Staff

Debt Drags the Dragon

W R Collier Jr July 23, 2014

BUSINESS NEWS- WORLD

China’s Debt Reaches 250% of GDP

William R Collier Jr. – For the past five years, we have been writing about China as a paper tiger with inflated numbers, and now analysis has revealed that China’s much-vaunted “economic miracle” is nothing more than the result of debt spending on a massive scale.

Stephen Green at Standard Chartered has calculated that China’s actual debt is now 250% of its Gross Domestic Product (GDP). But in 2009, China’s debt was only around 70% of its GDP, making this meteoric rise alarming. This debt includes both public and private debt. However, in China, the government controls much of the corporate world and financial institutions.

With a reported GDP of $9.6 trillion, China’s total debt should equal around $24 trillion. The US, by comparison, has a GDP of around $16.24 trillion, with a total debt burden of $42.2 trillion. Total public debt stands at $17.1 trillion.

While total government debt may be 53% of GDP, a major portion of the corporate and financial sector debt is directly driven by the government which operate a communist “management” policy that, at best, mixes free market policies with their overall Party agenda.

In the United States, government and private debt equal 260% of the GDP, with federal government debt right at 105% of GDP and private debt at 155% of GDP, but much of this private debt is independent of government obligation.

US Debt has also risen. At the end of 2008, just before President Obama was sworn into office, US public debt stood at around $10 trillion with a GDP at around $14.5 trillion. At the end of 2013, US public debt stood at $16.7 trillion compared to a GDP of $16.9 trillion. It is projected that 2014’s GDP will stay at around $16.9 trillion, while public debt has gone over $17.6 trillion. Household debt in the US, money owed by individuals, it at $13 trillion, near where it was in 2007, and has shrunk since the end of 2008 both as a percentage of total debt and in terms of raw amounts.

But while the total US debt has risen around 40% since 2009, an alarming number to be sure for some, Chinese debt has risen from a little under 80% of GDP to 251% of GDP, and that’s just the debt we know about. The Chinese are known for manipulating numbers in their favor, which usually means that if the numbers look bad, they are probably worse.

It would appear then that much of China’s “success” and even “growth” has been driven by a massive spending program, funneled through “private” but government controlled institutions to prop up what remains an essentially communist, and, therefore, unsustainable economy.

The Cyber Battle for Iraq

W R Collier Jr July 22, 2014

WORLD NEWS
William R. Collier Jr

Iraq’s warring factions, and the government, have come to the realization that controlling cyber-space is a necessary war-fighting element, as important as land warfare or aerial domination. Cyberspace, the place where people communicate, get information, and collaborate is the new target. Those who dominate the landscape can operate freely while preventing their enemy from operating freely.

We have learned how ISIL/ISIS has used cyberspace for sophisticated command and control, giving them quite modern and advanced communications capabilities once only available to first world nations. Simply turning off the space is becoming as difficult as turning off the sky: too many communications and transactions depend on the existence of that space.

In Iran, for instance, during the 2009 uprising the government tried to turn off the space. The problem? Millions of government and financial transactions required the use of that space. So the internet was “turned back on” and the government tried to control the space. Today, the ability of governments to control that space short of turning it off is limited. A simple software solution, such as creating a program that filters out certain sites based on content or location, will not work- insurgents and criminals can get around those blocks or simply burrow deep into “spaces” (websites or social networks) that are not blocked.

Criminals and insurgents in Iraq have taken to employing groups of cyber operators. Some act as sleuths, some create malware and other programs designed to spy on targeted computers and networks, some operate “clone accounts” to insinuate themselves into groups, some conduct “operations” (like denial of service attacks, physhing schemes that are meant to steal user names and passwords) and still others operate web crawling and spidering tools to obtain data.

In Iraq, cyber warfare observers have noted that full-on cyber war is being waged. In one instance, a Trojan Horse program was inserted through a link to a “friendly” article clicked on by the targets. The program turned on microphones and video and allowed ISIL to literally see and hear the internal workings of an opposition group operating in Iraq.

Of all the actors, including the government, ISIL has perhaps invested the most resources into these operations, while their operators have also devised clever ways to maintain secure communications for a sophisticated command and control. We have even hear rumors of an ISIL program that allows for a missile hack whereby a “dumb” rocket is guided to a target by Google maps. This is not as precise as US “smart munitions”, but it is far more sophisticated than what has been available.

The now “old” idea of tracking IP addresses is also not enough. These groups create multiple layers of proxy servers and, now, “ip hopping” programs change the IP address of a server every few seconds. The best way to locate the enemy is to actually get an operator into their network who obtains that information, or enough hints to allow for “investigations” to track locations.

