Tag Archives: Israel

On Thanksgiving, a glimmer of hope for Peace in the Middle East

11/21/2012 Portland, Oregon – Pop in your mints…

Today, the rockets around grounded in the Holy Land.  For how long, is anybody’s guess.  It appears, as most negotiations are, to be a mixed outcome, as both Egypt and the US are involved in the role of policing the agreement.

The current cease fire, which has, for the moment, halted aggressions between Hamas and Israel, appears to call for the Egyptian government to guarantee the conditions are being met with big brother, the United States, monitoring the situation.

If indeed the rockets, in particular the longer range Fajr-5s, remain neutralized, Israel will have gained a key objective.  However, according to Stratfor, it appears that, for the moment, only Hamas and Israel have assented to the cease fire.  The Palestinian Jihad remains a variable, and how long the cease fire will last likely hinges upon their willingness to observe it, as any projectile launched into Israel from Gaza will likely trigger the imminent Israeli ground invasion.

It is difficult to tell if Israel is strategically better off assenting to what is being reported as a tentative cease fire.  While humankind benefits, this will slow progress towards what we perceive to be the Israeli’s ultimate goal with this operation, the disabling of Iran’s nuclear program.

On the other hand, Israel now has the US firmly engaged, raising the odds that US assets will be called into the region.  In a sense, they have been hovering there for the past 11 years.

The United States has a gigantic problem of its own, namely, a Fiscal train wreck which is nearing impact with an ETA of January 1.  The train wreck has already done a great deal of damage, as assumptions across the board are being reset in anticipation of Washington punting or worse, bungling the situation.

Unfortunately, it is the type of problem that the Keynesians who dominate economic thought at the highest levels have openly advocated war, the ultimate economic stimulus in a self destructive, insane, “debt is money” system, as a remedy.

As the winds of war continue to swirl about the Middle East, let us be thankful for the gesture made by Hamas and Israel, and pray that it will bear the fruit of an everlasting peace in the region.  For in the deepest despair lies the potential for the greatest hope, and consequently the greatest good.

At this hour there have been few specifics as to what the terms of the cease fire are, but the mere fact that the hostilities have ceased comes as a great relief and gives those of us celebrating Thanksgiving, the wonderful, unique, and perhaps purest holiday celebration that we know of, an extra reason to celebrate tomorrow.

We continue to pray for the peace of Jerusalem and beyond, for peace is merely a matter of erasing borders and choosing to forgive.

For a lasting peace to prevail, the deadly “Might Makes Right” mentality must be renounced in favor of IMMEDIATE FORGIVENESS, and it is up to each one of us to choose to forgive and be forgiven.  Only then, when there is peace in our hearts, will the world know peace.

Happy Thanksgiving, may you and yours dine on forgiveness and drink in grace this Holiday Season.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 21, 2012

Copper Price per Lb: $3.47
Oil Price per Barrel:  $87.65
Corn Price per Bushel:  $7.41
10 Yr US Treasury Bond:  1.69%
FED Target Rate:  0.16%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,729 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  12,837
M1 Monetary Base:  $2,458,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,333,800,000,000

Middle East Conflict Analysis: Will Hillary Clinton’s visit to Middle East will result in US engagement?

11/20/2012 Portland, Oregon – Pop in your mints…

Here at The Mint, we have been following with great interest the recent escalation in the conflict in the Middle East.  It is understood by many that the grievances between the Israelis and the Palestinians are seemingly irreconcilable.  Today, we will attempt to provide a bit of background, along with details we have gathered from various sources regarding the current dynamic, and engage in speculation as to potential outcomes.

Background

While the divisions in the region have deep historical roots, we have attempted to gain what understanding we can of the modern conflict.  Our reading on the matter has been limited to The Bible, The Haj, and The Source, as such, we recognize that our bias is Pro-Israeli.

From these sources, we have cobbled together the following understanding:  Beginning in the early 1900’s as Jewish settlers began to populate Palestine in an attempt to create a homeland where the Jewish people, who had suffered persecution in every other land on the planet, could relocate to escape said persecution.

The logical place to do this, from the Jewish point of view, was to purchase land in the area where the ancient Kingdom of Israel had been.  The Jews then worked to establish settlements and to encourage Jewish pilgrims and refugees to come home.  In 1947, after the ethnic cleansing that the Jews suffered during World War II, the Jewish settlers appealed to the United Nations for statehood and recognition by the International Community.

On November 29, 1947, with the UN divided on the matter (which required a 2/3 majority vote for passage), the Philippines relented to pressure from the United States and cast the deciding vote in favor, and Israel for all practical purposes was recognized by the UN.

