Conspiracy theories emerge after internet cables cut

dicktater's picture

Whackjobs have now seized upon recent news items such as the scheduled Iranian Oil Bourse opening, that Australia's protection against such incidents was boosted just last week, the Pentagon's decision that the internet needs to be dealt with as if it were an enemy "weapons system", US anti-missile ship to dock in Haifa, and other innocent coincidences to create yet another crazy conspiracy theory.

And knowing that there is a historical precedence to numerous undersea cables being cut in a relatively short period of time, the plot sickens. Now, it is said that as many as five cables have been cut:

"Internet Cables Cut–Prelude to War or Simply A Warning?

http://theuglytruth.wordpress.com/2008/02/05/internet-cables-cut-prelude...

As of the moment of this writing, 5 internet cables–buried deep beneath the ocean floor to prevent them being accidentally dredged up by a ships’ anchor–have been cut, preventing most of the Middle East from internet access. The cables provide 90% of the region’s internet service and the countries affected most by this are Egypt, Bahrain, Qatar, United Arab Emirates, Kuwait, Saudi Arabia, Pakistan and Iran. They have since re-routed to older, slower lines and satellites, but overall internet service is slow and in some cases–particularly Iran, there is no internet service whatsoever.

Conspiracy theories emerge after internet cables cut

http://www.abc.net.au/news/stories/2008/02/04/2153974.htm?section=world

By Simon Lauder

Posted Mon Feb 4, 2008 3:14pm AEDT
Updated Mon Feb 4, 2008 4:03pm AEDT

When two cables were cut off the Egyptian port city of Alexandria last week, about a 100 million internet users were affected, mainly in India and Egypt. (AFP: Ammro Maraghi)

Audio: Third cable cuts 'a bad coincidence' (The World Today)
http://mpegmedia.abc.net.au/news/audio/twt/200802/20080204twt09-internet...

Is information warfare to blame for the damage to underwater internet cables that has interrupted internet service to millions of people in India and Egypt, or is it just a series of accidents?

When two cables in the Mediterranean were severed last week, it was put down to a mishap with a stray anchor.

Now a third cable has been cut, this time near Dubai. That, along with new evidence that ships' anchors are not to blame, has sparked theories about more sinister forces that could be at work.

For all the power of modern computing and satellites, most of the world's communications still rely on submarine cables to cross oceans.

When two cables were cut off the Egyptian port city of Alexandria last week, about a 100 million internet users were affected, mainly in India and Egypt.

The cables remain broken and internet services are still compromised.

Telecommunications analyst Paul Budde says the situation demonstrates how interconnected the world is.

"It clearly shows we are talking about a global network and a global world that we are living in," he said.

"So wherever something happens we all get, in one way or another, affected by it."

'Information warfare?'

It was assumed a ship's anchor severed the cables, but now that is in doubt and the conspiracy theories are coming out.

Egypt's Transport Ministry says video surveillance shows no ships were in the area at the time of the incident.

Online columnist Ian Brockwell says the cables may have been cut deliberately in an attempt by the US and Israel to deprive Iran of internet access.

Others back up that theory, saying the Pentagon has a secret strategy called 'information warfare'.

But Mr Budde says it is far more likely to be a coincidence.

"It is absolutely strange, of course, that that happens. At the moment it really looks like bad luck rather than anything else," he said.

Telecommunications professor at the University of Melbourne, Peter Gerrand, says Australia is in a far better position than India to withstand a cable breakage.

"We've got, in effect, five really major separate cables, each with high capacity, most of which have plans for upgrading their capacity in the next few years," he said.

Professor Gerrand does not believe Australia is vulnerable to the types of major disruptions that India and Egypt have seen.

"I gather India has most of its capacity on two cables - one's to its west and one to its east - so when the western cable got cut near Egypt, all this traffic had to then pass through a single cable and that's what's caused these very huge delays," he said.

Australia's protection zones

As it happens, Australia's protection against such incidents was boosted just last week.

Activities that could damage submarine communications cables have been prohibited off Perth's City Beach since Friday.

Australian Communications and Media Authority (ACMA) submarine cable protection manager Robyn Meikle says the events in the Middle East highlight the importance of submarine cables to all international communications.

