Investment Indicators from Peter George issue #66
HOUSE of SAUD on stilts
Tsunami Wave of Islamic Radicals
- can DOUBLE oil & gold

Peter George
January 24, 2005

Scripture
"He brings princes to naught
And reduces the rulers of
This world to nothing......."

"He blows on them and they wither,
...a whirlwind sweeps them away like chaff."
Isaiah chapter 40, verses 23 & 24

Note to Readers:

The Middle East is a notoriously controversial subject to deal with. All but the most benign comments invite angry and bitter reprisals from many different directions. For our reader's sakes we do not intend to make such benign comments at the expense of meaningful conclusions and therefore, at least to some extent, we invite controversy.

To examine the Middle East and its repercussions for the world in any useful way demands a somewhat lengthy and in-depth analysis.  What you are about to read is NOT A COMPLETE ANALYSIS. It is an excerpt half the length of the full report. While we enjoy communication with our readers please ensure you read our full article before conveying to us your criticism - constructive or otherwise.

SUMMARY

In the month of January TV viewers throughout the world have been exposed to scenes of devastation covering the islands and coastal resorts of South East Asia, in wake of the worst Tsunami wave in 40 years. It occurred early December 26 - the day after Christmas - first striking the Indonesian island of Sumatra. Hardest hit was the oil-rich province of Aceh, on the mainland. The cause was an undersea earthquake, epicentre 96 miles away in the Indian Ocean. It ranked 9,0 on the Richter scale - the largest quake since a magnitude 9,2 struck Alaska at Prince William Sound on May 27, Good Friday, in 1964. God certainly knows how to get our attention. The latest wave of destruction - metres high in places - may eventually be known as 'The Christmas Tsunami of 2004'.

In wake of the tsunami, overall death toll estimates - a day after the news came through - initially targeted 10,000. At latest count the figure had grown to over 220,000. A senior Indonesian spokesman warned the final count, for his country alone, could conceivably reach far higher.  Few have yet had to cope with significant deaths from spreading disease - the results of water pollution. These could spring to prominence if the crisis escalates.

The total force released by the quake was enough to jolt the planet. It has been estimated at the equivalent of 600 atom bombs. So severe was the tremor that the Island of Sumatra's position on the earth's surface was said to have 'shifted' some 20 metres to the north.

In coming weeks, new aspects of the disaster will likely emerge. People will comment on:

·      The lack of prior warning.

·      The failure of government to heed advance notice.

Finally there will be a growing determination by the US to be 'seen' to be helping the victims of disaster - most of whom were Moslems - in what the US believes has been an exceptional opportunity to counter negative fallout from the war in Iraq.

RELEVANCE TO THE 'HOUSE of SAUD' 

What has any of the above to do with threats to the survival of the 'HOUSE of SAUD' as portrayed in our front page cartoon?

As we enter 2005, we draw a parallel between the Tsunami wave of recent experience - particularly the speed and extent of damage - and we compare it to one of a different kind looming on the horizon - one which has capacity to dwarf the events described above, deeply impacting the spheres of religion, politics, war, and economics. In the next 12 to 18 months it can DOUBLE the prices of oil and gold.

An early victim could be the Saudi Royal Family, commonly referred to as the 'HOUSE of SAUD'. Others can fall. Elections are due in Egypt. Mubarak's time in office is drawing to a close. He was a moderate. Who will replace him?

The wave of destruction we see building is the Tsunami-like rise of Islamic Radicalism - morphing into suicidal waves of terrorism, all in the name of 'Allah'.

Anticipating and matching every step of this wave will be an uncompromising American President surrounded by a team of 'clear-thinking toughs'. Denigrators call them 'NeoCons', 'Likudniks', or 'Christian Fundamentalists'. Even they don't fully understand what links them. Together they are convinced that Islamic terrorists must be ruthlessly tracked down and stopped - irrespective of where that may lead.   

As the struggle mushrooms over a broad front it could trigger wars and revolution, cutting a wide swathe across the Middle East. There are already tensions between the two competing streams of Islam, the Sunni's of Saudi and the Shiites of Iran and Northern Iraq. Coming elections in Iraq could create fresh strains. The last thing wanted by Saudi-backed minority Sunnis in Southern Iraq is a democratic swing in power to the Iran-linked Shiites to the North.

In face of a perceived and growing threat to its supplies of oil, the US will not stand still. If it means invading countries they will do it. This could fan flames of anger and hatred between the world's major contending faiths of Islam and Christianity. Political moderates in the Middle East and elsewhere are in for a challenging time. The end could bring a final rift between the HOUSE of SAUD and erstwhile friends in the US. The root cause of this rift is Israel.

The discussion that follows begins with the origins of the Arab-US conflict over Israel, examining misunderstandings between Arabs and the West, following establishment of the state of Israel. We weigh Islam's claims to Jerusalem against a Judeo-Christian perspective. We study the history of the Saudi royal family, its ties to Islamic fundamentalism and its increasingly precarious relationships with both its clerics and a wary US establishment. Against that background, we analyze US strategy in the Middle East - particularly the real reasons for the invasion of Iraq. We point to where the road could lead and conclude with the implications for oil and gold.

1.  ORIGINS OF THE ISRAELI PROBLEM

Ever since the discovery of oil in 1936 the HOUSE of SAUD has been trying to pursue two mutually exclusive objectives. The first was their self-chosen role in protecting and promoting Islam - invariably at the expense of Israel. The second was a business decision - cultivated over decades - to develop a special relationship with high officials in the US Administration. Here is some background.

• The HOUSE of SAUD has historically been 'keeper' and 'guardian' of the two holiest sites of Islam - the cities of Mecca and Medina, spiritual home to 1,2billion Muslims. The cities featured prominently in the life of Islam's founder, the prophet Mohammed, way back in 620 AD, but HOUSE of SAUD involvement only came 1,000 years later.
  
