Friday, July 30, 2010

High Income Economy


By Dr. Mahathir Mohamad on July 30, 2010 4:00 PM | Permalink | Comments (0) | TrackBacks (0)

1. The Government has announced the intention to make Malaysia a high income country. I assume this means people will receive high wages, salaries and profits.

2. But if wages and salaries are to be increased by the private sector, the cost of doing business would have to increase as well. To cover this increase, prices of products must be increased. This will mean that the consumers will have to pay higher prices for whatever they purchase. There would be, by definition, inflation.

3. The increase in prices of goods and services should cover the higher wages and salaries and the profit margins from the business. But this will not be all. The cost of transport, fuel and raw materials would all increase as these businesses will also experience increased overhead costs as they too will have to increase wages etc. So the increase in product prices must also cover these costs.

4. Generally the cost of living would increase as prices increase. The rise in income may not increase the purchasing power of the wage earners. Higher incomes would not mean anything then. We know of many countries where people get higher incomes in terms of currency units but are extremely poor.

5. If there is to be an increase in income, it must be carefully managed so that it would result in increases of purchasing power and not just more money.

6. This can happen because the added cost of doing business may trigger unreasonable increases of prices for raw materials, goods (products) or services. For example a 10% increase in wages and salaries should not result in an increase of 10% in the prices of goods and services. This is because wages and salaries do not constitute the total cost of production.

7. Their contribution to cost of production varies. This has to be determined by careful scrutiny of all the cost of production including material cost, power cost, transportation, advertisement and promotion costs etc. If it is found that wages and salaries at all levels make up 20% of the cost of production, then a 10% increase in wages should contribute only 2% to the cost.

8. Similarly the increases in the other costs i.e. power, material, transport etc may increase by a much smaller percentage according to their percentage contribution to the cost. Assuming that together they contribute 50% of the cost, but the increase in their prices is 5%, i.e. 5% of 50% = 2½ %, the total increase in cost inclusive of wages and salaries should be 4½ %, or say 5%.

9. Thus the increase in wages by 10% will not increase overall cost by 10% but will only increase by 5%, after including increases of other costs.

10. The margin of profit varies. For wholesale and fast moving items the margin can be as low as 2%, while for some slow-moving luxury goods the margin may be as high as 300%. Assuming that the cost of production increases by 5% for a 10% increase in wages and salaries, there can be justification for only a 5% - 6% increase in price of products and service for those with low profit margins. For high profit margins there should be no increase in price at all.

11. The wage earners with a 10% increase in income should therefore have a 5% increase in purchasing power only; not 10%. In other words their increase in income would make them only slightly richer. Still with increase in purchasing power they would be able to contribute more to businesses. Eventually the Government would earn more by way of taxes to pay for the increases in wages and salaries in the Government service. Generally economic activity would be enhanced and there would be growth as the salary bill in Malaysia runs into hundreds of billions every year.

12. The above are some of the ways for preventing unfair cost increases when wages and salaries are raised. But there are also many other ways of reducing costs so that the cost of goods and services to the consumer is not increased much as a result of increasing incomes.

13. In manufacturing, a careful study of cost can result in ideas on cost cutting. The Japanese "Just In Time" manufacturing process is a good example. In this system the parts and components are produced just in time for them to go into the assembly of the final products. This eliminates the cost of storage and holding costs.

14. Automation and robotics are costly but they can work 24 hours a day and would reduce the cost of the three shifts of work by workers in one day. In ship-building, whole sections of the ship can be produced separately and then assembled. A lot of time can be saved this way. And time means money.

15. The classic case of reducing cost was invented by Henry Ford - namely mass production on assembly lines. Economies of scale can also contribute to lowering costs. We see the progress in retailing goods. The single specialised shops have given way to the supermarkets. Now the supermarkets are being replaced by the giant wholesale hypermarkets. These help increase volume and lower purchasing costs. Self-service also help to reduce costs in restaurants and supermarkets.

16. Various electronic devices can help in reducing costs. Because of additional capital needed for these devices, they contribute much when the volume is big.

17. Incomes can also be increased by better education and training. It is said that the Korean worker is three times more productive than the Malaysian worker. This is not just due to education and training but more because of work ethics. Obviously when a worker is more productive he should be paid higher wages.

18. Most manufacturing activities add higher value to basic material. Generally exporting raw material gives less return than exporting manufactured products. But other costs have to be taken into consideration.

19. The Malaysian strategy on industrialisation is also not conducive to reducing costs. Japan and Korea acquire foreign technologies and set up their own companies to produce their own products.

20. Malaysia adopted a different strategy. To create jobs for a large number of the unemployed, foreign investors were invited to set up labour intensive industries. Naturally wages were very low. Increased profits for the foreign owned industries did not necessarily result in increased income for Malaysian workers.

21. Over the years Malaysians had acquired the skills in manufacturing and the capital to invest. Today there are a lot of successful Malaysian companies. Should the Government help these Malaysian industries to grow they can become world class players. This means better income for the Malaysian entrepreneurs and better wages for the Malaysian workers.

22. We must not follow the route taken by the developed countries of the West to achieve high income. In the days when technology was exclusive to the European countries and North America increases in wages were largely due to the demands of the workers. To cover the increased cost of production prices were raised quite indiscriminately. This was sustainable when the Europeans were the only producer of manufactured goods.

23. But then the countries of East Asia, began to produce almost all the products of the West at lower cost. The workers of the West continued to demand for continuous increases in their wages. Very soon the high prices for their products caused them to lose the market.

24. Malaysia must never take this route in order to achieve high incomes. Instead it should study the other ways of increasing incomes which will not lead to inflation and loss of purchasing power.

Thursday, July 29, 2010

Outlook for 2010-2011: EIU Report, London

Economist Intelligence Unit, London

Country Report - Main report: August 1st 2010


Outlook for 2010-11

The Economist Intelligence Unit expects the Barisan Nasional (BN) coalition to remain in power in 2010-11. The BN still has a sufficiently large parliamentary majority to pass the bulk of new legislation unchallenged. Speculation has grown about the likelihood that the government will call a snap election, but we do not believe that the prime minister, Najib Razak, is preparing to go the polls before 2012.

Policy will be tightened in 2010-11 following a recent period of fiscal stimulus and loose monetary policy. The government aims to cut its fiscal deficit through an efficiency drive and a reduction in the subsidy bill. The economy is expected to stage a strong recovery in 2010, growing by 6.8%. However, as this relatively rapid acceleration mostly reflects the rebound from the contraction in 2009, the annual average rate of growth will slow in 2011.

Price pressures will remain subdued in 2010, when we expect consumer price inflation to average 1.7%. Inflation will then accelerate to 2.6% in 2011, owing in part to continued growth in domestic demand. Despite the relatively fast pace of growth of imports compared with that of exports, Malaysia will continue to post substantial trade and current-account surpluses in 2010-11.

Monthly review

There has been speculation in the past month that a general election will be called by early 2011. This would be considerably before its due date, which falls in March 2013. If an early election is called, it may be because the BN wants to make the most of a possible conviction against Anwar Ibrahim, the leader of the opposition Pakatan Rakyat alliance, who is in court fighting sodomy charges.

Relations between Malaysia and Singapore are improving, with the two sides co-operating on land ownership and tourism deals. On July 8th Bank Negara Malaysia (the central bank) took another step towards returning its main policy rate, the overnight policy rate, to a more neutral level. BNM raised the rate by 25 basis points to 2.75%.
In a surprise move on July 15th the government has reduced the size of the subsidies for five important items. It raised the regulated prices of petrol (RON95 grade) by 2.8%, diesel by 2.9%, cooking gas by 5.7% and sugar by 15.2%.
Data on industrial production and external trade for May showed a continuation of the recent strong growth, but a degree of caution is becoming evident, as reflected by changes in a business conditions index.

Outlook for 2010-11: Domestic politics

In 2010-11 fierce political tussles will continue between the ruling Barisan Nasional (BN) coalition and the main opposition Pakatan Rakyat (PR, People’s Alliance) as both groups strive to increase their representation in national and state parliaments. At present the BN governs with a simple parliamentary majority, which allows it to pass the bulk of legislation unchallenged. However, a two-thirds majority is needed to amend the constitution. The prime minister, Najib Razak, will continue to pursue a strategy aimed at restoring public confidence in the BN and winning back the seats in state assemblies and the national parliament that the coalition lost at the general election in March 2008. To date, there have been 11 state and parliamentary by-elections since the 2008 general election. The scorecard is eight wins to the PR and three to the BN. Despite these results, Mr Najib's approval ratings have been climbing steadily, from 44% in April 2009 to 72% in May 2010.

