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Today's Stories March 21, 2008 Peter Montague Run Your Car on Coal? Maybe Not Saul Landau Monroe's Deadly Doctrine Anis Hamadeh Merkel in the Knesset Madis Senner Will the Feds Underwrite the Stock Market? March 20, 2008 Damien Millet / Eric Toussaint The Triple Failing of the Big Private Banks Mike Whitney Winding Up Bear John Ross What Do We Owe Iraq? Dave Lindorff Paying the Piper: the Bodies and Bills are Piling Up Wajahat Ali Pakistan on Fire Jill Nagle Memo to Sex Workers: Stop Financing Shock Journalism Manuel Garcia, Jr. Obama and the Psychic Auto-Shrink-Wrapping Called Race in America Dan La Botz Obama's Race Speech Robert Weissman Alternative Power: Shutting Down the API Stella Dallas / Jennifer Matsui Apostasy Now! Mamet, Enter Stage Right Website of the Day The Angry Monk   March 19, 2008 Patrick Cockburn A War of Lies Robert Fisk The Little Men and the Inferno Jeff Taylor Five Years of War in Iraq Ed Ruggero From Pinkville to Iraq: the Dark Anniversary of My Lai Ron Jacobs Who'll Stop the Rain? Christopher Fons Obama Takes the Race Bait Sherwood Ross In Defense of Rev. Wright Cynthia McKinney An Urgent Crisis: Confronting America's Racial Disparities Joshua Frank The Kool-Aid That Kills Robert Weissman Monsanto's Genetic Food Gamble Walter Brasch It's a Welfare State--If You're Rich Yifat Susskind Iraqi Women Resist the Occupation Andrew Wimmer War Demands Its Due Website of the Day Glimpses of Nature   March 18, 2008 David Price The Military "Leveraging" of Cultural Knowledge Paul Craig Roberts The Collapse of American Power Tim Wise Of National Lies and Racial America: Jeremiah Wright, Barack Obama and the Unacceptability of Truth Patrick Cockburn One of the Most Disastrous Wars Ever Fought Conn Hallinan Afghanistan, a River Running Backward James T. Phillips Monsters: Past, Present and Wannabe Uri Avnery The Killing in Bethlehem David Macaray Could Wal-Mart Revive the Labor Movement? Marjorie Cohn Beware an Attack on Iran Peter Zinn Obama in New Orleans Dan La Botz The Economic Crisis, Labor and the Left Monica Benderman Where are We Going?   March 17, 2008 Pam Martens The Fed's Wall Street Dilemma Sasan Fayazmanesh The US, Iran and the Policy of Dual Containment Nelson P. Valdés The Imperial Branding of Simon Bolivar and the Cuban Revolution Peter Morici The Corrosive Consequences of the Trade Deficit Wajahat Ali Disrobing the Nine: a Conversation with Jeffrey Toobin on the Supreme Court Since 9/11 Ronnie Cummins Beyond Progressive Malpractice: Taking Down Big Pharma Shaun Harkin Saint Patrick's Day in Fortress America Ali Khan No Pardon for Musharraf Robert Jensen Beyond Peace P. Sainath Oh, What a Lovely Waiver! Greg Moses Jeremiah was a Bullhorn Dr. Susan Block Advice for Eliot Spitzer Website of the Day No Cowboys   March 15 / 16, 2008 Patrick Cockburn How to Destroy a Country in Five Years Mike Whitney Bearly Alive: Investment Giant Rushed to ICU by Panicky Fed Chief Ralph Nader Of Laws and Men Robert Pollin It's Still the Economy, Stupid Diane Christian The Poetics of Perversity: From Boccaccio to Spitzer Wajahat Ali Faking the Hood: a Conversation with Ishmael Reed Tom Wright / Therese Saliba Rachel Corrie's Case for Justice Alan Farago Back to Florida: Where Bushtime Began Greg Moses Raiding the Family Room in Texas Michael Hudson A Grand Global Bargain? Martha Rosenberg Why Hillary's Favorite Chicken Company is Eying China John Goekler Fourth Generation Warfare in a Fifth Generation Conflict Uzma Aslam Khan A Letter to Barack Obama: Where's the Change, Barack? Oren Ben-Dor The Silencing of Gilad Atzmon David Underhill Mammon, Morals and the Mobile Tanker Deal Fred Gardner The Education of Eliot Spitzer David Michael Green Why Spitzer Should Have Resigned (and Why He Shouldn't Have) Rev. William E. Alberts