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Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages. That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies’ credit. “We’re probably in the first inning of the commercial mortgage problem,” said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey. That’s bad news for more than just property owners. When businesses go dark, employees lose jobs. Towns lose tax revenue. School budgets and social services feel the pinch.

Companies have survived plenty of downturns, but economists see this one playing out like never before. In the past, when businesses hit rough patches, owners negotiated with banks or refinanced their loans. But many banks no longer hold the loans they made. Over the past decade, banks have increasingly bundled mortgages and sold them to investors. Pension funds, insurance companies, and hedge funds bought the seemingly safe securities and are now bracing for losses that could ripple through the financial system. More

J. R. Nyquist says,
These were the words of a Soviet diplomat, speaking anonymously to Pravda in late July. A few days prior to this statement, at a meeting of Russian ambassadors convened by President Dmitry Medvedev, Moscow launched a new diplomatic offensive to push the United States out of Europe. A war between Russia and Georgia would provide the catalyst. Europe’s attention would be galvanized. Special negotiations between Moscow and Berlin, Moscow and Paris, Moscow and Rome, could move forward, and new security arrangements announced for the whole of Europe. The United States would be depicted as an irritant in otherwise good relations between Russia and Berlin. In the process, Washington would be gradually isolated.

In his November 5 address to the Federal Assembly, President Medvedev spoke of “long-term economic” plans, including the modernization of Russia’s armed forces. “Events of great significance for each one of us in this country, I am sure, have taken place,” he underscored, “events that have also been a serious test for all of Russia.” He was referring to Russia’s military incursion into Georgia, prepared over a period of many months. Russia’s disinformation campaign has now succeeded in obscuring the fact that Russia planned to invade Georgia for many months. Russian agents in South Ossetia goaded a Georgian over-reaction that would justify a Russian “counter-reaction.

This last sentence is the key phrase in Medvedev’s Address to the Russian Federal Assembly. The destabilization of the foundations of the world order is Moscow’s objective. It is not the result of the war in Georgia, but the reason for initiating it. Since the Kremlin planned the war months in advance, since it was not a spontaneous reaction to Tbilisi’s “aggression,” since the South Ossetians were the ones who provoked the Georgians into action for the sake of justifying a Russian “reaction,” the destabilization of the world order was in view from the outset. Such is the Russian strategic plan. Destabilization opens a pathway to a Russian-dominated world, where American power is neutralized once and for all. Listen carefully to the words of the Russian president: “The global financial crisis also began as a ‘local crisis’ on the U.S. domestic market. As the biggest developed economy, tightly linked to the markets in all the developed countries, when the U.S. economy began to slide it pulled financial markets all around the globe with it in its fall. This crisis has now become global in scale.” More

Ramzy Baroud
Bush’s last bullet: Why the U.S. attacked Syria
The sovereignty of an independent, stable country that has carried out many constructive moves in recent months and weeks, which could have surely contributed to the stabilization of the Middle East, has been violated, its borders breached, and its civilians killed. But when the country targeted is Syria, an Arab country, and the perpetrator is the U.S. military, then, somehow things are not as appalling as they may seem. The U.S. raid on a small farming community near the Iraq-Syria border on October 26 is being treated differently than the Russian attack on Georgia in August 2008. The latter was vehemently condemned by every last leading U.S. official, who specifically decried Russia’s violation of international law, laws governing the sovereignty of nations, and the destabilization of a whole region. Few in the U.S. government, and fewer in the ever-willing mainstream media, dared offer any alternative reading to what truly triggered the conflict. For example, Georgia’s initial violent attacks on South Ossetia, killing many Russian citizens and peacekeepers, seemed a negligible fact.

The Syria case, where a dozen U.S. commandos killed eight Syrian civilians, including a father and his four sons, is somehow an entirely different story. Georgia is an ally of the U.S.; Syria is not. Georgia was armed and trained largely by U.S.-Israeli weapons and military experts; Syria is a key recipient of Russian weapons. Georgia was used as another U.S. foothold in an extremely strategic and rich region; Syria is a safe haven for the political leaderships of various Palestinian groups that continue to fight the Israeli occupation. Georgia is serving the essential role of tightening the geopolitical belt around Russia; Syria’s strong relationship with Iran is rather complicating U.S. efforts to tightly control Iraq.