• The HOUSE of SAUD has strong links to Islamic Fundamentalism, known as 'Wahhabism'. Today it is the driving force behind the 90% majority branch of Islam, known as the 'Sunnis'. Emotionally the ties go back to 1745 when Sheikh Wahhab, the son of a religious judge, called on Muslims to return to the original form of Islam, free of 'multiple idolatry', worshipping only one god, albeit not necessarily the god of the Jews and Christians. The origins of Islam are discussed below. 
  
• When Sheikh Wahhab was persecuted, a local prince, Bin Saud, offered him sanctuary. The two families agreed to work together.
  
• The partnership flourished and eventually, nearly two centuries later, led to the foundation of Saudi Arabia. There were reverses. A major one occurred in 1891 when the Ottoman Empire drove the Saud family into exile in Kuwait. In late 1901, Al Saud's son, Abdul Aziz, set off with a small band of followers and in January 1902 succeeded in retaking the capital of Saudi Arabia, Riyadh.
  
• Ten years later he extended his authority over the Arabian Peninsula, driving out the remaining Turkish garrison. This gave him access to the coast and unknowingly enabled him to acquire control over a quarter of the world's then hidden reserves of oil.
  
• The formal foundation of the Kingdom of Saudi Arabia only took place on September 23, 1932, when the British recognized the sovereignty of the new nation and decided to support their king against the Ottomans, the latter having sided with the Germans in the First World War.
  
• Today the Royal family retains political legitimacy only so as long as it continues to defend and uphold the Wahhabi movement and its fundamental Islamic beliefs. That's the 'deal' between the Family and Islamic clerics.
  
• In 1945 Saudi king, Abdul Aziz Saud, met with President Roosevelt aboard the USS Quincy in Egypt's Great Bitter Lake. Uppermost in the king's mind was the question of Palestine and Jewish immigration. His view was somewhat distorted:
  
• "If the suffering of the Jews had been caused by the Germans, the Germans should pay the price for it; let the Jews build their homeland on the best lands in Germany."
  
• Without contradicting him - which in retrospect he should have done - Roosevelt gave him a 'letter of understanding' to the effect that:
  
• "No decision would be taken with respect to the basic situation in that country without FULL CONSULTATION with both Arabs and Jews."

Roosevelt further agreed that he:

• "Would take no action in his capacity as Chief Executive of the Executive Branch of Government which might prove hostile to the Arab people."

Colonel Eddy, son of a missionary, was interpreter at the meeting on board the Quincy. He said the king took Roosevelt's letter as a commitment from the US and was furious to discover three years later that Roosevelt's successor, President Harry Truman, did not consider himself bound by it. Despite this knowledge, the Saudi Arabia Information Service continues to restate and depend on Roosevelt's undertakings, insisting they still obtain. Here is the Saudi version appearing on their website:

• "It was at this famous meeting that the American President gave his undertaking to the Saudi King that Arab interests in Palestine would not be sacrificed to Jewish aspirations for nationhood."

With respect to the Saudi Information Service, the above is not what Roosevelt actually promised. It has been strategically 'altered'. If Saudi Royals insist on holding to their own interpretation, it is little wonder they are constantly aggrieved by US actions over Israel. Unjustifiably, the entire Moslem world feels let down. But it was the Royal Family which created expectations about US intentions over the State of Israel which were, and are, both unrealistic and incapable of fulfillment. This in turn bears on the related problem of what to do with the Palestinians and has ever since been a constant source of friction in relationships between the US, Israel, and the entire Arab world.

We do not believe the problem can be resolved without Islam facing up to truths which are presently unpalatable. Failing that, 'Radical Islam' will lose patience with the equivocations of the HOUSE of SAUD and other Arab moderates - including the President of Egypt.  A Tsunami wave of anger, bitterness and impatience is on a roll. The HOUSE of SAUD is on 'stilts' - exposed and unsteady - incapable of withstanding the slightest jolt. If they fall, the implications are 'out of the box'. Let us focus on the stumbling block of Israel and the truths which Islam needs to face.

2.     JERUSALEM AND THE TEMPLE MOUNT

Most Moslems have been persuaded to believe - as an article of faith - that the Jewish state of Israel should be destroyed and Jews themselves forced to assimilate as a powerless minority amongst Arab nations. How did the idea originate, because it never featured in the Koran? To the contrary, the 13th century Arab biographer Yakut noted:

"Mecca is holy to Muslims; Jerusalem is holy to the Jews."

Yet today, Muslims proclaim Jerusalem's Temple Mount - containing the Dome of the Rock and Al-Aksa Mosque - as the third holiest site in Islam, after Mecca and Medina. Back in 1967, recently-deceased Palestinian leader Yasser Arafat went further and claimed that ALL of Jerusalem belonged to Islam. Instead of accepting these claims at face value we confront them at source. Let us emulate the boldness Reagan used in his famous "Evil Empire" speech, when addressing the Annual Convention of the National Association of Evangelicals in Orlando, Florida on March 8, 1983. His proclamations are as apt today as they were then. America may discover she is entitled to be as ruthless with Islamic terrorism as she was twenty two years ago, when facing down and exposing communism, and its claim to world domination. Here are some excerpts from Reagan's famous speech, back in 1983. If Bush said them today, people would object. It shows the extent to which secular has overtaken the spiritual.

• "There is sin and evil in the world, and we're enjoined by Scripture and the Lord Jesus to oppose it with all our might."
  
• "In this century, America has kept alive the torch of freedom, but not just for ourselves, but for millions of others around the globe."
  
• "I think the refusal of many influential people to accept the elementary facts of Soviet doctrine, illustrates a reluctance to see totalitarian powers for what they are." (For Soviet doctrine read 'Islamic Radicalism')
  
• "I intend to do everything I can to persuade them of our peaceful intent but the reality is we must find peace through STRENGTH."
  