"Here in Australia, over 99 per cent of all of our international communications carried through these cables lie at the bottom of the sea," she said.

"That's why the Australian Communications Authority [ACMA] has played a major role in declaring protection zones over our cables of national significance in Australia.

"Each of the zones, for instance, has restrictions to do with anchoring, which are aimed at preventing the sort of damage that has happened in recent times in the Middle East.

"ACMA declares protection zones over what are considered to be the main cables of national significance, and they're the ones that carry the bulk of the traffic," she said.

"So really, they are the most important cables that the industry relies on to carry all communications in and out of Australia."

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dicktater's picture

Connecting The Many [now 8?] Undersea Cut Cable Dots

The MSM can't seem to find out the real number of cable disruptions. One thing is certain, though. The number keeps growing.

Connecting The Many Undersea Cut Cable Dots

http://www.cyberspaceorbit.com/ConnectingTheDots.htm

By my count, we are probably dealing with as many as eight, maybe even nine, unexplained cut or damaged undersea cables within the last week, and not the mere three or four that most mainstream news media outlets in the United States are presently reporting. Given all this cable-cutting mayhem in the last several days, who knows but what there may possibly be other cut and/or damaged cables that have not made it into the news cycle, because they are lost in the general cable-cutting noise by this point. Nevertheless, let me enumerate what I can, and keep in mind, I am not pulling these out of a hat; all of the sources are referenced at the conclusion of the article; you can click through and look at all the evidence that I have. It's there if you care to read through it all.

1) one off of Marseille, France
2) two off of Alexandria, Egypt
3) one off of Dubai, in the Persian Gulf
4) one off of Bandar Abbas, Iran in the Persian Gulf
5) one between Qatar and the UAE, in the Persian Gulf
6) one in the Suez, Egypt
7) one near Penang, Malaysia
8) initially unreported cable cut on 23 January 2008 (Persian Gulf?)

Cable damage hits 1.7m Internet users in UAE

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/theuae/2008/Fe...

A total of five cables being operated by two submarine cable operators have been damaged with a fault in each.

These are SeaMeWe-4 (South East Asia-Middle East-Western Europe-4) near Penang, Malaysia, the FLAG Europe-Asia near Alexandria, FLAG near the Dubai coast, FALCON near Bandar Abbas in Iran and SeaMeWe-4, also near Alexandria.

casseia's picture

I see from the internet traffic report

here http://www.internettrafficreport.com/asia.htm that Iran is still at zero connectivity with the rest of the world. This is very weird -- I'm hoping it has to do with wanting to interfere with the opening of the oil bourse rather than preparation for war.

It occurred to me also that Iran just might be responsible for cutting itself off -- I'm just sayin' -- since it's not the most democratic, freedom of ideas kind of place.

dicktater's picture

Certainly a possibility but, ...

Certainly a possibility but, other ME countries have been affected to varying degrees, too. So, wouldn't that be kind of risky for the local image? Then again, it could even be set up to look that way to demonize Iran with her neighbors.

Who knows? We'll see if the repair ships can keep up with the disruptions.

dicktater's picture

A Bourse to burst?

From the first week of January:

Iran Oil Bourse to deal blow to dollar

http://www.presstv.ir/detail.aspx?id=37468&sectionid=351020103

Fri, 04 Jan 2008 20:45:41
Iran's Finance Minister Davoud Danesh-Jafari
The long-awaited Iranian Oil Bourse, a place for trading oil, petrochemicals and gas in various non-dollar currencies, will soon open.

Iran's Finance Minister Davoud Danesh-Jafari told reporters the bourse will be inaugurated during the anniversary of the Islamic Revolution (February 1-11) at the latest.

"All preparations have been made to launch the bourse; it will open during the Ten-Day Dawn (the ceremonies marking the victory of the 1979 Islamic Revolution in Iran)," he said.

The Minister had earlier stated that the Oil Bourse is located on the Persian Gulf island of Kish.

Some expert opinions hold inauguration of the bourse cold significantly devalue the greenback.

