[wanabidii] UNDERSTAND THE WORLD'S ECONOMIC MELT DOWN against SCRAMBLE TO AFRICA

July 26, 2006

Bankers Fear World Economic Meltdown

by GABRIEL KOLKO

On June 15 we published GABRIEL KOLKO's essay on the enormous instability of the world'd financial system. In the ensuing weeks Professor Kolko has enlarged his analysis, and here we offer our readers his updated version. AC / JSC

There has been a profound and fundamental change in the world economy over the past decade. The very triumph of financial liberalization and deregulation, one of the keystones of the "Washington consensus" that the U.S. government, International Monetary Fund (IMF), and World Bank have persistently and successfully attempted over the past decades to implement, have also produced a deepening crisis that its advocates scarcely expected.

The global financial structure is today far less transparent than ever. There are many fewer reporting demands imposed on those who operate in it. Financial adventurers are constantly creating new "products" that defy both nation-states and international banks. The IMF's managing director, Rodrigo de Rato, at the end of May 2006 deplored these new risks – risks that the weakness of the U.S. dollar and its mounting trade deficits have magnified greatly.

De Rato's fears reflect the fact that the IMF has been undergoing both structural and intellectual crises. Structurally, its outstanding credit and loans have declined dramatically since 2003, from over $70 billion to a little over $20 billion today, doubling its available resources and leaving it with far less leverage over the economic policies of developing nations – and even a smaller income than its expensive operations require. It is now in deficit. A large part of its problems is due to the doubling in world prices for all commodities since 2003 – especially petroleum, copper, silver, zinc, nickel, and the like – that the developing nations traditionally export. While there will be fluctuations in this upsurge, there is also reason to think it may endure because rapid economic growth in China, India, and elsewhere has created a burgeoning demand that did not exist before – when the balance-of-trade systematically favored the rich nations. The U.S.A. has seen its net foreign asset position fall as Japan, emerging Asia, and oil-exporting nations have become far more powerful over the past decade, and they have increasingly become creditors to the U.S.A. As the U.S. deficits mount with its imports being far greater than its exports, the value of the dollar has been declining – 28 per cent against the euro from 2001 to 2005 alone. Even more, the IMF and World Bank were severely chastened by the 1997-2000 financial meltdowns in East Asia, Russia, and elsewhere, and many of its key leaders lost faith in the anarchic premises, descended from classical laissez-faire economic thought, which guided its policy advice until then. "…{O]ur knowledge of economic growth is extremely incomplete," many in the IMF now admit, and "more humility" on its part is now warranted. The IMF claims that much has been done to prevent the reoccurrence of another crisis similar to that of 1997-98, but the international economy has changed dramatically since then and, as Stephen Roach of MorganStanley has warned, the world "has done little to prepare itself for what could well be the next crisis."

The whole nature of the global financial system has changed radically in ways that have nothing whatsoever to do with "virtuous" national economic policies that follow IMF advice – ways the IMF cannot control. The investment managers of private equity funds and major banks have displaced national banks and international bodies such as the IMF, moving well beyond the existing regulatory structures. In many investment banks, the traders have taken over from traditional bankers because buying and selling shares, bonds, derivatives and the like now generate the greater profits, and taking more and higher risks is now the rule among what was once a fairly conservative branch of finance. They often bet with house money. Low-interest rates have given them and other players throughout the world a mandate to do new things, including a spate of dubious mergers that were once deemed foolhardy. There also fewer legal clauses to protect investors, so that lenders are less likely than ever to compel mismanaged firms to default. Aware that their bets are increasingly risky, hedge funds are making it much more difficult to withdraw money they play with. Traders have "re-intermediated" themselves between the traditional borrowers – both national and individual – and markets, deregulating the world financial structure and making it far more unpredictable and susceptible of crises. They seek to generate high investment returns – which is the key to their compensation – and they take mounting risks to do so.

In March of this year the IMF released Garry J. Schinasi's book, Safeguarding Financial Stability, giving it unusual prominence then and thereafter. Schinasi's book is essentially alarmist, and it both reveals and documents in great and disturbing detail the IMF's deep anxieties. Essentially, "deregulation and liberalization," which the IMF and proponents of the "Washington consensus" advocated for decades, has become a nightmare. It has created "tremendous private and social benefits" but it also holds "the potential (although not necessarily a high likelihood) for fragility, instability, systemic risk, and adverse economic consequences." Schinasi's superbly documented book confirms his conclusion that the irrational development of global finance, combined with deregulation and liberalization, has "created scope for financial innovation and enhanced the mobility of risks." Schinasi and the IMF advocate a radical new framework to monitor and prevent the problems now able to emerge, but success "may have as much to do with good luck" as policy design and market surveillance. Leaving the future to luck is not what economics originally promised. The IMF is desperate, and it is not alone. As the Argentina financial meltdown proved, countries that do not succumb to IMF and banker pressures can play on divisions within the IMF membership -– particularly the U.S. –- bankers and others to avoid many, although scarcely all, foreign demands. About $140 billion in sovereign bonds to private creditors and the IMF were at stake, terminating at the end of 2001 as the largest national default in history. Banks in the 1990s were eager to loan Argentina money, and they ultimately paid for it. Since then, however, commodity prices have soared, the growth rate of developing nations in 2004 and 2005 was over double that of high income nations –- a pattern projected to continue through 2008 –- and as early as 2003 developing countries were already the source of 37 per cent of the foreign direct investment in other developing nations. China accounts for a great part of this growth, but it also means that the IMF and rich bankers of New York, Tokyo, and London have much less leverage than ever.

At the same time, the far greater demand of hedge funds and other investors for risky loans, combined with low-interest rates that allows hedge funds to use borrowed money to make increasingly precarious bets, has also led to much higher debt levels as borrowers embark on mergers and other adventures that would otherwise be impossible.

Growing complexity is the order of the world economy that has emerged in the past decade, and the endless negotiations of the World Trade Organization have failed to overcome the subsidies and protectionism that have thwarted a global free trade agreement and end of threats of trade wars. Combined, the potential for much greater instability – and greater dangers for the rich – now exists in the entire world economy.

High-speed Global Economics

The global financial problem that is emerging is tied into an American fiscal and trade deficit that is rising quickly. Since Bush entered office in 2001 he has added over $3 trillion to federal borrowing limits, which are now almost $9 trillion. So long as there is a continued devaluation of the U.S. dollar, banks and financiers will seek to protect their money and risky financial adventures will appear increasingly worthwhile. This is the context, but Washington advocated greater financial liberalization long before the dollar weakened. This conjunction of factors has created infinitely greater risks than the proponents of the "Washington consensus" ever believed possible.

There are now many hedge funds, with which we are familiar, but they now deal in credit derivatives – and numerous other financial instruments that have been invented since then, and markets for credit derivative futures are in the offing. The credit derivative market was almost nonexistent in 2001, grew fairly slowly until 2004 and then went into the stratosphere, reaching $17.3 trillion by the end of 2005.

What are credit derivatives? The Financial Times' chief capital markets writer, Gillian Tett, tried to find out – but failed. About ten years ago some J.P. Morgan bankers were in Boca Raton, Florida, drinking, throwing each other into the swimming pool, and the like, and they came up with a notion of a new financial instrument that was too complex to be easily copied (financial ideas cannot be copyrighted) and which was sure to make them money. But Tett was highly critical of its potential for causing a chain reaction of losses that will engulf the hedge funds that have leaped into this market. Warren Buffett, second richest man in the world, who knows the financial game as well as anyone, has called credit derivatives "financial weapons of mass destruction." Nominally insurance against defaults, they encourage far greater gambles and credit expansion. Enron used them extensively, and it was one secret of their success – and eventual bankruptcy with $100 billion in losses. They are not monitored in any real sense, and two experts called them "maddeningly opaque." Many of these innovative financial products, according to one finance director, "exist in cyberspace" only and often are simply tax dodges for the ultra-rich. It is for reasons such as these, and yet others such as split capital trusts, collateralized debt obligations, and market credit default swaps that are even more opaque, that the IMF and financial authorities are so worried.

Banks simply do not understand the chain of exposure and who owns what –- senior financial regulators and bankers now admit this. The Long-Term Capital Management hedge fund meltdown in 1998, which involved only about $5 billion in equity, revealed this. The financial structure is now infinitely more complex and far larger – the top 10 hedge funds alone in March 2006 had $157 billion in assets. Hedge funds claim to be honest but those who guide them are compensated for the profits they make, which means taking risks. But there are thousands of hedge funds and many collect inside information, which is technically illegal but it occurs anyway. The system is fraught with dangers, starting with the compensation structure, but it also assumes a constantly rising stock market and much, much else. Many fund managers are incompetent. But the 26 leading hedge fund managers earned an average of $363 million each in 2005; James Simons of Renaissance Technologies earned $1.5 billion.

There is now a consensus that all this, and much else, has created growing dangers. We can put aside the persistence of imbalanced budgets based on spending increases or tax cuts for the wealthy, much less the world's volatile stock and commodity markets which caused hedge funds this last May to show far lower returns than they have in at least a year. It is anyone's guess which way the markets will go, and some will gain while others lose. Hedge funds still make lots of profits, and by the spring of 2006 they were worth about $1.2 trillion worldwide, but they are increasingly dangerous. More than half of them give preferential treatment to certain big investors, and the U.S. Security and Exchange Commission has since mid-June 2006 openly deplored the practice because the panic, if not chaos, potential in such favoritism is now too obvious to ignore. The practice is "a ticking time bomb," one industry lawyer described it. These credit risks – risks that exist in other forms as well – seemed ready to materialize when the Financial Times' Tett reported at the end of June that an unnamed investment bank was trying to unload "several billion dollars" in loans it had made to hedge funds. If true, "this marks a startling watershed for the financial system." Bankers had become "ultracreative… in their efforts to slice, dice and redistribute risk, at this time of easy liquidity." Low-interest rates, Avinash Persaud, one of the gurus of finance concluded, had led investors to use borrowed money to play the markets, and "a painful deleveraging is as inevitable as night follows day…. The only question is its timing." There was no way that hedge funds, which had become precociously intricate in seeking safety, could avoid a reckoning and "forced to sell their most liquid investments." "I will not bet on that happy outcome," the Financial Times' chief expert concluded in surveying some belated attempts to redeem the hedge funds from their own follies.

A great deal of money went from investors in rich nations into emerging market stocks, which have been especially hard-hit in the past weeks, and if they (leave then the financial shock will be great — the dangers of a meltdown exist there too.

Problems are structural, such as the greatly increasing corporate debt loads to core earnings, which have grown substantially from four to six times over the past year because there are fewer legal clauses to protect investors from loss –- and keep companies from going bankrupt when they should. So long as interest rates have been low, leveraged loans have been the solution. With hedge funds and other financial instruments, there is now a market for incompetent, debt-ridden firms. The rules some once erroneously associated with capitalism — probity and the like — no longer hold.

Problems are also inherent in speed and complexity, and these are very diverse and almost surrealist. Credit derivatives are precarious enough, but at the end of May the International Swaps and Derivatives Association revealed that one in every five deals, many of them involving billions of dollars, involved major errors – as the volume of trade increased, so did errors. They doubled in the period after 2004. Many deals were recorded on scraps of paper and not properly recorded. "Unconscionable" was Alan Greenspan's description. He was "frankly shocked." Other trading, however, is determined by mathematical algorithm ("volume-weighted average price," it is called) for which PhDs trained in quantitative methods are hired. Efforts to remedy this mess only began in June of this year, and they are very far from resolving a major and accumulated problem that involves stupendous sums.

