Global GDP vs Global Debt. What is really going on?

I’m no economist but I am pretty good at understanding concepts. There are so many things about the global economy and all the talk about government debt that don’t make sense, well for me anyway and if anyone has any feedback I would like to hear it.

What it comes down to is this: In 2012 global GDP (Gross Domestic Product) that is the monetary value of all the finished goods and services including financial, produced in 2012 was about 70 Trillion Dollars. On the other hand the value of global debt (government, business and household) in 2012 was about 223.3 Trillion Dollars. That is a difference of 313% of global GDP. So my question is who are the creditors? Who is all the money owed to?

On the other hand, in theory, this level of global debt shouldn’t be a problem. For example, lets say you have an annual salary of $100k with no other debts and you take a mortgage to buy a house worth $300k, nobody would say that you can’t afford the house. The house could rise or fall in value but the debt itself remains the same. That is essentially the same situation with the ratio of global income to debt as exists now.

What is happening that is creating such a political storm in many countries, particularly in The USA and Europe, about government debt and spending? As I said before I’m not an economist but I am trying to find out for myself what is really happening. As part of trying to discover what is going on I want to look at the debt situations of two countries. The USA and Japan.

I have been looking at http://www.tradingeconomics.com to get the raw facts and figures and it poses some interesting questions. In Japan the ratio of government debt to GDP is 211%. This is the same as the person with the $100k salary taking a mortgage to buy a home worth $211k. In The USA the ratio of government debt to GDP is 101.6 %.

What is going on here? It seems like The USA government is the person with a $100k salary taking a mortgage to buy a home worth $101.6k, yet politically it is creating a storm that doesn’t exist in Japan, which has more than twice the level of government debt. What is the fundamental difference between these two countries?

I am going to quote directly from http://www.globalresearch.ca/ I came across their website in my research for this post and they put into words what I want to say more concisely than I can. The original article, written in September 2012, is here

“Japan’s massive government debt conceals massive benefits for the Japanese people, with lessons for the U.S. debt “crisis.”

In an April 2012 article in Forbes titled “If Japan Is Broke, How Is It Bailing Out Europe?”, Eamonn Fingleton pointed out the Japanese government was by far the largest single non-eurozone contributor to the latest Euro rescue effort.  This, he said, is “the same government that has been going round pretending to be bankrupt (or at least offering no serious rebuttal when benighted American and British commentators portray Japanese public finances as a trainwreck).”  Noting that it was also Japan that rescued the IMF system virtually single-handedly at the height of the global panic in 2009, Fingleton asked:

How can a nation whose government is supposedly the most overborrowed in the advanced world afford such generosity? . . .

The betting is that Japan’s true public finances are far stronger than the Western press has been led to believe. What is undeniable is that the Japanese Ministry of Finance is one of the most opaque in the world . . . .

Fingleton acknowledged that the Japanese government’s liabilities are large, but said we also need to look at the asset side of the balance sheet:

[T]he Tokyo Finance Ministry is increasingly borrowing from the Japanese public not to finance out-of-control government spending at home but rather abroad. Besides stepping up to the plate to keep the IMF in business, Tokyo has long been the lender of last resort to both the U.S. and British governments. Meanwhile it borrows 10-year money at an interest rate of just 1.0 percent, the second lowest rate of any borrower in the world after the government of Switzerland.

It’s a good deal for the Japanese government: it can borrow 10-year money at 1 percent and lend it to the U.S. at 1.6 percent (the going rate on U.S. 10-year bonds), making a tidy spread.

Japan’s debt-to-GDP ratio is nearly 230%, the worst of any major country in the world.  Yet Japan remains the world’s largest creditor country, with net foreign assets of $3.19 trillion.  In 2010, its GDP per capita was more than that of France, Germany, the U.K. and Italy.  And while China’s economy is now larger than Japan’s because of its burgeoning population (1.3 billion versus 128 million), China’s $5,414 GDP per capita is only 12 percent of Japan’s $45,920.

How to explain these anomalies?  Fully 95 percent of Japan’s national debt is held domestically by the Japanese themselves.

Over 20% of the debt is held by Japan Post Bank, the Bank of Japan, and other government entities.  Japan Post is the largest holder of domestic savings in the world, and it returns interest to its Japanese customers.  Although theoretically privatized in 2007, it has been a political football, and 100% of its stock is still owned by the government.  The Bank of Japan is 55% government-owned and 100% government-controlled.

Of the remaining debt, over 60% is held by Japanese banks, insurance companies and pension funds.  Another chunk is held by individual Japanese savers.  Only 5% is held by foreigners, mostly central banks.  As noted in a September 2011 article in The New York Times:

The Japanese government is in deep debt, but the rest of Japan has ample money to spare.

