Category Archives: Economics

Economics, Finance, Iran, Sanctions, U.S. Foreign Policy, Yemen

A Western Addiction to Sanctions? SWIFT-ing the Houthis of Yemen………

_9OJik4N_normal Sharqeya-Baneen-15    DennyCreek2

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“Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it…….” Newton’s First Law of Motion (one version)

“Iranian Foreign Minister Mohammad Javad Zarif on Wednesday accused the United States of being “obsessed” with sanctions against his country, on the eve of new bilateral talks on a nuclear deal……….”

Apparently imposing these financial sanctions (actually blockades) can become addictive. Anyone who does not know any better, and that probably includes me, might think that the Obama administration has become addicted to inflicting sanctions on other nations and entities and corporations and whatever and whoever catches its fancy in the wrong way. The U.S. Congress is an even more avid imposer of these sanctions, it leads the way: its hawkish threats scare and force the administration to be “proactive” in these matters.

Governments and despots (only a few of them) and peoples and groups and parties and unions and gangs and possibly bad musicians, probably even alumni associations are targeted. From East Asia through Russia and Iran and Lebanon and Syria and Africa and into the threatening little superpower of Cuba, after passing through the mighty empire of Venezuela. Even as the Iran+P5+1 talks were resuming this summer, some evil genius somewhere in Washington was churning out new plans for tightening the screws on the Iranians. Just to keep the mullahs on their toes, or maybe just to let the hotheads in Congress and Knesset know that they have nothing to worry about.

Yesterday, reports came out that the US (and possibly other Western powers) are considering imposing sanctions against the Houthis of Yemen. The Houthis? They are one of the many tribal/political/ethnic/religious factions that dot the Yemeni landscape. But they have nothing to do with Al Qaeda or any other Wahhabi terrorist groups: in fact they are their enemies. They have no goals beyond their own region of Yemen, so what would they be sanctioned for? Sanctioned for daring to protest against their fundamentalist military government and marching on the capital Sana’a. I would have thought the Western powers had their hands full trying to drone the Saudi-Yemeni Al-Qaeda (AQAP) out of existence (often taking a passel of innocent Yemeni civilians along as collateral damage). Or maybe someone in Washington got a persuasive call from someone with a golden telephone in Riyadh or Abu Dhabi.

Anyway, it is not clear how financial sanctions can affect the Houthis of the rugged territory of northern Yemen. As I recall from my past days of extensive travel, the economies of some remote regions are not very monetized, unlike Washington DC (not so many lobbyists with a lot of money hanging around Sanaa or Ouagadougou). These fellows are not known to fly to Las Vegas or Nice or even Dubai, or to own foreign property. Unlike the petroleum princes and potentates, they do not even frequent the diversion-filled joints of Beirut or Cairo or Bangkok. Unlike the Saudi princes, they never fly into the sin-filled cities of Morocco. So, they don’t have as much need for access to foreign exchange, be it dollars or euros or riyals.

Personally, sometimes I think they impose some of the sanctions jut because they can. The mechanisms and the people are in place, so there is some bureaucratic inertia involved, unless acted upon by an external force, as Isaac Newton taught us so long ago. There are no other world currencies that compete with the dollar, and no institution that can compete with SWIFT. SWIFTing a country or an organization is easy. But the Houthis?

Cheers
Mohammed Haider Ghuloum

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Arab Revolutions, Caliphate, Economics, GCC, Iran, Iraq, US Foreign Policy, Wahhabi

Power of Economic Assumption: How to Defeat ISIS with Gulf Princes and Iranian Mullahs……..

_9OJik4N_normal Sharqeya-Baneen-15    DennyCreek2

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“Iran’s supreme leader said on Monday he had personally rejected an offer from the United States for talks to fight Islamic State, an apparent blow to Washington’s efforts to build a military coalition to fight militants in both Iraq and Syria. World powers meeting in Paris on Monday gave public backing to military action to fight Islamic State fighters in Iraq. France sent jets on a reconnaissance mission to Iraq, a step towards becoming the first ally to join the U.S.-led air campaign there. But Iran, the principal ally of Islamic State’s main foes in both Iraq and Syria, was not invited to the Paris meeting…………..”

Mr. Kerry said only last weekend that having Iran attend the Paris meeting on confronting the murderous Caliphate of ISIS was “inappropriate”. Iranian officials were reported in the media as wanting to attend, and the French seemed amenable. Mr. Kerry vetoed Iranian attendance in Paris last week mainly because two of the main sources and financers of ISIS and other Wahhabi terrorist groups, Saudi Arabia and the United Arab Emirates, reportedly objected and exercised their monetary veto.

