M3 is the decisive factor … As illustrated by most of the 9 indicators described in this third issue, the past weeks have confirmed how decisive the US Federal Reserve’s decision is to stop reporting M3 on March 23, 2006. We are now convinced that this decision portends a period of accelerated money-printing by the Fed, concealed behind public statements that inflation is under control, that will result in the collapse of the US Dollar and the monetarisation of US debt (public and private), which a growing number of US experts now feel will never be repaid given the constantly growing gigantic amount (the US public debt now represents more than USD 8,000 billion, i.e., approximately four times the federal budget in 2006). According to the very conservative Heritage Foundation, if we also take in consideration the budgetary consequences of recent decisions by the Bush Administration regarding health and pensions, the real debt is USD 42,000 billion, or 18 times this year’s federal budget, and 3 times the US GDP in 2005.

… as well as the Iran crisis where time is in Tehran’s favour

While confirming the catalytic role of the opening of an oil bourse priced in Euros by Iran (recent Iranian allegations suggest that if the crisis worsens, Iranian authorities might simply decide to switch all foreign transactions to euros, following the example set by Syria a few weeks ago), the obvious deadlock at the UN Security Council pleads in favour of a US-Israeli military solution conducted without UN approval.

Indeed, China and Russia are now extremely clear about their opposition to getting involved in any process likely to result in economic sanctions (not to mention military ones).

In Europe, the coalition in power in Berlin would not survive if it supported US military operations against Iran (the SDP would immediately leave the coalition, causing the collapse of Angela Merkel’s government).

In the same way in France, if Jacques Chirac continues to support Washington and London on the Iran issue, he will soon be faced with growing opposition from public opinion and an untenable position in Europe with Germany, which would be unable to support his position.

Lastly, in London, Tony Blair is in a very weak political situation because he is facing a rebellion from part of the Labour Party because of his policies as a whole and because of the British presence in Iraq in particular. The involvement of the UK in a military strike against Iran, or even a mere supporting such action, would most likely lead to Blair being removed as head of the Labour Party and thus his resignation as British Prime Minister…

Read more in the GEAB No 3 / 16.03.2006