It is believed that ISIL operators succeeded in tracking an Iraqi police chief to his home, the location of which had been a closely guarded secret, by infiltrating an online group and inserting a “snooper” program into the police HQ’s computer network which had been accessible to informants. The infamous video of his beheading is proof enough that, for ISIL. cyber warfare is a major component of their warfare.

Near as we can tell, the Iraqi government has not been up to the task of countering this. Cyber space in Iraq is dominated by closely knit groups. The government’s operations are compromised because there are infiltrators involved and they have not worked out a process for vetting potential cyber operators that has worked. Only government cyber units that are coherent by tribe and sect have had any real success in preventing infiltration.

So the cyber landscape for average Iraqis is a dangerous one, although most malware infections have been rather targeted. Generally when “civilians” have had their computers compromised, it is because they are associated with or physically near a target of such operations. We are witnessing the first “collateral damage” due to cyber warfare.

But could this cyber battlefield be extended?

ISIL, for its part, envisions a Caliphate stretching from the Turkish border that includes the Levant and the Arabian Peninsula at least. Future targets of their cyber warfare will include all those nations and, possibly, even Turkey (this despite reports that Turkey’s Prime Minister has been secretly sending them arms).

All around the world, criminals and potential insurgents are seeing cyber space as the next frontier in lateral warfare or guerrilla warfare and many of the world’s governments are ill prepared for this onslaught.

Is Turkey Supplying ISIL and preparing for war with Greece?

W R Collier Jr July 21, 2014

REPORT
William R Collier Jr

ALARM BELLS RING OVER ERDOGAN’S INTENTIONS

Is Turkey secretly preparing for war again Greece? Meanwhile, a Turkish politician says Erdogan is secretly arming ISIL and al-Qaeda. Is Erdogan a secret Salafist bent on war and dictatorship?

Three developments are raising alarm bells regarding the true intentions of Recep Tayyip Erdogan, Turkey’s Islamist, and possibly Salasfist, Prime Minister. The three developments include accusations that Erdogan is arming ISIL and al-Qaeda, accusations that Erdogan will set up a presidential dictatorship if he wins the August 10^th to 24^th Presidential elections, and accusation that his military is preparing for war against Greece.

A Turkish politician from the “Republican People’s Party” has made the stunning accusation, with alleged documentary proof, that the government of Recep Tayyip Erdogan, the Turkish Prime Minister, is actively funneling money and weapons to the so-called “Islamic State”, an extremely radical Salafist group that has seized territory and is terrorizing Muslims and non-Muslims who do not conform to their ideological fanaticism.

Party Deputy Chairman Bülent Tezcan held a press conference on the very steps of the Turkish Parliament in Ankara. According to Tezcan, a National Intelligence Organization (MIT in Turkish) truck was seized in the city of Adana as part of an investigation several months ago. The documents, which Tezcan showed at the press conference, revealed that police who seized the truck discovered a large stash of small arms.

Tezcan said, “the records leave no room for doubt that the government has sent weapons and ammunition to the terrorist organizations al-Qaeda and the Islamic State of Iraq and the Levant (ISIL) in Syria.” Attached to the weapons were further documents, written in a Cyrillic script, probably indicating that they are Russian. The truck picked up the shipment from Ankara’s Esenboğa Airport, having been flown in, possibly from Russia, according to the testimony of the driver and other people involved in the shipment.

Party Deputy Chairman Bülent Tezcan scuffles with Erdogan's party in parliament earlier this year. — Party Deputy Chairman Bülent Tezcan scuffles with Erdogan’s party in parliament earlier this year.

He said, “the weapons that were given to ISIS have now beeen turned against Turkish citizens. “ He also asked “whether the Justice and Development Party (AK Party) government have struck a deal with ISIS?” This is the part of the government in power.

Most sensationally, he accused the government of arming these groups directly.

“So have you [the government] carried the missiles you will throw at Turkey with these trucks in advance? Was it these trucks that carried the weapons used in the Reyhanlı attacks?” he asked. He was referring an attack in the border town of Reyhanlı on May 11, 2013. The attack resulted in 53 causalities and is believed to have been carried out by al-Qaeada.

“Is it not a crime in international law to arm the militants of ISIL and al-Qaeda like this in the Middle East?” Tezcan asked during the press conference. “We know the answers to all of these questions and the government also knows the answers and they will one day give their answers in front of the Supreme State Council in Turkey, the name the Constitutional Court assumes while trying the current or former members of a government, and before international courts.”

