Infinite Unknown

The world is going completely mad. Prepare yourself.
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WASHINGTON: Sovereign nations have the right to protect themselves, US president-elect Barack Obama said on Monday, when asked if India could follow the same policy he advocated during his election campaign - of bombing terrorist camps in Pakistan if there was actionable evidence and Islamabad refused to act on it.

Although Obama said he did not want to comment on the specific situation involving India and Pakistan, his tacit endorsement of New Delhi adopting the same policy was circumscribed by two caveats: first, let the investigators reach definite conclusions about the Mumbai carnage, and second, see if Pakistan will follow through with its commitment to cooperate in eliminating terrorism.

”My administration will remain steadfast in support of India’s effort to catch perpetrators and bring them to justice. I expect the world community will feel the same way,” Obama said, in one of several references to the events in Mumbai that underscored the roll-out of his national security team in Chicago on Monday. ( Watch )

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Tags: Barack Obama, India, Military, Pakistan, Politics, terrorism, terrorists, U.S.

When I first saw this article 2 days ago I decided not to publish it, because this coming from Citigroup may rather be understood as a very good advice not to buy gold.
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Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world’s monetary system with liquidity, according to an internal client note from the US bank Citigroup.

An employee of Tanaka Kikinzoku Jewelry K.K. displays a gold bar at the company’s store in Tokyo Photo: Reuters

The bank said the damage caused by the financial excesses of the last quarter century was forcing the world’s authorities to take steps that had never been tried before.

This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

“They are throwing the kitchen sink at this,” said Tom Fitzpatrick, the bank’s chief technical strategist.

“The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

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Tags: Banks, Citigroup, Depression, Economy, Gold, Inflation, Meltdown, Pakistan, Recession

A commando rappelled from a helicopter near Nariman House, where militants are believed to be hiding, in Mumbai on Friday. Peter Keep/Reuters

MUMBAI, India - As the crisis in Mumbai approached its third day, Indian commandos fought running battles with militants on Friday, still struggling to end the murderous assault on India’s financial capital that has shaken the nation and raised perilous regional tensions with neighboring Pakistan.

Two Americans were confirmed killed, among a total of at least eight foreigners who the Indian authorities said had died during the attacks. In addition, five bodies of Israeli citizens were removed from a Jewish center, Chabad House, after Indian commando units stormed the attackers inside the building, Israeli officials said. The terrorists had executed the hostages during the commando raid, the Indian military said.

Shortly before night settled over the stricken city, the police said the death toll had reached 143 with the discovery of 24 bodies in the luxury Oberoi hotel, where the police had finally taken control and many guests were set free on Friday.

But the army’s operation at a second luxury hotel, the Taj, was only entering its “final phase,” according to the Indian military, with commandos battling one terrorist left inside who the army said was moving between two floors of the hotel, including an area that had been a dance floor for weddings and other parties. The army said two other terrorists had been killed overnight in the Taj hotel.

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Tags: India, Military, Pakistan, Politics, Special Forces, terrorism, terrorists

Turkey is reported to be in negotiations with the International Monetary Fund for a $40 billion loan. Very shortly, the Baltic States and at least a dozen developing countries will be filing for IMF handouts. But how will the venerable lender of last resort fund itself?

According to a fact sheet posted on its website in October, the IMF had $200 million available for emergency loans to the third-world, and another $50 billion in “additional resources”. But the IMF’s liquidity is rapidly dwindling. Between the crisis facilities concluded with Ukraine, Hungary, Serbia, Iceland and Pakistan, and the expected spate of new loan requests, the IMF should be running out of money within the first quarter of next year. Quite simply, unless the rich nations (including American tax-payers) can add to the IMF’s funding capabilities, the global recession will cause unprecedented havoc, chaos, hunger and turmoil in the world’s poverty pockets.

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Tags: Derivatives, Derivatives market, Economy, financial crisis, Iceland, IMF, Pakistan, Politics, Recession, Serbia, Turkey, Ukraine

Pakistani soldiers practised shooting at pilotless “drone” aircraft on Friday, the military said a day after the government lodged a protest with the U.S. ambassador over drone missile strikes in Pakistani territory.

Anti-aircraft guns and short-range surface-to-air missiles were used during the exercise conducted at a desert range near the city of Muzaffargarh in the central Pubjab province.

“The elements of Army Air Defence demonstrated their shooting skills by targeting the drones flying at different altitudes,” the military said in a statement.

Air defence commander Lieutenant-General Ashraf Saleem praised the “precision and agility” of the gunners.

