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September 2004 Moon of Alabama: September 2004 And must have whiskey Oh, you know why « August 2004 | Main | October 2004 » September 30, 2004 The Exit Strategy A foreign policy trial ballon from a current Financial Times article: Members of the municipal council of Basra, Iraq's second largest city, have been holding talks with officials from councils in two neighbouring provinces on establishing a federal region in the south, ... The three provinces - Basra, Missan and Dhiqar - account for more than 80 per cent of the proved oil reserves of the country's 18 provinces and provide a large share of the national income. ... people close to the Iraqi government say some officials driving the autonomy talks are backed by Muqtada al-Sadr, the renegade Shia cleric who launched an uprising against American troops in July. This Fictional Times article, January 2005, puts more light on the issue: The occupation authorities in Iraq have secretly asked two confidants, who afore had been appointed to the city council of Basra, to take over the government of the southern province. They are to form an administrative unit with those two neighbour provinces that account for most of Iraq’s oil reserves. Only one cabinet member from the southern provinces is member of Prime Ministers Allawis cabinet, created by the Coalition Provisional Administration. "Unfortunately this now allows The South to complain about under representation in the central government." the US ambassador to Iraq, Mr. Negroponte, explained. "We are trying to correct this sad error by lobbying the central government for more local latitude in The South." A Marine Corp general in Bagdhad gave some background on the military situation. "As the 15 northern provinces are now controlled by Iraqi personal, we can immediately reduce our troop numbers significantly. 50,000 men and women will stay in Iraq and will continue to build democracy. For logistical reasons I have proposed to station them exclusivly in the Autonomous Southern Provinces. This will shorten our lines of communication as supply will come through the harbour of Basra. It´s also only a short jump from our air bases in Kuwait." A British general added: "As the British troops are leaving, the American http://www.moonofalabama.org/2004/09/index.html (1 von 49) [16.11.2004 18:26:53] Moon of Alabama: September 2004 forces will take over our tasks. There have been less clashes here as in the Kurdish Kirkuk, the Sunni triangle and the Shia areas around Najaf, so their task here will be a lot easier. There will be fewer body bags." Prime Minister Allawi could not be reached for a statement as he is currently consulting with Muqtada al-Sadr in Najaf. Al Sadr, who had been said to be interested in the southern provinces, had denied such ambitions and had pointed out that no significant symbolic places of Islam are located in the south. After Sistanis death, the young cleric is expected to control the significant money flow generated by Shia pilgrimage in Najaf. "The process we are now engaged in, will lead to a completely Autonomous South" a former senior official working at the AEI in Washington envisioned. "That new national entity has strong family and tribal relations with their brothers across the southern border. In the long term these borders may vanish and a reunited Dawlat al Kuwayt will emerge as a new prosperous and peaceful diamond in the northern Gulf." The Financial Times article Oil-rich Iraqi provinces push for autonomy is just the trial ballon. They are dead serious with this concept and for the neocons as for the realists it makes a whole lot of sense. If the other 15 Iraqi provinces will be a dirt poor hell on earth - who cares? Posted by Bernhard on September 30, 2004 at 10:46 AM | Permalink | Comments (62) | TrackBack Con Job In CPI: Camouflaging Price Increase I voiced some shrill words about the official US inflation numbers. Billmon has been on this several times. Now we have the honor to be joined by Bill Gross, Managing Director for PIMCO, who oversees nearly $400 billion in fixed income assets. In his current Investment Outlook he opines on the government officials who produce the official numbers and looks at the real ones. “Inflation under control― – (ex food and energy of course) shout the carnival barkers. “The CORE is running at just under 2%,― .. No matter that a gallon of gasoline is over 2 bucks or that a half gallon of milk will set you back $3.69; the CORE is under 2%. .. prices of desktop and notebook computers declined by 8% a year during the past decade, The WSJ reports but because the machines’ computer power and memory have improved, their hedonically adjusted prices have dropped by 25% a year since 1997. No wonder the core is less than 2% with computers dropping by that much every year. But did your new model computer come with a 25% discount from