In the light of this higher approval rating and recent signs of a strong recovery in the economy, speculation has grown about the likelihood that the government will call a snap election. (The next general election is not due until early 2013.) Although a recent increase in parliamentary allocations for BN members of parliament (MPs) for help with their constituency expenses and a renewed focus on registering new voters has contributed to this speculation, the Economist Intelligence Unit does not believe that Mr Najib is preparing to go the polls before 2012. Although a strong election performance would bolster his mandate, the results of recent by-elections suggest that the electorate has become much more volatile, especially non-Malay voters, and there is no guarantee that the government's plans to reform policies that favour bumiputera (ethnic Malays and other indigenous peoples, who make up around 60% of the population) has increased its appeal among ethnic minorities.

Mr Najib continues to enjoy general support among ethnic Malays, but he does face opposition from conservative groups to his plans to reduce special rights for Malays. He appears to be hoping that he still has sufficient latitude to make further changes to these policies, while also securing a greater understanding for the necessity for other unpopular policy decisions, such as pushing through a goods and services tax (GST). The prime minister is also aware that the promotion of racial harmony is vital to his plans to woo voters from the country’s ethnic minorities, many of whom abandoned the BN in favour of the multiracial opposition at the last election. Mr Najib attempted to encapsulate his political ambitions by coining a new slogan—“1Malaysia: People first, Performance now”—at the start of his premiership.

Mr Najib may be looking for the opposition to fall further into disarray before going to the polls. The opposition leader, Anwar Ibrahim, is facing the possibility of a 20-year prison term if found guilty of sodomy, a charge for which he is currently on trial. Mr Anwar continues to claim that the case against him is politically motivated and has been fabricated to remove him from the political scene. A guilty verdict and a custodial sentence for Mr Anwar could destabilise the PR, as he is widely believed to be the glue that holds the alliance together. The PR received a confidence boost from its electoral success in May 2010 when it won the Sibu parliamentary seat, but morale among members of the one of the parties in the PR, the Parti Keadilan Rakyat (PKR) led by Mr Anwar, remains low, undermined by the recent decision by a handful of its MPs to leave the PKR and stand as independents.

Outlook for 2010-11: International relations

Mr Najib is expected to strengthen economic ties with Singapore and China, Malaysia’s largest trade partners in Asia. To this end, he will continue to promote to Singaporean investors the Iskandar project, a 2,217 sq-km develop-ment zone in the state of Johor, which borders Singapore. In addition, state tourism agencies of both countries have recently launched a feasibility study to look into ways to replicate the success of Singapore's Sungei Buloh Wetland Reserve in Kranji at similar sites in Johor. Through its membership of the Association of South-East Asian Nations (ASEAN), Malaysia’s economic ties with China, Australia, New Zealand and India have been strengthened by the signing of free-trade agreements, all of which came into full effect in January.

Outlook for 2010-11: Policy trends

During the next decade the policy agenda will be guided by a host of initiatives aimed at raising per-head income and meeting the goal of becoming a high-income nation by 2020. Improvements will be made to six national key result areas, outlined in a Government Transformation Programme, which includes raising the quality of human capital and improving basic rural infrastructure. The Tenth Malaysia Plan (10MP), a medium-term spending plan covering 201115, will promote 12 national key economic areas, such as tourism, palm oil and private healthcare, which are thought to have the greatest potential to boost overall economic growth. In the forecast period the government will also be implementing eight strategic reform initiatives, which have been outlined in an Economic Transformation Programme. One of the initiatives is the phasing out of price controls and subsidies, which has been deemed necessary to create a competitive domestic economy. Another is to reform bumiputera affirmative-action policies. The government has already relaxed a requirement obliging firms to offer a minority equity stake to bumiputera. It hopes that further reforms will attract greater inflows of foreign direct investment, which will be one of the main drivers of growth in the next five years. However, the government is unlikely to dismantle affirmative action altogether for fear of losing its Malay support base.

Outlook for 2010-11: Fiscal policy

The government appears determined to address the country’s poor fiscal position, having run up a budget deficit equivalent to 7% of GDP in 2009 owing in part to its economic stimulus measures. The government will have broad success in its aim to cut the deficit to 5.3% this year through an efficiency drive and a reduction in the subsidy bill. The Economist Intelligence Unit expects the government to have further success in reining in the budget deficit in 2011, but there will not be a marked narrowing. Plans to widen the tax base have encountered strong resistance from businesses as well as consumers. The government has already announced changes to a new property tax, which will reduce the amount collected from this particular source. However, it remains non-committal on the implementation of the GST, a crucial part of tax reform. The proposed GST will make the government less dependent on payments by the national oil company, Petronas, which currently supplies over 40% of the government's revenue. According to the second finance minister, Ahmad Husni Hanadzlah, in early July 2010 the government still had not set a definite timeframe for the implementation of the new tax. Under its original plan, the government had sought to introduce the tax in the third quarter of 2011.
Outlook for 2010-11: Monetary policy

Bank Negara Malaysia (BNM, the central bank) is expected to tighten monetary policy further in the forecast period. It has already raised the overnight policy rate (OPR) three times since March 2010, by a total of 75 basis points, pushing the OPR up to 2.75%. It is expected to make incremental changes to the OPR in a process that it regards as a normalisation of this interest rate, after it was cut to a record low in response to a dramatic downturn in the Malaysian economy in 2009. However, BMN does not foresee inflation rising to problematic levels, believing that it will remain moderate going into 2011, with the forecast of a strengthening in domestic demand being accompanied by only a gradual acceleration in inflation. As such we do not see the OPR rising above the high of 3.5% that was in place during 2007 and much of 2008.

Wednesday, July 28, 2010

No such thing as a free market. The notion that market "forces" dictate things certainly isn't free!

By Dr Mahathir Mohamad

1. A long time ago when I was Prime Minister I met President Bush the father, at Boston University where he was conferring degrees for graduates. I met him in a side room and I told him of the unfair anti-palm oil campaign by America, blaming it for heart diseases.

2. We later submitted palm oil samples for three American chemical laboratories to examine the cholesterol contents. Their findings proved that although palm oil had more cholesterol than rival soya bean oil, the main edible oil in America, cooking reduced palm oil cholesterol but increased the cholesterol in soya bean oil.

3. The campaign against palm oil stopped but Americans still refused to use palm oil for cooking to this day. It was a case of non-tariff barrier. But that is the way America deals with competitions.

4. When the Vietnamese exported catfish to America, American catfish producers got their Government to declare that Vietnamese catfish is not catfish. The catfish farmers in Vietnam lost their business.

5. Malaysia-made rubber gloves were banned in the United States because out of the hundreds of millions used, one person had allergic reaction.

6. Foreign aircraft manufacturers wishing to export to the United States have to use American components and do part of the finishing in America. It is the same with the automobile. The Japanese and the Koreans have to put up plants in the United States and employ American workers in order to remain in the United States market.

7. Despite all these conditions Toyota's share of the world auto market grew. Then news came that Toyota was on the verge of becoming the No 1 automotive manufacturer in the world, displacing General Motors of the United States.

8. American's pride was hurt. Soon something was found to fail in the hybrid Toyota "Prius". Apparently one American user from tens of thousands was hurt because the brakes failed.

9. The news about the Prius failure hit the headlines in the American controlled world media. Toyota was forced to recall tens of thousands of the Prius model. The losses were enormous.

10. In order to put Toyota in its proper place the head of Toyota Corporation was summoned to Washington to face a congressional enquiry.

11. Toyota's position as a possible biggest automobile manufacturer in the world has been eroded. But while American auto manufacturers have to be put under Chapter II, i.e. as bankrupts, Toyota is still showing profits. In time Toyota will become the biggest automobile company in the world, the faults with the Prius notwithstanding.

12. There really is no free market. If tariff and other barriers fail to stop imports, the application of sanctions against countries, whatever may be the reason is also another form of non-tariff barrier. Free trade simply does not exist.

13. Truly hypocrisy prevails in the markets and in international trade. The greatest hypocrites are the very people who conceive and promote the idea of tariff free world trade.

Friday, July 23, 2010

Dear MensRights..

I am a woman who has been lurking on your reddit for a while. I just wanted to let you know that you have the backing of women; maybe not a lot of us, but I know that there are at least three: myself and two friends.