The Japanese government’s debt is the people’s money.  They own each other, and they collectively reap the benefits.

Myths of the Japanese Debt-to-GDP Ratio

Japan’s debt-to-GDP ratio looks bad.  But as economist Hazel Henderson notes, this is just a matter of accounting practice—a practice that she and other experts contend is misleading.  Japan leads globally in virtually all areas of high-tech manufacturing, including aerospace.  The debt on the other side of its balance sheet represents the payoffs from all this productivity to the Japanese people.

According to Gary Shilling, writing on Bloomberg in June 2012, more than half of Japanese public spending goes for debt service and social security payments.  Debt service is paid as interest to Japanese “savers.”  Social security and interest on the national debt are not included in GDP, but these are actually the social safety net and public dividends of a highly productive economy.  These, more than the military weapons and “financial products” that compose a major portion of U.S. GDP, are the real fruits of a nation’s industry.  For Japan, they represent the enjoyment by the people of the enormous output of their high-tech industrial base.

Shilling writes:

Government deficits are supposed to stimulate the economy, yet the composition of Japanese public spending isn’t particularly helpful. Debt service and social-security payments — generally non-stimulative — are expected to consume 53.5 percent of total outlays for 2012 . . . .

So says conventional theory, but social security and interest paid to domestic savers actually do stimulate the economy.  They do it by getting money into the pockets of the people, increasing “demand.”  Consumers with money to spend then fill the shopping malls, increasing orders for more products, driving up manufacturing and employment.

Myths About Quantitative Easing

Some of the money for these government expenditures has come directly from “money printing” by the central bank, also known as “quantitative easing.”  For over a decade, the Bank of Japan has been engaged in this practice; yet the hyperinflation that deficit hawks said it would trigger has not occurred.  To the contrary, as noted by Wolf Richter in a May 9, 2012 article:

[T]he Japanese [are] in fact among the few people in the world enjoying actual price stability, with interchanging periods of minor inflation and minor deflation—as opposed to the 27% inflation per decade that the Fed has conjured up and continues to call, moronically, “price stability.”

He cites as evidence the following graph from the Japanese Ministry of Internal Affairs:

How is that possible?  It all depends on where the money generated by quantitative easing ends up.  In Japan, the money borrowed by the government has found its way back into the pockets of the Japanese people in the form of social security and interest on their savings.  Money in consumer bank accounts stimulates demand, stimulating the production of goods and services, increasing supply; and when supply and demand rise together, prices remain stable.

Myths About the “Lost Decade”

Japan’s finances have long been shrouded in secrecy, perhaps because when the country was more open about printing money and using it to support its industries, it got embroiled in World War II.  In his 2008 book In the Jaws of the Dragon, Fingleton suggests that Japan feigned insolvency in the “lost decade” of the 1990s to avoid drawing the ire of protectionist Americans for its booming export trade in automobiles and other products.  Belying the weak reported statistics, Japanese exports increased by 73% during that decade, foreign assets increased, and electricity use increased by 30%, a tell-tale indicator of a flourishing industrial sector.  By 2006, Japan’s exports were three times what they were in 1989.

The Japanese government has maintained the façade of complying with international banking regulations by “borrowing” money rather than “printing” it outright.  But borrowing money issued by the government’s own central bank is the functional equivalent of the government printing it, particularly when the debt is just carried on the books and never paid back.

Implications for the “Fiscal Cliff”

All of this has implications for Americans concerned with an out-of-control national debt.  Properly managed and directed, it seems, the debt need be nothing to fear.  Like Japan, and unlike Greece and other Eurozone countries, the U.S. is the sovereign issuer of its own currency.  If it wished, Congress could fund its budget without resorting to foreign creditors or private banks.  It could do this either by issuing the money directly or by borrowing from its own central bank, effectively interest-free, since the Fed rebates its profits to the government after deducting its costs.

A little quantitative easing can be a good thing, if the money winds up with the government and the people rather than simply in the reserve accounts of banks.  The national debt can also be a good thing.  As Federal Reserve Board Chairman Marriner Eccles testified in hearings before the House Committee on Banking and Currency in 1941, government credit (or debt) “is what our money system is.  If there were no debts in our money system, there wouldn’t be any money.”

Properly directed, the national debt becomes the spending money of the people.  It stimulates demand, stimulating productivity.  To keep the system stable and sustainable, the money just needs to come from the nation’s own government and its own people, and needs to return to the government and people.”

End of article from Global Research

So the fundamental difference seems to be that in Japan the people are beneficiaries of government debt whereas in the USA the banks are the beneficiaries and it is the people who have to pay. When the financial crisis hit back in 2007 and the world went into recession I remember thinking that surely it would be more useful for the governments to use QE (Quantitative Easing) to give money directly to the people. If that had happened then the economy would have been truly stimulated. Using average figures, the US government bought bank debt of about $1.7 trillion to fend off collapse of  the financial system. All that has happened with the money the banks received is that they have lent it back to The Fed and are earning interest on it. Basically the government used taxpayers money to bail out the banks. The banks are now earning interest on this money as they lend it back to the government. How perverse is that?