Considering the Bush doctrine — not just the part about preemptive war and rationalizing torture, but the fact that it ranks U.S. interests above international law and regards U.S. actions with different standards than those of any other nation — one hardly needs to infuse UN resolutions that forbid actions like bombing a quiet village inside some other country’s borders. It is simply ‘irrelevant’, a term that is dear to President Bush, for that is how he wished to delineate his government’s view of the UN for refusing to give him the green light to invade Iraq. More

Alpha Bank and Trust, Alpharetta, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume the insured deposits of Alpha Bank & Trust. The two branches of Alpha Bank & Trust will open on Monday, October 27, 2008 as Stearns Bank, N.A. Depositors of the failed bank will automatically become depositors of Stearns Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

Over the weekend, customers of Alpha Bank & Trust can access their insured deposits by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of September 30, 2008, Alpha Bank & Trust had total assets of $354.1 million and total deposits of $346.2 million. Stearns Bank did not pay the FDIC a premium for the right to assume the failed bank’s insured deposits. More

A prominent human rights group says Georgia has admitted dropping cluster bombs in its military offensive to assert control over the restive province of South Ossetia. Human Rights Watch says it has received an official letter from Georgia’s Defense Ministry that acknowledges use of the M85 cluster munition near the Roki tunnel that connects South Ossetia with Russia. More

Julie Hyland and Chris Marsden
A build-up of naval forces is underway in the Black Sea, involving both NATO and Russian ships. The provocative actions by the US-lead military coalition create the danger of a clash with potentially catastrophic consequences. Late last week, General Anatoly Nogovitsyn, deputy chief of the Russian military’s general staff, claimed that 10 NATO warships were in the Black Sea and that more were on the way. “In light of the build-up of NATO naval forces in the Black Sea, the [Russian] fleet has also taken on the task of monitoring their activities,” he said.

The ships include two US warships, ostensibly in the region to deliver humanitarian aid to Georgia. These have since been joined by a third. In addition, NATO admitted that four of its vessels are on a “pre-planned deployment” in the Black Sea, “conducting port visits with Romanian and Bulgarian forces”. The “long-planned routine” exercise Active Endeavor—which is said to involve training in anti-terrorist and anti-pirate manoeuvres—comprises one warship each from Spain, Germany and Poland. They were reportedly later joined by a US frigate for a three-week schedule of port visits and exercises.

While denying a build-up, a NATO spokesperson said that other NATO countries may have ships in the sea. “Obviously, there are other NATO-affiliated nations out doing things,” Lt. Col. Web Wright said. These reports confirm that at least six NATO vessels are in the Black Sea, meaning that Russian warnings that warships from the western alliance now outnumber their own fleet anchored off the western coast of Georgia are not as far off the mark as is claimed. Russia has charged the US with using aid as a cover for rearming Georgia. “Normally warships do not deliver aid and this is gunboat diplomacy, this does not make the situation more stable,” said Russian foreign minister Sergei Lavrov.

The New York Times August 28 admitted the US was “pursuing a delicate policy of delivering humanitarian aid on military transport planes and ships, apparently to illustrate to the Russians that they do not fully control Georgia’s airspace or coastline.”More

Aug. 29 (Bloomberg) — Integrity Bank of Alpharetta, Georgia, was closed by U.S. regulators today, the 10th bank to collapse this year amid a surge in soured real-estate loans stemming from the worst housing slump since the Great Depression. Integrity Bank, with $1.1 billion in assets and $974 million in deposits, was shuttered by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corp. Regions Financial Corp., Alabama’s biggest bank, will assume all deposits from Integrity, which was run by Integrity Bancshares Inc. The failed bank’s five offices will open on Sept. 2 as branches of Regions, the FDIC said. “Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance,” the FDIC said.

Banks are being closed at the fastest pace in 14 years as financial companies report more than $505 billion in writedowns and credit losses since 2007. California lender IndyMac Bancorp Inc., which had $32 billion in assets, was closed July 11 in the third-largest bank seizure, contributing to a 14 percent drop in the U.S. deposit insurance fund that had $45.2 billion at the end of the in the second quarter. More

