would not only leak but testify against it, at the cost of their careers, might be rewarded.

4. "What do you think about the planned military strategy?"

We don't know that much about it. It might be quickly successful, as Cheney, Rumsfeld, Wolfowitz and Perle, and others who, like these, have never been near a war, appear to expect with high confidence. It is certainly possible that Saddam (including all his doubles) will quickly be assassinated, by us or his officers, that the Revolutionary Guard will quickly defect along with the regulars and draftees, that command and control will be totally disrupted, that city-fighting in Baghdad will prove unnecessary, that Saddam's efforts to launch gas attacks will be preempted or that they will fail, perhaps because our protective clothing will prove effective, that Saddam will be preempted or prevented from destroying or setting on fire the oil-fields of Iraq (and perhaps Kuwait and Saudi Arabia), and that there will be no major terrorist attacks on our occupation troops after we take Baghdad. In other words, everything could go right, fast, and the war could be quick and cheap in American lives (and even, relatively speaking—i.e. no more than 10 to one—in Iraqi lives, not that the administration cares).

I don't think this is very likely. Certainly, to have high confidence in this, as the top Administration officials appear to possess (except for Powell and the JCS, the only ones with experience of war), bespeaks ignorance and foolishness. To gamble on it, which is the best that can be said for them, even if it had a likelihood as high as 80 or 90%, is reckless and irresponsible, given the actual stakes in terms of lives and American interests (including control of oil).

5. What kind of scenario do you envision: what kind of weapons will be used, will there be urban warfare? Some military strategists talk about a 'cakewalk.' Are they underestimating the Iraqi forces?

I think I've just answered this above, pretty adequately. I will add only that I fear there is a significant chance (2% would be significant, and I think it is well above that) that the US will use nuclear weapons at some point: in response to nerve gas, or (to set a precedent for the future, with an apparently "legitimate" and "limited" use) against "deep underground bunkers for production or storage of chemical or biological weapons" or for black-out effects on command and control (high-altitude low-yield bursts).

No one can say that there will not be heavy urban fighting. City-fighting is something that no one does well. The movies "Black Hawk Down" (Somalia) and "The Pianist" (Warsaw) give a good depiction of what this means for cities, civilians, and for the casualties on both sides among fighters. (Recall also "Full Metal Jacket" for a depiction of the battle for Hue in 1968). The chickenhawks simply have no answer for how we deal with this; nor do the real military, which is doubtless one reason they do not want this war.

6. Who or what could prevent the Bush administration from going to war?

I would be happy to see Saddam yield to inducements from his Arab neighbors and others to seek asylum somewhere, with assurance against war crimes prosecution if necessary. It would mean a success for threats of US aggression, but it would be a much better prospect for all than a war. France's warning that it might veto a UN-authorized attack for at least the next several months, while the inspections proceed, is both appropriate and could be effective; it should be joined by Russia and China (it would be too much to expect of Blair), while other members of the Security Council, starting with Germany, should warn in advance of a "no" vote in the absence of obstruction of inspection by Sadddam or positive findings of forbidden weapons (not empty casings) by the inspectors.

Even one to three vetoes would not guarantee that the US would not attack on the basis of a claimed "provocation"—a Tonkin Gulf incident, manufactured or simply claimed—but it might actually slow down the US attack by months, long enough for the illegality and recklessness of the whole project to become a matter of consensus, even in the US. The chance of this is small, but not zero: definitely worth pursuing.

I hope that officials with access to official documentation—IN ANY COUNTRY—which gives the lie to official US/UK rationales for war, including a possible Tonkin Gulf incident, will consider doing what I wish I had done on August 5, 1965, or soon thereafter before the bombs had started falling: Go to the world press, WITH DOCUMENTS, and reveal the truth. This is a global crisis; many, many individuals in many countries could do more than has been done to avert it, if they are willing to risk or sacrifice their own careers to do so. They might save a war's worth of lives, and avert a downward worldwide spiral. This applies above all to averting a first-use of nuclear weapons, under any circumstances whatever: by the US, Israel, UK (whose soldiers will also be at risk in Iraq), Pakistan, India, Al Qaeda (far more likely to acquire nuclear weapons—the worst possible prospect—from Russia's inadequately-guarded hoards, or from Pakistan or even North Korea-than from Iraq, UNLESS Iraq is attacked!), or from any other nuclear weapons state, currently or in the future.