Stephen Roach, Morgan Stanley's chief economist, on April 24 of this year wrote that a major financial crisis was in the offing and that the global institutions to forestall it– ranging from the IMF and World Bank to other mechanisms of the international financial architecture – were utterly inadequate. Hong Kong's chief secretary in early June deplored the hedge funds' risks and dangers. The IMF's iconoclastic chief economist, Raghuram Rajan, at the same time warned that the hedge funds' compensation structure encouraged those in charge of them to increasingly take risks, thereby endangering the whole financial system. By late June, Roach was even more pessimistic: "a certain sense of anarchy" dominated the academic and political communities, and they were "unable to explain the way the new world is working." In its place, mystery prevailed. Reality was out of control.

The entire global financial structure is becoming uncontrollable in crucial ways its nominal leaders never expected, and instability is increasingly its hallmark. Financial liberalization has produced a monster, and resolving the many problems that have emerged is scarcely possible for those who deplore controls on those who seek to make money – whatever means it takes to do so. The Bank for International Settlements' annual report, released June 26, discusses all these problems and the triumph of predatory economic behavior and trends "difficult to rationalize." The sharks have outfoxed the more conservative bankers. "Given the complexity of the situation and the limits of our knowledge, it is extremely difficult to predict how all this might unfold." The BIS (does not want its fears to cause a panic, and circumstances compel it to remain on the side of those who are not alarmist. But it now concedes that a big "bang" in the markets is a possibility, and it sees "several market-specific reasons for a concern about a degree of disorder." We are "currently not in a situation" where a meltdown is likely to occur but "expecting the best but planning for the worst" is still prudent. For a decade, it admits, global economic trends and "financial imbalances" have created increasing dangers, and "understanding how we got to where we are is crucial in choosing policies to reduce current risks." The BIS is very worried.

Given such profound and widespread pessimism, the vultures from the investment houses and banks have begun to position themselves to profit from the imminent business distress – a crisis they see as a matter of timing rather than principle. Investment banks since the beginning of 2006 have vastly expanded their loans to leveraged buy-outs, pushing commercial banks out of a market they once dominated. To win a greater share of the market, they are making riskier deals and increasing the danger of defaults among highly leveraged firms. There is now a growing consensus among financial analysts that defaults will increase substantially in the very near future. But because there is money to be made, experts in distressed debt and restructuring companies in or near bankruptcy are in greater demand. Goldman Sachs has just hired one of Rothschild's stars in restructuring. All the factors which make for crashes – excessive leveraging, rising interest rates, etc. – exist, and those in the know anticipate that companies in difficulty will be in a much more advanced stage of trouble when investment banks enter the picture. But this time they expect to squeeze hedge funds out of the potential profits because they have more capital to play with.

Contradictions now wrack the world's financial system, and a growing consensus now exists between those who endorse it and those, like myself, who believe the status quo is both crisis-prone as well as immoral. If we are to believe the institutions and personalities who have been in the forefront of the defense of capitalism, and we should, it may very well be on the verge of serious crises.

GABRIEL KOLKO is the leading historian of modern warfare. He is the author of the classic Century of War: Politics, Conflicts and Society Since 1914 and Another Century of War?. He has also written the best history of the Vietnam War, Anatomy of a War: Vietnam, the US and the Modern Historical Experience. His latest book, The Age of War, was published in March 2006.

He can be reached at: kolko@counterpunch.org

Huge deposits of rare earth minerals discovered in Pacific Ocean

Jul. 4, 2011 (3:30 pm) By: Matthew Humphries

Every time someone goes out and buys a new TV, laptop, iPad, Android smartphone, or any such device they are using up some of our rare earth minerals which these gadgets require to work. They are called rare not because there is only a small amount on earth, but because the deposits are small and therefore require a lot of mining to recover very little.

Another problem exists in the fact China holds about 97% of the rare earth mineral market, and it decides how much exits the country. This pushes up prices and makes it more difficult for companies outside of China to not only manufacture enough devices, but also to keep the costs of those gadgets competitive.

It will come with great relief then, to hear that Japanese researchers have found very rich deposits of rare earth minerals as well as the metal yttrium. In total around 26 sites located in the international waters of the Pacific Ocean have been found to have high concentrations buried between 3,500 and 6,000 meters beneath the sea bed.

Tantalum: used as metal powder coating for capacitors in PCs, smartphone, automotive electronics

The deposits are so rich they are thought to increase our reserves by 1000x. Current reserves are estimated at 110 million tonnes, but this new discovery adds another 100 billion tons.

Not only does this take the pressure off in terms of finding alternatives in the near future, the locations of the deposits near Hawaii and Tahiti means the reliance on Chinese exports will be removed. Prices should fall and competition will not be influenced by a lack of supply.

Most importantly for geeks out there, this assures future supplies meaning companies like Apple, Samsung, Sony, and HTC can continue to supply us with the latest gadgets on a regular basis.

Kibaki seeks support for green economy

President Kibaki addresses the United Nations Conference on Sustainable Development (Rio+20) in Rio de Janeiro, Brazil June 21, 2012. PPS

By PPS
Posted Friday, June 22 2012 at 08:24

President Kibaki held bilateral talks with His Highness Prince Albert II of Monaco on the sidelines of the ongoing United Nations Conference for Sustainable Development in Rio De Janeiro, Brazil Thursday.

During the talks, the two leaders discussed general areas of cooperation between Kenya and Monaco on green economy.

Noting that Kenya has initiated viable community projects designed to generate employment while attracting carbon trading market, President Kibaki appealed for the support of the Prince of Monaco in linking Kenyan green projects with international carbon trading dealers.

The President further noted that there are tremendous opportunities for green investments in Kenya including renewable energy which once initiated can be replicated in the East African region.

He invited investors from Monaco and Europe in general, to explore investment opportunities in Kenya saying that lucrative opportunities exist in a wide variety of sectors including oil exploration as well as manufacturing various products for the African market.

President Kibaki also sought support for an annual sporting event in Kenya to support Green Africa Villages for the East African region.

The President noted that Green Africa Villages are crucial centres of excellence at the grassroots level where demonstrative training is presented for communities to emulate.

On his part, Prince Albert commended the good work being done in Kenya by Green Africa Foundation which he said deserved support.

Recalling his visit to Kenya in June 2010 and April this year, Prince Albert praised the impressive progress that has been made in Kenya in various sectors adding that Kenya can be a role model in green economy in Africa.

The Price pledged to support the Plant for Your Age Initiative, which is being run by the Green Africa Villages, Rotary Clubs, Kenya Wildlife Service and UNEP with a view to conserving the environment.

Price Albert also pledged to assemble investors from Europe to explore business opportunities in Kenya saying the investment environment in the country had improved tremendously in recent years.

Kangai•a day ago•parent

Not until we have enough food for ourselves, brother/sister! Green energy must come only once we have mastered the art of conducting sustainable agriculture and can feed ourselves otherwise, we shall be trying to dance the Western Society tune while jumping an important step in between. Without sustainable food production to feed our people, we shall invest in green energy while destroying forests and water resources with concomittant worse consequences for the Planet. Au sio? Kangai in Joz

jakogelo•a day ago

Kenya must also sign a protocol with Ethiopia on how the waters of River Omo will be used .We cannot afford to import electricity from Ethiopia at the cost of Lake Turkana drying up and thus loosing a vital ecosystem .If Kenya can sign a protocol with Egypt on the use of the Nile for the benefit of the two Countries .I do not see why we cannot sign a protocol with Ethiopia for our mutual benefit .

Mohd Abdusheikh•a day ago

first, lets get the basic business environment right at home i.e safety, security, water, electricity, infrastructure..before we invite investors in droves and assure them of sustainable value of their investments

From: mark kirario <mkirario.088@gmail.com>;
To: progressive-kenyans@googlegroups.com <progressive-kenyans@googlegroups.com>; KOL <kenyaonline@yahoogroups.com>; uchunguzionline@yahoogroups.com <uchunguzionline@yahoogroups.com>;
Subject: [uchunguzionline] A tweet from mhe. PM
Sent: Fri, Jun 22, 2012 11:43:37 AM