Jesus, Entombed in Heaven Gail Dines It's All About the John: Prostitution and Male Power David Yearsley Conducting, Anarchy and the Problem of When to Begin Chris Clarke Walking with Zeke: the Luckiest of Dogs Poets' Basement Anderson, Lodge & Subiet Website of the Day Deviant Art   March 14, 2008 Paul Craig Roberts Watching the Dollar Die Don Santina Vichy Democrats: Pelosi and the Politics of Collaboration Patrick Cockburn Iraqi Mother Vows Revenge on US: How She Lost Her Husband and Her Sons Tim Rinne StratCom Rules! The Next War Will Start in Nebraska Robert Fantina In Torture We Trust Saul Landau Letter to the Presidents-in-Waitings David Macaray Common Myths About Labor Unions Franklin Lamb Is the Bush Administration Switching Horses in Lebanon Michael Neumann The One State Illusion: Reply to My Critics March 13, 2008 Paul Craig Roberts Republicans and "Free Market" Zealots Bring Disaster to America Mike Whitney Meltdown Looms Larger As Credit Markets Freeze Assaf Kfoury "One-State or Two State?"- Sterile Debate on False Alternatives Andy Worthington Afghan Hero Who Died in Guantánamo: The Background to the Story Adam Federman From Autopia to Autogeddon: Cars Reach the End of the Road March 12, 2008 Dave Lindorff Bringing Down Spitzer: It's the Big Brother Who Should Bother US R.F. Blader The Spitzer Backlash Yonatan Mendel How to be an Israeli Journalist. Never Write "Murder" or "Palestine" Jonathan Cook One State or Two? Neither. The Issue is Zionism Bill and Kathy Christison Fallon and Gates -- At Least One Cheer James J. Brittain Was the U.S. Involved in Killing the FARC-EP Leaders Ron Jacobs "All the Money You Make Will Never Buy Back Your Soul" March 11, 2008 Paul Craig Roberts How to End the Subprime Crisis Ed O'Loughlin How Israeli Troops Invade Homes in Gaza, Brutalize, Smash and Steal Ramzy Baroud 'Unwavering Commitment' to Inequality Kathy Christison One State or Two? The Debate Over Israel and Palestine China Hand PRC Plays it Cool, as U.S. Tries to Amp Up Pressure on Iran John Joslin Thank You, Nafta! Welcome to Weirton, Home of the Discount Cigarette Mike Averko Serb Politics, Kosovo and the Moscow-Washington Divide Ben Rosenfeld Gavin Newsom's Kneejerk Plan Thierry Paquot High Rise, Low Spirits:The Curse of the Tower Block March 10, 2008 Uri Avnery "Kill A Hundred Turks and Rest": The Five-Day War in Gaza Col. Dan Smith Scoring the "Surge" and What Lies Beyond R.F. Blader Why "Lock Them Up and Throw Away the Key" is Losing its Sheen Michael Neumann The One-State Illusion: More is Less Bob Fitrakis and Harvey Wasserman Did the Republicans Give Hillary Her Victory in Ohio? James J. Brittain Anti-Uribe Protests in Colombia and the World Missy Comley Beattie The Passion of John McCain March 8-9, 2008 Weekend Edition JoAnn Wypijewski The Only Way to Fight the Clintons Mike Whitney Sorting Through the Rubble in Post Bubble America Peter Morici Fed and Treasury Fiddle as Economy Plummets Ralph Nader The Silent Violence of Gaza's Suffering that Candidates Ignore Jonathan Cook The Meaning of Gaza's Shoah Steve Niva Behind the Israeli Escalation in Gaza Bill and Kathy Christison Crisis over Teheran's Alleged Nuclear Plans Nearing Climax Hervé Do Alto and Franck Poupeau Bolivia: Morales is Checked Eric Walberg To Leave and Stay at the Same Time: Putin to Medvedev to…? Scott Johnson City of A Thousand Foreclosures Mark Scaramella James Brown's Gate Bill Clinton President Clinton's Remarks on Naming William M. Daley as NAFTA Task Force Chairman Poet's Basement St. Thomasino, Engel, Davies and Willson Website of the Weekend Hillary Blackens Barack March 7, 2008 Patrick Cockburn Why Iraq Could Blow-Up in John McCain's Face Robin Blackburn Question for Barrack Obama: Why Afghanistan is the 'Right War'? Saul Landau The Stupid Economy Binoy Kampmark When Competition is Good: McCain