Now Mr. Kerry wants to have Iran participate in the deliberations, but “unofficially”. He wants them to be part of the anti-Caliphate dialog, but not in the open, just behind the scenes. That is mainly because he tested the Arab waters in Paris and realized that the current Middle East equivalent of Rhett Butler was also needed for this new version of GWTW. To use a crude and possibly immoral but nevertheless succinct example: he is sort of like seeking the Saudi princes and Emirati shaikhs as legal (but polygamous) wives and courting the Iranian mullahs only as potential mistresses. As usual it will be American resources and pilots (and others) bearing the brunt, not Europeans who are the nearest target of the terrorists. Maybe with some Arab monetary support. Maybe.

So, what to do? This is the easy part: as I learned in economics, we use the power of ‘assumptions’. We make assumptions that fit our conditions and our needs: in this case we make assumptions about the Syrian opposition groups. Many in the U.S. administrations are already making certain correct assumptions. The mythical moderate Syrian opposition, those that live on the Turkish border or in Rive Gauche apartments and Persian Gulf five-star hotels. They, with the cooperation of the absolute Wahhabi tribal princes, can do the job and bring democracy and cultural tolerance to a once-very-tolerant Syria. Or, we can start by assuming that for now.
Cheers
Mohammed Haider Ghuloum

Economics, USA

A New Dickensian American Century?………..

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“From early in its history, the United States rested on the notion of a large class of small proprietors and owners. “The small landholders,” Jefferson wrote to his fellow Virginian James Madison, “are the most precious part of a state.” To both Jefferson and Madison, both the widespread dispersion of property and limits on its concentration—“the possession of different degrees and kinds of property”—were necessary in a functioning republic. Jefferson, admitting that the “equal division of property” was “impractical,” also believed “the consequences of this enormous inequality producing so much misery to the bulk of mankind” that “legislators cannot invent too many devices for subdividing property.” ………. For this group, the rest of society, he suggested, exists only “as images and stereotypes.” Progressive theorists, such as Ruy Texerira, have suggested that, in the evolving class structure, the traditional middle and working class is of little importance compared to the rise of a mass “upper middle class” consisting largely of professionals, tech workers, academics, and high-end government bureaucrats……………This trend has continued even in the recovery. Between 2010 and 2012, the middle sixty percent of households, did worse not only than the wealthy, but even the poorest quintile between 2010 and 2012. In the years of the recovery from the Great Recession the middle quintiles income dropped by 1.2 percent while those of the top five percent grew by over five percent.………..….”

Cheers

Mohammed Haider Ghuloum

[email protected]

Arab Counterrevoltion, Economics, Egypt, GCC

Will Tony Blair get The Prize for Advising Sisi on the Economics of Counter-Revolution?……..

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“Tony Blair has agreed to advise the Egyptian president, Abdel Fattah el-Sisi, who came to power in a military coup last year, as part of a programme funded by the United Arab Emirates that has promised to deliver huge “business opportunities” to those involved, the Guardian has learned. The former prime minister, now Middle East peace envoy, who supported the coup against Egypt’s elected president Mohamed Morsi, is to give Sisi advice on “economic reform” in collaboration with a UAE-financed taskforce in Cairo – a decision criticised by one former ally. The UAE taskforce is being run by the management consultancy Strategy&, formerly Booz and Co, now part of PricewaterhouseCoopers, to attract investment into Egypt’s crisis-ridden economy at a forthcoming Egypt donors’ conference sponsored by the oil-rich UAE, Kuwait and Saudi Arabia…………..”

Mr. Blair, the Old New Labor Neoconservative leader, has a knack for attracting dictatorial and oligarchy talent. Not only does he find them, but he can also press the right buttons on them. You can say if you were rude and crude, which I am not, that he knows how to find their G-spot. From the Persian Gulf to Central Asia and North Africa, he has been advising them and lobbying on their behalf. Remember his famous squashing of British Serious Frauds Office (SFO) investigation into the $2 billion bribe paid by BAE Systems to Saudi Prince Bandar for a weapons deal? Remember his dealings with the Lat Colonel Gaddafi on behalf of J P Morgan? All these and more were IOUs that he collected from the potentates.

All that and his saying the right words, his incessant warmongering in the Middle East, from Syria through to Iran and beyond. The kind of talk that makes the Wahhabi princes and their Salafi allies salivate at the prospect of American boys and girls going to war on their behalf.