Folks,     The term "economic collapse" in Commerce and Trade is used to describe a broad range of bad economic conditions from a severe, prolonged fiscal bad debts incurred by any Government failed priorities to control or to regulate business activities of Trade and currency flow which equally ends with Depression ratings and hyperinflation which includes increase of human death rates from occurrences of such unregulated imbalances.   Economic collapse is accompanied by dysfunctioning of Government from delivering public service according to Public Mandate which as a result brings about social disintegration, destruction and chaos, civil unrest and many times a breakdown of law and order.   Conspiracies exist all around amongst those leaders who engage in corruption of Public Wealth Resources because of selfishness of self ego who network with the unscrupulous International Corporate Business Community of Special Interest, who care for themselves, their business and mostly killing the poor.   Cases of economic collapse include persistent trade deficits, civil wars, famines and depletion of important fundamental public's basic resources with stubborn unscrupulous corrupt leaders whose illegality is a driving force that pushes citizens to revolutions by forcing unprincipled, irregular and uncompromised policies that result to unfair Government delivery service to the general Public, which in extend is a failure to democratic principles leading to economic collapse.   These economic collapses are as a result of the educated professional lobbyist and CEOs who network with corrupt politicians and in return take big sums of money which are unrealistic and do not balance with the trade output which becomes main reason why there is no accountability as is required by the constitution.   When a Government system stops providing Public Delivery services for the fundamental basic needs to its Citizen, this creates turbulence to political turmoil and stability then severe hardship sets in and these are signs that progressively develop economic collapse.   The Great Conspiracy For the Scramble for Africa: Many unscrupulous International Corporate Business Community scramble to Africa to own land for Agriculture, Natural Resources and Minerals in the likes of Diamond, Gold, Titunium, Iron Ore, Coltan for computer chips etc., and the scramble to Africa is to hijack Africa so they can own Africa, but with good Constitution, Africa can be saved and proper favorable deal for Economic Trade and Exchange can be truck in a more conducive balanced and favorable environment where all people mutually gain.   Today Gold is replacing paper money with all other Bills and Promissory notes, if the paper currency is vanquishing, Government debt obligations through bonds are weakening and becoming worthless in the International platform and the Gold takes over, who will own land deposits of Gold in Africa and who will benefit? Considering that the most of Gold and Oil are now coming from Africa, if Africa do not have any proper Constitution laid down with People's Bills of Right put into consideration, where will Africa be? Who will be in control of Coltan minerals deposits for computer chips and other electronic accessories, if not Africans and if Africans are not cleverly protected under the Constitutional Bills of Rights?   Economic stability requires some sort of providing simple economy educational awareness to public through Constitutional Bills of Rights which Kenya's Coalition Government under the two Principals have not done. We all believe that, World Bank having released the funds for the same and the Coalition leadership refusing provide the necessary required training, with the anomaly of trashing the Constitution in Parliament, it is clear, both the two Principals in the Coalition Government see this as relatively unimportant because of their involvement in the conspiracy, they are playing with public intelligence to conspire in the sale of Kenya and their auctioning of the Country to the International Corporate Business of Special Interest.   Without Proper Constitution for Public Bills of Rights No business local or international will be considered legitimate.   For Kibaki and PM Raila to go to solicit greener pastures for investment or Aid from the International Business Community, is a case of panic, it is to solicit for a death pill to Kenya.   Main article: 1998 Russian financial crisis:   After more or less stabilizing after the disintegration of the USSR, a severe financial crisis took place in the Russian Federation in August 1998. It was caused by low oil prices and government expenditure cuts after the end of the Cold War. Other nations of the former Soviet Union also experienced economic collapse, although a number of crises also involved armed conflicts, like in the break-away region Chechnya. The default by Russia on its government bonds in 1998 led to the collapse of highly leveraged hedge fund Long Term Capital Management, which threatened the world financial system. The U.S. Federal Reserve organized a bailout of LTCM which turned it over to a banking consortium.   Is the world headed to a massive melt-down, and where will Kenya/Africa be when we remain stuck in the mad after President Obama boosted us with the New Constitution inclusively with an offer to a welcoming Foreign Policy agenda which is for a Mutual Partnership towards a sustainable development agenda where everyone has an opportunity to benefit and improve their lives, but are treated with dignity instead of being made slaves.   This is a serious food of thought that require your weekend moment to digest.   Be prayerful and open your deeper thought and understanding of the value to God's purpose of creation, to where we are headed in this case-scenario.......   Thank you all for sharing, Judy Miriga Diaspora Spokesperson Executive Director Confederation Council Foundation for Africa Inc., USA http://socioeconomicforum50.blogspot.com     FULFORD VS. HAARP http://www.youtube.com/watch?v=InV0cVH6KZc Uploaded by christollinger on May 28, 2008 Benjamin Fulford reports from Tokyo on a mysterious plasma weapon seen prior to the Niigata earthquake in July, 2007 and red, white and blue lights seen prior to the recent earthquake in China. Both quakes targeted nuclear facilities...coincidence?       Dummies' guide to what went wrong in Europe. Helga is the proprietor of a bar. She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem she comes up with a new marketing plan that allows her customers to drink now but pay later. Helga keeps track of the drinks consumed on a ledger (thereby granting the customers loans). Word gets around about Helga's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Helga's bar. Soon she has the largest sales volume for any bar in town. By providing her customers freedom from immediate payment demands, Helga gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer - the most consumed beverages. Consequently, Helga's gross sales volumes and paper profits increase massively. A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Helga's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral. He is rewarded with a six-figure bonus. At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These "securities" are then bundled and traded on international securities markets. Naive investors don't really understand that the securities being sold to them as "AA Secured Bonds" are really debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses. The traders all receive a six-figure bonus. One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Helga's bar. He so informs Helga. Helga then demands payment from her alcoholic patrons but, being unemployed alcoholics, they cannot pay back their drinking debts. Since Helga cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and Helga's 11 employees lose their jobs. Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community. The suppliers of Helga's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations; her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers. Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings-attached cash infusion from the government. They all receive a six-figure bonus. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who've never been in Helga's bar. Now do you understand? NOW THIS: Understanding the Looming World Economic Meltdown La'Ziramjad Thursday, 06 October 2011 17:42 After recovering from the Credit Crunch or the Global Financial Crisis in 2008 that has been labeled by many economists as the worst financial crisis since the 1930s Great Depression, the world is now on the brink of another economic meltdown. The rising cost of living and unemployment rate that burdens almost every country in the world today clearly shows that the world may hit the wall again at any time in the near future. Greece Default To understand what might happen to Malaysia if an economic meltdown is to happen, it is very easy to just look at Europe and see the troubled Greece, which is now battling against its debt default. Greece is a perfect illustration of a country which had run its economy the wrong way and the repercussions of doing so. With the European Union (EU) incessantly lending money to Greece while asking its government to cut its budget, many don't realize that the EU's help is rather futile. The economic models being used by many nations right now will need alteration at a global level in order to restore Greece and other soon-to-be-affected countries. But at the moment, with Greece, we are looking into the 'opposite approach'. EU was telling Greece, "we lend you money, so you must balance your budget, and you need to cut your social welfare programs, sell your investment, sell your transport." Unfortunately, this will make Greece poorer as the tax in Greece is going to shrink. To put it simply, with no tax money, a nation cannot grow. When Greece announced its debt default that sees its government no longer able to make out bonds, the banks, especially those in Germany, Spain and England will soon be affected as they were the ones that had lent the money to Greece. This would then ignite a chain-effect in other European countries and later spread to other continents like Asia as the economic models that are being use here are similar to those being used in Europe. And intriguing enough, The EU is not solving the problem in Greece. Instead, they've been driving out from the crisis in reverse. The whole world must understand the current issues and grasp at the fact that the best way to resolve the problem is through collective efforts. The underlining problem is under-consumption and distributing money to the wrong community. Understanding the Problem These days, too much of the world's wealth and income has gone into the corporate sector. That means our capital has flowed out to the likes of CEOs, shareholders of the corporate world and other related party of the corporations. This leaves the ordinary people getting less and less share of the profit. The consequence of the ordinary people getting fewer shares is that the buying power among the population stop to grow. The capital is growing but manufacturers cannot go on to produce goods and products such as TVs, shoes and other things because people just cannot afford to buy them due to their limited buying power. This then leads to an overhang of supply and demand. This happens as the surplus of the capital cannot produce material anymore due to the slow market. When this happens, the capital goes into speculation, more bonds, foreign exchange and also future derivatives. This will spark a chain effect where the government will fail to produce foods, houses and many more other necessities simply because the people can't afford to buy them. In the Europe nowadays, due to the derivative bubbles, most of the governments are now spending a lot of their money to save the banks. The economic environment is so worrisome that government deficits have reached 1.3 times the country's GDP. What happened to Greece now can happen to any country, as the capitalist economic system is currently 'eating' into the value for money while the profits are kept among the corporate. The Solution Since it's all because of the under-consumption, the answer to the problem is to take steps to transfer the wealth of the society to the ordinary people. One of the steps to circulate wealth to the public is by setting up minimum wage. The minimum wages affect will bring the buying power to the people again, and that money can go into the demands again. The other step is to make all country in the world to start charging tax on all corporate profit financial transactions. This measure will transfer the corporation money to the government. The results of this will see the government having extra money to spread among the organization members, the society. With this, the government can again start to congregate demands. We must realize that we need to transfer the wealth from the corporate to the government, to the people. If the money from the tax were given to the government then the government can use it for welfares, education, healthcare, and all kind of interventions to help the people. Then there will be demand all over again. This is how the world is going to get out from this current crisis. What Malaysia Has Done Malaysia has wooed RM21.3 billion in foreign direct investments (FDIs) in the first half of this year and with prime minster Najib at helm the FDI is getting higher due to government's hectic lobbying for foreign investors. Not that this is not good, investment is always good. However, we must be aware that, in this current economy, investors will not prosper the country in the right way. With a lot of foreign investors coming down to Malaysia to invest, the locals are getting lesser chance to gain the nation's capital. Najib has been saying that his wishes to liberalize the market and create more business people. These will only lead to corporation reaping the nation's capital and the national income will obviously get smaller. Big businesses, railways, hospitals and education cannot be left to commercial interest, no matter how straightforward we are going with this economy. The Wise Approach of the South Americans While Europe and some Asian countries are now on the brink of economic system, countries like Brazil have prospered and managed to avoid themselves from the meltdown. Since the 35th president of Brazil, Luiz Inácio Lula da Silva took over the government in 2003, Brazil's minimum wage have been raised three to four times. Brazil's government has started to realize the importance in uplifting the poor people. Brazil has started a program called 'Bolsa Familia' which gives money to poor family as long as they send their children to school. With such welfare system, the family would not only able to buy themselves foods, but the children would also receive education. Since 2003, when the program