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Consequences of Iran Military Strike Will Reverberate Around The World

Panetta Warns Israel on Consequences of Iran Military Strike

By Jennifer Griffin

Defense Secretary Leon Panetta said ahead of a meeting Friday with Israeli Defense Minister Ehud Barak that he would warn his Israeli counterpart about the global economic consequences of a military strike on Iran’s nuclear program, adding that he still favors sanctions and diplomacy over a strike.

“To go beyond (sanctions and diplomacy) raises our concerns about the unintended consequences that could result. … There are going to be economic consequences to that, that could impact not just on our economy but the world economy,” Panetta told those travelling with him to Halifax, Canada.

Some Republican lawmakers are complaining the Obama administration is sending a schizophrenic message to Iran and the region. On one hand, it is projecting that the Pentagon now has 30,000-pound bunker-buster bombs capable of striking an underground WMD program and selling smaller bunker busters to Iran’s neighbors such as the United Arab Emirates.

Yet officials are warning about the dire implications of a military strike.

Joint Chiefs Chairman Gen. Martin Dempsey, however, said Friday that the military option is not off the table. “I don’t choose to talk about our discussions with our Israeli partners, but I will tell you we are on a dual- track approach, economic and diplomatic, with never taking the military option off the table. And I think that’s the right place to be,” he said, when asked what the message to Israel would be regarding a potential military strike on Iran’s nuclear program.

Republican Sen. Mark Kirk of Illinois is sponsoring legislation, which was introduced Friday, to sanction Iran’s Central Bank, but says he is frustrated that the U.S. Treasury is not pushing harder to tighten sanctions against Iran’s Central Bank.

“I’m worried that the Obama administration policy on Iran is one becoming aggressive weakness,”
Kirk said. “They are not taking any real action against the Central Bank of Iran or other parts of the nuclear program of the Islamic Republic of Iran and then telling everyone else that they shouldn’t do anything either.”

Adam Szubin, director of the Treasury’s Office of Foreign Assets Control, said at a House hearing Tuesday that the Central Bank sanctions could actually benefit Iran while hurting the U.S. and global economies by causing oil prices to spike.

“If there is a hike in the price of oil, Iran gains. If there is a spike in the price of oil … there could be profound harm to the global economic recovery and a windfall to Iran,” he said.

A Treasury source said Friday that the department is “eager” to work with Congress on new ways to pressure Iran, “but it is critically important that the steps we take do not destabilize the U.S. and global economy while potentially benefiting Iran.”

Former Defense Secretary Robert Gates said he thinks both the U.S. and Israel are torn over how to approach Iran.

“I think the Israeli government is divided in some respects like our own over the right approach to take,
” Gates said, in an exclusive interview set to air Saturday on Fox Business Network’s “Tom Sullivan Show. “The former heard of Mossad has been out saying what a terrible mistake a military strike would be. Others cite the existential threat … a nuclear-armed Iran poses for Israel. So I think there are both sides of the issue.”

Gates said he thinks “we have a little more time” to “squeeze the regime.”

Meanwhile, the White House welcomed a resolution from the U.N.’s International Atomic Energy Agency Board of Governors Friday chastising Iran for its continued alleged efforts to obtain a nuclear weapon. White House Press Secretary Jay Carney said it will increase pressure on Iran to abandon its drive for a nuclear bomb — but did not specify how it would do so.

Kirk said the White House won’t take action against Iran next year because of fears that the oil markets could be disrupted. About 40 percent of the world’s oil goes through the Strait of Hormuz next to Iran.

The administration is “afraid of any instability and oil markets, and therefore wants to take no decisive action,” Kirk said. “They’ll give some pretty good speeches against Iran, but they will not take decisive economic action. That may be because they don’t want disruption in Western economies, worried about prospects for the campaign.”


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These States Will Suffer the Most in the Event of an EU Collapse

These States Will Suffer the Most in the Event of an EU Collapse
by Becket Adams

Some analysts believe that a collapse of the EU will have a calamitous effect on the U.S. economy. But exactly how will that play out, that is, who will get hit the hardest?

Although every state would feel the effects of a possible EU collapse, as a halt of billions of dollars in exports to the EU could prove to be disastrous, analysts believe there are some states in particular that will bear the brunt of the burden.

As it turns out, Utah, South Carolina, Indiana, Alabama, Washington state, and West Virginia, all relying heavily on exported commodities, will most likely suffer the worst, according to a new study by Wells Fargo Securities.

“We don‘t think it’s enough to pull us into recession, but exports have been one of the lone bright spots in our economy,”
said Mark Vitner, senior economist at Wells Fargo Securities who co-authored the report.

In Utah, which has an economy that relies on selling gold and silver produced in nearby states, European exports comprise 46 percent of all exports and 5.6 percent of the state’s economic output, according to the Wells Fargo report, writes the Post.

Or consider the case of South Carolina, an automobile manufacturing hub, where European exports make up 4.1 percent of the economy.

West Virginia’s economy is closely tied to the coal industry. Exports to Europe make up nearly 4 percent of the state’s GDP. So as Europe’s economy sinks, so too — the argument goes — will West Virginia’s GDP, reports the Global Post

Eight of the U.S.’s top 30 trade partners, according to the Department of Commerce, are European countries. However, some remain optimistic and maintain that a lower demand for exports would not necessarily plunge the U.S. deeper into recession, since exports account for just 11 percent of the U.S. economy, according to the World Bank.

