TBR News February 14, 2018

Feb 14 2018

The Voice of the White House

Washington, D.C. February 14 2018:” The ideological and geopolitical tides of change have finally caught up with Israel, even before the demographic wave of Arab births succeeded in overwhelming it. For the simple fact of the matter is that, barring Mike Huckabee‘s ascension to the White House, whoever occupies the Oval Office will have to deal with the objective factors that are dissolving the “special relationship.” Israel has chosen to isolate itself from the international community, and unless we want to share that prison cell with Bibi and his successors, the American political class will have to begin distancing itself from a country fast becoming a pariah among nations.

This has already begun to happen, with US officials strongly hinting that Netanyahu’s repudiation of the two-state solution means we’ll have to reconsider our role as Israel’s “shield” in the UN Security Council. And worse – from the Israeli perspective – is soon to come.

The Zionist movement was originally devoted to the principle of “national liberation,” and the principle of self-determination for all peoples, but the internal logic of their program eventually undermined this ideological window-dressing. The Labor wing, devoted to an egalitarian vision of socialism and cooperation between Jewish émigrés and indigenous Arabs, had to give way to a more realistic “revisionist” vision of a Greater Israel that would rise at the Arabs’ expense.

Now the masks have been dropped, and Israel’s true face is there for all to see. Some will look upon it and continue to proclaim its great beauty, or will go to great lengths to explain away and even prettify its flaws – but it’s only a matter of time now before the world turns away in disgust.”

Table of Contents

  • The Military Industrial Complex Strikes Again
  • Donald Trump’s Dangerous Game
  • Republican Scare-Mongering on “Sanctuary Cities” Backfires, Democrats Win Big Upset in Florida Special Election
  • Not the end of The World: the return of Dubai’s ultimate folly
  • Hiding Assets
  • Ayelet Shaked: Israel must safeguard Jewish majority
  • The Great Majority of Jews Today Have No Historical or Ethnic Relationship to Palestine


The Military Industrial Complex Strikes Again

War Spending Will Bankrupt America

February 13, 2018

by John W. Whitehead


“Why throw money at defense when everything is falling down around us? Do we need to spend more money on our military (about $600 billion this year) than the next seven countries combined? Do we need 1.4 million active military personnel and 850,000 reserves when the enemy at the moment – ISIS – numbers in the low tens of thousands? If so, it seems there’s something radically wrong with our strategy. Should 55% of the federal government’s discretionary spending go to the military and only 3% to transportation when the toll in American lives is far greater from failing infrastructure than from terrorism? Does California need nearly as many active military bases (31, according to militarybases.com) as it has UC and state university campuses (33)? And does the state need more active duty military personnel (168,000, according to Governing magazine) than public elementary school teachers (139,000)?”

– Steve Lopez, Los Angeles Times

Mark my words, America’s war spending will bankrupt the nation.

For that matter, America’s war spending has already bankrupted the nation to the tune of more than $20 trillion dollars.

Now the Trump Administration is pushing for a $4.4 trillion budget for fiscal year 2019 that would add $7 trillion to the already unsustainable federal deficit in order to sustain America’s military empire abroad and dramatically expand the police state here at home. Trump also wants American taxpayers to cover the cost of building that infamous border wall.

Truly, Trump may turn out to be, as policy analyst Stan Collender warned, “the biggest deficit- and debt-increasing president of all time.”

For those in need of a quick reminder: “A budget deficit is the difference between what the federal government spends and what it takes in. The national debt, also known as the public debt, is the result of the federal government borrowing money to cover years and years of budget deficits.”

Right now, the U.S. government is operating in the negative on every front: it’s spending far more than what it makes (and takes from the American taxpayers) and it is borrowing heavily (from foreign governments and Social Security) to keep the government operating and keep funding its endless wars abroad.

This is how military empires fall and fail: by spreading themselves too thin and spending themselves to death.

It happened in Rome. It’s happening again.

Not content to merely police the globe, in recent decades, America has gradually transformed its homeland into a battlefield with militarized police and weapons better suited to a war zone.

Since taking office, President Trump – much like his predecessors – has marched in lockstep with the military. Now Trump wants $716 billion to expand America’s military empire abroad and billions more to hire cops, build more prisons and wage more profit-driven war-on-drugs/war-on-terrorism/war-on-crime programs that eat away at the Fourth Amendment while failing to make the country any safer.

Even the funds requested for infrastructure will do little to shore up the nation’s crumbling roads, bridges, railways, highways, power grids and dams.

No matter how your break it down, this is not a budget aimed at perfecting the Union, establishing justice, insuring domestic tranquility, providing for the common defense, promoting general welfare, or securing the blessings of liberty for the American people.

No, this is a budget aimed at pandering to the powerful money interests (military, corporate and security) that run the Deep State and hold the government in its clutches.

So much for Trump’s campaign promises to balance the budget and drain the swamps of corruption.

The glaring economic truth is that at the end of the day, it’s the military industrial complex – and not the sick, the elderly or the poor – that is pushing America towards bankruptcy.

As investigative journalist Uri Friedman puts it, for more than 15 years now, the United States has been fighting terrorism with a credit card, “essentially bankrolling the wars with debt, in the form of purchases of US Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”

The illicit merger of the armaments industry and the Pentagon that President Dwight D. Eisenhower warned us against more than 50 years ago has come to represent perhaps the greatest threat to the nation’s fragile infrastructure today.

Having been co-opted by greedy defense contractors, corrupt politicians and incompetent government officials, America’s expanding military empire is bleeding the country dry at a rate of more than $15 billion a month (or $20 million an hour) – and that’s just what the government spends on foreign wars.

That does not include the cost of maintaining and staffing the 1000-plus US military bases spread around the globe.

Incredibly, although the US constitutes only 5% of the world’s population, America boasts almost 50% of the world’s total military expenditure,  spending more on the military than the next 19 biggest spending nations combined.

In fact, the Pentagon spends more on war than all 50 states combined spend on health, education, welfare, and safety.

War is not cheap.

Although the federal government obscures so much about its defense spending that accurate figures are difficult to procure, we do know that since 2001, the US government has spent more than $1.8 trillion in the wars in Afghanistan and Iraq (that’s $8.3 million per hour).

That doesn’t include wars and military exercises waged around the globe, which are expected to push the total bill upwards of $12 trillion by 2053.

Mind you, these ongoing wars – riddled by corruption, graft and bumbling incompetence – have done little to keep the country safe while enriching the military industrial complex – and private defense contractors – at taxpayer expense.

Just recently, for example, a leading accounting firm concluded that one of the Pentagon’s largest agencies “can’t account for hundreds of millions of dollars’ worth of spending.”

Just consider the fact that it costs American taxpayers $2.1 million per year for each soldier deployed in Afghanistan.

Imagine what you could do with that money if it were spent on domestic needs here at home.

Unfortunately, that’s not going to happen anytime soon, not as long as the money interests in Washington keep calling the shots and profiting from the spoils of war.

War has become a huge moneymaking venture, and America, with its vast military empire, is one of its best buyers and sellers. Not only does the US have the largest defense budget, it also ranks highest as the world’s largest arms exporter.

The American military-industrial complex has erected an empire unsurpassed in history in its breadth and scope, one dedicated to conducting perpetual warfare throughout the earth.

For example, while erecting a security surveillance state in the US, the military-industrial complex has perpetuated a worldwide military empire with American troops stationed in 177 countries (over 70% of the countries worldwide).

In the process, billions have been spent erecting luxury military installations throughout the world.

For example, the US Embassy built in Iraq, dubbed “Fortress Baghdad,” covers 104 acres and boasts a “city within a city” that includes six apartment buildings, a Marine barracks, swimming pool, shops and 15-foot-thick walls. Camp Anaconda in Iraq, like many US military bases scattered across the globe, was structured to resemble a mini-city with pools, fast food restaurants, miniature golf courses and movie theaters.