Couriermail.com
THE Georgian parliament today urged the government to cut diplomatic ties with Russia, as it declared that two breakaway regions were now “occupied” by Russian forces. The parliament’s move was the latest decision from Tbilisi aimed at increasing diplomatic pressure on Russia after Moscow infuriated the West by recognising the independence of South Ossetia and Abkhazia. MPs unanimously approved a resolution that “orders the executive power to cut diplomatic ties with the Russian Federation” after a debate carried live on Georgian television. Referring to Moscow’s insistence that its forces in the two regions are merely peacekeepers, it said: “Russian armed forces, including so-called peacekeepers, are declared as occupying armed forces.” The Georgian foreign ministry yesterday announced that it was downgrading diplomatic ties with Russia by recalling all but two of its diplomats from Moscow. More

RUSSIA today won support from China and Central Asian states in its standoff with the West over the Georgia conflict as the European Union said it was weighing sanctions against Moscow. Russia’s President Dmitry Medvedev said he hoped the “united position” of a summit of Central Asian nations would “serve as a serious signal to those who try to turn black into white.” The West has strongly condemned Russia’s military offensive in Georgia this month and Medvedev’s decision to recognise the breakaway Georgian regions of Abkhazia and South Ossetia as independent states. Ratcheting up pressure on Russia, French Foreign Minister Bernard Kouchner, whose country holds the presidency of the European Union, said the 27-nation bloc was preparing sanctions on Moscow. More

Shaun Walker in Tblisi
Russia’s relations with the West have plunged to a new low after President Dmitry Medvedev signed a decree officially recognising two breakaway territories in Georgia as independent states. “We are not afraid of anything, including the prospect of a new Cold War,” said Mr Medvedev, after signing the decree in defiance of the US and Europe. The decision, marking a U-turn for Russian policy, was swiftly condemned by Western leaders who urged Russia to reverse the “highly provocative” decree which violates international law.

The foreign secretary, David Miliband, who is flying to Kiev today (wed) to demonstrate the West’s solidarity with Ukraine – which like Georgia has been invited to become an eventual Nato member – said he was consulting partners to ensure “the widest possible coalition against Russian aggression on Georgia.” Although aides would not speculate on possible sanctions against Moscow, Mr Miliband is expected to argue in a speech today that Russia will be judged by its actions and “there will be consequences,” said one.

The US secretary of state, Condoleezza Rice, described the decision as “regrettable” and warned that it would be “dead on arrival” at the UN. The decree accused Georgia of “genocide” in South Ossetia and said that Georgian President Mikheil Saakashvili’s actions had left Russia with no other option but to recognise the independence of both South Ossetia and Abkhazia. “This is a difficult choice, but it is the only chance to save peoples’ lives,” it read. Both houses of the Russian parliament on Monday voted unanimously in favour of recognising independence for Georgia’s two breakaway states, but Mr Medvedev was urged by the West to refrain from officially recognising them. More

Russian lawmakers have voted unanimously to ask the president to recognise the independence of Georgia’s two rebel provinces, a move likely to anger the United States, the European Union and other Georgian allies. Russia has raised the stakes in the political fallout over its war with Georgia, as both houses of the Russian parliament voted unanimously to recognise the independence of South Ossetia and Abkhazia. The final decision on whether to recognise Georgia’s two breakaway regions as independent countries will be taken by Russian President Dmitry Medvedev. The vote on a resolution came as the last Russian soldiers still inside Georgia proper showed no sign of pulling out, and a military spokesman in Moscow said that Russian peacekeepers would from now on check all cargo unloaded at Georgia’s Black Sea port of Poti. More

Russia’s envoy to NATO, Dmitry Rogozin, has called off a meeting of the Russia-NATO council due to follow today’s Brussels meeting of the foreign ministers of the 26 members of the alliance to discuss the situation in Georgia. Rogozin also warned of Russia possibly reconsidering its relations with NATO if its members take a biased stand on the Georgia-South Ossetia conflict. He specifically emphasised that if NATO chooses to take such a position, Russia will not be able to maintain the high level and quality of Russia-NATO relations, and the blame for the collapse of the current global security system would fall on Washington and its allies. More

Georgian ministers reported that there was no evidence that the Russian military had started to move back for forward positions deep in Georgian territory. “Unfortunately, we see no signs that the Russians are starting to pull out or even preparing to withdraw from Georgia,” said the interior ministry spokesman Shota Utiashvili. President Nicolas Sarkozy of France had apparently secured a firm pullback pledge from his Russian counterpart Dmitry Medvedev on Sunday, but the commitment did not translate through to the ground. The Russian president warned today that any new aggression against Russian citizens would be met with a “crushing response.” “If anyone thinks that they can kill our citizens and escape unpunished, we will never allow this. If anyone tries this again, we will come out with a crushing response,” Mr Medvedev told World War Two veterans in the Russian city of Kursk. More

On the night of November 22, 2004, then-Russian president - now premier - Vladimir Putin watched the television news in his dacha near Moscow. People who were with Putin that night report his anger and disbelief at the unfolding “Orange” revolution in Ukraine. “They lied to me,” Putin said bitterly of the United States. “I’ll never trust them again.” The Russians still can’t fathom why the West threw over a potential strategic alliance for Ukraine. They underestimate the stupidity of the West.