It started when I was a little girl. I saw my mother verbally abuse my father. She would pick fights with him for no reason other than to back him into a corner. She called him horrible names and even hit him a few times. She didn't work; my father supported us alone as a contractor. This happened for years and years.

Eventually, when I was fifteen, I asked my father why he didn't just hit back or leave. He told me that the world was a complicated place, far more complicated than a fifteen year old could understand. He said that if he hit her back, he would put in a jail for a very long time. My mother would divorce him. He would have to pay child support. I expressed my concern of the unfairness; why couldn't he just say my mother was hitting him? He explained that a woman's tears are the gears for this world.
I watched as my brother was harassed in school by girls for being overweight. I watched them hit him in school and the teachers not do anything about it because he was a guy. I heard him cry in the bedroom one night and my mother burst him and tell him to "man up" and stop crying. My brother was never the same since that day; we share the same feeling towards women.

I know this is a sanctuary for men, and I hope you don't mind a woman being in here. I really just wanted to express how happy I am that men are taking a stand against the oppression of women. My father always told me that life worked like a pendulum. It swings too far one way (the extremist nature of men and their abuse and misuse of women) and that the pendulum swings too far the other way (where we are now, with women treating men the same way they were treated). He said it's our responsibility to grab that pendulum and stop it from swinging.

I'm 22 years old and married. I love and respect my husband. I don't place stereotypes on him; I don't expect him to be stupid, drunk, violent, lazy, or consume his life with naked girls and sports. Shockingly (/sarcasm), he isn't like that! We, as an entire society, need to stop putting these vicious stereotypes on people. I hate the way the media portrays men as drunken fratboys; I hate the way they show them as violent, testosterone nutcases; I hate that in sitcoms, the guy is always stupid and lazy and the woman is the only one in the family that anyone can count on.
I hate even more the social hypocrises that occur with men in our justice system. I watched first hand as my cousin gained full custody of her son--she was a convicted heroin and cocaine user, the father was clean. She was given child support from the father, as well as welfare. She doesn't work; she sits at home and gets drunk while the state and the baby's father do everything. Every time I express how I feel, my family slams me down. My father and brother are the only rational people in the whole picture.

I don't know why I posted this. I guess I was just tired of all the bullshit in this world. Men have it so hard in this world and I will take my part, when I have children, to try to change this world. I'm sorry for all the bullshit you guys have to go through.

Written by: Just a woman who's on your side. Fight the good fight.

Sunday, July 18, 2010

ameriCON dollars

Why Would China’s Rating Agency Rate The United States AA When It Is No Better Than Junk? - By Matthias Chang (19/7/10)

By Matthias Chang

Sunday, 18 July 2010 14:44

For all intent and purposes, the United States is insolvent.

This is not my personal assessment but that of world renowned “experts” and economists, and financial institutions. Just google “US Debts” and you can find thousands of analysts stating that there is no way that the US can ever pay off its debts. The US cannot even liquidate the accumulated interest on the outstanding debts. The debts are in the trillions!

The Casey Daily Dispatch observed:

The simple reality the Fed is waking up to is that the structural underpinnings of the economy are damaged beyond any quick or easy fix. That’s because until the debt is wrung out of the system, either through default or raging inflation – there’s no chance of it actually being paid in anything remotely resembling current dollars – the equivalent of an economic Black Death is going to plague the land.

The American rating agencies, Moody’s, Standard & Poor’s, and Fitch Ratings still give the thumbs up for the United States – a whopping AAA rating. These same agencies gave AAA ratings to the CDOs and other financial products peddled by the Too Big to Fail Global Banks when they were in fact junk. It took the financial tsunami to expose their fraudulent practices.

So I don’t give too much credence to the ratings by these crooked institutions.

The National Inflation Association (NIA) believes that the real credit rating of the US should be junk. But you don’t have to believe them either.

So how do we know for sure that the US should be rated as junk?

Simple! Apply common sense to the facts before you.

Since the United States defaulted on its debts in 1971, when President Nixon refused global and sovereign creditors the right of redemption in gold for US dollars, it has been living on borrowed time. The United States conned the world into accepting its toilet paper currency and for those who dared to question the integrity of its fiat currency, the mighty US military was deployed to ensure compliance.

The global banking elites then employed subservient economists the world over to tout the merits of the floating exchange rate as the mechanism to determine a currency’s value. Countries were compelled by threats of war or coups to peg their currency to the dollar. The dollar became the “anchor” in place of gold. Trade had to be denominated in US dollar which gave the United States an undue advantage.

This “pegging” gave an illusion of strength of the US dollar and creditworthiness of the United States. While others have to produce and earn an income in a “local currency” and then exchange it for US dollars to import and or purchase goods (as over 80% of global trade is denominated in dollars), the “paper tiger United States” need only to print money to pay for goods and services when its income was insufficient to pay and sustain its standard of living.

For over 37 years, the United States got away with this con!

For over 37 years, people the world over sold their produce to the United States in exchange for a paper with a number printed on it, a number denoting its value i.e. a 100 dollar note etc. People just accepted the number printed on the paper as reflective of the “real value” of the currency. In reality it has no value. It costs a few cents to print the toilet paper currency.

Through slick propaganda, people were led to believe that the value is as printed on the paper. No one dare to question the absurdity of this proposition.

But now, we have reached the stage of total collapse of the global fiat currency system. Every country in the developed world is implementing the policy of “quantitative easing” (the central bankers’ jargon for creating money out of thin air) in a desperate effort to pay off mounting debts and compounding interest in the trillions. To a lesser extent, developing countries are also following the Washington consensus. The global financial system is flooded with toilet paper currencies.

What will be the endgame?

Let’s pause and think for a moment. Let’s apply common sense.

The US dollar $, the Euro €, the pound £, the Yen ¥ etc. are all fiat currencies – they have no intrinsic value. Their value is a number arbitrarily printed on the paper and sanctioned by central bankers as “legal tender”.

In essence, they are all junk – toilet paper currencies. So how do they “float” against each other under the global floating exchange rate system?

This is where the fun starts.

How does one compare a junk from another? How does one determine the exchange value of one junk from another? A junk is a junk!

Forget about the market forces determining the values of the various junk currencies. It is determined by central bankers and no one else.

Whether a US dollar is equivalent to Ringgit 3.40 or Euro 1.18 or Yen 90 is arbitrarily decided by the respective central banks. And there is nothing you and I can do about it. If it serves the interest of a country to have its currency devalued, the central bank of that country will allow its currency to devalue and vice-versa.

Sometimes, the central bankers get their accomplices, the hedge funds to jointly manipulate the forex market through derivatives trading. And as long as the central bankers and their accomplices maintain the fluctuations in any one period of time in accordance with the parameters previously agreed by the central bankers, nothing much will happen. It is when central bankers cannot agree on the parameters that problems will emerge, often resulting in trade wars and even “hot” wars.

Don’t believe me?

I will give two examples:

The Plaza Accord:

In 1985, at the request of the United States – France, Germany, Japan, and the United Kingdom agreed to deliberately weaken the dollar's exchange rate. At the material time, the United States was having huge trade deficits, especially with Japan. The agreement, known as the Plaza Accord, was to help the United States reduce its huge trade deficit to assist its economy to climb out of the 1980's long recession. The intervention was so successful, that the dollar depreciated beyond its target level. By the end of 1987, the dollar had fallen by 54% against both the D-mark and the yen from its peak in February 1985. This sharp drop caused another panic – that of an uncontrolled dollar plunge.

To address and reverse the excessive depreciation of the dollar, the same group of countries agreed in 1987 to strengthen the dollar. This latter effort was known as the Louvre Accord. Another blatant market manipulation! Since when were any markets really free?

Why did England and France agree to participate in this blatant market manipulation? They owed US a big thank you for winning the Second World War. It was time for the US to collect past dues. In the case of Germany and Japan, being defeated nations and under occupation, they had no choice but to kow tow to big brother USA.

The Asian Financial Crisis:

All you need to do is to recall what happened during the Asian financial crisis. The tiger economies were undermined and attacked and their currencies went into a free fall. Malaysia’s economic development was severely threatened. But the then prime minister, Tun Dr. Mahathir Mohamad had the foresight and courage to take on the global financial elites and imposed capital and currency controls. The prime minister unilaterally fixed the exchange rate for the ringgit at RM3.80 to a dollar. Forex speculators took a major hit and never recovered from this surprise counter attack.

While this unprecedented intervention was executed to save the national economy and the livelihood of 23 million Malaysians, the global financial elites through the shadow banking system intervened to manipulate the market to reap obscene profits and to plunder.