If instead the government had used this $1.7 trillion and divided it up between the people of the USA then there would have been enough to give every individual, from baby to pensioner over $5,600. Let’s be more practical and say the money would have been better distributed on a household basis. There are just under 115 million households in the USA, if the money were divided equally then each one would have received about $14,782. Can you imagine the stimulus this would have given to the real economy as people used the money to buy goods, pay off debt or to use as a deposit on a home. The real economy would have recovered from recession rapidly.

If the government had done this then the entire banking system would have failed, or would it? I’m not so sure. All the banks were so indebted to each other that after seeing a few big banks go down they would have realized that the only way to stop a total collapse would have been to cancel out each others debts. The effect would have been dramatic, the financial sector would have shrunk enormously in value but it would still exist, the only difference being that all the artificial money and speculation would have vanished. This is what they meant when they said the banking system would collapse, all the derivatives and other financial instruments that are based on plucking numbers from the air would no longer be. Banks would have to go back to dealing with money that actually exists.

We need banks, they offer a very valuable service, they lend us money to buy our homes, they help business to grow. In this context banks are invaluable. The problem is they are now only interested in enriching themselves and they are doing it at the taxpayers expense.

It is ironic that Japan with its huge debt is also the country that lends the most to the USA yet the effect of debt on these two countries could not be more different. For Japan it is borrowing from itself and its people and pays back to itself and its people. The USA borrows from abroad to prop up a perverse banking system and in addition takes money from its people to do so.

Syrian chemical weapons. What does the new deal mean?

So finally there has been a breakthrough and a deal made between Syria, Russia and the USA with regard to Syrian CW. On the surface it looks like a good thing and if you take it at face value then for certain it can only be good that there is one less way for Assad/Russia/Iran to kill civilians in Syria.

On the other hand, you have to remember that all sides of this deal all have their own political strategy and these haven’t changed. The USA still wants to see Syria divided up into three parts. Russia and Iran are working as business partners and their objective is to increase their dominance in the middle east. Syria is being used like a pawn in a chess game. Assad himself is little more that a figurehead these days, a marionette with Iran and Russia working together to pull the strings.

If we look at the terms of the deal it raises lots of questions but also gives an insight into the objectives of all the parties involved. I give my opinions based on my own observations and analysis as well as my understanding of the psychology and political thinking of the various parties.

Under the terms of the deal brokered in Geneva, Assad has a week to account for his CW stockpile, type, location and quantity etc. This raises the first question, nobody knows exactly how much CW Assad holds, any declaration he makes is going to have to be accepted at face value as there is no way to prove otherwise. Can he be trusted to make a full declaration of his CW assets? Further to this, just how do UN inspectors expect to be able to carry out their work, to examine if Assad is telling the truth or not, this is after all a conflict zone? This last factor gives the possibility for so many delaying tactics, if security of the UN inspectors can’t be guaranteed then how are they supposed to carry out their work?

As for the Syrian rebels, they see the talks in Geneva and subsequent deal as simply buying more time for Assad and view with high suspicion the motivations of the deal that has been made.  Therefore it is highly unlikely that they will agree to a temporary ceasefire in order for the UN to go into the country. The rebels view all the talk about CW as very hypocritical and political maneuvering, for the rebels there is no difference between Assad killing women and children with bombs and bullets rather than chemical weapons. If the west were serious about stopping the killing of innocents it would have stepped in a long time ago.

Russia is playing the better political game at the moment but it is early days and you can be sure that there will be a lot of pushing backwards and forwards between the USA and Russia over the next few month as they fight their proxy war in Syria. Russia certainly doesn’t have a problem with Assad using chemical weapons, when Chechen rebels took hundreds of hostages in a Moscow theatre a few years ago they used gas knowing that many innocent hostages would die. For the Russians, it was more important to kill Chechen separatists than save the lives of innocent theatre goers. So Assad has no pressure from the Russians about his use of gas. As long as you create the appearance of trying to do the right thing, this is all that matters.

The USA went with this deal because it gives them the perfect get out clause, they are no longer committed to air strikes on Syrian regime CW assets, not that they ever really wanted to in the first place. Syrian air defense systems are pretty strong and are getting stronger through the installation of Russian made S-300 system. Russia has its advisers on the ground training the Syrians on how to use the system, if the USA were to attack and destroy one of these installations and Russians were subsequently killed then the USA and Russia would be brought into direct conflict and that is a situation that neither side can afford. At the same time the USA wants the war in Syria to keep going for as long as possible as a way of getting Iran to commit more and more resources, human and weapon, thereby making Iran weaker as the financial costs of this conflict build up. What we are seeing is that the USA is getting more weapons than before to the FSA, which is forcing Iran to spend more money on helping Assad. Will this strategy work? Time will tell.