The idea that elements of the Turkish government might be arming such groups goes hand in hand with reports that Turkey and Qatar are alone in the Muslim world urging Hamas to turn down cease-fire offers in what some see as a bid to create further unrest and instability. Prime Minister Recep Tayyip Erdogan’s party may be seeking to create external bogeyman and crisis in order to gain support during elections, or they may be secretly pursuing a Salafist agenda, which is worrisome to Turkish citizens.

The second accusation leveled against Erdogan is that he is plotting to create a dictatorship.

The first round of the Turkish Presidential Elections is slated for August 10, 2014 and some fear that Erdogan wants to win at all costs. Currently, he is the Prime Minister and as President It is expected that if Erdogan won the Presidency he must resign as Prime Minister, but if he chose to hold on to both offices together he could set himself up as a dictator, say some opponents.

Recently. Erdogan raised eyebrows when he stated that Israel’s operations in Gaza were far worse than anything Hitler did.

The Turkish people do not support groups like al-Qaeda or ISIL and if these accusation gain traction it could hurt Erdogan in the polls on August 10. Erdogan wants to change the Turkish system of government through a new Constitution that would make the government a “presidential system” in which the President holds most of the power.

It is alleged that Erdogan arranged to supply the weapons for two reasons- a secret Salafist sympathy and to barter for the release of 32 Turkish hostages held by ISIL, seized from Mosul, Iraq, in order to “look tough.” ISIL for its part has threatened to kill Erdogan, but, critics say, “he doesn’t appear to be a man under threat.”

The third allegation is that Erdogan is plotting to wage war against Greece.

Since 2011, military observers have raised suspicions that Erdogan intends to attack Greece on the European mainland itself.

In December of 2011, the Turks began to take deliveries of 52 offensive amphibious bridges, which delivery has now been completed. The bridges would allow the Turkish Army to cross the Evros River which separates Turkish territory from the Greek mainland. The Turks also took delivery of 40 heavy de-mining vehicles which could be used to push past any Greek minefields in potential area of operations.

The 52 offensive amphibious bridges- from defencegreece.com

All of this equipment, which has value only in offensive operations, was delivered solely to the 1st Army in Eastern Thrace and to no other units of the Turkish Army.

On November 13, 2013 Greek Secretary of Defense Athanasios Davakis claimed, “There is no doubt that there is an active threat formulated by our neighbor and there is also no doubt that there is over-concentration of military forces on the Ebro (river) and Asia Minor (Aegean), and significant increase in military spending in Turkey. Also, no one denies that they have a daily air and naval practice concerning violations, procedures for search and rescue, which means that our country must at all times have corresponding and similar data, in order not to be found lacking in this reality. Since that is the fact, then (we must) manage defense planning at all levels including new structures which will weight the proper assessment of the threat and our country’s national strategy. ”

Erdogan is believed by some to be harboring a secret Salafist ambition which would come into the fore only if he wins this Presidential election, which many fear will be “highly irregular.” Others dismiss this as highly speculative and sensationalist, including many Greek politicians, who have often spoken of an improvement of Greco-Turkish relations.

Greek efforts to broaden its base of support, including with China, out of nervousness about NATO’s commitment to its sovereignty, especially in light of the Ukraine crisis, might seem understandable in light of these development in Turkey, and while few seriously believe Erdogan is a secret Salafist, the low probability is offset by the severity of the possible consequences if this is true. If these allegations are true, however, it would seriously alter the geopolitical reality in the region and could lead to a rupture of NATO.

Stay tuned here as we will continue to cover this and analyze events.

Chinese Spying Is “Creating Tension”

W R Collier Jr July 21, 2014

REPORT
William R. Collier Jr.

World News- Business News- ANALYSIS of the Chinese Espionage Threat

Nations spy on nations. That is always a fact of life However, there are limits to which you can go before crossing a line, and increasingly nations around the world are saying that China has crossed the line.

In the latest dust-up over China’s incessant spying, the Chinese were invited to a biennial exercise called RIMPAC, a maritime safety exercise hosted by the US out of Hawaii that involves many nations. This year 24 nations have naval units on scene. They drill together, doing maritime safety and security exercises, getting to know how each navy operates, and even participating in on-shore sporting events and fraternization among personnel. It is a goodwill exercise. Among the invited participants this year is China. So when participants noticed a Chinese spy ship shadowing the fleet not a few among the officers were incensed. It is one thing to spy on the exercise as a non-participant but to do so as a participant is considered to be rather impolitic and undiplomatic.

