Silvio Berlusconi's lawyers: Italian PM is above the law

By Nick Squires
October 6, 2009

© AFP / Getty Images -What's behind that mask?

Silvio Berlusconi should be considered above the law, his lawyers insisted yesterday, as Italy's highest court deliberated on whether legislation giving the prime minister immunity from prosecution was unconstitutional.

Mr Berlusconi's duties distinguished him from ordinary Italians, his legal team argued.

"The prime minister. . . should be considered the 'first above equals'," said one of his lawyers, Gaetano Pecorella, putting a new twist on the more familiar Latin "primus inter pares", or "first among equals".

Opposition MP Massimo Donadi, of the Italy of Values party, said the argument recalled George Orwell's novel 'Animal Farm', in which the pigs asserted that "all animals are equal, but some animals are more equal than others".

Immunity

The 15 judges of Italy's Constitutional Court are considering the legality of the so-called Alfano Law, which was introduced by Mr Berlusconi after his re-election last year and gives him immunity from prosecution while in office.

Judges in Milan and Rome have challenged the legislation, saying it violates the principle that all Italians should be equal before the law.

If the court quashes the law, criminal cases involving the prime minister would be reactivated. Rejection of the law could also lead to early elections, at a time when Mr Berlusconi (73) is under pressure from a series of sex scandals. A ruling could take up to two weeks.

After a public hearing, the judges withdrew to deliberate and after two hours in private adjourned until this morning, a judicial source said.

They are expected to rule by tomorrow, but the Italian media said that they were split down the middle over the case, and could decide to delay their verdict by two weeks.

The controversial law shielding Italy's top-four holders of state office, including Mr Berlusconi, from prosecution was one of the first acts of the conservative leader's government when he formed his latest government last year.

Legal proceedings against him were halted as a result, including a trial in which he was accused of bribing British lawyer David Mills to give false testimony to protect his businesses.

Two other cases, one accusing Mr Berlusconi of tax fraud and false accounting over the acquisition of TV rights by his family-owned broadcaster Mediaset, and another involving allegations that he tried to corrupt opposition senators, have also been frozen.

Mr Berlusconi denies any wrongdoing.

Prosecutors in those cases have appealed to the Constitutional Court, arguing that the immunity law violates principles that are enshrined in the constitution -- including that all citizens are equal before the law.

The court began by hearing both sides yesterday morning.

A defiant Mr Berlusconi said on Monday he would serve out his full term until 2013 and his allies closed ranks around him.

"Silvio Berlusconi is firmly at the helm of the country, because that is the will of the voters who gave him the mandate to govern for five years," said the Planning Minister Gianfranco Rotondi.

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Media Tell the Rich Man's Story, Starve the People of Real News

by Glen Ford
October 7, 2009

The Great Recession, or the Financial Meltdown of 2008, or whatever history will ultimately wind up calling the unfolding economic debacle we are experiencing, has been “covered” in a highly skewed and selective manner by the media powers-that-be in the United States. That's the general conclusion of a new study by the Pew Research Center's Project for Excellence in Journalism. The Pew study was, of course, centered on news outlets owned and operated by huge corporations, since that is virtually all that has survived for general consumption in the U.S.
The study found that media coverage of the economic disaster – based on numbers of stories and articles – focused overwhelmingly on banking, the economic stimulus, and the fate of the auto industry. The pattern also reveals that the bulk of this narrow band of topics was examined from vantage points in New York and Washington, where the voices of finance capital and its servants in government are located.

It is no wonder, then, that the prevailing narrative on the nature of the crisis, and proposed solutions to the crisis, are informed almost entirely by the corporate view of the world. In essence, the very rich, through their media, have been holding a conversation among themselves and serving it up as “news.” Their crisis is all that has mattered in this corporate media conversation. It is, therefore, logical that when the stock market rallies the corporate media world is filled with news of “recovery” and “green shoots” sprouting all over the place. But most people experience the economy through the prism of jobs, housing and consumer prices. According to the Pew survey, these fundamental concerns shared by the vast majority of the population rank as very low priorities in the nation's newsrooms.