While most Americans can scarcely afford the cost of heating and cooling their own homes, the American government spends $20 billion annually just to provide air conditioning for military installations in Iraq and Afghanistan.

In essence, what we’re doing is “we’re air conditioning the desert over there in Afghanistan, Iraq, and other places,” noted retired brigadier general Steven Anderson, a former chief logistician for Gen. David Petraeus in Iraq.

Think about that for a minute.

There’s a good reason why “bloated,” “corrupt” and “inefficient” are among the words most commonly applied to the government, especially the Department of Defense and its contractors.

For instance, a study by the Government Accountability Office found that $70 billion worth of cost overruns by the Pentagon were caused by management failures. To put that in perspective, that equates to one and a half times the State Department’s entire $47 billion annual budget.

Fraud is rampant.

A government audit, for example, found that defense contractor Boeing has been massively overcharging taxpayers for mundane parts, resulting in tens of millions of dollars in overspending. As the report noted, the American taxpayer paid:

$71 for a metal pin that should cost just 4 cents; $644.75 for a small gear smaller than a dime that sells for $12.51: more than a 5,100 percent increase in price. $1,678.61 for another tiny part, also smaller than a dime, that could have been bought within DoD for $7.71: a 21,000 percent increase. $71.01 for a straight, thin metal pin that DOD had on hand, unused by the tens of thousands, for 4 cents: an increase of over 177,000 percent.

Price gouging has become an accepted form of corruption within the American military empire.

And if you think gas prices at home can get high, just consider what the American taxpayer is being forced to shell out overseas: once all the expenses of delivering gas to troops in the field are factored in, we’re paying between $18-30 per gallon for gas in Iraq and Afghanistan.

Incredibly, despite reports of corruption, abuse and waste, the mega-corporations behind much of this ineptitude and corruption continue to be awarded military contracts worth billions of dollars.

The rationale may keep changing for why American military forces are in Afghanistan, Iraq and elsewhere, but the one that remains constant is that those who run the government are feeding the appetite of the military industrial complex.

What began in 2001 as part of an alleged effort to root out al Qaeda has turned into a goldmine for the military industrial complex and its army of private contractors.

Just consider: the Pentagon in 2008 spent more money every five seconds in Iraq than the average American earned in a year.

Yet Congress and the White House want taxpayers to accept that the only way to reduce the nation’s ballooning deficit is by cutting “entitlement” programs such as Social Security and Medicare?

As Martin Luther King Jr. recognized, under a military empire, war and its profiteering will always take precedence over the people’s basic human needs.

Simply put, we cannot afford to maintain our overextended military empire.

“Money is the new 800-pound gorilla,” remarked a senior administration official involved in Afghanistan. “It shifts the debate from ‘Is the strategy working?’ to ‘Can we afford this?’ And when you view it that way, the scope of the mission that we have now is far, far less defensible.”

Or as one commentator noted, “Foreclosing the future of our country should not be confused with defending it.”

Inevitably, military empires collapse.

As Cullen Murphy, author of Are We Rome? and editor-at-large of Vanity Fair writes:

A millennium hence America will be hard to recognize. It may not exist as a nation-state in the form it does now – or even exist at all. Will the transitions ahead be gradual and peaceful or abrupt and catastrophic? Will our descendants be living productive lives in a society better than the one we inhabit now? Whatever happens, will valuable aspects of America’s legacy weave through the fabric of civilizations to come? Will historians someday have reason to ask, Did America really fall?

The problem we wrestle with is none other than a distorted American empire, complete with mega-corporations, security-industrial complexes and a burgeoning military. And it has its sights set on absolute domination.

Eventually, however, all military empires fail.

At the height of its power, even the mighty Roman Empire could not stare down a collapsing economy and a burgeoning military. Prolonged periods of war and false economic prosperity largely led to its demise. As historian Chalmers Johnson predicted:

The fate of previous democratic empires suggests that such a conflict is unsustainable and will be resolved in one of two ways. Rome attempted to keep its empire and lost its democracy. Britain chose to remain democratic and in the process let go its empire. Intentionally or not, the people of the United States already are well embarked upon the course of non-democratic empire.

I would suggest that what we have is a confluence of factors and influences that go beyond mere comparisons to Rome.

It is a union of Orwell’s 1984 with its shadowy, totalitarian government – i.e., fascism, the union of government and corporate powers – and a total surveillance state with a military empire extended throughout the world.

As we have seen with the militarizing of the police, the growth of and reliance on militarism as the solution for our problems both domestically and abroad affects the basic principles upon which American society should operate.

We must keep in mind that a military empire will be ruled not by lofty ideals of equality and justice but by the power of the sword. Those in the military are primarily trained to conduct warfare, not preserve the peace.

Here’s the kicker, though: if the American empire falls and the American economy collapses – and with it the last vestiges of our constitutional republic – it will be the government and its trillion-dollar war budgets that are to blame.

Of course, the government has already anticipated this breakdown.

That’s why the government has transformed America into a war zone, turned the nation into a surveillance state, and labeled“we the people” as enemy combatants.

For years now, the government has worked with the military to prepare for widespread civil unrest brought about by “economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters.”

Having spent more than half a century exporting war to foreign lands, profiting from war, and creating a national economy seemingly dependent on the spoils of war, the war hawks long ago turned their profit-driven appetites on us, bringing home the spoils of war – the military tanks, grenade launchers, Kevlar helmets, assault rifles, gas masks, ammunition, battering rams, night vision binoculars, etc. – and handing them over to local police, thereby turning America into a battlefield.

As I make clear in my book Battlefield America: The War on the American People, this is how the police state wins and “we the people” lose.

More than 50 years ago, President Dwight Eisenhower warned us not to let the profit-driven war machine endanger our liberties or democratic processes.

We failed to heed his warning.

As Eisenhower recognized in a speech given to the American Society of Newspaper Editors, on Apr. 16, 1953, the consequences of allowing the military-industrial complex to wage war, exhaust our resources and dictate our national priorities are beyond grave:

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people… This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.”


Donald Trump’s Dangerous Game

Despite a booming economy, U.S. President Donald Trump is calling for a weaker dollar, a move that threatens to jeopardize Europe’s fragile economic upswing. There’s very little the European Central Bank can do to fight back.

February 14, 2018

by Tim Bartz and Martin Hesse


For the past 15 years, Rolf Philipp has manufactured “bones for airplanes” in the town of Übersee on Bavaria’s Chiemsee lake. That’s what the founder and CEO of Aircraft Philipp calls the aluminum and titanium parts his company produces for the aerospace industry. His company has a combined 250 employees in Bavaria and at a second German plant in Karlsruhe — and business is going well, with the family-owned enterprise bringing in over 60 million euros in revenues last year.

Recently, though, developments overseas have been making life more difficult for Philipp. Within the past eight months, the United States dollar has lost more than 10 percent of its value, with the exchange rate now standing at $1.24 to the euro. Just one year ago, Aircraft Philipp found itself profiting from an exchange rate of under $1.10 to the euro.

Philipps’ most important customers, Airbus and Boeing, sell the majority of their aircraft in dollars, and their sheer power in the marketplace allows them to pass the currency risks on by also paying suppliers in dollars. If the dollar loses value against the euro, Aircraft Philipp’s profits also drop because the company’s costs are generated largely in euros.

“We have a technological edge in Germany, but that doesn’t help much when the dollar falls on us like a hammer,” says Philipp. He says that if the euro exchange rate was to rise to $1.35 or higher over an extended period of time, it would become increasingly attractive for customers to make purchases elsewhere.

In principle, of course, the euro’s rise, which began around a year ago, is good news. It signifies the degree to which the economy on the Continent has recovered after years of weakness. That development has been bolstered by the growing willingness to cooperate among the European Union’s core countries that has become visible since the Brexit vote — primarily because of France’s new president. “Skepticism of Europe has disappeared since Emmanuel Macron’s election,” says David Folkerts-Landau, chief economist at Deutsche Bank. “The major investors have returned to Europe because they see that things are running again.”

