Deep Politics Monitor: March 15, 2012

Mar 15, 2012

Russia May Give NATO Air Base for Afghan War

from The Ugly Truth :

Russian FM Warns Against Afghanistan Pullout

ed note–inevitably there will be those who will point to this as prima facie evidence that Russia is not the impediment to the US as some say she is.

Wrong. Russia wants to see the US dragged down in Afghanistan because she knows from experience that it is–as often described–a ‘graveyard’ for empires. In furtherance of this then, she will on one hand oppose NATO intervention in Syra and an American/Israeli attack on Iran while allowing her bases to be used for the US in Afghanistan.

antiwar.com

Saying that such a move was in the nation’s “national interest,” Russian Foreign Minister Sergey Lavrov threw his weight behind a proposal to provide NATO with an air base in Russian territory to use for the ongoing occupation of Afghanistan.
“We are helping the coalition,” Lavrov said, adding that he was opposed to any NATO deadlines to end the war, and believed that the war should continue as an effort toward “eradicating the threats of terrorism and drug trafficking in Afghanistan.”
The deal is far from finalized, but would see Russia giving NATO a base in the city of Ulyanovsk, potentially an opportunity for the occupation forces to replace the Manas base in Kyrgyzstan, which the Kyrgyz government has said it will convert to commercial use after the US lease expires in 2014.
It also gets Russia even more deeply involved in the Afghan War. Russia has been allowing NATO to ship certain supplies through its country to Afghanistan, and has suggested providing some more direct training aid to the conflict. Giving NATO a base inside Russia is an unprecedented move, however, and underscores just how interested the Russian government is in keeping the war going.
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Related:

Americans Favor Accelerated Withdrawal from Afghanistan

U.S.-U.K. Will Stick With Strategy in Afghanistan

By Jim Garamone - American Forces Press Service
WASHINGTON, March 14, 2012 – President Barack Obama and British Prime Minister David Cameron agreed the two nations will continue to follow the strategy for Afghanistan that calls for all combat troops out of the country by the end of 2014.

Buyer Beware: Statistics and the War in Afghanistan

NEW COLD WAR: Massive NATO Exercise in Norway Provocation directed Moscow. Russian General sends "Arctic Warning" to US

For Greece, it's Deja Vu All Over Again

From Zero hedge, by CrownThomas:

In 1865, four European countries decided to form a monetary union. France, Belgium, Italy, and Switzerland formed what is known as the Latin Monetary Union.

This union was to be a bimetallic monetary system. Although it had no common currency, the French Franc was the international store of value, and the Banc of France was the lender of last resort. All national silver & gold coins were allowed in settling domestic transactions. Incidentally, the fixed parity of silver to gold was 1:15.5.

Great, a monetary system set up to promote stability and commonality, sounds like a good idea -- Enter Greece. In 1868 Greece joined the LMU, and from the very beginning it couldn't keep its act together. Fresh off a default in 1843, Greece thought it a good idea to join such a union and presumably rebuild its creditworthiness. Sure, they would honor the full convertability of all paper money into gold & silver, keep budget deficits in check, and overall comply with the rules of the union - right?

Not so much. Greece immediately began to issue fiat money, and stopped converting their paper into gold and silver. Then they began to spend, spend, spend. By the mid 1870's, Greece was in political turmoil, and they were seeing deficits skyrocket as revenues declined (sound familiar to anyone?). Since they had defaulted aready, they were shut out of credit markets, so they decided the only way to continue to survive would be to print more paper money and issue it from their own bank.

Here's a visual of what that looked like - as you can see, the gold & silver had left the country as the convertability began to stop, and being that they were shut out of the credit markets, they literally had no choice but to print.

And just so you're aware, central banking has been around for a long, long time. Here is a visual of how much Greece's national bank loaned to the government back then, just so they didn't have to control spending, work, or tax anyone (kind of like today).

Greece was able to settle their previous default by 1878, and Greek bonds were back on the London stock exchange. Lesson learned right? Eh. A short fifteen years later they were in the exact same deficit spending hole with no end in sight. So, they decided to again stop payments servicing external debt... and they again defaulted.

The LMU eventually dissolved ~1925-1926, and Greece went on to peg the Drachma to the British Sterling.

The point of the story is that history will repeat itself, and Greece will always be looking for the next free ride. A way to start again with a clean slate. Wiping away their insane deficits & ignoring the spending habits that got them there. The current situation within the European Union should not be a surprise to anyone.

So the question is, what's after the Euro?

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BANK OF GREECE ‘PRINTING ITS OWN EUROS’ SAYS BELGIAN ECONOMIST

“Greece is printing its own Euros. The bank of Greece credits the accounts of Greek banks that would have been shutting their doors but for the emergency funds. All Greek banks are effectively bankrupt, it is that simple. These zombie banks can only survive through these ELA injections. Within the ECB system the only collateral for the euros created within the ELA mechanism – is the guarantee of the Greek state. I do not know what you think of this, but my humble opinion is that this guarantee is as good as worthless. You can change all sorts of declarations about the whys and wherefores of these operations, but believe me, the basic fact is simple: only by allowing the Greek central bank to print euros [create euros] can you avoid the implosion of the entire Greek financial system, with all the consequences that this would have for the eurosystem as a whole”.