While housing foreclosures climbed through the roof and home prices went into the basement, stories on housing represented only six percent of news coverage. The plight of renters is almost totally absent from the news. Unemployment shot from 8.1 to 9.7 percent between February and August – the highest in a quarter century – but merited only six percent of news coverage. The drama over General Motors and Chrysler corporate reorganization was one of the top three topics of news coverage, but stories about labor issues and worker layoffs in the auto industry made up an infinitesimal two-tenths of one percent of what passed for news in the corporate media. Food prices were of even less interest to corporate journalists, who gave the issue only one-tenth of a percent of news coverage. That's one story out of every thousand.

Relentless corporate consolidation of media has resulted in a daily menu of news that is worse than useless to the great mass of people. The rich use their media monopoly to starve the public of the fundamental facts of national economic life. In Black America, where Black-oriented radio still reaches 80 to 90 percent of households, the information void is all but total, with the virtual extinction of local news. As a result, the reality of economic disaster comes without warning. It arrives in the form of a pink slip or an eviction or foreclosure notice, while the television anchorperson blathers on about good times on Wall Street.

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The Economist Magazine: Irving Kristol Was a CIA Frontman

Posted by Thomas DiLorenzo on October 6, 2009 09:56 AM

From the September 24, 2009 Obituary of Irving Kristol (R.I.P.) in The Economist: “Regrets were very few in Irving Kristol’s…life. He had none at all for his youthful flirtation with Trotskyism…No regrets, either, for the fact that when he edited Encounter magazine…in the 1950s it was subsidized by the CIA…” (emphasis added).

I wonder if there were any other “neoconservative” magazines founded in the 1950s by former CIA employees that were also government-subsidized CIA fronts?

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Poll: most Britons still against UK role in Afghan war

Press TV - October 7, 2009 12:57:52 GMT

British troops have suffered heavy losses during the war in Afghanistan.

The number of Britons opposed to the country's involvement in military operations in Afghanistan has increased, a poll released Wednesday shows.

According to the opinion poll published by BBC at the eighth anniversary of the invasion of Afghanistan in 2001, out of the 1,010 people polled, 56 percent were against Britain's armed involvement in Afghanistan.

The number represents an increase, compared to previous figures gathered in 2006.

Currently, Britain has around 9,150 troops in Afghanistan.

They have suffered heavy losses during the war, especially in the Helmand province, where they are mainly based.

Their latest fatality was a soldier killed in the war-torn country on Monday, taking the overall death toll to 220 since the US-led invasion began.

CHILD LEUKEMIA DEATH RATES INCREASE NEAR U.S. NUCLEAR PLANTS

In case you missed it:

CHILD LEUKEMIA DEATH RATES INCREASE NEAR U.S. NUCLEAR PLANTS
RISES GREATEST NEAR OLDEST PLANTS, DECLINES NEAR CLOSED PLANTS

Nov. 11, 2008

New York, . Leukemia death rates in U.S. children near nuclear reactors rose sharply (vs. the national trend) in the past two decades, according to a recent study.

The greatest mortality increases occurred near the oldest nuclear plants, while declines were observed near plants that closed permanently in the 1980s and 1990s. The study was published in the most recent issue of the European Journal of Cancer Care.

The study updates an analysis conducted in the late 1980s by the National Cancer Institute (NCI). That analysis, mandated by Senator Edward M. Kennedy (D-MA), is the only attempt federal officials have made to examine cancer rates near U.S. nuclear plants.

U.S. Rep. Edward J. Markey (D-MA), a senior member of the House Energy and Commerce Committee, said

"Nothing is more important to American families than the health of their children. It is critical that we continue to improve our understanding of the causes of child leukemia and learn how this heartbreaking disease be prevented, therefore this study deserves critical consideration."