first started, 12 million families have joined the scheme and received small amounts of money (around US$12 a month). Inequality has been cut by 17 percent in just five years, which is perhaps one of the most dramatic achievements in welfare ever recorded. The poverty rate has fallen from 42.7 percent to 28.8 percent. In Brazil, with the introduction of such system, the corporate world is also started to receive demand again, because the people now have money in their hands, therefore their buying power has been restored. This will automatically encourage production of goods. In Brazil, all parts of the country are reaping something useful to satisfy all parts of the community. The Brazilian government, by giving money and buying power to the poor, has not only increased demand but also promote small local businesses to form. The money will always stay within the country as the poor communities are not 'customarily obliged' to buy that imported US$199 iPhones. They are satisfied with the cheaper local-made mobile phones. The consequence to this is it would boost the local corporate companies. Greed and Instant Gratification The people of the world must now realize the situation, not only them; the corporate power on the other hand must be less greedy and help the market first, so that they can receive demands again for production. By adapting this new attitude, the under-consumption problem that we are facing now can be overturned. Adam Smith was quoted saying that "you can be greedy as you like, but make sure you take care of your community". This must be practiced by the corporate world. It is understood that the capitalist's motive is to maximizing profits, but this shortsighted mentality should be chucked out so that more profits can be gained in the future. Why Can't People See It? Understanding the economic situation might prove decisive to the world economy now. Socialists have proven that its economic analysis has found the core problem of the modern era economic meltdown. And to look at it and have a think about it doesn't bring people closer to communism. This however is not the case as this is an economic analysis, not a political ideology. So if someone asks why the economy is going to go through a meltdown, just tell them that we, and the rest of the world, have perceived the meltdown in a wrong way and dealing with it in a wrong way. Actually we have been doing the opposite of what we're supposed to be doing. Mungiki yaerejea na sura mpya http://www.youtube.com/watch?feature=player_embedded&v=zgiQ7p2R3LA#! Published on Jun 19, 2012 by standardgroupkenya http://www.ktnkenya.tv Idara ya polisi nchini imetoa onyo kali kwa makundi haramu humu nchini na kuwataka wakenya kufahamu ya kwamba kundi haramu la mungiki limerejea tena na sura mpya. Naibu msemaji wa polisi Charles Owino mapema hii leo mchana alipasua mbarika na kusema kuwa polisi hawatoruhusu kamwe makundi kama hayo kuwahangaisha wakenya hususan tunapokaribia uchaguzi mkuu. Mohammed Ali anatuarifu zaidi. MPs want losing candidates nominated http://www.youtube.com/watch?feature=player_embedded&v=0OrjstobdUE Published on Jun 20, 2012 by NTVKenya http://www.ntv.co.ke Parliament is on course to amending a key component of the constitution, to allow presidential and deputy presidential candidates who lose in the elections to find their way back into parliament. Garsen MP Danson Mungatana, who is the proponent of the amendment has intimated that the amendment seeks to strengthen the opposition in parliament. Ben Kitilli reports on a matter that is set to receive backlash from Kenyans.. Cheserem: Kenya needs leaders with integrity at all levels Related News CRA chair answers questions on revenue allocation Updated 4 hrs 41 mins ago By Luke Anami The media have been asked to be at the forefront in educating Kenyans about the calibre of leaders required to take the country forward. Micah Cheserem, the chairman of the Commission on Revenue Allocation, said it was critical that Kenyans understood Chapter Six of the Constitution on Leadership and Integrity. Lamenting poor leadership, he asked voters to make a break with the past by electing visionary and transformative leaders during the General Election. "As Kenya turns 50 next year, and given our history, we should have done better. Kenya has performed way below its potential because of many factors. But the major one is poor leadership not at all levels," said Mr Cheserem. "And because of that, corruption has crept into every sphere of society, including the media. That is why we thought of Chapter Six given the integrity of the people we are going to elect," said Cheserem when he visited the Standard Group Centre where he met editors and senior journalists. Mr Cheserem called on the media to scrutinise those standing for elective posts, especially those gunning for president and governorship, saying the President and the 47 governors held the key to the future. "Go 20 years back on the lives of these persons (running for office and reveal them) without scandalising them," said Cheserem. The Standard Group Deputy Chairman and Chief Executive Paul Melly said the media group would not defend corrupt leaders and would proactively engage and facilitate a process that will ensure the defence of the Constitution. "Our role is to defend public interest and when those who are managing public resources are found to have engaged in activities inconsistent with the existing Constitution, we will be the first to bring it up," Mr Melly said. "When the MPs choose to use their privileged position to protect what is clearly vested interest, it is our duty to tell Kenyans to be aware of those involved so that they will never have an opportunity to see the inside of Parliament again," he said. "As far as the subject of Integrity is concerned and the implementation of Chapter Six, all of us will play an important role as the media in interrogating our leaders and more importantly setting the agenda," Melly added. Melly said Kenyans do not want to see most of the governors taken to court on corruption charges in the first, as happened in Nigeria. Cheserem said it would be costly if Kenyans did not elect women in line with the constitutional provision that not more than two-thirds of members should be one gender. "While the number of MPs is pegged at 290, the number of women elected must meet the requirements of Article 27. There is no article that covers Parliament on women but if the women are less, then you must nominate them," said Cheserem. Article 27(8) of the Constitution, which is within the Chapter on the Bills of Rights, prescribes that the state shall take legislative and other measures to implement this principle. "If you fail to elect the required number of women, consequently the wage bill will increase for the additional number of women you will have nominated. That is why is important for Kenyans to know that they must elect women in the coming elections." Cheserem said the provision was critical, because it required the state to be proactive in creating the necessary legislative and policy framework to ensure the realisation of the principle. Fury as 'selfish' MPs chop up Constitution Chairman of the Constitutional Implementation Committee Charles Nyachae. The Commission for implementation of the Constitution petitioned President Kibaki to reject the amendments. Photo/FILE By NATION TEAM newsdesk@ke.nationmedia.com Posted Thursday, June 21 2012 at 23:30 National outrage broke out on Thursday after MPs diluted laws designed to discourage party-hopping and set high thresholds for qualification to elective office in accord with the new Constitution. The Commission for implementation of the Constitution petitioned President Kibaki to reject the amendments, while lawyers and civil society groups vowed to challenge the amendments in court and to organise public protests. MPs had gone into an unusual late session on Wednesday to amend the Elections Act and the Political Parties Act, creating windows to allow persons without higher education to vie for political office. They also relaxed the provisions barring MPs from defecting from one party to another. CIC chairman Charles Nyachae, Law Society of Kenya chairman Erick Mutua and International Centre for Peace and Conflict chairman Ndung'u Wainaina argued that MPs had embarked on a journey to mutilate a Constitution that is less than two years old. Mr Nyachae said his team had petitioned the President to decline to sign the amendments into law. "We have written to the President pointing out the unconstitutional things and urge him not to assent to them. These amendments are not in the interest of the people of Kenya," he said. He said that the commission would seek court intervention to declare the changes unconstitutional if the president gives them assent. "They are aimed to serve the personal interests of the current MPs which is in direct contravention of Article 16 of the Constitution," he said. He also asked Kenyans to rise up and defend their constitution from mutilation by the Legislature. Mr Mutua concurred that the amendments were illegal. "MPs are engaging in a self-serving mission. We see these amendments as an illegality and a move by Parliament to circumvent the provisions of the constitution which deal with leadership and integrity," he said in a statement "We wish to point out that we shall proceed to court to challenge those unconstitutional amendments. We want to urge the public to ignore any unconstitutional law," he said. The LSK boss added that lawyers no longer had confidence that MPs will enact laws which are meant to ensure that only persons of integrity are elected to hold political office. "With what has happened we have no faith that the expected legislation under Chapter Six will accord with the letter and spirit of that chapter," he said. Lawyers Atsango Chesoni, Harun Ndubi, George Kegoro, Grace Maingi and activist Ngunjiri Wambugu threatened to move to court to reverse the amendments. Speaking at the Kenya Human Rights Commission offices in Nairobi, the group further vowed to hold demonstrations countrywide. Mr Wainaina described the amendments as archaic and retrogressive. "We hope that Judiciary will exercise its judicial authority and powers to review this anti-people amendments and also curtail excesses of Executive and Parliament," he said. Saying that MPs had "shamelessly disrespected" Kenyans, he urged the public to collect signatures to file a petition for the dissolution of the coalition government. Meanwhile, MPs for the second day running continued to make changes to the laws through the Statute Law (Miscellaneous Amendment) Bill, 2012. With the amendments to section 14 of the Political Parties Act, MPs and councillors will freely form and join new political parties, while still holding on to their seats. Also, losing presidential candidates now have a window to get back to leadership through nomination to Parliament or to the Senate. An amendment suggested by the Narc Kenya MP for Garsen Danson Mungatana overturned the law against losing candidates finding their way back to the legislature. However, the House rejected a move by Chepalungu MP Isaac Ruto to allow presidential candidates and their running mates to at the same time contest other elective seats. Mr Ruto, an ODM MP who has moved to the United Republican Party led by presidential aspirant William Ruto, proposed that the presidential candidate and the deputy clinch the top seat, they forfeit the lesser positions and occasion a by-election. The contentious amendments to allow defections proposed by Gachoka MP Mutava Musyimi were approved during an acrimonious debate pitting mainly ODM MPs who vehemently opposed against the party's rebel MPs now in URP and their counterparts allied to the PNU alliance. Similar Amendments to those of Rev Musyimi, a PNU MP and a presidential hopeful on a Democratic Party ticket, had also been suggested by Siakago MP Lenny Kivuti (Safina). Rev Musyimi's amendments were opposed by Narc Kenya presidential aspirant Martha Karua and MPs Ababu Namwamba, John Mbadi, and Millie Odhiambo; while Mr Adan Duale and assistant minister Peter Munya supported. Rev Musyimi argued proposed the changes by the reality that the country was in a transition "and transitions are not easy." However, Ms Karua opposed the changes vehemently, described the move as a "great shame". Coalition Chief Whip Jakoyo Midiwo accused those seeking to amend the elections laws of killing democracy. "I am opposing the amendment knowing that the people who are used to indiscipline shall win. This country is a democracy and there cannot be a thriving democracy where there is no political party discipline." But assistant minister Munya, the PNU for Tigania East, said restricting people to parties they were no longer keen on was an infringement of their rights and freedom of association. Budalangi MP Ababu Namwamba read to the House a letter from the CIC chairman Mr Nyachae informing House Speaker Kenneth Marende that the amendments were unconstitutional and would be fought in court. Mandera Central MP Abdikadir Mohammed, who chairs Parliaments Committee on Implementation of the Constitution (CIOC) dismissed Mr Nyache's assertions, saying it was not the responsibility of CIC to supervise Parliament. —Reports by Njeri Rugene, Bernard Namunane, Emeka Mayaka and Lucas Barasa Fresh probe on Anglo-Leasing files Photo/FILE Ethics and Anti-Corruption Commission spokesman Nicholas Simani. By BERNARD NAMUNANE bnamunane@ke.nationmedia.com AND PATRICK MAYOYO pmayoyo@ke.nationmedia.com Posted Thursday, June 21 2012 at 23:30 The anti-graft agency is sifting through the Swiss dossier on the complex money transactions behind the Anglo-Leasing scandal. Sources said investigators were studying information contained in more than 10 files on the money trail involving the account holders. But Ethics and Anti-Corruption Commission (EACC) spokesman Nicholas Simani took refuge in the confidentiality clause that protects the rights of individual account holders. He said they were not ready to make any disclosures on the investigations because they involved specific accounts of people who stashed the cash. "I have consulted widely in the commission and the common position is that we are not ready to make any comments at this time," he said on phone. Swiss ambassador to Kenya Jacques Pitteloud handed the dossier to the government in February and hinted it could herald a breakthrough in unravelling the shady transactions. Swiss authorities completed investigations into the transactions several years ago, but were unable to present the information to Kenya due to legal challenges and what was largely seen as a lack of political will. On Thursday, Mr Simani said the dossier included information of individual accounts. The EACC's refusal to make any disclosures comes a day after the Nation revealed that Kenyans have stashed away a staggering Sh72 billion (818 million Swiss francs) in Swiss banks. The