We will now address the trillion dollar question.

How does China or the United States decide that one US dollar is equivalent to 6.7 Yuan or whatever rate?

Before addressing the question, it is important for us to understand how in a relatively short period of time, China was able to accumulate such a huge amount of dollar reserves and became the No. 1 creditor of the United States.

In their grand scheme for financial hegemony, the US financial elites proposed to the Chinese financial elites that in exchange for massive FDI and outsourcing of industries by the US, China must supply cheap goods to the American market and maintain an agreed exchange rate. This scheme was the lynchpin to an unprecedented expansion of credit in the global financial system, because such a rapid expansion of credit would be extremely inflationary. When China can supply the entire spectrum of goods at less than ten percent of the prevailing price, the financial elites knew that they could flood the global casino with dollars without having to worry about inflation.

And as they say, the rest is history.

This arrangement served the US and China well for two decades, in fact too well resulting in China having the largest dollar reserves in the world as well as becoming the largest creditor to the US.

Coming back to the trillion dollar question, as stated earlier the exchange rate is determined by the respective central banks. Of late, the Obama administration has been putting pressure on China to revalue its currency. In response to the pressure and to avoid a trade war, China allowed its currency to appreciate slightly. In fact, this happened just before the G-20 Summit in Toronto.

While the above arrangement (specifically the agreed exchange rate) has served its original purpose, it can no longer be sustained. This is because the current yuan/dollar peg is distorting the forex market and will exacerbate even further the present global financial crisis.

As a result of the global financial tsunami, the US is in default once again. But this time round, Obama cannot do what Nixon did in 1971.

The Daily Reckoning assessed the situation correctly when its subscribers were told:

Wait a minute. We're still Number One, right? the sense that we can, in theory, kick any butt in the world. That is, if the Chinese let us. They've got so much of our money and so many of our bonds, if they decided to dump them, we'd be in one helluva fix. Because we don't pay enough in taxes to fund our social programs and the Pentagon at the same time. We can't afford it. So the nice Chinese lend us money.

But don't worry. They've promised not to dump our bonds. And we're sure they'll honor that promise for as long as they want to.

As far as we know, no empire that had to borrow money from its rivals has ever lasted very long. Britain got itself in that position in WWI. It could no longer afford the carrying costs of the empire – including the huge cost of the war itself. So, it borrowed from the US. The Germans borrowed from US lenders too. But America's lenders to Britain had more money in New York and more power in Washington. So, the US entered the war on Britain's side rather than on Germany's side.

Then, in WWII, when an American general was put in charge of D-Day, it was clear that Britain had ceded the lead dog position to the US. It was a friendly handover, achieved by force of economics rather than by force of arms. The US did not have to defeat Britain militarily. Instead, she merely had to finance her.

A few years later, during the Suez crisis, Britain learned what it was like to be a subordinate power. She discovered that she could no longer throw her weight around without US consent.

But that is on the military front. At home, Britons discovered that they were poor...and getting relatively poorer. Under the weight of growing social welfare programs and a shrinking empire, Britain's economy sagged. Its old allies – France and the US – boomed in the post-war years. So did its old enemies – Japan and Germany. Soon, not only were its friends richer and more were its adversaries.

So, we now have a ridiculous situation where the United States owes global creditors trillions of dollars (specifically China), is insolvent, yet, the exchange rate does not reflect the underlying weakness of the United States.

We also have the situation where China has been selling goods and services to the United States and is being paid in toilet paper currency that has no value other than the artificial and arbitrary value printed on the paper. China, in turn lends these toilet papers back to the United States so that it can purchase more goods and services from China. The United States has no money to repay China, so it creates money out of thin air, via the electronic printing press and use that to pay China.

Seriously, how long can this charade last?

Back in 1985, we had the Plaza Accord to bail out the paper tiger USA. The answer then was to devalue the US dollar. But Japan suffered two decades of stagnation.

Why has the same countries – UK, France, Germany and Japan not adopted a similar strategy at this juncture, thereby boosting US exports?


1. The US has outsourced so much of their previous exports to China and other countries that it does not have enough meaningful products to export anymore to make a substantial difference in the trade deficit.

2. For the past decade, the main exports of the US were, and continue to be “Financial Products” – the junks wrapped up as CDOs and rated AAA and sold to gullible investors (i.e. gamblers) all over the world. The US was the centre of the global derivatives casino, managed by the Shadow Banking Cartel.

3. There has been such a massive US dollar credit expansion in the last decade as well as toilet paper dollars in the global financial system that any attempt to devalue the dollar would result in an uncontrolled free fall, and the complete destruction of the economy of the US.

4. And China by maintaining its current exchange rate with the dollar (and within a narrow band of fluctuation) has artificially maintained the current value of the US dollar to avoid the status of being downgraded to junk.

5. Thus in the short term, China is complicit, together with other major central banks, in hoodwinking the ordinary folks that the global fiat money system is still in a healthy state. But, by downgrading the US one notch, China and the global elites hope that the con can be maintained for some time so that China as well as other countries can get out of their massive US dollar assets. But the situation is so volatile that no one, absolutely no one can say for sure when a child would cry out the proverbial exposé, hey, the emperor has no clothes!

6. It is also obvious to the global financial elites that if there is a massive flight from dollar assets to euro assets, there would also be an uncontrolled plunge of the US dollar. The European global banks are also up to their eyeballs holding junk dollar assets and would thereby suffer huge losses over and above their exposure in euro loans to the “PIIGS” countries (Portugal, Ireland, Italy, Greece and Spain). Unlike the time of the Plaza Accord, right now, no one wants dollar devaluation. When the slide starts, no one would be able to stop the plunge. Central bankers are sitting on a knife’s edge. Ouch!

7. So, the “Greek crisis” was engineered to prevent such a flight from dollar assets to euro assets. Greece is “Mary Poppins” in the overall financial scheme of things. Its GDP is not even 3% of the Euro zone. In contrast, California is bankrupt and is more pivotal to the US economy. It is the 7th largest economy in the world. Yet, the bankruptcy of California did not impact on the US economy as it should. This is because the global mass media ensured that the bankruptcy would not be highlighted. The hype instead was that the euro would be heading for a crash. The result? The flight to euros was halted in its tracks.

8. Someone threw the spanner in the works. The culprit in the eyes of the global financial elites was the indomitable Iran. China and Russia were playing geopolitical games in their trade relations with Iran in the hope that President Ahmadinejad would not spoil the party before they were ready to dump their massive dollar assets. The US and Israel played the hard ball role while China and Russia initially played the softy role so typical of the police methods when attempting to extract concessions and or confessions. But China’s and Russia’s true intentions were revealed, when exasperated with the resilience and defiance of Iran, they opted to impose severe sanctions on Iran. The quartet did not bother to maintain the farce. The nuclear weapons issue was merely a smoke screen to mislead the world of the impending financial implosion.

The downgrade by China must be seen for what it is – a stark warning that the end is near. The curtain has to come down on the charade.

Another signal that the end is near was when the Bank of International Settlement (BIS) swapped Gold as security for a dollar facility extended to a sovereign (most likely Portugal) via commercial entities. Gold, once considered a “barbaric relic” is now back in fashion in currency swaps. Who would have thought this was possible just a few months ago? In a sense, we have turned a full circle. In 1971, Nixon decoupled gold from the US dollar. Today, the BIS have taken the first few steps in bringing gold back to its rightful place.

No matter how hard the central bankers and China try to prevent the sovereign debt bubble blow-out, they will not succeed.

Sooner or later, China has to make the decision of the 21st century – to dump the dollar and allow global economies to suffer severe pain in the short term, five to ten years, or commit mass suicide together with the US, UK, France, Germany, Russia and Japan.

China at this moment in time is the only country that can survive the coming financial devastation with the least pain as it will be relatively easy to transform its economy from being export-driven to that of a domestic-based economy – tapping the limitless potential of its 1.5 billion citizens. China can do in one short year, maybe at the most two, what would take a generation for the other developed economies to do.

A marginal increase in the purchasing power of its citizens will take up whatever downturn in the export markets.

The fact that the Yuan is propping up the dollar means that it is the Yuan and not the dollar that is the undisputed global reserve currency. If China revalues drastically upwards the Yuan, every fiat currency would head for an uncontrolled free fall.

Let us not be naive and kid ourselves. It is pure pantomime for the US to demand from China to revalue the Yuan and for China to resist a revaluation. This so-called currency tug-of-war is a smoke screen to lend credence that the dollar is not junk but AA, albeit down one notch from AAA.

