Monday, February 9, 2015

The Terror We Give Is the Terror We Get

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We fire missiles from the sky that incinerate families huddled in their houses. They incinerate a pilot cowering in a cage. We torture hostages in our black sites and choke them to death by stuffing rags down their throats. They torture hostages in squalid hovels and behead them. We organize Shiite death squads to kill Sunnis. They organize Sunni death squads to kill Shiites. We produce high-budget films such as “American Sniper” to glorify our war crimes. They produce inspirational videos to glorify their twisted version of jihad.

The barbarism we condemn is the barbarism we commit. The line that separates us from the Islamic State of Iraq and Syria (ISIS) is technological, not moral. We are those we fight.

“From violence, only violence is born,” Primo Levi wrote, “following a pendular action that, as time goes by, rather than dying down, becomes more frenzied.” 

The burning of the pilot, Jordanian Lt. Muath Al-Kaseasbeh, by ISIS militants after his F-16 crashed near Raqqa, Syria, was as gruesome as anything devised for the Roman amphitheater. And it was meant to be. Death is the primary spectacle of war. If ISIS had fighter jets, missiles, drones and heavy artillery to bomb American cities there would be no need to light a captured pilot on fire; ISIS would be able to burn human beings, as we do, from several thousand feet up. But since ISIS is limited in its capacity for war it must broadcast to the world a miniature version of what we do to people in the Middle East. The ISIS process is cruder. The result is the same. 

Terror is choreographed. Remember “Shock and Awe”? Terror must be seen and felt to be effective. Terror demands gruesome images. Terror must instill a paralyzing fear. Terror requires the agony of families. It requires mutilated corpses. It requires anguished appeals from helpless hostages and prisoners. Terror is a message sent back and forth in the twisted dialogue of war. Terror creates a whirlwind of rage, horror, shame, pain, disgust, pity, frustration and impotence. It consumes civilians and combatants. It elevates violence as the highest virtue, justified in the name of noble ideals. It unleashes a carnival of death and plunges a society into blood-drenched madness. 

During the Bosnian War of the 1990s, relatives paid enormous sums to retrieve the bodies of their sons or husbands being held by corpse traders on the opposing side. And they paid even more in attempts to secure the release of sons or husbands when they were alive. Such trades are as old as war itself. Human beings, whether in our black sites or in the hands of Islamic militants, are war’s collateral. 

Not all hostages or prisoners evoke the same national outcry. Not all command the same price. And not all are slated for release. The Revolutionary Armed Forces of Colombia (FARC), which turned kidnapping and ransom negotiations into an efficient business and took hundreds of captives, held tiers of hostages. Celebrity hostages—including politician Ingrid Betancourt, who was captured while she was running for the presidency of Colombia and who was freed by the Colombian military after being held six years—were essentially priced out of the market. FARC also had middle-priced hostages such as police officers and soldiers and low-priced hostages who included peasants. Celebrity hostages are worth more to all sides of a conflict while they are in captivity. These celebrity hostages—onetime Italian Prime Minister Aldo Moro, who was kidnapped and executed by the Red Brigades in 1978, is another example—heighten war’s drama. Saddam Hussein in a cage served this purpose. Celebrity hostages, because the price demanded for their release is so extravagant, are often condemned to death in advance. I suspect this was the case with the American journalist James Foley, who was beheaded in captivity. The proposed ransom was so wildly exorbitant—100 million euros and the release of Islamic radicals being held by the United States—that his captors probably never expected it to be paid. 

The Jordanian government is struggling to contain a virulent, if small radical Islamic movement. There is unease among Jordan’s population, as there is unease in the United States about American air assaults on ISIS. The death of the Jordanian pilot, however, bolsters the claims by Washington and Amman that the battle with ISIS is a struggle between democratic, enlightened states (although Jordan is not a democracy) and savage jihadists. And Jordan’s hanging of two al-Qaida members Wednesday was calculated, along with Jordanian fighter jet strikes in Syria on the de facto capital of ISIS, to highlight these supposed differences and intensify the conflict.