With so many Naval units operating together, the Chinese could obtain lots of critical data, including the sound and electronic signatures of hundreds of different types of vessels, and even signals and communications data that cannot be obtained together in one spot anywhere else. US Pacific Fleet spokesman Captain Darryn James claimed that the US has taken measures to prevent security breaches, but critics say this is simply impossible and constitutes a weak response.

But while this incident may not in and of itself be extremely alarming, it is part of an ongoing pattern of aggressive espionage that few nations of any importance have not endured at the hands of the Communist Chinese dictatorship. Aggressive efforts to obtain data have extended to both the military and civilian sector, and increasingly corporations are facing Chinese espionage in order to allow Chinese firms to steal technology and catch up with their competitors, Inside China almost every technology patented by foreign firms has been stolen and duplicated in Chinese products, especially those that do not leave China where patent and copyright laws are actually enforced.

This has not only given the Chinese an unfair economic advantage, it is allowing their military to make technical advances which could, some warn, make China a greater military threat than the Japanese Empire of World War Two was to Asia and the Pacific.

The use of aggressive cyber warfare, with every Chinese University hosting what amounts to a cyber-espionage center with tens of thousands of “cyber sleuths” and hackers being employed, has earned the ire of its many victims- hacking directly into intelligence computers or even a nation’s corporate computer systems is technically an act of war. Under that definition, the Chinese have been waging war on MOST of the world’s leading nations for over a decade.

But this effort is not the only effort, it is “all encompassing”, and includes potentially every single one of the hundreds of thousands of Chinese nationals who go abroad as students, tourists, and for business. Every Chinese national who leaves the country has to be interviewed by state security and many, certainly not all or most, are asked to obtain information which it is illegal for them to obtain.

Increasingly, world intelligence agencies are casting about over “the Chinese question” and how to “make them pay.” A May 2014 filing by the Justice Department against three Chinese who were accused of hacking into computers from US companies in Western Pennsylvania to steal technology was widely viewed as a “shot across the bow”. essentially warning the Chinese that there will be consequences for these activities.

The “dragon of Asia” is in fact a communist dictatorship and if or when the supply of stolen technology is cut off, their system is itself incapable of making such advances and they would quickly begin to lose ground. The policy of “economic engagement” was meant to allow the West to “influence” the Chinese for the cause of freedom and free markets.

Instead, this policy has benefited the Chinese at everyone else’s expense and has allowed them to become a serious military threat to their neighbors. Chinese “enlightenment” in the area of human rights has been limited and shallow, often involving no more than “show cities” where an “open” policy is somewhat pursued while throughout most of China traditional communist oppression is rather the norm.

How angry the world powers are, and what kind of push back they give, remains to be seen but China has succeeded in the grand theft of trillions of dollars worth of stolen technology, but the price may be the eventual economic and diplomatic isolation of the Chinese Community e, which would very quickly lead to economic retrenchment and military decline. The only question is, do the world powers have more to offer in their own defense other than mere words and warning?

Heavy Slogging In Gaza

W R Collier Jr July 21, 2014

By William R Collier Jr

Details regarding the actual fighting in Gaza are sketchy, but we have cautioned that Hamas wants the IDF to enter into a close order battle with them in the streets of Gaza where they believe they can inflict heavy damage on the Israelis. The practice of closeting fighters and weapons, including rockets, in and among civilians is meant both to generate atrocity stories and to cause the IDF to have to mix it up in close combat.

There are now reports of “heavy fire”, including anti-tank missiles, coming from within civilian areas, including hospitals and mosques, and the toll on Israel in people and equipment is mounting, possibly even more than is currently known, or available, via open press reporting.

For our part, we have not been able to connect with anyone in Gaza, as we have before, about conditions on the ground there. It is possible that communications to and from the area have been disrupted by the IDF. Over 250 more rockets have been fired into Israel in the past 24 hours, resulting in public support for an overwhelming response to Hamas.

IDF officers continue to accuse Prime Minister Netanyahu of being indecisive, or not using overwhelming force to quickly dispatch their enemy.

Meanwhile, on the Arab side, there is growing criticism of Arab governments for not taking a more stance against Israel and both Jordan and Egypt face pressure to sever ties with Israel over Israel’s incursion into Gaza and the loss of civilian life. Some of the Arab hawks are feeling left in the lurch by their own leaders and desire to see Israel punished once and for all. On the other hand, there is growing sentiment that Hamas itself is the problem- using people as human shields and their intransigence in negotiations are frustrating many.

Hamas for its part has now offered a case fire if Israel agrees to supply all of Gaza with free electricity, a non-starter that observers note “they surely know is not realistic under the circumstances.”