information was contained in a new report by Swiss National Bank (SNB) — the Central Bank of Switzerland. Kenya is among several African countries with hidden wealth in Switzerland. The report shows that other countries whose nationals have stashed away wealth in Switzerland (in billions of Swiss francs) include, Tanzania (183 million), Uganda (154 million), Egypt and South Africa (1.914 billion) and Seychelles (2,515 million), Zimbabwe (96 million), Senegal (150 million), Rwanda (29 million), Sierra Leone (29 million), Somalia (1 million) and Sudan (796 million). These figures, described by SNB as "liabilities of Swiss banks towards clients from different countries" do not necessarily project the much-talked about black money held by Kenyans in the safe havens of Switzerland. SNB figures do not include money that Kenyan individuals might have in other names or are managed by wealth funds. "The total overseas funds in Switzerland's banking system stood at 1.53 trillion Swiss francs," the report adds. At the same time, global pressure has been rising on Switzerland to ask its banks to share information about their clients with foreign governments. It is suspected that Kenyans having illicit wealth in Swiss banks may be moving their funds for fear of being exposed due to growing scrutiny. Kenya is suspected to have lost more than Sh100 billion through the Goldenberg foreign exchange scam and Anglo-Leasing security contracts scandals. Most of the billions stashed away in foreign accounts by influential businessmen and powerful politicians is suspected to be proceeds of defence and security-related contracts and payments of fake debts. MPs allow Treasury to withdraw Sh424b SHARE THIS STORY Updated 4 hrs 42 mins ago Parliament allowed the Treasury to withdraw Sh424.66 billion from the Consolidated Fund to run its operations, even as some members protested. Members of the Budget Committee opposed the move saying it was unconstitutional, as the Appropriations Bill had not been passed as required by the Constitution. Finance Minister Njeru Githae breathed a sigh of relief after MPs passed his Motion, consequently ending a looming stalemate between the Executive and Parliament. Deputy Speaker Farah Maalim set the ball rolling when he allowed the minister to move the Motion after MPs had opposed it on Wednesday, claiming it was unconstitutional because the Appropriations Bill had not been published. Mr Maalim, who was guided by the precedent set in the ruling of Speaker Kenneth Marende on June 7, 2010, when a similar scenario faced Githae's successor Uhuru Kenyatta, said the move was aimed to avoid a shut-down of Government and denial of services to citizens, which is their constitutional right. Mr Githae was forced to make a personal undertaking that the Treasury would consider most of the recommendations of the Budget Committee in the Appropriation Bill that is expected before the House. "The consequences of not passing the Vote on Account will be drastic and the business of the Government will be crippled come August 1," said the minister. Alter his Budget He said the Vote on Account was just an advance to the Government and MPs will have their say when the Appropriations Bill comes to the floor of the House. The Budget committee had vowed to oppose the withdrawal of the funds until Parliament approves the Appropriations Bill, 2012, in line with Article 221 (6) of the Constitution. They accused the minister of attempting to intimidate MPs not to alter his Budget estimates on grounds that they stood to lose if proposals by the committee were effected. Gwassi MP John Mbadi, who opposed the Motion, said the minister was being dishonest by saying that if MPs altered the Budget they will suffer in areas of their mileage and Constituency Development Fund. While moving the Motion, Githae said experts at the Treasury had told him that if the budget was altered 30 per cent of the CDF will be affected and so will local and foreign travel. MPs Martha Karua, Ekwe Ethuro and Njoroge Baiya opposed the Motion saying if the minister was allowed to continue with the illegality he would set a bad precedent. Ms Karua termed the action by the Treasury "unconstitutional" given that the courts had ruled against the practice last year. But the minister said he was seeking approval of the funds to meet expenditure for the year starting on July 1. – Stories by Steve Mkawale and Martin Mutua Rwanda: U.S. Accused of Blocking UN Report on 'Rwanda Fuelling Congo Violence' By Abokoe Sibanda, 21 June 2012 Government of Rwanda The United States has been accused of blocking a UN report which examines claims that Rwanda is fuelling a violent rebellion in neighbouring Democratic Republic of the Congo. (See 'Is the U.S. blocking a controversial U.N. report to shield Rwanda?' by Colum Lynch.) According to the leaked report, rebel soldiers told United Nations officials that they were Rwandans who had been sent across the border to fight in a mutiny in eastern Congo that has displaced tens of thousands of civilians, the New York Times reported. The report says the Rwandan authorities have been complicit in recruiting soldiers for Congolese rebel leader, General Bosco Ntaganda, who is wanted by the International Criminal Court for war crimes and crimes against humanity. The Guardian reported on Wednesday that rebel fighters who have been captured and interviewed in the eastern Congo revealed a Rwandan network supporting the mutiny. Relevant Links Fears of War With Rwanda Rattle DRC Youth Rwanda Denies Fuelling War in East Rights Group Accuses Govt of Aiding DR Congo Warlord Thousands of Refugees Fleeing Violence Enter Uganda - UN Nation Is Not to Blame for DRC's Woes - Kagame The Congolese government claims that the report is being stalled by Rwanda and its allies on the security council to protect President Paul Kagame. Kagame has repeatedly dismissed the allegations. The New Times reported that Kagame slammed on the international community for "endlessly" blaming Rwanda for the DRC's woes. He also called on Congo to take responsibility for a surge in rebel fighting rather than blame its neighbour for stoking the violence. Rwanda: Govt Should Stop Aiding War Crimes Suspect - Congolese Renegade General Bosco Ntaganda Receives Recruits and Weapons From Rwanda 3 June 2012 press release Government of Rwanda Goma — Rwandan military officials have been arming and supporting the mutiny in eastern Democratic Republic of Congo (DRC) of Gen. Bosco Ntaganda, who is wanted for war crimes by the International Criminal Court (ICC), Human Rights Watch said today. Rwandan military officials have allowed Ntaganda to enter Rwanda and supplied him with new recruits, weapons, and ammunition. Ntaganda is sought on an ICC arrest warrant for recruiting and using child soldiers. "The role played by some Rwandan military officials in supporting and harboring an ICC war crimes suspect can't just be swept under the rug," said Anneke Van Woudenberg, senior Africa researcher at Human Rights Watch. "The Rwandan government should immediately stop all support to Ntaganda and assist in his arrest." Field research conducted by Human Rights Watch in the region in May 2012 revealed that Rwandan army officials have provided weapons, ammunition, and an estimated 200 to 300 recruits to support Ntaganda's mutiny in Rutshuru territory, eastern Congo. The recruits include civilians forcibly recruited in Musanze and Rubavu districts in Rwanda, some of whom were children under 18. Witnesses said that some recruits were summarily executed on the orders of Ntaganda's forces when they tried to escape. Relevant Links Fears of War With Rwanda Rattle DRC Youth Rwanda Denies Fuelling War in East Thousands of Refugees Fleeing Violence Enter Uganda - UN U.S. Accused of Blocking UN Report on 'Rwanda Fueling Congo Violence' Nation Is Not to Blame for DRC's Woes - Kagame One Rwandan, forcibly recruited into Ntaganda's forces and who later escaped, told Human Rights Watch, "I saw six people who were killed because they tried to flee. They were shot dead, and I was ordered to bury their bodies." Witnesses told Human Rights Watch that weapons provided to Ntaganda's forces by Rwandan military officials included Kalashnikov assault rifles, grenades, machine guns, and anti-aircraft artillery. New recruits brought these weapons to Runyoni in eastern Congo, the main base of the mutiny. The recruits, weapons, and ammunition coming from Rwanda have provided important support to Ntaganda and his forces, Human Rights Watch said. The support has helped them hold their military positions on the hills of Runyoni, Tshanzu, and Mbuzi, and surrounding villages, against military assaults from the Congolese army (see map). Providing weapons and ammunition to Ntaganda's mutiny contravenes the United Nations Security Council arms embargo on Congo, which stipulates that all states shall "take the necessary measures to prevent the direct or indirect supply, sale or transfer, from their territories or by their nationals [...] of arms and any related materiel, and the provision of any assistance, advice or training related to military activities [...] to all non-governmental entities and individuals operating in the territory of the Democratic Republic of the Congo." Rwandan officials also permitted Ntaganda and members of his forces to enter Rwanda on a number of recent occasions to evade capture, to elude attacks by Congolese armed forces, or to seek military support for their mutiny. On May 26, witnesses saw Ntaganda in Kinigi, Rwanda, meeting with a Rwandan military officer at Bushokoro bar. Kinigi is Ntaganda's home town and he retains family connections there. Human Rights Watch found no evidence that Rwandan officials tried to arrest Ntaganda while he was in Rwanda. When contacted for comment, the spokesperson for the Rwanda Defence Force referred Human Rights Watch to a May 28 public statement by the Rwandan foreign minister that denied any involvement in eastern Congo. "Permitting Ntaganda to move in and out of Rwanda without fear of arrest sends a message that Rwanda is not serious about helping deliver justice to victims of the war crimes he and his troops have committed," Van Woudenberg said. "Rwanda's allies should insist that Rwanda help end impunity in the region, not encourage it." In addition to being sought on an ICC arrest warrant, Ntaganda is on a United Nations Security Council sanctions list, barring him from any travel outside Congo. Under the UN sanctions, Rwanda âˆ' like other countries âˆ' is obligated to "take the necessary measures to prevent the entry into or transit through their territories of all persons" on the sanctions list. Ntaganda, a powerful general in the Congolese army, began his mutiny in eastern Congo at the end of March, following government attempts to weaken his control and increased calls for his arrest for alleged war crimes. He was joined by an estimated 300 to 600 troops in Masisi territory, North Kivu province, and at least 149 children and young men recruited by force around Kilolirwe. Ntaganda's forces were defeated and pushed out of Masisi by the Congolese army in early May. On May 3, another Congolese army officer, Col. Sultani Makenga, began a separate mutiny in eastern Congo. Makenga had previously served with Ntaganda in the National Congress for the Defense of the People (CNDP), a former Rwandan-backed rebel group responsible for numerous atrocities against civilians in Congo. A spokesman for Makenga said in a news release on May 6 and in an interview with Human Rights Watch that Makenga was not with Ntaganda, and that his mutiny - known as M23 in reference to the March 23, 2009 peace agreement between the CNDP and the Congolese government - was intended to highlight the grievances of the Tutsi ethnic group and conditions in the Congolese army. But mutineers who have escaped or defected told Human Rights Watch that the two mutinies are not separate, and that Ntaganda and Makenga operate together from the Runyoni area. These witnesses told Human Rights Watch that Ntaganda remained in overall command of the forces. Ntaganda has publicly denied being in Runyoni. On May 29, he told the BBC's Kinyarwanda radio service that he was in Masisi territory, and denied fighting alongside Makenga's M23 forces. His claims are contradicted by numerous witnesses interviewed by Human Rights Watch who saw him in the Runyoni area in May. The United Nations peacekeeping mission in Congo, MONUSCO, has also gathered information about recruitment for Ntaganda's forces in Rwanda. On May 28, the BBC reported on a leaked UN internal report saying that 11 Rwandan citizens, one of them a child, had gone to a UN base, saying they had been recruited under false pretenses in Rwanda to join Ntaganda's forces. The Rwandan government has denied providing support to Ntaganda's forces. In a public statement on May 28, in response to the BBC report, the Rwandan foreign minister, Louise Mushikiwabo, said the reports were "categorically false and dangerous." In a statement on May 31, Mushikiwabo accused MONUSCO of "spreading false rumours aimed at aggravating the volatile situation in Eastern DRC,"and further asserted, "The irresponsible words of lobbies like Human Rights Watch are no less dangerous than bullets or machetes." "Arming Ntaganda enables further grave abuses by a man already wanted for war crimes," Van Woudenberg said. "The Rwandan government should investigate the serious allegations of support for Ntaganda by its military officials and help the Congolese government arrest and transfer him to the ICC." Recruitment in Rwanda Human Rights Watch interviewed 23 people who escaped or defected from Ntaganda's mutiny after the mutineers arrived in Rutshuru in early May, as well asother witnesses to abuses, Congolese civilian and military officials, members of Ntaganda's forces, UN officials, and other sources. These included nine people recruited in Rwanda, seven in Congo, and one in Uganda, all Rwandan civilians; two Congolese children recruited in Congo; and four Congolese defectors who had initially joined the mutiny but later changed their minds. Interviewed separately, the witnesses said that hundreds of people recruited in Rwanda were among Ntaganda's forces. Those recruited in Rwanda were either recruited by force or under false pretences that they would earn money or join the Rwandan army. Some were demobilized former combatants from the Democratic Forces for the Liberation of Rwanda (FDLR), a largely Rwandan Hutu rebel group operating in Congo. Others were civilians with no previous military training. According to some accounts, a number of those forcibly recruited were children under 18. Several of those recruited in Rwanda described being taken by force from roadsides and markets near the towns of Musanze (formerly called Ruhengeri) and Kinigi in Musanze district, northwestern Rwanda, to Kinigi military camp. Others were recruited in Mudende sector in Rubavu district. Kinigi hosts a