{Editor’s Note:  We present the UN vote as an EPIC FAIL of large scale “democracy by proxy,” and again make the case for small scale democratic systems left to operate in a large scale anarchic environment, which would allow peace to prosper as the small scale systems tacitly work towards the stalemates presented in “The Strategy of Conflict“, which is a discussion for another day.}

On May 15, 1948, when the British Mandate in Palestine officially expired, the predominantly Arab countries surrounding Israel attacked her and were repelled.  It could be said that hostilities in the region have continued on and off ever since.  Naturally, the Arab States refuse to recognize Israel’s existence to this day, and the situation in Palestine may be the most marked example of how the simple drawing of border lines has caused ceaseless bloodshed and heartache for those involved, with the ultimate losers being the inhabitants of what is today understood to be Palestine, those lands in Palestine which are not part of the Jewish state.  These refugees were evacuated from their lands by the Arab states with the promise of inhabiting all of Palestine once the Jewish state was eliminated, and are now held hostage, in a sense, by both the Arab states and Israel.

We now fast forward from what undoubtedly is a biased History lesson to the present situation and, again more importantly, what is likely to occur.

The Present Dynamic

In the most recent escalation in hostilities, which began on November 15, 2012, both Hamas and Israel have continued their mutual assaults despite rumors that a cease fire is being negotiated by Egypt.  To summarize recent events, a number of short and medium range rockets, amongst them the Fajr-5, which has now been used to target both Tel Aviv and Jerusalem, have been launched from the Gaza strip at Israeli population centers.

In response, Israel has called up reserves and is preparing a force of roughly 100,000 for a ground assault into Gaza, with the goal of neutralizing the longer range threat that the Fajr-5 presents.

Even casual observers will note that 100,000 troops is quite a bit of manpower, in fact, it exceeds the number of troops that the US currently has deployed in Afghanistan.  Why would Israel, which should hold a clear technical advantage over its adversaries (leading many observers to sympathize with the Palestinians, a phenomenon known as “Underdogma” made famous by Michael Prell), call up so much firepower to deal with Gaza?  One response is the prospect of prolonged urban warfare in Gaza City, where a portion of the Hamas rocket cache may be located.

Speculation on possible outcomes

However, given the timing of the Israeli response, just weeks after the US Presidential elections, it is just as likely that Israel is using the current conflict as a launch pad towards a unilateral operation to destroy Iran’s nuclear program and eliminate what Israel sees as its most urgent existential threat.

Benjamin Netanyahu, the Israeli Prime Minister, more than alluded to this in his September speech at the United Nations as he all but called for an invasion of Iran.  With the re election of the Obama administration in the US, historically Israel’s closest ally, Netanyahu understands that the US is likely to stay on the sidelines in the near future and is taking the Iranian matter into his own hands.

Nadeem Walayat, the clairvoyant analyst at The Market Oracle, speculates that the ground campaign in Gaza is the first phase of a three phase operation.  In order to attack Iran with minimal civilian casualties, Israel must first remove the threat of short and medium range rocket attacks by Iranian proxies on its population centers as such attacks would immediately begin were Israel to immediately attack Iran.

According to Walayat, Israel would attack Gaza and then Hezbollah in Lebanon, hoping to seal up these theaters of conflict before launching what by any account would be a risky assault on Iran.  Either Iran is desperately close to developing a nuclear weapon, or Netanyahu is desperately seeking reelection.  Whatever the motive, it should be clear that Israel is intent on dismantling Iran’s nuclear capabilities and that they view the present circumstances in the region give them the best opportunity for success, meaning neutralizing Iran’s nuclear program with limited fallout in the region or beyond.

Another part of the regional dynamic which is may greatly aid or hurt the Israeli strategy, depending upon how it plays out, is the conflict in Syria.  The protracted conflict in Syria has caused Hezbollah to conserve rockets and other armaments which they would otherwise train on Israel in anticipation of a possible civil war breaking out in Lebanon.  The recent international recognition of the Syrian opposition has only increased this threat.

At this point, Hezbollah could just as easily be drawn into deeply into a conflict in Lebanon as it could be in Israel.  The current state of events in Syria favors the Israeli plan, if indeed Mr. Walayat is correct.  However, should Israel be drawn into a protracted operation in Gaza, Hezbollah could choose to strike the Israelis first and open up a second front, which would begin to stretch Israel’s armed forces and slow their strategy which, in order to be successful, must be carried out in a matter of months.

Another wildcard in a situation that is full of them is that the recent spillover from Syria into Turkey has the potential to draw German troops and NATO assets into the theater.

Against this backdrop, Washington DC is panicking (as a result of having no strategy in the Middle East) and has dispatched Secretary of State Hillary Clinton to bring the big brother (or sister, as it were) element into the mix.

Clinton, along with Egyptian officials, will attempt to broker a ceasefire between Israel, Hamas, and the Palestinian Islamic Jihad, which, according to Stratfor, is in control of at least some of the Fajr-5 rocket cache in Gaza.

