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The Kivu region of the Congo is the geological repository of some of the world’s greatest strategic minerals. The eastern border straddling Rwanda and Uganda, runs on the eastern edge of the Great African Rift Valley, believed by geologists to be one of the richest repositories of minerals on the face of the earth.

The Democratic Republic of the Congo contains more than half the world’s cobalt. It holds one-third of its diamonds, and, extremely significantly, fully three-quarters of the world resources of columbite-tantalite or “coltan” — a primary component of computer microchips and printed circuit boards, essential for mobile telephones, laptops and other modern electronic devices.

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Dr. J. Peter Pham, a leading Washington insider who is an advisor of the US State and Defense Departments, states openly that among the aims of the new AFRICOM, is the objective of ‘protecting access to hydrocarbons and other strategic resources which Africa has in abundance … a task which includes ensuring against the vulnerability of those natural riches and ensuring that no other interested third parties, such as China, India, Japan, or Russia, obtain monopolies or preferential treatment.’

In testimony before the US Congress supporting creation of AFRICOM in 2007, Pham, who is closely associated with the neo -conservative Foundation for Defense of Democracies, stated:

Bernanke yesterday said he may use less conventional policies, such as buying Treasury securities, to revive the economy, because his room to lower the main U.S. rate from the current 1 percent level is “obviously limited.” Even so, reducing the rate is “certainly feasible,” he said.

Policy makers may decide at their next meeting Dec. 15-16 on the details of carrying out such a shift, which might resemble the “quantitative easing” strategy the Bank of Japan pursued in 2001-2006 after driving interest rates close to zero. The Fed chief’s readiness to rely more on adding reserves to the banking system prompted JPMorgan Chase & Co. economist Michael Feroli to refer to him as “Bernanke-san” in a note yesterday.

“This sets the stage for the Federal Reserve to be more formal in its adoption of quantitative easing,” said Vincent Reinhart, the Fed’s director of monetary affairs until last year and now a scholar at the American Enterprise Institute in Washington.

The Bank of Japan is the only major central bank in modern times to rely on quantitative easing — the strategy of injecting more reserves into the banking system than needed to keep the target interest rate at zero.

Fed’s Balance Sheet

Steps Bernanke has taken so far have prompted some Fed officials and economists to say the central bank is already pursuing such a policy. With an array of emergency-loan programs aimed at easing the worst credit crisis in seven decades, Bernanke has expanded the Fed’s balance sheet to $2.11 trillion as of last week, more than double the year-earlier level.

Feroli, a former Fed economist, headlined his research note yesterday: “Bernanke-san goes further down the path of Quantitative Easing.”

Bank of Japan Governor Masaaki Shirakawa said in May that while the strategy “was very effective in stabilizing financial markets,” it had “limited impact” in remedying Japan’s economic stagnation because banks wouldn’t lend and companies wouldn’t borrow.

Bernanke himself didn’t use the quantitative easing term in his remarks yesterday to the Austin, Texas, Chamber of Commerce. If he does officially adopt the new approach, it will require a change in the way the policy-making Federal Open Market Committee conducts its business, Reinhart said. The FOMC, which currently votes on the level of interest rates, may now find itself debating the size of the Fed’s balance sheet and struggling to find ways to communicate that decision to financial markets, he said.

Stocks Sink

Investors didn’t immediately take to the prospect of a new strategy yesterday. While Treasuries extended gains after Bernanke’s remarks, stocks slid the most since October, wiping out more than half of last week’s rally. The Standard & Poor’s 500 Index sank 8.9 percent to 816.21, with financial stocks in the index tumbling a record 17 percent as a group.

The Fed chief’s comments coincided with the determination by economic scholars yesterday that the U.S. recession began one year ago this month. That declaration came from a committee of the National Bureau of Economic Research, a private, nonprofit group based in Cambridge, Massachusetts.

The U.S. economy “will probably remain weak for a time,” even if the credit crisis eases, Bernanke said yesterday in his speech. While the Fed can’t push interest rates below zero, “the second arrow in the Federal Reserve’s quiver — the provision of liquidity — remains effective,” he said.

Buying Treasuries

One option is for the Fed to buy “longer-term Treasury or agency securities on the open market in substantial quantities,” Bernanke said. “This approach might influence the yields on these securities, thus helping to spur aggregate demand.”

Should purchases of Treasuries fail to accomplish the Fed’s goals, “there’s very much a likelihood that they could expand the range of assets that they buy,” said former Atlanta Fed research director Robert Eisenbeis, now chief monetary economist at Cumberland Advisors, in an interview with Bloomberg Television.

At the same time, aiming to increase loans when banks still need to rid their balance sheets of bad assets “is a bit myopic,” Eisenbeis said. “They’re not going to expand lending when they’ve got a problem of leverage.”

