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To: banco$ who wrote (21769)10/15/1998 10:35:00 PM
From: CIMA  Read Replies (1) | Respond to of 116764
 
Russian Ties with Libya Help Rebuild Bipolar World

As Russia attempts to reassert itself as a global power, it is
reviving old alliances. A Russian delegation headed by the
Russian Minister for Emergency Situations, Sergei Shoigu, met
with Libya's Moammar Khaddafi in Tripoli on October 8, reportedly
to deliver a message from President Boris Yelstin to Khaddafi.
On October 10, the substance of Russia's overture to Libya was
made known by Foreign Ministry spokesman Vladimir Rakhmanin, who
announced that Russia sought cooperation with Libya in the oil
and gas sector. However, the Russian newspaper "Segodnya"
reported that same day that the purpose of Yeltsin's letter to
Khaddafi was to explore the "prospects of the resumption of
bilateral cooperation in the sphere of nuclear power."
Segodnya's report on Russian-Libyan nuclear cooperation was
verified by ITAR-TASS, on October 13.

For almost six months now, Khaddafi has been actively seeking to
revive relations with Russia. As it asserts Russian interests
from Iraq to Kosovo, Moscow has also begun to respond positively
to Libya. On September 14, Russia Duma leader Gennady Seleznyov
met with the Secretary General of the General People's Congress
of Libya Mohammed Zentani. During the meeting, Seleznyov
expressed his concern over the position of the U.S. against
individual countries. He also declared that Russia deplored U.S.
allegations of Libyan support of terrorism. " Accusations of
terrorism coming from the West, especially the U.S., against
whole countries runs counter to all the international norms,"
Seleznyov said. Russia has also offered its assistance in
helping to negotiate a "fair and acceptable" resolution over the
Lockerbie issue and relief from the resulting UN-imposed
sanctions on Libya. Despite the sanctions, Russia has recently
discussed a variety of economic cooperation plans with Libya,
including plans for the development of Libya's electrical power
grid, communications, and telecommunications.

Libya is already Russia's biggest debtor, owing Moscow an
estimated $7 billion. Russian aid to Libya, both in
infrastructure development and in attempting to lift sanctions,
benefits Moscow by enabling Libya to repay its debts. But
cooperation with Libya serves Moscow's foreign policy agenda as
well. Russian nuclear cooperation with Libya takes assistance
way beyond bolstering the Libyan economy and makes a clear
political statement. This direct threat to U.S. interests in the
region is another iteration of Moscow's new political agenda --
Russia intends to resume its role as a great power, on its own
terms, with its own allies, despite U.S. interests.

On October 2, we reported that Khaddafi has responded to the lack
of support form the Arab community by turning his back on it and
attempting to develop a Libyan leadership role in Africa.
Khaddafi decided that, if the Arab community will not stand up
against U.S. and UN efforts to isolate Libya, then he would find
his outlet to the world through the exertion of Libyan hegemony
on the African continent. A side benefit of this strategy is
that it allows Khaddafi to interfere with U.S. foreign policy
efforts without touching on anything that could get him bombed.
Basically, Libya sees opportunities in Africa that few industrial
nations see, and considering the linkages between Africa and the
Middle East, he may be right.

For Russia, Libya's new agenda offers a pre-packaged continent.
Resuming relations with Libya gives Russia immediate access to
foreign policy levers in Egypt, Sudan, Congo/Zaire, Algeria,
Angola, and indirectly to Nigeria and South Africa. Russia has
already reasserted its interests, and in doing so has confronted
the U.S., with political and possibly military support to Serbia
against possible NATO air strikes in Kosovo. Russia is also
proceeding with the delivery of S-300 anti-aircraft missiles to
Cyprus, a move that could undermine the structure of NATO by
fueling Greco-Turkish strife, pulling Greece towards the Russian
sphere of influence and forcing the U.S. to chose between Greece
and Turkey. In addition, Russia has thrown its support to Iraq
in its efforts to escape UN-sponsored sanctions.

Libya is but the next step in reviving old alliances and
rebuilding Russian power, and the nuclear cooperation is a nice
slap in the face of the U.S. in the process. However, the real
story is not the threat of a possible Libyan nuclear weapon in
the near future. The threat comes from the speed with which
Russia is rebuilding the bipolar world. In the midst of economic
collapse, Russia has discovered that many of its old friends may
have been forgotten, but they're not gone. The same political
patterns and animosities, and even many of the people that shaped
the Cold War are intact. Russia doesn't so much have to rebuild
the Cold War as rewire it. Despite the collapsed Russian economy
and Russia's own internal strife, Moscow will be able to reassert
itself through the many willing partners looking for leadership
against U.S. global hegemony.