American hardliners are the first to say that they feel stupid next to Putin. Victor Davis Hanson wrote on August 12 [1] of Moscow’s “sheer diabolic brilliance” in Georgia, while Colonel Ralph Peters, a columnist and television commentator, marveled on August 14 [2], “The Russians are alcohol-sodden barbarians, but now and then they vomit up a genius … the empire of the czars hasn’t produced such a frightening genius since [Joseph] Stalin.” The superlatives recall an old observation about why the plots of American comic books need clever super-villains and stupid super-heroes to even the playing field. Evidently the same thing applies to superpowers. The fact is that all Russian politicians are clever. The stupid ones are all dead. By contrast, America in its complacency promotes dullards. More

Itamar Rabinovitch
Now that the fighting in Georgia has died down, policy shapers and pundits in the West are free to analyze the maneuvers and results, and draw lessons. The picture that emerges is a dismal one. Vladimir Putin’s Russia exercised brutal force with the object of bringing a rebellious neighbor to its knees. The United States, which encouraged Georgian President Mikheil Saakashvili to defy Moscow, did not give him any real support. Former Soviet republics and satellites will now think twice before confronting Russia, or will be tempted to seek shelter beneath the cover of the U.S., NATO or the European Union. Oil is now much less likely to reach the Caspian Sea without Russia’s involvement.

The Georgian crisis will have specific repercussions on the Middle East. There is less of a chance that the United States and Russia will be cooperating to stop Iran’s nuclear program. There is a greater chance that Russia will wage a more ambitious and aggressive policy, including selling advanced weapons systems to Iran and Syria. There will also be a host of indirect repercussions. In this context, there is a striking similarity between the Russian move in the Caucasus, and Iran and Syria’s move in Lebanon. More

Mark Ames
The Nation
Five days after Georgia invaded and seized the breakaway separatist region of South Ossetia, sparking a larger-scale Russian invasion to drive Georgian forces back and punish their leaders, Russia surprised its Western detractors by calling a halt to the country’s offensive. After all, the mainstream media, egged on by hawkish neocon pundits and their candidate John McCain, had everyone believing that Russia was hellbent on the full-scale annihilation and annexation of democratic Georgia.

But then came Tuesday’s cease-fire announcement-and we’re now forced to ask ourselves serious questions about the recent conflict: what really started it, how dangerous was it and what, with serious careful consideration, could be done to prevent it from turning into a worst-case scenario?

Up until now, this war was framed as a simple tale of Good Helpless Democratic Guy Georgia versus Bad Savage Fascist Guy Russia. In fact, it is far more complex than this, morally and historically. Then there are two concentric David and Goliath narratives here. The initial war pitted the Goliath Georgia-a nation of 4.4 million, with vastly superior numbers, equipment and training thanks to US and Israeli advisers-against David-Ossetia, with a population of between 50,000-70,000 and a local militia force that is barely battalion strength. Reports coming out of South Ossetia tell of Georgian rockets and artillery leveling every building in the capital city, Tskhinvali, and of Georgian troops lobbing grenades into bomb shelters and basements sheltering women and children. Although true casualty figures are hard to come by, reports that up to 2,000 Ossetians, mostly civilians, were killed are certainly believable, given the intensity of the initial Georgian bombardment, the wanton destruction of the city and surrounding regions and the generally savage nature of Caucasus warfare, a very personal game where old rules apply.

But you don’t hear about this story from the Western media. Indeed, you hear little if anything about the Ossetians, who seem to hardly exist in the West’s eyes, even though their grievance is the root cause of this war.