Sajida al-Rishawi, one of the two who were hanged, had been on death row since 2005 for her role in the attacks on Amman hotels that left 60 people dead. She had been an associate of the Jordanian-born al-Qaida leader Abu Musab al-Zarqawi, who was killed in Iraq in 2006. The tit-for-tat executions by Jordan and ISIS, like the airstrikes, are useful in playing the game of terror versus terror. It fosters the binary vision of a battle between good and evil that is crucial to maintaining the fevered pitch of war. You do not want your enemy to appear human. You do not want to let your population tire of the bloodletting. You must always manufacture terror and fear.

France and most other European states, unlike the United States, negotiate with kidnappers and pay for hostages. This has devolved into an established business practice. The tens of millions of dollars raised by ISIS through kidnapping is a significant source of its revenue, amounting to perhaps as much as half of its operating budget. The New York Times, in an investigation, wrote in July 2014 that “Al Qaeda and its direct affiliates have taken in at least $125 million in revenue from kidnappings since 2008, of which $66 million was paid just last year.” But negotiating and paying ransoms has consequences. While French and other European citizens are more likely to be ransomed, they are also more likely to be taken hostage. But France is spared the scenes that Americans, who refuse to pay, must endure. And because of this France is able to remain relatively sane.

Terror serves the interests of the war mongers on both sides of the divide. This is what happened during the 444-day Iran hostage crisis that took place from 1979 to 1981. And this is why Jordan—unlike Japan, which saw two of its nationals executed but is not involved militarily against ISIS—has reacted with sanctimonious fury and carried out retaliation. It is why Foley’s murder strengthened the call by the war lobby in Washington to launch a bombing campaign against ISIS. Terror—the terror we commit and the terror done to us—feeds the lusts for war. It is a recruiting tool for war’s crusade. If ISIS were not brutal it would have to be made to seem brutal. It is the luck of the fanatics we oppose, and the fanatics in our midst, that everyone’s propaganda needs are amply met. The tragedy is that so many innocents suffer.

Mideast governments allied with the West, including Jordan, Iraq and Saudi Arabia, have watched in horror as ISIS has carved out of parts of Syria and Iraq to create a self-declared caliphate the size of Texas. ISIS has managed through oil exports and the business of hostage taking to become financially self-sufficient. The area under its control has become a mecca for jihadists. It has attracted an estimated 12,000 foreign fighters, including 2,000 from Europe.

The longer the rogue caliphate remains in existence the more it becomes a mortal threat to the West’s allies in the region. ISIS will not invade countries such as Saudi Arabia and Jordan, but its continued existence empowers the discontented and the radicals in those countries, many groaning under collapsing economies, to stoke internal upheavals. The United States and its allies in the region are determined to erase ISIS from the map. It is too destabilizing. Dramas like these, because they serve the aims of ISIS as well as those of the nations seeking to destroy ISIS, will be played out as long as the caliphate exists.

Terror is the engine of war. And terror is what all sides in this conflict produce in overabundance.