and the Muddled Democrats Chris Floyd Crushing the Ants: Admiral Fallon and His Empire Andy Worthington Spanish Drop "Inhuman" Extradition Request for Guantánamo Britons Will Potter Before the Smoke Even Clears in Seattle: Bringing Out the T Word March 6, 2008   March 6, 2008 Vincent Navarro The Next Failure of Health Reform Forrest Hylton High Stakes in the Andes: Colombia's Cornered President Peter Morici Why the Dollar is So Cheap George Ciccariello-Maher Counter-Attack of the Bureaucrats John Ross Taxi! Taxi! The Dark Side of the Oscars Jacob Hornberger No Standing to Lecture on Justice Paul Watson Illegal Japanese Whaling by the Numbers Dan Bacher Off the Deep End Website of the Day A Katrina Reader Online   March 5, 2008 Cockburn / St. Clair A Great Day for John McCain (and Maybe Nader) Joanne Mariner After Guantanamo Fidel Castro The Raid on Ecuador: Underestimating Rafael Correa Christopher Brauchli The Turkish Invasions Steven Sherman Obama and the Prospects for a Renewal of the Left Dave Lindorff Busting Bush & Co. in New England James Murren Bombing Somalia Adam Engel Necropolis Now Website of Day Remember Song   March 4, 2008 Wajahat Ali Mumbo Jumbo: Naming Names with Ishmael Reed William Blum How Could Hillary Have Known? Bill Quigley The Cleansing of New Orleans Ralph Nader The Prince Harry Solution Patrick Irelan Oil and Health in Venezuela James J. Brittain / R. James Sacouman Uribe's Colombia is Destabilizing a New Latin America Norman Solomon The War Election Jacob Hornberger Hillary in Waco: the Missing Apology Andy Worthington Guantánamo and the European Parliament Mike Averko Kosovo and the Press Website of the Day Tex-Mex Primary   March 3, 2008 Jennifer Loewenstein Gazan Holocaust Alan Farago American Politics and the Faltering Economy Richard Gott Colombian Deaths in Ecuador Wajahat Ali Who Speaks for a Billion Muslims? Analyzing the World Gallup Poll with John Esposito Paul Craig Roberts The Mukasey Conspiracy: a Bi-Partisan Attack on the Constitution Robert Weissman When Multinationals Say Adieu Uri Avnery Good Morning, Hamas Martha Rosenberg When Your Meat is a Downer Eva Liddell Leave the Next Dance for Bill Michael Donnelly Will Ferrell Does Flint Website of the Day Muddy Waters: Train Fare Home Blues   March 1 / 2, 2008 Alexander Cockburn The Race Card Paul Craig Roberts The Political Trial of Don Siegelman Kathleen and Bill Christison Nader the Best Antidote to American Imperialism Nelson P. Valdés Cuba After Fidel Christopher Brauchli Meet Mr. Nursultan Nazarbayev: Friend of Bill, George and Dick Ron Jacobs Inside the Secret City: Bomb Making at Oak Ridge John Ross The New Conquistadores: Spain's Reconquest of Mexico Robert Fantina Posturing Over Patriotism: Obama and Those Lapel Pins Robert Weissman Hidden in Plain Sight: Human Rights Hypocrisy Mohammed Omer Fear in Gaza Remi Kanazi Barack Obama and the Politics of Xenophobia Bob Jackson Why is Yellowstone Destroying Its Bison Herd? Richard Rhames Casual Threats: Loaded with Mercury Franklin Lamb Lebanon Awaits the Arrival of the USS Cole Rannie Amiri Showboat Diplomacy: US Warships Steam Toward Lebanon David Michael Green The Three Faces of Hillary: the Politics of Flim-Flam Conn Hallinan Notes from the Southern Cone Faheem Hussain Prince Harry of Afghanistan and the Meaning of Normalcy Poets' Basement Gibbons, Orloski, Gardner and Ford Website of the Weekend The Palestine Chronicle Needs (and Deserves) Your Help!     