The fact that so many western-trained economists have not addressed and or exposed this issue can mean only two things – either they are truly ignorant or they are part of this grand charade, blowing smoke into our eyes.

Be patient.

Invest in Gold.

Prepare for Act II of the financial Armageddon!

Monday, July 12, 2010

Speech by Tun Dr Mahathir Mohamad on International Conference on Gaza, 11 July 2010


We must end the Apartheid and establish an Independent Palestine State

Honourable speakers, guests, ladies and gentlemen,

Firstly I would like to welcome all of you to this conference on the siege
organised by the Perdana Global Peace Organisation backed by UMNO.

1. We are gathered here today not only to honour the Turkish martyrs who
were brutally slaughtered by Israeli commandos on the Mavi Marmara, but
also to counter the lies and propaganda by Israel and the Zionist
controlled international mass media, that the passengers, specifically the
martyrs, were terrorists and therefore the killings were justified.

2. More importantly, we must send a message of hope and solidarity to the
Palestinians that the peace loving peoples of the world will never abandon
them, come what may and that we will stand shoulder to shoulder with
them in their struggle for liberation and for the State of Palestine.

3. Prime Minister Netanyahu has openly and unreservedly declared just a
few days ago that Israel will not apologise for the brutal murders
committed in international waters in contravention of all conventions and
international laws because Israel was justified in the massacre of unarmed
people in order to defend Israeli security.

4. Netanyahu said in an interview with Israel’s Channel 1:

“Israel cannot apologise for our soldiers being forced to defend
themselves against the mob that almost slaughtered them.”

Yet, not one single Israeli commando was killed. In fact, from the
testimony of Ken O’Keefe, a passenger on Mavi Marmara, which we have
just witnessed from the multi-media presentation, it was the well-armed
commandos who killed and injured the passengers. Far from killing or
attempting to kill the commandos, despite their friends being killed, the
Turkish passengers managed to disarm three of the commandos and after
a doctor had washed away the blood caused by their faces being
scratched, released them. Is this the behaviour of a mob bent in
slaughtering the commandos?

5. In a speech to the Israeli parliament, Netanyahu elaborated:

“They want to strip us of the natural right to defend ourselves. When we
defend ourselves against rocket attack, we are accused of war crimes. We
cannot board sea vessels when our soldiers are being attacked and fired
upon, because that is a war crime.”

6. But where is the evidence that the Israeli commandos were being attacked
and fired upon? Such is the distortion of the truth! Even the UN Report
chaired by Justice Robert Goldstone, a Zionist and a Jew who found that
the Israelis committed war crimes when it invaded Gaza in 2008, was
dismissed as mere propaganda, and the said report was not allowed to be
tabled and debated in the U.N.

7. Self-defence can take place if there was an attempt at attacking or when
actually attacked by the aggressor. Even the Israelis said that the
passengers were armed with iron rods (railings) and scissors. Is Israel
suggesting that people with scissors and iron railings attacked the fully
armed commandos before they boarded the Mavi Marmara? It was to
defend themselves after the commandos dropped from the helicopters
and killed their friends that the unarmed passengers tried to defend
themselves with scissors and iron railings, the only weapons they could
lay hands on.

8. However, even without an Independent Inquiry and in spite of the fact that
Israel had confiscated and destroyed incriminating videos of the
massacre, the international mass media cannot ignore the overwhelming
evidence provided by the survivors of Mavi Marmara - journalists and
passengers who were able to evade the tight security measures and
brought out videos showing that Israeli commandos had commenced firing
at the passengers before boarding the Mavi Marmara. IHH, the
organisers of the Mavi Marmara has just come out with their report and I
am told that this is available in CD for all delegates.

9. Additionally, we cannot ignore the fact that the intent to attack the
Freedom Flotilla was made well before the flotilla set sail for Gaza. Prime
Minister Netanyahu and Defence Minister Ehud Barak declared that Israeli
naval ships and commandos would be conducting naval exercises to
prepare for the eventual attack on the flotilla and that Israel would do
everything possible to prevent the flotilla from reaching Gaza. This was
reported by Bloomberg, the Associated Press and even Israeli
newspapers, and was affirmed by the Israeli Ambassador to the United
States, Michael Oren in an interview on June 2nd, 2010.

10. It came as no surprise that on 31st May 2010, in contravention of
international laws, Israeli commandos as directed by the Israeli regime
boarded the Mavi Marmara, and in the process shot and killed nine
passengers and wounded many more and hijacked the entire flotilla to the
port of Ashdod in Israel.

11. Rifat Audeh, a passenger on the Mavi Marmara gave an account of what
happened before Israeli commandos boarded the Mavi Marmara. She

“The Israeli military was firing at us from their vessels which approached
the sides of our ship and the helicopters from above as well, even before a
single soldier landed on deck. Here we had fully armed Israeli commandos
firing live rounds, tear gas, sound grenades and other types of ammunition
at unarmed activists of a humanitarian ship at night in international waters,
and once again the media has criminalised us and vindicated the
perpetrators. Let me be clear: we had every right to defend ourselves and
our ship against this illegal barbaric assault as our brothers were being
wounded and killed.”

12. Just as Israel denied using white phosphorous and other banned weapons
on the civilians of Gaza in the barbaric invasion in 2008 and the massacre
of civilians in Jenin in 2003 until exposed by the Robert Goldstone report
and independent observers respectively, Israel is denying again and
hopes that this time, the war crimes would be lost with the passage of

13. But peace loving nations of the world condemned this wanton aggression
and demanded that the siege of Gaza be lifted and a U.N. sanctioned
Inquiry be established to investigate into the massacre of the passengers
on the Mavi Marmara.

14. Knowing that the United States will not condemn its actions and veto any
Security Council resolutions that demanded a full account for the incident,
Israel ignored international condemnation and maintained that she has the
right to do as she likes. Israel considers itself above international laws
and common moral values.

15. This heinous murder of Turkish nationals and the confiscation of the
Turkish ship, Mavi Marmara seemed strange to many, as Turkey has been
a close strategic ally of Israel for many years, having regular joint military
exercises and shared strategic interests. Turkey is also a NATO member.
However, it is evident that even an ally would not be spared the criminal
behaviour of Israel whether there is justification or not.

16. Such is Israel’s arrogance and her confidence that she can get away with
murder. And indeed Israel has been getting away with blatant murder
since 1948.

17. Many may have forgotten that such betrayal by Israel of an ally is not
without precedent. The ally that was previously betrayed by Israel was
none other than the United States. That treachery needs to be retold, if we
want to understand and appreciate the strategic implications of the attack
on Mavi Marmara.

18. It was on the 8th of June, 1967, soon after the commencement of the six-
day war by Israel against her Arab neighbours. President Johnson had
given his consent to Israel to launch a limited war against Egypt on the
condition that Israel would not widen the war to include any land grab
against Jordan and Syria.

19. Egypt had closed the Straits of Tiran to Israeli ships and the limited war
was to compel Egypt to reopen the Straits of Tiran to Israeli ships. But,
the then Defence Minister Moshe Dayan had different ideas from what
was agreed between President Johnson and the then prime minister of
Israel, Levi Eshkol and his military Chief of Staff, General Yizhak Rabin.
Moshe Dayan, the one-eyed war criminal wanted to use the opportunity to
extend the borders of Israel to fulfil the aspirations of the Zionists for a
“Greater Israel.” It was in the plan that after the capture of the Sinai
Peninsula, Israeli military would be diverted to the Jordanian and Syrian

20. The USS Liberty was a “spy ship” and its mission was to listen to all
Israel’s military communications so that Israel would abide by the
agreement not to widen the war after she attacked Egypt.

21. The USS Liberty clearly stood in the way, as President Johnson would
know through communication intercepts by the USS Liberty, if Israel
reneged on its agreement for a limited war, and proceeded to wage a full
scale war against all her immediate neighbours. Time was of the
essence. If the USS Liberty was disabled, Israel would by her surprise
attack against Syria and Jordan achieve her aims of a Greater Israel
before President Johnson could intervene to stop the wider war.