“Slow growth in Europe has already restrained U.S. economic growth,” said Vitner, according to the Huffington Post. “U.S. economic growth would have been 2.5 percent in 2012 — in contrast to Wells Fargo’s current prediction of 2.1 percent — if the European economy was growing at a healthy pace.”

Although an absence of exported goods due to a collapse of the EU could prove harmful to the U.S. (and some states in particular), just think about the economic fallout for the banks.

In the word’s of Harvard historian, and as reported earlier on The Blaze, Niall Ferguson writes:

Europe’s problem is not just that governments are overborrowed. There are an unknown number of European banks that are effectively insolvent if their holdings of government bonds are “marked to market”—in other words, valued at their current rock-bottom market prices.

Because of the existence of our present global economy, some U.S. financial institutions will naturally be affected by the euro banks collapsing.

Consider the fact that some of the biggest U.S. banks have some sort of “exposure” to euro bonds and banks. If the euro banks become “effectively insolvent,” this will affect the U.S. banks that have investments in those bonds.

To put it plainly, things are not looking good.

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Seven Reasons Why Capitalism Can’t Recover Anytime Soon

Seven Reasons Why Capitalism Can’t Recover Anytime Soon
by Shamus Cooke on July 13, 2011

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The following article originally appeared on opednews.com.

As the recession grinds on, politicians in most industrial countries have an incentive to make exaggerated claims about the supposed coming economic recovery. Some say the recession is over. Obama is in the group that claims we’re on “the road to recovery,” while other nations can only spot recovery “on the horizon.” Below are seven important social phenomena that point to a more realistic economic and political outlook.

1) Central Banks are Dumbfounded. The usual tricks that U.S. and European central banks use to avoid recessions are long-exhausted. Interest rates cannot get any lower. And because cheap money wasn’t working, the printing press was turned up a notch, into what the U.S. federal reserve calls quantitative easing — injecting hundreds of billions of dollars into the world economy, escalating an emerging trade war.

2) Trade War. For a global economy to grow, global cooperation is needed. But in a major recession all countries engage in a bitter struggle to dominate foreign markets so that their own corporations can export. These markets are won by devaluing currencies (accomplished in the U.S. by quantitative easing), installing protectionist measures (so that a nation’s corporations have monopoly dominance over the nation’s consumers), or by war (a risky but highly effective form of market domination).

3) Military War. Foreign war is a good symptom of economic decay. The domination of markets — every inch of them — become an issue of life and death importance. Wars have been unleashed in Afghanistan, Iraq, and now Pakistan. “Containing” economies like China and “opening” economies like Iran and North Korea become more urgent during a major recession, requiring brute force and creating further global instability in all realms of social life.

4) U.S. Economy at a Standstill. The most important consumer market in the world, the U.S. is a nation of nearly bankrupt consumers. Nearly thirty million Americans are unemployed or underemployed, while further job losses are certain, due to nearly every state’s budget deficit. The New York Times explains:

“Now states are bracing for more painful cuts, more layoffs, more tax increases, more battles with public employee unions, more requests to bail out cities. And in the long term, as cities and states try to keep up on their debts, the very nature of government could change as they have less money left over to pay for the services they have long provided.”
(12-05-10)

The world is dangerous. Are you prepared? Get a Safety Kit and Stay Safe Today!

5) Bailout Capitalism. First it was the banks and other corporations that needed bailing out, and now whole nations. Western nations bailed out their banks by falling into the massive debt that they are now drowning in. Greece and Ireland have been bailed out, with eyes shifting to Portugal, Spain, and Italy. The entire European Union is being called into question as the Euro takes a beating in the bailout spree. If the EU is dismantled, the shock waves will quickly reach other economies.

6) Bailout Repercussions.
All western nations — including the U.S. and England — are grappling with their national debts. Rich bond investors are demanding that these countries drastically reduce their deficits, while also demanding that the deficits be reduced on the backs of working families, instead of rich investors. This is tearing the social fabric apart, as working and poor people see their social programs under attack. In Europe mass movements are erupting in France, Spain, Portugal, England, Greece, Ireland, Italy, etc. Social stability is a prerequisite for a recovered economy, but corporate politicians everywhere are asking much more than working people are willing to give.

7) The Far Right Emerges. To deal with working people more ruthlessly, the radical right is being unleashed. In normal times these bigots yell furiously but no one listens. But in times of economic crisis they’re given endless airtime on all major media outlets. The message of the far right promotes all the rottenness not yet eradicated by education: racism, xenophobia, religious intolerance, violence, and a backward nationalism that fears all things “foreign.” These core beliefs effectively divide working people so that a concerted campaign against the corporate elite is harder to wage. Meanwhile, labor unions, progressives, and other working class organizations are instead targeted.

The above phenomena do not happen in a normal economic cycle of boom and bust. These symptoms point to a larger disease in the international economic system, a disease that cannot be cured by politicians who swear allegiance to this deteriorating system and to the wealthy elite who benefit from it. To ensure that the economic system is changed so that working people benefit, large-scale collective action is necessary, based on demands that unite the majority of working people: a massive job-creation program at the expense of Wall Street, no cuts to Social Security and Medicare, a moratorium on home foreclosures, passage of the Employee Free Choice Act, and so on. With the unions in the lead promoting these demands, working people could put up a real fight.

The world is dangerous. Get a Safety Kit Today!

( In the movement away from Obama America must be keenly aware of the dangers in moving too drastically or too far to the other side of the aisle – PECAN)

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