The Big Stories of 2005

The Big Stories of 2005
by Eric Margolis

Here are what will be the big stories of 2005, according to my cloudy crystal ball:

• The killer tsunami that struck Indonesia, Sri Lanka, and India a week ago will cause years of ongoing economic damage and human tragedy. Damage to Thailand will be quickly repaired. But Indonesia and Sri Lanka, both rent by decade-old civil wars, will particularly suffer.

• The biggest problem the world faces this new year is the continuing fall of the U.S. dollar. The Bush administration's reckless spending, ruinously expensive wars in Iraq and Afghanistan (now costing as much as the Vietnam War), America's galloping trade deficit and credit spending frenzy are creating the perfect economic storm.

• Japan and China's central banks may give up trying to artificially shore up the U.S. dollar by buying U.S. currency and securities. A plunging dollar could cause foreign investors to start dumping U.S. securities and assets. The result: A potential worldwide financial crisis that could collapse the housing bubble, cause interest rates to soar, and send securities markets into freefall.

• China's banking system is a house of cards. Uncontrolled credit expansion has fuelled China's property boom and international buying spree. Banks are swamped by bad, non-performing loans made to huge, money-losing state-owned corporations. Collapse of China's insolvent banking system would threaten world financial markets.

• The U.S.-led occupation of Iraq is a disaster for all concerned. The war is slowly being lost. The big question in 2005 is if and how President George W. Bush will extricate the U.S. from this catastrophe, which is costing $6 billion US per month. The elections in Iraq four weeks from today won't resolve this huge mess.

• "Terrorism" -- the insurgency against U.S. domination of the Muslim world and its resources -- will intensify even after Osama bin Laden is killed. He has created a new, powerful ideological movement that will continue to shake the Muslim world and challenge its corrupt, autocratic rulers and their foreign masters.

• As the U.S. gets sucked ever deeper into its disastrous crusade against the Muslim world, it may -- possibly with Israel -- attack Iran's nuclear infrastructure, or invade Syria. An attack on Iran would leave the U.S. garrison in Iraq trapped amid a sea of hostile Shia -- as well as Sunnis.

• A real, viable peace between Israel and the Palestinians seems unlikely. Israel's PM Ariel Sharon already has everything he wants, and, according to U.S. National Security Adviser Brent Scowcroft, has "wrapped Bush around his little finger." So why make concessions? Palestinians will remain trapped in their giant open-air prison.

• Now that Vladimir Putin has crushed all domestic political and business opposition, his control over Russia is absolute. Only the courageous Chechen mujahadeen have resisted Putin's restoration of Kremlin autocracy. Putin is determined to rebuild the old Soviet Union. Watch for him to put increasing pressure on Ukraine in the wake of last week's election.

• The Bush-Putin alliance will strengthen. By regaining state control of Russia's oil industry, Putin is poised to become a kingpin of world oil, even an equal to the Saudi royals -- if he can raise enough cash to tap his nation's vast but remote deposits.

• The European Union, for all its growing pains, economic doldrums, and bureaucratic obesity, has replaced the United States as the world's champion of human rights and support for civilized world order. By contrast, under Bush, the U.S. has become a reactionary power devoted to protecting the status quo in league with Britain, Russia, China and India. In short, a re-run of the Holy Alliance of 1815 in which Europe's autocrats sought to protect their power and privileges, and halt the rise of bourgeois democracy.

• Look for an increasingly independent-minded Europe and China to draw closer strategically as a result of the Bush administration's aggressive policies. Russia will play both sides, backing the U.S. in its "anti-terror" campaigns, and, discreetly, China, in opposing U.S. influence in East Asia. European arms may begin to flow to China in 2005.

• Revolution is under way in Saudi Arabia. The U.S.-backed royal family will be increasingly besieged in 2005. As for U.S. claims it will promote democracy in the Muslim world, any honest votes there will produce pro-Islamic parties advocating opposition to Israel, higher oil prices, and eviction of U.S. influence from the region.

So no true democracy, just U.S.-implemented "guided democracy" in Iraq, meaning a Vichy regime that keeps U.S. bases, sells oil cheap, makes nice to Israel, and allows U.S. firms to exploit Iraq's wealth.

© 2004 Toronto Sun