22. General Moshe Dayan therefore ordered the attack on the USS Liberty
that left 34 Americans dead and 175 wounded and severely damaged the
ship. The captain of a nearby US aircraft carrier scrambled jet fighters to
assist the USS Liberty but his orders were countermanded by President
Johnson and Defence Secretary Robert McNamara. The excuse for the
attack was that Israel made a mistake as to the identity of the USS Liberty.
Moshe Dayan hailed the day of the attack, 8th June 1967 as a “Great Day”
because the destruction of USS Liberty enabled Israel to extend its
borders to encompass the Golan Heights and the entire West Bank and
more! The fact that President Johnson had to cover up the murder of his
own soldiers and accepted thereafter the fait accompli of a Greater Israel
shows all too clearly that the United States was and is still subservient to

23. The international mass media propaganda at the material time accused
the Arab states for starting the war and wanting to annihilate Israel. Once
again, we have to ask, who is telling the truth?

24. We need only to examine some public statements of Israel’s military
leaders at the given time. On 28th February 1968, Yitzhak Rabin, the
Israeli Chief of Staff in an interview with Le Monde, conceded that:

“I do not believe that Nasser wanted war. The two divisions which he sent
to Sinai on 14th May would not have been enough to unleash an offensive
against Israel. He knew it and we knew it.”
Menachem Begin, then Minister without Portfolio was quoted by the New
York Times in 1982 as saying:
"In June l967, we had a choice. The Egyptian Army concentrations in the
Sinai approaches do not prove that Nasser was really about to attack us.
We must be honest with ourselves. We decided to attack him."

25. Given this hidden agenda, how did Israel prepare the propaganda for war
against the Arabs? The strategy was simple enough – portray Israel as
the victim. In an interview with Al-Hamishmar in 1971, Mordecai Bentove,
then Minister of Housing revealed:

“The entire story of the danger of extermination was invented in every
detail and exaggerated a posteriori to justify the annexation of new Arab
26. This deliberate lie was corroborated by General Haim Barlev, Chief of
General Staff Branch, Israel Defence Forces and as reported by the Israeli
newspaper Ma’ arrive in 1972. I quote:
"We were not threatened with genocide on the eve of the six-day war, and
we had never thought of such a possibility."
General Chaim Herzog, Commanding General and first Military Governor
of Israeli Occupied West Bank expressed similar views when he said:
"There was no danger of annihilation. Israeli headquarters never believed
in this danger. "

27. From these facts we can draw the following conclusions, namely:

a) Israel treats her allies no different from her enemies if its interests
are threatened.
b) It is by deception and outright lies, that Israel wages war.

28. Not for nothing is, “by way of deception” the motto of Mossad, the Israeli
intelligence unit. The attack against the Turkish ship and the Turks is thus
typical of the Israelis. They knew and yet they shot to kill the Turks with
live bullets. Given this sordid history, it comes as no surprise that
President Obama chose to express regrets instead of condemnation of the
murder of the nine passengers, one of whom was an American citizen of
Turkish descent. He was only nineteen years old. Tony Blair, the war
criminal and the so-called Special Peace Envoy for the Quartet for the
Middle East declared that Israel was acting in self-defence when it
attacked the passenger ship Mavi Marmara and hijacked the entire flotilla
to the port of Ashdod.

A question remains to be answered – Did President Obama know in
advance of the attack on Mavi Marmara and give his consent just as
President Johnson did when Israel attacked Egypt in 1967 in the six-day

29. It is inconceivable that the intelligence services of the United States were
unaware of such plans by the Israeli military. The President of the United
States is briefed daily by the intelligence services. And given the special
relationship between Israel and the United States, it would be naive to
think that Israel would not share intelligence regarding what they consider
their mutual security interests. In the just concluded visit by Netanyahu to
the White House, the prime minister remarked that:

“There is a depth and richness of this relationship that is expressed every
day. Our teams talk. We don’t make it public… What is not told is the fact
we have an enduring bond of values, interests, beginning with security
and the way we share both information and other things to help the
common defence of our common interests. The President said it best
in his speech in Cairo. He said it in front of the entire Islamic world, he
said, the bond between Israel and the United States is unbreakable. And I
can affirm that to you today.”

30. Yet, the Muslim world continues to be taken in by President Obama’s
rhetoric that he is committed to change and he is for peace. His actions
contradict his spoken words, for upon receiving the Nobel Peace Prize,
President Obama then escalated the war in Afghanistan, a war started by
President GW Bush. It is not surprising that the UN chose not to allow a
debate on Malaysia’s resolution condemning Israel for its dastardly acts.

31. Given this reaffirmation by President Obama and Netanyahu, we must not
be deluded into believing that there will be peace, genuine peace in the
Middle East anytime soon. On the contrary, war preparations are in place.
The same lies have been repeated. Have we not heard the same refrain,
that Israel’s very existence is threatened by her neighbours? A thief
shouting thief as he runs away with the booty is a most effective way of
deflecting focus on his thieving. That is Israel’s strategy.

32. Iraq was accused of having weapons of mass destruction so as to appear
to be a threat to Israel’s existence. Israel demanded that Iraq be invaded
and its people subjugated. And so in 2003, Iraq was invaded. But as we
now know Iraq had no weapons of mass destruction. Iraq was attacked
because the plans for the invasion of Iraq were laid much earlier. In 1996,
the then prime minister of Israel, Benjamin Netanyahu commissioned the
Institute for Advanced Strategic and Political Studies to prepare a blue
print to enable Israel to be the dominant regional power in the Middle East.
The report, A Clean Break: A New Strategy for Securing the Realm
sets out the new paradigm for Israel. According to its authors, the
centerpiece of the recommendations was the removal of Saddam
Hussein as the first step in remaking the Middle East into a region
friendly to Israel. Their plan also signaled a radical departure from the
peace-oriented policies of former Prime Minister Yitzhak Rabin, who was
assassinated by a member of an extreme right-wing Israeli group.

33. One of the pillars of this new policy was the abandonment of the
"comprehensive peace" with the entire Arab world. Israel’s new strategy
would be to work jointly with Jordan and Turkey to "contain,
destabilise, and roll-back" those entities that were regarded as threats
to all three (i.e. Israel, Turkey and Jordan), firstly by destroying Iraq and
then Syria and finally Iran. This is the significance of Turkey in the
overall scheme of Netanyahu under the “Clean Break” master plan.

34. Now that Iraq and Saddam Hussein have been disposed, the target has
shifted to Iran as Syria is seen to be a lesser threat. The world is made to
believe once again the lie that Israel’s existence is being threatened by a
nuclear armed Iran, notwithstanding that El Baradie, the former head of
the IAEA had repeatedly stated that there is no evidence that Iran has a
nuclear weapons program. President Bush had threatened Iran with
tactical nuclear weapons. President Obama is no different for he has said
that “all options are on the table” in confronting Iran.

35. And once again, the United States at the instigation of Israel has
compelled the UN Security Council to impose crippling sanctions to
weaken the resolve of the Iranians to resist Israel’s aggressive designs.
We can observe a pattern in the war preparations from recent examples,
namely Iraq and Gaza. Broad sanctions were imposed on Iraq and Gaza
to starve and weaken the people before the military invasion in 2003 and
2008 respectively. If the past is a precedent, then it is a matter of time
before the war criminals in Israel and the United States launch another
war of aggression, once Iran has been weakened by sanctions.

36. However, Israel may have miscalculated the willingness of Turkey to be a
partner in its grand design to contain Iran and Syria as envisaged in the
Clean Break blue print. As it stands at the present moment, the
encirclement of Iran – Afghanistan in the East, occupied Iraq in the West
and Turkey in the North rests on shaky foundations. But this may not deter
the warmongers from attempting to fulfill their design for a “New Middle-
East”. There is already a map showing how the Middle East would be
carved out to serve Israel’s strategic interests.

37. It is left to be seen whether Israel’s blood lust for wars of conquest can be
accomplished without Turkey as part of the equation as stipulated in the
Clean Break blue print. Turkey has demanded that Israel apologises for
the brutal murder of its nationals, failing which Turkey would sever
diplomatic relations with Israel. Presently, Turkey has ceased all military
collaboration with Israel and a few days ago had declared that Israeli
military planes are no longer allowed to enter Turkey’s airspace. It is early
to say whether these are temporary misalignments or potential major
paradigm shifts in the foreign policy of Turkey.

38. The recent actions of prime minister Erdogan provide grounds for hope
that the forces for peace can forge a broad alliance to isolate Israel and
thwart its grand design to wage wars of aggression to establish a Greater
Israel and to be the undisputed regional power. The public dressing down
of Shimon Peres, the President of Israel at the World Economic Forum by
premier Erdogan was unprecedented as even the President of the United
States has not dared to rebuke publicly any Israeli leaders.