While Russia and America see the conflict in abstract terms about spheres of influence and protecting allies, for Ossetians, who still recall the centuries of massacres Georgians committed against them, it is highly personal. They will still recall the Georgian massacres in the early 1920s, when Georgia was briefly independent, which exterminated up to 8 percent of the Ossetian population. In 1990, when Georgia was again moving towards independence, the ultranationalist leader Zviad Gamsakhurdia abolished Ossetia’s limited autonomy, leading to another Ossetian rebellion that was only quelled by a peace agreement signed by Georgia, Russia and the Ossetians. Gamsakhurdia was subsequently deposed, and Georgia’s ethnic chauvinism was shelved until the rise of current president Mikhail Saakashvili in 2003.

Ossetians have traditionally relied on their powerful northern neighbor Russia for protection against Georgia. The Georgians, in turn, have tried to counter Russian hegemony, for which they are no match, by aligning closely with the United States, finding friendly ears among old cold warriors and Bush-era neocons.

When he first rose to prominence, the American-educated Saakashvili was often referred to as “Georgia’s Vladimir Zhirinovsky”-the Russian ultranationalist firebrand who once promised to retake Alaska. Although Saakashvili was subsequently rebranded as a Euro-democrat, he promised to reunite Georgia and bring his separatist regions to heel, by force if necessary, whether the aggrieved ethnic groups liked it or not.

At the root of this conflict is a clash of two twentieth-century guiding principles in international relations. Georgia, backed by the West, is claiming its right as a sovereign nation to control the territory within its borders, a guiding principle since World War II. The Ossetians are claiming their right to self-determination, a guiding principle since World War I.

These two guiding concepts for international relations-national sovereignty and the right to self-determination-are locked in a zero-sum battle in Georgia. Sometimes, the West takes the side of national sovereignty, as it is in the current war; other times, it sides with self-determination and redrawing of national borders, such as with Kosovo. More

Michael Klare
In commenting on the war in the Caucasus, most American analysts have tended to see it as a throwback to the past: as a continuation of a centuries-old blood feud between Russians and Georgians, or, at best, as part of the unfinished business of the Cold War. Many have spoken of Russia’s desire to erase the national “humiliation” it experienced with the collapse of the Soviet Union 16 years ago, or to restore its historic “sphere of influence” over the lands to its South. But the conflict is more about the future than the past. It stems from an intense geopolitical contest over the flow of Caspian Sea energy to markets in the West. More

Reuters) - Russia said on Friday its forces had seized U.S.-made weapons from a Georgian military base near the town of Senaki, but added there had been no gunfire in Georgia in the past 24 hours. “Our forces have seized 1,728 arms in Senaki,” Colonel-General Anatoly Nogovitsyn, deputy head of Russia’s General Staff, told a news conference. More

Dr. George Friedman
The Russian invasion of Georgia has not changed the balance of power in Eurasia. It simply announced that the balance of power had already shifted. The United States has been absorbed in its wars in Iraq and Afghanistan, as well as potential conflict with Iran and a destabilizing situation in Pakistan. It has no strategic ground forces in reserve and is in no position to intervene on the Russian periphery. This, as we have argued, has opened a window of opportunity for the Russians to reassert their influence in the former Soviet sphere. Moscow did not have to concern itself with the potential response of the United States or Europe; hence, the invasion did not shift the balance of power. The balance of power had already shifted, and it was up to the Russians when to make this public. They did that Aug. 8.

The United States is Georgia’s closest ally. It maintained about 130 military advisers in Georgia, along with civilian advisers, contractors involved in all aspects of the Georgian government and people doing business in Georgia. It is inconceivable that the Americans were unaware of Georgia’s mobilization and intentions. It is also inconceivable that the Americans were unaware that the Russians had deployed substantial forces on the South Ossetian frontier. U.S. technical intelligence, from satellite imagery and signals intelligence to unmanned aerial vehicles, could not miss the fact that thousands of Russian troops were moving to forward positions. The Russians clearly knew the Georgians were ready to move. How could the United States not be aware of the Russians? Indeed, given the posture of Russian troops, how could intelligence analysts have missed the possibility that the Russians had laid a trap, hoping for a Georgian invasion to justify its own counterattack? It is very difficult to imagine that the Georgians launched their attack against U.S. wishes. More

Russia is making it abundantly clear that the US and NATO had both been warned to not push this NATO membership and arming of Georgia. What was the US response? Israel just kept pouring in weapons and preparing the Georgian military (and mercs and advisors) for this war, along with the US. You can bet that is why the KGB (FSB) was in Georgia to see what these greedy Zionist zhids and the US were up to. More

Russia’s invasion of neighboring Georgia has raised doubts about the security of oil and gas pipelines that cross through the former Soviet republic and the wisdom of further investment in the transport lines. The foray also put an emphatic stamp on Russia’s growing influence over the region’s natural resources and, by proxy, over Europe. The pipelines, supplying about 1% of the world’s daily oil needs, have not been damaged by the fighting, but the prospect of that led pipeline part-owner BP to shut down one of the oil lines as a precaution Tuesday. A second oil export line has been out of commission since last week because of a fire in Turkey.