Munich Security Conference: Threats and provocations against Russia over Ukraine

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The 51st Munich Security Conference, held in the Bavarian capital at the weekend, was dominated by the escalation of warmongering against Russia by the imperialist powers.
All the protagonists to the conflict—including German Chancellor Angela Merkel, German Foreign Minister Frank-Walter Steinmeier, Ukrainian President Petro Poroshenko, US Vice President Joseph Biden and US Secretary of State John Kerry—came together at the Bayerischer Hof luxury hotel. With Russian Foreign Minister Sergei Lavrov in attendance, they used the conference as a platform to ratchet up the conflict with Moscow.
In her opening speech on Friday, German Defence Minister Ursula von der Leyen praised Germany’s leading role in NATO’s arming of the Eastern European states and establishment of a rapid reaction force against Russia. “Germany is not only a framework nation and initial facilitator of the new NATO spearhead,” she declared, “We are helping to build the Multinational Corps Northeast and set up NATO bases in NATO’s eastern and southern member states.” She boasted of the “tireless commitment of the [German] government to strengthening the role of the Organization for Security and Cooperation in Europe (OSCE) and ensuring a united position of the EU in its relations with Russia.”
NATO Secretary General Jens Stoltenberg followed her. He praised the decision of the NATO defence ministers at their meeting last Thursday to upgrade their forces in eastern Europe as the “greatest strengthening of our collective defence since the end of the Cold War,” and left no doubt that the measures were directed against Russia.
Although the imperialist powers provoked the Ukraine crisis and have systematically escalated their military, economic and diplomatic offensive against Russia, Stoltenberg cast Russia as the aggressor. “Here in Europe,” he said, “we see a dangerous pattern of Russian behaviour: annexation, aggressive actions and intimidation. The conflict in Ukraine is deepening, with a horrific cost to civilians. The causes are clear and cannot be denied. Russia continues to provide training, equipment and forces in support of the separatists. And it continues to destabilise Ukraine in utter disregard for the country’s sovereignty and territorial integrity.”
On Saturday, German Chancellor Merkel spoke. Although she had only just returned, along with French President Hollande, from “peace” talks with Russian President Vladimir Putin in Moscow, she fiercely attacked Russia. She declared that Moscow’s actions, “first in Crimea, then in eastern Ukraine,” had “violated the foundations of our living together in Europe.” The “territorial integrity of Ukraine as well as its sovereignty have been flouted” and international law broken, she continued.
With regard to the discussions with Putin, Merkel tried to lower expectations. “It is uncertain whether [the talks] have been successful,” she said, “But it is my view and the view of the French president that it was in any case worth making the effort. I think we owe that at least to the people affected in Ukraine.”
In fact, the German government is largely responsible for the conflict in Ukraine, which has already cost more than 5,000 lives, forced hundreds of thousands to flee, and brought NATO and the US to the brink of war with Russia, a nuclear power. Berlin collaborated with Washington in backing last February’s putsch in Ukraine, utilizing fascist forces to bring a pro-Western regime to power to launch a brutal war against eastern Ukraine and stoke up the conflict with Russia.
The speech by Ukrainian President and oligarch Petro Poroshenko in Munich was virtually a declaration of war on Russia. He began by waving Russian passports in the air—supposedly proof of the presence of Russian soldiers in eastern Ukraine. Then he appealed to the West, particularly Germany, to supply weapons to the Ukrainian army.