The most recent report from Stratfor on the matter indicates that the Palestinian Islamic Jihad and Hamas will negotiate together.  The key demand of Israel is the grounding and confiscation of rockets in Gaza to neutralize the threat.  If this can be achieved via a Cease fire, which would likely mean Israeli or even US involvement overseeing the removal of the weapons and preventing further rockets from entering Gaza, Israel will have achieved its objective and a ground assault into Gaza would be unnecessary.

If this is the outcome, expect Israel to concentrate both diplomatic and military efforts on the Iranian threat and ignore Hezbollah, as they will perceive that the US has their back, both literally and figuratively.

If, on the other hand, the Egyptians insist on assuming the role of policing the rocket removal and preventing shipments, a condition that Israel is unlikely to agree to, we anticipate that Israel will proceed with their ground assault into Gaza.

Here at The Mint, half the world away, we hope for the best.  Perhaps the militants in Gaza will throw their rockets into the sea, and both Iran and Israel dismantle their respective nuclear programs.  Seeing this example, all of humanity will immediately lay down their weapons, dismantle their nukes, and sing kumbaya.  Anything is possible if those involved engage in IMMEDIATE FORGIVENESS and begin to live by the Golden Rule.

As this seems unlikely, we must all prepare for the worst, a middle east conflict launched in the name of self defense, which draws all of the world’s powers once again into armed conflict.

In the words of Jesse Ventura, “Nobody likes to see that…nobody.”

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 20, 2012

Copper Price per Lb: $3.49
Oil Price per Barrel:  $87.11
Corn Price per Bushel:  $7.43
10 Yr US Treasury Bond:  1.66%
FED Target Rate:  0.16%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,728 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  12,789
M1 Monetary Base:  $2,458,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,333,800,000,000

Escalation of Hostilities in Gaza as Israel prepares a ground campaign

11/15/2012 Portland, Oregon – Pop in your mints…

While politicians and bureaucrats in the US continue to posture and dig up dirt on one another in an attempt to place the blame on the “other guys” as the US goes off the Fiscal Cliff, something entirely more important is unfolding half a world away.

What happens in the Middle East is important for a variety of reasons, and it is important to pray for the peace of Jerusalem, not only for Jerusalem’s sake, but so that there will also be peace in our hearts.  We must leave pondering this truth for another time as we endeavor to bring you the latest on the events developing in the Holy Land, namely the recent escalation of hostilities between Hamas and Israel.

As always, Stratfor is on the case, providing on the ground intelligence and analysis to help the layman understand what is occurring, why it is important, and most importantly, what is likely to occur as a result.  Without further adieu, we turn to “Considering an Israeli Ground Assault in Gaza,” an insightful report, republished here with permission of Stratfor:

Considering an Israeli Ground Assault in Gaza

The Israeli air force continues to bombard targets within the Gaza Strip, but thus far ground forces have not yet begun an incursion into the territory. Whether the current air campaign escalates to a ground assault will largely depend on the mission that the Israeli military is trying to accomplish.

Israeli soldiers on the Israel-Gaza border on Nov. 15
Jack Guez/AFP/Getty Images

Israel Defense Forces’ official statements have emphasized that the goal is the severe degradation of Gaza militants’ ability to launch rocket strikes, particularly the new Fajr-5 rockets that are purportedly capable of striking Tel Aviv. Halting rocket attacks was also the mission during Operation Cast Lead, Israel’s most recent large-scale military operation involving Gaza, which took place in late 2008 and early 2009 and consisted of an air campaign similar to the current one followed by a ground invasion. Examining how Operation Cast Lead developed could provide useful context for how an Israeli ground invasion of Gaza could unfold.

Analysis

Operation Cast Lead can be separated into two distinct phases: air and ground. The air phase lasted for about one week and targeted suspected rocket smuggling routes, storage locations and firing positions, as well as targets of opportunity that emerged as hostilities progressed. This is very similar to what the IDF is doing currently, primarily with air assets but also assisted by naval and land assets capable of attacking from a distance.

The second phase was the ground attack. This phase consisted primarily of two distinct geographic theaters within Gaza. In the southern theater, Israeli units moved in and set up blocking positions near Rafah and Highway 4 in order to cut Hamas’ logistical supply lines running north toward Gaza City. Air and naval strikes were also used to enforce the border between Gaza and Egypt, where a strategically significant road known as the Philadelphi route is located. In the north, Israeli forces penetrated into the Gaza Strip to the north, northeast and slightly southeast of Gaza City itself. This served to isolate Gaza City and clear out initial rocket firing positions as well as defensive positions located in the immediate rural regions. After this initial move, follow-on forces were brought in to thoroughly search and clear identified enemy rocket launching sites, logistical hubs and command and control structures. Notably, Israeli forces did not venture deep into major population centers such as Gaza City and Rafah City to avoid the potentially higher casualties and more serious infrastructural damage associated with urban combat.