• "The Soviet Empire...is the focus of evil in the modern world."

Reagan proceeded to push the Soviets into an arms race which bankrupted them. It became known as 'The Star Wars Programme'. It led to the collapse of Communism. Ten years later the Russian Ruble shriveled from parity with the dollar, to 26,000. The new government then removed the noughts and started fresh. Today Russian foreign exchange reserves are exploding as rip roaring free markets return and commodities boom in face of growing demand.

In the same way his predecessor exposed the lies of Communism, Bush needs to dissect and deal with Islamic perversions of the truth today. Arafat sprouted them in profusion. Let us pursue and see where they lead.

·      Arafat claimed there was never a Jewish Temple and in recent years went further. He arranged for extensive excavations to take place, under the Temple Mount, destroying evidence of Jewish artifacts. Yet the Bible contains a detailed description of the building of the First Temple by King Solomon, in 956 B.C. If Arafat were correct, even the New Testament would be fiction. There Christians read how Jesus threw the money changers out of the 'Temple'. What Temple? Nebuchadnezzar destroyed this mythical First temple in 586 B.C. Of that there is no lack of evidence.

·      If one Temple wasn't sufficient, Cyrus, the King of Persia, ordered and paid for the reconstruction of a Second. It was completed in 515 B.C.

·      The destruction of the Second Temple by the Roman Emperor Titus was recorded by the first century historian Josephus. He gave a dramatic and - for him - a painful account of how he witnessed the events first hand. Forty years earlier its fate had been foreseen by Jesus himself when he said in Matthew chapter 23, verses 37 onwards:

·      'Do you not see all these things? Assuredly I say to you, not one stone shall be left here upon another, that shall not be thrown down.'

·      As final proof of the Temple's prior existence in its 'reconstructed' form, the Romans memorialized their destruction of the Second Temple in engravings on the 'Arch of Titus', still standing near the old Roman Forum.

The above should be sufficient to dispense with Arafat's first lie concerning the non-existence of the Jewish Temple.

His second lie is the myth that Jerusalem is Islam's third holiest city.  

The Moslem 'claim' to Jerusalem and the Temple Mount as its third holiest city is based on a verse in the Koran. Despite Jerusalem not being mentioned even once in the Koran, there is a modern-day belief among most Moslems, that Mohammed was referring to Jerusalem's El-Aksa Mosque, when he described his famous 'night journey' to the 'Furthest Mosque'.

In Sura 17:1 it says:

"Glory be unto Allah who did take his servant for a journey at night from the Sacred Mosque to the Furthest Mosque."

Is there any foundation to the argument by Islamic 'fundamentalists' that the 'Furthest Mosque' refers to what today is called the El-Aksa Mosque on the Temple Mount in Jerusalem?

·      When Mohammed died in 632 A.D. Jerusalem was a Christian city within the Byzantine Empire. During this time there were only CHURCHES in Jerusalem, and a church stood on the Temple Mount. It was called the 'Church of St. Mary of Justinian'. Hard for Mohammed to have visions of a 'Furthest Mosque' in Jerusalem when there were only churches standing on the Mount. There was certainly no Al-Aksa Mosque at that time.

·      Mohammed died in 638 A.D. Six years later Jerusalem was captured from the Christians by Khaliph Omar. There was a struggle over who would assume the role as leader of the new religion of Islam. Sixty years AFTER Mohammed's death, in an effort to redirect power to himself as the new leader of Islam - away from Mohammed's old priest cult who still lived in Mecca - the Khaliph Abd El Malik transformed the 'Church of St. Mary of Justinian', into the Dome of the Rock. That was in 692 A.D.

·      Twenty years after that again - 80 years after the death of Mohammed - the Khalif's son Abd El Wahd, built the El-Aksa Mosque, down-dip from the 'Dome', but still on the Temple Mount. He took a second church, simply called St. Mary's, standing not far from the relatively new Dome. Leaving the 'Basilica' structure with its rows of pillars unchanged, he added an onion-like dome to make it look like a Mosque. He named it 'El-Aksa' to make it sound like the one mentioned in the Koran. Yet this particular Mosque only came into existence 80 years AFTER Mohammed's death.

·      It is quite clear that Mohammed could never have been referring to the El-Aksa Mosque in Jerusalem when compiling the Koran. It only came into existence after his death. As many scholars long ago established, the only possible and logical solution is that Mohammed intended the Mosque in Mecca as the "Sacred Mosque" and the Mosque in Medina as the "Furthest Mosque".

Ever since Solomon built the First Temple in 956 B.C. - more than 3,000 years ago - Arabs and other nations have been seeking to capture the 'source of power' presumed to lie under the Jewish Temple Mount, but to no avail. It quite likely, in the course of the present century, current tenants will once again have to give way. If end-time prophecies are correct, their disappearance will herald the building of a third and possibly final Temple. This will be the one to which biblical end time prophecy alludes when the Jewish 'Messiah' returns - and Christians expects Jesus to come back for his 'church'.

Before we close this section, we introduce an element of common sense into the equation. Back in 1875 a Lebanese family took what are believed to have been the earliest photos of the Dome of the Rock and the El-Aksa Mosque. All showed a poor state of repair indicating a total lack of use. It was only when the Grand Mufti al Husseini restored them in the 1930's that Jerusalem and its Temple Mount suddenly acquired their new role as: "The third holiest site in Islam."

These findings have a major bearing on how one ought to approach Arab nations who vociferously claim the right to determine what ought to be done with Jerusalem, or who would deny to the Jewish people what they in turn believe is their God-given right to re-establish the State of Israel - eventually along the boundaries given to King David. At this stage one is not even talking about where exactly those 'boundaries' will be. But if there is ever to be 'peace' in the Middle East, the issue of the legitimacy of Israel has first to be resolved. Unfortunately it is a 'biblical' right which most will either ignore if they are 'unbelievers' or refuse if they are Islamic Fundamentalists.