Actor and advocate Alec Baldwin said

"exposure to ambient levels of radiation near nuclear reactors used by public utilities has long been suspected as a significant contributor to various cancers and other diseases." Baldwin, who has a long-standing interest in radiation health issues, adds "nuclear power is not the clean, efficient energy panacea to which we are presently being reintroduced. It is dirty, poses serious security threats to our country, and is ridiculously expensive. Nukes are still a military technology forced on the American public with a dressed up civilian application."

Study authors were epidemiologist Joseph Mangano MPH MBA, Director of the Radiation and Public Health Project and toxicologist Janette Sherman MD of the Environmental Institute at Western Michigan University. They analyzed leukemia deaths in children age 0-19 in the 67 counties near 51 nuclear power plants starting 1957-1981 (the same counties in the NCI study). About 25 million people live in these 67 counties, and the 51 plants represent nearly half of the U.S. total).

Using mortality statistics from the U.S. Centers for Disease Control and Prevention, Mangano and Sherman found that in 1985-2004, the change in local child leukemia mortality (vs. the U.S.) compared to the earliest years of reactor operations were:

• An increase of 13.9% near nuclear plants started 1957-1970 (oldest plants)
• An increase of 9.4% near nuclear plants started 1971-1981 (newer plants)
• A decrease of 5.5% near nuclear plants started 1957-1981 and later shut down

The 13.9% rise near the older plants suggests a potential effect of greater radioactive contamination near aging reactors, while the 5.5% decline near closed reactors suggests a link between less contamination and lower leukemia rates. The large number of child leukemia deaths in the study (1292) makes many of the results statistically significant.

The Mangano/Sherman report follows a 2007 meta-analysis also published in the European Journal of Cancer Care by researchers from the Medical University of South Carolina. That report reviewed 17 medical journal articles on child leukemia rates near reactors, and found that all 17 detected elevated rates. A January 2008 European Journal of Cancer article that found high rates of child leukemia near German reactors from 1980-2003 is believed to be the largest study on the topic (1592 leukemia cases).

The carcinogenic effects of radiation exposure are most severe among infants and children. Leukemia is the type of childhood cancer most closely associated with exposures to toxic agents such as radiation, and has been most frequently studied by scientists. In the U.S., childhood leukemia incidence has risen 28.7% from 1975-2004 according to CDC data, suggesting that more detailed studies on causes are warranted.

The Radiation and Public Health Project is a non profit group of health professionals and scientists based in New York that studies health risks from radioactive exposures to nuclear reactors and weapons tests. RPHP members have published 23 medical journal articles on the topic. A copy of the child leukemia article (PDF or faxed) is available upon request from Mangano and is also availale online by clicking here.

The Many Deaths of Hakimullah Mehsud

Tehreek-e Taliban Pakistan Leader Still Not Dead, Despite Reports

by Jason Ditz, October 05, 2009

They say cats have nine lives. It’s not clear how many Tehreek-e Taliban (TTP) leader Hakimullah Mehsud has, but it’s at the very least more than four.

Hakimullah Mehsud

Hoping to stem reports of his death, Hakimullah met at an undisclosed location with members of the press, and a video clip showing the healthy-looking militant was broadcast around the nation.

Over the weekend US officials declared of the reclusive TTP leader “we’re pretty clear that we think he’s dead.” If that sounds familiar you’re not alone, Hakimullah was also declared killed in early September, and twice in August.

The first of Hakimullah’s many deaths occurred in early August, when he and fellow TTP commander Wali Rehnman reportedly killed one another. Rehman came forward almost immediately and insisted the fight never happened, Hakimullah did the same days later.

The persistent rumors of Hakimullah’s death seemed to center around a conspiracy theory involving his somewhat similar looking brother Kalimullah, who supposedly had been making public appearances in Hakimullah’s place. Kalimullah was reportedly killed last week in a US drone attack.

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Probing the Arctic Sea conspiracies

Experts found it hard to believe the ship would be hijacked for its cargo of timber

What really happened when the Arctic Sea cargo ship went missing amid allegations of hijacking and weapons smuggling? The BBC's Sarah Rainsford went to Kaliningrad to find out.

The man's voice on the crackly recording from onboard the Arctic Sea cargo ship sounds very calm, even cheerful.

