₦airaland Forum

We live in interesting times!!!

I hope Nigerians can heed the warnings before SHTF. We need to keep abreast of world events in this interconnected world but if by any chance there is a war in the Middle East oil prices will shoot up atronomically due to the closure of the straits of Hormuz and high ship premiums for oil tankers to lift crude from the Middle East.

I hope we will be wise to use the windfall well.

http://debka.com/article/22378/Hamas-signs-binding-military-commitment-to-Iran-led-war-on-Israel

Hamas leader Mahmoud A-Zahar and deputy commander of its military arm, Marwan Issa, spent the second week of September in Beirut and Tehran finalizing and signing protocols covering a binding commitment by the radical Hamas rulers of the Gaza Strip to join Iran, Syria and Hizballah in a war on Israel, DEBKAfile’s exclusive military sources disclose.

The protocols set out in detail the circumstances, procedures and terms governing Hamas’s participation in a conflict, whether it arises from an Israeli attack on Iran’s nuclear program or the involvement of Iran’s allies, Syria and Hizballah, in comprehensive or partial hostilities against Israel. Hamas agreed to obey any orders to attack the Jewish state coming from Tehran, Damascus or Beirut.

Tehran also required A-Zahar and Issa to attach their signatures to copies of the military understandings Iranian National Security Director Saeed Jalili concluded with Bashar Assad during his visit to Damascus on Aug. 7. Those understandings, DEBKAfile reports, touched off the massive Iranian airlift currently carrying hundreds of military personnel and weapons day by day to the embattled Syrian regime.

Hamas’s signature provided a booster shot of 22,000 trained fighters including reservists for the battle array of elite Iranian al Qods Brigades units building up in Syria and Lebanon and taking up positions along Israel’s borders.
This buildup prompted the large-scale snap military exercise Israel staged on the Golan Wednesday, Sept. 19. Most of the forces stayed on after the exercise was over and spread out along the Syrian and Lebanese borders.

http://www.reuters.com/article/2012/09/23/us-iran-nuclear-israel-preemptive-idUSBRE88M09C20120923


(Reuters) - Iran could launch a pre-emptive strike on Israel if it was sure the Jewish state were preparing to attack it, a senior commander of its elite Revolutionary Guards was quoted as saying on Sunday.

Amir Ali Hajizadeh, a brigadier general in the Islamic Revolutionary Guard Corps, made the comments to Iran's state-run Arabic language Al-Alam television, according to a report on the network's website.

"Iran will not start any war but it could launch a pre-emptive attack if it was sure that the enemies are putting the final touches to attack it," Al-Alam said, paraphrasing the military commander.

Hajizadeh said any attack on Iranian soil could trigger "World War Three".

"We cannot imagine the Zionist regime starting a war without America's support. Therefore, in case of a war, we will get into a war with both of them and we will certainly get into a conflict with American bases," he said

"In that case, unpredictable and unmanageable things would happen and it could turn into a World War Three."

For policy-makers, the pick up in food inflation signals problems, as high food prices tend to magnify social unrest.

"Politics and economics are inextricably linked as exemplified by the Arab Spring, which was preceded by a rise in food prices," note Hermes fund managers in a recent report.

But no crisis looks quite the same as the last. Rabobank thinks the consumer impact could be less painful this time around compared to 2008, when there were severe shortages of wheat and rice.

That is because today's shortages are being seen more in crops used as animal feed, such as corn and soybeans.

In contrast, back in 2008 falling wheat stocks and various bans on rice exports capped the amount of grains available for direct consumption by people.
Today, prices for staple grains such as rice and wheat are currently 30pc below their 2008 peaks.

So while the pressure on feedstock supplies pushes up meat prices, consumers feeling the squeeze should be able to switch from animal protein towards staple grains.

http://www.telegraph.co.uk/finance/commodities/9561143/World-on-track-for-record-food-prices-within-a-year-due-to-US-drought.html


They are being driven upwards by the climb in grain and oilseed prices as US crops weather the country's worst drought since 1936, while the farming belts of Russia and South America suffer through similar water shortages.