“The Russians have clearly demonstrated their military capability of getting very close to the pipelines,” said Edward Chow, an energy expert at Washington’s Center for Strategic and International Studies. “And they also sent the Black Sea fleet off the Georgian coast, so they also have demonstrated that they can blockade Georgia anytime they want.” The pipelines begin in Azerbaijan and pass through Georgian territory en route to ports on the Black Sea and the Mediterranean Sea, where tankers take the crude mostly to Western Europe.

Chow worries about whether transit lines through Georgia will remain secure in the long run and whether additional foreign investment would be safe. Russia is an energy giant on two continents through the state-controlled Gazprom, its largest company. Gazprom produces 85% of the nation’s natural gas, controls 17% of the world’s reserves and is a major supplier to countries across Central Asia and Europe. More

CHRISTOPHER TORCHIA
GORI, Georgia - Russia’s foreign minister declared Thursday that the world “can forget about” Georgia’s territorial integrity, and officials said Russia targeted military infrastructure and equipment — including radars and patrol boats at a Black Sea naval base and oil hub. Georgia’s coast guard said Russian troops had burned patrol boats and destroyed radars and other equipment at the port city of Poti, home to Georgia’s main naval base and a major hub for oil exports to Europe. More

War in the Caucasus is as much the product of an American imperial drive as local conflicts. It’s likely to be a taste of things to come

Seumas Milne
The outcome of six grim days of bloodshed in the Caucasus has triggered an outpouring of the most nauseating hypocrisy from western politicians and their captive media. As talking heads thundered against Russian imperialism and brutal disproportionality, US vice-president Dick Cheney, faithfully echoed by Gordon Brown and David Miliband, declared that “Russian aggression must not go unanswered”. George Bush denounced Russia for having “invaded a sovereign neighbouring state” and threatening “a democratic government”. Such an action, he insisted, “is unacceptable in the 21st century”. Could these by any chance be the leaders of the same governments that in 2003 invaded and occupied - along with Georgia, as luck would have it - the sovereign state of Iraq on a false pretext at the cost of hundreds of thousands of lives? Or even the two governments that blocked a ceasefire in the summer of 2006 as Israel pulverised Lebanon’s infrastructure and killed more than a thousand civilians in retaliation for the capture or killing of five soldiers? More

DEBKAfile’s military sources report…Bush orders US Air Force-Navy humanitarian airlift to Georgia…US president George W. Bush ordered Wednesday, Aug. 13, after seven days of Russian-Georgian warfare, amount to a bid to break the sea, land and air blockade Russia still maintains against Georgia in violation of the EU-brokered ceasefire. The first direct US-Russian military clashes in Georgia are now possible if the Russians fail to give way when challenged by US air transports and vessels heading for Georgia. For seven days, Russia has exerted exclusive mastery of Georgia’s skies, sea and land routes. More

Moscow News,№03 2008
Russia underlined its right to a “preventive” nuclear strike this week in what military analysts interpreted as a move to introduce more clarity into the nation’s defense doctrine. The statements, made by Chief of General Staff Yuri Baluyevsky on Saturday, were followed by naval exercises in the northern Atlantic that will feature over 40 aircraft of the Air Force. Though unrelated, the developments pointed to a Russia not so much on the offensive as a one that was eager to bring its defense doctrine in line with that of the Western world and make it more up to date with contemporary military demands. More

The hypocrisy of Bush and the American media is beyond measure. Russia’s actions are dwarfed by the US invasion and ongoing wars in Iraq and Afghanistan.