Donald Trump’s Controversial Cocktail 

But the European developments that have strengthened the euro represent just one side of the coin. The flip side is Donald Trump’s “America first” policies: his open interest in a weak dollar as well as a controversial cocktail of supply and demand policies — lowering taxes, rolling back regulations and the repatriation of wealth that has been parked abroad. The president’s policies are laden with enormous risks.

Even though the U.S. economy has already been growing robustly for years and, with an unemployment rate of just 4.1 percent, is approaching full employment, Trump is continuing to stimulate growth — a focus that could result in an overheated economy, which would present a danger to the entire global economy.

On the surface, everything appears to be in good shape. America, Europe and Asia alike are producing, consuming and investing more, and the International Monetary Fund just issued an upward revision of its forecast for worldwide economic growth to 3.9 percent for 2018 and for 2019.

But the speed with which euphoria can turn into panic was on full display at the beginning of last week, when fear suddenly began to spread among markets over excessive government deficits, inflation and interest rate increases, sparking the largest point loss in Wall Street history.

Even if the percentage slide on the markets was less dramatic, it is still likely that it bothered Trump a great deal. But when it comes to the weak dollar, his administration has literally talked it into existence. Trump wants to weaken the currency to promote exports, curb imports and to reduce his country’s current accounts deficit — one of the central pledges he made during the election campaign.

At the World Economic Forum in Davos, U.S. Treasury Secretary Steven Mnuchin said that a weak dollar was good for the U.S. economy. Trump himself may have sounded a little more conciliatory later on, but the genie was already out of the bottle, and Mnuchin’s verbal intervention was already having an effect. The dollar fell rapidly, and the nasty term “currency war” could suddenly be heard in the hallways of Davos.

Irritated, But Relatively Powerless

“There is no longer any doubt that the U.S. government is not only waging a currency war, but is also in the process of winning it,” Joachim Fels, chief economist at mutual funds giant Pimco, says. Trump’s policies represent a threat to Europe’s recovery, a situation that has displeased the European Central Bank (ECB). But there isn’t much the ECB can do about it.

By pursuing economic policies that ignore the needs of America’s trading partners — an approach economists refer to as “beggar-thy-neighbor” — Trump has revisited an old American tradition. In the early 1970s, it was Treasury Secretary John Connally who raised the prospect of a budget deficit of $40 billion — a massive sum at the time — and justified it as “fiscal stimulus.” In response to concerns voiced by his European counterparts, worried as they were about the weak dollar, he responded with his legendary line that the dollar “is our currency, but your problem.”

Lloyd Bentsen, treasury secretary under Bill Clinton, informed the Japanese in 1993 that he urgently desired a stronger yen in order to stem the Asian trading partner’s high export surpluses.

With “America First,” Trump has now elevated “beggar thy neighbor” to the status of administration doctrine.

The first part of Trump’s economic policy agenda envisions stimulating the economy through tax cuts and public infrastructure investments. That would help American companies, and the rest of the world could also profit initially if the U.S. economy were to grow more rapidly and companies in Europe or Asia were to receive more orders.

But it’s the second part of the Trump program that reveals the real strategic thrust. During the same weak that the treasury secretary could be heard preaching the virtues of a weak dollar, the U.S. government imposed steep import tariffs on washing machines and solar cells. The combination of a weak dollar and protectionist measures are aimed at creating a competitive advantage

“The government clearly wants a weak dollar right now because inflation is moderate and a weaker dollar will make it easier for the manufacturing sector to grow,” says Barry Eichengreen, a professor for economics at the University of California at Berkeley.

Loose fiscal policy does in fact create downward pressure on the currency. If taxes are lowered and the government increases its spending, households then have more money at their disposal. Demand increases for goods from abroad, thus weakening their own currency. Domestically, higher demand drives prices upwards, especially when cheap imports are slapped with tariffs, so that the purchasing power of the dollar sinks.

Playing with Fire

Unless, of course, the Federal Reserve steps in to counter that development with higher interest rates. That would attract investors from abroad looking for better returns and the dollar would be strengthened, but it would also jeopardize the upswing. The situation in the economy and on the financial markets is so tense right now that Trump’s policies are tantamount to playing with fire.

His policies have the potential to overturn years of delicate crisis management on the part of the central banks in the U.S. and Europe and to force them into an abrupt change of course. “It’s not the right time for that kind of fiscal policy program,” says one of the world’s most influential central bank heads.

Few past upswings have been as completely dependent on low interest rate policies of the kind put in place after the global financial crisis a decade ago. In addition to getting the economy back on track, they also drove up stock and real estate prices. Indeed, astronomical prices are once again being paid for company acquisitions — prices of the kind last seen in 2007.

The crash in stock prices seen on Feb. 5 also revealed that banks and hedge funds are once again playing with risky bets on the financial markets that can magnify upheavals if the markets get spooked. So-called exchange-traded notes (ETN) valuing in the billions are a bet on calm market conditions and minimal changes in stock prices, but they suddenly lost all their value in last Monday’s turbulence and also intensified the downward market trend.

Fear is now rampant that the best of all imaginable worlds for companies, governments and speculators may soon come to an end — a world of zero percent interest rates, making debt almost completely unproblematic, investments unbelievably cheap and financial investments of all kind seemingly without risk.

An Impossible Task

The volatile situation has transformed Jerome Powell into one of the most interesting appointees in Washington at the moment. His predecessor Janet Yellen has left behind an almost impossible task for the new head of the Federal Reserve.

Powell likely already sensed what he was up against on this first day of work at the massive Fed headquarters on Constitution Avenue, just four blocks from the White House. Right at the start of his new job, global stock markets collapsed. It’s possible the central banker might face the same challenges as his predecessors Alan Greenspan and Ben Bernanke did when they were appointed. Greenspan had barely been in office for two months in 1987 when he had to deal with the biggest market crash seen since 1929. In 2007, meanwhile, just a year after his appointment, Bernanke was tasked with saving the country from the consequences of the subprime mortgage crisis and the massive recession that followed.

The Fed is scheduled to make its first interest rate decision under Powell in March and it’s possible he will be forced to signal to the markets whether he expects to increase interest rates at a higher frequency than the three times that have been forecast for 2018.

“The risk of inflation in the U.S. is increasing, the interest rates for the bond markets are far too low,” says Folkerts-Landau, who regards Powell as an independent thinker. “He’s very pragmatic and is unlikely to just do what others want.”

Given the high sovereign debt level, it’s unlikely that Trump wants either higher interest rates or a stronger dollar. Experts estimate that Trump’s tax plan could increase the budget deficit over the next 10 years by an additional $1.5 trillion.

The question as to whether Trump prevails, or Powell puts up a forceful challenge to the president is also of major importance for Europe. If interest rates remain low and Trump maintains his weak dollar policy, the Europeans will have a problem.

Inside the European Central Bank skyscraper in Frankfurt, the mood is more charged than it has been in a long time. Members of the ECB’s powerful Governing Council only recently stated that they were close to the benchmark goal of 2 percent inflation, but they now worry about the fruits of their labor.

“We are confident, but at the same time vigilant because our monetary policy is working and has made the upswing more robust, which is bringing us closer to our goal,” says ECB Chief Economist Peter Praet. “But there are a number of international risks and we are watching them very closely.”

The Governing Council considers the weak dollar to be the greatest risk. For years, the ECB kept the key interest rate under 0 percent and bought up large quantities of government and corporate bonds to stimulate the economy. Even if the ECB always stressed that it was not engaging in exchange-rate policy, it too was deploying its currency as an economic weapon. A (desired) side effect of its policies, after all, was weaker euro, with the European currency even approaching parity with the dollar a year ago.

The euro’s rapid rise since then has been inopportune for the ECB, which explains the unusually curt reaction from Frankfurt to the American comments that sent the dollar into a tailspin. “The last thing the world needs today is a currency war,” Benoit Coeure, a member of the ECB Governing Counsel, groused recently at the World Economic Forum in Davos. And speaking in front of the European Parliament in Strasbourg at the beginning of last week, ECB head Mario Draghi said that the strong volatility in the euro exchange rate had created “new headwinds.”