So far the operations seems to be in slow motion, the IDF have failed to totally isolate the populations centers from one another, they do not occupy from the sea back to Gaza’s eastern land border with Israel, and they are entering piecemeal into the major cities, contrary to plans. The “limited goal” of destroying tunnels is also not much appreciated- the main threat has been coming from rockets, not the tunnels, and many believe that this is inadequate..

Treasury Secretary Urges “Economic Patriotism”

W R Collier Jr July 20, 2014

US Treasury Secretary Jack Lew urges "economic patriotism" and an end to "inversion"/ — US Treasury Secretary Jack Lew urges “economic patriotism” and an end to “inversion”/

By William R. Collier Jr.
The Democrats are pushing for Congressional action to end the profit-hiding practices of some of their biggest corporate backers.

“What we need as a nation,” Treasury Secretary Jack Lew told members of Congress, “is a new sense of economic patriotism, where we all rise or fall together.” Lew is referring to a new push by the Obama Administration to go after US Corporations which hide their profits overseas, profits which some estimate to be at $2.1 trillion per year. Though some say this is greatly over-inflated.

With Federal Corporate tax rates of 35% (40% higher than Communist China’s corporate tax rate of 25%) US corporate taxes are the highest in the developing world. US corporations are, some argue “understandably”, seeking ways to get out from under this tax burden which impacts their ability to invest in growth and deliver profits to investors, factors which they believe will make them less competitive than foreign owned corporations.

The United States is the single most aggressive pursuer of its nationals’ foreign assets and earnings. The UK, for instance, allows its citizens to keep foreign earnings in those countries where they are taxed by the country where they are earned, but Americans can often be forced to pay both any “local” taxes where foreign income or profits are earned AND US taxes.

The new push for Congress to act against the hiding of corporate profits abroad would increase US efforts to track down and apprehend foreign earnings by its citizens. It might also result in corporations and executives renouncing their American affiliation or citizenship, respectively, which is an increasing trend. Senate Majority Leader Harry Reid is leading this charge and has stated that, “It’s taken far too much time….If we don’t do something about inversion, there will be nothing to do tax reform on.”

The practice of “inversion” by US Companies, referred to by Senator Reid, involves moving their corporate “domicile” to a country with lower tax rates. They often do this by becoming “partners” with an overseas firm. For instance, corporations in the United Arab Emirates enjoy a tax-free environment, which is making the UAE a global corporate hub. The most popular destinations are reported to be Ireland and the Netherlands.

The counter argument is that those companies which move their domicile through an inversion still enjoy the benefits of being largely housed in the US. For instance, they enjoy our infrastructure, our copyright protections, and many other benefits. In essence, the argument runs, they are enjoying the benefits of having their operations in the US but they are letting other people pay for those benefits. Indeed those tax havens enjoy security, and save public money because the US provides an umbrella of protection through our global and costly military.

Often those same companies support the very policies, and the political party, that is calling for higher taxes and greater public spending. General Electric is a traditional supporter of Democrats, but leads the pack for inversion by hiding a reported $110 billion in off-shore profits. Often, conservatives defend this corporate practice or call for lower tax rates to lure companies back to the US, while those same corporations finance the Democrats (and Progressive causes in general) especially General Electric.

EDITORIAL ADDENDUM:
The push to “deal with” this practice is being led by Senator Harry Reid, the Majority Leader of the Senate. The type of action required to address this practice of “inversion” would involve changes in tax laws. As all bills dealing with revenue (taxes) must originate in the House, the actions of Senator Reid are not likely to yield results. The GOP-controlled House is not likely to support such a bill.

The irony of this call by a leader in the Democratic Party is not lost on observers: Harry Reid, whose party gets millions from the same corporations conducting this practice of inversion, is calling for action against his own financial backers which know they will enjoy the protection of the party they do not back.

This practice of issuing sound bites to get votes, knowing that nothing will come of it, is an ancient and proven political technique. The only fear the proponents of this policy have is that the GOP will agree with it and then punish those corporate backers of the Progressive agenda who have no real interest in seeing the more populist and anti-corporate aspects of that program being fulfilled.

The arguments for and against the new policy push each have merit. That we have a potentially crippling corporate tax policy seems self-evident. That US corporations are avoiding US taxes while both enjoying the benefits of public spending and supporting those who want more public spending is also self-evident.

Perhaps a middle road is to lower corporate taxes to 25%, to at least match Communist China, while ending this practice of inversion, as well as corporate welfare and tax loopholes that are not available to working people.