The Ukrainian question would remain unresolved, he asserted, as long as Western officials refused to provide “solid, practical support.” Ukraine needed “defensive military support to ensure the ceasefire and containment of aggression,” he added.
In the course of the conference, a conflict developed over whether weapons should be supplied to the Ukrainian army, which now faces military defeat. While in the US the camp advocating the delivery of lethal weapons is growing, the representatives of the German government warned the security conference against such plans.
In response to a question from US Senator Bob Corker (Republican from Tennessee), Merkel said she understood the impulse to send arms. However, she said, the idea that weapons supplies alone would enable the Ukrainian army to proceed against a superior opponent was illusory. “It cannot be won militarily,” Merkel declared. “That is the bitter truth.”
Nevertheless, those opposing Russia were not weak or defenseless, Merkel said, because their strength was rooted in the economy. It was wrong to doubt the effectiveness of sanctions, she insisted. “I am 100 percent convinced that we will win with our principles,” Merkel declared, adding that “when some in the European Union say after just two months we can’t see any effect of the sanctions, then I can only say: ‘That’s not how you win the battle.’”
While the German government stresses that the conflict cannot be won militarily, and proposes to force Russia to submit through economic pressure, a section of the American elite is ever more aggressively advocating supplying weapons. Following Merkel’s speech, US Senator John McCain (Republican from Arizona) attacked the German government in an interview with broadcaster ZDF.
“If one looks at the position of the German government, one could believe they had no idea, or they couldn’t care less, that people in Ukraine were being slaughtered,” the former Republican presidential candidate and chair of the Senate Armed Services Committee said. He asked whether Merkel wanted merely to watch “as a country in Europe was destroyed for the first time since the Second World War.” He added that he was disappointed with the Europeans, but had “expected nothing else.”
Despite the growing tensions between the US and Germany about further actions against Russia, both sides were keen to appear as united as possible before Monday’s meeting between Merkel and Obama in Washington. Secretary of State John Kerry tried to play down the differences regarding weapons deliveries.
“I assure you that there is no split, only people who are trying to create one,” Kerry said in his speech on Sunday. “We are working closely together.” The US was also seeking a diplomatic solution to the Ukraine conflict. “We all agree that this problem cannot be resolved militarily,” Kerry said.
Prior to this, his German counterpart, Foreign Minister Steinmeier, sharply attacked Russia once again. Moscow must “be clear that there is a good future for Russia only with and not against Europe,” he declared. The speech of Russian Foreign Minister Lavrov, who accused the US and EU of ratcheting up the conflict in Ukraine, had “not contributed anything,” Steinmeier added.
Behind the mantra of a “diplomatic solution,” the German ruling elite is preparing for war. The chairman of the Federal Armed Forces Association, André Wüstner, told Deutsche Presse-Agentur: “If you want peace, you must prepare for war.”
He called for a massive military build-up. “In order to achieve the optimum deployment capability of the German Armed Forces,” he said, the government must “gradually raise the defence budget over the coming years, from 2016, initially by one billion euros.”