large Rwandan military presence as well as the headquarters of Volcanoes National Park, from where mountain gorilla tours are launched. The military presence in Kinigi helps protect the important tourism trade. Two Rwandan civilians from Musanze district, ages 19 and 22, told Human Rights Watch that Rwandan soldiers forcibly took them from a street-side cinema in the early evening around May 19. Soldiers rounded up about 30 young men and boys who were watching a film and forced them into a truck, the two young men said. Another 31-year-old Rwandan recruit told Human Rights Watch he was taken by Rwandan soldiers in late April from Kinigi market, where he had gone in search of food. Soldiers brought him to a Rwandan military position with about 30 other civilians. Former FDLR fighters said they were told by demobilization coordinators or other former fighters to attend meetings for demobilized combatants, which they did in the hope of receiving financial support or finding employment. They told Human Rights Watch that they reported directly to a military camp in Kinigi. At the military camp, Rwandan soldiers provided weapons and ammunition to the new recruits before dividing them into groups of about 40 to 75. Carrying the weapons and ammunition, the recruits were then forced to march through the national park to the Congolese border, escorted by Rwandan soldiers. At the border, the Rwandan military escorts handed over the new recruits to waiting Ntaganda forces, who then escorted them to Runyoni in Congo. "From Kinigi, 40 Rwandan army soldiers escorted us into the forest," one of the recruits who later escaped told Human Rights Watch. "In total there were 54 of us, including 15 under 18 years old and 10 who were less than 15 years old. Some of us carried grenades. Others carried boxes of ammunition, and bigger people like me carried the 'Mututu gun,' a big machine gun that four of us carried together on a log." When the new recruits arrived in Runyoni, those with military training were quickly deployed to front-line positions to fight the Congolese army. Some civilian recruits received basic military training, such as how to use a gun, and then were also deployed to front lines. Others were ordered to build shelters, prepare food, fetch water or steal food and other belongings from homes in the largely abandoned villages around Runyoni. One Rwandan civilian recruit told Human Rights Watch: "After we brought the ammunition to Runyoni, they [the mutineers] gave us guns and told us to go fight. There wasn't any training. They just showed us how to use a gun and shoot. I myself then went to the front." In most instances described to Human Rights Watch, the Rwandan soldiers returned to Kinigi military camp after handing over the recruits to Ntaganda's forces. Recruits told Human Rights Watch that, on several occasions, however, Rwandan soldiers continued with them to Runyoni and participated in combat operations alongside Ntaganda's forces, sometimes after changing into Congolese army uniforms. A Rwandan civilian recruited in Musanze around May 19 told Human Rights Watch: "We saw many other Rwandan army soldiers [in Runyoni] too. I don't know how many. When they arrived, they took off their Rwandan army uniforms and put on the uniform of the mutineers." He was able to identify one of the Rwandan soldiers by name as he knew him as an officer who had served in his home town in Rwanda. Summary Executions of Recruits Those who tried to flee Ntaganda's forces or refused to work or fight because they were tired faced severe penalties. Based on accounts collected by Human Rights Watch, some of them were summarily executed. One Rwandan civilian who was forcibly recruited told Human Rights Watch: "I saw six people who were killed because they tried to flee. They were shot dead, and I was ordered to bury their bodies. All of us wanted to flee to the government troops, but many of us didn't know how and we were scared." He later escaped when those guarding him were sheltering from a rainstorm. A Rwandan civilian recruited while herding cows in Masisi, eastern Congo in April by Col. Baudouin Ngaruye, an officer close to Ntaganda, told Human Rights Watch that he witnessed Colonel Ngaruye order his escorts to kill seven recruits with an agapfuni (small hammer). "Some of the civilians were tired because of the long distance we had to walk," he said. "So Colonel Baudouin gave the order to kill them." In another case, a witness told Human Rights Watch that Colonel Makenga ordered him to kill three people who had tried to flee and were caught. "We killed them with the agapfuni. We tied them up first and then killed them. One was about 25 years old, one 18, and the third about 20. Four of us got the order to kill them. Then we buried them there in Runyoni." A number of officers who joined Ntaganda's mutiny, including Colonel Makenga, Colonel Ngaruye, Col. Innocent Zimurinda and Col. Innocent Kayna, have past records of serious human rights abuses in eastern Congo. Human Rights Watch, UN human rights monitors, and local human rights organizations have documented ethnic massacres, torture, abductions, widespread sexual violence, and forced recruitment of children committed by these individuals while they were rebel group commanders or officers in the Congolese army. Rebel Leaders Visit Rwanda Unhindered Apart from Ntaganda's visit to Rwanda on May 26, described above, other former Congolese army officers who have joined the mutiny, such as Colonel Makenga, have been to Rwanda since the mutiny began, according to witnesses interviewed by Human Rights Watch, who saw them cross the border, communicate and meet with Rwandan military officers. Soldiers who joined the mutiny but later defected told Human Rights Watch that, on May 3, Colonel Makenga defected from Goma with a group of soldiers loyal to him. Upon leaving Goma, the small force crossed the border into Rwanda at an unofficial crossing north of the city and traveled along the Rwandan side of the border until they reached a Rwandan military position. The following day, the witnesses said, Makenga met with Rwandan military officials and received weapons, ammunition, and other supplies. They were then escorted by Rwandan soldiers to the Karisimbi volcano area, where they crossed the border back into Congo. In the following days, Makenga was joined by Ntaganda's forces from Masisi. On May 11, the mutineers began a military assault on Runyoni, and after defeating a small unit of Congolese army soldiers based there, set up their main military position. Passing through Rwanda not only gave Makenga the opportunity to get military supplies, it also meant that his forces could avoid interception by Congolese soldiers by not travelling along Congolese roads and footpaths. Attacks by the FDLR Since Ntaganda and his forces began their mutiny in late March, numerous areas in North and South Kivu have been taken over by other armed groups, most notably by the FDLR, a largely Rwandan Hutu rebel group operating in eastern Congo, composed in part of individuals who took part in the 1994 genocide in Rwanda. The FDLR and other militias were able to take new ground when soldiers joined Ntaganda's mutiny and abandoned their military positions, leaving villages and towns, such as Pinga, Nyabiondo, Mpati, and Kivuye in North Kivu unprotected. The Congolese army focused its efforts on defeating the mutiny rather than taking back these locations from the FDLR and their allies. The arrival of the FDLR and other groups in areas previously defended by the Congolese army has resulted in numerous attacks on civilians whom the FDLR has accused of collaborating with their enemies. The attacks have been particularly severe in Kalehe territory, South Kivu, as well as the Ufumandu area of Masisi territory, North Kivu, where FDLR fighters with machetes and knives have brutally massacred dozens of civilians, including many children. In revenge, a local defense group, known as Raia Mutomboki, has attacked wives and children of FDLR fighters. Background on the ICC Arrest Warrant Ntaganda has been sought on an ICC arrest warrant since August 2006 on charges of war crimes for recruiting and using child soldiers in active combat in 2002 and 2003 in the northeastern district of Ituri, when he commanded another armed group. In March, the ICC in its first case found Ntaganda's co-accused, Thomas Lubanga, guilty of the war crime of recruiting and using child soldiers. Despite the ICC warrant, the Congolese government integrated Ntaganda into its army and in 2009 promoted him to the rank of general. Until his mutiny, Ntaganda moved about freely in eastern Congo, playing tennis and dining at top restaurants in Goma in full view of Congolese government officials, UN peacekeepers, and foreign diplomats. No efforts were made to arrest him, although he continued to commit human rights abuses, many of which were documented by Human Rights Watch, including targeted killings, rape, torture, and recruitment of child soldiers. Following Ntaganda's mutiny, President Joseph Kabila suggested, on April 11 during a public speech in Goma, that the Congolese government was considering arresting Ntaganda. In the weeks that followed, senior Congolese military and government authorities told Human Rights Watch that Kabila had issued an instruction for Ntaganda's arrest. The order for his arrest signified an important change in the Congolese government's policy toward Ntaganda, whom the government had previously insisted was needed for the country's peace process. On May 14, the ICC prosecutor formally requested additional charges for Ntaganda of crimes against humanity for his alleged role in murder, persecution based on ethnic grounds, rape, sexual slavery, and pillaging in connection with his activities in eastern Congo's Ituri district in 2002-2003. Rwanda: Govt Should Stop Aiding War Crimes Suspect - Congolese Renegade General Bosco Ntaganda Receives Recruits and Weapons From Rwanda 3 June 2012 press release Government of Rwanda Goma — Rwandan military officials have been arming and supporting the mutiny in eastern Democratic Republic of Congo (DRC) of Gen. Bosco Ntaganda, who is wanted for war crimes by the International Criminal Court (ICC), Human Rights Watch said today. Rwandan military officials have allowed Ntaganda to enter Rwanda and supplied him with new recruits, weapons, and ammunition. Ntaganda is sought on an ICC arrest warrant for recruiting and using child soldiers. "The role played by some Rwandan military officials in supporting and harboring an ICC war crimes suspect can't just be swept under the rug," said Anneke Van Woudenberg, senior Africa researcher at Human Rights Watch. "The Rwandan government should immediately stop all support to Ntaganda and assist in his arrest." Field research conducted by Human Rights Watch in the region in May 2012 revealed that Rwandan army officials have provided weapons, ammunition, and an estimated 200 to 300 recruits to support Ntaganda's mutiny in Rutshuru territory, eastern Congo. The recruits include civilians forcibly recruited in Musanze and Rubavu districts in Rwanda, some of whom were children under 18. Witnesses said that some recruits were summarily executed on the orders of Ntaganda's forces when they tried to escape. Relevant Links Fears of War With Rwanda Rattle DRC Youth Rwanda Denies Fuelling War in East Thousands of Refugees Fleeing Violence Enter Uganda - UN U.S. Accused of Blocking UN Report on 'Rwanda Fueling Congo Violence' Nation Is Not to Blame for DRC's Woes - Kagame One Rwandan, forcibly recruited into Ntaganda's forces and who later escaped, told Human Rights Watch, "I saw six people who were killed because they tried to flee. They were shot dead, and I was ordered to bury their bodies." Witnesses told Human Rights Watch that weapons provided to Ntaganda's forces by Rwandan military officials included Kalashnikov assault rifles, grenades, machine guns, and anti-aircraft artillery. New recruits brought these weapons to Runyoni in eastern Congo, the main base of the mutiny. The recruits, weapons, and ammunition coming from Rwanda have provided important support to Ntaganda and his forces, Human Rights Watch said. The support has helped them hold their military positions on the hills of Runyoni, Tshanzu, and Mbuzi, and surrounding villages, against military assaults from the Congolese army (see map). Providing weapons and ammunition to Ntaganda's mutiny contravenes the United Nations Security Council arms embargo on Congo, which stipulates that all states shall "take the necessary measures to prevent the direct or indirect supply, sale or transfer, from their territories or by their nationals [...] of arms and any related materiel, and the provision of any assistance, advice or training related to military activities [...] to all non-governmental entities and individuals operating in the territory of the Democratic Republic of the Congo." Rwandan officials also permitted Ntaganda and members of his forces to enter Rwanda on a number of recent occasions to evade capture, to elude attacks by Congolese armed forces, or to seek military support for their mutiny. On May 26, witnesses saw Ntaganda in Kinigi, Rwanda, meeting with a Rwandan military officer at Bushokoro bar. Kinigi is Ntaganda's home town and he retains family connections there. Human Rights Watch found no evidence that Rwandan officials tried to arrest Ntaganda while he was in Rwanda. When contacted for comment, the spokesperson for the Rwanda Defence Force referred Human Rights Watch to a May 28 public statement by the Rwandan foreign minister that denied any involvement in eastern Congo. "Permitting Ntaganda to move in and out of Rwanda without fear of arrest sends a message that Rwanda is not serious about helping deliver justice to victims of the war crimes he and his troops have committed," Van Woudenberg said. "Rwanda's allies should insist that Rwanda help end impunity in the region, not encourage it." In addition to being sought on an ICC arrest warrant, Ntaganda is on a United Nations Security Council sanctions list, barring him from any travel outside Congo. Under the UN sanctions, Rwanda âˆ' like other countries âˆ' is obligated to "take the necessary measures to prevent the entry into or transit through their territories of all persons" on the sanctions list. Ntaganda, a powerful general in the Congolese army, began his mutiny in eastern Congo at the end of March, following government attempts to weaken his control and increased calls for his arrest for alleged war crimes. He was joined by an estimated 300 to 600 troops in Masisi territory, North Kivu province, and at least 149 children and young men recruited by force around Kilolirwe. Ntaganda's forces were defeated and pushed out of Masisi by the Congolese army in early May. On May 3, another Congolese army officer, Col. Sultani Makenga, began a separate mutiny in eastern Congo. Makenga had previously served with Ntaganda in the National