February 29, 2008 Matt Gonzalez The Obama Craze Jonathan Cook Academic Freedom? Not for Arabs in Israel Joshua Frank Obama and Israel Anthony DiMaggio The Unilateral Presidency: Signing Statements and the Rollback of American Law Linn Washington, Jr. Cop Abuse in America Binoy Kampmark Hubris and Nemesis Robert Bryce Energy Efficiency May be a Good Thing, But It Won't Cut Energy Use Sonja Karkar Australia's Government Continues Its Love Affair with Israel Dave Lindorff A Manchurian Candidate in the White House? Obama or Bush? Website of the Day Olduvai George   February 28, 2008 Patrick Cockburn "Iraq" Falls Apart Fred Gardner The Birth of NAFTA Michael Levitin The Crisis in Kosovo is Just Beginning William S. Lind The Fake State of Kosovo David Macaray A Ray of Hope for Organized Labor Stephen Fleischman Nader's Latest Run: Monkey Wrench or Cattle Prod? George Wuerthner The Myths of Forest Health: Why Ecological Logging is an Oxymoron Laura Carlsen The North American Union Farce Carl Finamore Why the Delta-Northwest Deal Hasn't Taken Off Michael Dickinson The Day I Bombed the House of Commons Website of the Day Plane Stupid   February 27, 2008 David Rosen Playing the Race Card: Obama, Love Across the Color Line and Political Dirty Tricks Vijay Prashad Bomber John: McCain and the 100 Year War Harvey Wasserman Incident at Turkey Point: Did Florida Go to the Radioactive Brink? Andy Worthington Guantánamo's Shambolic Trials: Pentagon Boss Resigns, Ex-Prosecutor Joins Defense Wajahat Ali Pakistan for Sale: an Interview with Ayesha Siddiqa on Pakistan's Military Economy Peter Morici The Auction-Rate Securities Fiasco: a Drama of Greed and Betrayal Stephen Philion Conspiracy Theory, Fears of Betrayal and Today's Anti-War Movement Michael Donnelly Obama by Unanimous Decision Erica Rosenberg / Janine Blaeloch After the Land Deals: Will There be Any Wilderness Left to Protect? Website of the Day Dress Blues   February 26, 2008 Debbie Nathan Confessions of a Gitmo Guard Alan Dershowitz v. Frank Menetrez On Finkelstein Harvey Wasserman How Ohio Got Nuked Michael Colby Ralph Nader vs. the Fundamentalist Liberals Gary Leupp Condi vs. Putin on Bullying Belgrade David Orchard The New Conquistadors: Canada in Afghanistan Martha Rosenberg The Big HRT Fran Shor The Electoral Circus and Nader's Sideshow Serge Halimi The Dom Perignon Socialist Manifesto: Bernard Henri-Levy's Plan for the French Left Global Balkans Neo-Liberalism and Protectorate States in the Post-Yugoslav Balkans: an Interview with Tariq Ali Website of the Day Texistentialism   February 25, 2008 Roger Morris A Death in Damascus Anthony DiMaggio Military Bases, the Media and the Democrats Ralph Nader Why I'm Running Patrick Cockburn Iraq Broils Paul Craig Roberts Kosovo and the Empire Crazies Peter Morici Bernanke's Failing Policies: a Long Recession Looms Dave Lindorff General Welch's Whitewash: What We Still Don't Know About That Minot Nuke Incident Saul Landau / Farrah Hassen Fanatics, Mountebanks and Drillers: a Bloody Oil Film Heather Gray James Orange, Civil Rights Legend Robert Weitzel Accomodating Torture John Halle Kucinich Goes Down Website of the Day Do the Trunk Monkey! February 23 / 4, 2008 Alexander Cockburn The Mushrooming Clouds That Hang Over McCain Paul Craig Roberts Obama and Global Trade Wajahat Ali Omissions of the Commission: an Interview with Phillip Shenon on the 9/11 Commission Ralph Nader Neutering the FDA Jürgen Vsych "What Was Ralph Nader Thinking?" Fidel Castro Watching the US Presidential Campaign from Havana Andy Worthington Britain's Guantánamo David Macaray Unions Under Assault Jeremy Scahill The Real Story Behind Kosovo's Independence David Krieger Stanley Sheinbaum Caging the Cold War Monster Ron Jacobs Building for the Future Michael Garrity The Last, Best Hope for the Northern Rockies Brian McKenna Higher Ed's "Civic Engagements" Get Dumbed Down Missy Beattie Over the Hill with John McCain Fred Gardner American College of Physicians Takes Pro-Cannabis Stand (Mostly) Boris Kagarlitsky The Growth of the Russian Labor Movement Mike Ferner Kick That Barrel Dan Bacher On the Trail with the Border Angels Christopher Ketcham Hillary Goes Where Obama Fears to Tread Poets' Basement Davies and