Gaza

A ground operation now would likely look very similar to Cast Lead in design and tactics, since Cast Lead was considered an operational success and its mission was similar to the current one. However, there are two notable differences. First, in the southern theater during Cast Lead, Egyptian security forces worked to secure the Rafah crossing from their end and allowed Israeli forces to engage the Philadelphi route. Egypt now has a very different government, which brings into question its willingness to support a ground operation. Cairo has already announced that the Rafah Crossing will remain open. This creates an even more serious imperative for Israeli units to cut the supply lines in the south of the Gaza Strip to Gaza City. Israeli ground forces may need to physically occupy the Egypt-Gaza border because naval strikes and airstrikes may not accomplish the mission. This would be a slight expansion on the action taken in 2008-2009 and could bring Israeli forces into uncomfortably close contact with Egyptian forces.

Second, in the north, the potential range of the Fajr-5 missile expands the potential firing zone that needs to be cleared. As stated earlier, Cast Lead focused on Gaza City and its surrounding areas in clearing operations. In order to degrade militants’ abilities to reach Tel Aviv with the Fajr-5’s expanded range, the IDF will need to clear all potential firing areas to just south of Nusayrat. In theory, this would require the isolation of a larger area and the potential use of more forces or require more time to accomplish.

Visit our Israel page for related analysis, videos, situation reports and maps.

Tactically, IDF troops entered the Gaza Strip during Cast Lead by operating at night and creating their own crossing points as opposed to using previously established points. They also relied heavily upon combat engineers, armored construction equipment including unmanned D9 bulldozers, and dog teams to establish their own avenues of approach instead of using common routes through Gaza. Ground units also worked in heavy conjunction with air assets for reconnaissance and close air support, and had access to comprehensive artillery support. This allowed them to avoid improvised explosive devices, heavily mined primary access routes, ambushes and counterattacks militants had planned near the assumed IDF approaches.

In a likely ground incursion, we can expect IDF to use similar tactics that have been refined even further over the past four years, but we must assume that militants in Gaza will not make the same mistakes twice and will use different tactics in order to inflict more damage on ground forces. Already in this round of fighting, unconfirmed reports have emerged saying that militants are using MANPADS. If these rumors are true, it could force a more limited role for rotary-wing air support as well as anti-tank guided missiles and thus seriously hamper the firepower, cover and protection provided by armor.

Many of the conditions, geographic settings and stated goals of the current mission are similar to Operation Cast Lead, so one can assume that the potential upcoming ground phase would be similar as well. That being said, some differences have emerged that would likely force an expanded role for ground forces, and the mission stays the same only until the first exchanges of fire happen, as militants and other political actors would also be able to influence how events unfold. With the evolution of the battle, a ground operation is becoming increasingly likely and with the transition to the ground phase of operations casualties, tensions, and political ramifications will only intensify.

It is worth reiterating that Egypt has a completely different government than the one which was friendly to the Israeli cause during their 2008-2009 operations.  Iran’s further isolation also make it likely to engage on some level against Israel if and when the ground offensive begins.

Again, pray for the peace of Jerusalem, Gaza, and all of Palestine, for hostilities there can throw the entire world out of balance.  If you need proof, just watch the Western stock markets react as events unfold.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 15, 2012

Copper Price per Lb: $3.46
Oil Price per Barrel:  $84.50
Corn Price per Bushel:  $7.21
10 Yr US Treasury Bond:  1.59%
FED Target Rate:  0.16%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,716 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  12,542
M1 Monetary Base:  $2,458,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,333,800,000,000

War and Bluff: Iran, Israel and the United States

As always, George Friedman, author of Strafor’s indispensable publication Geopolitical Weekly, provides clarity into what on the surface is a situation on the verge of erupting.  A situation that, if poorly handled, has the potential to unleash chaos throughout the world.

In a world where Might makes right, striking a delicate balance between one’s rhetoric and actions is the statesman’s most important task.  A task that would be rendered useless were we all to chose the better way.

Nonetheless, Friedman helps us to cut through the rhetoric to recognize both the motivations of and limitations on each of the actors in what has become a game of brinksmanship of epic proportions, and the stakes have never been higher.