The cable disruptions began before the Dawn:

1-11 February 2007 - Ten-Day Dawn

The 10 Day Dawn (Daheh-ye Fajr) celebrations mark anniversary of the victory of the Islamic Revolution in 1979. On 12th of Bahman 1357 (01 February 1979), the Imam Khomeini appeared in Iran on the steps of an Air France plane. The great crowd of people who had gone to welcome their Imam were waiting at Mehrabad airport and along his way to Behesht-e Zahra Cemetery. They desired to meet their leader whom was returning to his homeland after a 15-year exile forced by the Shah’s regime. The whole city was illuminated and strewn with flowers. The Islamic Revolution gained the victory on 11 Febreary 1979. The Ten Day Dawn marks the victory of the Islamic Revolution in Iran in 1979 and is celebrated by Iranians each year.

On 14 November 2006 President Mahmoud Ahmadinejad said that two major technological achievements of the government will be made public during the Ten-Day Dawn (February 1-11) of 2007. He said this year's Ten-Day Dawn will the ten-day celebration of Iranian nation for its nuclear and technological achievements. "This year's Ten-Day Dawn period will mark the Iranian nation's success in mastering fuel cycle as well as its achievements in other fields," Ahmadinejad said. He said Iran possesses the “full nuclear fuel cycle and time is completely running in our favor in terms of diplomacy.” Further, “We will commission some 3,000 centrifuges by [the Ten-Day Dawn festivities at the beginning of February].” On 18 Decenber 2006 Government Spokesman Gholam Hossein Elham said that Iran will be announced as an established nuclear state during the 2007 Ten Day Dawn ceremonies.

See next post:

"How an Iranian 'Oil Bourse' Threatens the American Empire"

dicktater's picture

How an Iranian 'Oil Bourse' Threatens the American Empire

How an Iranian 'Oil Bourse' Threatens the American Empire

http://mparent7777-2.blogspot.com/2008/02/how-iranian-oil-bourse-threate...

Tuesday, February 05, 2008

It's been over seven years since the US had real or competent leadership and now a neo-ape man may precipitate our return to the cave! Iran's planned oil bourse threatens not only Bush's simplistic view of the world, it strikes at the the coffers of "big oil". Isolated by mysteriously cut internet cables, Iran --if it is not nuked --will this month begin trading oil in currencies other than the dollar. Bush's cave man response: Nuke Iran! Kill, kill!

On September 16 1985, when the Commerce Department announced that the United States had become a debtor nation, the American Empire was as dead, theoretically, as its predecessor, the British. Our empire was seventy-one years old and had been in ill financial health since 1968. Like most modern empires, ours rested not so much on military prowess as on economic primacy.

--Gore Vidal, Chapter Three of Imperial America (Nation Books, 2005)

Bush's response to Iran's "Oil Bourse", his response to the end of American empire, is pre-stonge age in nature. Indeed, the US empire will collapse when the dollar collapses. Because we have an ape-man and not a real President, the consequences will be tragic.

A commenter to this blog used the term "sunset fuel" to describe oil and our dependence upon it. The world grows more dangerous as oil becomes increasingly hard to find, more expensive to produce and refine. We should have expected the world to become a much more dangerous place under those conditions. In its decline, oil becomes disproportionately important, nations more desperate, Bush more belligerent.

Monitoring the news today --it is clear that the Middle East cables were deliberately sabotaged and the effect has been to cut Iran off the internet. Isolating a nation by cutting off its systems of communication is a first step preceding a military attack. Bush no longer cares about even the pretense of pre-text! His charge that Iran has weaponized grade fuels is universally and credibly debunked. The real threat is to the poohbahs of US empire --the Military/Industrial complex. Bush doesn't care. Nuke Iran! Kill, kill!

Like the US today, Rome had currency problems, one of the reasons for its fall. When Rome attacked Dacia, it was for the gold. Much of the history of Rome is the history of how "empire" became "enterprise", how the Praetorian Guard become the Military/Industrial complex.

The first known Roman "money" was a lump of bronze called the aptly named "aes grave", literally, "a heavy lump of bronze". An "aes grave" weighed about seven pounds. Traded by weight, it required slaves to carry it around. A more portable medium --the true coin --would not appear until about 89 BC. It was quickly debased with increasingly thin silver plating as more coins were needed in circulation than could be backed up by the "real" wealth of empire. By the mid 60s AD, Nero was alloying silver with cheaper metals, a process virtually impossible to detect. Nero thus set the precedent and standard not only for later emperors but politicians of almost every stripe. Briefly, Nero did what almost all politicians do. He swindled the people in order to put more coin into circulation.