With or without first-use in this conflict, I fear that an attack on Iraq will spur other nations into acquiring nuclear weapons for deterrence in the future. In the guise of averting proliferation in Iraq, this bullying attack by the world's preeminent nuclear power will accelerate proliferation dramatically. (It may already have had that effect in North Korea). The black market price for Russian (or Pakistani, or North Korean) nuclear materials or, better, operational nuclear weapons, will skyrocket. If a market and international trade in such materials and weapons does not develop in response to this, then the assumptions underlying the theory of markets and free trade need radical overhaul.

7. "How great is the danger Hussein poses?"

Answered above, in question 1. In sum: unattacked: negligible (externally); attacked: great.

8. "How should he be dealt with?"

I won't give a general answer to how the international community should "deal" with tyrannous, brutal regimes (such as China—to mention one permanent member of the Security Council—or Saudi Arabia, or Pakistan). Pre-emprive war is NOT the answer, any more than it was for the Soviet Union, though even that had its advocates, including some nut-cases who say now that that's what we should have done then.

The inspection process, perhaps continued indefinitely, is quite reliable in preventing Iraq from developing nuclear weapons, even from proceeding with that development. That's certainly desirable, though not the highest priority in the world. Keeping al Qaeda from getting nuclear weapons is an infinitely higher priority, and attacking Saddam will make it much much more likely that this will come to pass. Keeping al Qaeda from getting nuclear material goes hand in hand with two other top security priorities for the US, safeguarding Russian weapons and materials, and ending the North Korean program by negotiation (in effect, meeting their not-unreasonable terms!) The Pakistani program and stockpile is also very dangerous in this respect. So: keep inspecting! And meanwhile, while the inspections keep coming up negative, end the sanctions on non-military imports entirely.

One danger posed by the planned war against Iraq is not raised by your questions. The notion that a war against Iraq is any way part of a "war against terror" is a dangerous hoax. On the contrary: the war against Iraq inevitably conflicts with the supposed campaign against terrorism, to the point of virtually nullifying the latter. The inevitable spectacle of massive US and UK killing of Muslim civilians—and for that matter, draftees, defending against an aggressive invasion—will, I believe, mean surrendering to the prospect of endless, escalating stalemate (not unlike Vietnam, but with less prospect of an eventual end or lessening, and with much higher consequences for the US civilian population) in the "war on terrorism."

This will happen for three reasons: 1) the number of recruits for suicide bombing against the US and its allies (including, possibly, Germany) will increase a hundredfold; 2) regimes with sizeable Muslim populations (including Indonesia, the Philippines, France and Germany, not only in the Middle East) will find it politically almost impossible to be seen collaborating with the US on the anti-terrorism intelligence and police operations that are essential to lessening the terrorist threat (to which Saddam Hussein is not even contributing); 3) Iraq, under attack (and conceivably segments of the Pakistani Army) will finally share directly with Al Qaeda and others a capability for "weapons of mass destruction."

The only prospect of avoiding all of these effects, or minimizing them, is if the most wishful hopes of the warhawks are all realized, and the war really is very quick; and, what is most unlikely, this would have to preclude not only any city-fighting, but any sizeable killing of Iraqis. That's not impossible. But the likely military plans will probably be designed to minimize US and UK military casualties, with heavy air bombardment (possibly from high altitudes), and that points toward heavy Iraqi casualties, military and civilian, even if there is an inclination of the Iraqi military to defect early. Thus, the price of this reckless policy is likely to be measured in civilian lives in America and its allied homelands, as well as in lives of innocent Iraqis. We should not, must not, imitate US (and Israeli Likud) policy in answering terrorism with terrorism, nor seek to prevent terroristic aggression with terrorism. On the other hand, no non-violent measures of opposition could come too soon, or be too "extreme," if they held any prospect—at whatever personal or institutional costs—of averting the disastrous risks of this war.
_________________________________________________