What we are seeing represents the third major rally in global grain and oilseed prices in just half a decade.
Worse is to come, new research warns. World food prices look set to hit an all-time high in the first quarter of next year – and then keep rising, according to the analysis from Rabobank, a specialist in agricultural commodities.

By June 2013, the basket of food prices tracked by the United Nations could climb 15pc from current levels, according to the bank's analysts.
"The coming year will see the world economy re-enter a period of agflation as grain and oilseed stocks decline to critically low levels, pushing the FAO [Food and Agricultural Organisation] Food Price Index above record nominal highs set in February 2011," they say.

The economy has been close to stall speed for months. A hard-landing in China and a double-dip recession in Europe are already under way. One more shock will push the entire global system into a very nasty "feedback loop".

Nathan Sheets from Citigroup -- an expert on "stall speeds" from his Fed days -- said that once the US economy has slowed to 1.5pc growth on a "rolling four-quarter basis", it tends to fall 3pc over the following year and takes the world with it.

By his estimates, the US `fiscal cliff' would amount to net tightening of $800bn or 5pc of GDP if Congress fails to strike a deal. "A major U.S. misstep could edge the global economy closer to a point at which markets entirely lose confidence in the ability of policymakers to manage their economies," he said.

One suspects that the Fed's real motive for QE3 -- whatever it claims -- is to prime-pump the US economy pre-emptively just in case. If all goes well, the stimulus can be drained later.

He fears the stimulus will hit before companies are ready to crank up output. It is a recipe for inflation. "Yet again, incompetent, short-termist policy-making risks wrecking a promising economic outlook."

Tim Congdon says the case for further QE is "far from compelling". The broad M3 money supply (which the Bernanke Fed no longer tracks) has been growing at a 7.9pc rate over the last six months. Bank deposits up $330bn so far this year to $8.82 trillion.

He too suspects that the Fed has over-egged the pudding. The economy will take off in early 2013. Bernanke's pledge to keep interest rates near zero until mid-2015 will prove "folly of a high order". Inflation will force him to tighten much earlier in a humiliating volte-face.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9561192/Back-Ben-Bernankes-QE3-with-a-clothes-peg-on-your-nose.html

Fed chair Ben Bernanke kept policy far too tight after the US economy buckled in early to mid 2008. He allowed a collapse in the money supply to run unchecked, causing avoidable disasters at Fannie, Freddie, Lehman, and AIG later that year.

Call it the "Bernanke Depression" if you want, a term gaining traction in elite circles. The indictment is a little unfair. The European Central Bank was worse. It raised rates into a deflationary oil shock in August 2008, and worsened a run on the dollar that constrained Fed actions.
There was little that Bernanke could do about the deeper causes of the crisis, whether the `Savings Glut' of Asia and North Europe, the `China Effect', the $10 trillion reserve accumulation by the world's rising powers.

Yet three heavyweight books now lay the blame squarely on the Fed: the 'Great Recession' by Robert Hetzel, a top insider at the Richmond Fed; 'Money in a Free Society' by Tim Congdon from International Monetary Research; and 'Boom and Bust Banking: The Causes and Cures of the Great Recession' by David Beckworth from Western Kentucky University.
They do not agree on everything. Hetzel denies that there was a serious debt bubble before the crisis. Beckworth and Congdon think there was, and I am with them. Total debt levels in the OECD club of rich states rose from 167pc of GDP to 330pc in thirty years. This was the blow-off phase of a Kondratieff debt cycle. The system was primed for a crisis.

http://www.zerohedge.com/news/2012-09-23/china-officially-warns-japan-not-infringe-its-territorial-sovereignty-japan-reciproc


http://www.zerohedge.com/news/2012-09-22/iran-accuses-german-siemens-sabotaging-its-nuclear-plant-turkey-sends-heavy-weapons-

AS IN ALL GLOBAL ECONOMIC MELTDOWNS THE THREAT OF WORLD WAR LOOMS, 2 THEATRES ARE LOOMING, THE. MIDDLE EAST AND JAPAN VS CHINA

China has been a source of demand since the crises of 2008. With the bad PMI's coming out of China with a revision of their GDP downwards, the effect of a China hard landing coupled with a loss of demand from Europe leaves us waltzing towards a Depression!!!