We encourage you to review the full report which is reproduced below with the permission of Stratfor:

War and Bluff: Iran, Israel and the United States

Flag of IsraelFlag of the United States of America

Flag of IranBy George Friedman

For the past several months, the Israelis have been threatening to attack Iranian nuclear sites as the United States has pursued a complex policy of avoiding complete opposition to such strikes while making clear it doesn’t feel such strikes are necessary. At the same time, the United States has carried out maneuvers meant to demonstrate its ability to prevent the Iranian counter to an attack — namely blocking the Strait of Hormuz. While these maneuvers were under way, U.S. Secretary of State Hillary Clinton said no “redline” exists that once crossed by Iran would compel an attack on Iran’s nuclear facilities. The Israeli government has long contended that Tehran eventually will reach the point where it will be too costly for outsiders to stop the Iranian nuclear program.

The Israeli and American positions are intimately connected, but the precise nature of the connection is less clear. Israel publicly casts itself as eager to strike Iran but restrained by the United States, though unable to guarantee it will respect American wishes if Israel sees an existential threat emanating from Iran. The United States publicly decries Iran as a threat to Israel and to other countries in the region, particularly Saudi Arabia, but expresses reservations about military action out of fears that Iran would respond to a strike by destabilizing the region and because it does not believe the Iranian nuclear program is as advanced as the Israelis say it is.

The Israelis and the Americans publicly hold the same view of Iran. But their public views on how to proceed diverge. The Israelis have less tolerance for risk than the Americans, who have less tolerance for the global consequences of an attack. Their disagreement on the issue pivots around the status of the Iranian nuclear program. All of this lies on the surface; let us now examine the deeper structure of the issue.

Behind the Rhetoric

From the Iranian point of view, a nuclear program has been extremely valuable. Having one has brought Iran prestige in the Islamic world and has given it a level of useful global political credibility. As with North Korea, having a nuclear program has allowed Iran to sit as an equal with the five permanent members of the U.N. Security Council plus Germany, creating a psychological atmosphere in which Iran’s willingness merely to talk to the Americans, British, French, Russians, Chinese and Germans represented a concession. Though it has positioned the Iranians extremely well politically, the nuclear program also has triggered sanctions that have caused Iran substantial pain. But Iran has prepared for sanctions for years, building a range of corporate, banking and security mechanisms to evade their most devastating impact. Having countries like Russia and China unwilling to see Iran crushed has helped. Iran can survive sanctions.

Visit our Iran page for related analysis, videos, situation reports and maps.

While a nuclear program has given Iran political leverage, actually acquiring nuclear weapons would increase the risk of military action against Iran. A failed military action would benefit Iran, proving its power. By contrast, a successful attack that dramatically delayed or destroyed Iran’s nuclear capability would be a serious reversal. The Stuxnet episode, assuming it was an Israeli or U.S. attempt to undermine Iran’s program using cyberwarfare, is instructive in this regard. Although the United States hailed Stuxnet as a major success, it hardly stopped the Iranian program, if the Israelis are to be believed. In that sense, it was a failure.

Using nuclear weapons against Israel would be catastrophic to Iran. The principle of mutual assured destruction, which stabilized the U.S.-Soviet balance in the Cold War, would govern Iran’s use of nuclear weapons. If Iran struck Israel, the damage would be massive, forcing the Iranians to assume that the Israelis and their allies (specifically, the United States) would launch a massive counterattack on Iran, annihilating large parts of Iran’s population.

It is here that we get to the heart of the issue. While from a rational perspective the Iranians would be fools to launch such an attack, the Israeli position is that the Iranians are not rational actors and that their religious fanaticism makes any attempt to predict their actions pointless. Thus, the Iranians might well accept the annihilation of their country in order to destroy Israel in a sort of megasuicide bombing. The Israelis point to the Iranians’ rhetoric as evidence of their fanaticism. Yet, as we know, political rhetoric is not always politically predictive. In addition, rhetoric aside, Iran has pursued a cautious foreign policy, pursuing its ends with covert rather than overt means. It has rarely taken reckless action, engaging instead in reckless rhetoric.

If the Israelis believe the Iranians are not deterred by the prospect of mutually assured destruction, then allowing them to develop nuclear weapons would be irrational. If they do see the Iranians as rational actors, then shaping the psychological environment in which Iran acquires nuclear weapons is a critical element of mutually assured destruction. Herein lies the root of the great Israeli debate that pits the Netanyahu government, which appears to regard Iran as irrational, against significant segments of the Israeli military and intelligence communities, which regard Iran as rational.

Avoiding Attaining a Weapon

Assuming the Iranians are rational actors, their optimal strategy lies not in acquiring nuclear weapons and certainly not in using them, but instead in having a credible weapons development program that permits them to be seen as significant international actors. Developing weapons without ever producing them gives Iran international political significance, albeit at the cost of sanctions of debatable impact. At the same time, it does not force anyone to act against them, thereby permitting outsiders to avoid incurring the uncertainties and risks of such action.

Up to this point, the Iranians have not even fielded a device for testing, let alone a deliverable weapon. For all their activity, either their technical limitations or a political decision has kept them from actually crossing the obvious redlines and left Israel trying to define some developmental redline.

