Friday, April 29, 2011

Gas pipelines, and east Mediterranean energy bonanza's high stakes...

Gas pipelines, and east Mediterranean energy bonanza's high stakes...

There’s been a great deal of discussion lately on the issue of Lebanon’s maritime border with Israel, and how it will impact Lebanon’s plans for off-shore drilling.

I recommend a piece Matt Nash wrote on the subject . (Matt, is a CIA/MOSSAD mouthpiece....)

Here’s the gist of the dispute:

  • Lebanon signed an agreement with Cyprus in early 2007 which established their maritime borders and the exclusive economic zone (EEZ) of each country. [ this is not true... Lebanon's EEZ was established in 2009, once it had set its borders with Syria as well]. The southernmost point of that border was called Point 1.

  • In 2010, Cyprus signed an agreement with Israel establishing their maritime borders, and used the same Point 1 as a terminal reference.
  • By then, Lebanon had determined that Point 1 was actually too far north and the real point of intersection between all three countries was several kilometers to the south, known as Point 23. It filed papers with the UN to that effect in July 2010.
  • Initially choosing Point 1 was a major blunder on Lebanon’s part, as admitted by the relevant officials in charge
  • Israel has, of course, taken exception to Lebanon’s claim, reminding the UN that this new border violates Lebanon’s original agreement with Cyprus.
  • The UN and the US have both gotten involved as mediators, but there have been no breakthroughs as of yet.

Based on the various sets of coordinates filed by Israel, Cyprus, and Lebanon with the UN, I drew up a Google map showing the precise area under dispute (see above).

My question is the following: what led Lebanon to revise its opinion on the location of the border? Was it based on a new survey? If anyone has any information on this score, please provide it in the comment section....

Once again this week the Arab Gas Pipeline had to be shut down - with no gas flowing to Israel and Jordan. An "unknown armed gang" bombed the al-Sabil gas terminal near the coastal city of el-Arish, less than 350 kilometers northeast of Cairo in the Sinai Peninsula.

On March 27, an "unknown armed gang" tried to blow up the terminal but failed. On February 5, they did succeed - the flow of gas to Israel and Jordan was interrupted.

The Sinai Peninsula is a de facto red zone. Local Bedouins rule. Security is spotty. Weapons smuggled to Gaza and other parts of the Middle East flow through the Sinai - that is, within striking distance of the Arab Gas Pipeline.

The Arab Gas Pipeline is the star of Arab Pipelineistan - linking Egyptian gas to the north to Israel and to the south towards the Gulf of Aqaba and from there across Jordan to Syria and via Damascus towards Lebanon.

The Arab Gas Pipeline has the potential to grow east and west - turbulent politics and economic allowing. From Damascus it could go to southern Turkey, and then connect to the perennially troubled, still in the making, Nabucco project exporting gas to Europe. The other possibility is an extension towards Italy and Spain including Libyan and Algerian gas.

In strategic el-Arish, the Arab Gas Pipeline breaks in two; one of the arms goes northeast, to the Israeli city of Ashkelon. The el-Arish-Ashkelon pipeline has been supplying Israel since 2008. For the moment, Israel gets 1.7 billion cubic meters a year; before Tahrir Square there were plans to increase it to 2.1 billion. As it stands, Egypt supplies about 10% of Israel's energy mix, and is responsible for over 30% of Israel's electricity. Over half of the total natural gas consumed in Israel comes from Egypt.

Few may know that Egypt - with 63 billion cubic meters a year - is one of the largest producers of natural gas in the Maghreb. In Africa, it's only behind Algeria (80 billion). While Egypt is increasing production, Algeria is decreasing. Cairo and Algiers are fierce competitors in the natural gas market. At the same time, Egypt is also investing heavily in liquefied natural gas (LNG) - to be transported by sea - so it may offset its dangerous dependency on Middle Eastern Pipelineistan.

Egyptian gas exports are regionally strategic - but especially to Israel. Sabotage may hurt the Israeli economy and its military/energy security. Bit it also hurts Egypt's regional and international credibility as a gas hub; the Hosni Mubarak regime was very keen to cultivate this image.

Because president Anwar Sadat and then Mubarak killed any attempts to diversify the Egyptian economy, the country has to rely on tourism; remittances from Egyptian workers abroad; tolls in the Suez Canal; payment for dodgy privatizations; and their oil and especially gas exports. A hefty chunk of all these proceeds ended up in Mubarak's Swiss banks accounts.