Oil strike shows growing combativeness of US workers

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The week-long strike by US oil refinery workers has revealed widespread social anger over the continued erosion of living standards and working conditions over nearly six years of a supposed economic recovery. On Sunday morning, 1,400 workers at refineries in Indiana and Ohio joined the walkout of 3,800 workers on strike since February 1 in California, Texas, Kentucky, and Washington state.
The past six years have marked the longest period of wage stagnation since the Great Depression, even as corporate profits and share prices have soared to record heights. With the oil strike, American workers are beginning to push back in a drive for higher wages, confirming the fears of US think tanks and media outlets that have been warning of a “wages push” this year.
“Over the last 19 years, every time our pay goes up so does our cost of living,” a worker on a picket line at Marathon’s Galveston Bay refinery near Houston, Texas told the World Socialist Web Site. “Last time, we got a 2.4 percent wage increase, but our health care costs went up by four percent! No matter what happens, the company always seems to come out on top.”
ExxonMobil, Chevron, Shell and BP—four of the largest corporations in the world—are digging in their heels and refusing to budge on workers’ demands for better wages, lower health care costs, improved safety, and reduced hiring of temporary contract workers. Instead, the oil giants are using the recent collapse of crude oil prices to press for even more cost cutting. BP has already imposed a pay freeze on its worldwide salaried work force, and contractors at drilling operations are facing 15 percent wage cuts.
While the oil price fall has affected profits, the corporations have reaped higher-than-expected fourth quarter earnings from their refinery operations, which benefit from the low cost of crude. Tesoro earned $698 million in the first nine months of 2014, a 67 percent increase over the same period the year before.
Even as they wipe out jobs and demand more concessions from workers, the oil giants continue to spend ten of billions on stock buybacks and dividend payments for wealthy investors. “We’ll protect the dividend first,” ConocoPhillips CEO Ryan Lance told investors on a January 29 conference call.
“In reporting their first financial results for a full quarter since crude prices began to collapse last summer, oil executives have cut nearly everything else,” the Houston Chronicle noted. “Jobs, drilling plans, raises, benefits and even crew sizes have been slashed, but not a single large oil producer has discussed a potential dividend cut.”
Negotiations between the United Steelworkers union (USW) and Shell—the lead bargainer for the industry—broke down last week after the USW rejected a sixth concessionary offer from the Dutch-based conglomerate. The union accused the company of “bad-faith bargaining, including the refusal to bargain over mandatory subjects, undue delays in providing information, impeded bargaining, and threats issued to workers if they joined the strike.”
But the USW leadership continues to limit the strike to just 11 of the 65 USW-organized refineries in the US, roughly 13 percent of the 65 percent of total refining capacity the union could shut down. Less than a fifth of the 30,000 oil workers in the USW have been called out.
At the struck facilities, the oil companies are continuing operations with management personnel, contractors and, in some cases, tradesmen from other unions. On Friday night, a strike-breaker driving a pick-up truck at the Martinez Tesoro refinery in California hit two picketers, sending one to the hospital, according to workers. Security guards are videoing picketers and the companies have issued provocative statements declaring their determination to continue production.
On the picket lines, there is a strong sentiment for spreading the strike and shutting down the entire industry. “If we all took a stand together we would be stronger,” one worker at the Toledo, Ohio refinery jointly owned by BP and Husky told the World Socialist Web Site .
Such a struggle, however, requires the initiative of rank-and-file workers and a rebellion against the USW leadership. Like other unions, the USW has for decades collaborated with the corporations to drive down wages and boost the “competitiveness” and profitability of American businesses. The endless sacrifices, the unions claimed, would save jobs and allow workers to recoup their losses some time in the future. In reality, neither of these things happened.
Instead, a vast transfer of wealth from the bottom to the top has occurred. The assault on workers’ jobs and basic rights that began in the 1980s with a wave of union-busting, factory closures and mass layoffs was intensified after the financial crash of 2008. President Obama’s first act after bailing out the Wall Street criminals responsible for the crisis was to restructure General Motors and Chrysler and halve the wages of tens of thousands of new-hires.
Whatever his rhetoric about “middle class economics” and “inclusive prosperity,” Obama has made the lowering of wages and shifting of health and pension costs from the corporations and government to the workers the centerpiece of his economic policy. In carrying this out, the White House has relied on the services of the USW and other trade unions.
In 2013, President Obama appointed USW President Leo Gerard to the Advanced Manufacturing Partnership Steering Committee. There, the USW head works with corporate executives to slash labor costs and increase the exploitation of workers in the energy and manufacturing sector.
Last week, the White House deputy press secretary issued a statement calling on the oil companies and the USW to use the “time-tested method of collective bargaining” to resolve the strike. The administration wants a quick end to this struggle because a breakthrough by oil workers would inspire other sections of workers to follow suit, including the 139,000 GM, Ford and Chrysler workers whose contract expires this summer.
The USW has insisted that the strike is not over wages, but over safety and working conditions. It claims that demanding wage increases will isolate the strikers and turn public opinion against them. Not only is this cowardly, it is untrue. There is enormous support for a struggle to reverse the decades-long decline of working class living standards.
The current isolation of the strike must be ended and the walkout expanded through the organization of a nationwide strike of all 30,000 USW oil workers. In 1980, 60,000 oil workers conducted a 14-week national strike, defied the Carter administration, and won a 31 percent wage increase. Today, the fight pits workers in a direct political struggle against the Obama administration, both big business parties, and the profit system they defend.
To extend the strike, the conduct of the struggle must be taken out of the hands of the USW. Rank-and-file strike committees should be organized to shut down all 200 refineries, petro-chemical plants, pipelines and oil terminals.
Workers across the US and internationally should rally behind the strikers, holding demonstrations and sympathy strikes. The oil workers are fighting for all working people.
The oil strike is a sign of the renewal of class struggle in the US. The emergence of mass struggles by the American working class, alongside its brothers and sisters internationally, will fundamentally alter the political climate and create the conditions for the emergence of a powerful political movement of the working class against social inequality, dictatorship and war.
To safeguard the jobs, living standards and working conditions of oil workers, the energy industry must be nationalized, placed under workers’ control, and reorganized on the basis of social need rather than profit.