***Here are reviews of Ellsberg's current book...

ellsberg.net

“. . .consistently dramatic. . . . a compelling narrative. . . . His well-told memoir sticks in the mind and will be a powerful testament for future students of a war that the United States should never have fought.”
—Washington Post

“In this long-awaited memoir, Ellsberg tells the gripping story of his transformation from hawk to dove, insider to outsider, secrets keeper to secrets spiller.”
—Boston Globe

“Reading the complete Pentagon Papers for the first time in the summer of 1969, Daniel Ellsberg had two revelations. One, of historical interest today, concerned the character of the Vietnam War; the other was about the war powers of the presidency, and how they corrupt Presidents. The relevance of this second revelation, as President Bush decides whether to exercise the authority Congress has given him to attack Iraq, is profound.”
—Atlantic Monthly



To: lurqer who wrote (22163)1/28/2003 9:32:45 AM
From: Mannie  Read Replies (1) | Respond to of 104218
 
A Tale of Three Cities
Marc Faber

In all the more advanced communities the great
majority of things are worse done by intervention of
government, than the individuals most interested in
the matter would do them, or cause them to be done,
if left to themselves.
John Stuart Mill (1806-1873), Principles of Political
Economy

After having returned from a trip, which took me to eight different countries, I
applied for a tourist visa at the Indian consulate in Chiangmai since, as the
chairman of two India funds, I had to travel to Dehli and Mumbai, for some
speaking engagements. The visa was refused on the ground that my
passport was damaged. Welcome to the Indian bureaucracy! I still made it
eventually to Mumbai after having had to get a new passport from the Swiss
embassy in Bangkok and then went on to Delhi, Singapore, Shanghai, and
Dubai. Mumbai and Shanghai are both impressive cities from an economic
development point of view. In the case of Mumbai's inner city, the remarkable
feature is that little has changed since my first visit to the metropolis in 1973,
except that its buildings are now even more dilapidated. The reason for this
lack of development of the infrastructure in the inner city is a maze of totally
antiquated property laws that have prevented landlords increasing the rents
on the premises they let out, with the result that they have no incentive to
maintain their properties in good condition. Furthermore, tenants have the
right to stay in their apartments for as long as they wish, and the children of
tenants can even inherit the leases taken out by their parents, many of which
date back to before the Second World War. A friend of mine told me that
years ago he inherited an apartment building in the city for whose apartments
he is collecting a rent of less than US$1 a month! This lack of any property
development over the last 25 years, unlike elsewhere in Asia, is also
interesting given that economic activity is shifting to the outskirts of the city
and to other regions of the country, where India's totally incompetent
government is unable to hamper economic development to the extent that it
has in Mumbai's inner city. I can do no better, in describing the Indian
bureaucracy, than quote the 11th-century Chinese poet Su Tung P'o, who
wrote:

Families when a child is born, Want it to be intelligent.
I through intelligence Having wrecked my life Only
hope the baby will prove Ignorant and stupid. Then he
will crown a tranquil life By becoming a Cabinet
Minister.

Still, what is reassuring about India is that, despite its horrendous
bureaucracy, entrepreneurs have thrived and India is now home to many very
promising companies doing business in all kinds of sectors, but especially in
the fields of pharmaceuticals and software. The good news, not only for India
but for the entire global economy, is that entrepreneurs are like rats who
manage to survive in just about any environment, no matter how difficult, and
that they show an impressive ability to adapt to even the harshest
commercial and legal infrastructures by developing a high degree of immunity
to these unfavourable conditions. Moreover, entrepreneurs can mutate rather
quickly in order to take advantage of opportunities in sectors such as
software, for which there were no government impediments or regulations in
India. Such is the power of free markets over bad governments and
governments' interventions in the economy. Yet it is discouraging to see
Mumbai, the business capital of the world's second-most populated country,
lacking a large foreign business community, such as we find in New York,
London, Tokyo, Singapore, and Hong Kong, because of the government's
inability to provide an efficient infrastructure and a more conducive business
environment. Even more discouraging is the virtually non-existent nightlife in
India's capital, Delhi! So my advice is to travel to India for its beauty and very
interesting cultural sites, but forget about nightlife (I found some but it is
certainly not Bangkok, which is at present the world's best - by far.)