By one AD, a tiny new bronze aes or "as" was introduced. It had no real intrinsic value but it was easy to carry around. One could gain entry to bath houses or free public performances with it. Even then it was just a token to help "ushers" and/or doormen keep track of the number of folk.

By the time, the Praetorian Guard auctioned off the empire to Didius Julianus, the transaction would be completed in Drachmas (Greek currency) not Roman the sestercius or the ass. The smart money had already dumped Roman coinage. In the late Empire, it was hoped that new coins --the silver "nummus" and the gold "aureus" -- would restore confidence during periods of devastating inflation.

Much is made of the "gold standard". In fact, it doesn't matter. If someone like Ron Paul restored the Gold Standard in the US, the economy would melt down for several reasons. First, economies must grow or die. Fixing the currency to a finite standard guarantees that it will be necessary to "debase" to accommodate a growing population, growing demand for money itself. Secondly, given US weakness, encouraging Americans to dump bucks for metals, will only hasten the death cycle of the dollar. Perhaps Paul believes it is already too late --so just kill it off and be done with it. Nevermind, the millions who would literally starve or wind up on the streets.

The "Gold Standard" is a myth that is easily demagogued. In fact, a nation's currency is really backed up by its total productive capacity. If the nation is at work and productive, we could use monopoly money! And we have been for years. Who the hell would care for so long as we get more to circulate each time we pass "Go" and stay out of jail. American prosperity was always behind and had always "backed up" the strong dollar. Paulian thinking that we need only jack around with the currency to restore American prosperity is literally "backward". It doesn't work that way.

Productivity needs help. US economic expansion had always been fueled by an abundance of natural resources --land, timber, water, farm land, metals, et al. The nation's history was changed forever when oil was discovered first in Pennsylvania and, when that ran out, Spindletop in Texas. For over a century, US economic expansion was backed up by oil. The US was an oil producing nation. Oil was better than gold or silver in that it had much more intrinsic value than either metal. Oil not only lubricated the engines, it fueled them. In the process of turning it into gasoline, it was discovered that its plastic properties could make an almost unlimited number of doodads, some of which had utilitarian value and some only value as playthings and baubles.

On a personal note, landing at Kansas City International Airport the other day, my vision of America altered by my in-flight reading of Mr. Berman's remarkable work, I saw the landscape through new eyes, a landscape I now understood to have been systematically vandalized by the corporatocracy: big box stores, chain hotels and restaurants, strip malls and gas stations, a landscape everywhere repeated across the United States, a landscape we intend to impose upon the world in order to fulfill our destiny as bringer of freedom as expressed through consumption.

--Reader Review of Dark Ages America

From internet reaction to my previous article on the US v Iran:

If Iran is attacked it will have nothing or next to nothing to do with the oil bourse. It will be because the PNACers have targeted Iran, because, like Iraq, it is not a puppet state, and, in the Neocon "mind" thus presents an "existential threat" to the greater Israel that they imagine.

It has everything to do with Neocons who are most certainly supporters of the Military/Industial Complex or, more accurately, the Military/Oil Exploitation complex. Neocons are all about empire and oil is at the heart of American empire. Israel is, in fact, just a convenient ally as were the various puppet, vassel states of Rome --many of which were in the Middle East.

Certainly, when oil is no longer traded in dollars, it is not only the dollar that will collapse. It means that the US --on the bad end of a huge balance of trade deficit --will no longer be able to afford to import goods or services. For a nation that long ago (Reagan years primarily; See Vidal, cited) gave up its role as a manufacturing nation, this collapse will be monumental, catastrophic. The fact that oil had been traded in dollars was the only thing propping up the dollar. That there was a demand for dollars because there was a demand for oil meant that you could continue to buy imported goods with dollars. Now --imagine a world in which no other country need "purchase" dollars in order to import oil! What if oil producing nations agree to accept other currencies? What if they refuse to accept dollars? Go to Wal-Mart or even your local supermarket. Almost everything on the shelves is imported. Imagine a shop owner refusing to accept in payment your worthless dollars in payment for anything in the shop!