Ground War In Gaza

W R Collier Jr July 17, 2014

At 10:30PM local IDF forces began an operations in three sectors in Gaza which, if successful, would divide Gaza into 4 manageable slices, bypassing the populated areas for now, in what is described as a “limited operation” against “Hamas tunnels.”

The operation is as we had predicted it, a limited operation aimed at isolating the populated regions and disrupting Hamas’ operations and communications. It is unlikely that the IDF will want to roll tanks into populated areas and it remains to be seen whether Hamas’ much vaunted “increased capability” against Israeli armor will materialize. The rockets from Gaza has apparently stopped during this operation.

Coincident with the Israeli government’s announcement of this operation, the Egyptian government announced “the possibility for hundreds of civilian deaths in Gaza” must be blamed on Hamas for being unwilling to agree to any truce, which the Arab powers have brokered and which Israel had agreed to. The Egyptian Government has diplomatic relations with Israel and has been actively brokering peace between Arab Palestinians and the State of Israel.

On July 14th Avignor Leiberman, Israel’s Foreign Minister, reportedly told the Norwegian Foreign Minister that a truce fire agreement set to occur on July14th did not happen “because Qatar and Turkey” urged Hamas not to consider the deal. Hamas had denied that they had been consulted, a fact denied by the Egyptians and the Israelis. However, while the Qataris and the Turks have consulted, there is no evidence that the Qataris urged Hamas to reject any deals.

Some are saying that the IDF is crossing the border “at all points” in order to find tunnels, while forces are only moving further into Hamas territory in less populated areas. We are working to connect with people on both sides to get more detailed information.

We had issued a War Warning for the area. That Warning has materialized. We are issuing a War Report- war has broken out on the ground on a limited basis between Israel and Hamas.

A low probability War Warning remains in effect for the region. War Warning General War, Israel Versus Hamas and Hezbollah- there is a low but credible probability that Hezbollah, operating from Lebanon and Syria, will launch rocket and other artillery attacks against Israel which could prompt air attacks and limited ground attacks aimed at securing their population from such threats. The danger of a more general war is extremely low at this time as Egypt is embroiled in its own political instability thanks to the Muslim Brotherhood and Syria is militarily weak. However there are remote possibilities that the factions in Syria and Egypt agree to unite and push for some sort of military response.

For Arabs, this invasion elicits rage as they consider the Arab civilians which must necessarily suffer as a result of this, but this does not mean they “side” with Hamas. Hamas is viewed as a destabilizing influence and a “bad actor”, their “antics” undermining Arab efforts to create a Palestinian State with international recognition. As long as Hamas is in power, many Arabs have confided to me, the case for a Palestinian State is weakened.

If Israel can quickly eliminate Hamas and if Fatah can regain control over Gaza this can de-escalate and a pathway for peace may be possible. But if Israel’s invasion is in depth, takes a long time, and creates civilian casualties many Arab leaders will find it politically untenable to do anything but defy Israel and possibly even push some into real or covert conflict with the State of Israel.

Currently the battle appears, from a distance, to be rather one-sided but if Israeli forces are not entering heavily populated areas Hamas will not deploy their alleged “new” anti-tank capability. Their aim is to lure the IDF into populated areas where close combat is necessary and where air support is impossible.

Meanwhile, Israel has indicted three unnamed young men (names not released) for the murder of a an Arab Palestinian youth in apparent retaliation for the murder of three Israeli youths, the murder of which indirectly sparked this round of conflict. Immediately after the discovery of the murdered teens, Prime Minister Netanyahu accused Hamas of murdering them. Hamas responded by beginning a rocket assault against Israel, which has gone on for 9 days.

There have been no arrests in the case of the three murdered Israeli teens. It has not been established that Arabs, let alone Hamas members, were responsible, although Hamas has since declared that “every Israeli, everywhere” is “a legitimate target”.

Chinese Naval Base In The Mediterranean Sea?

W R Collier Jr July 17, 2014

WORLD NEWS
Bill Collier

During the Cold War, the United States did its best to make the Mediterranean unfriendly for the Soviet Navy. Their ships were closely monitored and towards the end of the Cold War a lone Victor Class submarine was the only credible naval presence maintained, aside from a few obsolete frigates generally docked in a Syrian port. When other forces outside this small package were deployed it was a big deal.

Today however, a NATO ally, Greece, is considering hosting a Chinese Naval base smack dab in the middle of the eastern Mediterranean. What the Chinese might dock there has not been disclosed, but it could be more robust than the normal Soviet deployments.

