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Middle East

Israeli Foreign Minister Tzipi Livni called for a snap general election on Sunday after the collapse of coalition talks with the Shas political party. The announcement came a month after Israeli President Shimon Peres appointed Livni to form a government to replace Prime Minister Ehud Olmert, who resigned amid corruption allegations. The elections have been set for February 10, extending the country’s political limbo for over three more months.

Iran has a dual strategy in Iraq of providing military aid to Iraqi militia while at the same time giving political support to Iraqi political parties, a report released by the Combating Terrorism Center at West Point on October 13 details. The report, titled “Iranian Strategy in Iraq: Politics and ‘Other Means,’” discusses Iran’s covert operations in Iraq from before the U.S.-led invasion right up to the present. The primary way Tehran is influencing Iraq, the report states, is through leveraging its close historical association with Iraqi Shiite political organizations. Second, Iran uses the Iranian Revolutionary Guard Corps and Qods Force to provide paramilitary training and weapons to various Iraqi terrorist groups. The report notes that “Iran’s two-pronged approach obscured the importance of Iran’s political influence in Iraq by focusing the international media and U.S. policymakers on Iran’s lethal aid to militia groups.”

A tunnel discovered in the City of David may be the one King David’s men used during their conquest of Jerusalem, says archaeologist Dr. Eilat Mazar. Earlier this year, Mazar accidentally discovered an opening to a tunnel dating to the 10th century b.c. while excavating the ruins left from the ancient City of David, located in the modern-day city of Jerusalem. “The tunnel’s characteristics, date and location testify with high probability that the water tunnel is the one called tsinnor in the story of the King David’s conquest of Jerusalem [2 Samuel 5:8],” said Mazar. She hopes to excavate the area further during her next phase of digging, tentatively set for some time next year.

Europe

The new British defense secretary has backed French plans to create an EU army. John Hutton told the Sunday Times this week that “France is one of our closest allies, militarily. The French believe very strongly in this type of role. If we can support it, we should.” French President Nicolas Sarkozy, whose country holds the rotating EU presidency, wants European nations to commit to creating a force that is capable of deploying 60,000 troops with naval and air support within 60 days, according to Agence France Presse. German Chancellor Angela Merkel and German Foreign Minister Frank-Walter Steinmeier have both publicly called for an EU army. For more information on where Europe is leading, see our February 2004 Trumpet article “Does Britain Know What It’s in For?”

The official consensus among Israeli leaders and media pundits is that Germany is one of their nation’s best friends. Behind the scenes, however, many Israeli officials are concerned about growing anti-Israeli sentiment in Germany. Ynetnews reported October 28: “Although German Chancellor Angela Merkel is considered one of the most prominent pro-Israel leaders in the European Union and in the world, the public opinion in her country appears to be completely different. A senior state official told Ynet that although the official Germany remains pro-Israel, the public atmosphere in the country is affecting the Merkel government’s attitude, particularly in terms of the Iranian nuclear plan.” To see how Germany’s attitude will shift in the future, read our August 2008 Trumpet article “Can Israel Trust Germany?”

Poland adopted a detailed timetable to change its currency to the euro this week. By 2012, the Polish zloty will be replaced by the euro. It was the credit crisis that, in part, drove Poland to the euro. “The world crisis has shown that it’s safer to be with the strong, among the strong and to have influence on the decisions of the strong,” Polish Prime Minister Donald Tusk said on Monday. Watch for Europe to use the credit crisis to accrue more political power.

Germany announced that it would put up 7 million euros to help Kosovo train and equip its own security force. Germany was behind the entire breakup of Yugoslavia. Watch for it to create puppet states in the leftover republics. For more information, read our booklet The Rising Beast—Germany’s Conquest of the Balkans.

Asia

The prime ministers of Russia, China and four Central Asian countries met in Kazakhstan on Wednesday to discuss measures for overcoming the global financial crisis. The leaders decided their nations needed to increase their economic cooperation through the use of international entities like the Shanghai Cooperative Organization (sco). The sco is widely regarded as a counterweight to nato’s influence in Eurasia. The economic crisis is actually strengthening the sco as it pushes Asian nations closer in order to ward off economic collapse. As this trend continues, nato will find out that its days of global dominance are drawing to an end.