Pakistan is bristling over a series of missile strikes by U.S. drones targeting al Qaeda and Taliban militants in the lawless tribal regions along the Afghan border in recent weeks.

The U.S. forces have carried out more than 20 such drone attacks in the last three months, reflecting U.S. impatience over militants from Pakistan fuelling the Taliban insurgency in Afghanistan and fears that al Qaeda fighters in northwest Pakistan could plan attacks in the West.

A U.S. commando raid on September 3 led to a diplomatic storm, and there has not been any subsequent incursion by ground troops.

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Tags: Al-Qaeda, Al-Qaida, Drone, Government, Military, Missiles, Pakistan, Politics, Taliban, U.S., UAVs

Residents stand on the rubble of shops and a house damaged in the fighting between Pakistan army and militants in Kanju, a troubled area of Pakistan’s Swat Valley, Tuesday, Nov. 18, 2008. Pakistani security forces are engaged in fierce fighting against militants and Talibans in various areas including Swat Valley, a northwest region that used to be beloved tourist destination. (AP Photo/Sherin Zada) (Sherin Zada - AP)

ISLAMABAD, Pakistan — The U.S. military apparently struck at Islamic militants outside Pakistan’s lawless tribal belt for the first time Wednesday, firing a missile that killed six suspected insurgents taking refuge away from the conflict zone along the Afghan border.

The government denounced the attack as yet another “grave provocation” amid a series of U.S. military operations in the country that have enflamed widespread anger among ordinary Pakistanis.

The harsh words were a sharp contrast to comments Tuesday by U.S. and NATO officials who reported increased cooperation from Pakistan in the fight against militant groups. Tens of thousands of U.S. and NATO troops are stationed in neighboring Afghanistan.

“It looks like the Americans are not listening, but this is such a great provocation that it will bring a strong response from the government of Pakistan that will dissuade them,” presidential spokesman Farhatullah Babar said of the latest missile strike.

He declined to say what the response would be.

The government, which relies heavily on U.S. financial aid, has not gone beyond criticizing raids. Some experts question whether the leadership secretly condones the attacks while speaking out publicly against them, but the government denies that.

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Tags: Afghanistan, Al-Qaeda, Al-Qaida, Government, IMF, Military, Missiles, NATO, Pakistan, Politics, Taliban, U.S., War

Nov. 15 (Bloomberg) — Pakistan agreed to a $7.6 billion loan package with the International Monetary Fund, to help the south Asian country avert defaulting on its debt with the first such program in four years.

The loan “will be used for the balance of payments and to build our foreign reserves,” Shaukat Tarin, the finance adviser to the prime minister, said today at a televised news conference in Karachi. The IMF will give the loan in installments over 23 months at interest rate of 3.5 percent to 4.5 percent, he said.

Pakistan has been forced to seek funds from the IMF after its foreign-exchange reserves shrank 75 percent in the past year to $3.5 billion last week, the equivalent of one month’s imports, and a group of donor nations declined to provide funds.

“The IMF loan will help in stabilizing the economy only if the government shows the political will to implement the Fund’s program,” said Samiullah Tariq, head of research at InvestCapital & Securities Ltd. in Karachi. Pakistan’s civilian governments from 1988 to 1999 did not complete seven separate IMF loan programs because of “tough” IMF conditions, he said.

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Tags: debt, Economy, IMF, Inflation, Pakistan, Politics, Standard & Poor's

Local Pakistani tribal people stand near an armored car reportedly hijacked by militants in Khyber tribal region of Landikotel, 55 kilometers (34 miles) northwest of Peshawar, Pakistan on Monday Nov. 10, 2008. An officials says security forces are hunting militants who hijacked 13 trucks carrying military vehicles and other supplies for foreign troops in Afghanistan. (AP Photo)

PESHAWAR, Pakistan (AP) - Suspected Taliban fighters hijacked trucks carrying Humvees and other supplies for U.S.-led troops in Afghanistan, authorities said Tuesday after a brazen attack near the Khyber Pass that underscored the militants’ grip across key mountain strongholds.

The assault highlighted the vulnerability of a vital supply route for the 65,000 U.S. and NATO forces battling a resurgent Taliban in landlocked Afghanistan. A significant amount of supplies for the Western forces go through Pakistan.

Attacks on convoys carrying food, fuel and other supplies are common on the road. But Monday’s raid was especially large and well-organized. It also could further strain U.S.-Pakistani relations over rooting out Taliban and al-Qaida militants along the border, which remain entrenched despite military offensives and U.S. missile strikes.