Congress for the Defense of the People (CNDP), a former Rwandan-backed rebel group responsible for numerous atrocities against civilians in Congo. A spokesman for Makenga said in a news release on May 6 and in an interview with Human Rights Watch that Makenga was not with Ntaganda, and that his mutiny - known as M23 in reference to the March 23, 2009 peace agreement between the CNDP and the Congolese government - was intended to highlight the grievances of the Tutsi ethnic group and conditions in the Congolese army. But mutineers who have escaped or defected told Human Rights Watch that the two mutinies are not separate, and that Ntaganda and Makenga operate together from the Runyoni area. These witnesses told Human Rights Watch that Ntaganda remained in overall command of the forces. Ntaganda has publicly denied being in Runyoni. On May 29, he told the BBC's Kinyarwanda radio service that he was in Masisi territory, and denied fighting alongside Makenga's M23 forces. His claims are contradicted by numerous witnesses interviewed by Human Rights Watch who saw him in the Runyoni area in May. The United Nations peacekeeping mission in Congo, MONUSCO, has also gathered information about recruitment for Ntaganda's forces in Rwanda. On May 28, the BBC reported on a leaked UN internal report saying that 11 Rwandan citizens, one of them a child, had gone to a UN base, saying they had been recruited under false pretenses in Rwanda to join Ntaganda's forces. The Rwandan government has denied providing support to Ntaganda's forces. In a public statement on May 28, in response to the BBC report, the Rwandan foreign minister, Louise Mushikiwabo, said the reports were "categorically false and dangerous." In a statement on May 31, Mushikiwabo accused MONUSCO of "spreading false rumours aimed at aggravating the volatile situation in Eastern DRC,"and further asserted, "The irresponsible words of lobbies like Human Rights Watch are no less dangerous than bullets or machetes." "Arming Ntaganda enables further grave abuses by a man already wanted for war crimes," Van Woudenberg said. "The Rwandan government should investigate the serious allegations of support for Ntaganda by its military officials and help the Congolese government arrest and transfer him to the ICC." Recruitment in Rwanda Human Rights Watch interviewed 23 people who escaped or defected from Ntaganda's mutiny after the mutineers arrived in Rutshuru in early May, as well asother witnesses to abuses, Congolese civilian and military officials, members of Ntaganda's forces, UN officials, and other sources. These included nine people recruited in Rwanda, seven in Congo, and one in Uganda, all Rwandan civilians; two Congolese children recruited in Congo; and four Congolese defectors who had initially joined the mutiny but later changed their minds. Interviewed separately, the witnesses said that hundreds of people recruited in Rwanda were among Ntaganda's forces. Those recruited in Rwanda were either recruited by force or under false pretences that they would earn money or join the Rwandan army. Some were demobilized former combatants from the Democratic Forces for the Liberation of Rwanda (FDLR), a largely Rwandan Hutu rebel group operating in Congo. Others were civilians with no previous military training. According to some accounts, a number of those forcibly recruited were children under 18. Several of those recruited in Rwanda described being taken by force from roadsides and markets near the towns of Musanze (formerly called Ruhengeri) and Kinigi in Musanze district, northwestern Rwanda, to Kinigi military camp. Others were recruited in Mudende sector in Rubavu district. Kinigi hosts a large Rwandan military presence as well as the headquarters of Volcanoes National Park, from where mountain gorilla tours are launched. The military presence in Kinigi helps protect the important tourism trade. Two Rwandan civilians from Musanze district, ages 19 and 22, told Human Rights Watch that Rwandan soldiers forcibly took them from a street-side cinema in the early evening around May 19. Soldiers rounded up about 30 young men and boys who were watching a film and forced them into a truck, the two young men said. Another 31-year-old Rwandan recruit told Human Rights Watch he was taken by Rwandan soldiers in late April from Kinigi market, where he had gone in search of food. Soldiers brought him to a Rwandan military position with about 30 other civilians. Former FDLR fighters said they were told by demobilization coordinators or other former fighters to attend meetings for demobilized combatants, which they did in the hope of receiving financial support or finding employment. They told Human Rights Watch that they reported directly to a military camp in Kinigi. At the military camp, Rwandan soldiers provided weapons and ammunition to the new recruits before dividing them into groups of about 40 to 75. Carrying the weapons and ammunition, the recruits were then forced to march through the national park to the Congolese border, escorted by Rwandan soldiers. At the border, the Rwandan military escorts handed over the new recruits to waiting Ntaganda forces, who then escorted them to Runyoni in Congo. "From Kinigi, 40 Rwandan army soldiers escorted us into the forest," one of the recruits who later escaped told Human Rights Watch. "In total there were 54 of us, including 15 under 18 years old and 10 who were less than 15 years old. Some of us carried grenades. Others carried boxes of ammunition, and bigger people like me carried the 'Mututu gun,' a big machine gun that four of us carried together on a log." When the new recruits arrived in Runyoni, those with military training were quickly deployed to front-line positions to fight the Congolese army. Some civilian recruits received basic military training, such as how to use a gun, and then were also deployed to front lines. Others were ordered to build shelters, prepare food, fetch water or steal food and other belongings from homes in the largely abandoned villages around Runyoni. One Rwandan civilian recruit told Human Rights Watch: "After we brought the ammunition to Runyoni, they [the mutineers] gave us guns and told us to go fight. There wasn't any training. They just showed us how to use a gun and shoot. I myself then went to the front." In most instances described to Human Rights Watch, the Rwandan soldiers returned to Kinigi military camp after handing over the recruits to Ntaganda's forces. Recruits told Human Rights Watch that, on several occasions, however, Rwandan soldiers continued with them to Runyoni and participated in combat operations alongside Ntaganda's forces, sometimes after changing into Congolese army uniforms. A Rwandan civilian recruited in Musanze around May 19 told Human Rights Watch: "We saw many other Rwandan army soldiers [in Runyoni] too. I don't know how many. When they arrived, they took off their Rwandan army uniforms and put on the uniform of the mutineers." He was able to identify one of the Rwandan soldiers by name as he knew him as an officer who had served in his home town in Rwanda. Summary Executions of Recruits Those who tried to flee Ntaganda's forces or refused to work or fight because they were tired faced severe penalties. Based on accounts collected by Human Rights Watch, some of them were summarily executed. One Rwandan civilian who was forcibly recruited told Human Rights Watch: "I saw six people who were killed because they tried to flee. They were shot dead, and I was ordered to bury their bodies. All of us wanted to flee to the government troops, but many of us didn't know how and we were scared." He later escaped when those guarding him were sheltering from a rainstorm. A Rwandan civilian recruited while herding cows in Masisi, eastern Congo in April by Col. Baudouin Ngaruye, an officer close to Ntaganda, told Human Rights Watch that he witnessed Colonel Ngaruye order his escorts to kill seven recruits with an agapfuni (small hammer). "Some of the civilians were tired because of the long distance we had to walk," he said. "So Colonel Baudouin gave the order to kill them." In another case, a witness told Human Rights Watch that Colonel Makenga ordered him to kill three people who had tried to flee and were caught. "We killed them with the agapfuni. We tied them up first and then killed them. One was about 25 years old, one 18, and the third about 20. Four of us got the order to kill them. Then we buried them there in Runyoni." A number of officers who joined Ntaganda's mutiny, including Colonel Makenga, Colonel Ngaruye, Col. Innocent Zimurinda and Col. Innocent Kayna, have past records of serious human rights abuses in eastern Congo. Human Rights Watch, UN human rights monitors, and local human rights organizations have documented ethnic massacres, torture, abductions, widespread sexual violence, and forced recruitment of children committed by these individuals while they were rebel group commanders or officers in the Congolese army. Rebel Leaders Visit Rwanda Unhindered Apart from Ntaganda's visit to Rwanda on May 26, described above, other former Congolese army officers who have joined the mutiny, such as Colonel Makenga, have been to Rwanda since the mutiny began, according to witnesses interviewed by Human Rights Watch, who saw them cross the border, communicate and meet with Rwandan military officers. Soldiers who joined the mutiny but later defected told Human Rights Watch that, on May 3, Colonel Makenga defected from Goma with a group of soldiers loyal to him. Upon leaving Goma, the small force crossed the border into Rwanda at an unofficial crossing north of the city and traveled along the Rwandan side of the border until they reached a Rwandan military position. The following day, the witnesses said, Makenga met with Rwandan military officials and received weapons, ammunition, and other supplies. They were then escorted by Rwandan soldiers to the Karisimbi volcano area, where they crossed the border back into Congo. In the following days, Makenga was joined by Ntaganda's forces from Masisi. On May 11, the mutineers began a military assault on Runyoni, and after defeating a small unit of Congolese army soldiers based there, set up their main military position. Passing through Rwanda not only gave Makenga the opportunity to get military supplies, it also meant that his forces could avoid interception by Congolese soldiers by not travelling along Congolese roads and footpaths. Attacks by the FDLR Since Ntaganda and his forces began their mutiny in late March, numerous areas in North and South Kivu have been taken over by other armed groups, most notably by the FDLR, a largely Rwandan Hutu rebel group operating in eastern Congo, composed in part of individuals who took part in the 1994 genocide in Rwanda. The FDLR and other militias were able to take new ground when soldiers joined Ntaganda's mutiny and abandoned their military positions, leaving villages and towns, such as Pinga, Nyabiondo, Mpati, and Kivuye in North Kivu unprotected. The Congolese army focused its efforts on defeating the mutiny rather than taking back these locations from the FDLR and their allies. The arrival of the FDLR and other groups in areas previously defended by the Congolese army has resulted in numerous attacks on civilians whom the FDLR has accused of collaborating with their enemies. The attacks have been particularly severe in Kalehe territory, South Kivu, as well as the Ufumandu area of Masisi territory, North Kivu, where FDLR fighters with machetes and knives have brutally massacred dozens of civilians, including many children. In revenge, a local defense group, known as Raia Mutomboki, has attacked wives and children of FDLR fighters. Background on the ICC Arrest Warrant Ntaganda has been sought on an ICC arrest warrant since August 2006 on charges of war crimes for recruiting and using child soldiers in active combat in 2002 and 2003 in the northeastern district of Ituri, when he commanded another armed group. In March, the ICC in its first case found Ntaganda's co-accused, Thomas Lubanga, guilty of the war crime of recruiting and using child soldiers. Despite the ICC warrant, the Congolese government integrated Ntaganda into its army and in 2009 promoted him to the rank of general. Until his mutiny, Ntaganda moved about freely in eastern Congo, playing tennis and dining at top restaurants in Goma in full view of Congolese government officials, UN peacekeepers, and foreign diplomats. No efforts were made to arrest him, although he continued to commit human rights abuses, many of which were documented by Human Rights Watch, including targeted killings, rape, torture, and recruitment of child soldiers. Following Ntaganda's mutiny, President Joseph Kabila suggested, on April 11 during a public speech in Goma, that the Congolese government was considering arresting Ntaganda. In the weeks that followed, senior Congolese military and government authorities told Human Rights Watch that Kabila had issued an instruction for Ntaganda's arrest. The order for his arrest signified an important change in the Congolese government's policy toward Ntaganda, whom the government had previously insisted was needed for the country's peace process. On May 14, the ICC prosecutor formally requested additional charges for Ntaganda of crimes against humanity for his alleged role in murder, persecution based on ethnic grounds, rape, sexual slavery, and pillaging in connection with his activities in eastern Congo's Ituri district in 2002-2003. Huge deposits of rare earth minerals discovered in Pacific Ocean Jul. 4, 2011 (3:30 pm) By: Matthew Humphries Every time someone goes out and buys a new TV, laptop, iPad, Android smartphone, or any such device they are using up some of our rare earth minerals which these gadgets require to work. They are called rare not because there is only a small amount on earth, but because the deposits are small and therefore require a lot of mining to recover very little. Another problem exists in the fact China holds about 97% of the rare earth mineral market, and it decides how much exits the country. This pushes up prices and makes it more difficult for companies outside of China to not only manufacture enough devices, but also to keep the costs of those gadgets competitive. It will come with great relief then, to hear that Japanese researchers have found very rich deposits of rare earth minerals as well as the metal yttrium. In total around 26 sites located in the international waters of the Pacific Ocean have been found to have high concentrations buried between 3,500 and 6,000 meters beneath the sea bed. Tantalum: used as metal powder coating for capacitors in PCs, smartphone, automotive electronics The deposits are so rich they are thought to increase our reserves by 1000x. Current reserves are estimated at 110 million tonnes, but this new discovery adds another 100 billion tons. Not only does this take the pressure off in terms of finding alternatives in the near