You can save in Dollars for the long term but it is better to buy ASSETS NOW as a hedge against the impending inflation.

THESE INCLUDE:- LAND, HOUSES, GOOD BUSINESSES AND GOLD AS WELL AS SOME SECURE STOCKS LIKE NESTLÉ, FIRST BANK, NIGERIAN AND INTERNATIONAL BREWRIES

We need to understand finance especially in times like these when western governments are literally printing money and thus deliberately destroying the value of money.

The best way to hedge against all of this is to trade some form of goods or services as those with fixed income salaried jobs or savers will be consumed by the coming INFLATION. The price of goods will go further than any salary rise and also destroy savings

With the floods that have ravaged the North of Nigeria due to overflow of both River Niger and Benue as well as the release of water from the Camerounian dam all coupled with the worldwide increase in food prices we should be prepared for really high food prices.

The increase in the price of Crude Oil will lead to a deficit in payment for subsidy so it is a double edged sword however luckily Saudi Arabia is overproducing so as to keep oil prices down so that President Obama can get reelected.

What all these means is that in the short term it is better to hold Nara than Dollars and Pounds but as soon as they raise interest rates in the West to tame inflation, the hot money will flow out again and the Naira will crash badly.

With so much excess liquidity and low interest rates in the West, commodities will boom, food prices will go up and inflation will slowly creep in until everything goes bust. That is why some are looking for War as a shortcut to the looming economic disaster because China is about to have a hard economic landing.

STIMULUS spending by central banks is creating a domino effect around the globe, prompting governments from Brazil to Turkey to take steps to keep easy or "hot" money from flooding in and driving up the value of their currencies, says The Wall Street Journal. Japan followed the US and Europe yesterday in pledging to ease monetary policy to get the global economy moving. So far, only Brazil, Turkey and Peru have taken steps to ensure their currencies do not appreciate in value, mostly by dropping interest rates.

South Korea, Thailand, Singapore and the Philippines have all said they're ready to act if capital inflows become excessive. Yesterday, Nigeria expressed concern about "hot money" from the Fed.

Investors meanwhile are looking for countries that are less likely to protect their currencies from inflating, among them Poland, Norway, Mexico and Canada. Economists doubt many economies will protest too loudly.

Complaints about "hot money" during the second round of quantitative easing in 2010 came from economies like Brazil and China that were booming. Now, with every major economy seeing their manufacturing sectors slowing and exports struggling, complaints are likely to be less vocal.

"The Brazilians and the Chinese, who were among the biggest critics of QE2, I think have changed their view of it in hindsight," says former Fed economist Joseph Gagnon. "They're just less inclined to worry about it." With a succession contest around the corner, China in particular has other things to worry about, says Bloomberg.



Read more: http://www.theweek.co.uk/markets/49119/us-europe-and-japan-stimuli-spark-currency-devaluation-domino#ixzz27EGYLKXW

http://www.zerohedge.com/news/even-nigeria-gets-it


Nigeria gets it. So why not our distinguished Princeton/MIT/Harvard edumacated PeeEichDees?

NIGERIA'S SANUSI: ECB, US QUANTITATIVE EASING DRIVING OIL PRICE
NIGERIA'S SANUSI: THREAT OF HOT MONEY FROM QUANTITATIVE EASING

We give our own Politburo intelligentisa at least 3-4 years before they grasp what is now painfully obvious even in Africa.

In his address, Mr Volcker concluded that the US was still the country that should lead the world recovery.

“We can no longer look to China to rescue the world. The Chinese economy has slowed 50pc since its peak and is no longer able to support international growth.