No wonder Israel defended Mubarak until the last minute. Mubarak's sons Gamal and Alaa pocketed hundreds of millions of dollars in "commissions" from the sale of Egyptian gas to Israel. As much as Tel Aviv paid these "commissions" to get gas at a ridiculously low rate, average Egyptians could not even dream of enjoying at least some financial benefit for working in the gas fields. No wonder in mid-April new Egyptian Prime Minister Essam Sharaf ordered a serious review of the pricing deals with Israel.

The new gas rush
Now there's another huge game at play in Arab Pipelineistan. Texas-based Nobel Energy has found massive natural gas deposits - trillions of cubic meters - in the eastern Mediterranean. The waters encompass all number of key regional players; Israel, Lebanon, Cyprus, Gaza, Egypt and Turkey. No treaties demarcate these territorial waters. What everyone may eventually enjoy is no less than over 300 years of assured energy; at least in theory, that would mean the end of a regional energy war.

Turkey is at the moment involved in a complex push to develop regional Pipelineistan not only along an east-west axis but north-south as well; this means it must cultivate a complex web of relations with no less than nine countries - Russia, Azerbaijan, Georgia, Armenia, Iran, Iraq, Syria, Lebanon and Egypt. Before Tahrir Square, serious negotiations were already ongoing regarding an extended Arab Pipelineistan that could link Cairo, Amman, Damascus, Beirut and Baghdad. This would certainly do more to unify and develop the Middle East than any "peace process".

The same applies to the newfound eastern Mediterranean gas. An ideal world would point to multi-nation corporation in charge of exploiting these new gas finds, maybe located in Cyprus, which is neutral and a member of the European Union (EU) to boot. That would simplify the sale of much of this gas to energy-hungry Europe, thus alleviating its dependency on Russian gas.

Russia's energy giant Gazprom anyway won't fail to be part of the action. It has already offered Lebanon its prospection services. China is already on the spot, ready to buy from anyone. For the moment, the heart of the action in this New Gas Rush is Cyprus airport. The Delek corporation - which controls the second-largest quota, after Noble Energy, of the extraction rights in Israel - wants to install a LNG refinery in Cyprus, on a site strategically located between two American naval bases.

So reality will be messy - especially with Israeli/US interests trying to get the upper hand while Arab governments think they could use this new gas bonanza as a way to pierce the economic/military hegemony of Israel.

At least one front of the great 2011 Arab revolt might seem to be spelling a rosy future, as in "natural gas"; commodity, capital and infrastructure leading to development for all. Or maybe not; and this will turn out to be yet another lethal chapter of ongoing energy wars....

By Pepe Escobar

Thursday, April 28, 2011

Total joins gamblers at Russian roulette...

Total joins gamblers at Russian roulette...
By Robert M Cutler

MONTREAL - During the Cold War, Soviet experts on international relations would write articles about the profit-driven race for hegemony among various competing transnational corporations based in different capitalist countries. They would point to how inherently difficult and conflictual situations were exacerbated by what they called "inter-imperialist contradictions".
Lately, the differences between the United States and the European Union over Libya, and also within the EU among such members as Italy, Germany and France, have seemed to suggest that there may in fact something to such a way of looking at things.

The recent increased involvement of major Western energy companies in Russia also indicates the advantages of such a perspective. In particular, the French company Total, already in Russia since 1989, has now decided to follow the American company ExxonMobil, Britain's BP and the Anglo-Dutch firm Shell with increased investment in the country.

As reported by the Moscow Times last week, the head of Total's exploration and production division in Russia told a conference that his company has a target to increase its output in Russia by no fewer than 30 times by the beginning of the next decade at the latest.

Given that its current production is only about 10,000 barrels of oil equivalent per day, that is not so outrageous a goal as it might otherwise seem, not is this a particularly impulsive decision in as much as Total has been in Russia for over two decades. What is new is that Total is banking on new projects in the Russia's Arctic region to make the difference.

Most notably, last month it gained a 12% stake in the Russian independent gas-producer Novatek at a price of US$4 billion in the hope of acquiring a 20% share of a projected liquefied natural gas (LNG) project in Yamal, where it already develops the Termokarstovoye gas condensate deposit together with Novatek.

More investment by Total may, however, be required to overcome the lack of funding for the Yamal LNG project, for which the Russian government declines to provide long-term financing.