As Gore Vidal pointed out, the US empire ended in the eighties, when the US became a net debtor nation. GOP regimes since have only made the situation worse. Just as empire became the business of Rome, empire had become the "business" of the US which no longer produces enough to employ its population let alone export to the rest of the world. Most US consumer goods are imported from China, sold in Warl-Mart, discarded in America. America's best days are over. We live in the twilight of empire.

Additional resources???

* The Day the American Empire Ran Out of Gas
http://lists.econ.utah.edu/pipermail/a-list/2006-October/062914.html

* Roman Coins
http://www.blogger.com/%20http://www.roman-imperial-coins.com/ARTICLES/G...

* How the White House Snookered the 9/11 Commission
http://www.buzzflash.com/store/items/960

* The Commission: The Uncensored History of the 9/11 Investigation
http://www.buzzflash.com/store/items/960

dicktater's picture

Unexplainable Cutting Of Internet Cables Points To Sabotage

Unexplainable Cutting Of Internet Cables Points To Sabotage

Is the undoubtedly deliberate damage to communications
throughout the Middle East and Asia a warning, or something
even more deadly?

http://www.infowars.net/articles/february2008/060208Cables.htm

Wednesday, Feb 6, 2008

The cutting of multiple undersea cables in several
different locations hundreds of miles apart continues
to arouse suspicion and stir speculation.

It seems that the activity represents, at the very
least, a warning shot across the bows of certain Middle
Eastern and Asian nations, and may even signify the
imminence of a major geopolitical event.

In the space four days the Middle East and Asia
has experienced unprecedented mass Internet outages after
no less than four undersea Internet cables were cut without
explanation.

Internet blackouts were reported in large tracts of Asia,
the Middle East and North Africa after the cable connections
were severed. Egypt, Saudi Arabia, Qatar, the United Arab
Emirates, Kuwait, Bahrain, Pakistan and India, all
experienced severe problems.

Reports in the press in the United Arab Emirates have since
claimed that the total number of cables now cut
is five.

Some questioned whether Iran has been completely
cut off from the net. Although the target="_blank"> internet traffic report shows
the main routers as off, Iran and surrounding countries have
satellite links and access to older power lines they used
to use, before optical fibre cables were introduced.

Most large tech firms, particularly in India, that
do outsourced programming and data entry for U.S. and European
insurance, banking and medical companies have not been seriously
disrupted because they have used such alternate connections.

However, undersea cables carry about 95 percent
of the world's telephone and Internet traffic, according to the
International Cable Protection Committee, an 86-member group that
works with fishing, mining and drilling companies to curb damage
to submarine cables.

The media and bloggers alike have questioned the
plausibility of up to five cables being cut by accident, affecting
most of the Middle East in such a short space of time. The cables
are laid deep underwater and are extremely durable. The odds of
five of these being damaged within 3 days are astronomical.

In December 2006, seven of the eight Internet cables
connected to Taiwan were damaged by an earthquake, disrupting
Internet communications in much of Asia for weeks. However the
five cables in question are hundreds of miles apart and no earthquake
activity has been reported in any of the affected areas.

Suspicions were further aroused when United Arab
Emirates' second largest telecom company reported that the cables
off of Egypt in the Mediterranean, were cut due to ships dragging
their anchors, a practice that ships rarely engage in.

The location of the cables are on shown on nautical
charts, they are also placed within maritime exclusion zones.
Egypt has video cameras that watches the stretch of ocean where
the cables are located, and it has since been
confirmed by the government
there that there were
no ships in the area when the cables were cut. So whatever happened
occurred entirely beneath the surface of the Mediterranean sea.

Two of the damaged cables, the Flag Europe-Asia
cable and Falcon, are owned by Flag Telecom, a subsidiary of Indian
conglomerate Reliance ADA Group. Flag Telecom has since stated
that it has never had two cables down at the same time in the
region.

Flag Telecom's network is also one of the "newest in existence"
so it would be unlikely that the cables would break because of
wear and tear or age.