Buknatski Website of the Weekend Obama Mariachi   February 22, 2008 Mike Whitney The Bonfire of Capital Jason Hribal Elephants and the Circus: The Story of Janet Liaquat Ali Khan Arresting Musharraf Joshua Frank That Obama Glow: the Nuclear Industry's Golden Child Dave Lindorff Vicki's John: Ask Not What She Did for Him, Ask What He Did for Her! Liliana Segura When Torture is Old News: McCain's Blonde Diversion Robert Fantina Castro, Bush and Cuba: a Fiasco Waiting to Happen? Yifat Susskind The ABCs of Death: Bush vs. Africa's Women Norm Kent Pushing 60 with Pot Website of the Day Bush Gets Down in Liberia February 21, 2008 Saul Landau Fidel Steps Aside Elizabeth Schulte Left Behind, With No End in Sight: America's Long-Term Unemployed Helen Redmond Health Care as a Human Right Benjamin Dangl Undermining Bolivia Michael Levitin Kosovo's Dilemma Liam Leonard Fear and Loathing on the Emerald Isle Patrick Irelan Land and Food in Venezuela Linn Cohen-Cole Poor Ohio: a Second Letter to Hillary on Her Ties to Monsanto Michael Simmons Daydream Believer: John Stewart, the Miles Davis of Folk Music CounterPunch News Service A Message from the Women of Okinawa to US GIs Website of the Day Cop Abuse in Shreveport             Subscribe Online

March 21, 2008 Deflation or Inflation? Money for Nothing By KENNETH COUESBOUC The harder they come, the harder they fall one and all. -- Jimmy Cliff. There are currently two contradictory forecasts for the times to come, deflation and inflation. Are rising commodity prices mere speculation, a bubble amongst bubbles that will burst as bubbles do? Will the credit crunch lead to a liquidity crisis that must push prices down? Or is legal tender loosing its face-value? Is OPEC to blame for the rising price of crude oil, or should the major central banks be held responsible for flooding the market with "money for nothing"? Trading in commodities is always a speculative business, as it demands a continual anticipation of future prices. But this also applies to stocks and real estate. And these, as shown by recent events, can inflate without inflating currency. However, the price of stocks and real estate only affects the price of stocks and real estate, whereas the price of commodities affects the price of just about everything else. It is also true that company shares and land are practically eternal, whereas commodities are destined to enter the production/consumption process. A barrel of oil is not continuously coming back on the market to be bought and sold. At some stage its value is determined once and for all (without, of course, prejudicing the price of future barrels of oil). Commodities and their value are destined to be consumed and must be produced again. Company shares (as long as the company exists) and land (a part of the Earth's surface) cannot be consumed. Their market value may fluctuate but their material existence persists unchanged. The persistence of stocks and real estate allows the formation of speculative bubbles that drain money from other employment, but do not otherwise affect the prices on the market. Whereas inflated commodity prices inflate all other prices. The direct effect of a liquidity crisis is that banks hesitate in lending to each other and to the world at large. This means that the biggest banks will take control of the smaller fry, probably after substantial government bail-outs (vis. Bear Stearns). The next to suffer are the market operators on the stock exchange and in real estate, who need regular injections of extra credit to keep their buoyancy. Then come home-buyers, car-buyers, buyers of sofas and TVs, right down to the ordinary overdraft. Less liquidity means less buying power all round. Will this bring prices down generally, or will it reduce spending to the essentials of life, at whatever price? A shrinking demand for