Simon Jenkins
Putin would die laughing if he read this week’s American newspapers. The president, George Bush, declared the Russian invasion of Georgia “disproportionate and unacceptable”. This is taken as a put-down to the vice-president, Dick Cheney, who declared the invasion “will not go unanswered”, apparently something quite different. Bush says that great powers should not go about “toppling governments in the 21st century”, as if he had never done such a thing. Cheney says that the invasion has “damaged Russia’s standing in the world”, as if Cheney gave a damn. The lobby for sanctions against Russia is reduced to threatening to boycott the winter Olympics. Big deal.

Every student of the Caucasus has known since the fall of the Soviet empire that this part of the world was an explosion waiting to happen. The crisscrossing fault lines of ethnicity, religion and nationalism, fuelled by gas and oil, would not long survive the removal of the Red Army and communist discipline. There were too many old scores to settle, too much territory in dispute and too much wealth at stake - rivalries brilliantly portrayed in Kurban Said’s classic novel of Edwardian Azerbaijan, Ali & Nino. More

US attempts to get Georgia into NATO, coupled with its desire to erect an anti-missile defense shield in Poland and the Czech republic would give it first strike capability towards Russia. Moscow sees this as a national security threat against the sovereignty of Russia. Political economist F William Engdahl believes this is the geopolitical endgame being played out in Georgia. See Video

Robert M Cutler
The armed conflict between Russian and Georgia has further exposed the fragile position of the energy links running through the smaller country from the Caspian Sea to developed market economies.

Russian forces are placed to disrupt oil flows through the Baku-Tbilisi-Ceyhan (BTC) pipeline, which has carried Caspian Sea oil from Azerbaijan across Georgia to Turkey since 2006, and the Baku-Tbilisi-Erzerum pipeline, which opened last year and exports gas to Turkey, as well as the older Baku-Supsa “early oil” line that runs to the Georgian Black Sea coast. A fire in eastern Turkey that last week shut down the BTC pipeline, the result of a bomb claimed by the Kurdistan Workers’ Party (PKK), has been extinguished, but there will be a three-week delay in lifting Azeri oil from the Turkish terminal at Ceyhanon, on the East Mediterranean coast, as the line is inspected, repaired, and tested.

The Russian troops occupying Georgia, effectively cutting the country in half on Monday as they occupied the town of Gori on the main east-west highway and not far from the BTC pipeline, could easily prevent it reopening on schedule. Despite the supply disruption, the price of light sweet crude on the New York Mercantile Exchange declined to under US$114 in electronic trading on Monday, as traders continued to factor in decreased world demand as a result of anticipated economic contraction. Meanwhile, the Azeri state energy company SOCAR has ceased shipments to the Georgian Black Sea ports of Batumi and Kulevi and will probably declare force majeure to limit its liabilities.

As from Sunday, ships of Russia’s Black Sea fleet were blockading Georgia’s Black Sea coast, after Russian military planes had bombed and significantly damaged the oil loading terminal at Poti, which serves the Baku-Supsa line that had been used for so-called “early oil” before the BTC entered into service and was being refurbished in view of expanded capacity. More

A cluster of major pipelines pass through Georgia, some of them within a few kilometres of positions occupied by Russian forces before Moscow declared its own ceasefire on 12 August. At present, the existing Baku-Tbilisi-Erzurum pipeline (BTE) carries some six billion cubic metres of gas a year (bcm/y) to Turkey, some of which is then forwarded to Greece. As Azerbaijani gas output grows, the line should reach its full 20 bcm/y capacity. There are plans in hand to raise throughput to the line’s full 20 bcm/y capacity by about 2014, while the European Union is backing proposals for development of essentially parallel lines to carry as much as a further 30 bcm/y of gas from Turkmenistan, and perhaps Kazakhstan. More
Also See: Broader Russia-US Military Confrontation

Russiatoday.com
The United States is sending fresh supplies of weapons to Georgia from its base in the Jordanian port of Aqabah. That’s according to the Israeli newspaper – Maariv. The paper says the US began flying weapons from the transport hub on Saturday. According to Maariv, the US is hiring Russian-made freight planes belonging to UTI Worldwide Inc. to transport arms and ammunition to Georgia. The paper says the Pentagon is redirecting supplies to Tbilisi that were earmarked for Iraq. The Aqabah terminal is used by the US to supply troops in Iraq. The American military relies on the hub mainly because it’s safer to use Aqabah than Iraq’s own ports in the Persian Gulf. Georgia stocks a wide range of weapons from many sources. This is a strategic move in case Russia were to block off the channels through which it gets its military supplies.