In conclusion of this section, it is interesting to note that the above analysis totally dispels any substantive Arab claims to Jerusalem on grounds of religion. The claim was a myth. We need to move on and discuss the even more contentious issue of the land of Israel. It may well be that hopes of ever achieving 'peace' in the Middle East are futile. Christians believe there will be no reconciliation between Arab and Jew until Christ returns.   

3.  JEWISH ENTITLEMENT TO THE LAND OF ISRAEL

Jews, and Christians familiar with both Old Testament and New, have a substantial body of scripture on which to draw when seeking to determine whether the land of Israel will eventually be restored to the Jewish people. It is unlikely to come without a major battle. The question is therefore two fold? Will it come and what ought bible-believing Christians to do in the meantime? Here are a few key passages:

·      Genesis chapter 17, verse 8
"The whole land of Canaan, where you are now an alien, I will give as an everlasting possession to you and your descendants after you; and I will be their God."

·      Amos chapter 9, verses 11 to 15
"In that day I will restore David's fallen tent. I will repair its broken places, restore its ruins, and build it as it used to be, so that they may possess the remnant of Edom, and all the nations that bear my name."

      "I will bring back my exiled people Israel; they will rebuild the ruined cities and live in them...I will plant Israel in their own land, never again to be uprooted from the land I have given them, says the Lord."

We include a New Testament scripture in which Jesus himself confirms the above Old Testament promises. This is for the benefit of 'Replacement Theologians' who believe the modern-day Church has 'replaced' Israel:

·      Matthew chapter 5, verse 17
"Do not think that I have come to abolish the Law or the Prophets; I have not come to abolish them but to fulfill them. I tell you the truth, until heaven and earth disappear, not the smallest letter, not the least stroke of a pen, will by any means disappear from the law until everything is accomplished."

Finally there is a warning to nations and peoples who would harm the Jewish people, and a promise to those who bless and protect them. Arabs seeking the permanent destruction of the Jewish state of Israel, need to reflect on the total defeat suffered by the German peoples after world war two. By the same token, America's current President George Bush may enjoy a measure of divine blessing out of all proportion to the apparent risks of his current policies in the Middle East - as long as he aligns his nation's actions with biblical injunctions.

If Bush holds fast to his Christian principles and the scriptural advice he receives from his friend, Franklin Graham, Billy Graham's son, then Arab nations that expect him to favour their interests at the expense of the integrity of the State of Israel are likely to be disappointed.

The writer does not in any way wish to close his mind to the intractable problems surrounding the issue of the Palestinian people and the very real sufferings they have had to endure. In this context Christians cannot forget the main thrust of the task the Lord Jesus gave them - testifying the gospel of God's grace. Nonetheless, much of the suffering the Palestinian people have had to endure appears to have been of their own making, and could possibly have been avoided.

Within the collective scope of the vast lands owned by the Arab states, and the substantial wealth that flows from their oil revenues, there is surely a place and a provision for the Palestinian peoples? That is where Arab imaginations ought to be focused - not on seeking the destruction of tiny Israel. However, end-time prophecy suggests it will never happen peacefully.

4.  BALFOUR DECLARATION OF 1917 - UK ROLE

In late 1917, the outcome of the First World War was hanging in the balance. Thanks to Chaim Weizmann's invention of an alternative fermentation process for 'acetone'- needed in the production of munitions - the British Foreign Secretary, James Balfour, saw an opportunity to win Jewish support for the Allies in the First World War. He wrote to Jewish leader Lord Rothschild, assuring him that his Government supported the idea of providing a homeland for the Jews. The 'Balfour Declaration' of November 2, 1917, became the basis for international support for the founding of the modern state of Israel. A key passage of Balfour's letter is reproduced below:

"His Majesty's Government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object, it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jews in any other country."

The intention was to give Jews the whole of Palestine - including the whole of Jordan and the land west of the Jordan River. This is clear when studying the original wording in a telegram from Weizmann to Justice Brandeis, as approved by the Foreign Office and Prime Minister:

1. His Majesty's Government accepts the principle that Palestine should be reconstituted as the National Home for the Jewish People.

2. His Majesty's Government will use its best endeavours to secure the achievement of this object and will discuss the necessary methods with the Zionist Organization.

As the document evolved it was altered, mostly due to pressure from an anti-Zionist Jew, Edwin Montagu, recently appointed as Secretary of State for India. He was concerned the existence of a Jewish state would call into question the loyalties of Jews living in other countries and that this would lead to anti-Semitism. There were therefore two amendments:

·      The first one changed the declaration to call for a National Home 'IN' Palestine, rather than making ALL Palestine a National Home. It was later used to justify removing the whole of Transjordan from the British Mandate that resulted from the Balfour Declaration. This was done in 1922 under pressure from the Arabs.

The second change added the following wording:

·      "It being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non- Jewish communities in Palestine, or the rights and political status of Jews in any other country."

This last change was tragically used to limit immigration to Palestine from 1939 onwards, to 75,000 a year. Millions died in Hitler's 'Death Camps' due to their inability to escape from Nazi-occupied Europe to their new 'homeland', of or 'in' Palestine. 

The Balfour Declaration in its original form was the culmination of a long tradition in Britain that supported restoration of the Jews to their own land.   

After the war, Arab and Jew met during the 1919 Paris Peace Conference. Emir Faisal, previously King of Greater Syria, then King of Iraq and leader of the Arab Revolt against the Turks, agreed to accept the Balfour Declaration of 1917, on condition the British honoured their promise to grant the various Arabs states their Independence. In particular it was agreed that the whole of Palestine - including the area west of the Jordan - become a homeland for the Jewish people.

