Archive for October 2nd, 2016

5 Times the United States Helped ISIS


By Darius Shahtahmasebi

Just last week, the U.S. and its allies — who are currently conducting military operations within Syrian territory without a U.N. mandate or permission of the Syrian regime — bombed Syrian troops, killing over 60 fighters and wounding over 100 more. This attack, according to the Assad regime, lasted for over an hour. It also involved a number of warplanes belonging to American, British, and even Australian air forces.

This aerial bombardment coincided with an offensive launched by ISIS militants, who then sought to take back government-held facilities. In the eyes of Russia and Syria, the aerial offensive was working in tandem with ISIS’s ground offensive, confirming their concerns the American-led coalition has been providing air cover to ISIS militants.

This should come as no surprise to anyone who has followed the rise of groups like ISIS in the Middle East. Since ISIS replaced al-Qaeda in 2014 as the top monster to fear, the U.S. has aided the group in a number of ways, both covertly and overtly, despite officially declaring war against the savage terror group.

Let’s examine some of the ways the U.S. has directly aided ISIS while claiming to fight against it since the American-led war began in 2014 (the U.S. aided ISIS growth from the outset, but that is a topic for a separate article).
1. Mosul and Baiji

In June 2014, ISIS crossed the Syrian border into Iraq, effortlessly taking the strategic oil-rich cities of Mosul and Baiji and almost making it as far as Baghdad. Amid the terror group’s frightening victory, they uploaded images and footage of drive-by-shootings, large-scale death marches, and mass graves (following the mass executions of Iraqi soldiers).

ISIS militants claimed massive quantities of American military equipment, including entire truckloads of Humvees, helicopters, tanks, and artillery, as their own. This was no secret to Washington, or even the world, as the militants photographed and recorded themselves and publicly flaunted their activity on social media.

What did the U.S. do in response? Nothing. In spite of all the American bases in Iraq and the government’s ability to perform all manner of illicit activity — including assassinating Muammar Gaddafi in Libya using a drone that was flown out of Sicily by a pilot who operated the vehicle from a naval base in Nevada‚ the U.S. couldn’t do anything to stop ISIS rapid advancements. Was there a problem preventing the U.S. military from conducting air strikes? Clearly not, as the U.S. had been launching drone strikes in Pakistan at around the same time ISIS advanced.
2. ISIS oil revenue

In documenting ISIS’s expansion, the media previously reported ISIS was enjoying a lucrative oil business in which they were earning at least $50 million a month. Who, exactly, was buying this oil? Mainstream media refused to investigate this openly, and the United States Air Force did nothing to try to eliminate ISIS’s main source of revenue.

On the other hand, Russian air forces began targeting convoys of oil headed into Turkish territory in November 2015. In a completely unrelated matter, Turkey shot down a Russian bomber they claimed violated Turkish airspace (for 17 seconds). Russian and Turkish relations immediately deteriorated, and Russia responded in kind with sanctions. They also cited satellite evidence they claim shows Turkey is the main importer of ISIS oil.

The U.S. government disputed the evidence, offered no evidence of their own, and was forced to partake in the Russian assault on ISIS oil tankers in an attempt to play catch-up. This whole debacle raised the question of why on earth a country with as shady and brutal a reputation as Russia is doing the job the U.S. claimed they were going to do.

The U.S. was forced to offer an explanation as to why they had not targeted the main source of ISIS revenue. According to former CIA director Michael Morell, environmental damage and the need to protect Iraqi and Syrian infrastructure were the reasons why the U.S. did not target those oil tankers:

We didn’t go after oil wells, actually hitting oil wells that ISIS controls, because we didn’t want to do environmental damage, and we didn’t want to destroy that infrastructure.

Makes sense. The U.S. military has a long history of protecting the environment and public infrastructure (it doesn’t).

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5 Times the United States Helped ISIS


Why Governments and Banks Want to Eliminate Your Cash

Closeup colorful american cash bills

Scott Sumner writes:

In a new book called “The Curse of Cash”, Harvard economist Kenneth Rogoff advocates removing from circulation all cash with a denomination of greater than $10. In countries such as Sweden, Canada and Italy, the government is already beginning to discourage the use of cash. Almost everywhere in the world, a decreasing share of transactions are being done with cash. Are we moving towards a cashless society?

Surprisingly, despite the increasing use of credit cards, cash holdings are about 8% of GDP, which is actually a larger share of the US economy than a decade ago, indeed even larger than 90 years ago.

The amount of cash in circulation (paper currency and coins) is roughly $4500 for every man, women and child in America. It is believed that roughly ½ that total is held overseas, but even $2000/person would be a surprisingly large figure, far higher than people admit to in government surveys.

Ironically, it is this increasing popularity of cash holdings that helps explain why governments are so anxious to discourage the use of cash.

Economists study cash holdings with a model that looks at the costs and benefits of currency. Even back before 2007, people held fairly large quantities of cash, despite the fact that perfectly safe assets such as bank CDs and Treasury bills offered 3% to 5% interest. Of course cash earns no interest, and if you hold large quantities in safe deposit boxes, there’s even a small negative return on cash.

Therefore economists view the risk-free interest rate as the opportunity cost of holding cash, what you forego by not choosing a more traditional investment.

This helps to explain the recent surge in cash holdings. Since 2008, the interest rate on safe assets has been close to zero, and so there is no longer a substantial opportunity cost of holding cash. When the cost of something declines, people demand more of it. But what about the benefits of holding so much cash; why were cash holdings fairly large even back in 2007, when interest rates were well above zero?

One clue is to look at currency in circulation by denomination. The vast majority of currency (by value) is composed of $100 bills. And yet in ordinary transactions, people tend to use smaller bills, such as $1s or $20s. This is confirmed by the fact that small bills wear out pretty quickly, and need to be replaced often with newer versions at the Federal Reserve. In contrast, $100 bills wear out very slowly, suggesting they are mostly hoarded, and used only infrequently for transactions. So why is it that even back in 2007 most currency consisted of $100 bills being held for long periods, when better investments were available?

Cash has one big advantage over other investments — anonymity. There is evidence that cash is often used as a way of evading taxes. When people first hear about cash and the underground economy, they often picture gangster films with drug dealers swapping briefcases of cash. But the truth is often more mundane. Lots of cash is hoarded by people in otherwise legal businesses, who are simply trying to hide wealth from the IRS, or perhaps even their spouse. When interest rates fall to zero, cash becomes an even more appealing option.

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