Then we come to Iran, so far they are the biggest winners in the Syrian conflict. The world’s eyes are toward Syria as they continue a pace and much closer to completion the development of their nuclear capability. They have two objectives that I know of with regard to Syria. The first is colonial, Iran has always had a desire to dominate the middle east, they desire to have once again a Persian empire. Assad miscalculated when he became President and allowed the Iranians deep inside the workings of the country, politically, militarily and economically. Now Assad is little more than a puppet on a string. Of course he would like to think that he is in control but he lost that a while ago. The second of Iran’s objectives is to keep the world occupied with Syria while it works on completing its nuclear development program. The new Iranian President Rouhani portrays the face of moderation and is warmer to the west but this is all part of the Iranian game of smoke and mirrors. Rouhani doesn’t have the real power, that belongs to the Ayatollahs and the Republican guard and their objectives have not changed. Rouhani is simply a delaying tactic. The USA thinks helping the FSA will force Iran to spend more money than it can afford on supporting Assad with weapons and fighters and Iran is pouring more resources into Syria to keep the USA busy as it hurries to get nuclear capability. Iran and Russia have a business partnership based on economics, oil, gas and weapons and geo-strategy, political influence and weakening the influence of the USA in the middle east.

Ok, time for a scenario, time will tell if I am right or wrong but based on my understanding of the different actors involved, I think there is a real possibility that something along these lines will happen. As nobody knows exactly how much CW Assad has or where he has it, we can make a safe assumption that the UN will not be able to take control of all the chemical weapons.  What I believe will happen is that some time after the UN has taken control of the declared CW assets one of two things will happen, maybe even both. Assad will use chemical weapons against an Alawite town or village. These weapons will be from part of the hidden stockpile that he didn’t declare or he will use his own people to make a raid on a UN guarded CW facility to steal them and at the same time make it look like it was the rebels who made this attack. Why would he do this? Assad has in the past killed those on his side that were no longer useful if he thought it could give him a propaganda advantage. He would be able to say, tongue in cheek, that all CW are under control of the UN so it isn’t possible that he launched the attack, much less so on people from his own tribe. It would be a huge propaganda coup for him on a global scale. You must also remember that the majority of the Alawites are also treated badly by the Syrian regime, it is only a small minority that have the wealth and power. Most Alawites are poor just like the majority of the Syrian population. The regime made the Alawites fear the Sunni majority in order to create a sectarian division, the fear that the Sunni would slaughter them if they ever came to power, this guaranteed that these poorly educated people have followed Assad not out of love and loyalty to a family member but out of fear that the treatment from the Sunni would be worse than that they already receive.  Assad despises the majority of Alawites only slightly less than he despises the Sunni. Killing a few thousand Alawite and making it look as if the rebels did it would be like a wet dream come true for Assad.

If Assad can pull this off then it would be a huge political and propaganda win for him. World opinion would shift and the rebels would lose a lot of good will but more importantly the USA would have serious egg on its face as it gets accused of supporting rebels who have finally been ‘proven’ to have used chemical weapons. This would put America in a very difficult and much weakened position on the international stage, Russia and Iran would wet their pants laughing at the USA as they build up their own global influence.

As I have said in a previous post, what is happening in Syria is no longer about revolution but rather a battlefield that is being used by two superpowers to try and outsmart and out maneuver each other in their battle to increase their global power and influence.

If you have any questions then please leave a comment or send me a private message.

Assad just announced he will hand over chemical weapons. What does it mean?

There are 2 ways of looking at this announcement. The first is that he really is going to hand everything over. The second is that he only hand part of his CW stockpile over and save the rest for use another time.

You have to look at the logistics of what he has said he will do. Is he saying that he will allow the CW to be taken out of the country or is he saying that he will allow inspectors to make sure that nobody can take them out of the storage facilities?

Before answering these questions I should tell you what I know about the different factions of the opposition to Assad in Syria, moderate and extremist. When I was in Syria I met everybody from FSA to extreme Islamist group Jabhat al Nusra. I didn’t meet anybody from Al Qaeda because when I was there earlier this year there were so few they were virtually invisible. Of all my conversations with the different factions we always got into conversations about chemical weapons. When I was there back in the spring, everyone told me, from moderate to extreme Islamist that even if they got their hands on these weapons they would never use them. The moderate FSA is no fan of the extremists but they know them well enough to believe them, that they will not use these weapons. If they did the population would destroy them, the extreme Islamists are too small in number to risk provoking the wrath of 25 million Syrians. For now they are only tolerated because they fight against the Syrian regime. The FSA would never consider doing anything that would kill the people it is fighting for.