“A currency war works like this: If you don’t react to a thrust of the kind America has just made, then the assailant will be emboldened to continue doing it,” says Ulrich Kater, chief economist at Germany’s DekaBank. “That’s why the ECB has to respond quickly and strongly, and it has done so.”

At the moment, it remains a war of words, but it has the potential to escalate.

“A stronger euro could slow growth, especially in the periphery countries,” says Deutsche Bank Chief Economist Folkerts-Landau. “That’s why the ECB could see itself compelled to delay its exit from ultra-loose monetary policy if the dollar continues to fall.”

U.S. economist Eichengreen thinks that the Trump administration’s toying with the exchange rate is dangerous for another reason. A moment could come when investors have doubts about the U.S. government’s determination to maintain a high credit rating. “Then they could push dollars onto the market, leading the dollar to fall faster than expected. That wouldn’t be in anyone’s interest.”

Mid-Size Businesses Could Take Hit

Particularly not in the interest of European businesses.

At the moment, the dollar hasn’t yet become a problem for the European economy. Most experts view the fair exchange rate as being between $1.25 and $1.30 to the euro. But that picture will change if the U.S. currency continues to weaken.

“For European exports, things will get difficult with a euro exchange rate of $1.35 or $1.40 — and it is very possible that the rate will continue to move in that direction,” says economist Folkerts-Landau. He also says a weak dollar won’t be such a problem for firms on the DAX index of German blue chip companies, but it would present significant difficulties to the mid-sized businesses that form the backbone of the German economy. Their profit margins tend to be lower. Companies in Italy in Spain would likewise be affected, says Folkerts-Landau, because they “export products that tend to be slightly lower quality and are more likely to compete on the basis of price.”

DAX index companies like Fresenius, SAP, Daimler, Bayer and Linde can draw up to 20 to 50 percent of their revenues from the United States, often even more than they generate in Germany. But they no longer suffer as strongly from currency fluctuations as they used to, before globalization had advanced this far.

“We have strongly internationalized value creation in the past 10 years and thus considerably reduced the risk created by fluctuations in the dollar and other currencies” says Norbert Mayer, senior vice president of finance and group treasurer at BMW. He learned his lesson shortly before the global financial crisis, when the euro had risen to a rate of $1.50 to the euro, which led BMW’s business in the U.S. to suffer considerably. BMW and many other companies made major changes in response to the currency fluctuations, beefing up or establishing plants in the dollar area.

The result is that in 2017, BMW sold 353,000 vehicles in the United States, but manufactured around 400,000 at its plant in Spartanburg, South Carolina. Despite this shift, the company still has a dollar risk in the single-digit billions, in part because the company also sells engines in the U.S. in addition to vehicles. But because BMW purchases raw materials in dollars and also hedges its currency risks through financial market mechanisms, its remaining risks are manageable.

For mid-sized companies like Airbus supplier Rolf Philipp, however, manufacturing abroad usually isn’t worthwhile. And the lower your position in the supply chain, the harder it is to, for example, procure raw materials in dollars, Philipp explains. The only option really available to him and many other companies is to hedge the currency risks for as many of their orders as possible through the bank. But doing so is expensive, and it will get even more so the longer the weak dollar continues and the further the exchange rate falls.

Even worse than a weak dollar — for Philipp, for other corporations and for the entire global economy — would be if Trump’s risky policies led to inflation, higher interest rates and an abrupt end to the economic boom. That would mark the end of a cold war — and everybody would lose.


Republican Scare-Mongering on “Sanctuary Cities” Backfires, Democrats Win Big Upset in Florida Special Election

February 13 2018

by Zaid Jilani

The Intercept

In a special election on Tuesday, Florida’s Republicans took a page from Ed Gillespie’s playbook and deployed the threat of “sanctuary cities” to scare up the votes to win.

And, as it did in Virginia, the book ended the same way, with Republicans losing at the polls. Democrat Margaret Good beat Republican James Buchanan, son of Rep. Vern Buchanan, 52-45 percent, after Trump had carried the Sarasota district a year ago.

After weeks of dodging forums with the other candidates, Buchanan raised the sanctuary issue in a debate with Good and libertarian Alison Foxall in late January. “I do think as far as sanctuary cities are concerned, we should not have any sanctuary cities here in the state of Florida,” he said. “We shouldn’t be harboring illegal immigrants.”

“We must end sanctuary cities and put a stop to benefits for illegal immigrants,” reads the campaign website.

Good — who based her campaign for office on opposition to school vouchers and support for Medicaid expansion and environmental protection — countered Buchanan by insisting she cares about public safety, but pushed back on what she viewed as a larger assault on local control. “I think it’s important to remember that we are a country of immigrants,” she countered. “But let me be clear, if someone commits a crime in Sarasota or in Florida, they should be punished. And it does not matter what your immigration status is at that point. I think as far as home rule and sanctuary cities goes, that’s yet another example of the legislature trying to tell local governments what to do. And I leave it to local law enforcement and the federal government to follow the law.”

A political action committee called Leadership for Florida’s Future has been sending mailers hitting Good on the issue. The Intercept obtained a copy of one below:

Buchanan has said he is not responsible for the mailers, saying that they are being sent by “third-party groups.” Leadership for Florida’s Future is chaired by Michael Millner, a longtime GOP-aligned campaign consultant. Millner is known to be willing to play both sides of an issue to win an election. Although his committee is aligning with Trump-like views in this election in which Republican turnout is key, his very same committee in 2016 was running negative mailers comparing a Democrat to Donald Trump in a Democratic-leaning race.

The larger political context is that Republicans in the legislature are trying to pass the toughest law in the nation penalizing local public agencies for shielding undocumented immigrants. Florida’s Republican House Speaker Richard Corcoran went on TV with an ad touting the change. It features a fair-skinned, redheaded woman in a Florida suburb being accosted by a man in a hoodie with a gun — implying that sanctuary status would enable violence.

Currently, there are very few communities in Florida that have this designation. Four localities, mostly small ones have been designated by Immigration and Customs Enforcement or the Department of Justice as having policies that are equivalent to sanctuaries: Clay County, Hernando County, Alachua, and West Palm Beach. Miami was once designated as a sanctuary city, but that designation was removed last year with the approval of the Trump administration.

Collectively, about half a million Floridians live in these locations, in a state of 20 million people.

But Kara Gross, legislative counsel at the Florida American Civil Liberties Union, pointed out to The Intercept that the bill Florida Republicans are supporting does not just take aim at sanctuary cities. “The bill doesn’t even mention the word sanctuary city,” she noted. “It’s about basically any policy that might limit the ability of law enforcement to make determinations on their own about how they want to interact with their immigrant communities.” As written, the legislation would enable the state to fine even a public university that refuses to honor immigrant detainers up to $5,000 a day.

There was always a chance that such a harsh measure against something that isn’t even relevant could backfire on Buchanan, much as it did Gillespie.

But the 72nd District is not directly analogous to the state of Virginia. Virginia’s increasing diversity is making racially tinged attacks less effective than they would have been in the past. The 72nd, which includes Sarasota Beach, is home to a large elderly white population that Republicans could reasonably believe might be more receptive to fears about crime from undocumented immigrants.

The district narrowly went to Trump in November 2016 by around five points. On the state house level, Republicans easily picked up the seat in 2016 by a 16-point margin, though a last-minute scandal involving alleged sexual misconduct by the Democratic candidate was a major factor in the race.

There were, however, signs that Democrats had the momentum heading into election day. According to the latest campaign finance figures, Good had raised over $484,000, partly with the help of Sister District, which adopted her race and encouraged progressives from around the country to pour money in.