Well, like yet another bad dream he is back in the Middle East, after years of pretending to be looking into the Palestinian-Israeli issue but achieving nothing. He has been selected by the Saudi and Emirati and other Gulf overlords of Egypt to advise the newest strongman of Egypt on the ‘economy’. Who knows, maybe Tony will get a Nobel Prize in Economics: anyone who can solve or reduce or ease Egypt’s economic problems would deserve the prize. And if he doesn’t, there is always the King Whatishisface and Shaikh Whatishisass prize as consolation.

And you know what I think? I think we will see riots back on the streets of Cairo, once the people realize that they have been robbed of ll what they thought they had gained in 2011. That they have been led by their political leaders and opinion-makers on a circle back to where they started in January 2011. That what they experienced has not been a revolution but a cruel hoax.

(FYI: Here is what I tweeted when I read about it last night: ” Oh sh-t, oh sh-t, oh sh-t…………. hired to advise Generalisimo Al on economic matters. Poor Egypt………” )

 

Cheers

Mohammed Haider Ghuloum

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Economics, GCC, Labor, Qatar, Trafficking, United Arab Emirates

Middle East Focus: Asian Dreams and Labor Nightmares on an Asian Gulf………

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“He could hardly wait to leave Qatar. Ganesh has promised himself to never again set foot in the desert. On this spring evening, though, Ganesh’s trip back home still lies before him. He is sprawled out exhausted on his bed on the outskirts of Doha after finishing his shift. The room is just 16 square meters (172 square feet) — and provides shelter to 10 workers. With the fan broken and the window sealed shut with aluminum foil, the air is thick and stuffy…………. On the map, the area is simply labeled “industrial zone.” But it is home to the thousands of faceless workers, the place where they eat and sleep. In Ganesh’s building, 100 workers are housed on three floors, far away from the glittery hotels in the city center. They live on the edge of a dream that the sheikhs want to make reality……………….”

The same also applies to laborers from other places, like Egypt and the Sub-continent and East Africa. Temporary foreign laborers form about 90% of Qatar’s population: almost the same percentage that they form of the population of the United Arab Emirates (UAE). So you see why they are indispensable to these countries. Not only do these foreigners work on creating buildings and roads, on the supply side: they are also needed to create the demand for the goods and services. They are needed to buy much of the consumer goods the local merchants import, they are needed to transfer in remittances billions of dollars that keep the local banks operating, and foreigners are needed to fill these buildings that are owned by the princes and potentates and their business allies. Otherwise the newly erected towns between Doha and Abu Dhabi will look like ghost towns; they did not exist a couple of decades ago.

Cheers

mhg

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Conspiracy Theories, Culture, Economics, Food

New Age Conspiracies? Bilderbergers, Schmilderbergers, Cheeseburgers in Paradise………

      

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Video:  Cheeseburger in Paradise (Jimmy Buffett)

“About two thirds of the participants come from Europe and the rest from North America; one third from politics and government and the rest from other fields. The conference is a forum for informal discussions about megatrends and major issues facing the world. The meetings are held under the Chatham House Rule, which states that participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s) nor of any participant may be revealed………..” bilderbergmeetings.org

““The Bilderbergers’ first concern… is the rise of Iran, Russia and China,” Kevin Barrett wrote in an article for the Press TV website referring to this year’s Bilderberg conference in Copenhagen, Denmark, which ended on June 1. He highlighted a significant gas deal recently signed between Russia and China and “Iran and Russia’s successful defense of Syria against NATO-led aggression” as factors having “raised grave questions about whether the Bilderberg-led West can continue its world-domination scheme.”………….” Press TV (Iran)


“The Bilderbergers ostensibly meet each year to brainstorm about the day’s great international issues. Their discussions remain off the record so that politicians and others in sensitive roles can speak candidly without risking “gotcha” exposés. Conspiracy theorists believe the Bilderbergers control the course of world events. That through crisis and uncertainty they steer society’s great developments with an ultimate goal of establishing a New World Order……………….” Forbes Magazine

At least I learned something about Bilderbergers, wtf that be, but I still prefer cheeseburgers (grilled with onions and jalapeno, summer is almost upon us). What would life be without conspiracies and paranoia? 

