Geopolitical chaos procreating a chaotic leaderless world is sucking the literal life out of human hope. The tentacles of austerity measures and quantitative easing are the primary catalyst of all the madness. One way or another every government financier around the world is determined to cultivate the appearance that the good times are still rolling. The only problem is that the natural rate of failure refuses to participate in the economic facade. Fiat currencies’ purchasing power dwindles, the pounding drum beat of war beckons, and an open ended hegemonic polarity struggle for commodities ensues.

While serving as a member of the Board of Governors of the Federal Reserve System in 2002, current U.S. Federal Reserve Chairman Ben Bernanke gave the world a glimpse into the past, present, and future all at once. In his speech, entitled “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” Ben Bernanke stated:

“Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it’s worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt’s 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation.”

Today the infamous 40 percent strikes again, as Cyprus agreed to the terms of a European Union bailout in which banks will seize 40 percent of uninsured bank depositors’ wealth.

Moody’s Investors Service was quoted in Bloomberg as saying, “The seizure of larger deposits may spark tensions with Russia, the source of an estimated $31 billion in holdings in Cypriot banks.”

Proxy wars have gone beyond the spectrum of arming rogue militants and allied nations in dispersed pockets of the globe, graduating to the realm of state sponsored economic terrorism. As “Gerald Celente” consistently and aptly states, “Currency wars + Trade Wars = Real Wars.”

All of the economic wheeling and dealing continues on as the “Arab Spring” explodes into a caballing year round inferno engulfing the entire Middle East. Daily at the United Nations, permanent Security Council members China, Russia, France, United Kingdom, and the United States spar over regional influence with each passing veto and resolution.

This is most apparent in Syria where Russia opposes any intervention as it struggles to prop up the government of its last remaining ally in the Mediterranean region. Russian naval forces stationed at Tartus, Syria may be the last line of repellent preventing NATO intervention.

The lines of frienemy engagement get blurrier with every passing engagement.

Simultaneously as the United States prepares to implement its own austerity measure policy that has carefully been repackaged and marketed to the public under the label sequestration, it is arming rebels in Syria. All claims of being in financial dire straits gets immediately lost within the noise of controlling key choke points around the globe.

One cannot forget less than two years after watching the Al Qaeda flag being proudly raised in the Libyan city of Benghazi, that America’s new found ally the Free Syrian Army are the protégés of Al Qaeda.

The life cycle of keyboards do not possess the durability to correctly and fully analyze threats posed by the uncontrollable Kim Jong Un ruled North Korea. The isolated peninsula nation even managed to startle its longtime ally China into voting in favor of U.N. Security Council resolution 2094. Chinese Foreign Ministry spokesman Qin Gang was quoted as saying;

“China supports the UN Security Council’s necessary and moderate response to the nuclear test of the Democratic People’s Republic of Korea (DPRK).”

Barely beyond two weeks later newly appointed Chinese President Xi Jinping, warned the West not to meddle in Syria’s civil war while on his first visit to Russia.

Not even the mythical country of Chimerica can rescue the too big to fail world from the natural rate of failure. Governments around the world are taking sides now under the cloak of every global economic and geopolitical conflict, because nations know that a hegemonic storm is coming with no evacuation routes or shelter in sight. Once more, honesty of time is proving that which cannot last forever won’t.

Image courtesy: European Parliament

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New York, U.S.A. — U.S. designation of Hezbollah as a primary supporter of the Assad regime’s brutality “is another important step in efforts to confront the murderous Syrian regime,” said David Harris, executive director of AJC, the global advocacy organization. The U.S. government announced the new designation of Hezbollah in a conference call with reporters.

Ambassador Daniel Benjamin, the State Department’s Coordinator for Counterterrorism, one of the U.S. officials announcing the new designation, said “it serves the very, very important purpose of making clear to parties around the world – both domestically and internationally – the true nature of Hezbollah’s activities.”

The U.S designation states that Hezbollah has been training Syrian government personnel inside Syria, facilitating training of regime forces by Iranian Revolutionary Guards, and actively helping to expel Syrian opposition forces from some areas of Syria.”Hezbollah’s actions in Syria are particularly egregious, extending and prolonging this deadly conflict,” said Ambassador Benjamin.