If Assad is saying he will get the chemical weapons out of Syria it will be a logistical nightmare, moving an enormous stockpile through the middle of a war zone will be difficult to say the least. I’m also suggesting that the announcement made today is simply a game of smoke and mirrors. He has already used CW on Syrian civilians. It is quite possible to imagine he will do it again. Assad has no qualms about killing even those relatively close to him if it will give a propaganda or political gain.

If inspectors are allowed into the country they will only be shown and given control of a part of the stockpile. Then at a time that suits him he will attack an Alawite town with CW, they are the same tribe as him, he will kill thousands more than in the chemical attack in Damascus. Claiming that all his CW is under the control of international inspectors he will try to make it look as if it was the rebels who made the attack. What will probably happen is that Syria, Russian and Iran will say that the USA is supporting terrorists in the use of chemical weapons in Syria. As a result Syria will ask for international intervention, specifically Russia to help it get rid of the ‘terrorists’. Russia would be complicit in this, they have no qualms about using chemical weapons on their own people. When Chechens took hundreds of Russians hostage in a Moscow theater a few years ago the Russian authorities had no problem using gas in the knowledge that many innocent people would die. The Russian government has a very dim view of its subjects, for them it was more important to kill Chechens than save lives of ordinary Russians. So they have no problem with Assad using chemical weapons.

Another possibility is that Assad will make a show of getting the CW out of the country but it will only be a part. International inspectors will have no way of proving otherwise and then any subsequent chemical attack can be blamed on ‘terrorists’ with the same results.

The final question has to be, if Assad doesn’t use chemical weapons again then what else is he planning with Russia and Iran? If that is their strategy then we are moving into a very dangerous yet predictable area. Don’t forget either that the USA want to keep this war going for as long as possible, they see it as the best way to weaken Iran as it will have to keep on committing more resources to this war if it wants to win.

The reason why President Obama is happy the Russians won’t accept the French UN proposal on Syrian chemical weapons

Oh the games that are being played. So Obama jumped at the chance to accept the Russian offer to get Assad to hand over his stockpile of chemical weapons (CW) I actually laughed when I heard that bit of news. Just how do you go about collecting huge stockpiles of CW in the middle of a war zone. Back in the 1990’s it took UN teams 3 years to deal with Iraq’s CW and things were a lot easier there. So how on earth they could do the same in Syria is anybody’s guess. The fact is everybody knows this and it is just words being used to give an impression that something is being done.

Then there is the case of the French UN proposal that Assad must hand everything over in 15 days. The French knew that Russia would object to this. To be honest even the French know it isn’t possible for Assad to do this in 15 days. The French have made this proposal with US backing. So what is the reason? There are 2 possibilities:

The first is that the USA will launch an air strike on targets in Syria and all this talk about going to the UN is just hot air.

The second possibility is that the USA never had any intention of making a direct strike and all this talk about going to the UN is still just hot air. I believe this to be the more likely of the 2

As I have said many times before, the USA want to keep this war going for as long as possible. The reason being, is to get Iran and Hezbollah to commit ever more resources and consequentially become weaker. Bashar al Assad has become little more than a figurehead who is controlled by Iran. The USA helps the Free Syria Army (FSA), not enough to enable them to overthrow Assad but just enough to keep fighting. Saying that, very recently the US supplied the FSA with a large quantity of Chinese ‘Red Arrow’ anti tank/anti aircraft missiles and launchers as well as sniper rifles and several truck loads of ammunition. These were supplied through various Russia region Mafia groups the US uses when it needs to have deniability for certain actions. The intention is to give the FSA a morale boost, nothing more.

Non of the countries that say Assad should be punished care one iota for the ordinary Syrian people. They are using the war there for their own political aims. The USA and her allies know very well that Assad is under the control of Iran. If Iran were to win this war then it would be a big step in its ambitions to dominate the entire middle east. Iran with its business partner Russia are doing all they can to win this war, at the moment they have the upper hand over the USA. I would go as far as saying that the war in Syria is being used as a test of strength, cunning and strategy by the USA, Russia and Iran to see who is the top dog. Syria is being used like a pawn in a game of chess as the ‘superpowers’ battle for supremacy.

The war in Syria is no longer just about revolution, if there were no international interference then the Assad government would have been overthrown a long time ago. You would be amazed at the level of defection that is taking place from the Syrian army to the FSA at the moment. Iran is having to work full time sending its own replacements in to bolster what remains of the Syrian army. Russia is supporting Assad with weapons and new air defense systems and the USA is supporting the FSA in its fight against Assad. What we have happening is a classic proxy war. One false move by the USA or Russia and this conflict will have global consequences. The problem is they are blinded by their own hubris and ideas of how smart they think they are. In the next months events will happen which will take them all by surprise.

