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China has stepped up computer espionage against the US government and American businesses, according to a Washington congressional panel. In its annual report to Congress, the panel warned that China was gaining increasing access to sensitive information from US computer networks. It said China was aggressively pursuing cyber-warfare capabilities to gain an advantage over the US in any conflict. There has been no comment so far from the Chinese on the report. The US-China Economic and Security Review Commission was set up by Congress in 2000 to advise, investigate and report on US-China issues. Its report said the US government and economy were critically vulnerable to cyber-space attack since both depended heavily on computers and the internet. The panel of six Democrats and six Republicans said China would continue to target the US using cyberspace as it was cheaper than traditional activities. Another advantage, they say, is that determining who infiltrated computer networks is often difficult to establish. “China is stealing vast amounts of sensitive information from US computer networks,” said Larry Wortzel, chairman of the commission. More

The Congressman discusses the G-20 summit taking place in Washington this weekend that will address the global monetary system. “What’s coming up is the internationalization of a central bank. They would like to come up with one central bank for the world to replace the dollar standard. The dollar standard is coming to an end. The Chinese and even the British now are getting together with the Europeans and saying what we need is new reserve currency….”

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Adirondack Daily Enterprise.com
Top international military officials meet in Adirondacks
POSTED: October 18, 2008
SARANAC LAKE - Powerful generals and admirals from some of the most powerful nations on Earth are reportedly meeting somewhere in the local area this weekend after flying into the Adirondack Regional Airport in Lake Clear on Friday.

Among the passengers of a large Boeing 757 airplane with “United States of America” printed on its fuselage were top members of the U.S. Joint Chiefs of Staff and their counterparts from France, Germany and another country, possibly Great Britain, according to Barry DeFuria, a town of Harrietstown councilman and Airport Committee member who was there when the plane landed. A top military delegation from Italy flew in on a separate Falcon airplane, DeFuria said.

Town Supervisor Larry Miller, also on the Airport Committee, was also there and confirmed which nations’ officials were on which planes, but he said he did not know what kind of officials they were or where they were going from the airport. He said he and DeFuria had to get security clearances to be present and that soldiers were guarding the 757 around the clock at the airport.

The Joint Chiefs of Staff is the leadership council of the U.S. military, comprised of the top general or admiral of each branch of the armed services. Its current chairman is Admiral Michael Mullen.

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So What Were Top Military Commanders From The US and Europe Doing at the Trudeau Institute?

Dead Scientists DO Tell Tales

JIM KUNSTLER
“Presto Change-o”
…despite British PM Gordon Brown’s fatuous suggestion that we are ready to formalize it. The world is about to lose its “flatness” (sorry Tom Friedman) and get much rounder. For one thing, the racket of American “consumers” gobbling up the output of Asian factories in exchange for paper promises is over. For the moment, the Chinese are struggling with epic factory closures with the sudden prospect of a restive lumpenproletariet. The situation there is bound to get worse. Before long, these broke-and-hungry masses may actually challenge the present government. In the meantime, there’s no telling what the (unelected) Chinese government might do either to keep itself in power, or genuinely defend its country’s perceived economic interests. One thing is self-evident: we are not returning to the old racket of toys-for-treasury-bills. One thing China might do in economic self-defense is shed whatever US dollar-denominated paper is moldering in their vaults before it becomes valueless altogether.

As global trade relations wither, and they will, the US will be thrust back on its own devices, at the same time that oil resources grow punishingly scarce. Mr. Obama will have to contend with the necessary radical reform of all the activities necessary for daily life here. Near the top of the list — invisible to most of the public so far — will be the question of how we produce the food we need. Industrial farming is done, just as suburbia is toast. Mr. Obama will have to apply plenty of ass-time to the first stages of negotiating this bottleneck. I don’t even know what he can do policy-wise, though he can certainly make it plain to the public that we have to grow more of our food close to home and do it with fewer engines and fewer oil-based soil supplements. It is a problem of such surpassing difficulty that it was not even close to being in the election arena. The transition will probably occur by means of “emergence.” Self-evident necessity will prompt different behavior and different ways of doing things. Sooner or later, the new arrangements will self-organize — if we don’t squander resources defending an unsustainable status quo. One thing we can certainly predict is that growing our food will require more human labor and attention — meaning there will be plenty of work for people currently losing their jobs at The Footlocker and Arby’s, but it’s far from certain whether they will be happy in their new vocations.