Last week, the Fed announced two new programs aimed at unfreezing credit for homebuyers, consumers and small businesses. Those include a commitment to buy as much as $600 billion of debt issued or backed by government-chartered housing-finance companies and a $200 billion initiative to support consumer and small-business loans.

Governor Glenn Stevens lowered the overnight cash rate target to a six-year low of 4.25 percent in Melbourne today, the fourth reduction in as many months. Four of 21 economists surveyed by Bloomberg News forecast today’s move and 15 tipped a three-quarter point cut.

Stevens said monetary policy is now “expansionary” to help restore consumer and business confidence, which has been battered by this year’s 44 percent slump in the benchmark stock index and the biggest drop in house prices since 1978. Three percentage points of cuts since September save borrowers with an average A$250,000 ($159,000) home loan more than A$500 a month.

Although Ecuador currently has the capacity to pay, dropping oil prices and squeezed credit markets are putting President Rafael Correa’s plans to boost spending on education and health care in jeopardy. Correa has pledged to prioritize the “social debt” over debt to foreign creditors.

The commission accused Salomon Smith Barney, now part of Citigroup Inc., of handling the 2000 restructuring without Ecuador’s authorization, leading to the application of 10 and 12 percent interest rates. The commission evaluated all commercial, multilateral, government-to-government and domestic debt from 1976-2006.

Commercial debt, or debt to private banks, made up 44% of Ecuador’s interest payments in 2007, considerably more than the 27% paid to multilateral institutions such as the International Monetary Fund (IMF). But the report also lambasted multilateral debt, saying that many IMF and World Bank loans were used to advance the interests of transnational corporations. Ecuador’s military dictatorship (1974-1979) was the first government to lead the country into indebtedness.

The commission found that usurious interest rates were applied for many bonds and that past Ecuadorian governments illegally took other loans on. Debt restructurings consistently forced Ecuador to take on more foreign debt to pay outstanding debt, and often at much higher interest rates. The commission also charged that the U.S. Federal Reserve’s late 1970’s interest rate hikes constituted a “unilateral” increase in global rates, compounding Ecuador’s indebtedness.

If President Rafael Correa follows the commission’s recommendations–which is far from a certainty–Ecuador could default on some portion of its foreign debt, becoming the first Latin American country to do so since Argentina in 2001.

But despite all the hints at a default, it seems likely that Ecuador will use the commission’s report as leverage for restructuring the country’s debt. Commission president Ricardo Patiño indicated as much to Bloomberg News, but said that Ecuador would not settle for a 60% reduction, a number that had earlier been mentioned.

Ecuador announced that it would delay paying $30.6 million in interest on the Global Bonus 2012, taking advantage of a month-long grace period. The announcement sent the global financial universe into a panic, with Standard and Poor’s cutting Ecuador’s risk rating to CCC-.

Social movements have long alleged that corrupt former governments illegally negotiated loans for their own personal financial gain.

Significantly, the commission singled out foreign debt for being “illegitimate” rather than simply illegal. Social movements have long declared most foreign debt to be illegitimate, but Ecuador’s use of legitimacy as a legal argument for defaulting would set a major precedent; indeed, the mere formation of a debt auditing commission does so. Osvaldo Leon, of the Latin American Information Agency (ALAI), says that it remains to be seen if other countries in Latin America will follow suit.

Ecuador’s findings could set an important precedent for the poorest of indebted countries, whose debt burden has long been criticized as inhumane.

Pablo Davalos, an economist and fierce social movement critic of Correa, has said that the report will in the end only amount to political posturing. Correa has criticized the foreign debt since his brief 2005 stint as Finance Minister–but has faithfully made each and every payment since his 2006 election. Correa has also made peace with oil and mining companies after acrimonious, high profile negotiations. In response, social movements have accused Correa of being overly friendly to business. The foreign press, and the business press in particular, regularly exaggerates Correa’s radicalism.

It is also important to emphasize that Argentina’s 2001 default did not hamper the country’s economic recovery–in fact, it gave it a strong boost.

In my opinion this agreement template is the one that will be used to destroy national currencies at the same time as to buy the key infrastructure of the various economies involved with the UK/USA pact.

To support your own research into the matter I have posted below all of the questions as answered by RBNZ spokeperson Mike Hannah.

1. How would a declining US$ impact New Zealand wealth should we be holding US currency ?

RBNZ: In principle it decreases wealth, although in this case note that the Bank ends up acting as intermediary – ie, we have a USD loan from the Fed and a USD investment with a bank that wants to borrow the USD from us.

Interpretation: Yes there are wealth implications for New Zealand including penalty interest payments going offshore and the potential to lose the colateral in the event of default.

