It’s very difficult — perhaps impossible — to know the truth about war. For what it’s worth:

Virtually everyone believes Georgian President Mikheil Saakashvili foolishly provoked a Russian invasion on August 7, 2008, when he sent troops into the breakaway district of South Ossetia. “The warfare began Aug. 7 when Georgia launched a barrage targeting South Ossetia,” the Associated Press reported over the weekend in typical fashion.

Virtually everyone is wrong. Georgia didn’t start it on August 7, nor on any other date. The South Ossetian militia started it on August 6 when its fighters fired on Georgian peacekeepers and Georgian villages with weapons banned by the agreement hammered out between the two sides in 1994. At the same time, the Russian military sent its invasion force bearing down on Georgia from the north side of the Caucasus Mountains on the Russian side of the border through the Roki tunnel and into Georgia. This happened before Saakashvili sent additional troops to South Ossetia and allegedly started the war.

- Michael J. Totten: Link.

Via Wired.com: Link.

See Also

Gorbachev on war and peace in the Caucasus

“Iraq’s Ministry of Defense is considering buying 140 of the United States’ most advanced tanks, at approximately $4 million to $5 million per tank, plus hundreds of millions of dollars’ worth of support equipment to go along with the tanks. “
- USA Today: Link.

You can sell a lot of different weapon systems to foreign militaries, but where exactly do we get off in selling the Iraqi army our top military weapon systems? Do they rank with the Saudis now? We just got done beating these guys a few years ago. Do we want to come back some day and stare down the 120mm tubes of our own “used tanks”? And as we’re growing our Army’s end-strength, is there such a situation where we sell “used tanks” instead of refurbing them and using them ourselves?

This isn’t a smart decision. Give the Iraqis some old APCs or let some other countries sell them tanks. Nothing good will come of this other than profits for the military-industrial complex.

- Jason Sigger @ Armchair Generalist: Link.

“Small nations of the Caucasus do have a history of living together. It has been demonstrated that a lasting peace is possible, that tolerance and cooperation can create conditions for normal life and development. Nothing is more important than that.”
- Mikhail Gorbachev

What happened on the night of Aug. 7 is beyond comprehension. The Georgian military attacked the South Ossetian capital of Tskhinvali with multiple rocket launchers designed to devastate large areas. Russia had to respond. To accuse it of aggression against “small, defenseless Georgia” is not just hypocritical but shows a lack of humanity.

Mounting a military assault against innocents was a reckless decision whose tragic consequences, for thousands of people of different nationalities, are now clear. The Georgian leadership could do this only with the perceived support and encouragement of a much more powerful force. Georgian armed forces were trained by hundreds of U.S. instructors, and its sophisticated military equipment was bought in a number of countries. This, coupled with the promise of NATO membership, emboldened Georgian leaders into thinking that they could get away with a “blitzkrieg” in South Ossetia.

In other words, Georgian President Mikheil Saakashvili was expecting unconditional support from the West, and the West had given him reason to think he would have it. Now that the Georgian military assault has been routed, both the Georgian government and its supporters should rethink their position.

- Mikhail Gorbachev @ Washingon Post, 12 August 2008: Link.

2008 South Ossetia War @ Wikipedia

“His deeper tragedy was to perish in the madhouse that his Serbia became, a stricken nation where the poets and criminals cannot tell each other apart.”

I hear with shock that my very close friend, a great Serbian poet, died in a Belgrade clinic haunted by Dragan Dabic, whose “quantum human energy” obviously cannot cure lung cancer. My friend the poet never committed genocide, nor did he ever hide from justice by stealing the identity of an innocent man. He wrote his verse about his beloved city and he published books. He also smoked too much to survive, but his mortality was not his sorest problem, because his verse outlives him. His deeper tragedy was to perish in the madhouse that his Serbia became, a stricken nation where the poets and criminals cannot tell each other apart.

- Jasmina Tešanović @ Boing Boing: Link.