Total also owns one-quarter of SDAG, the consortium with Norway's StatOilHydro, in which Gazprom owns a majority share, seeking to develop the giant Shtokman gas condensate field in the Barents Sea. SDAG's shareholders did not initially seek tax breaks for the projects but last week has put off a final investment decision pending the Russian government's response to its request for tax breaks.

That will now be a joint decision for or against both gas field development and an LNG processing plant (even though there will also be a pipeline component). Moreover, that decision will now depend on Moscow's response to SDAG's new tax-break request, which the consortium did not originally anticipate requiring and which Moscow has not welcomed receiving.

Total's new investment plans in the Arctic, the relatively new emphasis on LNG by Shtokman, and the continuing significance of the Yamal project, all come in the wake of Russian Prime Minister Vladimir Putin's surprise declaration earlier this year that the South Stream gas pipeline project, long touted by his government under the Black Sea to either Bulgaria or Romania, could be discarded altogether in favor of LNG projects from Russia's Arctic regions. (See
South Stream may disappear, .)

That announcement reflects Putin's near-obsession with finding yet another route for Russian natural gas to Europe beyond the Nord Stream pipeline under the Baltic Sea. At the time, Putin even evoked piping the Arctic gas to Russia's Black Sea coast and building a LNG facility there for cross-Black Sea transit. It is odd that few observers commented at the time that this was an admission that Russia did not have the gas available to fill South Stream if it were built.

However, the unanticipated dependence of the final investment decisions for the Arctic mega-projects on direct and indirect state support means that these plans are really more "iffy" than are even normal projects in the industry. These are gargantuan projects even by Russian standards and the Yamal development, for example, has consistently fallen behind schedule.

Putin wishes to increase Europe's dependence on Russian gas despite the past decade's repeated fiasco over his winter pipeline cutoffs and despite the fact that Europe receives one-quarter of its gas imports from Russia already. (For a telling anecdote about Putin in Brussels, see
Emerging triangles: Russia-Kazakhstan-China, .)

What emerges is that to the collection of Western "imperialist" powers that Moscow's international-affairs experts used to catalogue during the Cold War, it is now necessary to add Russia itself, which just as in the Soviet era remains dependent on foreign capital and advanced technologies for the exploration and development of its largest proposed projects.

The problem for its foreign partners, as the Khodorkovsky and BP sagas illustrate among others, is that the government in Moscow is not so meticulous about respecting agreements as it once was. Even at the height of the late Cold War with Ronald Reagan at the White House, for example, the Soviets never cut off gas to Western Europe.

The Chinese, unlike potential Western partners, seem to recognize this. Although Chinese energy firms have been making acquisitions and investments around the world for almost a decade, spending what nevertheless remains a small portion of its huge US-dollar foreign reserves, Beijing have been reticent about foreign direct investment in Russian oil and gas. Beijing's preferred instruments are long-term loans that are repaid in Russian exports of natural resources. (See, for example,
China on buying and lending spree, .)

That is why, when Russian President Dmitry Medvedev was in China for a summit with the leaders of Brazil, India, China and South Africa this month, he insisted on China becoming what Russian analyst Fyodor Lukyanov called "a source of investment and technology, not just a vacuum cleaner for Russian resources". The degree of Medvedev's success in this regard is yet unclear....

Monday, April 25, 2011

China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings....

All those who were hoping global stock markets would surge tomorrow based on a ridiculous rumor that China would revalue the CNY by 10% will have to wait. Instead, China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE" again?

From Xinhua:

China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.

Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.

And as if the public sector making it all too clear what is about to happen was not enough, here is the private one as well:

China should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.

The amount of foreign exchange reserves should be restricted to between 800 billion to 1.3 trillion U.S. dollars, Tang told a forum in Beijing, saying that the current reserve amount is too high.

Tang's remarks echoed the stance of Zhou Xiaochuan, governor of China's central bank, who said on Monday that China's foreign exchange reserves "exceed our reasonable requirement" and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.

Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health.

However, these strategies can only treat the symptoms but not the root cause, he said, noting that the key is to reform the mechanism of how the reserves are generated and managed.

The last sentence says it all. While China is certainly tired of recycling US Dollars, it still has no viable alternative, especially as long as its own currency is relegated to the C-grade of not even SDR-backing currencies. But that will all change very soon. Once the push for broad Chinese currency acceptance is in play, the CNY and the USD will be unpegged, promptly followed by China dumping the bulk of its USD exposure, and also sending the world a message that US debt is no longer a viable investment opportunity. In fact, we are confident that the reval is a likely a key preceding step to any strategic decision vis-a-vis US FX exposure (read bond purchasing/selling intentions). As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.

