Mumbai Terror Attacks Expose India's Chronic Systemic Security Weakness

"Terrorism is a tactic, a technique, a weapon that fanatics, dictators and warriors have resorted to through history. If, as Clausewitz wrote, war is the continuation of politics by other means, terrorism is the continuation of war by other means."
' Patrick J. Buchanan

The 60 hour brutal rape of Mumbai, India's commercial and cultural metropolis, telecast around the world, which was carried out by Pakistan based Muslim terrorists (financed and trained at inception in 1980s by the West, Saudi Arabia and Muslim countries and allowed to fester), with New Delhi almost immobilized, exposed its dysfunctional security infrastructure and inability to hit back at Islamabad. Since then Indian leaders fulminations against Islamabad and West's blowing hot and cold with little likely effect on its long term ally Pakistan, highlights Indian state's abject failure to provide its citizens with even basic security, a basic social contract between the rulers and the ruled. Business Houses like Tatas are going in for their own private security. So what is the state for! Yes India's generally corrupt political elite is well protected by the National Security Guard commandos since the December 2001 attack on the Indian Parliament.

If another rampage takes place, would the outcome be any different ! There have been so many terror attacks in the last few years; in 2008 alone terrorists struck at many places Delhi, Ahmedabad, Bangalore and Jaipur. Every time the same rhetoric is repeated and then central government accuses the opposition ruled state governments of failure and the states in return blame Delhi.

So What is New; India's History

Since millennia invaders have come down the passes of Hindu Kush and with a few tens of thousands of horsemen indulged in loot and rapine and established dynasties all over India. European trading company with some armed sailors with Hindustan eternally divided along caste, regional or religious lines, colonized India for two centuries and sucked away its wealth. Before the arrival of the British East India Company, the sub-continent's share in world manufacturing was 24.5 percent in 1750. But by the time the British had finished with India, the sub-continent's share had fallen to 1.7 percent (in 1900) and that of the British increased from 1.9 percent (in 1750) to 22.9 percent (in 1880) - Rise and fall of Big Powers by Professor Paul Kennedy. In these figures lie recurrent famines in India and millions of deaths, not counting around ten million young Indians killed by the British forces after 1857 resistance to uproot the British company regime. Still, many Indians praise British colonial rule.

For the first time in Indian history, invaders penetrated the Himalayas from Xinjiang and Tibet in the 20th century and stay put.

Collapse of Agencies and Institutions

What ever happened to various Indian agencies and institutions, established to ferret out advance information of terror plots, if possible pre-emptly disrupt them and counter even unexpected attacks through crisis management structures.

Some of the structures are '

(a) the powerful office of the National Security Adviser with its Crisis Management Centre ; (b) the Research and Analysis Wing, India's external espionage agency, with its operatives all over the world including in Islamabad; (c) Intelligence Bureau, with its branches spread all over India with its charter to sniff into terror plots, smoke out enemy sleeper cells and neutralize them (d) India's naval and the air force and the national coastal guard; all under the ministry of defense; (e) the Port Authority of India with the Mumbai Port Trust, very much under the jurisdiction of New Delhi, and of course (f) the state police intelligence organizations.  Apart from these there might be some known and unknown outfits.

Whatever Happened!

To cater for such contingencies, a Crisis Management Group (CMG) at New Delhi has been constituted, which must assemble immediately a crisis begins and remain in session until the crisis is resolved. Chaired by the Cabinet Secretary, CMG is composed of the heads of all Intelligence services, Service Chiefs and concerned heads of ministries and agencies needed to deal with the crisis. Its charter is to organize coordinated, prompt, well-informed and efficient response to the developing crisis by utilizing inputs from various agencies and handle the crisis in a holistic manner.

When ever necessary, CMG takes directions from political authorities i.e. members of cabinet and the Prime Minister either via hot line or personal meetings. Similarly, a local level CMG must also set up immediately to coordinate action on the spot with all available resources under the overall guidance of the CMG at Delhi. In hostage, high jacking aircrafts etc or buildings take over situations, it is mandatory that CMG constitute a team to negotiate with the hostage takers.