The cables are the communication, commerce and technology lifelines
for the afore mentioned nations. Government operations, trading
and the financial markets are totally
dependent
upon the internet.

Most notably, Israel and Iraq have been unaffected
by the outage, leading some to predict that the mysterious cable
sabotage could portend another imperial Neo-Con crusade in the
works.

There is a historical
precedent for this kind of sabotage, at the beginning of
world war two, one of the first British actions against
Germany was to cut their under water communications
cables.

In the 1960s the US developed submarines for the
purpose of tapping into cables and cutting communications.
The USS Parch and the USS Halibut were both used to tap communications cables.

Recently, a document entitled Information Operation
Roadmap was declassified by the Pentagon due to a Freedom of Information
Act request by the National Security Archive at George Washington
University.

One portion of the document states:

“Information, always important in warfare, is now critical
to military success and will only become more so in the foreseeable
future..... Information operations should be centralized under
the Office of the Secretary of Defence and made a core military
competency."

"Objective: IO [information operations] becomes a core
competency. The importance of dominating the information spectrum
explains the objective of transforming IO into a core military
competency on a par with air, ground, maritime and special operations.
The charge to the IO Roadmap oversight panel was to develop
as concrete a set of action recommendations as possible to make
IO a core competency, which in turn required identifying the
essential prerequisites to become a core military competency."

The importance of information warfare is clearly laid out in
this document. Brent Jessop, a regular contributor to Infowars
has exhaustively documented the phenomenon of “Full
Spectrum Information Warfare

Mark Glenn of the American
Free Press
explains why the cutting of communications
may indeed be a prelude to aggression or a warning:

The countries most affected are all major players in the current
goings-on in the Middle East where the US and the Jewish state
are up to their eyeballs in skullduggery. The gulf countries
were recently visited by George Bush who tried–unsuccessfully–to
rally them around support for renewed pressure on a recalcitrant
Iran, only to be laughed out of the region. In addition, when
asked recently by the US to increase oil output in order to
lighten the effects of a downward-spiraling economy, the OPEC
nations (some of whom were affected by the cable cut) refused.

The Gulf countries in particular are heavily involved with
Iran in banking issues at a time when Israel and America are
trying through sanctions and other pressures to isolate and
economically strangulate the Islamic republic by preventing
other nations from doing business with her. The Gulf countries
are getting nervous about a steadily-declining dollar to which
their own economies are directly linked and are now openly talking
about following other nations that have linked their own currencies
to something less troublesome such as the Euro. Pakistan–the
only nuclear-armed Muslim country, recently gave a resounding
‘Hell-no’ to the prospect of US troops operating
on its soil.

In short, the deliberate cutting of the internet cables can
easily be seen as a shot across the bow by the US/Israeli hydra,
a form of low-intensity/covert warfare aimed at destabilizing
them and making things uncomfortable, as well as reminding them
that if they don’t play ball according to the dictates
of the New World Order that ‘accidents’ can happen.

Others have also speculated that the actions may
be related to Iran opening its oil bourse on the 12th of February.
The bourse is considered a direct threat to the continued global
dominance of the dollar because it will require that Iranian oil,
petrochemicals and gas be traded in non-dollar currencies.

As Online Journal contributorMike
Whitney
comments:

"If the dollar is de-linked from oil; it
will no longer serve as the de facto international currency
and the US will be forced to reduce its massive trade deficits,
rebuild its manufacturing capacity, and become an export nation
again."

The real danger is that the oil bourse will accelerate
the downward pressure on the dollar that has been facilitated
by rampant overspending by the US government and printing of money
out of thin air by the Federal Reserve. Furthermore, Saudi Arabia
is already dropping hints that if Iran succeeds in getting their
oil bourse up and running, they too will start taking Euros for
their oil. Without foreign demand for the dollar as an oil exchange
currency, the US economy is in real danger of slipping into recession
with the dollar take a battering.

Repair
ships
have now reached at least three of the cables,
where full functionality is scheduled to be restored within the
week. The owners of the cables have not yet issued any statements
as to their findings and have
refused to speculate
on the cause of the cuts.

dicktater's picture

Gulf states ‘to drop’ dollar peg on Fed Reserve action

Gulf states ‘to drop’ dollar peg on Fed Reserve action

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=199924...