“Europe is in or near recession, including the UK. So don’t look to the UK, to China, Brazil or India — the US is the only country that can create the type of economic hope and market leadership the world needs. We have a weaker platform than we used to but it is still the most important platform in the world.”

Last week, the Fed announced a programme of unlimited purchases of mortgage-backed securities in an effort to boost the economy and drive down unemployment. It also said it would hold rates near zero until mid 2015

The strategy has elicited rebuke from some critics, including the finance minister of Brazil, who accused the US of potentially reigniting currency wars.

The Fed is already committed to buying long-dated Treasuries, which together with the new round of QE will see a total of $85bn (£52bn) spent each month buying assets for the rest of 2012.
Mr Volcker stressed that although the risk of inflation was not imminent, central bankers had to be careful. “The risk is that central bankers are not able to tighten policy in time. Will they be able to pull back fast enough from loose monetary policy?” he said.

Mr Volcker, addressing a conference at Gleneagles in Scotland, said the decision by the Fed to begin a third round of asset buying — nicknamed QE3 — amounted to the “most extreme easing of monetary policy” he could recall. Mr Volcker’s comments came as the World Trade Organisation intensified the economic gloom by slashing its global growth forecasts.

This scenario implicitly made the point that since the US election was only weeks off and America would most likely go to war with Iran next year anyway, Israel had no need to jump the gun before November, 2012.
This was most likely the answer Israel’s Defense Minister Ehud Barak received too when he met with Chicago Mayor and Obama’s former chief of staff Rahm Emanuel for lunch at City Hall Thursday, Sept. 20.
The only known result of their conversation was a gift by the mayor to the minister of a six-pack of Chicago’s famous Goose Island 312 beer. Whether Barak shared it with Netanyahu and whether the beer was to their taste was not revealed.
Apart from this message, the Saban Institute war game notably hinged on two basic premises while skipping a third.
The first was that American and Iranian leaders both acted on wrong strategic and intelligence assessments of the other’s intentions and therefore miscalculated each other’s responses. Had they realized this, the war might have been avoided.
A second working assumption was that Iran had scattered half of its stocked enriched uranium in dozens of places across the country to reduce their vulnerability to attack, while keeping the other half in one place. This was taken to signal qualified Iranian willingness for a diplomatic resolution of its controversy with the United States.
Where the Saban war game erred was in leaving the Syrian factor out of the equation.
DEBKAfile’s military sources point out that Syrian President Bashar Assad is using the same strategy as Iran for his chemical and biological arsenal. Half has been distributed and placed in the care of an estimated 20 Syrian army units; the other half reposes at fixed storage sites – a device indicating to Washington and Moscow that he is open to negotiating an end to the war before deciding to loose his weapons of mass destruction against Syrian rebels.
The Washington think tank’s war game fails to take into account that Iranian and Syrian steps are so closely synchronized that Syrian already looms large as the most likely venue for the approaching core event of a conflict pitting the US and Israel against Iran. Syria and Iran have become almost interchangeable against their shared foes.
Elite units of Iran’s al Qods, the Revolutionary Guards (IRGC) external arm, are being airlifted into Syria and Lebanon, as the IRGC chief Gen. Ali Jafari, disclosed Sunday, Sept. 16. I
Iranian troops are now deployed on Israel’s northern and eastern borders.

Israel responded Wednesday, Sept. 19, with a snap military exercise, the largest the IDF has staged in many years, on its borders with Syria and Lebanon.
Not all the Israeli units taking part in the drill returned to home basewhen the drill was over. Substantial military strength, estimated at two divisions, is therefore building up and facing the Iranian troops across the border in Syria and Lebanon.

Indeed, that same Wednesday saw more than one telling event in the same incendiary context:  Iran’s foreign minister Ali Akbar Salehi paid an unscheduled visit to Damascus for talks with Assad on his way home from a meeting in Cairo with Egyptian, Turkish and Iraqi foreign ministers. They gathered on the initiative of Egyptian President Mohamed Morsi for another go at resolving the Syrian disaster. Saudi Arabia which is deeply committed to backing the rebels was pointedly absent.