  • Protocols of the Elders of Zion (still going strong in the Arab world)
  • Illuminatti (it says they’ve lost influence in Washington but take a look at the back of your Greenbacks)
  • Free Masons
  • Obamacare Death Squads (alive and well in Alaska at least) 
  • Muslim Brotherhood Agents in the White House (alive and well before elections)
  • Communists in the U.S. Congress (can never get rid of those, broke old Joe’s and J Edgar’s hearts)
  • WEF- Davos (they still shy away from anointing Goldman Sachs chief as newest prophet)
  • Iranian-Mexican Cartels-FARC Alliance (greatest threat since Twinkies and Ding-Dongs)………. 

Cheers
mhg

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Economics, Europe, NATO, Russia, Sanctions, SCO Shanghai Cooperation Organization, US Foreign Policy

Ukraine Fallout on an Arizona Gas Station: Union of Sanctioned Pariah States……

      

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“Even as the crisis in Ukraine continues to defy easy resolution, President Obama and his national security team are looking beyond the immediate conflict to forge a new long-term approach to Russia that applies an updated version of the Cold War strategy of containment. Just as the United States resolved in the aftermath of World War II to counter the Soviet Union and its global ambitions, Mr. Obama is focused on isolating President Vladimir V. Putin’s Russia by cutting off its economic and political ties to the outside world, limiting its expansionist ambitions in its own neighborhood and effectively making it a pariah state………………”

A pariah state: it sounds ominous. The list is already long and can get longer. Cuba, Iran, North Korea, Sudan, Syria, etc. Now the mother of all sanctions: a possible creeping economic blockade of the huge Eurasian mass of Russia, with spillover into other countries. Mr. Putin may be excused if someday he makes a famous Reagan-esque speech outside the IMF building, with a great sound bite: “Mr. Obama (or Mrs Clinton or Mr. Bush III) tear down this blockade………” 

Provided he can get a visa to get to the IMF building. And it would be more effective if he could keep his shirt on during that speech.


Yet a blockade against Russia invites blockades against many others, if the Iranian example is to be imitated. Russia is huge; it is still that ‘other’ world (bigger than an Arizona gas station). Many countries, from Asia through Latin America and Africa, and even Europe, will not go along with sanctions against (Mother) Russia. But even if they do, we will have two new definitions of nations. Now we have: First World and Third World, Developed World and Underdeveloped World, Industrial and non-Industrial World (the last one is not as sharp anymore). SCO (Shanghai) countries are highly unlikely to comply. Countries like India and China and Brazil may straddle the two as they are partially blockaded by the “international community”, meaning by the Western powers of North America and Europe. Of course, India and China represent many more people than all of the “international community” of North America and Europe.  


Soon we may have new blocs of nations: Sanctioned or Blockaded Nations and Non-blockaded Nations; Blockading nations and Blockaded Nations, etc. Sounds almost like a new Cold war of “beggar they neighbors across the vast oceans”.

Cheers
mhg

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Al-Qaeda, Economics, Muslims, Terrorism, U.S. Politics, USA

The Real Enemy Within: New Dastardly Plot of Al Qaeda………

      

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“Putting the nation on alert against what it has described as a “highly credible terrorist threat,” the FBI announced today that it has uncovered a plot by members of al-Qaeda to sit back and enjoy themselves while the United States collapses of its own accord. Multiple intelligence agencies confirmed that the militant Islamist organization and its numerous affiliates intend to carry out a massive, coordinated plan to stand aside and watch America’s increasingly rapid decline, with terrorist operatives across the globe reportedly mobilizing to take it easy, relax, and savor the spectacle as it unfolds………… A recently declassified CIA report confirmed that all known al-Qaeda-affiliated organizations—from Pakistan to Yemen, and from Somalia to Algeria—have been instructed to kick back and enjoy the show as the United States’ federal government, energy grid, and industrial sector are rendered impotent by internal dissent, decay, and mismanagement. According to statements made by top-level informants and corroborated by leading Western terrorism experts, if seen through to its conclusion, al-Qaeda’s current plot could wreak far more damage than the events of 9/11…………………..”

According to this piece, the 2008 financial meltdown must have been just a trial run, a rehearsal for the big one. The Onion does not say openly, but it probably knows that it may all depend on the two next U.S. elections: the 2014 congressional elections and the general elections of 2016.
So, maybe the New York NYPD was smart to decide to dismantle its network of espionage around the area mosques and shawarma joints. Maybe it plans to move all the spare agents to monitor the banking sector (for weaknesses in capital and solvency and honesty and, by necessity, supervision).