Publish Date: Wednesday,6 February, 2008, at 02:16 AM Doha Time

DUBAI: Gulf states including Saudi Arabia and the United Arab Emirates will be forced to revalue their currency pegs this year following the dollar’s declines and the Federal Reserve’s interest-rate cuts, Bear Stearns has said.

Five Gulf nations lowered interest rates last week in step with the US to keep their links to the dollar even as inflation accelerates. When Saudi Arabia left rates unchanged after the Fed’s Sept. 18 reduction, the riyal rose to a 20-year high.

“It’s going to be very difficult for central banks in the region to have adequate control of monetary policy, and hence inflation, when the Fed is slashing rates left, right and centre and the dollar is slumping,” Steven Barrow, chief currency strategist in London at Bears Stearns, wrote in a client note yesterday.

Inflation accelerated to records in all GCC, states last year as the oil-rich nations sought to preserve their dollar links. The regional average was 6.3% in 2007, compared with 0.3% in 2001, according to Merrill Lynch & Co.

The Fed cut its target rate for overnight bank lending by 1.25 percentage points in January to prevent the housing slump from pushing the world’s biggest economy into a recession.

The US Dollar Index traded on ICE Futures in New York, which tracks the currency against six major counterparts, dropped 0.7% last week to 75.45. It was at 74.48 on Nov. 23, the weakest level since the gauge started in 1973.

“The only way out, unless the Fed reverses course soon or the dollar soars, is to adjust the currency regime with either a free float, revaluation or the adoption of a currency basket,” Barrow wrote.

Speculation of a Gulf-wide revaluation is rising before a meeting between Saudi Arabia’s advisory council, the Shura, and the finance ministry and central bank, according to Barrow. Saudi Arabia is blocking other Gulf states, such as the UAE and Qatar, from revaluing their currencies, he said.

The meeting will take place on February 17, a newspaper reported at the weekend. “The authorities do not have to act on recommendations from the council and, of course, the council might not even recommend any currency change,” Barrow wrote.

Kuwait became the first GCC state to drop its currency peg to the dollar in May, linking it to a basket dominated by dollars but including the euro, yen and British pound.
Saudi Arabia, the largest Arab economy, cut its benchmark rate for deposits by half a percentage point to 3% on January 31, while Kuwait and the UAE lowered their repo rates by the same amount to 3.5% and 3%, respectively.

Qatar and Bahrain reduced their deposit rates by half a point to 3%. Oman cut its repo rate 0.18 percentage point to 4.14% today, Dow Jones reported.

Traders see a 74% chance the Fed will lower its target for overnight bank lending by half a percentage point to 2.50% at its March 18 meeting, futures on the Chicago Board of Trade show. That compares with 70% yesterday and 14% a week ago.

“Central banks can take other measures to try to limit the damage, such as raising reserve requirements, but we are skeptical that this works and we are also concerned that such tactics can adversely affect the banking sector,” Barrow said. – Bloomberg

dicktater's picture

World Economies hang by an Internet thread (cable)

Intercontinental Internet CableBy now, any news junkie is probably aware there was a mysterious set of events that all but brought Internet access in some countries to a halt. You can breathe a sigh of relief if you live in North America, Australia, UK, Israel, Iraq and most English speaking countries you are untouched. The brunt of the virtual shutdown slowed Internet access in large areas of Asia, the Middle East and North Africa. Egypt, Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, Bahrain, Pakistan and India. Many of these countries were able to redirect their Internet traffic through alternative routes.

Although one country is publicly announcing they are having no problems and “everything is fine”, 3rd party reports show quite a different story. The Iranian embassy in Abu Dhabi told ArabianBusiness.com that “everything is fine”, but Internet connectivity reports on the web, citing a router in Tehran, appear to indicate that there is currently no connection to the outside world. You can view the 3rd party Internet traffic report here for Iran, Asia and the world.

While conspiracy theories are spinning around the Internet that this is a planned strike by Israel and the US to break Iran off from the world, we’re not looking to get into that mess. Iran FlagWhat is very interesting to take a close look at is how closely our world is tied to the Internet for our business and personal lives. Financial transactions from bank transfers to stock trades are transmitted through these intercontinental cables connecting our countries.