Faisal specifically agreed to the following:

All necessary measures will be taken to encourage and stimulate immigration of Jews into Palestine on a large scale, and as quickly as possible to settle Jewish immigrants upon the land through closer settlement and intensive cultivation of the soil. In taking such measures the Arab peasants and tenant farmers shall be protected in their rights, and shall be assisted in forwarding their economic development.

Unfortunately the British did not honour their undertakings to Faisal and tragically the agreement fell away. One commentator said that even the agreement 'in principle' showed that Jewish aspirations and Arab sentiments were not mutually exclusive. We are less optimistic because the differences centre on the religious. At the time the Arabs were under pressure in a quest for independence. What would have happened after it was granted may have tempted them to renege.

In 1920 the League of Nations ratified the Balfour Declaration but, in 1922, under pressure from the Arabs, the British and the League took away Jordan. Then in 1939, as mentioned above, the British virtually reneged on the entire agreement. Based on the Biblical promises that follow those who alternatively bless or curse the Jewish people, it is not surprising that after the war, the British lost their Empire.

As a South African of British descent it is disappointing to read of such things. One is able to sympathize with foreigners who use the phrase 'Perfidious Albion' - the French version of which was employed by Napoleon to describe his dealings with the British. Some say the word 'Albion' derives from the White Cliffs of Dover which face a traveller crossing the Channel for the first time. 'Perfidious' is easier to understand. It means 'treacherous' or 'guilty of breaking faith'. Thanks for nothing! 

5.  ORIGINS OF ISLAMIC TERRORISM

Two days after the September 11, 2001 bombing of the Twin Towers, Robert Fisk, Middle East correspondent of The Independent produced the following justification as to why Muslims had come to hate the West:

·      "So it has come to this. The entire modern history of the Middle East - the collapse of the Ottoman Empire, the Balfour Declaration, Lawrence of Arabia's lies, the Arab revolt, the foundation of the  state of Israel, four Arab-Israeli wars and thirty four years of brutal occupation of Arab land - all erased within hours as those who claim to represent a crushed, humiliated population struck back with the wickedness and awesome cruelty of a doomed people...Some of us warned of 'the explosion to come'. But we never dreamed of this nightmare."

Fisk has his view and its one which is increasingly common. He appears to be biased against American policies in general and the Jewish people in particular. He also displays little or no knowledge of, or respect for, the bible. His summary is useful in one respect. It encapsulates historical events of significance. There is one problem. His reference to the 'Balfour Declaration' is hardly a reason for Arab anger. They successfully persuaded the British to renege on it!

Before proceeding to our study of Islamic Terrorism, we lift one more quote from Reagan's speech to the Evangelicals in 1983. It concerned Racism, Anti-Semitism and ethnic hatred.

·      "The long struggle of minority citizens for equal rights - once a source of disunity and civil war - is now a point of pride for all Americans. We must never go back. There is no room for racism, anti-Semitism, or other forms of ethnic or racial hatred in this country."

Our study of Islamic Terrorism highlights a movement which runs contrary to the goals and principles set out above. We analyze the extent to which the movement is either an aberration from pure Islam or its 'natural spawn'. If the latter, it will doubtless rest on the many vengeful passages in the Koran which, if taken at face value, can justify all manner of evil. 

In this section on 'terrorism' we intend confining our comments to those persons likely to affect a regime change in Saudi Arabia, since this is ultimately the purpose of our study - assessing the likelihood of such an event.

We pick up with the first appearance on the scene of Osama bin Laden, the man credited with the attack referred to above by Robert Fisk and to many other attacks besides - both before September 11 and after. Fisk had interviewed bin Laden some three years earlier and heard him describe how his men had helped destroy the Russian Army in Afghanistan. Bin Laden's efforts doubtless played a role in hastening the downfall of the Soviet Union. It clearly wasn't just the product of financial bankruptcy. The myth of 'Military Invincibility' also had to die. This is where the US has to be extremely careful. They cannot afford another 'Vietnam' in Iraq. They have to win at all costs.

They may encourage themselves with the knowledge that no 'guerrilla' is invincible - certainly not if his moral armour has been removed. This may well become obvious as we proceed. bin Laden's moral principles are highly questionable. If the US can clean up their act in Iraq, it is possible for them to turn the tide against him.  

·      Bin Laden originally studied Management and Economics at university in Jedda, a coastal resort in Saudi Arabia. In due course he came under the influence of religious teachers who introduced him to the wider world of Islamic politics. The 1979 Soviet invasion of Afghanistan galvanized him. He supported the resistance which became a 'jihad' or holy war. Ironically the US then became a major supporter of the Afghan 'resistance', or mujahideen, working with the governments of Saudi Arabia and Pakistan, to set up Islamic schools in Pakistan, for Afghan refugees.  Known as 'madrassas',  these religious schools later evolved into virtual 'training centres' for Islamic radicals. They taught a particularly austere form of Islam based on Saudi 'Wahhabism' - not so much concerned with scholarship as making war on 'infidels'. Later on the process was repeated in Saudi itself.

·      In a Power Point presentation to a Pentagon advisory group in July 2002, analyst Laurent Murawiec from Rand Corporation summarized what was happening as follows:

      "The Wahhabi acid was corroding societies, proselytizing new converts to extremism and terrorism, setting up new madrassas, new nodes of the international army of 'jihad', new cells. Thousands of feverish fanatics were churned out day after day by Islamic schools and universities within the kingdom, with their burning hatred for all non-Wahhabis: Shiites, non-Wahhabi Moslems, Christians, Jews, Westerners, modernizers, Americans. The regime was happy to export them to wreak the havoc of jihad elsewhere. The deal was firmly sealed whereby the satiated princes could enjoy their riches while their lean and hungry offspring went off to battle elsewhere."

      Initially it was the Soviet Union. Now it's America. Much of bin Laden's funding came - and still comes - from the upper levels of Saudi society.