According to a recent report, the Prime Minister of Greece said that Crete could serve as a regional node for the support, maintenance and repair of the Chinese Navy and the possibility exists for joint naval operations between Greece and China’s People’s Liberation Army Navy. (The “Navy” is a subordinate arm under the PLA.) The Greek Prime Minister was reported to have told this to the visiting Chinese president on Rhodes on July 13th (Sunday).

“On Crete there is all the appropriate infrastructure for refueling, maintenance and repairs for all your country’s navy units. There is a possibility of cooperation, for example, in joint patrols of war ships. And another example, in the area of fighting piracy, where the interests of our two peoples coincide,” Antonis Samaras told Xi Jinping, China’s Premiere and communist dictator.

This cozying up to the Chinese by the cash-strapped Greeks has been largely ignored by the US and NATO, but observers note that this development is most unwelcome among military professionals. It places potentially hostile forces on Crete, an island which also hosts a NATO naval base at Souda Bay, right in the middle of a most strategic region.

But the Greeks, who are no doubt receiving money from the Chinese for such a deal, envision even closer cooperation with the Chinese communist regime.

Samaras, the Greek Prime Minister said, “I also want to say that I believe deeply in our relations of strategic partnership that will constantly expand, as your country’s presence at the forefront of the international stage also grows.” Such a statement of intent could be interpreted by some to call into question Greece’s commitment to NATO and is seen as evidence that China evinces a policy of intervention in European geopolitics.

The Greek Prime Minister and the Chinese leader met at the Palace of the Grand Master of the Knights of Rhodes.

The Chinese leader noted that his country is keen to build its relations with Greece, saying,“We want to make joint efforts, with the Greek side, to launch a new era in our bilateral relations in terms of the overall strategic partnership relations of Greece and China. Greece and China have a natural friendship and there are naturally very close feelings between them. We can say that Greece is the friendliest and most reliable country in Europe for China.”

This statement, praising Greece as the most friendly and reliable country in Europe for China, has more than a few eyebrows raised among military professionals from NATO countries. The truth is that Chinese and NATO interests diverge, in general, and for Greece to court the Chinese may in jeopardize its standing in NATO, according to sources we have contacted.

The move towards China may be a reaction to the “bad deal” some Greeks believe they have received at the hand of the European Union and could lead to a cash infusion in the short term but dependence on China, a hostile power as far as most rank and file NATO officers might see it, in the long term.

HISTORICAL NOTE:
The relation of Western Europe to Greece has been rocky since the days of the Byzantium Empire when, in 1204, a crusader army sacked the city of Constantinople on their way to fight in Jerusalem. The Byzantine Empire, however, had good relations with China, being the trade point between China and Western Europe.

ADDENDUM:
During this same period of time, the Greek Prime Minister has also had a phone conference with US Vice President Biden and today has met with Germany’s Prime Minister, Angela Merkel in Brussels.

AND ON THIS DAY:
Ironically, on the very day of this post, July 17th, the following happened:

On this day (July 17th) in 1204AD, the 4th Crusade breached the walls of Constantinople. Emperor Alexios III tried to rally the troops, but his courage failed him and he abandoned the City.

“Their first attempts were repulsed, but on 17 July, with four divisions attacking the land walls while the Venetian fleet attacked the sea walls from the Golden Horn, the Venetians took a section of the wall of about 25 towers, while the Varangian guard held off the Crusaders on the land wall. The Varangians shifted to meet the new threat, and the Venetians retreated under the screen of fire. The fire destroyed about 120 acres (0.49 km2) of the city and left some 20,000 people homeless.

“Alexios III finally took offensive action, leading 17 divisions from the St. Romanus Gate, vastly outnumbering the crusaders. Alexios III’s army of about 8,500 men faced the Crusaders’ seven divisions (about 3,500 men), but his courage failed, and the Byzantine army returned to the city without a fight. The unforced retreat and the effects of the fire greatly damaged morale, and the disgraced Alexios III abandoned his subjects, slipping out of the city and fleeing to Mosynopolis in Thrace. The Imperial officials quickly deposed their runaway emperor and restored Isaac II, robbing the crusaders of the pretext for attack. The crusaders were now in the quandary of having achieved their stated aim while being debarred from the actual objective, namely the reward that the younger Alexios had (unbeknownst to the Byzantines) promised them. The crusaders insisted that they would only recognize the authority of Isaac II if his son was raised to co-emperor, and on 1 August the latter was crowned as Alexios Angelos IV, co-emperor.”
More at http://en.wikipedia.org/wiki/Fourth_Crusade#Siege_of_July_1203

We wanted to add this commentary from an American Greek, Dimitri Bozikis, who had some provocative insights and counter-views to our report:

First- The Greeks’ European ‘Allies’ have betrayed them on multiple occasions and in multiple ways. So the Greeks would be wise to diversify their list of ‘friends’. The Vatican and Britain in particular seem to have made an Art of throwing Eastern Christians to the mercy of the Islamic hoards.

