Riots in the Middle East: Blowback, Gold, and America’s Role

“We have convinced over one billion members of the Islamic faith that we are prejudiced against their religion, that we would deny them freedom of religion, that we want to suppress their culture and invade their governments.”

Theodore C. Sorenson

The Middle East is aflame with riots and protests, in reaction to  a movie trailer on YouTube that is offensive and makes fun of the Islamic prophet Mohammed. Some believe that we are seeing blowback from our actions over the last 11 years against Middle Eastern countries and terrorist groups. Others think that the protests are indicative of much larger problems that may soon come to a head.

Originally, blowback was a CIA term that was used to denote unintended consequences from covert operations that are suffered by the civilian population of the aggressor government. For instance, during the Cold War, some of  the Afghan insurgents that were being financed by the CIA to fight the Russians, left to join Al Qaeda.  Obviously, that was not an after effect that we wanted , though it was not surprising. This is a good example of blowback, or the unintended consequence of our action.

Another example comes from Israel’s support of the Islamic movements in the 1970s and the 1980s. The intention was to weaken the Palestinian Liberation Organization (PLO). Israel hunted down factions of the PLO, but weakened the restrictions placed on Islam by the former rulers and encouraged Islamic activism for many years. This led to the creation of Hamas, or the Islamic Resistance Movement, which is a political party that governs Gaza. Israel and the United States view the Hamas as a terrorist organization; however, some countries, namely Russia, Turkey, and Norway, regard the Hamas as a legitimate governmental influence in the West Bank region.

One of the activists who was able to benefit from Israel’s toleration was Sheik Ahmed Yassin, leader of the Muslim Brotherhood in Gaza and founder of the group Mujama al-Islamya, which was a charity group in Gaza that offered clinics, blood banks, medical treatments, etc. Unfortunately, they were also harboring weapons caches, which were found in raids in 1984. Yassin and six others formed Hamas in 1987.

What does this have to do with America? Well, you reap what you sow. Are we seeing blowback or is it something deeper than that? In an effort to find out how it all ties together, we may uncover some interesting truths.  The most important question of all is whether America can sustain itself or if we are about to go the way of Rome.

Is America truly a dwindling superpower?

When Barack Obama decided that America needed to intervene in Libya, many abroad and at home felt that we were meddling in something that was not our business. While Obama has stated that we went into Libya for humanitarian reasons, critics have accused us of imperialism and going into Libya for resources rather than to help the people there.

Was it America’s responsibility to “protect the world” from Gaddafi? Or was it from concern that Gaddafi had planned to introduce a gold dinar as a single African currency, able to rival the euro and the dollar?

Two conferences were held on this; it’s not as if our government was unaware of what Gaddafi was proposing. Gaddafi wanted to sell oil for gold dinars, rather than the dollar, meaning that a country’s wealth would depend on the amount of gold it was sitting on, not the pieces of paper that they traded in. Libya has 144 tonnes of gold. Coincidence?

This has happened before. In 2000, Saddam Hussein told the world that Iraqi oil would begin to be traded in euros, rather than dollars. I believe that you can remember what happened next…sanctions, and then invasion based on allegations of weapons of mass destruction that did not exist.

It is simply amazing to me that the U.S. is so desperate to keep other countries tied to the dollar, which is almost worthless, but refuses to go back to the gold standard, which would allow us to compete with countries that stockpile gold on the global markets.

Creating fiat money out of thin air is really a form of taxation: when you create new money with no backing, you are essentially devaluing what is already in circulation. And, since our deficit is incredibly high, the dollar keeps going down. The more we print, the less it is worth. In this cycle, inflation is substituting for taxation…it’s pretty much the same thing. The value of the dollar has gone down by about half since the late 1980’s.

Steve Forbes, in an interview with Hera Research Newsletter, said that he believes returning to the gold standard is the only way to preserve our economy. “If there’s any better system to ensure a stable value for money, it’s yet to be found.  For nearly all America’s first 200 years, the dollar was linked to gold.  Since we went off the gold standard, we’ve had more and more financial, economic and banking crises,” said Forbes.

“For example, if the Federal Reserve hadn’t started to print so much money ten years ago, we wouldn’t have experienced the housing bust or the commodities boom or the sovereign debt crisis in Europe.  Eventually, events become a persuasive teacher.”

Forbes and Ron Paul agree on these points (and many others, actually, if you read the interview cited above.) Dr. Paul has long advocated a return to the gold standard as a way of encouraging wealth creation, fair trade, and a stable economy. Many in Washington are vehemently against this idea, and call Ron Paul crazy for the suggestion.

Critics cite the 1870’s to the 1900’s as an example of how disastrous the gold standard would be to the United States. However, this period was actually one of prosperity. With no Fed to bail out Wall Street, any malinvestment was quickly liquidated and fueled back into the economy. When prices fell, the people prospered and jobs were created. According to Murray Rothbard, in his book, “The History of Money and Banking in the United States“, during that period the real national product grew 6.8 % per year.