Buchanan, on the other hand, had raised just over $353,000. The district was also subject to the same trends that are occurring across the wider South, where Democrats were victorious in a number of special elections in previously GOP-held seats. Last year, a Democrat bested a Republican in a special election for a state Senate seat. Previously, the district was a plus-10 GOP seat.




Not the end of The World: the return of Dubai’s ultimate folly

Underwater bedrooms, ‘Lohan Island’ and snow all year round – a decade after it was scuppered by the financial crash, the fantasy archipelago of 300 artificial ‘countries’ is back in business. Has anybody learned anything?

February 13, 2018

by Oliver Wainwright in Dubai

The Guardian

I had the whole of Palestine to myself that day. It was only a short swim from Lebanon but, as I waded ashore out of the shallow, soupy water, it became clear that I was the only visitor the island had seen for some time. Clambering to the top of the hill, over a lunar landscape populated by the occasional piece of driftwood and the odd discarded beer bottle, I could see the sandy mounds of Jordan, Saudi Arabia and Ethiopia beyond, rising out of the sea like bobbing croutons. The gleaming spire of the Burj Khalifa twinkled through the haze on the distant horizon.

A decade since it was dredged from the seabed, The World is a forlorn sight. It was the most ambitious plan of Dubai’s pre-crash bubble, topping the creation of peninsulas shaped like palm trees and the construction of the tallest building on the planet, dreamed up as the ultimate trophy project to trump them all. In pursuit of the world’s attention, the oil-rich emirate would remake the world itself. “The Palm puts Dubai on the map,” proclaimed the marketing material at the time. “The World puts the map on Dubai.”

Conceived in 2003, the project was to be an exclusive offshore playground for film stars, royalty and celebrity tycoons: an artificial archipelago of 300 islands set two miles off the coast. Invitations to “Own the World” were sent to a targeted group of 50 potential buyers each year, offering tours of the site by yacht or helicopter, with prices for the islands ranging from $15-50m (£10-36m). Richard Branson posed for photos on little Britain in a Union Jack suit; Karl Lagerfeld launched plans for a fashion-themed island; rumours swirled that Brad Pitt and Angelina Jolie had acquired Ethiopia for their ever-expanding clan of adopted children.

After five years of dredging, which saw 320 million cubic metres of sand and 25 million tonnes of rock hauled into place, the final stone in the breakwater was laid in January 2008 – on the eve of the global financial crisis. The vision collapsed just as quickly as the computer renderings had been conjured. Dubai World, the government investment arm in charge of the project, was revealed to have debts of $60bn.

Surveying the barren spots of sand that dot the sea today – which, in aerial images, make it look as if the Gulf is suffering from a nasty case of acne – it’s hard to shake the sense of an Ozymandian ruin. Covering more than 5,000 hectares – almost seven times the size of Venice – and encircled by a 20-mile-long breakwater, the remains of The World lie as a mind-boggling monument to the spectacular hubris of a moment in time when anything seemed possible. The owners of Ireland were planning to rebuild the Giant’s Causeway, along with typical Irish streets, pubs and rolling green countryside. A Chinese billionaire had drawn up plans to remake Shanghai’s skyline on his island, complete with a copy of the Oriental Pearl TV Tower. A company called Opulence Holdings had acquired Somalia, with ambitions to sculpt it into the shape of a seahorse, where residents could hit golf balls from their balconies.

Overnight, billions of pounds in construction contracts evaporated in a puff of sand, leaving a trail of bankruptcies, lawsuits and unpaid debts. The owner of Great Britain, Safi Qurashi, was jailed, accused of bouncing £50m of cheques (for which he was later exonerated, after serving three years), and the owner of Ireland, John O’Dolan, killed himself in early 2009. After years of being hounded by irate investors wondering where their money had gone, the British co-owner of Thailand, Imtiaz Khoda, was recently jailed for an unrelated fraud, as part of a group that conned NHS hospitals, councils and a government out of more than £12m. Dogged by associations with shell companies and criminal dealings, the whole project became toxic, damned by rumours of money-laundering, pyramid schemes and reports that the islands were sinking into the sea.

Lebanon was the only island that opened to the public, and it still struggles on today. For 200 dirham (£40), you can spend the day at its world-weary beach club, paddling in the pool and eating wagyu beef sliders on a faded fibreglass sun lounger. The island plays host to champagne-fuelled jamborees by night, as a venue for fashion shows, DJ parties and debauched corporate events. It seems like an appropriate place for a bit of end-of-the-world hedonism, surrounded by a scene of post-apocalyptic desolation.

So it comes as some surprise to learn that construction is back under way. Standing on Lebanon’s beach alongside a small handful of other bewildered tourists, I see diggers in the distance, shifting sand beneath what looks like the frame of a substantial new building on an island next door. Trucks are trundling from a concrete batching plant on Monaco over towards Sweden, where a series of villas are under construction, designed in collaboration with Bentley Home. On Italy, the Portofino Hotel is rising out of the sand, billed as the first family-oriented five-star hotel in the region. The ground is being prepared for the arrival of a sprawling Alpine-themed complex on the island of Switzerland, while a speedboat brings a couple of Emirati buyers to view a floating show home, and to marvel at the view from its glazed underwater bedroom. After a decade in limbo, The World is back – with more ambitious plans than ever before.

“I am going to make it snow all year round,” says Josef Kleindienst. He is sitting in a white leather armchair in his office at the top of a tower in Dubai, from where he can survey the fronds of the Palm Jumeirah stretching out into the sea below. In the room next door stands an enormous model of his vision for the Heart of Europe, a fantastical concoction of Austrian castles, Swiss chalets and Russian palaces (and, oddly, Polynesian huts) set across a group of six islands, connected by meandering walkways and baroque bridges. “Rain and snow might not be so attractive if you live in northern Europe, but to someone in Dubai they are magical things,” he says. “People here dance in the street when it rains.”

With his heavy Austrian accent, imposing stature and chilly demeanour, Kleindienst has the air of a Bond villain, and I half expect him to unveil a giant laser cannon for making it snow on his desert islands. He explains how he has been working with scientists at the Fraunhofer Society in Germany to develop outdoor cooling technology using cold water. It has the same energy consumption and uses the same principle as conventional air conditioning, he says, except that the water will fall from a network of pipes in the form of rain. On a plaza in the Swiss-themed resort, the temperature will be cranked down a few notches to make snowflakes, which he says will settle on the ground thanks to cooling pipes buried beneath the surface.

As a former police chief inspector, who set up his property development business in 1998 and moved to Dubai in 2002, Kleindienst makes an unlikely saviour of The World. He bought the island of Austria in 2006, before catching the bug and acquiring three more islands, then another three. Owners received access to their patches of sand from the master developer, Nakheel, in September 2008, one month before the full force of the financial crisis hit Dubai. “There was a chance, and there was a risk,” he says. “All the others saw the risk and left. We saw the chance and stayed.”

As we walk around the big model, Kleindienst ticks off his countries and attractions, like God inspecting his handiwork on the seventh day. “St Petersburg is our honeymoon island,” he says, pointing out a blob of land that they have remodelled in the shape of a heart, dotted with thatched cabins, from which long piers extend to provide mooring posts for “Floating Seahorse” villas, on sale for 12-15m dirham (£2.3m–£2.9m). “Then we have the main Europe island, with our Ibiza party hotel and four city hotels – Munich, London, Amsterdam and Scandinavia, connected by a circular, glass-bottomed swimming pool on the roof – and the Ikaria wellness hotel, named after the Greek island where people live longer and healthier than anywhere else in the world.” It is a heady global smorgasbord, with little concern for geographical accuracy or architectural vernacular.

Germany has been reserved for higher-end occupants – “the second or third homes of your average millionaire” – while Sweden is billed as the pinnacle of exclusivity, featuring 10 “palaces”, whose rooftops are modelled on the upturned hull of a viking ship. They come complete with infinity pools, private beaches and furniture branded with the winged B of Bentley. Kleindienst claims they have all been sold to members of the Gulf states’ ruling families, the last one for 75m dirham (about £15m).