Space Car Driver will be playing a special early set
Saturday July 26th, 2008
at O’Gara’s Garage: 164 Snelling Avenue North, St. Paul MN
One-hour set starting at 9pm sharp

Space Car Driver’s entire debut album is currently available for FREE listening at spacecardriver.com. The album is also available for download at eMusic, iTunes, Amazon, Rhapsody, Lala, Napster, and more.

“Americans came back from their Independence Day holiday … and found their Empire of Debt in worse shape than ever — $1.6 trillion in potential losses from the credit crunch!”
- Bill Bonner

Freddie Mac (NYSE:FRE) and Fannie Mae (NYSE:FNM) are to America’s great empire what the East India Company was to the British Empire in the 19th century … and the Louisiana Company [see John Law] was to France in the 18th. Huge, stupid, and probably fatal.

Freddie and Fannie are huge government-chartered mortgage lenders. In 18th century France, speculators bet on the riches of Louisiana, through the government-chartered Louisiana Company. In the 19th century, they wagered their money on the riches of India, through the government-chartered East India Company. And in the 20th century, they gambled on rising housing prices through Fannie and Freddie.

- Bill Bonner @ GoldSeek.com: Link.

What more fitting name for the man “said to be the father of finance, responsible for the adoption or use of paper money or bills in the world today” than … John Law??

“Wars are won by destroying the enemy’s will to fight. A nation is never really beaten until it sells its women.”
- Spengler

The French sold their women to the German occupiers in 1940, and the Germans and Japanese sold their women to the Americans after World War II. The women of the former Soviet Union are still selling themselves in huge numbers. Hundreds of thousands of female Ukrainian “tourists” entered Germany after the then-foreign minister Joschka Fischer loosened visa standards in 1999. That helps explain why Ukraine has the world’s fastest rate of population decline. On a smaller scale, trafficking in Iranian women explains Iran’s predicament.

- Spengler @ Asia Times Online: “Jihadis and whores” (Nov 21, 2006): Link.

Via Rudy Carerra @ Tower of Babel: Link

Over at Tower of Babel blog, Janelle Renée — a Californian living in Italy — writes touching essays about life in Siena:

Siena offers free Italian lessons to immigrants. The classes are excellent, because the teachers are top-notch. The second best thing I like about the school is that it is truly multicultural. In my classes I’ve met two Ethiopians, a Senegalese, a Turk, some Romanians, a Brit, an Uzbek, two Russians, an Indian, and two Martians. (Martians are NOT to be trusted! If you don’t believe me, you must watch Mars Attacks! Don’t say I didn’t warn you.)

Anyway, most everybody at the school speaks English as their second language, so it is fairly easy to communicate when our Italian fails us. What sets me apart from the group, other than the fact that Italian is my second-ish language (I briefly studied French some time back), is that I’m the only person who came to Italy simply because. Everybody else came to Italy for a better life: for work, for economic stability, and/or to send money back home to the loved ones they’ve left behind.

- Janelle Renée @ Tower of Babel: Link.

Album: Space Car Driver
Release Date: May 09, 2008
Genre: Alternative
Copyright 2008 Space Car Driver

Space Car Driver recently released their first album.

I attended their CD Release show [May 9, 2008]. Excellent show — solid grooves, interesting arrangements, wide range of dynamics, good chemistry between the musicians.

• Home page: spacecardriver.com
• Space Car Driver @ iTunes - (download iTunes)
• Space Car Driver @ MySpace
• Space Car Driver @ Minniwiki: “Dancy, improvisational jam-rock”
• MP3’s available by request

Special Bonus Download — I got permission from bassist Adam Lutz to sponsor an MP3 download here at karljones.com:

• Minus Ten by Space Car Driver

Enjoy!

“In one shoot-out, the KGB found themselves up against men from the interior ministry, as the security services were effectively privatised, each arm guarding a different client.”