From media reports and official announcements, it is not clear whether CMG went into action and if so, with what results. By the sequence of events that followed, it is obvious that there was no single unified command centre in charge of the crisis anywhere. Governments of India and Maharashtra appeared to have been simply overwhelmed by the events and failed to grasp and appreciate the seriousness of the situation. Decision making appeared to be ad hoc and confused.

From reports now in public domain, the crisis became known around 930 PM on 26 November, 2008. The request for NSG came at 11 PM from the state government. Had the CMG been in session and acted immediately, NSG should have been alerted much earlier, without waiting for the state's request. If the aircraft meant for them was not available, the CGM should have commandeered planes available on the tarmac and rushed the NSG. Even the idle VIP jets could have been pressed into service.

The Navy's role has also come in for criticism, especially its western command. The 2005 fire on the Bombay High oil platform had brought out its lack of preparedness to face crisis situations and a total absence of any crisis management apparatus in Maharashtra. Maharashtra and Gujarat coastlines have many key strategic installations of high military and economic significance. Are they sitting ducks!

The failure of intelligence processing and coordination arises from some what flawed structure of the NSA, based on the US model, which has a presidential regime. NSA's position was formalized by "office orders", overriding the Rules of Business notified under the Constitution of India. This has disturbed lines of command and diffused responsibility. (Indians in any case are poor team players and good at passing the buck later on.) Intelligence Chiefs thus report to two bosses, an organizational disaster. The MOS rank of the bureaucrat NSA and his placement in PMO further devalues the authority of the Home Ministry and the systems under the Cabinet Secretary as head of the civil service to resolve turf fights and funnel distilled inputs to the Prime Minister.

Unfortunately, NSA, a policeman with little exposure to foreign affairs, has not remained focused on his prime function of sensitizing his constituents to the methods of work as group to tackle terror and making available real time intelligence to the agencies concerned. Instead, he has allowed himself to be distracted by looking after ruling coalition UPA's security, or matters like high profile Nuclear Deal and even routine politicking. The latter act is a serious breach of conduct rules. In any case, national intelligence became the casualty.

While the question of punishing the perpetrators of the criminal attacks and the state behind them is a different matter, but there appears to be an almost total failure of the structures inside and outside India to sniff , pre-empt and then counter such terror attacks. India's intelligence agencies have not served national interests too well ,say in regard to 'Operation Blue Star ' or advice on sending Indian troops to Sri Lanka. I overheard a RAW Chief in late 1980s boasting that he could make LTTE's Prabhakaran do what he wished ! There are reports of misuse of funds and defection of its senior operatives and other misdeeds. A counter intelligence chief of IB was dismissed when he took a US honey trap a free honey pot. Some supervision by members of Parliament is necessary, but basically police and security services in India are used as they were by the rulers in feudal times, for partisan or personal ends.

This systemic collapse cannot be summed up without a word on accountability. The intelligence czar supposed to smell plots and conspiracies and the CGM headed by Cabinet Secretary to douse the fires are both under the Prime Minister. While a generally lackluster Home Minister in Delhi and Maharashtra's shaky Chief Minister and Home Minister were made to resign, the political elite continued playing its grinding Byzantine games on even their replacements. It was business as usual. A politician who had to resign under the shadow of massive corruption scandal has come back into the Maharashtra cabinet. As yet no accountability has been fixed on the bureaucrats and no heads have rolled.

National Investigation Agency

It also appears that no thorough enquiry into the systemic failures of the institutions and agencies has been announced, as was done by USA after 9/11 by a bipartisan National Commission and an enquiry by the Intelligence and Security Committee of the British Parliament into the London explosions of July 2005. The writer followed them and many analysts rightly accused them of white wash. But at least the deficiencies were looked into.

The report of the committee which enquired into the debacle of 1962 was never released and debated in the Parliament or the public. The Kargil Review Committee Report was released and acted upon, but never discussed in Parliament. (which has now become scenes of bedlam and not serious debates) India remains arrested into the secretive Brahmanical time warp and its syndrome of secrecy. Even the Vedas could only be taught to disciples, mostly sons or relatives. In South India, non-Brahmins were deprived of education by a miniscule minority of powerful Brahmin elite. It took Herculean efforts by non-Brahmins to break through the caste/varna imposed educational and cultural apartheid.