·      Bin Laden was deeply impacted by the course of the first Iraq war. On July 25 1990, a week before Saddam Hussein invaded Kuwait, he called in the US Ambassador at the time, a woman called April Glaspie.

·      Saddam had three legitimate complaints. The first was that OPEC had called on all members to limit production to allocated 'quotas'. At the probable urging of the US, it was apparent that Kuwait was producing in excess of its allowed quota in order to assist the US keep a lid on prices at a time when they were set to rise. US connivance is clear because in his meeting with the Ambassador, when Saddam complained about Kuwait's behaviour in this regard, the US Ambassador defended Kuwait and emphasized the importance of keeping prices at 'reasonable levels'. Saddam's second complaint was that the Kuwaitis were 'slant-drilling' on the Iraqi border into an Iraqi field. His third complaint was that Kuwaiti farmers were running their sheep over the border into Iraq.

·      When Saddam told US Ambassador, April Glaspie, of his intentions with regard to invading Kuwait, he was virtually given a blank cheque to proceed. She said America would not interfere - it was an Arab matter. Who could then blame him for marching in? What right did America subsequently have to vilify him?

·      A month later the US Ambassador was challenged by British journalists who had obtained a copy of the tape and transcript of her meeting with Saddam. When they accused her of having 'encouraged his invasion', she responded:

      "Obviously I didn't think - and nobody else did - that the Iraqis were going to take ALL of Kuwait."

·      When Saddam appeared to threaten Saudi, bin Laden approached the Saudi defence minister and volunteered to mobilize veterans of the 10-year Afghan jihad against Soviet occupation, this time to defend Saudi Arabia against Iraq. There are those who believe Saddam actually had no intention of invading Saudi. The disposition of his troops at the time never supported the logic of expecting such an attack. In retrospect accepting bin Laden's offer may have been the wisest course of action - both for the Saudi Royal family and for the US military. Alternatively, bin Laden undoubtedly had his own agenda and the Saudi Royal family was justifiably nervous. Certainly his track record in fighting the Russians gave cause for confidence, but that was a guerrilla war. The Saudi Royals obviously had no desire to run and hide in caves like bin Laden had been forced to do.

·      As it happens the Saudi government declined bin Laden's offer, preferring to rely instead on a US-led coalition which eventually moved 500,000 troops into their country. Maybe this was the American objective all along - to provoke Saddam into attacking Kuwait, thereby arousing Saudi fears. Once in a state of fear, the House of Saud would be strongly motivated to invite the permanent protection of US troops. Having troops stationed in Saudi definitely gave the US massive leverage in the world of oil, albeit for a limited period.        

·      Once his offer of help was rejected, Bin Laden gave all to understand he was incensed that 'non-believers' should be stationed in the birthplace of Islam. He was able to charge the Saudi regime with deviating from the true policies of Islam. He became increasingly difficult. In 1991 the government expelled him for anti-government activities.

·      It took the US from August 2, 1990 until February 1991, to launch 'Desert Storm', the operation which eventually drove Saddam out of Kuwait. George Bush Senior was apparently quite apprehensive about the plan but then British Prime Minister, Maggie Thatcher, famously told him: "This is not the time to go wobbly." She was later astounded that: 'the Americans allowed the vile dictator to stay in power'. In fact, had she known the circumstances in which Saddam had been inveigled into attacking Kuwait, she may have had second thoughts about urging Bush to attack. What subsequently became clear is that a major reason for holding back was to placate the Saudis. The latter were apprehensive that the downfall of Saddam could lead to the installation of a Shiite majority - one aligned with Iran, against the Sunnis in Saudi. This explains why there is a current strongly-held belief that the driving force of terrorism in Iraq today is still Saudi-financed.

·      From 1991 onwards bin Laden's attention turned towards the US, Israel and the Saudi monarchy. Unfortunately, certain members of the Saudi Royal family still continued to fund him and his newly-launched organization, al-Qaeda, which means 'the base'.

·      In 1992 bin Laden claimed responsibility for bombing US troops in Yemen and the following year for attacking US troops in Somalia.

·      In 1996 the risk and evidence of widespread resentment against US forces in Saudi were revealed by bin Laden's successful bombing of the Khobar Towers in Dahran, a vital Saudi installation. This was an attack that left 19 Americans dead and 372 wounded. American troops were subsequently redeployed to more secure locations within the country but in the process became virtual prisoners.

·      In 1998 he organized the bombings at the US embassies in Kenya and Tanzania. The date, August 7, was significant. It marked the anniversary of the deployment of the first US troops to his home country of Saudi Arabia. It was a bitter reminder of the consequences of the Monarchy having chosen US troops in preference to his own.  

·      On September 11, 2001, bin Laden stunned the US with his daring attack on the Twin Towers Trade Centre. What shocked the US Administration most was that within hours of the incident they discovered that senior Saudi intelligence officials had been involved and that 15 out of the 19 terrorists were Saudis. The US found it hard to digest the fact that parts of the vast Royal family were not only corrupt, but also deeply intertwined with anti-American terror and extremist fundamentalism.

·      Former CIA agent Robert Baer wrote a book in mid 2003, alleging that the US government had systematically turned away from growing evidence of Saudi complicity in promoting Islamic fundamentalist terrorism. By choosing to turn a blind eye, they frustrated the kind of investigations that might have headed off September 11.

·      Senator Bob Graham later enquired why, two days after September 11, the Saudi Ambassador was able to gain access to Bush and secure permission for 140 or so wealthy Saudis to leave the country in a specially chartered luxury plane. Some were even related to Osama bin Laden himself. It happened at a time when all other American air traffic was tightly restricted. None of the people on the plane were questioned by the FBI - not even an alleged al-Qaeda intermediary, said to have had foreknowledge of the attacks. The man has since died.