To finish, I am posting a link to a video interview I made with Mustafa. He is now back in Syria. The interview gives an insight into the thinking of what the normal Syrian people want. We only hear about extremists but they really are in the minority compared to the 180,000 of the FSA. The Syrian people are by nature moderate. They just want to have a quiet life. Watch the video and see what you think. Also if you have any questions or comments please feel free to comment or send me a private message.

Some info about the ‘FSA’ fighters being trained and equipped by the USA in Jordan

There has been some reporting of moderate Free Syria Army fighters being trained by the USA at camps in Jordan. While it is true that the USA is setting up and training brigades in Jordan, they are not FSA. Let me elaborate.

As the war has progressed, quite a few military officers from the Syrian regime have defected, some genuinely to the FSA but many not. Many, not because they are against the regime but simply because they are trying to protect themselves and keep their finances intact. Principal among these is Colonel Achmed al Namah. He is leader of the military council that is set up in Amman, Jordan. He runs this council that has many of these defected Syrian officers as its members.

It is with this military council that the USA is working and setting up fighting brigades.These brigades are led by the defected officers and the fighters are bought and paid for, mostly those who are unacceptable to the FSA due to their unsavory background.

What has been the results of these brigades? Despite the fact that they are very well equipped they are proving to be quite useless as fighting units but to be honest that seems to be the intention. It seems the purpose of these brigades is nothing more than to try and dilute the real FSA. The USA and Jordan are also using coercive tactics to try and get as many of the defected Syrian officers into positions of command as possible of the genuine FSA brigades. Doing so will weaken them and put them under the influence of the USA. Cut the heads off the command structures of the FSA in Southern Syria, insert ex Syrian regime military commanders which will then be controlled by the USA and Jordan. It seems the ultimate purpose for this is to create an option, a new autonomous area in the south of Syria run by senior defected military commanders who can be easily influenced by the USA.

America will strike Syria. New raw intelligence from Syria.

The FSA (Free Syria Army) has been supplied with a large quantity of Red Arrow or HJ-10, Chinese made anti tank/helicopter missiles as well as sniper rifles with the permission of the USA. They have been supplied through channels that use various crime syndicates in the region of Russia but not Russia itself.  These have been supplied because there will be a strike on targets of the Assad regime and as my source told me, it is to boost moral of the Syrian revolutionaries and to defend border regions of the countries that surround Syria. I had this conversation this evening with a very good Syrian friend of mine. He also told me that they are only supplied enough to defend themselves but not enough to attack.

Watch this space.

President Obama’s speech about Syrian intervention

The US president has finally spoken, so what does it all mean. In a nutshell, not a lot.

I’ve read through the transcript of the speech several times to understand the language that was being used and it raises some interesting points as to what was said as well as what was not said.

Obama said that the US should take military action against Syrian regime targets. (italics are mine) He didn’t say that the US must or will take action, only that they should. This is clever political wording that leaves the door open for doing nothing whatsoever.

The responsibility for any decision is now apparently in the hands of congress which also gives another nice get out clause if need be. There is no guarantee that congress will give its approval for action but if it does then it will come with strict conditions. To be honest I think congress representatives have already been polled and decisions made before Obama gave his speech yesterday. He would not have made a promise like that unless he already knew what the decision would be. That is how politics works.

So we go through the charade of congress mulling over whether it should support the President or not. What will the result be?

First we need to consider what wasn’t said in the speech. Nothing was said about trying to overthrow Assad or help the FSA. In fact absolutely nothing was said about helping the normal Syrian civilians. All that was said is that the ability to carry out CW attacks should be degraded. From this, I am assuming that congress will come back with a very limited mandate for Obama to attack missile sites that are used to launch CW attacks as well as some CW storage and production facilities. Beyond this there will be nothing.

Back in April in a week long operation, over 500 civilians were killed in Damascus, among them many women and children by Syrian, Hezbollah and Iranian forces. There was no international outcry over this and no promise by the international community that action must be taken against the Syrian government. So what is different this time around? Not much.

When the Syrian revolution became an armed conflict, with Iran and Hezbollah being involved from the start, the USA saw an opportunity to weaken Iran and Hezbollah, to make them bleed in Syria. Since the start, the USA has helped the Free Syria Army in a limited way. Not enough help to enable the FSA defeat the Syrian government but enough to hold them and continue to commit resources. As it is Iran that is now running the war in Syria, it is Iran that is having to put ever more resources into this conflict. Iran is also using the war in Syria as a laboratory to experiment with different types of weapons, including CW and warfare techniques.