US influence and power on the world stage always stood on four pillars .... (1) its economy, (2) the US as a reserve currency, (3) its military, (4) its alliances and agreements with other nations. Points (1) and especially (2) are going to be severely impacted by this Chinese decision.

Wednesday, April 20, 2011

Geopolitical Implications of the World Economic Crisis


Geopolitical Implications of the World Economic Crisis...

Mark Steyn (in his typical sarcastic trademark) also looks at this slow moving US train wreck....


Geopolitical Implications of the World Economic CrisisIntroduction

The world economic depression is a dire threat to the national security of the United States. To date, little or nothing has been done to address the causes of the depression and rebuild the economy. With the lack of leadership and vision in the western world, the depression will continue until the Anglo-American economic system known as the Washington Consensus self-destructs. This is occurring rapidly, and the Beijing Consensus is being asserted to replace it. At some point during this process the center of world politics, economics and military power will shift to North East Asia. This shift will not happen peacefully, and system wide warfare is the likely outcome if this breakdown crisis is allowed to run its course.

Let us be clear that we are in a depression on par with the Great Depression, not a downturn, a slowdown, a rough patch or a recession. Housing values have already fallen on average 26%, and during the Great Depression they fell 25.9% (1). We are not at the bottom for real estate by any means either. Unemployment the way it was measured back then was at least 24.9% (2). Today by those measures it stands at about 23% (3). Let there be no mistake, we are in an extreme crisis. The purpose of this passage is to emphasize the magnitude of the crisis. Calling it by other names and creating a false propaganda reality will only delay the actions needed to combat the depression. The longer our leaders delude themselves, the more severe the crisis will become.

Derivatives are the Cause of the Depression

The origin of the crisis lies in deregulated credit derivatives of various types. The proper way to understand derivatives is that they are some form of paper based on paper. Anytime we are more than one step removed from an underlying asset we are dealing with derivatives. The Bank of International Settlements admits that there are around ~$600 trillion in derivatives out there (4). This is more than ten times the entire GDP of the Earth, which is about ~$58 trillion. Other sources indicate that the outstanding amount of derivatives of all types approached ~$1.5 quadrillion, and has now fallen to a mere ~$1 quadrillion (5). A dangerous feature of derivatives is that they are zero sum instruments, in that there is always a winner and a loser. This means that every derivative represents some amount of debt that someone will have to pay at some point in the future, with the notional fulfillment value much higher than the market value of the instrument.

These derivatives are controlled by globalized finance oligarchs based primarily in New York and London. These oligarchs dominate the governments of most western countries, and they have abused their power by making the sole mission of the state that of propping them up. All of the other concerns of the nation states of the world are regarded as secondary to the effort to rehabilitate the cancerous mass of $600 trillion-$1.5 quadrillion of derivatives. The United States cannot recover until Wall Street is stopped and put into receivership by the federal government, and the derivatives are liquidated in bankruptcy proceedings. The Special Inspector General of the Troubled Asset Relief Program (SIGTARP) Neil Barofsky reported to Congress that as of 2009 the potential public liabilities from the banking bailouts of various types were already at $23.7 trillion just for the United States (6). The Wall Street banking cartel, and the London oriented Inter-Alpha Group of Banks are already bankrupt. They exist as economic wards of the state, and survive only because of vast amounts of public money. The deregulated markets that they need in order to operate are also responsible for tremendous instability around the world. Here is the example of Federal Reserve (The Fed) Chairman Bernanke’s Quantitative Easing II (QE2) bailout program, and how it is contributing to the destabilization of the world.

Banker Bailouts Destabilize the World

QE2 is by no means the only liquidity vehicle being used to recapitalize the banks, but it is a discrete example that can be used in the space available here. All of the money coming from the other unmentioned credit facilities is subject to the same logic presented here on QE2. QE2 involves the Federal Reserve engaging in open market operations to monetize ~$110 billion per month of treasury securities in the 7-10 year range, and this is ongoing. This means they print the money and give it to the banks, and the treasury securities go onto the Fed balance sheet.