The Indian tragedy is that, in the absence of its bureaucracy and with, to
paraphrase Adam Smith, a tolerable administration of justice (an efficient
legal system with straightforward commercial laws and property rights), the
country could easily grow at around 8-10% per annum - admittedly from a
low base - and boost per capita incomes significantly compared to the
present environment, which allows the economy to grow at only around 5%
per annum while per capita incomes hardly budge. Still, this may be an
opportune time for investors to purchase Indian shares. The Indian stock
market, which shouldn't have a meaningful correlation to foreign markets
since India's economy doesn't depend much on foreign trade and foreign
portfolio flows (exports amount to just 10% of GDP), is at present extremely
depressed and is, in my opinion, discounting to a large extent the country's
problems. In addition, time deposits as a percentage of total market
capitalisation, which has declined to just 21% of GDP, are now at an all-time
high. The various listed India Funds, such as the Jardine Fleming India Fund
(JFI), the MSDW India Investment Fund (IIF), and the India Fund (IFN), all sell
at discounts of around 20% from net asset value and might be a suitable
vehicle for investors wishing to participate in the Indian corporate sector. For
an investment in a fund with a stronger bias towards a bottom-up approach to
stock selection, our readers might contact Jon Thorn
(jon@indiacapfund.com) who manages the Indian Capital Fund, of which I am
the chairman. Jon Thorn has, in the past, written about India for the Gloom
Boom & Doom report. (See his contribution entitled "The Best of Times, The
Worst of Times" in GBD report of July 20, 2001.)

There could hardly be a stronger contrast than traveling to Shanghai after
Mumbai: whereas inner-city Mumbai has stagnated in terms of infrastructure
and real estate development, Shanghai has emerged as a modern and
impressive city over the last decade. In fact, the rapid development of its
physical and commercial infrastructure is unprecedented in history.
Furthermore, as an Indian minister pointed out to me, although it was
achieved at a certain price in terms of human rights, the success Shanghai
has achieved in improving people's standard of living and per capita incomes
far outweighs those shortcomings. I have been visiting Shanghai regularly
since 1989, and on each visit I am struck anew by its continuously changing
skyline and the extent and speed of its modernisation. And this is the same
city that, ten years ago when I first began to write about its impending
emergence as Asia's most important commercial and financial metropolis,
businessmen in Hong Kong dismissed as being far too bureaucratic and
lacking the necessary educational infrastructure to develop!

I also visited Suzhou, a city I hadn't visited for over three years. At that time,
there were just two industrial parks under construction on the outskirts of the
city; now there are factories everywhere, with trucks continuously moving
goods to and from Shanghai's port along a newly built highway. While I am
fully aware of the problems that are endemic to the Chinese economy,
including the difficulties facing foreign companies wanting to make money
(due largely to the tremendous overcapacities in all industrial sectors and the
inevitable "speed-bumps" the Chinese economy will periodically hit), the
changes that have occurred in China in the last few years are simply
extraordinary. (And you may recall that I am rather well known for my
somewhat cautious views about the health of China"s social and financial
system.) While seated comfortably, on my way back to Hong Kong, in a
business class seat on China Eastern Airlines with significantly more
legroom than in any first class seat of a US air carrier, not to mention the far
friendlier service, I mused how in the future airlines such as China Eastern
and China Southern would dominate the skies, while the Swissairs of this
world, with their high cost structures, would become extinct. I also thought
that if I was twenty or thirty years old, I would move to China right away, as
the opportunities there are just mind-boggling. Many people keep telling me
that I was lucky to move to Hong Kong in 1973, when there lots of
opportunities in Asia and at a time Asia was not yet discovered. But, the
same is true today. However, the opportunities may no longer be as great in
Hong Kong, Singapore, Taiwan and South Korea, but what about Bangalore,
Shanghai, Beijing, Dalian, etc! Most unfortunately, I did not have time to go
out at night while in China, but from my previous trips I can recommend
Shanghai as a promising nightlife center.