The US sees that Iran is getting the upper hand in this war and in order to rebalance things and keep this war going for as long as possible, the CW attack will be used as an excuse for any future action. However, any future action becomes ever more risky as Syrian air defenses become stronger and stronger with the ability to strike down missiles, this capability being supplied by the Russian S-300 air defense system. Iran has been preparing for this confrontation for quite some time now and Russia is fully backing them as a way of giving a black eye to the USA. In the end,any action taken by the USA will not be taken with the ordinary Syrian people in mind. Hence the irony of using their deaths as a justification for pushing forward various political agendas.

Syria: US intervention, Iran and Russia. Part 2

I received an email commenting on my previous post which I would like to show as well as my comment. I hope you find it interesting.

The email I received:

This is a very interesting post/analysis and I agree with you on many parts.
I am a Syrian Political studies student at the American University of Beirut
I agree with you for the most part regarding the fact that there is a bigger “plan” for the whole region with outside interests and that the events in Syria will define the path of this “plan”.

However, I would have liked to read about the US interests in the region as well, and not only Russia and Iran’s. Also, as far as I know and based on what I read, the evidence regarding the CW attack is not conclusive and does not point to one side. However, in the beginning, you seemed very convinced that it is an Iran-backed attack by the regime.
Can you please give me your input regarding these points?

My reply:

Thanks for your comments. I will try my best to answer your questions. Before I do though I want to say that I have many friends in Syria and this was part of my motivation for going. I wanted to see the reality on the ground. It breaks my heart to see the country torn apart. I don’t know if you are pro Assad or pro revolution, in the end we are all people and there has been too much death, I think that you will agree with me when I say that 99% of the Syrian people have had enough and just want to live in peace.

You asked about the US interest in the area. It was always pro Assad because relations between him and Israel were stable, Syria was no immediate threat. The fear of the US is if Assad is toppled then who will be running the country and how will they view Israel. Seeing as political opposition to Assad is confused to say the least there is no way of knowing who would get the government and what actions they might take.

Aside from this, when the revolution became an armed conflict with Iran and Hezbollah getting involved from the very start, the US saw this as an opportunity to make Iran and Hezbollah bleed in Syria. So the US helps the FSA, never enough to help them make any big wins but enough to help them resist and continue fighting. The longer this goes on the more resources Iran and its proxy Hezbollah have to put into the war. Even Israel helps the FSA sometimes if fighting gets too close to the border.

My opinion is that the US has made a big miscalculation of the situation and the strategy of limited help to the FSA will not pay off in the end. If things continue the way they are now then Iran will win this war. As you are probably already aware the US plan has always been to divide Syria into different parts and by doing so make it weaker. The Kurds get the northeast as they already have. The west of the country from Damascus up through Homs to Tartous and Latakia will remain under the control of Assad. The south with its fresh water will be allowed to go to Jordan. Jordan will give citizenship to the Syrians living in this area. As for the rest of the country it will be left to the various Sunni and Shia militias to fight it out. The US idea being to create a balance of power between Sunni and Shia from north to south and east to west which cancels each other out. It is a balance that will never happen. Iran wants the entire country and will not stop until it has it. This is the US miscalculation, Iran can do it, it is now in a good relationship with Russia which has the view that the enemy of my enemy is my friend and will help Iran just so they can give a black eye to the US. The US and Russia have never been further apart at any time since the collapse of the Soviet Union. Russia under Putin is feeling the need to flex its muscles and extend its influence.

Moving on to the CW situation, my friends in Damascus saw some of the dead, all asphyxiated. Only CW would have done that, a hypobaric bomb will suck the air out of your lungs but the blast injuries would be very apparent. The dead were unmarked. Of course they are going to say results for CW usage are inconclusive. Sarin for example is an organic compound that degrades quite rapidly after deployment. By the time inspectors eventually got to the site all physical evidence of CW would have degraded so much there would be nothing to find. One of the things that Iran is doing is using Syria as a testing ground for new weapons and warfare technique. CW is simply a part of that experimentation.

 

Syria: US intervention, Iran and Russia

First there was a lot of talk about the USA and others finally getting directly involved in the Syrian conflict, beyond the help they are already giving to the Sunni rebels with regard to intelligence and satellite imagery. They are only helping in a limited way though, they tell the rebels directly which targets they will help with and which they wont. Now it seems the USA and UK are back-tracking as they realize that the minimum action required to have any sort of effect would actually have to be a major military operation, it would mean having to get into a war that they would not be able to win.

