The Week in Review

Middle East

Turkey informed Israel last weekend that it has withdrawn from naval exercises with Israel and the United States scheduled for August. This was the latest of Ankara’s hostile moves against Israel since the Mavi Marmara incident in May, when Israel raided a Turkish flotilla bound for the Gaza Strip. Additionally, Turkey’s foreign minister has confirmed that Turkish airspace has been closed to Israeli military flights. “Turkey’s airspace is fully closed to Israeli military planes. The ban is not implemented case-by-case. It’s a blanket ban,” Ahmet Davutoglu said in an interview last Sunday. Davutoglu last week threatened to break diplomatic ties with Israel unless it apologizes for or accepts an international probe into its raid on the Gaza-bound flotilla. While analysts are describing relations between Turkey and Israel as “business as usual,” the relationship is irreparably damaged. In the end, Turkey’s antipathy toward Israel will lead to a tragic betrayal of its erstwhile ally.

U.S. President Barack Obama met with Israeli Prime Minister Benjamin Netanyahu in Washington on Tuesday. Some view the ostensibly cordial meeting as an effort by President Obama to win over voters ahead of mid-term congressional elections in November. Other analysts say it is the Obama administration’s attempt to be seen to be making progress in the Middle East peace process. In an effort to ease international pressure, Netanyahu said he was prepared to meet with Palestinian Authority President Mahmoud Abbas, and Israel has taken legal action against several Israeli soldiers involved in the 2008 offensive in the Gaza Strip, including charging one soldier with manslaughter. Despite the apparent reconciliation between the two leaders after President Obama’s previous snubs of Prime Minister Netanyahu, based on biblical prophecy we can expect America’s relationship with Israel to continue to deteriorate.

Hezbollah is establishing military positions, including the placement of weapons and explosives, next to schools and hospitals in southern Lebanon, an idf officer said on Wednesday. The Iranian-sponsored terrorist group is digging tunnels and setting up communications infrastructure as it prepares for war, the source said. Hezbollah has infrastructure set up close to population centers in about 160 villages in southern Lebanon. This has been achieved even while the United Nations’ force in Lebanon has been present, supposedly to stop Hezbollah rearming and rebuilding.

Europe

Bronislaw Komorowski, the candidate for the Civic Platform Party, was elected the new president of Poland on July 4, setting Poland up for a cozier relationship with Europe and Russia and signaling frostier relations with Washington. Komorowski, Poland’s acting president and parliamentary speaker, won 53 percent of the vote in the runoff elections. His opponent, Jaroslaw Kaczynski, twin brother of the late President Lech Kaczynski, won 47 percent of the vote. The result may herald a shift for Poland away from the U.S. and toward Europe. Komorowki is from the same party as Poland’s Prime Minister Donald Tusk and therefore is unlikely to obstruct Tusk’s shift toward Europe and Russia. He “shares Tusk’s vision of a Poland firmly anchored in the EU, working closely with Germany and trying to improve long-troubled ties with Russia,” writes Time. Despite Europe’s economic turmoil, Komorowski wants Poland to adopt the euro as its currency. His views are broadly in line with younger, city-dwelling Poles who see Poland’s future in Europe. Komorowski is also less supportive of the U.S. In the election, he promised to pull Polish troops out of Afghanistan by 2012. Expect Eastern European nations to form stronger ties with the EU as a 10-nation European superstate comes together.

Following German Chancellor Angela Merkel’s setback in the presidential election on June 30, the New York Times singles out one man to watch as her possible successor. “After her biggest challenger, Christian Wulff, was sworn in as president last week, Mrs. Merkel has deflected any threat to her leadership. Except, possibly, Defense Minister Karl-Theodor zu Guttenberg,” writes the Times’Judy Dempsey. Officials within Guttenberg’s Christian Social Union say he is deciding between remaining in Berlin as defense minister, or returning to Bavaria in search of a bigger political role. Throughout the turmoil of Merkel’s second term in office, Guttenberg has remained one of Germany’s most popular politicians. “The question is,” writes Dempsey, “how Mrs. Merkel will deal with Mr. Guttenberg’s growing popularity.” She continues: “Unlike other potential challengers, Mr. Guttenberg will not be easily silenced. As a member of the Christian Social Union party, he is politically independent from Mrs. Merkel’s Christian Democrats. She cannot afford a fallout with her sister party in Bavaria. She needs that electoral support.” As the Trumpet has been saying for some months now, Guttenberg is a man to watch.

Asia

On June 28, Chinese officials were shocked as three nuclear-powered U.S. submarines surfaced unannounced in Pacific waters surrounding China. The submarines were a new class of U.S. warship designed to stealthily strike targets up to 1,000 miles away with hundreds of non-nuclear warheads. According to Time, “alarm bells would have sounded in Beijing June 28 when the Tomahawk-laden 560-foot uss Ohio popped up in the Philippines’ Subic Bay. More alarms likely were sounded when the uss Michigan arrived in Pusan, South Korea, the same day. And the klaxons would have maxed out as the uss Florida surfaced the same day at the joint U.S.-British naval base at Diego Garcia, a flyspeck of an island in the Indian Ocean. The Chinese military awoke to find as many as 462 additional Tomahawks deployed by the U.S. in its neighborhood” (July 8). U.S. officials denied that any specific message is being directed at Beijing, and say that the timing was simply a coincidence. They did, however, make sure news of the deployments appeared in the Hong Kong-based South China Morning Post—on Independence Day, July 4. The move in naval forces is part of the Pentagon’s new dogma that places the Pacific theater as more of a threat than the Atlantic. The submarines aren’t the only new potential issue of concern for the Chinese. Two major military exercises involving 37,000 U.S. and allied personnel and three dozen ships and subs are now underway off Hawaii and Singapore. China is excluded from both exercises—and this, at least, is no coincidence.