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To: banco$ who wrote (21769)10/15/1998 10:48:00 PM
From: goldsnow  Respond to of 116764
 
Fed Rate Cut Timing Surprises Market, Raises Questions

By Barbara Etzel and Bill Watts
FWN Washington Bureau

Washington-Oct. 15-FWN--The Federal Reserve's decision to cut interest rates Thursday caught markets off guard and may indicate deep-seated concerns among policy-makers regarding the threat posed to the U.S. economy by troubles abroad, analysts said.

In a statement, the Fed said, "Growing caution by lenders and unsettled conditions in financial markets" are likely to slow the U.S. economy in the future, providing a backdrop that warranted further monetary easing "to sustain economic growth in the context of contained inflation."

The U.S. dollar plunged and the stock market soared on the news, with the Dow Jones Industrial Average gaining more than 300 points on the day. But analysts said the Fed's statement and the timing of the move may indicate Fed Chairman Alan Greenspan and fellow policy-makers are even more worried than previously thought about the impact of the deepening global economic crisis on credit availability and financial markets in the United States.

"The timing surprised most people," said Dan Seto, senior economist with Nikko Securities International. However, most people were open to the possibility of an inter-meeting move.

"They wouldn't move unless they are really, really concerned about current conditions," said Kevin Harris, an international economist at MCM Currencywatch. The Fed's move indicates it was concerned about credit conditions tightening, Harris said.

The question for those in the market is whether the Fed acted in a pre-emptive move to promote liquidity or whether it acted in response to big problems that people are not yet aware of, Seto said.

That assessment will provide the answer to what the Fed's next move is. If this was a pre-emptive move, then the Fed can afford to wait. However, if it acted to address a bigger problem, then more aggressive easing is likely, Seto said.

Some economists viewed the move as unnecessary, and argued it may serve to unduly spook investors.

"Our sense is that moving like this between meetings is not necessary and may cause people to be a bit more concerned about how worried the Fed is perceived to be," said Rick Egelton, deputy chief economist at the Bank of Montreal.

Thursday's move marks the first time the Fed has altered rates between regular Federal Open Market Committee policy meetings since 1994. The next meeting is set for Nov. 17.

Anticipation of a possible inter-meeting rate cut was underscored by Greenspan's remarks to business economists last week. The Fed chairman gave a solid indication he believed it possible for the global economic and financial crisis to push the U.S. economy into recession next year, Fed watchers said. Greenspan warned that policymakers needed to be "especially alert."

But in the same address, he also argued that the United States was "far short" of a credit crunch and that the domestic economy remained sound. Overall, Greenspan's remarks were seen leaving the likely timing of a rate move as murky.

U.S. officials have been increasing the tone of their comments about the risks to the United States from the global economic turmoil.

On Wednesday, U.S. Deputy Treasury Secretary Lawrence Summers said that U.S. financial markets are now being seriously affected by the global turmoil. "By wide agreement, what used to be called the Asian financial crisis is now a global financial market problem as serious as any the international community has faced since World War II," Summers said in a Philadelphia speech Wednesday.

The U.S. dollar plummeted against the Japanese yen and the German mark after the move. The dollar dropped more than 3 yen to Y115.55 and was quoted at DM1.6122 versus the D-mark, a loss of almost 2.56 pfennigs on the day.

The dollar is falling apart, Harris said. While price screens may not reflect it, dollar/mark has traded as low as DM1.61 in the interbank market, he said. Less liquid conditions in the afternoon forex market likely may have undercut the Fed's desire to limit market turmoil, he said.

Mike Malpede, senior foreign exchange analyst with Refco Inc. in Chicago, said the timing of the move was "somewhat a surprise" and is likely to lead to further pressure on the dollar in overseas trading. Harris said expectations of more easings to come will likely serve to keep the dollar under pressure over coming sessions.

(c) Copyright 1998 FWN
futuresmag.com



To: banco$ who wrote (21769)10/16/1998 4:24:00 AM
From: long-gone  Read Replies (1) | Respond to of 116764
 
re: new Brenton woods
I think this is where it is(& has been) headed for some time. could be the best thing for all, if the "people" really get a chance to play. Not just politicians and rich and powerful.
rh