Proponents such as Paul and Forbes believe that a return to the gold standard would boost the economy and give America a better standing among the world powers, especially since our credit rating has been downgraded. Getting rid of the Federal Reserve would be an important step.

In his book, “Gold, Peace, and Prosperity, The Birth of a New Currency” Ron Paul wrote,”The dollar died on August 15, 1971; after that date, it had no independent value for anyone. The new rules, with the dollar now simply a managed fiat currency, ushered in even greater inflation, economic turmoil, and set the stage for total loss of confidence in the dollar.”

“This will happen eventually, and perhaps in the near future, though no one knows exactly when.” (pg 31-32, Dec. 31, 1981)

Nixon ended the gold standard in 1971. The Consumer Price Index (CPI) in August of 1971 was 40.9. In August of 2012, the CPI was 230.379. So, in 1971, if you bought something for $10.00, that same item would cost you $50.88 today, with inflation change at 468.8% annually. Our money is worth less and our cost of living is higher than when we adhered to backing our money with sound currency.

As of December 2010, the U.S. reportedly had 8,133.5 tonnes of gold held in reserve. However, this is not privately held. 76.6% is Forex reserve, or foreign exchange, which are foreign currency deposits held by central banks and monetary authorities. This includes special drawing rights (SDRs) and the International Monetary Fund (IMF), which is essentially an international central bank with 188 member countries.

The IMF allows countries that contribute money to a pool through a quota system to borrow funds temporarily. Through this loaning process, and through surveillance of its member’s economies, the IMF purportedly works to foster global growth and economic stability. It is mandated to oversee the international monetary and financial system.

You are probably wondering what this may have to do with what is going on in the Middle East right now. As you know, the U.S. candidates for President are both beating the  drums for war with Iran. Contrary to actual evidence, the American public has been led to believe that Iran is building nuclear weapons in an effort to attack us.

What is Iran doing? U.S. sanctions have put their economy in the toilet, so they are doing something that may sound like a familiar impetus for U.S. invasion: they are importing GOLD from Turkey.

According to an article from Voice of America, in the first six months of 2012, Turkey exported a total of $6 billion worth of gold to Iran. The U.S. is sanctioning the banking system in Iran, which makes it increasingly harder for Iran to export natural gas. They have to go through intermediaries, because the U.S. has shut off their banking system from the rest of the world. So, those who are importing energy from Iran have to pay these intermediaries that cannot directly transfer that money to Iran. How does Iran get that money? Gold could be a solution. The intermediaries could be circumventing U.S. sanctions by shipping gold to Iran.

The European Union has imposed sanctions against Iran as well, disallowing countries to export gold to them. However, Turkey is not a member of the EU. In August, U.S. Under Secretary for Terrorism and Financial Intelligence David Cohen visited Istanbul to talk about enforcement of Iranian sanctions.

The Muslim Brotherhood are said to be critical of the protests going on all over the world, in response to the YouTube film that has angered the Salafists, the group that seems to be behind the anti-American demonstrations. The U.S. sends millions of dollars to Egypt in aid, and within the past month, Obama has been preparing to bail out Egypt’s failing economy with $1 billion from American taxpayers. It would be stupid for the Muslim Brotherhood to incite violence against the U.S. and lose the enormous contribution from the U.S., as well as our goodwill.

Or would it? According to the Washington Free Beacon, U.S. officials monitored a secret meeting between Egypt’s Intelligence Chief and a senior Iranian spy back in August. It is feared that the Muslim Brotherhood will covertly support global terrorism, while Obama is supporting their regime in Cairo.

The Intelligence Chief was removed after the meeting, as well as several other officials. The Muslim Brotherhood advocates jihad, but a nonviolent one. Iran’s foreign minister said that they were trying to restore diplomatic relations with Egypt, which were severed 30 years ago.

(Jihad can be interpreted in many ways, according to the Quran, with some interpreting violent war (extremists) but most Muslims view it as a personal struggle with God from within.)

Earlier this week, it was reported that the U.S. was hesitating on bailing out Egypt, due to the reports about the Iranian meetings and belief that the Muslim Brotherhood may have encouraged the riots. However, Egypt needs this money, and the new regime will either make or break the economy with their actions in the coming months.

Egypt needs money, Iran needs money…..the dollar isn’t stable, but there is a lot of gold out there…..

President Mursi went on television to call for an end to attacks on embassies, according to the BBC.  The Brotherhood scaled down calls for a large protest, saying that they wanted a “symbolic” presence in Tahrir Square, not a violent one.A day later, they took a tougher stance, sending in the riot police to clear Tahrir Square and the area around the U.S. embassy.

The film that is supposedly behind all of the protests was largely ignored in the U.S., but when it was shown on Egyptian television, all hell broke loose. Violent anti-American protests erupted all over the Middle East, and a U.S. Consulate was attacked in Benghazi, Libya, resulting in the death of U.S. Ambassador Chris Stevens and three other Americans.

The filmmaker, who used an alias but was confirmed by federal officials to be Nakoula Basseley Nakoula, a convicted felon and possibly a Coptic Christian, told a film production staffer during a phone call that he was in Alexandria raising money for the film. There is a lot of tension between Copts and Muslims in Egypt.