On Wednesday, Chinese officials held a press conference ostensibly to allay concerns about the damage China could do if it sold the $900 billion worth of U.S. treasuries it currently holds. Its foreign exchange agency assured the press that China’s dollar holdings were not a “nuclear weapon” that could be used to blackmail America, and that the issue “should not be politicized.” The statement seemed to have been in response to 2007 comments by two Beijing officials who argued that China could and should use America’s debt as a political weapon or “bargaining chip” to counter congressional calls to revalue the yuan and impose trade sanctions on Chinese goods. At the time, Chinese state media referred to the country’s stockpile of U.S. dollars as its economic “nuclear option,” capable of destroying the dollar at will. China is America’s biggest creditor and holds over $1.5 trillion in U.S. dollar-denominated assets. The agency said the money it had lent to America was strictly an economic investment designed to benefit the Chinese people. Echoing earlier appeals by Chinese leaders, the agency then called on Washington to follow prudent economic policies to protect the value of Beijing’s investments. The statement also reassured investors that there was no need to worry that China was shifting out of dollars and buying gold. Chinese demand for treasuries is one of the primary pillars supporting the dollar’s value. When China buys treasuries, it keeps the dollar strong, interest rates low, Chinese imports inexpensive, and consumers spending. Remove that pillar, and the whole U.S. economy is thrown into jeopardy. Sino-American relations remain far from the official “most trusted” trade status. The longer America remains stuck in recession, the worse tensions between China and America will likely grow.

Latin America/Africa

The Vatican is helping to bring Cuba out of diplomatic isolation and closer to Europe. On July 7, Cuban officials announced they would release 52 political prisoners. The announcement comes after nearly two months of talks between Cuba and the Vatican. The 52 are among 75 prisoners arrested in 2003 for “treason.” Following the announcement, Spain called for Europe to soften its position on Cuba. EU nations have refused to have normal relations with Cuba because of its human rights record. But Spanish Foreign Minister Miguel Angel Moratinos said the prisoner release “opens a new era in Cuba.” “I think there is no reason to maintain a common (EU) position any longer,” he said. “I expect my European colleagues to now respond.” Several commentators point out that the prisoner release doesn’t mean that conditions in Cuba are improving. “The government makes a show of releasing prisoners but then it does nothing to dismantle the repressive machinery it has in place to imprison people and it continues arresting them,” said a spokesman for U.S.-based group Human Rights Watch. The last prisoner release occurred in 1998, when Cuba released 101 prisoners following a visit by Pope John Paul ii. Watch for the common Catholic heritage of the EU and Latin America to bring the two blocs closer together.

Five east African nations formed a common market on June 1. Members of the East African Community (eac)—Kenya, Tanzania, Uganda, Rwanda and Burundi—officially allowed the free movement of people, produce and capital across their borders last week. They aim to be a monetary union by 2012, and want a common currency by 2015. Most of the people in the region speak Swahili, and the community has been a customs union since 2005. The EU has been trying to sign Economic Partnership Agreements with the eac for some time. The European Investment Bank is also working to strengthen its presence in the eac. Europe is trying to gain access to the natural resources of the area. The eac is an excellent tool for this, allowing Europe to form a free-trade agreement with five nations at once. Expect Europe to continue to push into Africa.

Anglo-America

The International Monetary Fund weighed in on American economic policy this week, saying that the Obama administration should consider raising taxes and cutting Social Security benefits to get control of the nation’s budget deficit and public debt, the Wall Street Journal said on Thursday. The imf pointed to joblessness and a still-anemic housing market as increased risks to the nation’s recovery. Watch for outside authorities to seek increasing influence over America’s economy.

At the same time, Federal Reserve officials have scaled back any enthusiastic evaluations of the nation’s recovery, causing many to think a double-dip recession might be on the horizon. Investor anxiety has kept interest rates low, and the Fed has said the recovery is not so much “strengthening” as it is “proceeding.”

In one of the worst-affected states, California, Gov. Arnold Schwarzenegger has ordered massive salary cuts to try to avoid default and pass a budget. He put 200,000 state employees on minimum wage for the rest of the month.

The federal government has recognized that the nation’s private companies, as well as government departments, are vulnerable to cyberattack. Washington has initiated a broad program called “Perfect Citizen” to detect vulnerabilities and assaults via cyberspace that could damage the nation’s electricity grid or nuclear plants. Trumpet editor in chief Gerald Flurry has pointed to the United States’ reliance on technology as its Achilles heel.

Canada’s housing bubble might be about to pop. House sales in Vancouver and Calgary are plummeting. The Globe and Mail reports that home sales in Vancouver plunged by 30 percent in June compared to one year ago. Sales were down 5.8 percent from May. Calgary saw even greater reductions in sales. In June, the Calgary Real Estate Board reported that single-family home sales were down 42 percent from a year earlier and down 16 percent from May. In Toronto, realtors report a 23 percent drop in sales from last year.