non-essential goods and services will push the weak to the wall, and the big companies will swallow the small. Like the Roman god Janus, money is two-faced. It can be the intermediary of exchange and it can be the finality of exchange. As K. Marx explained long ago, the perpetual chain of exchanges, commodity - money - commodity - money - C - M - C - M - etc., is made up of two separate series of events. One is C - M - C, and the other is M - C - M. The first series concerns the exchange of goods and services, with money as their intermediary. The second series concerns the exchange of money, with goods and services as its intermediary. Selling the produce of labour to buy the produce of different labour is a consequence of the division of labour. Buying the produce of labour to sell it again at a profit is a consequence of the monetary system. Through the intermediary of money, goods and services are exchanged for consumption (productive or not). Use and exchange value changes hands, and the intervening money is a simple formality. Whereas buying to sell at a profit means that the object of the exchange between money and more money is of secondary importance and that, ultimately, everything is bought and sold. Buying to sell instead of selling to buy means available credit instead of available goods and services, capital instead of labour. It is no longer the product of labour that is sold to buy the product of other labours. It is labour that is bought, and its product is sold at a profit. And the question arises of the nature of profit. Is labour bought at less than its value, or is the product of labour sold at more than its value? This is a moot-point. But the value of a product is the sum of the values that go into its production, and its market price must cover this plus profit. Profit is the difference between the market price and the production costs. This means that profit depends on a market price that is superior to the value of the product. And profit increases as the gap between price and value widens. If the market price of a product is unchanged (if supply matches demand), and its value is reduced by productivity gains (new technology), or by reducing the price of labour (outsourcing), then profit will increase accordingly. But the exchanges on the market are exchanges of value that do not take into account the difference between an excessive and an insufficient price of labour. The value of labour is the price paid for it. Profit means that the market price is in excess of value, and that the currency measuring the price is devalued. And the larger the profit margin, the more currency is devalued. In 1973, the Arab members of OPEC decided to reduce their production of oil. This was a reaction to the Kippur War and the occupation of the Sinai. Faisal, the then king of Saudi Arabia who was to be murdered and replaced by his nephew two years later, even declared an embargo on all deliveries to the US. In a matter of weeks, the price of oil was multiplied by four. Arabian light, priced at $2.32 in October 1973, had risen to $9 by January 1974. This led to inflation rates of 10% and more. By 1979 the price of oil had stabilised but, as a consequence of the Iranian revolution followed closely by the Iran/Iraq war, supply was again reduced and prices almost trebled. Inflation rates soared again past the 10% mark. These two "petroleum shocks" were sudden and unexpected, being linked to probable but unpredictable political and military conflicts. Their consequences for oil importing countries were high inflation, recession and unemployment. The present situation seems very similar and the same outcome is likely. This time, however, there are no obvious causes, either political or military, to explain the actual multiplication of the price of oil. The novelty, this time, is that