·      There are those who believe the September 11 attacks led directly to the launching of the war against Iraq. We will discuss our reasons for saying this later. Suffice to say, we do not believe the issue of "weapons of mass destruction" was ever more than a blind. The real reasons for launching the war were genuine enough and will be discussed later.

·      On 20 March, 2003, the US launched its second invasion of Iraq, against the wishes of the UN and on the pretext of having foreknowledge of the existence of the weapons referred to above.

·      On 30 April 2003 the US announced the total and immediate withdrawal of all its troops from Saudi, including from a $2billion base finished only 2 years earlier. This suggests a measure of urgency verging on panic. The HOUSE of SAUD was seriously threatened and the US was not yet ready to act to prevent bin Laden taking over.

·      On May 12, 2003, barely two weeks after the above announcement, suicide bombers in Riyadh killed 34, including 8 Americans, at housing compounds for Westerners. Al-Qaeda suspected. Bin Laden's focus appeared to have shifted from the US, to the Saudi government themselves. 

·      On May 29-31, 2004, again in Riyadh, terrorists attacked the offices of a Saudi oil company in Khobar, killing 22, including an American.

·      On June 11-19, 2004, in Riyadh, terrorists kidnapped and then publicly beheaded an American Paul Johnson. In this some have suggested they went too far. They may be underestimating the popularity of bin Laden and the galvanizing effect his exploits have on the masses.

·      On December 7, 2004, in Jiddah, terrorists stormed the US Consulate, killing 5 Americans before being subdued by Saudi security, who then killed 5 of the militants.  

It is common cause that if there were an open election in Saudi tomorrow, and bin Laden stood for President, he would be overwhelmingly victorious. The question therefore is: How does the US plan to fight back? In the past, US foreign policy was based on détente - in this case it would involve pandering to Islamic fundamentalism and seeking to placate them. The alternative strategy would be to seek to discover the terrorist command centres and sources of finance - then implement an interventionist policy to eliminate them by cutting off their roots. This could explain the much-maligned 'Neocon' strategies pursued by the Bush Administration. 

10.  CAN THE US WIN IN THE MIDDLE EAST?

There is nothing insurmountable about the fight against terrorism. By no means is it true to say that the terrorists always win. Post world war two Malaysia was one of the first countries to prove that. Certainly there have been times in the past when the West despaired of defeating communism. But the US is coming from a position of great weakness. They are to all intents and purposes bankrupt. Foreigners own much of America's debt. As the battle for oil intensifies, major new consumers like India and China will feel extremely threatened if the US spreads its tentacles of control over the entire Middle East as the source of most of the world's oil. They can react by dumping US bonds and the dollar. If foreigners refuse to finance America's daily deficit of $2billion, she will be unable to prosecute the war - any war. 

There are numerous parallels between the Shah of Iran's downfall in the late seventies and the tottering steps of the Saudi Royals as they seek to walk a tightrope between an increasingly disenchanted US ally and rising political and religious discontent at home. Even on the home front there is a widening division between the old guard who want fundamentalism restored and the family's ties to the US severed - and a younger generation in a better educated middle class - who want the autocratic rule of the family replaced by democracy and modernism. This would especially improve the role of women in Saudi society. Currently they are not even allowed to drive their own cars.

Back in 1978, the President of the US at the time was Jimmy Carter. He was angling to have the Shah of Iran replaced and was eventually successful in doing so. His mistaken assessment of Ayatollah Khomeini was encouraged by advisors with a desire to form an Islamic 'green belt' to contain atheist Soviet expansion with the religious fervour of Islam. His actions unleashed nearly three decades of turmoil and suffering. The Iran the US faces today is the product of Carter's stupidity. They need to be extremely sure of their facts before they move this time. Strangely enough, we are confident they will do just that. In many respects the Iraq Invasion was thoroughly mishandled.

Gross mistakes were made but valuable lessons have been learned. If Iran is next, far greater care will be taken. 

In all cases the US needs to make up its mind whether it's going to promote democracy for all, or support dynasties and dictatorships when it suits. The principle of the supposed 'Divine Right of Kings' went out in England - without any violence - in the Glorious Revolution of 1688. In France it died violently with the French revolution of 1789, and the beheading of Louis the sixteenth. Which way will the wind blow in Saudi? Certainly the modern financial system makes it easier for the wealthy to sequester their funds offshore. In the event of a threatened upheaval, he who fights and runs away, lives. Even if bin Laden wins, unless he undergoes a similar change of heart to Gaddaffi, his tenure will be short lived. The moment he shows his face, the US will be shouting : "Off with his head!"       

Events in the Middle East through 2005 look set to ratchet both tension and the price of oil. If war and regime change proliferate, the prospect of production disruptions will worsen. Unfortunately this will occur against the background of a sharp rise in demand from India and China, combined with faltering long term supplies as the reality of PEAK OIL begins to make itself felt. The most serious example of this could manifest in Saudi itself. Bush's energy advisor Matt Simmons has more to say and we quote him below.

11.  PEAK OIL TO HIT SAUDI IN 24 MONTHS

In EM64, entitled 'Nuclear Revolution - in the making', we discussed : "The case for PEAK OIL". Michael Ruppert defined it as:

"That moment in time when global oil and natural gas production begins an irreversible decline, which will not yield or give way regardless of how much money and effort is spent in trying to change it."

One of the biggest problems, claims Ruppert, is Saudi Arabia itself. Pressure to produce at maximum capacity has forced Saudi to push its mother field, Ghawar, to a point where over-production has likely shortened its life. It is now showing a 55% 'water cut' - that means 55% of what is pumped out every day is the SAME seawater pumped IN to push the oil up. Experience shows, he says, that when the 'water cut' approaches 75%, a field is prone to collapse.