Just as Dubai’s ruler, Sheikh Mohammed, gifted one of The World islands to Formula One champion Michael Schumacher in 2006, as a ruse to encourage others to come here, so Kleindienst hopes to use the presence of royals as bait. “We know that where the royals are spending their summer vacation, many other people also want to be,” he says. But would privacy-seeking princes really want to relax anywhere near hundreds of other people holidaying in an Ibiza-themed resort? “One of our buyers could easily afford to buy a whole island of his own,” says Kleindienst, “but he wants to be part of our project so he can experience the snow plaza and enjoy all of the entertainment we will be laying on. We will have a restaurant from every country in Europe, and a different cultural festival each night.”

With distances of just a few metres between the islands, it doesn’t feel like a particularly exclusive place. You’ll be able to wave at your neighbouring billionaire across a shallow channel. “We are working on floating landscaping for privacy,” says Kleindienst. “We have already tested floating palm trees.”

Trees won’t be the only things bobbing in the water. Given the high premium on land, his firm is developing plans for entire floating islands, beginning with Venice. Gondolas will weave between modern palazzos, set around a swimming pool proportioned to match St Mark’s Square, while underwater bedrooms and restaurants will provide views on to a new coral reef. He says they have already established a coral nursery on one of the islands, and plan to cultivate oyster beds too, with pearl-diving added to the list of attractions on offer.

Wading through the murky water today, it is hard to believe the Photoshopped visions of people frolicking among shoals of exotic fish in a crystal-clear lagoon, lounging in their underwater lairs or playing in the snow. Kleindienst says the entire development and its 4,000 bedrooms will be completed in time for the Dubai Expo in 2020, which seems impossibly tight. He insists that most of the Floating Seahorse villas have been sold, promising investors a guaranteed yield of 8% over five years; but these figures are hard to take seriously when current prime residential property yields in Dubai stand at around 5%. Nor might it be of particular encouragement to investors that one of Kleindienst’s structures recently sank following a New Year’s Eve party.

For all the hype, industry insiders raise their eyebrows at the idea that The World is back on track. “When you go into these marketing suites, it feels like 2007 all over again,” says Dubai-based architect Sara Anwar, who was involved with Karl Lagerfeld’s plans for a fashion island, Isla Moda, before the financial crisis hit. The project, developed by Dubai Infinity Holdings, was to include a fashion resort, themed residential villas, haute couture boutiques and luxury hospitality facilities, all aimed at ultra-high net worth individuals (or UHNWIs as they are known – an acronym that, when pronounced, sounds appropriately like “unwise”).

“Every five minutes a bus would arrive at the sales office full of potential buyers, and people would fly here on their private jets for the most lavish launch parties imaginable,” Anwar says. “Everyone here on the ground had a real belief in what was happening, but there was definitely a sense of skepticism from outsiders when they arrived.”

Others dismiss the new plans outright as a financial loser, but Kleindienst’s bullish attitude appears to be rubbing off. After a decade of despair, some other island owners have been buoyed by the company’s efforts. Emirati developer Seven Tides announced in September that it plans to complete a 100-villa resort on one of its 10 islands in the South America cluster by the end of 2018.

“This will be the first resort of its kind anywhere on The World,” said the company’s CEO, Abdulla Bin Sulayem. “The design is beautiful, which is important, because if we don’t have a ‘wow’ factor, there’s no point in doing it.” Commenting on the unlikely speed of the project, he added: “When you’re building lots of [similar structures], everything is like Lego,” which doesn’t bode particularly well for the quality of the plans. It’s not the first time Seven Tides has announced its intentions to be the first to have a resort open on The World. In 2009, it promised a scheme of chalets on stilts would be “opening soon” on the islands of Buenos Aires, Bolivia, Argentina, Chile and the Falklands, complete with swimming pools and tennis courts. Nothing has materialised.

As if to complete the sense of deja-vu, bringing back a touch of celebrity sparkle, Mean Girls star Lindsay Lohan, who recently relocated to Dubai, has announced that she too is designing her own island on The World. “I have a lot of little projects [in Dubai] because I like to keep busy,” she told a US talkshow in January, describing her expansive range of branded enterprises, from a new makeup line to nightclubs in Athens and Mykonos, and now “Lohan Island”. “I’m out Trump-ing Trump with the name Lohan!”

These days there is no sign of The World in the sales office of Nakheel, the government-owned development company that was founded in 2000 to head up the offshore projects. Crossing a bridge over an azure pond, I arrive at their complex of domed buildings set a in lush tropical garden, to be welcomed into a marketing suite beneath a soaring marquee roof recalling a bedouin tent, where polished steel palm trees tower over a model of the Palm Jumeirah.

“People ask why we build new land in the sea when we have so much empty desert,” says Mohammed Rashed Bin Dhabeah, Nakheel’s managing director of development, adjusting his crisp white keffiyeh. A vitrine of miniature sports cars stands against one wall of his office, and a signed Lionel Messi football shirt hangs framed on another. “We only have 60km of beach running along the coast of the Emirates, but we have 14 million visitors a year who come here for the beaches. So we needed to create more beach.”

It all began with the Palm Jumeirah, an idea credited to Sheikh Mohammed, who is said to have sketched out the form of the trunk and fronds as the most efficient shape to maximise the amount of beachfront. Each frond would be like a street, with a row of properties on either side, backing on to their own stretch of private beach. The novelty shape and the promise of beachfront homes was a winning formula: the plots sold out in two days.

Walking up the hard shoulder of the roaring highway of the Palm today (there is no pavement; everyone drives), the feeling is less one of an exclusive private enclave than that of a generic slice of American suburbia. The houses have been packed in cheek by jowl, at three times the original planned density, leaving rows of McMansions looking across at each other between thin strips of stagnant water.

In the sales brochures and news reports, this new form of Google Earth urbanism was intoxicating, especially given that much of the intended audience would never see it in reality. The media frenzy generated by the Palm was enough to convince Nakheel to plan a further two palm-shaped islands of even greater size: the Palm Jebel Ali, further south along the coast towards Abu Dhabi, and the gargantuan Palm Deira nearer Dubai’s old town centre, seven and a half times the size of the original. Together, they would add more than 250 miles of coastline to the shores of Dubai, and provide an additional 6,000 hectares of land – an area larger than the whole of Manhattan. In a move that now seems like tempting fate, the Palm Jebel Ali was to feature a halo of calligraphically shaped islands, spelling out the lines of a poem written by Sheikh Mohammed: “Take wisdom only from the wise, / Not everyone who rides a horse is a jockey. / It takes a man of vision to write on water, / Great men rise to great challenges.”

In this case, the challenge proved too great. The shape of Jebel Ali was formed, but the project has been on hold ever since. Meanwhile, Palm Deira got as far as the base of the trunk before the rest of the tree was cancelled, its sorry stump since rebranded “Deira Islands”.

Caught up in a frenzy of shape-making, before the palms hit the buffers, The World was the obvious next step. “After the success of the Palm Jumeirah, people wanted their own private islands,” says Bin Dhabeah. “The World was a way of creating a place where each person could do their own thing.”

On the corridor outside his office hangs a satellite view that shows not only The World and the three palms, but a cacophony of other swirly shapes that fill the entire area of sea between the mainland and the existing islands. There are moon-shaped crescents, cosmic starbursts and wiggling worms, arranged in an indiscriminate muddle, as if someone had spilt a bowl of spaghetti shapes across the map. This is The Universe, an aborted plan for an additional 3,000 hectares of fantasy islands shaped like the Milky Way and the solar system. It was announced in January 2008, just as The World was completed, but was swiftly sucked into the great black hole of the financial crisis, never to be seen again. “We don’t talk about that one,” says the PR, chivvying me out of the office.

Sitting at home in Miami, the architect of these crazed visions recalls a time when Nakheel couldn’t have been keener to shout its plans from the rooftops, recounting a rose-tinted era when nothing was deemed too outlandish.