2. Who can use access the swapline?

RBNZ: New Zealand banks (counter parties).

3. Please give me a scenario showing why a New Zealand bank (counter party) would want to do this through this facility.

RBNZ: With respect to this question only one scenario applies – this is where a RBNZ domestic markets counterparty (which includes both NZ and foreign banks with NZ interests) borrows USD from the Bank. In this case the bank concerned would be interested in accessing USD from the RBNZ because they were having difficulty in getting USD anywhere else in the market. This might be because a fund manager may have dealt with the bank to borrow USD for a period to hedge a foreign asset portfolio leaving the bank concerned needing to borrow USD cover the loan to the fund manager. In this case the bank would bid in the RBNZ’s USD lending operations and pay a penal rate to access USD to cover their shortfall.

4. What situations/events/scenarios does RBNZ foresee that could cause a New Zealand counterparty to have difficulty getting USD elsewhere in the market?

RBNZ: As in the example above, a New Zealand institution requires USD to meet a financial obligation (eg, repaying a loan). If the normal channels for raising USD are not functioning, the NZ party will not be able to access USD. This situation has not arisen yet, but the risk of it occurring was considered to be higher if the virtual closure of the US commercial paper market for the last month or so persisted. We wanted to have insurance that USD were accessible for NZ institutions. Remember, this is an “insurance”, it gives access to loans, and the facility has not yet been used. It will not be needed if markets resume normal operations, but it is prudent to have it to ensure access to USD is not a problem for NZ institutions.

5. Has a similar set of events happened before?

RBNZ: No.

6. Please list all of the channels for raising US dollars that RBNZ
defines as normal.

RBNZ Kelly Eckhold (Financial Markets Dept): Market participants can raise USD in a number of ways including:

– issuing commercial paper or long term debt securities in the US
markets
– issuing securities in the Euro-USD market (i.e the market for USD that
exists outside of the US)
– using the FX swaps market by using borrowings in any non USD currency
to exchange for USD for a period
– borrowing secured USD funds in the US repo market
– raising unsecured USD deposits from wholesale financial institutions

7. How was the US$15billion amount determined? Please provide the quantification method / justification for this amount.

RBNZ: No comment.

Significance of US$15bn to New Zealand:
The US$15b swapline represents:
– 37% of the market value of publicly traded shares new Zealand or
– 13.3% of New Zealand’s Gross Domestic Product for (2008) or
– 4.5 x NZ Super Fund

7. Can the NZ public see a copy of the full agreement? Please provide as much disclosure of the agreement as permitted

RBNZ: As noted before the Fed has asked we keep the agreement confidential – although the terms of the agreement have been described in these answers and earlier questions.

8. Which interest takes priority to RBNZ?:
– The New Zealand public
– The Fed

RBNZ: The Official Information Act allows us to withhold such information. We have given you as much detail as we can.

The US Army and Navy have both hired experts in the ethics of building machines to prevent the creation of an amoral Terminator-style killing machine that murders indiscriminately.

By 2010 the US will have invested $4 billion in a research programme into “autonomous systems”, the military jargon for robots, on the basis that they would not succumb to fear or the desire for vengeance that afflicts frontline soldiers.

A British robotics expert has been recruited by the US Navy to advise them on building robots that do not violate the Geneva Conventions.

Colin Allen, a scientific philosopher at Indiana University’s has just published a book summarising his views entitled Moral Machines: Teaching Robots Right From Wrong.

He told The Daily Telegraph: “The question they want answered is whether we can build automated weapons that would conform to the laws of war. Can we use ethical theory to help design these machines?”

Pentagon chiefs are concerned by studies of combat stress in Iraq that show high proportions of frontline troops supporting torture and retribution against enemy combatants.

Ronald Arkin, a computer scientist at Georgia Tech university, who is working on software for the US Army has written a report which concludes robots, while not “perfectly ethical in the battlefield” can “perform more ethically than human soldiers.”

He says that robots “do not need to protect themselves” and “they can be designed without emotions that cloud their judgment or result in anger and frustration with ongoing battlefield events”.

Airborne drones are already used in Iraq and Afghanistan to launch air strikes against militant targets and robotic vehicles are used to disable roadside bombs and other improvised explosive devices.

Last month the US Army took delivery of a new robot built by an American subsidiary of the British defence company QinetiQ, which can fire everything from bean bags and pepper spray to high-explosive grenades and a 7.62mm machine gun.

But this generation of robots are all remotely operated by humans. Researchers are now working on “soldier bots” which would be able to identify targets, weapons and distinguish between enemy forces like tanks or armed men and soft targets like ambulances or civilians.

Their software would be embedded with rules of engagement conforming with the Geneva Conventions to tell the robot when to open fire.