In support of his views Ruppert quotes Matt Simmons, Chairman and CEO of Simmons and Co., the world's largest private energy banker. Simmons has been a key advisor to the Bush Administration, a member of Vice President Dick Cheney's 2001 Energy Task Force and a regular participant in Council on Foreign Relations meetings for key 'Insiders'. In June 2004 he was one of the top speakers at the Berlin Conference of ASPO (Association for the Study of Peak Oil). He openly confirms everything Ruppert says regarding 'Peak Oil'. Specifically, he believes that Saudi oil production could begin to decline rapidly within three years and that there is no way to avoid a 'world energy cataclysm'. In an interview with Petroleum News on August 1, 2004, Simmons said:

"If I'm correct in my concerns, Saudi Arabia is now producing more than they should to sustain their oil output....I could argue that for the well-being of the world Saudi ought to back off and start producing 3 to 4 million barrels per day so that their oil might last another 30 to 50 years. However, they may already have peaked in their ability to grow oil production, and if that's so, the world has peaked, as well....There is no other oil producer on earth that could even begin to replace a significant shortfall in Saudi Arabia's oil."

Ruppert concludes his analysis by looking at the demand side of the equation. With deliveries to India and China beginning to escalate sharply, he projects that by 2015 global oil demand will increase by 66% - 60mbpd beyond current consumption of between 75 and 80mbpd. To meet demand the industry will have to find the equivalent of ten new North Sea oil fields over the next decade, or three giant Saudis. Yet they are currently hard pressed to find even ONE of the former, let alone one of the latter.

Britain's previous Environment Minister, Michael Meacher, summed it as follows:

"We are facing the sharpest and perhaps the most violent dislocation of society in recent history."

Today, Saudi Arabia herself claims to have total oil reserves of 260billion barrels of crude. Yet during the '80s all the Middle East producers got into bragging and would up their reserves with the stroke of a pencil. Back in 1975, when Aramco was being run by Exxon, Chevorn, Standard Oil, Mobil and Texaco, they put total Saudi reserves at 108billion barrels - not 260billion. They thought Ghawar basically had 61billion. Simmons says that in February 2004, he was told that Ghawar had already produced 55billion. He said 61 was not the total, it was the amount they could recover. The Saudis claim Ghawar has another 125billion in recovery. 125 plus 60 is 185. Could US oil producers have underestimated Ghawar by threefold?  The retired Chairman of Texaco in the '70s said to Simmons: "That's impossible."

Simmons concludes: "If it turns out the old '75 figures were right, then we really are almost to the end of the miracle. We should be preparing for the beginning of steep declines in the five big fieldsThis is an enormous worry for the wellbeing of the worldUnfortunately there are still 5billion people on earth who are just STARTING  to use modern energy....this is a bad time to say, no, the era has ended....Even if the Saudis are promising to produce 10-15million barrels a day for the next 50 years, I don't understand how the Energy Information Agency can project 25million barrels a day from Saudi by 2025, to meet the 120m barrels a day required to sustain world energy demand."  

At the ASPO conference in October 2004, (Association for the Study of Peak Oil and Gas), an anonymous contributor from the heart of the oil industry gave a devastating insight as to likely Saudi oil production going forward. He said:

"Output will peak at 9,6million barrels a day by end 2004. By the end of 2005, Saudi output could be down to 9,0million a day. By the end of 2006, capacity will be down to 8,7million and by end 2007 it will fall to just over 8,0million."

12.  OIL: A WORST CASE SCENARIO

In the Atlantic Monthly of May 2003, Robert Baer, author of 'Sleeping with the Enemy', wrote an article entitled: 'The Fall of the House of Saud'. He was speculating as to what would happen if Islamic terrorists successfully sabotaged the Saudi oil production complex of Abqaiq, 24 miles inland from the northern end of the Gulf of Bahrain.

"For the first two months after a moderate attack....production would slow from an average of 6,8million barrels a day to 1million, a loss equivalent to one third of America's daily consumption of crude. For 7 months following the attack, daily production would remain as much as 4million barrels below normal - a reduction roughly equal to what all of OPEC were able to effect during the 1973 embargo."

Baer went on to discuss the relative ease with which the other facilities in Saudi could be targeted at the same time. He concluded with the following:

"The US Strategic Reserve can support the domestic market for only about 70 days. And if Saudi's (total) contribution to the world's oil supply were cut off, crude petroleum could quite realistically rise from around $40 a barrel today to as much as $150 a barrel. It wouldn't take long for other economic and social calamities to follow....Losing Saudi would be like losing the Federal Reserve."

Baer served for 21 years with the CIA's Directorate of Operations in the Middle East. He is well aware that the bin Laden's of this world are prepared to commit economic suicide to effect maximum damage to the US economy. He concludes with the following observation:

"Saudi Arabia is more and more a breathtakingly irrational state. For a surprising number of Saudis, including members of the Royal family, taking the kingdom's oil off the market - even for years, and at risk of destroying their own economy - is an acceptable alternative to the status quo.....Sometime soon, one way or another, the HOUSE of SAUD is coming down."

Our own assessment is that if we cut Baer's worst case price in HALF, then we can probably target an end 2005 price of up to $75 a barrel if the Saudi situation blows. Due to the 50 year linkage between oil and gold, such an event would easily DOUBLE the price of gold - more if there is catch-up to the old ratio of 1980. Then, when oil was $40, gold was $850. Now oil is $45 and gold is only $420.    END

More follows for Subscribers: The rest of the report analyses the real strategy the US plans to pursue in the Middle East. We look at the implications for Iran and the ensuing repercussions for the West. We also take a more detailed and historical look at the claims of Islam and the ideological battle that the US is currently fighting. We encourage you to access it at Peter George's website with a view to becoming a SUBSCRIBER. The address is: www.investmentindicators.com

Peter George
tel: 021-700-4880
cell: 082-806-3147
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