“They were totally unfazed by anything,” says Luis Ajamil, president of architecture giant Bermello Ajamil & Partners, a practice whose CV boasts the momentous accomplishment of masterplanning The World and The Universe. “The Universe would have been longer than Miami Beach in its entirety. It even had its own airport, and would have needed 1 or 2 million people to make it successful. They said: ‘So what?’ If you said no to them, it was their trip to say: ‘OK then, we’ll do it.’”

Ajamil did manage to bring a little bit of market sense to the madness. Before he got involved, The World had been planned solely with private owners in mind. “It soon turned out that there weren’t 300 people who wanted to buy an island for $30m,” he says, “so we changed the plan and increased the density to make it commercially viable, more like a city without cars. Imagine Venice on steroids.”

His team developed a zoning plan, locating the more public, resort-style islands closer to the mainland, while the more exclusive areas for private estates were sited further back towards the Gulf. Antarctica was imagined as a big commercial hub, with rows of seven-storey hotels and a mile-long beach facing Dubai, creating a wall of development that would have essentially blocked the sought-after view of the mainland from the private islands behind.

Ajamil says sales really took off when they demonstrated how owners could re-shape their islands, carving coves, inlets and marinas to create more saleable area. “We went from trying to sell a bunch of pancakes to showing people how they could make spaces that could really work commercially. The smart folks figured out that the game was to work with the water, given that the plots of land were so small. You could put buildings on stilts and bring boat slips in underneath them. It was a lot of fun. We did some kick-ass projects.”

His practice worked on a number of the early schemes, including a plan to divide Moscow into two linear islands, connected by a five-storey glass box called Red Square, which would have glowed red by night. He also planned to slice the UK landmass in two, connecting the slivers with what he describes as “an abstract interpretation of Tower Bridge”. That wasn’t the only replica icon: “A lot of people were looking at recreating wonders of the world. At one point I counted seven Eiffel Towers.”

The whole premise behind The World was fundamentally transformed from being a community of exclusive desert islands, with a villa on each, to thin strips of sand carved, stretched and squeezed to ensure the maximum commercial return. Bermello Ajamil’s design for the UK bears no relation to the outline of Britain, or to its architecture. Instead, it looks like a pair of mating caterpillars, the two spits of land whittled away into long, curling tendrils, upon which dozens of white modernist holiday homes have been packed side by side. The high-density rezoning paved the way for Kleindienst’s plans, which do their best to fill every square inch of land and sea available, creating an atmosphere redolent of the Costa del Sol.

The Universe would have only increased the congestion – it was planned at a higher density still. But all of this planned terraforming was facing a more fundamental hurdle: they were running out of sand. “When they started building the first Palm, the dredgers just went out and scoured sand from a few hundred metres around the site and piled it up,” says Ajamil. “But as they built the next palm and The World, there was no sand left nearby. By the time The World was being finished, the ships were going out 20km or more. The costs were getting prohibitive.”

And presumably the tangled knots of the Universe would have drastically reduced the value of the existing islands? “Absolutely,” says Ajamil. “But, by then, a lot of The World was already sold.”

The speed of the sales, at the height of the bubble, was based on the fact that buyers would readily pay 100% cash up front, based on drawings alone. “You didn’t need to raise capital – that’s why things moved so fast,” he says. “Now it’s a model that requires risk and debt, and a lot of these developers are not equipped for that.” Still, he is optimistic that The World will be inhabited one day.

“It will take a different mindset and a bit of focus from the Dubai government, but it’ll happen. There are billions of dollars of sales that have been made. That money is not just going to sit out there for ever.” Unless, that is, those billions have already been swallowed into the sea.


Hiding Assets

February 14, 2018

by Christian Jürs


Dubai, part of the UAE, is proving to be the new hiding ground for rich American businessmen and politicians to conceal their money, protecting it from being taxed. Many millions of dollars are slipping away, untaxable, to a safe haven where their possessors can retrieve them in the event of sudden retirement. I have a long list, obtained by a foreign friend and communicant, of a good portion of these hidden funds. There are amounts, banks and, most important, names. Dubai is not covered by the MLAT (see below) and earlier hiding places like Panama, Lichtenstein or Switzerland, are so it’s off to Dubai with tax-free loot and screw the public.


Company name  Company name (in Arabic)  Location domiciled  Stock code



United Emirates Bank بنك الإمارات المتحدة Dubai Banks DFM: UEB

Abu Dhabi Commercial Bank بنك أبوظبي التجاري Abu Dhabi Banks ADX: ADCB

Abu Dhabi Islamic Bank مصرف أبوظبي الإسلامي Abu Dhabi Banks ADX: ADIB

Arab Bank plc البنك العربي Abu Dhabi Banks ASE:ARBK

Bank of Baroda   Banks

Arab Emirates Investment Bank بنك الإمارات العربية للاستثمار Dubai Banks DFM: AEIBANK

Bank of Sharjah بنك الشارقة  Banks ADX: BOS

Citibank UAE   Banks

Commercial Bank International البنك التجاري الدولي Ras Al Khaimah Banks ADX: CBI

Commercial Bank of Dubai بنك دبي التـجاري Dubai Banks DFM: CBD

Dubai Islamic Bank بنــك دبي الإســلامي Dubai Banks DFM: DIB

Emirates Islamic Bank بنــك الإمارات الإســلامي Dubai Banks DFM: EIB

First Gulf Bank بنك الخليج الأول Abu Dhabi Banks ADX: FGB

Habib Bank AG Zurich  Dubai Banks

HSBC Bank Middle East Limited بنك HSBC الشرق الأوسط Dubai Banks

Invest Bank بنك الاستثمار Sharjah Banks ADX: INVESTB

Mashreqbank بنك المشرق Dubai Banks DFM: MASQ

National Bank of Abu Dhabi بنك أبوظبي الوطني Abu Dhabi Banks ADX: NBAD

Emirates NBD بنك الإمارات دبي الوطني Dubai Banks DFM: ENDB

National Bank of Fujairah بنك الفجيرة الوطني Fujairah Banks ADX: NBF

National Bank of Umm Al-Qaiwain بنك أم القيوين الوطني Umm Al-Qaiwain Banks ADX: NBQ

Noor Bank بنك نور الإســلامي Dubai Banks

RAKBANK بنك رأس الخيمة الوطني Ras Al Khaimah Banks ADX: RAKBANK

Sharjah Islamic Bank مصرف الشارقة الإسلامي Sharjah Banks ADX: SIB

Union National Bank بنك الاتحاد الوطني Abu Dhabi Banks ADX: UNB

United Arab Bank البنك العربي المتحد Sharjah Banks ADX: UAB

United Bank Limited (UBL)


A mutual legal assistance treaty (MLAT) is an agreement between two or more countries for the purpose of gathering and exchanging information in an effort to enforce public or criminal laws. Modern states have developed mechanisms for requesting and obtaining evidence for criminal investigations and prosecutions.

MLATs, which are negotiated by the Department of State in cooperation with the Department of Justice to facilitate cooperation in criminal matters, are in force with the following countries: Antigua and Barbuda, Argentina, Australia, Austria, the Bahamas, Barbados, Belgium, Belize, Bermuda, Brazil, Canada, Cyprus, Czech Republic, Dominica, Egypt, Estonia, France, Germany, Greece, Grenada, Hong Kong, Hungary, India, Ireland, Israel, Italy, Jamaica, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malaysia, Mexico, Morocco, the Kingdom of the Netherlands (including Aruba, Bonaire, Curacao, Saba, St. Eustatius, and St. Maarten), Nigeria, Panama, Philippines, Poland, Romania, Russia, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, Trinidad and Tobago, Turkey, Ukraine, United Kingdom (including Anguilla, British Virgin Islands, Cayman Islands, the Isle of Man, Montserrat, and Turks and Caicos), Uruguay, and Venezuela.

There is no such treaty with the UAE or Dubai.