My visit to the United Arab Emirates also held some surprises. As in the
case of Shanghai, both Abu Dhabi and Dubai have developed rapidly in the
last few years and have now become far more cosmopolitan than in the past.
In particular, Dubai has emerged as an important trading center, being the
gateway to a large number of Middle Eastern, Central Asian, and North
African nations, as well as an enjoyable entertainment and tourist center for
well-to-do people from around the region. Whereas Shanghai is impressive
because of its size and rising economic power, Abu Dhabi and Dubai
impress the visitor because of the money the ruling families have spent over
the last few years on building extravagant gardens and parks, as well as
monumental hotels. In fact, Dubai is worth visiting just to see the Burj Al
Arab Hotel, the world's only seven-star hotel, whose stunning architectural
structure rises to more than 40 storeys from a man-made island in the
Persian Gulf. I may add that Dubai has also one of the world's best
nightclubs called Cyclone (conveniently located next to the American
Hospital), which is littered with girls from all over the world. I have never seen
anywhere such a quantity and diversity of professionals! Truly a melting pot
for one's heart, which alone makes a trip to Dubai worthwhile.

Admittedly, one could argue that the Middle Eastern economies are
"artificial", since they depend largely on the price of just one commodity - oil.
But what is the difference between the Middle Eastern economic system,
which depends on the price of oil, and the Western industrialised nations,
which over the last few years have increasingly become dependent on the
price of their stock markets for economic growth? And on what would you
rather bet your future: oil, whose price is now rather depressed (at least in
real terms); or Western stock markets, which by any valuation standard still
appear to be expensive?

The purpose of this brief description of my recent trip is not, however, to draw
any conclusions about the relative investment merits of emerging economies
compared to the Western industrialised nations. (For such an analysis, see
Gloom Doom & Boom reports of May 16, 2001, entitled "Emerging Markets:
An Unpopular but Depressed Asset Class", and of July 20, 2001, entitled "If
the Purchase of Emerging Stock Markets is Financial Suicide, What Then is
the Buying of US Equities?") Rather, it is to note that, despite the fact that
the emerging markets have grossly under-performed the Western developed
markets since 1990, impressive economic progress has taken place in
most developing economies over the last ten years. Who, ten years
ago, had heard of Bangalore and of India's now famous software and
pharmaceutical companies, or spoke at dinner parties about Shanghai's
stunning development and China's large trade surplus with the United
States? And who, at that time, was aware of Emirates Airlines, an airline that
is now certainly better managed than Swissair or Sabena in recent years, or
of the Emirates Tower Hotel Group, which owns and manages several luxury
properties in Dubai (among them the Burj Al Arab Hotel) and now also runs
the Carlton Tower Hotel on London's Cadogan Square?

While I am aware of all the shortcomings of globalisation, it would seem to
me that, over the last ten years or so, whole regions that in the past were
absent from our Western market economy and which shunned our
capitalistic system as a result of their adherence to socialist ideologies and
to the ideas of self-reliance and hostility towards foreign investments have
1/4now been fairly well integrated into a "global economic system".
Moreover, there is no doubt in my mind that over the same period, an
unprecedented amount of knowledge, new ideas, technology, management
techniques, and capital was transferred to these developing economies.
However, such a major and rapid change for the global economy - the
integration of close to three billion people into the world's economy
who, until the late 1980s, were participating only on the periphery of
the capitalistic market economy - also brings about a state of lasting
disequilibrium. Following an initial boom that lasted from the mid-1980s to
the mid-1990s, the emerging economies experienced severe crises in the
late 1990s. These crises were accompanied by significant currency
devaluations or, in the case of China, by a deflationary environment, which in
aggregate badly deflated the price level of the emerging world. In turn, the
emerging world is now exporting their deflated price level to the Western
world and contributing to a structural "deflationary shock" in the global
economy, very much in the same way the opening of the western territories
in the US and the opening of Australia to the production of grain in the
second half of the 19th century led to a deflationary period that lasted from
the mid-1860s to 1900.



To: lurqer who wrote (22163)1/29/2003 3:02:34 AM
From: lurqer  Read Replies (2) | Respond to of 104218
 
Market Scrapbook

Came across this chart - channels within channels.

stockcharts.com[h,a]dhcayiay[pb20!b50!b200!c20!d20,2!f][vc60][ilb14!la12,26,9!lg!li10,10!lh5,5!lp14,3,3!ll14][j8551307,y]&listNum=1

lurqer