The money that the banks get is not regulated, and they can use it anyway that they want to. Since the Fed maintains its interest rate at .25%, the banks have a hard time making any money in the United States. This money becomes flight capital because of this. The banks send it to speculate in emerging markets, commodities exchanges, foreign exchange markets and derivatives. Emerging markets are experiencing speculative booms and busts because of this hot money, and this is destroying jobs and social order across the third world. This constant huge influx of flight capital is driving up the currencies of exporting nations like Brazil and Japan, and stoking high inflation in China because of the Renminbi peg to the dollar. The Finance Minister of Brazil has stated that currency war has already broken out around the world (7). This analysis of QE2 is supported by Joseph Stiglitz in an interview with the London Telegraph (8).

When this money hits deregulated commodities markets we see speculative booms in prices to unprecedented levels, and this includes food stuffs. Food prices are at all time highs, and have risen dramatically in the last year (9). Much of the unrest across North Africa and in the Middle East is the result of massive increases in food prices. In areas where large sections of the population survive on $2 per day or even less, this is a matter of life and death. Chairman Bernanke’s banking bailout activity is destroying the geostrategic position of the United States around the world as friendly regimes fall, or are destabilized and weakened. America’s influence throughout the entire third world is now seen to be in decline because of the depression. The growing un-governability in the United States may drastically accelerate the crisis as well.

The approaching danger here lies in the destabilization of the US Treasury market. Brief explanation is required. The only source of US dollars in the world is here in the US, not in China, or anywhere else. Congress first appropriates money into existence to do various things, and second authorizes bonds to be issued by the treasury. The media deceives people into believing that it is the other way around, and this leads to confusion. Part of the money appropriated into existence goes to fund the trade deficit with China. The bonds that are issued from the treasury allow China a place to invest those dollars without driving up prices in other markets. Limiting the availability of bonds to soak up these dollars is dangerous to the international currency system, and the mass of derivatives associated with it.

The House Republicans are playing a game of brinksmanship with President Obama and the Democrats over the US debt ceiling this spring. This is an ideological and demagogic exercise. If the ceiling is not raised, no new bonds can be issued. This does not stop congress from spending money, because the government is the sole source of new dollars in the world. It also does not stop the trade deficit from continuing either. It just means that as the deficit continues, and treasury bonds are naturally redeemed over time, there will not be enough new bond issues to roll over into. In order to have economic stability in a situation like this the federal deficit would have to quickly fall to an amount equal to interest payments on the debt plus bond redemptions, and there would have to be no trade deficit. This would allow enough month to month roll over room to keep the current dollar supply locked up in bonds.

Since that level of cutting cannot and should not happen, it means that hundreds of billions of dollars that are currently locked up in the secondary treasury market will suddenly be forced to start competing for scarce goods and services around the world. This could cause a dramatic currency crisis, and bring a new wave of mass panic to nations around the world. With the world economic system already battered from the depression, there is no telling how the system would react to this potentially huge shock. Our leaders would be wise to back away from the abyss, and not test the theory.

Anglo-American Institutions in Crisis

The post-WWII international financial institutions dominated by the Anglo-Americans are also collapsing. The World Bank, dominated by the Washington Consensus, has fallen behind the Chinese in lending to developing countries. The World Bank loaned out ~$100 billion from mid-2008 to mid-2010. The Chinese Development Bank and Export Import Bank lent ~$110 billion during a comparable period of time (10). This means that western influence is waning all across the third world. Africa, Latin America and South Asia are turning increasingly to Beijing and not Washington for economic development. This translates directly to loss of strategic position and influence around the world.

China is overtaking the United States economically at an alarming rate. Chinese financial institutions have overtaken the World Bank in lending to developing countries. In 2010 China surpassed America in total energy consumption (11). China is projected to pass America in manufacturing either this year or in the next few (12). America has been the greatest manufacturing nation in the world for 110 years, and when we took the crown from Britain we became the greatest nation in the world. America will cease to be the greatest nation in the world when it is surpassed in industrial capability by China.

The GDP measurement appears to give America some breathing room with the US at $14.6 trillion and China at $5.7 trillion. GDP measurement should not fool anyone though, because it is a fraudulent measure of economic strength. This is because GDP counts everything that goes on in an economy. In the world of physical economy and national greatness many things do not count: narcotics trafficking, money laundering, gambling, pimping and prostitution, lawsuits, and generally all forms of Wall Street related speculative activity. In real physical terms the Washington Consensus is being defeated by the Beijing Consensus, and the change over in domination of the world system is not likely to be peaceful.