"My last port of call is Jakobstadt, Finland."

"Your destination, sir? Bejaia?" the female coastguard asks from the station on the Dover cliffs overlooking the English channel.

"Yes, that's correct," the voice replies.

But the Arctic Sea never reached Algeria. This was the last recorded conversation with the vessel, two days before it disappeared amid rumours of a hijack, whispers of arms smuggling and the whiff of international conspiracy.

I was given the first copy of the call by Dover coastguards as I began probing the many theories about what happened.

The cargo ship was finally located by the Russian navy 300 miles (483km) west of Cape Verde.

Eight men said to have boarded close to Sweden were whisked away to a Moscow prison and charged with hijack.

After weeks searching the vessel, far out at sea, Russian investigators announced they had found no suspicious cargo.

Cover story?

But the official account leaves many questions unanswered.

How could pirates operate in heavily-monitored European waters? Would they really hijack a cargo of wood, or was something more valuable on board? And why did the alleged pirates surrender without a fight or a ransom?

Apart from fuel and provisions for the crew, [the Arctic Sea] was empty as a drum Vladimir Parshin The Russian Maritime Register in Kalingrad

Stitching together John le Carre-style plotlines is simple.

But pinning-down hard evidence is far tougher, and that seems deliberate.

The ship's crew is under a gagging order, and my requests for interviews with Russian investigators and officials have come to nothing.

Fuelled by a level of secrecy unusual even for Russia, speculation about the Arctic Sea abounds.

Most gripping is the theory prompted by an Israeli intelligence source who told the BBC that Israel had warned Russia it knew the ship was smuggling S300 anti-aircraft defence systems to Iran.

Israel feared those missiles would protect any nuclear weapons facilities Iran might be building. So the hijack was a cover story, the source said, to let Russia block the delivery and save face.

The Russian foreign minister denies there were S300s onboard the Arctic Sea, and Israeli sources will say no more. The story is implausible but not impossible - so I tested the practicalities.

Normal ship

Before its last voyage, the Arctic Sea spent almost three weeks in Kaliningrad for what its owner calls routine maintenance.

The Arctic Sea has a similar-sized hold to this one - did it contain missiles?

The militarised Russian region was a smugglers' paradise after the collapse of the USSR.

The Baltic Fleet there is equipped with S300 missiles. So Kaliningrad seems a prime spot to load secret cargo.

It was the first time the ship's owner had chosen the Russian port, but classification records I have seen show this was a scheduled docking.

"This was an intermediate survey. It was the end of year three in a five-year cycle so it fits," confirmed Vladimir Parshin, local head of the Russian Maritime Register.

"We have to check the tanks and the drainage system. We can't do that when the ship is loaded. Apart from fuel and provisions for the crew, she was empty as a drum."

But his team's last visit was on 16 July, and data from Lloyds Register/Fair Play indicates that the Arctic Sea remained in Kaliningrad another day.

Despite repeat requests, I was not permitted to visit Pregol shipyard to investigate whether an illicit cargo could have been loaded then.

Instead, I traced those who went onboard the Arctic Sea in Finland, where the ship took on its official cargo of pine. I discovered there was no physical inspection.

"If they say they are empty, they are empty," customs officer Kjell Lintholm told me. "We were on the ship for passport control, just documents. It was a normal ship."

But could a consignment of S300s have been hidden somewhere?

Equally flawed

Inside the vast hold of a British-owned ship almost identical in size to the Arctic Sea, I watched dockers at work as cranes lowered mobile homes onto deck.

There is clearly ample space for the S300 launch vehicles, but no way for the Finns to miss them.

Moscow denies S-300 missiles were on board

The seven-metre long missiles are also hard to hide.

The only feasible place is the ballast tanks, so I squeezed through a manhole and climbed into one of them to take a look.

Access to all these dark, damp areas is through an oval hole about 80cm (31 inches) at its widest.

The space beneath is fairly generous but manoeuvring a long, thick missile in there would be impossible.