US presses for military action against Russia

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As German Chancellor Angela Merkel and French President François Hollande prepare another round of talks with Russia and Ukraine on Wednesday on the war crisis in Eastern Europe, the United States is ratcheting up the pressure for military action.
Over the past several days, American political and military officials have issued a series of bellicose statements, all premised on the lie that the US must move rapidly to counter “Russian aggression” in Ukraine.
On Sunday, US Secretary of State John Kerry said in an interview on “Meet the Press” that the US would be providing the pro-Western regime in Kiev with “additional assistance of [an] economic kind and other kinds,” a reference to bipartisan demands that the Obama administration directly arm Ukraine. On Saturday, US Air Force Gen. Philip Breedlove, who serves as the head of both the US European Command and NATO in Europe, insisted that it was impossible to “preclude out of hand the possibility of the military option” in Ukraine.
At the Munich Security Conference over the weekend, Republican senators John McCain and Lindsay Graham poured scorn on European negotiations with Russian President Vladimir Putin. McCain summed up Merkel’s speech at Munich, which included a statement of opposition to arming Ukraine, with one word: “foolishness.” He added, “I can assure you that [Putin] will not stop until he has to pay a much higher price.”
Washington is mobilizing its allies within Europe, including former Swedish Prime Minister Carl Bildt, a member of the US-based RAND Corporation and other think tanks close to the American military. Bildt declared last week that, “war with Russia is conceivable.”
The Obama administration is expected to announce a final decision on whether to arm Ukraine some time this week, following meetings today with Merkel in Washington. Whatever the immediate outcome of these talks, the statements of US civilian and military figures and American-allied officials in Europe make clear that the United States is preparing a massive escalation of its intervention in Ukraine and Eastern Europe as a whole.
The prospect of a continent-wide war has produced nervousness in European capitals, expressed in the tactical divisions that have emerged between Germany and France on one side and the US on the other over a possible decision by Washington to provide advanced weapons to Ukraine.
Yet the European powers, whatever their misgivings, are themselves deeply implicated in the operations in Ukraine, set off by the fascist-led coup last February that installed a right-wing, pro-NATO government in Kiev. The putsch was followed by sanctions, threats and the militarization of Eastern Europe. Rather than arming Ukraine, European leaders have called for a tightening of economic sanctions against Russia aimed at strangling the country and forcing it into submission.
The provocative stance of the imperialist powers has been evident throughout the proceedings at Munich, characterized by a series of denunciations of Russia. Russian Foreign Minister Sergei Lavrov made the entirely correct point that at every step in the Ukraine crisis, the US and the EU “have tried to escalate the situation.” His remarks were met with boos and catcalls from the assembled representatives of imperialism.
Whatever the divisions between the major imperialist powers, it is clear that the Obama administration will not accept any agreement that undermines the outcome of the putsch that was launched a year ago.
The United States is pursuing a strategy that follows the playbook outlined several months ago by Zbigniew Brzezinski, the national security adviser under President Jimmy Carter. At a conference sponsored by the Wilson Center, Brzezinski, a leading figure in the US foreign policy establishment, made clear that the aim of the US is to draw Russia into prolonged combat in Ukraine. Arming Ukraine would allow it to engage in “urban short-range fighting” in the major cities of Kiev and Kharkiv, Brzezinski said, ensuring a “prolonged and costly” war for Russia.
Brzezinski pioneered just such a strategy in the 1980s, when he initiated the arming of Islamic fundamentalist forces in Afghanistan as part of a proxy war against the Soviet Union. The US is seeking to do to Russia, via Ukraine, what it did to the Soviet Union via Afghanistan. In the process, Ukraine is to be turned into a wasteland of death and destruction, with the very real prospect of a wider conflagration involving nuclear weapons and the deaths of hundreds of thousands if not millions of people. There is an extraordinary disconnect between the policies that are being planned and carried out and what is being told to the American people. Foreign and military policy takes on the character of a vast conspiracy, organized by a cabal of state officials, generals, intelligence chiefs and foreign policy strategists.
All of this is being carried out without any discussion of the implications. Most Americans have little or no idea what the criminal gang in Washington is plotting and the immense consequences of these actions for the entire world. Amidst talk of imminent war in Europe, the American people are led to believe that the greatest danger they face is the latest winter storm. The weather once again topped the evening news reports on Sunday.
Not a single media figure has posed to Kerry, Obama, McCain, Brzezinski or any of the other plotters such basic questions as: How many millions of deaths are they prepared to accept to force Russia to “pay a higher price?” If the United States arms Ukraine and Russia responds with an offensive against Kiev or operations in one of the Baltic states, is NATO planning to declare war on Russia? At what point in the “military option” will the use of nuclear weapons be considered? How many hundreds of billions of dollars is the US government prepared to spend in pursuit of global slaughter?
The crisis in Ukraine is bound up with the overall strategy of American imperialism. The United States has been engaged in virtually continuous warfare for over a quarter century. The US ruling class concluded from the dissolution of the Soviet Union that it could establish a “new world order” based America’s military supremacy. This would be leveraged to counter the protracted decline in the economic position of American capitalism. Whether under Democrats or Republicans, the ruling class has pursued this strategy systematically, seeking to conquer and control Central Asia, the Middle East, East Asia, Africa, Latin America and Eastern Europe.
Now these actions have placed the question of a global conflict involving nuclear-armed powers on the agenda of world capitalism. However the latest crisis over Ukraine is resolved, imperialism is set on a course that, without the independent intervention of the working class, leads inexorably to world war.