John Mearsheimer argues convincingly that potential military power derives from economic power, and potential economic power derives from population size. The unproductive activities listed above contribute to GDP, but not to potential military power and therefore should not be counted economically from the point of view of strategy. If American leaders make the mistake of believing the GDP measure, they will believe that the nation possesses more potential military power than it actually does. When leaders believe that they have significantly more power than they actually do, it is easy for otherwise rational actors to commit huge blunders.

China, Russia, and the many nations looking to them for help and protection will assert their national interests more and more against the United States over the coming years. As the crisis deepens in these countries, problems will have to be blamed on someone. Some of the problems will really be their own fault, some really will be America’s fault and it will not matter which is which. In America similar demagogic things are happening already. The obsessive, compulsive focus on the Chinese Renminbi exchange rate is a prime example. This is a mask for the larger problems of free trade, globalism and deregulation that lie at the heart of the system here. These problems will not be addressed, so there must be a suitable stand in to be blamed for all of our ills. Years of this type of propaganda on both sides sets the stage for escalating levels of confrontation. The danger of system wide warfare is real.

There is no certainty in how this conflict will play out. Of course, the apocalyptic scenarios are possible, featuring direct confrontation between great powers. The more likely scenario is already in play, and involves decades of low level guerilla war and regional scale war. The first decade of this is already completed, and in the books. These wars will prohibit industrialization and economic development across the third world, and allow the real culprits behind the crisis to fade into the background unpunished. China and Russia will begin to intervene by proxy in these brushfire wars and coups across the third world. As time goes on, the reasons for the collapse of world civilization will become less and less clear as the wars take on lives of their own. An entire generation doomed to falling standards of living, and even immiseration, will fight a thousand small endless wars as fascist corporatism dominates the formerly free nations of the West.

The only way for the United States to avoid this fate is to return to its economic traditions. End globalization, the free trade mania and bring back the protective tariff. Break up finance capital with a new Glass-Steagall Act. Bringing industrial development back to this country will automatically put tremendous internal pressures on rival nations when they are no longer able to rob America blind for free. This will preserve the reserve currency status of the dollar, and stabilize markets around the world. Force the Chinese economic engine to fuel itself, and the Chinese Miracle will be shown to be an empty illusion.

(1) Curnutte, Katie. “Home Value Declines Surpass Those of Great Depression”, 1/11/2011. Accessed on 2/11/2011.
(2) Vangiezen, Robert and Schwenk, Albert. “
Compensation from before World War I through the Great Depression”. Bureau of Labor Statistics, 1/30/2003. Accessed on 2/11/2011.
(3) Williams, John. “
Unemployment (U3 & U6) vs SGS Alternate”, 1/2011 data. Shadow Government Statistics. Accessed on 2/11/2011.
(4) Bank of International Settlements. “
Table 19: Amounts Outstanding of over-the-counter (OTC) derivatives”. Accessed on 2/11/2011.
(5) Matai, D.K. “
Derivatives Quadrillion Play: How Far Away Are We From A Second Financial Crisis?”, 3/23/2010. Accessed on 2/11/2011.
(6) Office of SIGTARP. “
Quarterly Report to Congress, July 21st 2009”, Page 4. Accessed on 2/11/2011.
(7) Wheatley, Jonathan. “
Brazil in ‘Currency War’ Alert”. Financial Times, 9/27/2010. Accessed on 2/11/2011.
(8) Trotman, Andrew. “
Joseph Stiglitz: America’s QE2 ‘poses considerable risks’”. The Telegraph, 12/10/2010. Accessed on 2/11/2011.
(9) Lubin, Gus. “
Global Food Prices Just Hit Their Highest Level Ever”., 2/3/2011. Accessed on 2/11/2011.
(10) Dyer, Geoff and Anderlini, Jamil. “
China’s Lending Hits New Heights”. Financial Times, 1/17/2011. Accessed on 2/11/2011.
(11) Smith, Grant and Schmollinger, Christian. “
China Passes U.S. as World’s Biggest Energy Consumer, IEA Says”. Bloomberg, 7/20/2011. Accessed on 2/11/2011.
(12) Isidore, Chris. “
China Close to Chatching U.S. in Manufacturing”. CNN Money, 6/21/2011. Accessed on 2/11/2011.

Source: Strategic Culture Foundation