"You could squeeze something in, but not big stuff," the ship's Russian captain agreed. "And I don't believe these missiles are flexible."

Accessing the bottom ballast tanks would mean cutting open the lower deck and resealing it.

If the Russian navy was really scrambled to remove the missiles, it would have to do that from a fully-loaded timber carrier - out at sea.

Captain Yevgeny, like others I met, is deeply sceptical.

"If the tanks are covered, there is no chance to get in them," he told me.

Might a Russian naval frigate have transferred the timber?

"Everything's possible, if you really want it," the Captain laughed. "But it's closer to a fairy-tale. It would be a miracle."

Even allowing for that miracle, all this sidesteps other big questions including how the supposed missiles would reach Iran from Algeria, and why crossing the Caspian Sea was not simpler.

I have explored several alternative theories about the Arctic Sea, and interviewed dozens of people in many countries.

So far all versions are unproven and equally flawed.

Frustrating though it is, unless someone breaks their silence, what is left is a deep mystery and any thrilling plotline you care to choose.

Source

The Iranian Rift in the IAEA

Leaked Paper on Iranian Nuke Based on Disputed Intel

By GARETH PORTER
October 6, 2009

Excerpts of the internal draft report by the staff of the International Atomic Energy Agency (IAEA) published online last week show that the report's claims about Iranian work on a nuclear weapon is based almost entirely on intelligence documents which have provoked a serious conflict within the agency.

Contrary to sensational stories by the Associated Press and The New York Times, the excerpts on the website of the Institute for Science and International Security (ISIS) reveal that the IAEA's Safeguards Department, which wrote the report, only has suspicions – not real evidence - that Iran has been working on nuclear weapons in recent years.

The newly published excerpts make it clear, moreover, that the so-called "Alleged Studies" documents brought to the attention of the agency by the United States five years ago are central to its assertion that Iran had such a programme in 2002-03.

Whether those documents are genuine or were fabricated has been the subject of a fierce struggle behind the scenes for many months between two departments of the IAEA.

Some IAEA officials began calling for a clear statement by the agency that it could not affirm the documents' authenticity after the agency obtained hard evidence in early 2008 that a key document in the collection had been fraudulently altered, as previously reported by this writer. As journalist Mark Hibbs reported last week in Nucleonics Week, opposition to relying on the intelligence documents has come not only from outgoing Director General Mohamed ElBaradei but from the Department of External Relations and Policy Coordination.

Since September 2008, however, the Safeguards Department, headed by Olli Heinonen, has been pressing for publication of its draft report as an annex to a regular agency report on Iran.

Heinonen leaked the draft to Western governments last summer, and in September it was leaked to the Associated Press and ISIS. That has generated sensational headlines suggesting that Iran can already build a nuclear bomb.

The draft report says the agency "assesses that Iran has sufficient information to be able to design and produce a workable implosion nuclear device". But other passages indicate the authors regard such knowledge only as a possibility, based on suspicions rather than concrete evidence.

It says the "necessary information was most likely obtained from external sources and probably modified by Iran". But it cites only the 15-page "uranium metal document" given by the A. Q. Khan network to Iran when it purchased centrifuge designs in 1987.

"Based on the information in the document," it says, "it is possible that Iran has knowledge regarding the contents of a nuclear package."

The IAEA "suspects" that the 15-page document was part of "larger package that Iran may have obtained but which has not yet come to the Agency's attention", according to the leaked excerpts.

But that document only outlines procedural requirements for casting uranium into hemispheres, not the technical specifications, as the IAEA report of Nov. 18, 2005 noted. No evidence has ever surfaced to challenge the Iranian explanation that Khan's agents threw in the document after a deal had been reached on centrifuges in an effort to interest Iran in buying the technology for casting uranium.

The IAEA affirmed that it has found no evidence that Iran ever acquired such technology.

The only external "nuclear package" ever reported to have been provided to Iran is a set of flawed technical designs for a "high-voltage block" for a Russian-designed nuclear weapon, which was slipped under the door of the Iranian mission in Vienna by a Russian scientist working for CIA's Operation Merlin in February 2000.