future, the locations of the deposits near Hawaii and Tahiti means the reliance on Chinese exports will be removed. Prices should fall and competition will not be influenced by a lack of supply. Most importantly for geeks out there, this assures future supplies meaning companies like Apple, Samsung, Sony, and HTC can continue to supply us with the latest gadgets on a regular basis. Is The World Heading For A Massive Economic Meltdown? By Michael Snyder on March 5, 2011 | More Posts By Michael Snyder | Author's Website It is not just the United States that is headed for an economic collapse. The truth is that the entire world is heading for a massive economic meltdown and the people of earth need to be warned about the coming economic disaster that is going to sweep the globe. The current world financial system is based on debt, and there are alarming signs that the gigantic global debt bubble is getting ready to burst. In addition, global prices for the key resources that the major economies of the planet depend on are rising very rapidly. Despite all of our advanced technology, the truth is that human civilization simply cannot function without oil and food. But now the price of oil and the price of food are both increasing dramatically. So how is the current global economy supposed to keep functioning properly if it soon costs much more to ship products between continents? How are the billions of people that are just barely surviving today supposed to feed themselves if the price of food goes up another 30 or 40 percent? For decades, most of the major economies around the globe have been able to take for granted that massive amounts of cheap oil and massive amounts of cheap food will always be there. So what happens when that paradigm changes? At last check, the price of U.S. crude was over 104 dollars a barrel and the price of Brent crude was over 115 dollars a barrel. Many analysts fear that if the crisis in Libya escalates or if the chaos in the Middle East spreads that we could see the all-time record of 147 dollars a barrel broken by the end of the year. That would be absolutely disastrous for the global economy. But it isn't just the chaos in the Middle East that is driving oil prices. The truth is that oil prices have been moving upwards for months. The recent revolutions in the Middle East have only accelerated the trend. Let's just hope that the "day of rage" being called for in Saudi Arabia later this month does not turn into a full-blown revolution like we have seen in other Middle Eastern countries. The Saudis keep a pretty tight grip on their people, but at this point anything is possible. A true revolution in Saudi Arabia would send oil prices into unprecedented territory very quickly. But even without all of the trouble in the Middle East the world was already heading for an oil crunch. The global demand for oil is rising at a very vigorous pace. For example, last year Chinese demand for oil increased by almost 1 million barrels per day. That is absolutely staggering. The Chinese are now buying more new cars every year than Americans are, and so Chinese demand for oil is only going to continue to increase. Much could be done to increase the global supply of oil, but so far our politicians and the major oil company executives are sitting on their hands. They seem to like the increasing oil prices. So for now it looks like oil prices will continue to rise and this is going to result in much higher prices at the gas pump. Already, ABC News is reporting that regular unleaded gasoline is going for $5.29 a gallon at one gas station in Orlando, Florida. The U.S. economy in particular is vulnerable to rising oil prices because our entire economic system is designed around cheap gasoline. If the price of gas goes up to 5 or 6 dollars a gallon and it stays there it is going to have a catastrophic effect on the U.S. economy. Just remember what happened back in 2008. The price of oil hit an all-time high of $147 a barrel and then a few months later the entire financial system had a major meltdown. Well, as the price of oil rises it is going to create a whole lot of imbalances in the global financial system once again. This is definitely a situation that we should all be watching. But it is not just the price of oil that could cause a global economic disaster. The global price of food could potentially be even more concerning. As you read this, there are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less. Those people cannot afford for food prices to go up much. But global food prices are rising. According to the United Nations, the global price of food has risen for 8 consecutive months. Last month, the global price of food set a brand new all-time record high. Many are starting to fear that we could actually be in the early stages of a major global food crisis. The price of just about every major agricultural commodity has been absolutely soaring during the past year…. *The price of corn has doubled over the last six months. *The price of wheat has more than doubled over the past year. *The price of soybeans is up about 50% since last June. *The price of cotton has more than doubled over the past year. *The commodity price of orange juice has doubled since 2009. *The price of sugar is the highest it has been in 30 years. Unfortunately, the production of food in most countries around the world is very highly dependent on oil, so as oil goes up in price this is going to make the food crisis even worse. Hold on to your hats folks. Also, as I have written about previously, the world is facing some very serious problems when it comes to water. Due to the greed of the global elite, there is not nearly enough fresh water to go around. The following are some very disturbing facts about the global water situation…. *Worldwide demand for fresh water tripled during the last century, and is now doubling every 21 years. *According to USAID, one-third of all humans will face severe or chronic water shortages by the year 2025. *Of the 60 million people added to the world's cities every year, the vast majority of them live in impoverished slums and shanty-towns with no sanitation facilities whatsoever. *It is estimated that 75 percent of India's surface water is now contaminated by human and agricultural waste. *Not only that, but according to a UN study on sanitation, far more people in India have access to a mobile phone than to a toilet. *In northern China, the water table is dropping one meter per year due to overpumping. These days, one of the trendy things to do is to call water "the oil of the 21st century", but unfortunately that is not a completely inaccurate statement. Fresh, clean water is something that we all need, but right now world supplies are getting tight. Our politicians and the global elite could be doing something about this if they really wanted to, but right now they seem perfectly fine with what is happening. On top of everything else, the sovereign debt crisis is worse than it has ever been before. All of the major global central banks have been feverishly printing money in an attempt to "paper over" this crisis, but it is not going to work. Most Americans don't realize it, but right now the continent of Europe is a financial basket case. Greece and Ireland would have imploded already if they had not been bailed out, and now Portugal is on the verge of collapse. The interest rate on Portugal's 10-year notes has now been above 7% for about 3 weeks, and most analysts believe that it is only a matter of time before they are forced to accept a bailout. Sadly, if the entire global economy experiences a slowdown because of rising oil prices, we could see half a dozen European nations default on their debts if they are not bailed out. For now the Germans seem fine with bailing out the weak sisters that are all around them, but that isn't going to last forever. A day or reckoning is coming for Europe, and when it arrives the reverberations are going to be felt all across the face of the earth. The euro is on very shaky ground already, and whether or not it can survive the coming crisis is an open question. Of course there are some very serious concerns about Asia as well. The national debt of Japan is now well over 200% of GDP and nobody seems to have a solution for their problems. Up to this point, Japan has been able to borrow massive amounts of money at extremely low interest rates from their own people, but that isn't going to last forever either. As I have written about so many times before, the biggest debt problem of all is the United States. Barack Obama is projecting that the federal budget deficit for this fiscal year will be a new all-time record 1.65 trillion dollars. It is expected that the total U.S. national debt will surpass the 15 trillion dollar mark by the end of the fiscal year. Shouldn't we have some sort of celebration when that happens? 15 trillion dollars is quite an achievement. Most Americans cannot even conceive of a debt that large. If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt. But the United States is not alone. The truth is that wherever you look, there is a sea of red ink covering the planet. The current global financial system is entirely based on debt. If the total amount of debt does not continually expand, the system will crash. If somehow a way was found to keep this system going perpetually (which is impossible), the size of global debt would keep on increasing infinitely. Now the World Economic Forum says that we need to grow the total amount of debt by another 100 trillion dollars over the next ten years to "support" the anticipated amount of "economic growth" around the world that they expect to see. The entire global financial system is a gigantic Ponzi scheme. It is designed to keep everyone enslaved to perpetual debt. If at some point the debt spiral gets interrupted in some significant way, we are going to witness an economic disaster that is going to make what happened in 2008 look like a Sunday picnic. The more research that one does on the current global economic situation, the more clear it becomes that we are absolutely doomed. So people of earth you had better get ready. An economic disaster is coming. Gold surges to record, biggest daily gain since 09 Posted on May 20 2012 NEW YORK: Gold prices surged 3 per cent to an all-time high late in New York session on Thursday, the biggest one-day rise since early 2009, as the dollar slumped a day after the Federal Reserve unleashed a second round of monetary easing. Silver rose 6 per cent to its highest level since 1980, palladium was up 4 percent at a 9-1/2-year peak and platinum reached its strongest price since 2008. "The dollar got hammered, and a lot of people are concerned that we are headed for the winds of inflation. It's a perfect storm for gold today," said Bill O'Neill, partner of New Jersey-based commodities firm LOGIC Advisors. Investors now turn their attention to Friday, when the U.S. nonfarm payrolls report will show the state of the world's largest economy, and the Bank of Japan will announce a rate decision, after its asset-buyback plan last month rocked global markets. Spot gold rose 3.4 per cent to a record of $ 1,393.16 an ounce. It later was up 3.3 per cent at $ 1,391.39 an ounce at 4:19 p.m. EDT (2019 GMT). US gold futures for December delivery settled up $ 45.50 at $ 1,383.10, with trading volume at about 250,000 lots, sharply above its 250-day moving average, preliminary Reuters data showed. The Fed's move, its second round of quantitative easing, stripped almost 1 per cent off the value of the dollar against a basket of currencies, triggering a broad-based precious metals rally. The inverse link between gold and the dollar strengthened after the Fed announcement, Reuters data showed, with the hourly correlation between the two tightened to peak at a negative 0.66 on Thursday. "The relationship between the dollar and gold remains a very strong one and the recent move post-QE is a dollar-related move more than anything else," said RBS commodities strategist Daniel Major. "It's pretty constructive on a near-term basis, provided the market continues to trade gold very closely to moves in the currency." The Federal Reserve committed $ 600 billion to buy government bonds late on Wednesday in a fresh effort to support a struggling US economy, undermining the US currency and stoking fears over longer-term inflation. Gold benefited as a hedge against a weaker dollar and inflation. The dollar's third successive fall brought its losses this week to 1.5 percent as the market concluded that the Fed's move spelled more dollar supply that would be likely to weigh it down further. Weakness in the greenback tends to benefit dollar-priced commodities as it cuts their cost for other currency holders, but it benefits gold in particular as the metal can be bought as an alternative asset to the currency. "There is definitely going to be some more fallout from what has been announced," said Credit Suisse analyst Tom Kendall. "Clearly this is contributing to the bearishness on the U.S. dollar, and that is bullish for all commodities, not just gold." Currency analysts are waiting to see what the broader implications of the Fed's move will be in what is still a heavy news week on the macroeconomic front. WEAK DOLLAR BOOSTS COMMODITIES The US dollar slumped on Thursday, hitting a 28-year low against the Australian currency and a more than nine-month trough against the euro, as a Federal Reserve decision to buy more Treasuries pushed US yields lower and prompted investors to seek returns elsewhere. The Fed's commitment to open-ended purchases of Treasuries, implying low funding costs, brings into focus an expected increased use of the dollar in carry trades in which the U.S. dollar is used to fund purchases in commodities, emerging markets and higher-yielding currencies. On the physical side of the gold market, Indian demand was strong because of the Hindu festivals of the Dhanteras, which celebrates prosperity, and the Diwali festival of light. Silver rose to a 30-year high at $ 26.26 an ounce, tracking gains in gold. It was up 5.6 percent at $ 26.19 at last trade. Palladium rallied to its strongest since May 2001, lifted by strength in gold and expectations its underlying fundamentals will improve as demand from automakers recovers and supply struggles to keep pace. Palladium peaked at $ 679.50 an ounce and traded up 4.4 per cent at $ 678.97 an ounce. Platinum rose to a two-year high at $ 1,788.74 an ounce and it climbed 4.5 per cent to $ 1,747.74 an ounce at last. Markets-The Economic Times

Kenyan Pm currently St.Petersburg with Putin, Russian president. Now, some genus will still doubt if that was an official trip, still others will demand to know who will foot hotel accommodation bills. Shenzi types! Read below, With Russian President Vladimir Putin at St. Petersberg at the International Economic Forum in Russia. http://t.co/75anXKUj -- Raila Amolo Odinga (@RailaOdinga) Mark