Dr Allen applauded the decision to tackle the ethical dilemmas at an early stage. “It’s time we started thinking about the issues of how to take ethical theory and build it into the software that will ensure robots act correctly rather than wait until it’s too late,” he said.

“We already have computers out there that are making decisions that affect people’s lives but they do it in an ethically blind way. Computers decide on credit card approvals without any human involvement and we’re seeing it in some situations regarding medical care for the elderly,” a reference to hospitals in the US that use computer programmes to help decide which patients should not be resuscitated if they fall unconscious.

Dr Allen said the US military wants fully autonomous robots because they currently use highly trained manpower to operate them. “The really expensive robots are under the most human control because they can’t afford to lose them,” he said.

“It takes six people to operate a Predator drone round the clock. I know the Air Force has developed software, which they claim is to train Predator operators. But if the computer can train the human it could also ultimately fly the drone itself.”

Some are concerned that it will be impossible to devise robots that avoid mistakes, conjuring up visions of machines killing indiscriminately when they malfunction, like the robot in the film Robocop.

Noel Sharkey, a computer scientist at Sheffield University, best known for his involvement with the cult television show Robot Wars, is the leading critic of the US plans.

The patient, Karen Wetmore, is convinced that Hyde and other researchers subjected her and possibly other patients to experiments paid for by the CIA at the Waterbury facility.

In addition to her claim, new evidence, though incomplete, suggests that such tests might have been conducted at the Vermont State Hospital.

Several books and numerous newspaper accounts have detailed how techniques developed through testing, including on mental health patients at hospitals in other parts of the country, are related to the interrogation methods used in Guantanamo and other locations in the war on terror. These well-known and well-documented drug experiments began in secret after the Korean War and were sponsored by the U.S. government.

The long-planned shift in the Defense Department’s role in homeland security was recently backed with funding and troop commitments after years of prodding by Congress and outside experts, defense analysts said.

There are critics of the change, in the military and among civil liberties groups and libertarians who express concern that the new homeland emphasis threatens to strain the military and possibly undermine the Posse Comitatus Act, a 130-year-old federal law restricting the military’s role in domestic law enforcement.

But the Bush administration and some in Congress have pushed for a heightened homeland military role since the middle of this decade, saying the greatest domestic threat is terrorists exploiting the proliferation of weapons of mass destruction.

Before the terrorist attacks of Sept. 11, 2001, dedicating 20,000 troops to domestic response — a nearly sevenfold increase in five years — “would have been extraordinary to the point of unbelievable,” Paul McHale, assistant defense secretary for homeland defense, said in remarks last month at the Center for Strategic and International Studies. But the realization that civilian authorities may be overwhelmed in a catastrophe prompted “a fundamental change in military culture,” he said.

The Pentagon’s plan calls for three rapid-reaction forces to be ready for emergency response by September 2011. The first 4,700-person unit, built around an active-duty combat brigade based at Fort Stewart, Ga., was available as of Oct. 1, said Gen. Victor E. Renuart Jr., commander of the U.S. Northern Command.

If funding continues, two additional teams will join nearly 80 smaller National Guard and reserve units made up of about 6,000 troops in supporting local and state officials nationwide. All would be trained to respond to a domestic chemical, biological, radiological, nuclear, or high-yield explosive attack, or CBRNE event, as the military calls it.

Military preparations for a domestic weapon-of-mass-destruction attack have been underway since at least 1996, when the Marine Corps activated a 350-member chemical and biological incident response force and later based it in Indian Head, Md., a Washington suburb. Such efforts accelerated after the Sept. 11 attacks, and at the time Iraq was invaded in 2003, a Pentagon joint task force drew on 3,000 civil support personnel across the United States.

In 2005, a new Pentagon homeland defense strategy emphasized “preparing for multiple, simultaneous mass casualty incidents.” National security threats were not limited to adversaries who seek to grind down U.S. combat forces abroad, McHale said, but also include those who “want to inflict such brutality on our society that we give up the fight,” such as by detonating a nuclear bomb in a U.S. city.

In late 2007, Deputy Defense Secretary Gordon England signed a directive approving more than $556 million over five years to set up the three response teams, known as CBRNE Consequence Management Response Forces. Planners assume an incident could lead to thousands of casualties, more than 1 million evacuees and contamination of as many as 3,000 square miles, about the scope of damage Hurricane Katrina caused in 2005.

Last month, McHale said, authorities agreed to begin a $1.8 million pilot project funded by the Federal Emergency Management Agency through which civilian authorities in five states could tap military planners to develop disaster response plans. Hawaii, Massachusetts, South Carolina, Washington and West Virginia will each focus on a particular threat — pandemic flu, a terrorist attack, hurricane, earthquake and catastrophic chemical release, respectively — speeding up federal and state emergency planning begun in 2003.