Iran’s approach has created a slowly unfolding crisis, reinforced by Israel’s slowly rolling response. For its part, all of Israel’s rhetoric — and periodic threats of imminent attack — has been going on for several years, but the Israelis have done little beyond some covert and cyberattacks to block the Iranian nuclear program. Just as the gap between Iranian rhetoric and action has been telling, so, too, has the gap between Israeli rhetoric and reality. Both want to appear more fearsome than either is actually willing to act.

The Iranian strategy has been to maintain ambiguity on the status of its program, while making it appear that the program is capable of sudden success — without ever achieving that success. The Israeli strategy has been to appear constantly on the verge of attack without ever attacking and to use the United States as its reason for withholding attacks, along with the studied ambiguity of the Iranian program. The United States, for its part, has been content playing the role of holding Israel back from an attack that Israel doesn’t seem to want to launch. The United States sees the crumbling of Iran’s position in Syria as a major Iranian reversal and is content to see this play out alongside sanctions.

Underlying Israel’s hesitancy about whether it will attack has been the question of whether it can pull off an attack. This is not a political question, but a military and technical one. Iran, after all, has been preparing for an attack on its nuclear facilities since their inception. Some scoff at Iranian preparations for attack. These are the same people who are most alarmed by supposed Iranian acumen in developing nuclear weapons. If a country can develop nuclear weapons, there is no reason it can’t develop hardened and dispersed sites and create enough ambiguity to deprive Israeli and U.S. intelligence of confidence in their ability to determine what is where. I am reminded of the raid on Son Tay during the Vietnam War. The United States mounted an effort to rescue U.S. prisoners of war in North Vietnam only to discover that its intelligence on where the POWs were located was completely wrong. Any politician deciding whether to attack Iran would have Son Tay and a hundred other intelligence failures chasing around their brains, especially since a failed attack on Iran would be far worse than no attack.

Dispersed sites reduce Israel’s ability to strike hard at a target and to acquire a battle damage assessment that would tell Israel three things: first, whether the target had been destroyed when it was buried under rock and concrete; second, whether the target contained what Israel thought it contained; and third, whether the strike had missed a backup site that replicated the one it destroyed. Assuming the Israelis figured out that another attack was needed, could their air force mount a second air campaign lasting days or weeks? They have a small air force and the distances involved are great.

Meanwhile, deploying special operations forces to so many targets so close to Tehran and so far from Iran’s borders would be risky, to say the least. Some sort of exotic attack, for example one using nuclear weapons to generate electromagnetic pulses to paralyze the region, is conceivable — but given the size of the Tel Aviv-Jerusalem-Haifa triangle, it is hard to imagine Israel wanting to set such a precedent. If the Israelis have managed to develop a new weapons technology unknown to anyone, all conventional analyses are off. But if the Israelis had an ultrasecret miracle weapon, postponing its use might compromise its secrecy. I suspect that if they had such a weapon, they would have used it by now.

The battlefield challenges posed by the Iranians are daunting, and a strike becomes even less appealing considering that the Iranians have not yet detonated a device and are far from a weapon. The Americans emphasize these points, but they are happy to use the Israeli threats to build pressure on the Iranians. The United States wants to undermine Iranian credibility in the region by making Iran seem vulnerable. The twin forces of Israeli rhetoric and sanctions help make Iran look embattled. The reversal in Syria enhances this sense. Naval maneuvers in the Strait of Hormuz add to the sense that the United States is prepared to neutralize Iranian counters to an Israeli airstrike, making the threat Israel poses and the weakness of Iran appear larger.

When we step back and view the picture as a whole, we see Iran using its nuclear program for political reasons but being meticulous not to make itself appear unambiguously close to success. We see the Israelis talking as if they were threatened but acting as if they were in no rush to address the supposed threat. And we see the Americans acting as if they are restraining Israel, paradoxically appearing to be Iran’s protector even though they are using the Israeli threat to increase Iranian insecurity. For their part, the Russians initially supported Iran in a bid to bog down the United States in another Middle East crisis. But given Iran’s reversal in Syria, the Russians are clearly reconsidering their Middle East strategy and even whether they actually have a strategy in the first place. Meanwhile, the Chinese want to continue buying Iranian oil unnoticed.

It is the U.S.-Israeli byplay that is most fascinating. On the surface, Israel is driving U.S. policy. On closer examination, the reverse is true. Israel has bluffed an attack for years and never acted. Perhaps now it will act, but the risks of failure are substantial. If Israel really wants to act, this is not obvious. Speeches by politicians do not constitute clear guidelines. If the Israelis want to get the United States to participate in the attack, rhetoric won’t work. Washington wants to proceed by increasing pressure to isolate Iran. Simply getting rid of a nuclear program not clearly intended to produce a device is not U.S. policy. Containing Iran without being drawn into a war is. To this end, Israeli rhetoric is useful.