Reportedly the Mumbai's Crime Branch is looking into the 26/11 debacle. It is not a serious proposition. There are too many complex questions to be looked into which are beyond the competence of the Crime Branch. Were there only a dozen commando style terrorists as finally declared or more! Numbers suggested varied up to two dozens excluding local sleeper support. There were reports that some of them were of Pakistani descent but British citizens, including in a statement by Maharashtra's Home Minister and in the UK media. British Premier George Brown's sudden arrival in Delhi raised many suspicions.

While blaming Pakistan for the Mumbai rampage UK based writer Salman Rushdie said that Britain has been far too complacent about the rise of extremism. "Both (Margaret) Thatcher and (Tony) Blair made the same mistake, which was the so-called Londonistan policy where you allow these (Islamist) groups to set up shop here in the belief that if you do that they won't attack this country and that you can monitor them." "This country became the safe haven for every extremist group in the world. It was idiocy - idiocy," Rushdie concluded.

British government controlled BBC was the worst biased Western channel that gave 98% time to cheer leaders of illegal invasion of Iraq in 2003 .It still refers to Mumbai terrorist as 'gunmen' .BBC had also telecast gloating and champagne sipping Khalistan supporters after the assassination of Indira Gandhi in 1984. US media with five corporate entities controlling 90% of media is equally bad.

The truth is that UK since its colonial days and US since last six decades have used Islamic extremists and Jihadists and plain terrorists to divide and rule nations in the Middle East, Asia and elsewhere and now to promote their policies. See West Stirred-up Muslims Terrorize Mumbai

With all eyes on the forthcoming elections, nobody wants a post-mortem of 26/11. It was not even on the agenda of the conference of Chief Ministers held in Delhi to discuss the security problems facing India in the wake of 26/11.

Yes, a National Investigation Agency has been promptly established. Many, specially from opposition ruled states, decry that it has staggeringly sweeping powers, overriding the constitutional provision that jurisdiction over law and order belongs to the state government. Leftists ruling in Bengal and Kerala accuse the Centre of using the NIA for UPA's so called strategic alliance with Washington. The US Federal Bureau of Investigation (FBI), they claim has actually been trying for the past two decades to open outposts in India so as to cope better with both the immediate peril of 'Islamic terror' and the impending peril of the US losing its global hegemony to China.

Crisis Management of Terror Situations ' A Primer

In 1987-89, while establishing Indian External Affairs Ministry's institute for training diplomats and upgrading their mid career skill, after reading up on history of violence and how crisis situations created by terrorists are managed, I had designed a week long training module, which was inaugurated by the then Minister of State for Home, P. Chidambaram, ironically now the new Home Minister. The module was to sensitize diplomats, officers from police, intelligence, military, civil aviation, NSG and other services on the subject. When I checked up in 1999 at the time of the hijacking of Indian airlines plane from Katmandu to Kandahar, the module had been discontinued.
Given below is the format of the first module of 1987 in order to sensitize readers as well as ill informed media persons and equally ill informed political elite, who after every terror attack make vacuous and knee jerk analyses and comments. Maharashtra's Home Minister after 26/11 said "Itne bade shahar me ekadh hadsa ho jata hai  ' in such a big city, an accident or two can happen." India's corporate media lamented the temporary destruction of their rendezvous points at Trident, Hotel Taj or Leopld Caf' in Mumbai, highlighting the sufferings and viewpoints of print media's page three crowd and lighted some candles. Only later media some coverage was directed to Mumbai's Shivaji Terminus where a large number of ordinary people were shot dead by the Pakistani assassins. It is strange that three senior most Mumbai terror experts went out in a single vehicle to handle terrorists and became easy victims.

The primer below might help educate some of them.