Iran played ball with Egypt for the purpose of lining up its diplomatic ducks for the war to come by putting together a potential Muslim bloc to stand against the US-Israel-Arab grouping. Tehran is looking ahead to the inevitable propsect of peace negotiations taking off amid the fury of war - or as soon as it ends.
Shortly after the Israeli drill, US intelligence officials accused Iran of “secretly transporting large quantities of weapons and military personnel, almost daily, under the cover of civilian aircraft – via Iraqi airspace – to aid embattled Syrian President Bashar al-Assad.”

(Reuters) - Israel will eventually go beyond threats and will attack Iran, the commander of Iran's Revolutionary Guards was quoted as saying on Saturday.

As speculation mounts that Israel could launch air strikes on Iran before U.S. elections in November, Mohammad Ali Jafari told a news conference that the Jewish state would be destroyed if it took such a step.

"Their threats only prove that their enmity with Islam and the revolution is serious, and eventually this enmity will lead to physical conflict," Jafari said when asked about Israeli threats to strike Iran's nuclear facilities, the Iranian Students' News Agency (ISNA) reported.

As speculation mounts that Israel could launch air strikes on Iran before U.S. elections in November, Mohammad Ali Jafari told a news conference that the Jewish state would be destroyed if it took such a step.

"Their threats only prove that their enmity with Islam and the revolution is serious, and eventually this enmity will lead to physical conflict," Jafari said when asked about Israeli threats to strike Iran's nuclear facilities, the Iranian Students' News Agency (ISNA) reported.

"We are making all efforts to increase our defensive capabilities so that if there is an attack ... we could defend ourselves and other countries that need our help with high defensive capabilities."

Jafari's comments, made at an Islamic Revolutionary Guard Corps (IRGC) military exhibition, come as Israeli leaders have increased their rhetoric against Iran.

"A war will occur, but it's not clear where or when it will be," Jafari was quoted as saying on Saturday. "Israel seeks war with us, but it's not clear when the war will occur."

DUBAI (Reuters) - Iran launched a submarine and a destroyer into the Gulf from Bandar Abbas port on Tuesday at the same time as U.S. and allied navies held exercises in the same waters to practice keeping oil shipping lanes open.
Tehran has repeatedly threatened to close the Strait of Hormuz, a route for oil exports from the Gulf, if Iranian nuclear sites are attacked by Israel, which believes Tehran is trying to develop an atomic bomb.
The United States, Britain, France and a number of Middle Eastern states are conducting a naval exercise in the Gulf this week, focusing on how to clear mines that Tehran or guerilla groups might deploy to disrupt tanker traffic.

Iran's refitted Tareq-901 submarine and Sahand destroyer were launched on the direct orders of Supreme Leader Ayatollah Ali Khamenei, the official IRNA news agency reported.
On the other side of the country, Khamenei visited the northern coastal city of Nowshahr on Tuesday to watch naval cadets practice planting mines, freeing hijacked ships, destroying enemy vessels and jumping from helicopters, his official website said.

"The armed forces must reach capabilities such that no one can attack the strong fence of the country and the dear people of Iran," Khamenei told army commanders, according to the Iranian Students News Agency.

Iran's Tareq-class submarines are diesel-electric boats that were originally built in Russia in the early 1990s, according to the Nuclear Threat Initiative, a non-profit organisation which focuses on security affairs.

Israeli Prime Minister Benjamin Netanyahu said on Sunday that Tehran was close to being able to build a nuclear bomb, fuelling speculation about an Israeli strike. Iran insists its nuclear programme is peaceful.
Publicly, Iranian military officials have sounded relaxed about the U.S. naval exercise.
"This exercise is a defensive exercise and we don't perceive any threats from it," Mohammad Ali Jafari, commander of the Islamic Revolutionary Guard Corps, told local media.