OPEC no longer needs to reduce supply to raise the market price of oil. Not increasing production fast enough is sufficient. And insurgent Iraq seems unable to produce more than it does. Iran is ostracised by several potential customers who refuse to trade. Chavez is doing fine as it is. And other nations (Kuwait, Saudi Arabia, and Nigeria) may have reached their production peaks. The price of non-renewable commodities is entering a new phase. So far, abundance has been the rule, and this may still be true (1). But the growth curve of supply has been crossed by the growth curve of demand, which is much steeper. Market prices are but a reflection of this new relation, where the planet's resources are pushed to the limit. However, demand must be solvent, and increasing demand depends on increasing amounts of liquidity. And that seems to be in contradiction with the present situation. Unless liquidity is being drained onto the commodity market, thereby accentuating the lack of liquidity elsewhere. Either demand for commodities slackens and the world economy stagnates or recedes, or this demand is sustained by credit and banks will fall like dominoes. Or, and this is the case so far, central banks change their status of ultimate lenders to that of primary lenders. Instead of backing short term discounting and inter-bank lending, central banks are doing the lending themselves at a bargain rate. This is not quite the same as printing larger and larger denomination bank-notes, because credit returns to the creditor, whereas bank-notes stay in circulation. But the principle is the same. The loans granted by central banks will have to be renewed and increased. Renewed to keep the banks afloat, and increased to compensate the liquidity drawn on to the commodities market. And also to compensate the liquidity that is withdrawn to be consumed. As rising commodity prices are passed on to the consumer, the credit squeeze forces him to fall back on his savings. He too needs cash and must sell his stocks and bonds, maybe even his life insurance or his home. This also must be compensated by central bank loans. It seems that 2008 will be an up and down year, as central banks regularly intervene on a weekly, monthly and quarterly basis with increasing amounts of credit. The real test will come when governments try to fill their abysmal budget deficits by borrowing on the money market. With banks on the verge of asphyxiation and savings being spent on consumption, this will be difficult and costly and will depend on more central bank lending. Handing out swaths of money at close to zero interest, backed by little or no collateral, may be different from printing bank-notes but the result will be just as inflationary. So inflation wipes out debts and borrowing can increase again, drawing growth along with it. Inflation will greatly alleviate government, corporate and all fixed interest debts. But the holders of these debts will loose out. So will wage earners and fixed incomes in general. And the consequence of these recurrent inflationary peaks is always proportionate to the size of the debt. With inflation, the amount of value destroyed is necessarily a percentage of the total sum of all values. Kenneth Couesbouc can be reached at kencouesbouc@yahoo.fr 1. The state of petroleum reserves in the ground is a well kept secret. And may, in fact, be difficult to ascertain. Most sites have been pumping water into the fields for years, to push up the oil. And there is probably no precise way to know how much of an underground reservoir is full of water, and how much is still full of oil. For example, does the Ghawar field in Saudi Arabia still contain more, as much, or less than the 60 billion barrels it has produced so far? http://en.wikipedia.org/wiki/Ghawar

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