Ayelet Shaked: Israel must safeguard Jewish majority

February 13, 2018


Israel must safeguard a Jewish majority even at the expense of human rights, the country’s justice minister has said in a speech defending a bill that would legally define Israel as the “national home of the Jewish people” for the first time.

Ayelet Shaked said on Monday that Israel must maintain both a Jewish majority and democracy, but stressed that keeping the state’s Jewish character may come “at the price” of human rights violations.

“There is place to maintain a Jewish majority even at the price of violation of rights,” Shaked told a conference in Tel Aviv on Monday, Israeli media reported.

In her speech, Shaked, a member of the far-right Jewish Home party, defended the so-called Jewish Nation-State Bill, which would constitutionally define Israel as the national home of the Jewish people for the first time.

“There are places where the character of the State of Israel as a Jewish state must be maintained, and this sometimes comes at the expense of equality,” Shaked said, as reported by Israel’s Haaretz newspaper.

Shaked said Israel must administer equal civil, but not national, rights.

“Israel is a Jewish state. It isn’t a state of all its nations. That is, equal rights to all citizens but not equal national rights,” she said.

‘Highly dangerous’

The contentious Nation-State Bill, which still needs to be approved by Israel’s parliament, the Knesset, passed a preliminary reading last May. It is expected to be brought to a first reading later this year.

The bill states that “the right to exercise national self-determination in the State of Israel is unique to the Jewish people”.

It also demotes Arabic from an official language to a language with “special status”, even though it is the mother tongue of approximately 1.7 million Palestinian citizens of the state.

Adalah, a legal centre for Palestinian citizens of Israel, said that, because the bill would become a Basic Law in Israel, i.e. constitutionally binding, “its enactment could be used to justify through law widespread discrimination” against Israel’s non-Jewish citizens.

For that reason, it is “highly dangerous”, the group said.

The bill would also force all citizens of the state, regardless of their religion, to comply with Jewish civil law, often without legal precedent, explained Mossawa, an advocacy centre for Palestinian citizens of Israel, in a position paper.

The legislation “clearly denigrates the non-Jewish, Palestinian Arab minority to the status of second-class citizens”, Mossawa concluded.


The Great Majority of Jews Today Have No Historical or Ethnic Relationship to Palestine

by Issa Nakhleh  LL.B

The Jews of today are composed of the Ashkenazi and the Sephardi Jews. The Sephardi Jews are the Oriental Jews wo are descendants of the Jews who left Palestine during the Christian era and migrated to neighboring Arab countries., North Africa and Spain. Some of the Oriental Jews were also converts to Judaism, such as some Berbers of North Africa who were converted to Judaism. The Tunisian Jews, Albert Memmi, a Professor of Sociology at the Sorbonne in Paris, has expressed doubt as “to whether his own ancestors in the Saraha had any historic connection to Palestine. Perhaps, he suggested, they were just Berbers converted to Judaism, since according to his information, “most North African Jews are simply Berber nomads who have accepted Judaism.”

Arthur Koestler maintains that there were many Jewish converts outside of Palestine with no biblical family roots:

‘Witness to the proselytizing zeal of the Jews of earlier times are the black-skinned Falasha of Abyssinia, the Chinese Jews of Kai-Feng who look like Chinese, the Yemenite Jews with the dark olive complexion, the Jewish Berber tribes of the Sahara who look like Tauregs, and so on, down to our prime example, the Khazars.’

The Ashkenazi Jews who lived in Russian and Central Eastern Europe and later on migrated to Western and Southern Europe, are of Khazar origin and were converted to Judaism in the 9th century A.S. The Khazar Jews have no ethnic or historical connection with Palestine. The Ahakenazi Jews who migrated to Palestine during the British mandate and who committed the crime of genocide against the Palestinian people are descendants of the Khazars. The Jewish Encyclopedia refers to the Khazars and their conversion to Judaism:

“A people of Turkish origin whose life and history are interwoven with the very beginnings of the history of the Jews of Russia. The kingdom of the Khazars was firmly established in most of South Russia long before the foundation of the Russian monarchy by the Varangians(855)…Driven onward by the nomadic tribes of the steppes and by their own desire for plunder and revenge, they made frequent invasions into Armenia…

In the second half of the sixth century the Khazar move westward. They established themselves in the territory bounded by the Sea of Azov, the Don and the lower Volga, the Caspian Sea, and the northern Caucasus…In 679 the Khazars subjugated the Bulgars and extended their sway further west between the Don and the Dnieper, as far as the the head-waters of Donetsk….It was probably about that time that the Khaghan (Bulan) of the Khazars and his grandees, together with a large number of his heathen people, embraced the Jewish religion…

It was one of the successors of Bulan, named Obadiah, who regenerated the kingdom and strengthened the Jewish religion. He invited Jewish scholars to settle in his dominions, and founded synagogues and schools, The people were instructed in the Bible, Mishnah, and Talmud…

From the work Kitab al-Buldan written about the ninth century, it appears as if all the Khazars were Jews and that they had been converted to Judaism only a short time before that book was written….It may be assumed that in the ninth century many Khazar heathens became Jews, owing to the religious zeal of King Obadia,. “Such a conversion in great masses says Chwolson (Izvyestia o  Khazaraka, p 58), ” may have been the reason for the embassy of the Christians from the land of the Khazars to the Byzantine emperor Michael…

The Jewish population in the entire domain of the Khazars, in the period between the seenth and tenth centuries, must have been considerable…

The Russians invaded the trans-Caucasian country in 944…This seems to have been the beginning of the downfall of the Khazar kingdom…The Russian prince Sviatoslav made war upon the Khazars (c.974) the Russians conquered all the Khazarian territory east of the Sea of Azov. Only the Crimean territory of the Khazars remained in their possession until 1016, when they were dispossessed by a joint expedition of Russians and Byzanatines…Many were sent as prisoners of was to Kiev, where a Khazar community had long existed…Some went to Hungary, but the great mass of the people remained in their native country. Many members of the Khazrian royal family emigrated to Spain…

Professor Graetz describes the Khazar kingdom as follows:

“The heathen king of a barbarian people, living in the north,m together with all his court, adopted the Jewish religion…Their kings, who bore the title of Khakhan or Khaghan, had led these warlike sons of the steppe from victory to victory…

It is possible that the circumstances under which the Khazars embraced Judaism have been embellished by legend, but the fact itself is too definitely proved on all sides to allow any doubt as to its reality. Besides Bulan, the nobles of his kingdom, numbering nearly four thousand,m adopted the Jewish religion. Little by little it made its way among the people, so that most of the inhabitants of the towns of the H=Khazar kingdom were Jews…At first the Judaism of the Khazars must have been rather superficial, and could have had but a little influence on their mind and manners…

A successor of Bulan, who bore the Hebrew name of Obadiah, was the first to make serious efforts to further the Jewish religion. He invited Jewish sages to settle in his dominions, rewarded them royally, founded synagogues and schools, caused instruction to be given to himself and his people in the Bible and the Talmud, and introduced a divine service modeled on that of the ancient communities…After Obadiah came a along series of Jewish Khaghans, for according to a fundamental law of the state only Jewish rulers were permitted to ascent the throne…”

According to Dr. A.A. Poliak, Professor of Medieval Jewish History at Tel Aviv University, the descendants of the Khazars-“those who stayed where they were, those who emigrated to the United States and to other countries, and those who went ti Israel– constitute now the large majority of world Jewry.”

The physiological differences between the Ashkenazim, who are mainly of Turkic Khazar origin, the the Sephardim, who are mainly of Semitic Palestinian origin, has been confirmed by scientific evidence:

“By, and large, the Sephardim are dolichocephalic (long-headed), the Ashkenazim brachycephalic (broad-headed)…The statistics relating to other physical features also speak against racial unity…The hardest evidence to date come from classification by blood groups.”The thirteenth Tribe by Arthur Koestler pps. 232-233

Thus both historical and physiological evidence negate any historical claims to being of Palestinian origin to the European Jews in Israel and to the majority of Jews in the world.





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