Second- The Greek Byzantines traded with China long before Marco Polo was born. The Chinese called the Silk Road the Horse Road because they coveted Greek horses above all others. And, contrary to the other European cultures the Chinese encountered later, the Greeks never colonized, exploited nor subjugated the Chinese. That is why they have a special ancient friendship. The Chinese see the Greeks as civilized equals and founders of their respected civilizations.

Third- You might want to look at Turkey’s joint air maneuvers with the Chinese a year or two ago. They are NATO allies also, aren’t they? Didn’t the Turks also announce they were going to purchase weapon systems from the Chinese instead of the US made Patriot System?

Finally- The Greeks didn’t make these overtures to China unilaterally. They are fully aware of their obligations to both the EU and NATO. They made then with the blessing of Brussels, Tel Aviv and Washington, from the Palace of the Grand Master of the Knights of Rhodes. THAT, my friend,should be the topic of your next article. Best, D

GAZA- Short Lived Cease Fire Broken

W R Collier Jr July 17, 2014

WORLD NEWS
Bill Collier

A 5-hour “humanitarian cease fire” had been agreed to between Israel and Hamas in order for Gazans to stock up on needed supplies and bring aid supplies into Gaza from Israel. Three rockets were fired, however, ending the scheduled six hour cease fire.

Earlier reports by the BBC that a comprehensive cease fire was expected to take place as of 6AM (local) Friday were strongly denied by both Israel and Hamas. At present Hamas and Israel do not talk directly, but the Egyptian Government, which has relations with both parties, is hosting teams from Israel and Gaza who are housed in the same hotel in Cairo, but in different rooms. The Egyptian negotiators are going back and forth between the rooms, sharing proposals and counter proposals.

In response to Hamas firing three rockets at Beersheba, Israel warplanes were seen attacking targets in Gaza, although further attacks by either side have not materialized.

The truce’s end could very well be a prelude to a “ground invasion” with Israeli forces first driving armored wedges between the various towns and Gaza city to divide the Gaza strip into 3-4 manageable slices and then send in infantry to occupy cities after locating and destroying armed Hamas and other units.

We have been warning that Hamas believe they have the means of inflicting serious casualties on ground forces, including enemy armor, and that their objective is to lure Israel in to a ground fight. Whether or not Hamas is correct remains to be seen, it is possible that they are deceiving themselves and would be humbled by a ground invasion.

Israeli Killed by Mortar Fire Ending Truce Before It Begins

W R Collier Jr July 15, 2014

Bill Collier

An Israeli man bringing food to IDF soldiers at the Erez Crossing into Gaza was killed just as an Egyptian brokered cease fire was set to go into effect.

The ceasefire, while it was accepted by the Israeli Cabinet, was rejected by Hamas after it was set to take hold. Hamas stated that they had received no communication from the Egyptians although our sources reveal that Egyptian officials went to great lengths to deliver the text to Hamas. The Egyptians, for their part, were under the assumption that Hamas had agreed to the terms.

The death of an Israeli civilian may indeed ratchet up the conflict, which we warned about in a previous post, but Arabs argue that he was killed in the vicinity of a “legitimate military target”, a nuance lost on the Israeli public who are reacting with outrage. Indeed, the acceptance by Jerusalem of the cease fire offer was the cause of angry denunciations by some Israelis who feel that Netanyahu is “all talk and no walk.” They also believe his measures are “halting and indecisive.”

Israeli military sources, speaking on condition of anonymity, say that, as one put it, “while the IDF are prepared to launch any kind of needed counter-measure, including a ground invasion, there have been no tactical, let alone strategic, objectives approved by the Cabinet.”

We have assessed that Hamas believes it has what it takes to offer unexpected resistance in a local order street battle. Our sources tell us Hamas is actually hoping for an Israeli ground invasion to prove the Israeli military is ‘beatable.’ The recent foray of Israeli special forces into Gaza was not met with that resistance, “because we do not want to waste this on a few enemy, we want to see large numbers of enemy come in to our reach”, as one Hamas operative is reported to have said.

Many Arab Palestinians ado not wish to be caught in the middle of this fight and, despite Hamas pleading with them to stay, hundreds and thousands are fleeing from the expected combat zones.

Stay tuned here for insights and more behind the scenes intelligence on this conflict.