Toby Clements reviews McMafia: Crime without Frontiers by Misha Glenny –

By the Mafia, Misha Glenny means any group of organised criminals, not just those with their roots in Sicily. Balkan cigarette smugglers, Nigerian internet phishers, Russian oligarchs, Chinese snakehead people-traffickers, South African drug lords, Bombay extortion-racketeers, Israeli money-launderers and Brazilian cyber-thieves are among the many who play their part in a complex network of links that the author estimates makes up nearly 20 per cent of global trade.

… Where did all this money come from? In a word, Russia.

… Stark differences in wealth is one thing that typically excites criminal activity, but as … traders grew luridly wealthy, the state institutions collapsed around them, and services such as the KGB found themselves without prestige, money or purpose.

A supply of bored young men with guns is the other stimulus to crime, and soon the oligarchs needed bodyguards. In one shoot-out, the KGB found themselves up against men from the interior ministry, as the security services were effectively privatised, each arm guarding a different client.

Toby Clements @ The Telegraph : Link.

Via The Day They Tried to Kill Me: Link.

McMafia: Crime Without Frontiers, by Misha Glenny: Amazon: Link.

“Backing paper money with mortgages is nothing new. The French tried it in the late 18th Century, and it lead to hyperinflation.”
- Peter Schiff


Peter Schiff makes some interesting — and alarming — observations about the mortgage crisis in America:

This week, as the financial sector began to give way under the unbearable weight of bad mortgage debt, the Federal Reserve stepped in to save the day. At least that’s what it says in the script.

In a surprise move, the Federal Reserve announced its intention to swap $200 billion of treasury debt for $200 billion of potentially worthless mortgage-backed securities. The Fed may have been partially spurred to take the step as a result of the rapid collapse of Carlyle Capital Corp. a publicly traded private equity firm that is a subsidiary of the Carlyle Group. The Dutch firm could not meet margin calls on its depreciating collateral of AAA-rated mortgaged-backed securities guaranteed by Fannie Mae and Freddie Mac. On Friday, the Fed then took the unusual step of providing emergency “non-recourse” funding to Bear Stearns, collateralized by that firm’s similarly worthless mortgage debt. Apparently the Fed now stands willing to assume any mortgage-related risk that no other private entity would touch.

… According to the Fed, its new plan does not amount to buying mortgages but simply accepting them as collateral for 28-day loans. However, will the Fed really return these ticking time bombs to their true owners in 28 days, inciting the very collapse its actions were originally designed to postpone? Why does the Fed believe that the mortgages will be marketable next month; or the month after that?

… The problem with these mortgages (other than the borrowers lacking any means or desire to repay them) is that the underlying collateral is worth a fraction of the face amount. With recent foreclosure recovery rates amounting to less than 50 cents on the dollar, it is no wonder that no one wants them. The real estate bubble allowed borrowers to leverage themselves to the hilt using inflated home values as collateral. However, now that the bubble has burst, mortgage balances far exceed current property values. It is a trillion dollar time bomb that no one can possible defuse.

Paper dollars are technically Federal Reserve Notes, which means they are liabilities of the Fed. When it puts newly minted notes into circulation it does so by buying assets, usually U.S. treasuries, which it then holds on its balance sheet to offset that liability. By swapping treasuries for mortgages, the Fed effectively alters the compilation of its balance sheet and the backing of its notes.

… Backing paper money with mortgages is nothing new. The French tried it in the late 18th Century, and it lead to hyperinflation. Assignats, which were first issued in 1790 to help finance the French revolution, were backed by mortgages on confiscated church properties. Although the stolen underlying collateral did have some value, the revolutionaries saw no reason to limit how many Assignats were printed, which resulted in massive depreciation. Within three years, price controls were introduced and failure to accept Assignats, initially an offence subject to six years in prison, was made a capital crime. By 1799 the currency was completely worthless.

- Peter Schiff @ For Sou 15 Mar 2008: Link.

- Prise de la Bastille by Jean-Pierre Houël: Link.

Global markets are “a voting machine. And they vote whether or not they believe in the value of this currency.”

“Think of the dollar as another commodity,” said [Chris] Farrell. “It’s worth less. Therefore you’re gonna try and charge more to make up for the decline of its value.”

