Tuesday, January 27, 2009

Caught in the whirring gears of tragedy

Benjamin Netanyahu is pulling away from his rivals in the race to become Israel's next prime minister, in a sign that the three-week war against Hamas in the Gaza Strip has accelerated Israel's shift to the political right. Financial Times

Backing Bibi will be the Israeli lobby, the Evangelicals, the neocons and a Congress that could find only five members to oppose a resolution endorsing all the Israelis had done and were doing to the people of Gaza. Pat Buchanan

Prince Turki, a man who expresses himself with care and moderation, was recently the Saudi ambassador to the UK and the US and, before that, the long-serving chief of Saudi intelligence. He and his brother, foreign minister Prince Saud al-Faisal, have represented the pro-US kingdom to the world for well over three decades. They are also part of the reforming wing of Saudi Arabia’s absolute monarchy and allies of King Abdullah. Prince Turki, citing equally forthright remarks by King Abdullah and Prince Saud, is now telling the new administration of Barack Obama it can either change course radically on the Israeli-Palestinian conflict or forfeit the US “special relationship” with Saudi Arabia. The US, he warns, risks losing its leadership role in the Middle East. The Bush administration has not only left “a sickening legacy in the region”, he says, but “contributed to the slaughter of innocents”. Mr Obama should embrace the 2002 peace plan of King Abdullah, offering full Arab recognition of Israel for full Israeli withdrawal from occupied Arab land and the creation of a Palestinian state, with Arab east Jerusalem as its capital. Prince Turki reveals that Iran last week called on Saudi Arabia to lead a jihad against Israel. “So far, the kingdom has resisted these calls,” he said, but “eventually, the kingdom will not be able to prevent its citizens from joining the worldwide revolt against Israel”. Strong stuff. Editorial - Financial Times
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The three quotes above lay out the parameters for an epoch making disaster.

First: Netanyahu is going to be elected the next prime minister of Israel and the chances of progress toward a two state solution based on the Saudi peace plan or Taba are nil and the Gazans will continue to be starved and killed.

Second: because of the peculiarities of the American system of political financing the US Congress will refuse to ever seriously twist Israel's arm.

Third: the Saudi royal family, faced with the humiliation of being ejected by their irate subjects, egged on by Iran, from their uniquely prestigious role as protectors of the holy places of Islam and faced with the prospect as Bedouins of spending eternity living on the shores of some frozen Swiss lake with only the company of their money, despised by all Muslims, are finally going to act.

They are not going to cut off the oil like in 1973, they simply will refuse to buy any more US treasury bills until the US government pressures Israel into accepting the two state solution outlined in the Saudi plan.

In this refusal to finance the American economy that arms and enables Israel, they will be probably be accompanied by all the other kinglets and princelings of the Persian Gulf, who are also anxious to prove their Muslim credentials in the face of militant Iran's growing influence over their infuriated subjects.

In short a creditors strike, which in America present condition would be terminally devastating.

This will mean the bursting of the T-Bill bubble and with it any hope of success for a stimulus plan to save the US economy by printing more money. It might also cause America's creditors, such as China, to unload their dollar reserves. This would mean the collapse of the dollar and a galloping, Argentine style, inflation which would wipe out what little purchasing power America's middle class might still possess and leave all those on fixed incomes destitute.

"Impossible! They wouldn't dare!", you say.

If you don't believe that great disasters that everyone can see coming and would want to avoid can happen, think about the tragic summer of 1914, the lead up to World War One, that Barbara Tuchman so perfectly described in her best-selling masterpiece "The Guns of August".

Like then, a complex mechanism that we do not, perhaps cannot, fully understand, has been set in motion and as in classic Greek tragedies the character of the participants leads irremediably to their downfall. In this play Israel's attack on Gaza takes the role of Gavilo Princip. DS

1 comment:

Anonymous said...

Interesting, original and wholly possible analysis.

Prince Turki's op-ed in the FT very much read like a warning shot across the bow. Oh, the irony of Israel ultimately taking down the US with it.

Reap what you sow, etc. but if it does come to pass as you anticipate there will be major implications for the RoW, financial and otherwise.