The trailers were translated into Arabic and then aired on Egyptian television. Officials at the Egyptian embassy were warned 48 hours before the attacks began by cable, though no specific threat was discussed.

Officials in Libya believe that the attack on the U.S. Consulate was premeditated. Some U.S. officials do as well. According to an article on CNN’s Security Clearance, there was no intelligence in advance to warn of an impending attack, but there was a high level of organization behind the attack that points toward pre-planning. The Libyan government fully believes that it was planned and was intended to do maximum damage.

Libya no longer has Gaddafi, but they still have oil and gold.

There is a larger demand for gold in other countries than there is in the U.S. There has been a large shift in how gold is purchased; jewelry sales have declined but gold investment has gone up in the Middle East and North Africa. The demand has weakened somewhat in the last quarter, but India and China have become major players in the global gold trade.

Demand for gold by central banks and official sector institutions accelerated in the last quarter. These are banking systems in developing countries, rather than world powers.  Japan’s investment in gold is positive for the first time since 2008. Iran is importing gold at an almost alarming rate.

The Republican party, who have ostracized Ron Paul partly due to his ideas on returning to the gold standard, recently announced that they are setting up a “gold commission
to discuss the feasibility of returning to the gold standard.

In the aftermath of all of this, there are some questions to consider:

Why would an Egyptian Coptic Christian living in America make an anti-Islamic film and then claim to be an Israeli-American?

Was the film shown in Egypt to provide a smokescreen for a terrorist attack in Libya?

What is the connection between Egypt and Iran? Is Egypt playing fast and loose with Obama, or is there collusion somewhere along the line?

Will the wealthy people (and there are many) in countries such as Egypt, Saudi Arabia, and other countries in North Africa, consider moving their assets into small metals in an attempt to preserve wealth before the dollar fails? Are they doing this already?

Why are all of these countries investing in gold, while the U.S. continues to print more unsupported fiat currency?

Why are the Republicans, who called Ron Paul crazy, suddenly willing to look at a return to the gold standard?

Are we experiencing blowback, or is America on a desperate mission to retain power by seizing control of gold in the Middle East under the guise of humanitarianism or the threat of attack?

How does this all fit together?

In the coming months, I believe that these questions will be answered. However, I’m not sure that it’s an answer that Americans are wanting to hear. The GOP made a huge mistake when they shut out Ron Paul…and the uncertainty that lies ahead could be devastating, no matter which candidate gets elected.

Economic collapse might be just around the corner. Instead of opening trade relations, we have continued to meddle in affairs in the Middle East. That interventionist policy may very well play a large part in our downfall.

“Let the word go forth from this time and place, to friend and foe alike, that the torch has been passed to a new generation of Americans–born in this century, tempered by war, disciplined by a hard and bitter peace, proud of our ancient heritage–and unwilling to witness or permit the slow undoing of those human rights to which this nation has always been committed, and to which we are committed today at home and around the world.

Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty.

This much we pledge–and more.”

John F. Kennedy

About angiedavidson75

mama,political activist, cat lover, free thinker
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9 Responses to Riots in the Middle East: Blowback, Gold, and America’s Role

  1. The Scarecrow says:

    This is why Ron Paul’s movement has been so much about peaceful resistance a la Gandhi. If you use violence or other such tactics, you won’t achieve anything, especially today with the media being run by corporate stooges just waiting to make any movement they don’t like look violent and stupid.

  2. Draw for Liberty says:

    Thank you for this!!!

  3. Pingback: Riots In The Middle East: Blowback, Gold, and America’s Role « Cedar Rapids Activist

  4. This is a great commentary. You are so talented!

  5. Larry Seiter says:

    Awesome and thought provoking… usual!

  6. stacy says:

    Well done Angie..thank You for all your hard work….. Again 🙂

  7. Paul Lukitsch says:

    Great article… And I am frustrated as well that there aren’t more answers to a lot of what’s going on, but that is primarily because the Federal government seems to have an agenda that isn’t necessarily in sync with either middle east stability, or stability of three US dollar domestically (at least until that fact created more problems for them in the middle east, which is why they are forming the Gold Commission now).

    I am infuriated with the Republican party in ignoring Ron Paul as well. But they didn’t just ignore him, or call his platform that of a “crackpot”. They ignored him almost too deliberately…as if his policies were to be feared. Perhaps they were. The federal government does major range to abandon its self-serving campaign in the middle east , and RP was certainly shunned for that reason… but maybe they thought the gold standard idea wasn’t so bad. But consider that if we did go back on some form of a gold standard, what would happen to the spending power of the US? I realize we have gold, but what I readily think is that Washington in concert with the Fed has too much power to spend however and whenever it sees fit. Actually spending gold would mean we would necessarily have to start keeping a real set of financials or books since we really are not using gold or putting any assets in direct risk by using the Fed and borrowing on credit. There is no real risk in paying with an unsecured credit card…which is exactly what the US is doing now. So essentially, I think the power hungry on the federal government don’t want to be hampered with any “real financial responsibility” which going on the gold standard would require.

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