39. It is in the context of this geopolitical matrix that we must applaud the
courageous leadership of Prime Minister Erdogan in supporting the efforts
of IHH peace activists on board the Mavi Marmara as part of the Freedom
Flotilla to break the siege of Gaza. The supreme sacrifice by the nine
Turkish peace activists will not be in vain, as by their deaths, the true
nature of the Zionist regime, its barbarity and ugliness has been laid bare
before the world:
Israel is…

A brutal regime that has no respect for international law;
A brutish regime that has no qualms in murdering unarmed civilians on a
humanitarian mission;
A brutish regime that has created the largest open prison in the world, the
enslavement of 1.5 million people within its borders, through blockade and
economic sanctions of Gaza;
A brutish regime that brainwashes its young to be mindless killers of
unarmed civilians, men, women and children;
A brutish regime that practices apartheid.
A brutish regime that wages wars through deception and lies.
A brutish regime that practices and fosters state terrorism.

40. When the Perdana Global Peace Organisation visited Cyprus in July 2009
to collaborate with the activists of the free Gaza Movement, we did not
expect that our idea of a flotilla of cargo ships and passenger boats
manned by volunteers from all over the world would have such an impact
on the conscience of world leaders who before had stood aloof and cared
not for the sufferings of the Palestinians. Following the invasion of Gaza in
December 2008, more than 1,400 civilians, men, women and children, in
fact mainly children were slaughtered, over 20,000 homes were
destroyed, schools and hospitals were levelled to the ground. Many
countries pledged billions in aid, but the pledges were not translated into
concrete action to alleviate the sufferings of the Palestinians in Gaza. It
was hypocrisy at its very worst.

41. While world leaders turned their backs on Gaza, peace activists the world
over came together to challenge the might of Israel and expose their
crimes. George Galloway started the Viva Palestina Land Convoy which
smashed the land blockade and brought hundreds of truckloads of aid to
Gaza. The Free Gaza Movement had more humble beginnings. They
started by sending small fishing boats to break the sea blockade. On one
occasion, their boat was rammed and the volunteers were thrown into the
sea to drown. On another occasion, fully armed Israeli commandos
boarded their boat, The Spirit of Humanity and hijacked it to Israel. The
world took scant notice of these happenings.

42. We realised that small fishing boats would not do and that a flotilla of
cargo ships and passenger boats would be needed to challenge Israel’s
navy. And as they say, the rest is history. Malaysia’s contribution in this
effort was the purchase of a cargo ship and two passenger boats, the
former named after the courageous American peace activist Rachel Corrie
who was crushed to death by an Israel Defence Forces (IDF) bulldozer
when she acted as a human shield to prevent the demolition of Palestinian
homes in 2003. She gave her life so that others could live in freedom and
with dignity. Her country had forgotten her, but we were moved by her
determination and sacrifice to free the Palestinians.


43. Imbued with the spirit of Rachel Corrie, our Irish colleagues – Jenny and
Derek Graham nurtured and brought back to life the abandoned cargo
ship MV Linda and appropriately renamed her MV Rachel Corrie. The ship
was abandoned by her owners and was auctioned for 70,000 Euros. She
set sail for Gaza on 14th May and immediately encountered problems. She
had a broken propeller shaft and had to dock for repairs. She could not
join the flotilla in time and so the flotilla led by the Mavi Marmara set sail
for Gaza.

44. Following her repairs, the Rachel Corrie, determined as ever, headed for
Gaza. On board were five Irish volunteers Derek and Jenny Graham and
my good friend Denis Halliday, the former Assistant Secretary General of
the United Nations as well as the Nobel Peace Laureate, Mairead
McGuire. There were six Malaysians, two representatives from the
Perdana Global Peace Organisation, a Member of Parliament, a volunteer
from the Ministry of Information and two TV3 journalists.

45. Rachel Corrie was all alone, sailing at a mere 8 knots but she never
waivered in her resolve to reach Gaza. After the massacre of the nine
Turkish nationals on board the Mavi Marmara, massive disinformation was
initiated against Rachel Corrie. It was rumoured that she had turned tail
and headed back for Ireland. Another report stated that she was heading
for the safe haven of Cyprus and might even head for Turkey. This
propaganda was made notwithstanding that the Captain and his crew
together with all the activists on board had declared in a press statement
that in honour of the martyrs they were more determined than ever to sail
towards Gaza and bring badly needed aid, comprising of cement,
medicine and equipment, toys and educational materials.

46. Knowing that Israel had just massacred nine passengers and wounded
many more and that Israeli commandos may act similarly, Rachel Corrie
and her passengers were not deterred and were ready to face Israeli
brutality. Israel deployed four naval ships, two fast patrol boats and six
zodiacs to intercept and hijack the Rachel Corrie to Israel. This was an act
of cowardice by the Israelis – to deploy naval ships and armed
commandos to hijack a small cargo ship with unarmed passengers and
crew. By this single act of defiance, Rachel Corrie exposed Israeli
cowardice to the world.

47. This is but a beginning in our collective efforts to bring peace to the long
suffering Palestinians. Israel under tremendous international pressure
declared that it would be easing the blockade and would allow more aid to
enter Gaza. Israel must take us for fools to believe in her lies.

48. Let us not forget that Netanyahu is the prime minister of Israel, the same
man who in 1996 commissioned the blue print, the Clean Break which
rejected a comprehensive peace in the Middle East and opted for war – to
be precise the destruction of Iraq, Iran and Syria so as to impose peace
on its own terms. The present policy of Israel is but the continuation of the
strategies laid down in that blue print.

49. Israel has succeeded in destroying Iraq and emboldened by this success
is now moving to the next phase of the blue print, the destruction of Iran.
The time tested modus operandi of imposing harsh sanctions followed by
a vicious invasion has already started. In the just concluded visit to the
White House, Netanyahu made the following remarks at the joint press
conference with President Obama. He said with regard to sanctions on

“I think the sanctions the President signed the other day actually have
teeth. They bite. The question is – how much do you need to bite is
something I cannot answer now. But if other nations adopt similar
sanctions, that would increase the effect.”

50. Let us be very clear. Sanctions amount to laying siege, to starve and
weaken the enemy. It pays to remind ourselves of what Dov Weisglass, an
Israeli aid to Prime Ministers, said of sanctions;

“The idea is to put the Palestinians on a diet but not to make them die of

The invasion would meet with little resistance after that. This is the US’
and Israeli strategy. It is a strategy based on cowardice.

51. But in spite of two years of sanctions against Gaza before the preceding
invasion of December 2008 an invasion which lasted until mid-January
2009, the Gazans withstood the siege. The Palestinians were not so easily

52. Hence the blockade of food and medicine. It is not about preventing arms
from reaching Gaza. The blockade of the food, medicine and cement
convoy is about weakening the people of Gaza for the next orgy of
slaughter. Israel and the United States have no intention to see a
Palestinian State and for the Palestinians to live side by side with the
Israelis. Netanyahu has not said since becoming the prime minister of
Israel that he has abandoned the Clean Break blue print, and neither has
President Obama demanded that he should.

53. The warmongers continue to propagate that the ideological enemy of the
West is Islam and the Zionist controlled mass media have not ceased their
efforts to demonise Muslims. In the circumstances, the path for all of us,
the peace loving people of the world, is clear. We must be vigilant and be
prepared to resist any attempt by the warmongers to unleash another war,
be it with Iran, Syria and or any other country.

54. We must pursue with greater vigour our efforts to criminalise war. War is
mass killing, is massacre and must be made a crime. It is heartening to
note that recently, the International Criminal Court is also of the view that
war of aggression is a crime, but the United States under the present
leadership of President Obama opposed vehemently this noble initiative.
So once again, we are being confronted with the inevitable conclusion –
there is no change, the status quo remains and for these leaders war is
their preferred option.

55. In the circumstances, we must strive to create a broad coalition for peace
and to expose and resist the grand designs of these warmongers. Rachel
Corrie and Mavi Marmara have shown the way. The NGOs and the
volunteers have cleared the path. We must build on this momentum and
surge forward. We must call upon all governments not to be hypocritical
and stand up to this rogue State called Israel.

56. Israel cannot be allowed to continue in its present path and exist as an
Apartheid state. Just as the world would not stand for a White South
Africa, it should also not allow an apartheid state to continue its
oppression of the Palestinians. We will struggle for as long as it takes.

We will break the siege.

Palestine will be liberated from Israeli oppression.

Thank you.