Rather than seeing Netanyahu as trying to force the United States into an attack, it is more useful to see Netanyahu’s rhetoric as valuable to U.S. strategy. Israel and the United States remain geopolitically aligned. Israel’s bellicosity is not meant to signal an imminent attack, but to support the U.S. agenda of isolating and maintaining pressure on Iran. That would indicate more speeches from Netanyahu and greater fear of war. But speeches and emotions aside, intensifying psychological pressure on Iran is more likely than war.

War and Bluff: Iran, Israel and the United States is republished with permission of Stratfor.

Watch “Prime Minister of Israel Binyamin Netanyahu at AIPAC 2012” on YouTube

A decent speech from Mr. Netanyahu at the AIPAC 2012, and unfortunately there is much prophecy that would be fulfilled were Israel to strike Iran, or vice versa.  It is a difficult situation, and Mr. Netanyahu may be admired for not skirting around the issue, as the Western nations have done until now, for it is gravely serious.

Yet for all of his wonderful discourse, the most moving of which starts at minute 22:30 of the below video, Mr Netanyahu, like most of us, misses the point. 

Jesus came so that the world would be forgiven, and to overcome death and live abundantly.  Resorting to the “Might Makes Right,” “Strike them before they strike us mentality,” to which Mr. Netanyahu appeals in this address, is what leads all nations to espouse war and violence as a response to their fragile surroundings.  Followed to its logical end, mankind would exterminate itself in a very short period of time. 

While a preemptive strike against a country which is going to annihate your nation may seem like the best response, or the least amongst evils, what is even more necessary is a need for understanding and ultimately the abandonment of the nation state, especially the religious nation state, so that people can deal with each other without the unnecessary prejudices which the mask of the nation state paints on its adversaries. 

With that in mind, enjoy the speech and, as you ponder its obvious consequences, pray for the peace of Jerusalem, Tehran, and your own city.

A run on BNP, Europe’s Financial Collapse begins in earnest

9/22/2011 Portland, Oregon – Pop in your mints…

While it was a rough day for equity markets everywhere, in light of what is occurring, they (the markets) were amazingly resilient.  A testimony to how fast the monetary spigots at the Central Banks are running.

There are two events that appear to be on a collision course with destiny today (No, neither of them is the NASA space junk hurtling towards the earth).  It feels as if the world is reaching a sort of inflection point in modern history.  Perhaps a great awakening is about to occur.  Will people’s faith in Central Banking finally be broken?

The colliding events are the Palestinian bid for official recognition by the United Nations, scheduled for tomorrow, and the emerging institutional bank run on BNP Paribas.

The Palestinian situation needs no further discussion.  It is clear to most that it is an explosive topic to which the bid for recognition threatens to detonate, much in the way the Israeli Declaration of Independence ignited war in Palestine in 1948.

The Institutional run on BNP Paribas is an event that is occurring as we write and it is unclear how it will play out.  Reggie Middleton at the BoomBustBlog, is chronicling this event in real time.  If you are interested, we highly recommend following the event there.

Real Money Fleeing the Continent!

We have read reports of Lloyds of London, the famous Insurance Marketplace, pulling a great deal of its deposits out of banks on the continent.  We have also read reports of Siemens pulling deposits and parking them directly at the ECB.

Then there was the report of the ECB making an emergency loan of $500 million US Dollars to an unidentified bank (read BNP) with similar loans to other institutions in the cue.  It is clear that the banking crisis in France is dwarfing the ability for the French government to deal with it.

There is no use pointing out the many lessons that society will learn from this, for only one is expedient at the moment.  That lesson is that digital bits on a computer screen or numbers on a bank statement are worthless if the counterparty cannot make good on their commitments.

The run on BNP will intensify the focus on Western Central Banks, which have balance sheets that make BNP, BAC, and all of the other large sinking banks look good by comparison.  This is important because a good part of the world is to some extent a counterparty to the Central Banks.

Need proof?  Open your wallet.  If you have US Dollars or Euros, you are a counterparty to (owed money by) the Federal Reserve or the ECB, whose management is currently buying every worthless paper asset on the planet with leverage that is unimaginable for mere mortals.

Dollar and Euros are about to become extremely hot potatoes, which makes trading them for potatoes, spuds, or anything real, a real good idea.

Let us pray for the peace of Jerusalem, and that tomorrow passes uneventfully on all fronts.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for September 22, 2011

Copper Price per Lb: $3.45
Oil Price per Barrel:  $80.41

Corn Price per Bushel:  $6.50  
10 Yr US Treasury Bond:  1.72%

FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,736 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.4%!!!   UP UP UP!!!
Dow Jones Industrial Average:  10,734  

M1 Monetary Base:  $2,010,000,000,000 RED ALERT!!!
M2 Monetary Base:  $9,541,800,000,000 YIKES!!!!!!!