We’re going to have to resume making things in the USA again….More

Bloomberg — China’s manufacturing contracted by the most on record last month as the global financial crisis cut demand for exports, a second survey showed. The CLSA China Purchasing Managers’ Index fell to a seasonally adjusted 45.2 in October from 47.7 in September, CLSA Asia-Pacific Markets said today in an e-mailed statement. A government-backed survey, released on Nov. 1, also showed a record contraction, adding to concern that the world’s fastest-growing economy may slump. Australia also reported today that manufacturing shrank by a record, as the crisis rips across the Asia Pacific. “The very sharp fall in the October PMI confirms that China is more integrated into the global economy than ever,” said Eric Fishwick, head of economic research at CLSA in Singapore. “Chinese manufacturers are seeing their order books cut, both at home and abroad, as the world economy falls into recession.” More

From the Toronto Resource Investment Conference, Dr. Jim Willie talks to Al Korelin.
“I got word in the last 24 hours that the Europeans, Russians, Chinese and Arabs, have agreed to a new world currency. It’s going to be based on a basket and the dollar and British Pound are not included. Those currencies are going to be largely tethered to gold. There’s going to be a new Russian gold-backed Rubel and a new Arab-Gulf Dinar. You cannot have a global finance system with a world reserve currency based on a debt system or an indebted economy…you have to ask yourself who is calling the shots, who is forcing decisions? The answer is the Bank for International Settlements which has had enough of the United States.”

New York Times
Ten central government departments, including the powerful Ministry of Finance, “misused or embezzled” more than $660 million last year, according to the latest report from China’s top auditor. The report, part of a long-running crackdown on government fraud, said 88 people had been arrested, 14 officials had been referred for prosecution and an additional 104 government employees had been punished for their roles in mismanaging or embezzling government funds, state media reported Thursday. Liu Jiayi, the nation’s top auditor, said in the report that a further $6 billion in government funds had been “mismanaged” last year, and that fraud had been detected in dozens of government bureaus, including the Ministry of Education, the National Bureau of Statistics, the Ministry of Health, the Chinese Academy of Sciences and the State Administration of Radio, Film and Television. Even the State Administration of Taxation was accused of fraud. More

As of today, there should be no remaining doubts as to the tectonic shift in the global economy — the world’s largest and most profitable bank is Chinese. While banks in North America and Europe are still counting massive credit crunch losses, Industrial and Commercial Bank of China has surged ahead of its international competitors thanks to a booming domestic economy that has dramatically boosted profits. More

It Is Time
The Automatic Earth
The main development in financial markets in the past 6 months, bar none, has been the accelerated influx of taxpayers’ money into the US and EU economies, in an alleged but highly suspect attempt to “save” financial markets. Today, August 21 2008, marks another such watershed moment that I simply have to call. A number of developments come together to mark the moment.. I think I first realized it fully when Fannie Mae and Freddie Mac share prices were rising this morning. There is no reason for that, and it won’t last. But it does shine a blindingly clear light on other things: Their shares went up because everything else is worse.

The main development may be that foreigners are no longer willing to buy US debt paper, at least not in the way they have until now. Lehman, one of the oldest, best connected and largest US investment banks, until recently, tried to sell 50% of itself to foreign funds. They refused to buy. 6 months ago, it would have been unthinkable to offer 50% of such an institution to a Chinese fund. Congress would have forbidden it. Today, there’s no such protest. Just a “Thanks, but No, Thanks” from the Chinese. Moreover, there’s a avalanche of reports on the desperate situation at the other investments giants, Goldman Sachs and Morgan Stanley. Waiting in the wings are the commercial banks, with Citigroup teetering toward oblivion.

Fannie and Freddie are long beyond salvation; the only reason they haven’t been liquidated to date is politics, the same kind that allows Ford and General Motors to pose as going concerns. But neither Washington nor the Federal Reserve could possibly save the US financial system anymore, even if they wanted to, something I question. The number of institutions being hurled into the black abyss is increasing so fast, they wouldn’t know where to start anymore. The game in town is saving the Hampton estates and the Learjets with tax revenue funds. It’s a game the market makers are good at. The only consolation for the US is that the entire planet is incredibly shrinking into a credit crunch the likes of which nobody’s ever even dreamed of.