Sunday, July 11, 2010

What has the DAP-led PR Penang State Govt achieve in 2 years+

Comment from a Penangite on Pakatan's Report Card - 30 People Cen tric Policies by Penang State GovtShare
Today at 7:58am

gG is in no way connected in this but very encouraged by the analytical mind of the writer in presenting the truth of the CAT Government Penang. We hope our present leaders can use this approach to rebut the allegations and lies of LGE's lies and half truths to Penangites. Do not be quiet when you should be making noise.

Normally, I don't like to dabble with politics issues as I neither support PR or BN. However, in this case, I will make an exemption in terms of fairness. I will encourage you to get your friends to support if the below on the other side of the coins is what you think can be supported. Recently, pamphlets on the 30 People Centric Policies of the Penang State Government and they name this as the Penang PR's report card to 1.5 million Penangites. Since I am a Penangite, I am entitled to responds here. The report said that it has implemented 30 policies that benefited Penang. Sure, let's see how :

Under Enabling the People.
a) Providing disabled friendly facilities where Penang has been acknowledged by UNDP as the best in Malaysia. Yes, thanks to the Penang State Govt for further enhancing this but....
The truth is I thought some level of thanks should also be given to the previous state govt and the former MP of Bukit Bendera for example. Gurney Drive has started to provide such facilities way before 308 and how come there is no acknowledgement here ? Take all the good things and push the blame. CAT - Continuously Avoiding Truth (CAT).

b) Gender Friendly Program
Under the previous state govt I believed such initiative has already taken place. For example, the Invest Penang GM is already a lady who is a former HR Manager. As such, this is nothing new when another lady replaces this lady. As such, claiming this as part of the initiative now, hmmm... I wonder the truth. There is also State Exco for tourism - Kee PC who is a lady too. In addition, I believe Jahara at one time also holds an exco position.

Your take whether is this new or publicity stunt ?
Please do not get me wrong. I am not against putting ladies who are capable to lead but what I am saying is that this policy of putting capable ladies in driving position has begin under the previous state govt already.

c) Establishing women centres and child care centres to allow women to be independent.
Hmm... perhaps, Puan Sri Chui KP could help to provide inputs. In my knowledge, Bunga Tanjung has already started to provide some of this facilities via independent effort. In fact, there are more efforts and programs under the Bunga Tanjung associations.

,b>d) Establishing Penang Science Council.,/b>
Yes, good idea.
However, will they also acknowledge that under the previous state govt, there is also effort in the Penang K-Economy Council being established which spearhead a few of the programs ? In fact, Invest Penang was also the brain child of the previous state govt to established the industry and help investors.

Empowering the people:
a) Becoming the 1st state in Malaysia to restore the 3rd vote by asking the Elections Commissions to conduct local govt elections in Penang.
Hmmm... claiming credits for what it cannot delivered. Hello, asking anyone can also do. But implementing them is what the real challenge is. And... to add to my worries, this is called a success story.

Let me tell you that you dont have to depend on the Elections Commissions to conduct the elections. You can also do this unofficially like asking for local area candidates and get the communities to vote. You then need to appoint them only. Remember, today you are appointing your PR representative and some NGOs. NGOs appointment are good but perhaps, add this type of appointment to your list too to let it become great.

b) Open tenders
- Congratulations on savings the dollars.
What about PICC ?

By the way, if you can check with the previous state exco or councillors, open tender was also in practice already although there are cases that decisions were made for direct award and perhaps due to certain criteria or aspects.
Perhaps, a better way to put this is that you practice open tenders in much a greater scale than the previous BN govt. But is this claim correct too ?

c) Anti-Corruptions measures with RM 10K award for exposures and RM 10K award for reducing/simplifyng procedures to improve efficiency. Yes, bravo.
But then how many have taken this award. Please share the statistics and not the programs only.

d) Cancelling BN crony projects like PGCC.
But, if cancelling of PGCC is justifiable, why do we need PICC then ?
In directly, are you saying that Penang still needs a convention center ? I am confused and please share with me the difference.

e) Succeedding in protecting, preserving and promoting Georgetown as UNESCO World Heritage and restricting building height to 18 meters ?
Hmm.. how about the fiasco that was pointed out for the piece of land near the E&O hotel ?

f) Promoting of speaker's corner. Yes, this is good for promoting freedom of speech.

But then, when freedom of speech cannot be taken with open heart or further debates is bad. Remember, your political sec lead a PR team to demonstrate in front of the Penang Gerakan HQ because one of the youth leader said something about the Penang Govt. If the youth leader is incorrect in his speech, please correct him at the same speaker's corner by providing the actual truth and data.

Demonstration and provoking of others at their space is NOT a matured political landscape. Please be reminded that you are already a state govt machinery or you are planning to relinquish them soon ?

Enriching the people
a) Cancelling summons issues to hawkers and parking tickets before 308.
Huh... this is the best one. I am deeply hurt by this actions. What it meant was that GOOD Penangites like me who duely paid the parking summons by MPPP or MPSP is being punished but those who are delinquent will benefits. Can you explain what type of behaviour that you will like to encourage ?

Can I say that if we vote you in again, you will promise to cancel all the summons issues since 308 ? Meanwhile, can you also consider to pay me back the summons that I have paid prior to 308 if you are not punishing the good citizens.

Tell me honestly, is this for popularity govt or really sincere in helping its citizens ?

b) Becoming the 1st state to wipe out hard core poverty in Malaysia (every family in Penang received at least RM 500 per month).
Hmm... here is the gaps. I thought I still see people begging for money or perhaps, the RM 500 may not be enough or rather these people are not the citizens of Penang.

Here are some that should also be recorded :
a) The 2 huge walls that is an eyesore at the entrance of Botanical Garden. Is this a success story too that is not publish ?

b) The land issues that was debated on the TV and much publicized. However, to my amazement, NO ONE was ever charge. If there are corruptions or misuse of power, then someone needs to be charge and truth being revealed. I am still waiting though. Publicizing that there are corruptions but no one was charge is like spreading rumors.

Ooppsss... I better stop here as otherwise there maybe another big demonstration in front of my house.

Saturday, July 03, 2010


By Dr. Mahathir Mohamad
on July 4, 2010 2:00 PM

1. The Government has been urging Malaysians to do research and development and to be innovative. The response may not be overwhelming but quite a number have tried. They usually find no one to finance them in the development of their original and innovative ideas. And many gave up.

2. Others scrape some money to pay for their research and many lost the few Ringgits that they have not because their ideas are bad but because they do not have enough money to complete their research and development.

3. But a few succeeded and came up with functional products. But will they really work? They need to test out on a reasonable scale. For this they need more money. But no one would put up money on something that is uncertain.

4. People with money have been successful doing something else. Though they could afford to allocate the money for the final tests, they are comfortable making money with what they are doing.

5. Others just could not understand the technology. If it is an improvement on their products they would not like to see a competing product.

6. For a thousand reasons nobody wants to put money into inventions and innovations.

7. Finally when the product is proven nobody in Malaysia would buy something invented by Malaysians in Malaysia.

8. Frustrated they come to see me, to demonstrate their products. While some are of doubtful value, many are really good products and should be worth investing in or buying. They can be quite unique Malaysian inventions, can help make Malaysia known for its innovativeness and inventive capacity.

9. If investors would help finance their development and production Malaysian inventors and Malaysia would gain a name for inventiveness and innovative skill.

10. Some of these people have gone abroad with their product samples. But invariably they would be asked if Malaysia is using them. When they shake their heads, that was the end of the presentation. But some Malaysians actually succeed in foreign countries even when they can sell none in Malaysia.

11. Some suggest that the Government should in whatever way possible extend help. Maybe this can be an answer. Maybe Government can finance the final phase of the research and test of concepts. Maybe the Government might buy for its own use.

12. But it is very doubtful that the officers manning the Government agencies would want to buy anything untried produced by Malaysians. Even if the product proves to be workable and even cheaper than what the Government is presently using, there would be a great reluctance to terminate the present suppliers, even after the contract is finished.

13. The products I have identified which have real potential include a security system for video discs, additives for fuel products, conversion of waste to oil, conversion of padi husks to charcoal, uses of oil palm waste, electronic information systems etc. If we want to see Malaysian original products reach the market, Government officers must not look for returns on investments but must accept that in research, development and innovations, the risks are very high. But even if one in ten make the grade, in the long run it will pay. Government must be prepared to lose money if it expects Malaysians to go seriously into research and development.

14. The Government, the civil servants, the business community need to change their mindsets if Malaysia is serious about research and development.