Some 60 masked militants blocked the route at several points before overpowering the convoy, said Fazal Mahmood, a government official in Khyber tribal region. He identified the attackers as members of Pakistan’s Taliban movement.

Security forces traded fire with the gunmen, but were forced to retreat, he said. The militants took about 13 trucks along with the drivers, who were believed to be Pakistani.

A U.S. military spokesman in Afghanistan confirmed the thefts late Tuesday.

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Tags: Afghanistan, Military, NATO, Pakistan, Politics, Taliban, U.S., War

N.Y. Times: U.S. targeted al-Qaida fighters in Syria, Pakistan and elsewhere

WASHINGTON - The U.S. military has conducted nearly a dozen secret operations against al-Qaida and other terrorist groups in Syria, Pakistan and other countries since 2004, The New York Times reported in Monday editions.

Meantime, Pakistan’s president said he expects U.S. President-elect Barack Obama to re-evaluate American military strikes on al-Qaida and Taliban targets on its side of the Afghan border.

Citing anonymous U.S. officials, the Times story said the operations were authorized by a broad classified order that then-Defense Secretary Donald H. Rumsfeld signed and President Bush approved in spring 2004. The order gave the military authority to attack al-Qaida anywhere in the world and to conduct operations in countries that were not at war with the United States.

One such operation was the Oct. 26 raid inside Syria, the Times reported. Washington hasn’t formally acknowledged the raid, but U.S. officials have said the target was a top al-Qaida in Iraq figure. Syria has asked for proof and said eight civilians were killed in the attack.

In another mission, in 2006, Navy SEALs raided a suspected terrorist compound in Pakistan’s tribal areas.

The raids have typically been conducted by U.S. Special Forces, often in conjunction with the Central Intelligence Agency, the newspaper said. Even though the process has been streamlined, specific missions have to be approved by the defense secretary or, in the cases of Syria and Pakistan, by the president.

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Tags: Afghanistan, Al-Qaeda, Al-Qaida, Asif Ali Zardari, CIA, civilians, David Petraeus, Donald Rumsfeld, George Bush, Iraq, Military, Pakistan, Politics, Syria, Taliban, terrorism, U.S., War

The International Monetary Fund may soon lack the money to bail out an ever growing list of countries crumbling across Eastern Europe, Latin America, Africa, and parts of Asia, raising concerns that it will have to tap taxpayers in Western countries for a capital infusion or resort to the nuclear option of printing its own money.

IMF’s work in countries such as Turkey is only just beginning

The Fund is already close to committing a quarter of its $200bn (£130bn) reserve chest, with a loans to Iceland ($2bn), Ukraine ($16.5bn), and talks underway with Pakistan ($14.5bn), Hungary ($10bn), as well as Belarus and Serbia.

Neil Schering, emerging market strategist at Capital Economics, said the IMF’s work in the great arc of countries from the Baltic states to Turkey is only just beginning.

“When you tot up the countries across the region with external funding needs, you get to $500bn or $600bn very quickly, and that blows the IMF out of the water. The Fund may soon have to start calling on the West for additional funds,” he said.

Brad Setser, an expert on capital flows at the Council for Foreign Relations, said Russia, Mexico, Brazil and India have together spent $75bn of their reserves defending their currencies this month, and South Korea is grappling with a serious banking crisis.

“Right now the IMF is too small to meet the foreign currency liquidity needs of the larger emerging economies. We’re in a dangerous situation and there is the risk of extreme moves in the markets, as we have seen with the Brazilian real. I hope policy-makers understand how serious this is,” he said.

The IMF, led by Dominique Strauss-Kahn, has the power to raise money on the capital markets by issuing `AAA’ bonds under its own name. It has never resorted to this option, preferring to tap members states for deposits.

The nuclear option is to print money by issuing Special Drawing Rights, in effect acting as if it were the world’s central bank. This was done briefly after the fall of the Soviet Union but has never been used as systematic tool of policy to head off a global financial crisis.

“The IMF can in theory create liquidity like a central bank,” said an informed source. “There are a lot of ideas kicking around.”

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Tags: Bank for International Settlements, bankruptcy, Belarus, bonds, central bank, debt, Dominique Strauss-Kahn, Economy, financial crisis, GDP, Government, Hungary, Iceland, IMF, Liquidity, Pakistan, Politics, Romania, Russia, Serbia, taxpayers, Turkey, Ukraine