… The global markets are operating on the fundamentals of the economy, but according to Farrell, they also operate on a psychological level.

“They’re a voting machine. And they vote whether or not they believe in the value of this currency. What we’re dealing with right now is we’re right on the edge where the international capital markets are saying, ‘We don’t trust this currency anymore, we don’t think it should be the world’s currency,’” said Farrell.

- Jason DeRusha @ wcco.com: Link.

Free market economy? Level playing field? I don’t think so:

• The US Trade Representative makes trade concessions to the European Union, related to internet gambling.
• The deal is not subject to Congressional scrutiny or approval.
• A US Congressman requests that the USTR disclose the concessions.
• USTR rejects the request, “claiming the agreement was classified for national security reasons.”

Congressman Calls for U.S. Trade Representative to Provide Details of WTO Internet Gambling Settlement

Congressman Peter DeFazio (D-OR) has requested the U.S. Trade Representative (USTR) disclose trade concessions made to foreign trading partners without Congressional approval. DeFazio’s inquiry raises the possibility of Congressional intervention to void new market access commitments granted by USTR to the European Union and other complainants as compensation for a United States trade violation regarding Internet gambling.

In a letter circulated to all members of Congress last week, DeFazio encouraged his colleagues to join him in calling for the USTR to provide a copy of the concession agreement between the United States and the European Union. The USTR had recently rejected a Freedom of Information Act request for the same document, claiming the agreement was classified for national security reasons. “There is a concern that the USTR may have been ambitious in its use of a ‘national security’ classification to avoid any publicity of which new business sectors are to be subject to the GATS (General Agreement on Trade in Services) treaty,” said DeFazio’s March 6 letter.

… The DeFazio request comes following a contentious trade dispute over Internet gambling, in which the Caribbean nation of Antigua successfully challenged the regulation of Internet gambling in the United States. The European Union announced earlier this week that it will open an investigation into a possible international trade violation by the US on this issue. The investigation is the result of a Trade Barriers Regulation complaint filed by the Remote Gambling Association (RGA), which represents the largest remote gambling companies in Europe. The RGA claims the US is in violation of international trade law by threatening and pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gaming operators, while allowing domestic U.S. online gaming operators, primarily horse betting, to flourish.

- @ Eye on Gambling: Link.

Office of the United States Trade Representative @ Wikipedia: Link.

“It is precisely Obama’s experiences in Hawaii, Indonesia, and Kenya that are soul-forming for a future global leader.”
- William Irwin Thompson

Thompson explains why he likes Barack Obama, and what’s wrong with Hillary Clinton and John McCane:

… We are now heading into a period of enormous cultural transformation, and Obama is the kind of soul that can instinctively feel and understand, indeed, articulate a new planetary civilization. Obama is not a messianic figure that we need fear as some crazed cult leader; he more simply, and more enduringly, embodies a paradigm shift in American political leadership. Hillary may scoff at him and claim that his years in an Indonesian Muslim elementary school do not count as foreign policy experience, because she is thinking as the technocratic policy wonk that she is. It is precisely Obama’s experiences in Hawaii, Indonesia, and Kenya that are soul-forming for a future global leader. Hillary and McCain are the old paradigm of politics: the Eastern technocratic manager and the sunbelt suburban Goldwater-Reagan reactionary calling for tax cuts and militarism to solve all problems with a hatchet or a bomb.

- William Irwin Thompson, 3/3/2008: Link.

Thanks, E.B.

The $2 Trillion Nightmare

Because the administration actually cut taxes as we went to war, when we were already running huge deficits, this war has, effectively, been entirely financed by deficits. The national debt has increased by some $2.5 trillion since the beginning of the war, and of this, almost $1 trillion is due directly to the war itself … By 2017, we estimate that the national debt will have increased, just because of the war, by some $2 trillion.

- Joseph Stiglitz @ New York Times: March 4, 2008: Link.

Via Cassandra @ Newsvine: Link.