“The Syrian people are suffering and dying at the hands of this unholy alliance of Hezbollah, Iran and the Assad regime,” said Harris. “State terrorism at its worst is playing out on the streets of Aleppo, Damascus and many other Syrian cities and towns.” The U.S. designated Hezbollah as a terrorist organization in 1999. Canada, the United Kingdom and Israel have similarly labelled the group.

Several years ago, an attempt to secure European Union designation came close, but ultimately failed because a few European leaders maintained that Hezbollah, with representatives in the Lebanese Cabinet and Parliament, was a “legitimate” political organization.

“Serving at the highest levels of a government does not facto legitimize a terrorist organization,” said Harris. “Hezbollah should not be allowed to have it both ways — on the one hand, maintain its own militia and global terrorist apparatus, while, on the other hand, being recognized as a legitimate political force.”

Hezbollah, created with Iran’s aid nearly 30 years ago, is one of the world’s most dangerous terrorist organizations with a record of deadly attacks and foiled attempts in Latin America, Europe and the Middle East. Most recently, Hezbollah has been implicated in terrorist plots in two EU countries — Bulgaria andCyprus — as well as in other attempts from Kenya to Thailand.”

AJC last week sent letters to the foreign ministers of all 27 EU member states, the first step in a renewed campaign to encourage the EU to formally designate Hezbollah as a terrorist organization.”European nations should be among the very first to understand the true nature of Hezbollah and the regional and global threat it continues to pose,” said Harris. “It’s deadly involvement in Syria, as underscored by the new U.S. designation, only further underscores the point.”

Image Courtesy of   homeros / Shutterstock.com

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Cyprus, like all other Eurozone countries, has been struggling with debt and recession. However, due to the recent crisis in Greece it is looking more and more likely that Cyprus will be the next country requesting a bailout from the Eurozone, like Greece, Portugal and the Republic of Ireland have before them.

Cyprus has a total of 23 billion euros (US$29 billion) tied up in the Greek financial crisis. The second largest lender in Cyprus, Cyprus Popular Bank, lost 1.8 billion euro (US$2.2 billion) in Greek investments. The Cypriot government has since underwritten the 1.8 billion euro equity issue to help the bank raise capital from other investors, but if the bank is unable to raise the money from other investors by June 30, 2012, the government will have to put up the funds itself – an amount equal to a tenth of the Cypriot economy.

Talks about Greece leaving the euro currency are also making Cyprus more nervous. If Greece leaves the euro they will most likely switch back to the drachma. However, Greece will no longer have the advantage of other countries to appreciate the value of their currency even though they have a bad economy, meaning the drachma will be severely devalued in relation to the euro.

This devaluation will cause Greece to default on their loans to other countries including not only the bailout to the Eurozone, but also to Cyprus. President Demetris Christofias stated, “[Greece leaving the Eurozone and the euro currency] is something I hope will never happen.”

Cyprus and its banks have not been able to borrow on international markets since June of 2011 after two of the world’s top three credit raters gave Cyprus a junk status.

Since then Cyprus managed to borrow 2.5 billion euros (US$3.1 billion) from Russia which it has used to survive for the past year. Cyprus is trying to find another independent investor or country to loan them the 1.8 billion they need to save Cyprus Popular Bank and their economy. According to the Telegraph, Cyprus is in talks with China for another loan and possibly another undisclosed investor as well.

The European Commission has recommended that Cyprus make significant changes to its economy. Some of these changes include fixing its public finances, recapitalizing its banks, reforming labor and service markets, revitalizing the energy sector, updating education policy, and correcting pension and healthcare systems. Cyprus will release a new plan that will hopefully help them reach their deficit goal of 2.5% of GDP this year. Cyprus also hopes to keep its low 10% corporate tax to encourage financial investments.

If Cyprus is unable to receive another investment from an independent nation or investor or Greece leaves the euro, it will need to request a bailout from the Eurozone.

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