Cheers
mhg

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Davos, Economics, Vatican

Pope Francis and the Fat Well-Fed Hungry Men (and Women) of Davos………

      

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“Pope Francis on Tuesday called on the world’s political and business elite gathered in Davos to use their spirit of entrepreneurship to alleviate crushing global poverty. In a message read out at the opening ceremony of the annual World Economic Forum, Francis said: “Those who have demonstrated their ability to be innovative and for improving the lives of many people by their ingenuity and professional expertise can further contribute by putting their skills at the service of those who are still living in dire poverty.” It is “intolerable” that hunger continues to stalk the world even though “substantial quantities” of food are wasted, the pontiff added. Ahead of the annual meeting of the global elite that ends Saturday, the charity Oxfam issued a report that said inequality had run so out of control, that the 85 richest people on the planet “own the wealth of half the world’s population.”……………………”

The Pope is right in this case of course. But the men and women meeting in Davos, and those groupies who hang around the periphery, sort of like the IMF-World Bank meetings that I used to attend, are also hungry. Their hunger in Davos is not for food, for I know they are well-fed and well-wined and dined (actually overfed and almost certainly over-wined).
 
I here posted on Davos 2013. Here is an excerpt of that post:

‘”Big
firms no longer aspire merely to train competent managers. They pride
themselves on their ability to select and train leaders for global
roles………. Many of the bankers and politicians caught dozing by the
financial crisis were regulars at Davos. Ordinary folk trust Davos Man
no more than they would a lobbyist for the Worldwide Federation of Weasels……………..”
Also sprach The Economist,
for once not gushing over the sanctimonious potentates, glib bankers,
my fellow economists, and celebrities converging on Davos.
It is where leaders, potentates, economists, banksters, celebrities, self-styled
celebrities, minions, journalists, and groupies converge. I have been always
skeptic of this gathering: it could just be sour grapes. But I have been even more
skeptic, nay hostile, about it these past four or five years.
Some shameless bankers and investment banksters are there pontificating to the financial
media about how the economy should be managed. They who managed their banks and
investment banks into near oblivion and had to get public welfare to save their
fat annual bonuses. Banker-Panhandlers with a sense of entitlement, with an attitude, panhandlers with the
Mother of All Attitudes…..’

Cheers
mhg

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Arabian Peninsula, Economics, GCC, Saudi Arabia

Saudi Labor Unrest: An Economic Gulf of Expats?……….

      

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“Two people were killed and 68 others injured in clashes between police and foreign workers following a visa crackdown in Saudi Arabia, the official news agency reported. Police arrested 561 people Saturday in the capital of Riyadh, according to the Saudi Press Agency. The arrests came after “unidentified” people barricaded themselves in narrow streets, where they threw stones at residents and vandalized shops and cars, according to a police statement posted on the news agency’s website. In the aftermath of Saturday’s clashes, a police spokesman urged workers without proper documents to surrender at a shelter in the capital until they could be deported…………..”

“Nearly 17,000 illegal foreigners, including women and children, have surrendered to Riyadh police until Monday evening………” Arab News

“Thousands of undocumented expatriates are desperately seeking to get arrested and deported, as a last resort to end their plight……….” Arab News

This can be a sign of more ominous events. All the Gulf GCC countries have huge foreign populations of laborers, housemaids, and others. The percentages of foreigners to the population range from about one third in Saudi Arabia to about 85% for the UAE and Qatar. Is this Saudi unrest a prelude to more unrest along the Gulf? It can be. When there is a majority of temporary foreigners leading a precarious life, their livelihood and stay in the country tied to often unstable employers, unrest is quite possible. Many are laid off or quit and are forced into becoming “illegal” and fending for themselves. There are tens of thousands of unemployed (also meaning illegal) expatriate laborers in the Persian Gulf states who earn a living in black markets and legally gray areas of the economy, including illegal activities like petty crimes, prostitution, smuggling, and drugs. What is even more ominous is that much of the domestic GCC economies are tied to temporary expatriate labor. The whole infrastructure and available housing and trade and supply network of the GCC states have been built based on larger populations than the native citizens can ever attain. If ‘enough’ of these expats depart, much of the domestic non-oil economies would collapse. Both the supply and demand for goods and services would implode.
I have suggested in the past, almost seriously, that the name of the Gulf be changed from the Persian-American Gulf to the Gulf of South Asia. Now I amend that to the more appropriate name of “Gulf of Expatriates”. Of course the scowling mullahs across the Gulf might object………..

Cheers
mhg

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