Syrian air defense systems are strong and the Russians are sending some of their navy to the Syrian coastal area and would probably also use these to shoot down any missiles that are targeted at Syria. Then there is Iran, they are pretty much in charge of Syria now and running the show. Assad has become little more than a figurehead, he is paying the price for allowing the Iranians to have so much influence since he came to power. It was the Iranians who were the masterminds of the chemical weapon attack in Syria and have control over the country’s stockpile of CW. I would not be at all surprised if they aren’t also moving some of their long range ballistic missiles into Syria. These have a range of up to 3000km. Strategically and operationally this would open up a lot of new possibilities for them.

What we are seeing now is the development of an axis of power, Russia and Iran are fully prepared to protect their interests in the middle east and have the full capability to resist any efforts by the USA to challenge them. I don’t know if Syria has taken delivery of the S-300 system yet but if it has then this would make any action by the USA much more risky. It is very similar to the Patriot air defense system run by the USA The S-300 missile system is designed to shoot down aircraft and missiles at a range of 5-to-150 kilometers. It can also track and strike multiple targets simultaneously at altitudes ranging from 10 meters to 27,000 meters. It is a serious bit of kit. If the Syrians have got any of these then attack options are going to be limited. The other danger is that if Syria do have this new system then there will be Russian advisers showing the Syrians how to use it, it takes time to learn how to use it and Russia always sends people to the country that has bought it. Imagine what could happen if the USA were to destroy one of these as a prelude to flying its planes over the country. If any Russian advisers were killed then the situation would bring the USA and Russia into a very dangerous place. This is my hypothetical musing but Syria has a contract to buy these things with a delivery of no later than spring 2014 so it is worth asking the question “what if”

Iran has long held hegemonic ambitions, it is in control of large areas of Iraq, President Maliki of Iraq is in the pocket of the Iranians, Lebanon is also ripe for the taking, Hezbollah is a proxy Iranian operation, the country is essentially without government and is seen by the Iranians as a country they should have control over. So what’s next? You need to get inside the heads of the Iranians to understand their ambitions. They really want to re-establish the Persian empire and will work in all sort of cunning ways to achieve their goals. Jordan is one of the countries in its sights.  Let me explain what I believe to be their strategy. This is my personal opinion and I am aware I could be totally wrong so here goes.

First: The war in Syria is creating huge numbers of refugees, many of these are going to Jordan, this is creating a strong destabilizing effect on the country and putting enormous pressure on its resources, economy and population, Jordan is not a rich country. The way the war in Syria is being executed by the Iranians has a deliberate aim of creating as many refugees as possible with the knowledge that many will go to Jordan.

Second: The south of Syria is slowly being abandoned by the Syrian regime and Iranians. They are still fighting the rebels but they are not concentrating their efforts here, they are however creating as much damage as possible which is driving the ordinary Syrians out and toward Jordan. The impression is being given that the only part of Syria that is truely important is the west of the country, from Damascus to Homs, Tartus and Latakia as far as the Turkish border with everything else slowly being abandoned.

Third: This is where I get to what I believe this is all about. In the south of Syria there are huge fresh ground water resources. Jordan under huge strain, politically and economically due to the refugee situation will see, at some point in the not so distant future, that the south of Syria has been abandoned by the Syrians and Iranians and attempt to annex this land. They will do this because of the water that they need and also to repatriate many of the refugees. But this is a trap, when Jordan tries to do this the Iranians will be waiting. I believe that the appearance of giving up on the south of Syria to the rebels is a trap to draw in the Jordanians. Jordan has long been part of an international plan to split Syria into different parts and the Iranians will use this plan against them. There is absolutely no intention of giving up land, it is seen as part of the future Persian empire. So when Jordan makes its move it will be hit very hard by the Iranians, who will also have the support of the Russians. The effect of Jordan having its military destroyed inside Syria as well as its bases attacked inside Jordan will be devastating. And because Jordan made the first move, believing the south of Syria had been abandoned, the Syrian regime and Iranians will be able to say that they were protecting Syrian sovereignty. The Jordanian monarchy will collapse without the use of its military and the country will be thrown into chaos. The monarchy controls pretty much everything in the country, when they go there will be a huge vacuum which the Iranians will use to assert themselves through the figurehead of the Syrian regime. They will have a ‘legitimate’ excuse, Jordan invaded first.

Assuming things happen this way then the entire northern border of Saudi Arabia will be surrounded by countries under the control of Iran, Iraq and Jordan. Iran’s ultimate ambition is to take over the Gulf states, gaining control of Jordan will be the first step in that game. Also Israel will be surrounded to the north and east. We live in interesting times.

For those of you who are new to my blog, I was in Syria for a month back in March/April. I’m very well connected in the country and still have regular contact in order to get updates on what is happening. This blog post is a little different. I have been analyzing the situation for some time and decided to stick my neck out and give my opinion on where I think all of this is going. I know I might be wrong but hopefully I have given you something to think about. If you have any questions, comments or need something clarified then please ask me.