Time for an Israeli ‘event’

By Dominique de Kevelioc de Bailleul

Global liquidity has dried up in credit markets, US Treasury funding needs weigh in at a whopping $846 billion until March 2012, and a Fed looking for a higher dollar and public support before announcing another full-blown QE, requires a solution—and a pretty darn fast one, too.

What was once normal for funds to flow into high quality debt as forecasts of recession loom at the horizon cannot be taken for granted in today’s mix of sovereign debt crises and investor fears of default, ‘haircuts’ or currency devaluations. And, it appears as if the Fed has experienced a steady drain of foreign holdings at the Fed since November.  Sign-up for my 100% FREE Alerts!

Moreover, money from mom-and-pop investor has long since fled unusually high volatility of global equities markets—especially emerging markets of the now-vulnerable and ‘risky’ BRICs.

The problem of US current account deficits has become acute. Treasury needs more and more cash, yet it cannot wait for the post presidential election and a new Congress to enact a mandate of pension funds and qualified plans to ‘invest’ a portion of its stash in Treasuries—that’s where the honey hole is breathtakingly large enough to fund deficit spending into 2020.

But, until then, the Fed must somehow kill commodities markets, scare money back into the ‘safety’ of US Treasuries along with the hope of garnering the urgent call for the Fed to do something during a worsening crisis. Public support for inflationary measures from the Fed, temporarily, or course, would be ideal at this time.

“If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months,” economist Paul Krugman famously said on CNN on Aug. 11 of this year. “And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better–

“There was a ‘Twilight Zone’ episode like this in which scientists fake an alien threat in order to achieve world peace,” Krugman added. “Well, this time, we don’t need it, we need it in order to get some fiscal stimulus.”

Krugman said that within a context of a question posed to him regarding a possible solution to a miserable US economy that seems in need of extraordinary, or extraterrestrial means, as Krugman facetiously posited.

Krugman and his ilk, not only have been trained (inculcated?) to mask Treasury’s need for funding by talking instead about a stalled economy, but he also seems to truly believe that WWII helped end the Great Depression—a similar prescription that may, in fact, be carried out, if sane minds will consider after a litany of bizarre and criminal behavior that’s already come from a US government on many, many fronts.

“Israel will launch military action to prevent Iran developing a nuclear weapon as soon as Christmas, intelligence chiefs have warned,” the UK-based Daily Mail reported, Thursday.

The British newspaper continued, “A report by a UN watchdog into Iran’s nuclear ambitions ‘completely discredits’ the Islamic nation’s protestations of innocence, according to Foreign Secretary William Hague.”

And, of course, the US will offer a helping hand to fight those evil Muslims (with weapons of mass destruction, too) as it once did with Britain against another enemy, Germany, with the Lend-Lease program during WWII, the Taliban in Afghanistan against the Soviet Union, as well as countless other friends or enemies of our enemies (see John Perkins’ book, Confessions of an Economic Hit man).

Since the US military is already stretched and public support for yet another war entailing boots on the ground is very weak, Israel’s problem is the US’s solution when it comes to securing more black gold.

Why else would the US support and cover up for Israel for so long? The country has been a 49^th US state since the Arab-Israeli War of 1948, playing the role of a free state under US covert colonization. Each time ‘Bibi’ Netanyahu squawks about the lack of US support, think of him as a governor complaining about a lack of highway funds coming from Washington.

“Sources say the understanding at the top of the British Government is that Israel will attempt to strike against the nuclear sites ‘sooner rather than later’ – with logistical support from the U.S.

“A senior Foreign Office figure has revealed that ministers have been told to expect Israeli military action, adding: ‘We’re expecting something as early as Christmas, or very early in the new year.’”

And the timing of such an event is nice, too, during the cold winter months—a nice temporary deterrent for further demonstrations, especially during a possible currency event involving the dollar if the law of unintended consequences rears its ugly head during an attack and resulting oil price spikes—which, by the way, is another means of cycling evermore petrodollars from many OPEC nations (save Venezuela) into Treasuries—inflation (tax) to America be damned.

Sounds farfetched? It beats Krugman’s alien scam by a mile.