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Generational Dynamics Web Log for 13-Jul-2010
13-Jul-10 News -- Iran's government weakens under international pressure

Web Log - July, 2010

13-Jul-10 News -- Iran's government weakens under international pressure

China's financial ratings agency downgrades Western debt

Russian president Medvedev warns that Iran is close to nuclear weapon capability

Russian President Dmitry Medvedev said on Monday Iran was gaining the ability to build a nuclear bomb.

Medvedev is quoted by Reuters as saying, "It is obvious that Iran is moving closer to possessing the potential which in principle could be used for the creation of nuclear weapons. Iran is not acting in the best way."

However, Medvedev is still skeptical of the value of sanctions, saying, "I have said before that sanctions as a rule do not have the desired results. Their role is to send a signal, to stimulate the negotiating process."

The U.S. State Department reacted positively to Medvedev's statement. "This is about as blunt as Medvedev has ever been about Iran's nuclear programme and should be taken as a good sign of increased international unity on Iran's nuclear programme," the article quoted an Obama administration official.

Worldwide pressure on Iran is growing

Tehran has recently suffered a number of body blows, according to Debka's weekly subscriber-only newsletter (forwarded to me by a subscriber).

The following are the items listed by Debka:

Iran was shocked when Russia and China failed to cast vetoes in the U.N. Security Council, and voted in favor of sanctions on Iran. Then, to make matters worse, the EU and the U.S. followed by passing additional sanctions on Iran, including a crippling ban on gasoline and jet fuel.

Turkey has been supporting Iran's position, but Iran paid a high price for the support, in that Turkey is beating out Iran for the top spot in the nascent Northern Islamic Bloc (Iran, Turkey, Syria, Hizbollah and Hamas). Iran's plans have always been to gain hegemony over their Arab peninsula, but now Turkey is moving into that role.
From the point of view of Generational Dynamics, Iran never had a chance anyway, because it's a Shia Muslim country, trying to gain hegemony over Sunni Muslim countries. Turkey, through the Ottoman Empire, has historically been the leader of the Sunni Muslim countries, and the popularity of Turkey in the Arab world has grown significantly in the last few weeks because of the conflict over the Israeli blockade of Gaza.

Recognizing Iran's current weakness, the Obama administration ordered a further buildup of American naval, air and Marines forces around Iran. Iran now fears attacks from all directions, including the Caucasus and Central Asia.

Iran's rulers exhibited enormous confusion in their reactions to the U.S. sanctions on gasoline and jet fuel, first claiming that some countries were refusing to refuel Iran's passenger planes, and then having to backtrack.

The United Arab Emirates (UAE), especially Dubai, have served as trading hub allowing Iran to break trading sanctions in the past. However, UAE appears to have bowed to US and Saudi pressure, and is easing out of this role.

Now we have the new statement on Monday by Medvedev expressing alarm over Iran's development of nuclear weapons.

Internally, Iran's hardline government still faces enormous political opposition from the young generation, as shown by all the protests of last year's June 12 presidential election. It's worth remembering that the Iran is a schizophrenic country, with a hardline leadership that bitterly anti-West and anti-American, but with a young population that's largely pro-West and pro-American, and who have no real desire to see Israel pushed into the sea. As I've said many times, when Iran is forced to choose sides in the Clash of Civilizations world war, there is little doubt that they will choose the West.

China's ratings agency downgrades U.S. debt

The Dagong Global Credit Rating Co. Ltd., is an international credit rating agency in China, competing with America's ratings agencies, Fitch Ratings, Standard & Poor's Ratings and Moody's Investors Service.

Dagong has issued a press release providing credit rating reports of 50 countries, accounting for 90% of the world's total GDP.

Among the 50 countries, ratings were issued as follows:

Norway, Australia, Denmark, Luxembourg, Switzerland, Singapore, New Zealand were assigned "AAA" ratings;

China, Canada, the Netherlands, Germany were assigned "AA+" ratings.

The United States and Saudi Arabia received "AA" ratings.

France , the United Kingdom, Korea and Japan got "AA-" ratings.

Belgium, Chile, Spain, South Africa, Malaysia, Estonia, Russia, Poland, Israel, Italy, Portugal and Brazil received "A-" ratings.

Dagong says that it's ratings are "not be affected by the ideology in the country," according to the press release.

The Telegraph quotes Chinese president Hu Jintao in April as saying that the world needs "an objective, fair, and reasonable standard" for rating sovereign debt. Dagong appears to have stepped into the role.

Additional links

While many countries are avoiding trade with Greece, which is being bailed out by the European Union, the Chinese are investing heavily in Greece as a distribution center for its trade with all of Europe. China's state-owned shipping giant Cosco last month took control of a pier in the Athenian port of Piraeus in a Ł2.8 billion deal to lease the pier for the next 35 years, investing Ł470 million in upgrading the port facilities, building a new pier and almost tripling the volume of cargo it can handle. Telegraph

Loans to small businesses by the Small Business Administration (SBA) plunged sharply by 2/3 in June from May's level, when last year's stimulus measures expired. NY Times

U.S. small businesses are having to pay high interest rate spreads than at any time in at least a quarter of a century. Financial Times (Access).

There is an American "creativity crisis," in that today's school children do very poorly in creativity tests, compared to school children prior to 1990. This appears to implicate the young Millennial generation. NewsWeek

Steve Jobs claims that the iPad makes the desktop PC obsolete, but here are ten reasons why the PC is here to stay. Among the reasons: Demand for PC is growing; PCs can do many things that iPads can't do, especially for businesses; PCs are cheaper. InfoWorld

Iran hawks are "sharpening their claws," preparing for a major campaign in the fall to convince the public that now is the time for a military attack on Iran's nuclear installations. Asia Times

Hizbollah has stationed 20,000 additional troops on the Israeli border. The troops are backed by a vast arsenal of rockets. Debka

The new violence in Indian-controlled Kashmir presents al-Qaeda with a "God-given opportunity" to provoke further conflict, with the goal of bringing India into a war with Pakistan. Asia Times

Paul, Germany's world-famous soothsaying octopus, incredibly got every one of his World Cup predictions right, resulting in a perfect record of 8-0. He correctly predicted the 5 German wins, and then predicted the 2 German losses. In the final, he correctly predicted a Spanish victory. Spiegel

If you're rich, and you think that you might die next year, then you should consider dying this year instead, because the estate tax is going to come roaring back next year, costing your heirs a lot more money. WSJ (Access).

(Comments: For reader comments, questions and discussion, see the 13-Jul-10 News -- Iran's government weakens under international pressure thread of the Generational Dynamics forum. Comments may be posted anonymously.) (13-Jul-2010) Permanent Link
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