A Day Of Reckoning For The Euro Has Arrived – 26 TRILLION In Currency Derivatives At Risk

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This is the month when the future of the eurozone will be decided.  This week, Greek leaders will meet with European officials to discuss what comes next for Greece.  The new prime minister of Greece, Alexis Tsipras, has already stated that he will not accept an extension of the current bailout.  Officials from other eurozone countries have already said that they expect Greece to fully honor the terms of the current agreement.  So basically we are watching a giant game of financial “chicken” play out over in Europe, and a showdown is looming.  Adding to the drama is the fact that the Greek government is rapidly running out of money.  According to the Wall Street Journal, Greece is “on course to run out of money within weeks if it doesn’t gain access to additional funds, effectively daring Germany and its other European creditors to let it fail and stumble out of the euro.”  We have witnessed other moments of crisis for Greece before, but things are very different this time because the new Greek government is being run by radical leftists that based their entire campaign on ending the austerity that has been imposed on Greece by the rest of Europe.  If they buckle under the demands of the European financial lords, their credibility will be gone and Syriza will essentially be finished in Greek politics.  But if they don’t compromise, Greece could be forced to leave the eurozone and we could potentially be facing the equivalent of “financial armageddon” in Europe.  If nobody flinches, the eurozone will fall to pieces, the euro will collapse and trillions upon trillions of dollars in derivatives will be in jeopardy.
According to the Bank for International Settlements, 26.45 trillion dollars in currency derivatives are directly tied to the value of the euro.
Let that number sink in for a moment.
To give you some perspective, keep in mind that the U.S. government spends a total of less than 4 trillion dollars a year.
The entire U.S. national debt is just a bit above 18 trillion dollars.
So 26 trillion dollars is an amount of money that is almost unimaginable.  And of course those are just the derivatives that are directly tied to the euro.  Overall, the total global derivatives bubble is more than 700 trillion dollars in size.
Over the past couple of decades, the global financial system has been transformed into the biggest casino in the history of the planet.  And when things are stable, the computer algorithms used by the big banks work quite well and they make enormous amounts of money.  But when unexpected things happen and markets go haywire, the financial institutions that gamble on derivatives can lose massive quantities of money very rapidly.  We saw this in 2008, and we could be on the verge of seeing this happen again.
If no agreement can be reached and Greece does leave the eurozone, the euro is going to fall off a cliff.
When that happens, someone out there is going to lose an extraordinary amount of money.
And just like in 2008, when the big financial institutions start to fail that will plunge the entire planet into another major financial crisis.
So at the moment, it is absolutely imperative that Greece and the rest of the eurozone find some common ground.
Unfortunately, that may not happen.  The new prime minister of Greece certainly does not sound like he is in a compromising mood
Greece’s new leftist prime minister, Alexis Tsipras, said on Sunday he would not accept an extension to Greece’s current bailout, setting up a clash with EU leaders – who want him to do just that – at a summit on Thursday.
Tsipras also pledged his government would heal the “wounds” of austerity, sticking to campaign pledges of giving free food and electricity to those who had suffered, and reinstating civil servants who had been fired as part of bailout austerity conditions.
Prior to the summit on Thursday, eurozone finance ministers are going to get together on Wednesday to discuss what they should do.  If these two meetings don’t go well this week, we could be looking at big trouble right around the corner.  In fact, Greece is being warned that they only have until February 16th to apply for an extension of the current bailout…
Euro zone finance ministers will discuss how to proceed with financial support for Athens at a special session next Wednesday ahead of the first summit of EU leaders with the new Greek prime minister, Alexis Tsipras, the following day.