Another far-reaching claim in the draft report is that the IAEA "has information, known as the Alleged Studies, that the Ministry of Defence of Iran has conducted and may still be conducting a comprehensive programme aimed at the development of a nuclear payload to be delivered using the Shahab 3 missile system."

It does not explain how the "Alleged Studies", which are documents on work done in 2002 and 2003, could have any bearing on whether Iran is now conducting work on nuclear weapons.

Using the same language found in published IAEA reports, the draft suggests that the Alleged Studies intelligence documents represent credible evidence. "The information, which has been obtained from multiple sources, is detailed in content and appears to be generally consistent," it says.

But that characterisation of the intelligence first shown to the IAEA by the United States in 2005 has been contested by sceptics in the agency. A senior IAEA official familiar with the documents suggested in an interview with IPS last month that the claim of "multiple sources" may be misleading.

Given the existence of "intelligence sharing networks", the official said, "one can't rule it out that one organisation got the intelligence and shared it with others." That would explain the reference to "multiple sources consistent over time", he said.

The initial U.S. account, according to the official, was that the documents came from the laptop computer of one of the Iranian participants in the alleged nuclear weapons research programme. Later, however, that account was "walked back", he said.

"There are holes in the story," said the official.

The introduction by ISIS to the excerpts from the report, evidently based on conversations with the IAEA personnel, confirms that the documents did not come from Iran on a laptop computer, as U.S. officials had claimed in the past. It suggests that the documents were smuggled out of Iran as "electronic media" by the wife of an Iranian who had been recruited by German intelligence and was later arrested.

That new explanation is highly suspect, however, because an intelligence agency would not confirm the identity of one of their agents, even if he were arrested. Asked about the ISIS account, Paul Pillar, who was national intelligence office for the Middle East when the "laptop documents" surfaced, said it "sounds unusual".

The draft report also argues that the information in the documents is credible, because it "refers to known Iranian persons and institutions under both the military and civil apparatuses, as well as to some degree to their confirmed procurement activities".

But the senior IAEA official cast doubt on that claim as well. The names of people working in the relevant Iranian military and civilian organisations are readily obtainable, he observed. "It's not difficult to cook up such a document," the official told IPS.

The draft paper states that the agency "does not believe that Iran has yet achieved the means of integrating a nuclear payload into the Shahab 3 delivery system with any confidence that it would work".

That statement hints at the fact that the reentry vehicle studies were found to have serious technical problems. The senior IAEA official told IPS that the Sandia National Laboratories, which ran computer simulation analyses of the plan, not only found that none of them would have worked, but had expressed doubt that they were genuine.

The paper makes an indirect reference to a plan for a bench-scale facility for uranium conversion, but does not mention that it had several technical flaws, as acknowledged by Heinonen in a February 2008 briefing for members.

Nor do the draft report's conclusions deal with the fact, confirmed by the senior IAEA official to IPS, that none of the intelligence documents have any security markings, despite the fact they are purported to be part of what presumably would have been Iran's most highly classified programme.

Gareth Porter is an investigative historian and journalist with Inter-Press Service specialising in U.S. national security policy. The paperback edition of his latest book, "Perils of Dominance: Imbalance of Power and the Road to War in Vietnam", was published in 2006.

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Dollar Hysteria

Commentary on Robert Fisk's recent warmongering:

Is the Sky Really Falling?
06.10.2009
By Mike Whitney

October 06, 2009 "Information Clearing House" — - Robert Fisk lit the fuse with his hyperventilating narrative which appeared in Tuesday's UK Independent titled, "The Demise of the Dollar". The article went viral overnight spreading to every musty corner of the Internet and sending gold skyrocketing to $1,026 per oz. Now every doomsday website in cyber-world has headlined Fisk's "shocker" and the blogs are clogged with the frenzied commentary of bunker-dwelling survivalists and goldbugs who're certain that the world as we know it is about to end.

From Fisk's article:

"In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security." (UK Telegraph)

"International cabal"? C'mon, Bob, you're better than that.