Bernanke fires up the Helicopters and Precious Metals Blast off!

7/13/2011 Portland, Oregon – Pop in your mints…

Today Bernanke went before the US Congress and gently laid down the gauntlet.  If Congress fails to raise the debt ceiling soon (by August 2nd, we are told), it could have catastrophic effects on the economy

Given that nearly the entire banking system on the planet depends upon the US Treasury being Grade A debt, Mr. Bernanke may again be credited with the understatement of the year!

We pity Mr. Bernanke.  He is like a pilot flying an Airbus aircraft that is stalling at extremely high altitute.  We don’t know much about aircraft but we understand that Airbus aircraft, with their European design slant, do not give a pilot much freedom to override the plane’s automated systems.  It assumes that all of the necessary corrective actions can be pre-programmed and, if the plane begins to stall, the computers take over to attempt to correct the problem.

Actual Airbus pilots are free to dispute the merits of our oversimplification.  We just needed a metaphor.

Back to Bernanke, with the autopilot mechanism failing, the pilot does not know what to do.  If the US Congress had dutifully raised the debt ceiling as it had 94 times in the past, as the Airbus autopilot manual said it would, Bernanke’s reaction to the most recent US jobs report would have been to simply propose a third round of quantitative easing (read: money printing or counterfeiting of currency).

On the Airbus, he would get on the intercom and say “please fasten your seatbelts until we pass through this patch of rough air.”

However, the failure of the US Congress to reach a deal to raise the debt ceiling has thrown a wrench in his plans.  What is his plan now?  Think helicopters, Zimbabwe, Gideon Gono.

Mr. Bernanke is going on a safari!

Yes, fellow taxpayer, with each day that passes, it is becoming clearer to the majority that Mr. Bernanke is unwittingly following in the footsteps of none other than Gideon Gono.  Some may recall that Mr. Gono, the Governor of the Reserve Bank of Zimbabwe, was forced to “do extraordinary things that aren’t in the textbooks,” meaning that he oversaw the printing of large amounts of his country’s currency which produced an amazing modern example of hyperinflation.  

In an interview with Newsweek in early 2009, Gono offered an explanation for his actions and predicted that the US would do the same, as it has:

“I’ve been condemned by traditional economists who said that printing money is responsible for inflation. Out of the necessity to exist, to ensure my people survive, I had to find myself printing money. I found myself doing extraordinary things that aren’t in the textbooks. Then the IMF asked the U.S. to please print money. I began to see the whole world now in a mode of practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.”

The hyperinflation in Zimbabwe led to shortages of real goods and destroyed the economy.  Why would Mr. Bernanke’s experiment end any differently?

Meanwhile, over in the Eurozone, the Airbus is in rapid descent and everybody on the plane is offering ideas as to what went wrong and how to fix it.  Its auto-pilot has not been programmed to deal with the failures the plane is experiencing and as the pilots and passengers engage in a heated debate, none are able to grab the controls much less safely land the aircraft.

 it will not be long before impact and the smarter passengers are starting to grab for the parachutes made of Gold and Silver.  Gold closed up almost 1% to a record of $1,583 and Silver gained nearly 6% on the day.

Back in the US, whether or not Congress passes legislation to raise the debt ceiling is irrelevant.  The US Treasury will borrow and the FED will print even without Congressional approval.  That is what makes modern Government fun, if you don’t like a rule, just ignore it and claim that you were exercising “Leadership.”

All of the countries in the Eurozone will soon surrender their sovereignty to Germany and the IMF in exchange for the “privilege” of using Euro as currency.  The ideological divide that is being exposed in the US may eventually lead to civil war.

But these events may be small compared to what is occurring in the Middle East.  Iran opened its own international Crude Oil exchange today which is akin to declaring war on the western governments and banking interests.

And keep your eyes on Palestine.  The UN vote on Palestinian statehood in September is eerily similar to the vote 62 years ago when the UN accepted Israel as an independent state.  Our guess is that this vote will spark events there that will capture the attention of the whole world.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

P.S. 

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Key Indicators for July 13, 2011

Copper Price per Lb: $4.35
Oil Price per Barrel:  $97.83

Corn Price per Bushel:  $7.26  
10 Yr US Treasury Bond:  2.89%
FED Target Rate:  0.07%  JAPAN HERE WE COME!

Gold Price Per Ounce:  $1,582 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.2%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,492  TO THE MOON!!!
M1 Monetary Base:  $2,020,000,000,000 RED ALERT!!!
M2 Monetary Base:  $9,112,300,000,000 YIKES!!!!!!!

*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.