Mark Faber claims Asian current account surpluses (and I’d add: holdings of foreign debt) will lose 50% of their value in the next few months, and I think he’s dead on (though I doubt it’ll boost the US dollar). Also, the European Central Bank can’t prop up EU banks any longer, and that will turn ugly, especially in Spain where Don Quixote is set to meet Franco in Guernica. What has changed recently, and certainly today, is that the respected media now start saying the same things I’ve been warning about for a long time. So the only consolation for me is that I’ve been right about it all, and all along.

JAY: Minqi, can you give us some examples of what you say are a rising disparity or these social tensions? Give us some facts, some statistics on them, that give us a picture of what’s happening in general.

LI: Between 1 percent or 5 percent of Chinese population controlling about 70 percent of all of the financial wealth, as far as I can recall correctly. And it’s also interesting that a few days earlier I read a commentary article on The Financial Times, which says why China’s middle class does not like democracy. Now, it’s written by an American who—basically, he is arguing that the Chinese middle class—. The middle class actually a misnomer in the Chinese context. It’s actually about the most privileged 15 percent of population. And they would, in fact quite be concerned, given China’s context, that if you do have democracy in China, they would be outvoted by the lower classes in China. So that’s the—you know, give you some idea about the situation in China today. More

AL Jazeera—Thousands of people have rioted in Wengan county in southwest China’s Guizhou province, accusing the police of a cover-up after the death of a local girl. More than 10,000 people ransacked and torched government office buildings on Saturday, the Hong Kong-based Information Centre for Human Rights and Democracy said. The riots began after officials said that the 16-year-old committed suicide by jumping into a river. However, many locals have suggested that she was raped and murdered. She was believed to have last been seen nine days ago with three men, two of them relatives of high-ranking government officials. The violence escalated after the girl’s uncle, who had protested against the conclusion of the police investigation, was reportedly beaten to death on Saturday. More

WASHINGTON — A U.S. congressman said Wednesday the FBI has found that four of his government computers have been hacked by sources working out of China. Representative Frank Wolf, a Virginia Republican, said that similar incidents — also originating from China — have taken place on computers of other members of the House and at least one House committee.

A spokesman for Wolf said the four computers in his office were being used by staff members working on human rights issues and that the hacking began in August 2006. Wolf is a long-time critic of the Chinese government’s human rights record. The congressman suggested the problem probably goes further. “If it’s been done in the House, don’t you think that they’re doing the same thing in the Senate?” he asked. More

Photo Savannah Grandfather
Warmongering on the planet isn’t good enough for mankind. Let’s extend our warring nature to outerspace. There’s no hope for our species.

The United States and other Western nations have criticised China’s efforts to build a presence in space, especially a test in January 2007 when it shot down one of its own aged satellites.

But in a book issued by the state-run China Arms Control and Disarmament Association, two People’s Liberation Army (PLA) experts said Washington’s bid for enduring security domination in outer space was pressing Beijing and other powers into competition, even confrontation.

“Strategic confrontation in outer space is difficult to avoid. The development of outer space forces shows signs that a space arms race to seize the commanding heights is emerging,” wrote Wu Tianfu of the Second Artillery Corps Command College. The Corps controls China’s nuclear arsenal. “We can say that weaponisation of outer space… is already unstoppable.” More

Modern apartment buildings and schools crumbled, smoothly paved highways buckled and bridges collapsed — their flimsy construction no match for the awesome forces of nature.

John Chan
WSWS
Although the earthquake is a natural disaster, the extent of the destruction and death has exposed the monstrous reality of an irrational social order that puts private profit ahead of the safety and well being of people. Anger is mounting at the shoddy character of the buildings in the impoverished towns and villages and the stark inequality between rich and poor.

At least nine schools and two hospitals were flattened in Sichuan. The death of school children has focussed resentment on “tofu” buildings—substandard constructions that look good on the outside but are like soybean curd on the inside. Limited safety regulations are often subverted by corrupt collusion between developers and government officials. An online comment cited in the Los Angeles Times yesterday asked: “Why did so many schools collapse but all the government buildings were fine? It’s outrageous!” Read more