However, the chairman of the finance ministers said the following meeting of the Eurogroup on Feb. 16 would be Greece’s last chance to apply for a bailout extension because some euro zone countries would need to consult their parliaments.
“Time will become very short if they (Greece) don’t ask for an extension (by then),” said Jeroen Dijsselbloem.
The current bailout for Greece expires on Feb 28. Without it the country will not get financing or debt relief from its lenders and has little hope of financing itself in the markets.
And as I mentioned above, the Greek government is quickly running out of money.
Most analysts believe that because of the enormous stakes that one side or the other will give in at some point.
But what if that does not happen?
Personally, I believe that the eurozone is doomed in the configuration that we see it today, and that it is just a matter of time before it breaks up.
And I am far from alone.  For example, just check out what former Fed chairman Alan Greenspan is saying
Mr Greenspan, chairman of the Federal Reserve from 1987 to 2006, said: “I believe [Greece] will eventually leave. I don’t think it helps them or the rest of the eurozone – it is just a matter of time before everyone recognizes that parting is the best strategy.
The problem is that there there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated – actually even just fiscally integrated won’t do it.”
The Greeks are using all of this to their advantage.  They know that if they leave it could break apart the entire monetary union.  So this gives them a tremendous amount of leverage.  Greek Finance Minister Yanis Varoufakis has even gone so far as to compare the eurozone to a house of cards
The euro is fragile, it’s like building a castle of cards, if you take out the Greek card the others will collapse.” Varoufakis said according to an Italian transcript of the interview released by RAI ahead of broadcast.
The euro zone faces a risk of fragmentation and “de-construction” unless it faces up to the fact that Greece, and not only Greece, is unable to pay back its debt under the current terms, Varoufakis said.
“I would warn anyone who is considering strategically amputating Greece from Europe because this is very dangerous,” he said. “Who will be next after us? Portugal? What will happen when Italy discovers it is impossible to remain inside the straitjacket of austerity?”
After all this time and after so many bailouts, we have finally reached a day of reckoning.
There is a very real possibility that Greece could leave the eurozone in just a matter of months, and the elite know this.
That is why they are getting prepared for that eventuality.  The following is from a recent Wall Street Journal report
The U.K. government is stepping up contingency planning to prepare for a possible Greek exit from the eurozone and the market instability such a move would create, U.K. Treasury chief George Osborne said on Sunday.
A spokeswoman for the Treasury declined comment on the details of the contingency planning.
The U.K. government has said the standoff between Greece’s new anti-austerity government and the eurozone is increasing the risks to the global and U.K. economy.
“That’s why I’m going tomorrow to the G-20 [Group of 20] to encourage our partners to resolve this crisis. It’s why we’re stepping up the contingency planning here at home,” Mr. Osborne told the BBC in an interview. “We have got to make sure we don’t, at this critical time when Britain is also facing a critical choice, add to the instability abroad with instability at home.”
And if Greece does leave, it will cause panic throughout global financial markets as everyone wonders who is next.
Italy, Spain and Portugal are all in a similar position.  Every one of them could rapidly become “the next Greece”.
But of even greater concern is what a “Grexit” would do to the euro.  If the euro falls below parity with the U.S. dollar, the derivatives losses are going to be absolutely mind blowing.  And coupled with the collapse of the price of oil, we could be looking at some extreme financial instability in the not too distant future.
When big banks collapse, they don’t do it overnight.  But we often learn about it in a single moment.
Just remember Lehman Brothers.  Their problems developed over an extended period of time, but we only learned the full extent of their difficulties on one very disturbing day in 2008, and that day changed the world.
As you read this, big financial troubles are brewing in the background.  At some point, they are going to come to the surface.  When they do, the entire planet is going to be shocked.