Reports of the dollar's demise are greatly exaggerated. The dollar may fall, but it won't crash. And, in the short-term, it's bound to strengthen as the equities market reenters the earth's gravitational field after a 6 month-long ride through outer-space. The relationship between falling stocks and a stronger buck is well established and, when the market corrects, the dollar will bounce back once again. Bet on it. So why all this bilge about Middle Eastern men huddled in "secret meetings" stroking their beards while plotting against the empire?

Isn't that the gist of Fisk's article?

Yes, the dollar will fall, (eventually) but not for the reasons that most people think. It's true that the surge in deficit spending has foreign dollar-holders worried. But they're more concerned about the Fed's quantitative easing (QE) program which adds to the money supply by purchasing mortgage-backed securities and US Treasuries. Bernanke is simply printing money and pouring it into the financial system to keep rigamortis from setting in. Naturally, the Fed has had to quantify exactly how much money it intends to "create from thin air" to placate its creditors. And, it has. (The program is scheduled to end by the beginning of 2010) That said, China and Japan are still buying US Treasuries, which indicates they have not yet "jumped ship".

The real reason the dollar will lose its favored role as the world's reserve currency is because US markets, which until recently provided up to 25 percent of global demand, are in sharp decline. Export-dependent nations--like Japan, China, Germany, South Korea--already see the handwriting on the wall. The US consumer is buried under a mountain of debt, which means that his spending-spree won't resume anytime soon. On top of that, unemployment is soaring, personal wealth is falling, savings are rising, and Washington's anti-labor bias assures that wages will continue to stagnate for the foreseeable future. Thus, the American middle class will no longer be the driving force behind global consumption/demand that it was before the crisis. Once consumers are less able to buy new Toyota Prius's or load up on the latest China-made widgets at Walmart, there will be less incentive for foreign governments and central banks to stockpile greenbacks or trade exclusively in dollars.

Here's a clip from the Globe and Mail cited on Washington's Blog:

"A UBS Investment Research report says that while it would be wrong to write off the U.S. dollar as the global reserve currency, its roughly 90-year iron grip on that position is loosening. “The use of the U.S. dollar as an international reserve currency is in decline,” said UBS economist Paul Donovan.

“The market share of the dollar in international transactions is likely to decline over the coming months and years, but only persistent policy error – or considerable fiscal strain – is likely to cause the dollar to lose reserve currency status entirely.”

The UBS report maintains that the gradual slide of the U.S. dollar is being driven not by the world’s central banks, but by the private sector, as individual companies increasingly abandon the greenback as their international currency of choice.

“The private sector’s use of reserves is more important than official, central bank reserves – anything up to 20 times the significance, depending on interpretation,” Mr. Donovan said. “There is evidence that the move away from the dollar as a private-sector reserve currency has been accelerating since 2000.”

As private industry veers away from the dollar, governments, investors and central banks will follow. The soft tyranny of dollar dominance will erode and parity between currencies and governments will grow. This will create better opportunities for consensus on issues of mutual interest. One nation will no longer be able to dictate international policy.

So-called "dollar hegemony" has added greatly to the gross imbalance of power in the world today. It has put global decision-making in the hands of a handful of Washington warlords whose narrow vision never extends beyond the material interests of themselves and their constituents. As the dollar weakens and consumer demand declines, the United States will be forced to curtail its wars and adjust its behavior to conform to international standards. Either that, or be banished into the political wilderness.

So, what exactly is the downside?

Superpower status rests on the flimsy foundation of the dollar, and the dollar is beginning to crack. Fisk is right; big changes are on the way. Only not just yet.

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Israeli tanks enter eastern Gaza

Press TV - October 6, 2009 15:28:44 GMT

Fighting has broken out between Israeli forces and Palestinian fighters in eastern Gaza Strip after Israeli tanks and armored bulldozers crossed the border into the coastal region.

Military tanks fired shells at residential areas in the region, leaving a Palestinian wounded, a press TV correspondent reported Tuesday.

The incursion set off the fighting.