The economic crisis is also driving other Asian nations together. Many leading government officials and media experts in Southeast Asia are calling for economic unity. At a forum of the Association of Southeast Asian Nations (asean) on Thursday, these officials hailed regional economic integration as the solution to their declining exports. Since America and Europe are entering into recessions and not buying as many Southeast Asian goods, they reasoned, why not trade freely with one another? The goal is to create an EU-style economic union by 2015. From Moscow to Jakarta, Asia is emerging as one gargantuan trade bloc.

Latin America, Africa

Venezuela’s president, Hugo Chavez, may find it hard to retain power if the price of oil continues to drop. Venezuela is especially dependent on oil revenue—more than 90 percent of its exports and over half of government expenditure are from oil. Jose Manuel Puente, from the Public Policy Center in Caracas, told the bbc that while there is no chance of an economic collapse this year, “sooner or later the bomb will explode.”

Brazil, Argentina and Mexico also face economic problems. Brazil’s currency has devalued 16 percent, and the private sector reports losses equaling 2 percent of gross domestic product. Mexico is highly dependent on money from the U.S.—largely, money sent home by illegal immigrants—and as the U.S. economy weakens, that money decreases. Argentina’s debt is rising to nearly the levels that caused its 2002 default. Increasing nationalization prevents the private sector from recovering from economic problems on its own. For more on Latin America’s future, read our June 16 article “The Threat From Latin America.”

Zimbabwe’s political situation continues to deteriorate—to the point where the government has now denied a new passport to Morgan Tsvangirai—the prime minister under the power-sharing agreement, and the man with the most votes in the presidential election earlier this year. Tsvangirai’s party, the Movement for Democratic Change (mdc), is especially irritated that President Robert Mugabe is redefining “consultation” in their agreement: “As far as us negotiators are concerned,” said mdc Secretary General Tendai Biti, “whenever the word consultation appears in the agreement it means in agreement with the prime minister.” Instead, Mugabe is defining consultation to mean he decides after discussions, removing any real power the mdc might have had. Adding to the chaos, mediator Thabo Mbeki has completely lost the confidence of members of the mdc, who feel he is not looking after their interests. For more on Africa’s struggles to implement a functional democracy, read “The Failure of African Democracy” by Joel Hilliker from the April 2008 Trumpet.

Anglo-America

Conditions on Wall Street are wild. The Dow Jones plunged beneath 8,100 and then set off to achieve its second-best one-day rally ever—leaping 890 points to close at 9,065 on Wednesday. Mortgage rates were also volatile, jumping from 5.5 percent for a 30-year fixed rate, up to 6.35 percent. Higher interest rates, if long-lasting, will continue to be a drag on the housing market. Exchange rates too have been jumping around, with the pound and Australian and Canadian dollars getting hammered, rebounding, and then getting hammered again.

Meanwhile, the Federal Reserve decided to slash its federal funds rate by a third, to 1 percent, saying, “The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures. Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.” The New York Times is predicting a future that includes “zero percent interest rates.” It may sound like free money, or maybe a promotional deal from General Motors to get people to buy Hummers, but if the Fed goes there, you will know the economy is literally in dire straits, because the loss of credibility could be massive.

The Federal Reserve also announced on Wednesday that it will give lines of credit to the central banks of Brazil, Mexico, South Korea and Singapore to help those countries deal with the global credit crisis. The Fed will begin with $30 billion respectively and will make a maximum of $100 billion, per country, available—for a possible total of $400 billion. If the higher end of the credit line becomes reality, Federal Reserve printing presses will be burning up. Don’t be fooled by recent dollar strength—it will most likely be very temporary. As Bob Moriarty of 321gold.com said, “The dollar is going the way of the Mexican peso and Zimbabwe dollar.”

The U.S. government is also being very free with its money lately. In a stunning revelation, Bloomberg is reporting that despite the fact that taxpayers will be spending hundreds of billions of dollars bailing out the banking industry, banking insiders are still on track to receive tens of billions in bonuses. Goldman Sachs and Morgan Stanley are each receiving $10 billion from the government as part of the effort to help prop up the financial system. The two companies are set to pay out $6.85 billion and $6.44 billion in bonuses respectively.

In other news, the presidential race continues to heat up. Most polls seem to favor Barack Obama, but if 2004’s election taught us anything, big media polls often don’t reflect reality. Tensions are high as vote day nears. If the results are even close, expect an unprecedented flurry of lawsuits—and more ominously, as Trumpet editor in chief Gerald Flurry has forecast, race riots. •