last year’s price? ... In addition, when “substitution bias― (a BLS maneuver that follows your preference for Chicken McNuggets vs. a Quarter Pounder) is eliminated, the gap gets even worse. ... The CPI as calculated may not be a conspiracy but it’s definitely a con job http://www.moonofalabama.org/2004/09/index.html (2 von 49) [16.11.2004 18:26:53] Moon of Alabama: September 2004 foisted on an unwitting public by government officials .. ... [These statistics] might serve [Greenspan] well, but they do a disservice to those grounded in the reality of stretching a paycheck for new cars, laptop computers, and cell phones that somehow haven’t gone down as much in price as the government says they have. ... High productivity? Nonsense, in part – statistical, hedonically created nonsense. My sense is that the CPI is really 1% higher than official figures and that real GDP is 1% less. Mr. Gross does not mention the home owner equivilant rent, the biggest chunk in the CPI calculation, where increasing housing costs for home owners are substituted by decreasing statistical apartment rents. This alone makes for 1% unaccounted inflation. Add that to Mr. Gross' 1% and the official numbers and the true picture comes to light. Inflation is around 5-6% and GDP growth at maybe 1%. The official high productivity growth is and has been no growth at all. As more international recognized money managers go public with these facts, international investors will take note. When they start to pull out their money, the real state of the US economy will be unveiled. Sell your US treasuries and bonds now and buy some value in Euroland, Australia or elsewhere. Posted by Bernhard on September 30, 2004 at 08:24 AM | Permalink | Comments (2) | TrackBack Fresh Open Thread Any ideas about the dual staged press conference, The Debate, tonight? Posted by Bernhard on September 30, 2004 at 05:54 AM | Permalink | Comments (48) | TrackBack Perception Management I am flabbergasted by a recent Program on International Policy Attitudes (PIPA) study that shows these results: Majorities of Bush supporters favored including labor and environmental standards in trade agreements (93%), and the US being part of the Comprehensive Test Ban Treaty (68%), the International Criminal Court (75%), the treaty banning land mines (66%), and the Kyoto treaty on climate change (54%). Only 33% of Bush supporters wanted to build a new missile defense system now, while more wanted to do more research until its capabilities are proven (56%). Forty percent of Bush supporters favored increased defense spending, while 47% wanted it kept about the same (9% wanted to cut). Suddenly I find myself agreeing with Bush supporters on several important foreign policy issues. But why will they vote for somebody, who does not favor the positions they support? PIPA http://www.moonofalabama.org/2004/09/index.html (3 von 49) [16.11.2004 18:26:53] Moon of Alabama: September 2004 says they do not know Bush's real position. Majorities of Bush supporters incorrectly assumed that Bush favors including labor and environmental standards in trade agreements (84%), and the US being part of the Comprehensive Test Ban Treaty (69%), the International Criminal Court (66%), the treaty banning land mines (72%), and the Kyoto Treaty on global warming (51%). They were divided between those who knew that Bush favors building a new missile defense system now (44%) and those who incorrectly believe he wishes to do more research until its capabilities are proven (41%). However, majorities were correct that Bush favors increased defense spending (57%) Two possibilities come to mind: ● Bush supporters do not want to know Bush's real position. ● Bush supporters are managed to perceive his position as they do. The U. S. Department of Defense defines Perception Management as: Actions to convey and/or deny selected information and indicators to .. audiences to influence their emotions, motives, and objective reasoning as well as to intelligence systems and leaders at all levels to influence official estimates, ultimately resulting in .. behaviors and official actions favorable to the originator’s objectives. In various ways, perception management combines truth projection, operations security, cover and deception, and psychological operations. Are these the results of such actions? How can they be countered? Posted by Bernhard on September 30, 2004 at 05:17 AM | Permalink | Comments (6) | TrackBack September 29, 2004 Intended Outcome? Jim Sinclair is a serious trader in gold and commodities, and multimillionaire, with many years of international experience. Here is his view (Reg.req.) on Iraq (corrected version): One cannot compare Iraq to the war in Vietnam. For one thing, Vietnam was never a critical player in the oil market and the war was never underpinned by any particular religious fanaticism.
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