Most of the countries effected by the most recent Internet blackout were only effected for around a 24 hour period. Smart engineers were able to reroute Internet traffic to other parts of the countries and the only result was heavy traffic on certain intercontinental cables. This produced slow access for most, putting countries like India at 60% of capacity. In particular, Delhi which is the second largest city in India with 11.5 million people has had an almost complete shutdown. While the reports state the city is at 50% capacity, users at Internet cafes are telling others they’re having no luck getting access. ”We are unable to access any website. Customers are disappointed by this. The Internet is really very slow,” said Sahil, a Net user in Delhi.

At this point in time only four intercontinental cables were cut within a few days period of time. Reports were first released that it was likely ships anchors had cut the cables. On February 3rd, 2008 Egypt’s Ministry of Communications said no ships were present when the two cables were present. “A marine transport committee investigated the traffic of ships in the area, 12 hours before and after the malfunction, where the cables are located to figure out the possibility of being cut by a passing vessel and found out there were no passing ships at that time,” said the statement. More information the Ministry’s report can be found here. If these cables were not cut by ship’s anchors then it’s easy to conclude that someone cut the cables with intent.

Worldwide Financial MarketsWith a small number of four cables being cut, it was easy for the world’s telecommunications engineers to reroute Internet traffic and recover some access, albeit Iran’s reported consistent blackout. With the world’s business communications and transactions becoming almost dependent on these cables, we need to find alternative solutions to grow the ability to reroute our data whether it be through more redundant Internet sea cables or by satellite. If a clandestine operation were to target these cables in great numbers it could bring the entire world economy to a standstill for weeks. Financial kickbacks could be established easily by shorting the markets and knowing certain sectors would take quite a hit. Hopefully our government is hard at work preparing for a possible attack on our communications that lie outside of our country. Since we all participate in a worldwide economy which has been more apparent with the recent sub-prime crisis, it’s of a serious consequence that we protect others access to the Internet as much as ours. How long will we let the world’s economies hang by an Internet thread?

casseia's picture

Here's an interesting tidbit

posted as a comment on Portland indymedia:

I put in years and years in the technical side of telecommunications field. It looks like this cable breach incident could easily have everything to do with the Iranian oil bourse.

One technical detail: while I certainly no expert in undersea cables, when a cable breaks the location of the break it would probably be easy to determine the position of the break at the "landing stations" at both ends. If it was just a continuous fiber optic cable (not practical for long cable) you would just send out pulses from the landing station. The pulses would basically move at the speed of light, and would tend to bounce back from the point of the breach, and you could just measure the time between when the pulses are sent, and divide it by 2*c (two times the speed of light) (and the density of the cable fibers would affect that speed a little).

But since there must be repeaters (in-line amplifiers to boost and "clean up" the signal), that would be handled through them, basically. It presumably would not be practical to comb an entire ocean looking for a breach. Now suppose you were in the snooping business and you wanted to install a "wire tap" on the cables, by installing "extra" repeaters to sniff the signal, or tamper with it, or block it completely for some reason. See, the instant you breach the cable to install it, the point of installation becomes known from both ends. But not if you first breach the cables close to the landing stations at both ends!

This will backfire, I would surmise. Nations will simply no longer trust the cables (which represent billion dollar investments by companies like Verizon, for example). Then what? Then Russia and China go into the geosynchronous microwave link satellite business, with everything encrypted and decrypted at the earth stations, presumably.

dicktater's picture

Method for determining fiber optic fault location

It doesn't take a scubadiver or submarine inspecting hundreds of miles of cable up close and personal to find the location of a fault or degradation. Time domain reflectometry is used for the same purpose for finding breaks in underground cables without having to dig up the entire route.

Method for determining fiber optic fault location
US Patent Issued on March 14, 2006

http://www.patentstorm.us/patents/7011453-description.html

This invention pertains to optical time domain reflectometers and to the use of such devices in determining the location of degraded portions of fiber optic cables. More particularly, this invention pertains to an optical time domain reflectometer for detecting and locating degraded fiber optic cable connectors.