Crisis Management Program Outline and Daily Schedule 

0915 Registration
0930 Inauguration by Hon'ble Sh P Chidambaram, M.O S
1015-115 Political Violence and Terrorism a historical overview
1115-1130 Tea break
1130-1300 Foreign Policy and Legal Aspects of Terrorism
1300-1400 Working Lunch
1400-1530 Psychodynamics of terrorism
1530-1600 Tea break
1600-1730 Theories and practices in Crisis Management

1000-1300 Dealing with crisis situations- negotiating skills and techniques
1300-1400 Working Lunch
1400-1600 Dealing with terrorists' a simulation exercise
1600-1630 Tea break
1 630-1730 Organization of terrorist and militant groups in India

0930-1100 Media and Crisis Management
1100-1130 Tea break
11301300 International Terrorist Groups
1300-1400 Working Lunch
1400-1530 ' International Terrorist
1530-1600 Tea break
1600-1730 Smuggling and Narco-terrorism

1000-1300 Case study of terrorist incident : analysis and conclusion
1300-1400 Working Lunch
1400-1730 Case studies in terrorism
       1) Mhatre murder case (Birmingham)
       2) Hijacking of Indian Airlines plane in Dubai
       3) Attempted hijacking of PAN AM Aircraft at Karachi (Sept 1986)
       4) Dec 1988 PANAM Aircrash

1000-1300 Simulation exercise: Indian Ambassador held hostage
1300-1400 Working Lunch
1400-1 530 Institutional Arrangements for Crisis Management
1530-1545 Tea break
1545-1630 Video film 'Crisis Management'
1630-1730 Review/Assessment

In 1987-89, except for north east, India basically faced terrorist violence and attacks from Sikh Khalistan groups, functioning and operating from Pakistan under Gen Zia-ul-haq's patronage and even overtly from UK, Canada and USA, with these western countries turning a blind eye in exchange for Pakistan support in Afghanistan against USSR troops. Before 11/9 stunned them, they lectured India on freedom of speech, association and human rights. Now USA and UK have abridged freedoms in their countries. The Indian inimical terror groups and organizations based in Pakistan and elsewhere are well documented and available since 1980s.The methods of these terrorists have now become more sophisticated with the use of internet, voice over and other such technological advances but the basic core principles remain the same. Action by the NSG and police is the last step. We have to study the role of violence in history and its use by states. A war is only a state sponsored terror i.e. of colonial European powers and now USA, in Iraq, Afghanistan among others and Pakistan's against India. How terrorists are trained, their mental make up, i.e. psychological training for bombers and for commando terrorists used by Pakistan .How terror groups are organized. Their modus of operation , international laws and conventions on terrorism.

After weathering the initial blowing off of Indian steam, in spite of ample proof of the commando-terrorists being of Pakistani origin, trained in Pakistan and their venturing out from Karachi port, Islamabad has blithely told US and UK that in case of any threat from Indian military build up, it will abandon its support to the so called US war on terror ' an euphemism for Western brutal efforts to control Afghanistan since last 3 decades, both for its strategic leverage against Russia, Iran and China and to use it as a corridor to transfer energy belonging to central Asian republics and in the Caspian basin southwards to India and elsewhere. Islamabad has also reminded the world that it has nuclear bombs, which in past, when tensions increased with India, it gave the impression of getting ready and 'news' leaked by western sources to pressurize India. But as in the past not a word of condemnation on nuclear blackmail has come from western leaders or its corporate media or government controlled BBC.

Protecting Sovereignty and Dignity

"It was by force that the sons of Osman seized the sovereignty and Sultanate of the Turkish nation; they have maintained this usurpation for six centuries. Now, the Turkish nation has rebelled and has put a stop to these usurpers and has effectively taken sovereignty and Sultanate in its own hands."

Thus admonished Kemal Ataturk in the Grand National Assembly in Ankara in 1923, when some members, including Islamic clerics and scholars, opposed his proposal to abolish the Sultanate. Many, including some of his comrades, had wanted the Sultanate to continue. A vote by applause after his intervention abolished the six-century-old institution, leaving Ataturk to embark on his program of Westernizing and modernizing the new nation forged out of the ashes of the Ottoman Empire.

India must protect its own sovereignty with what ever it takes. Governments and states rule by 'Iqbal' fear of reprisal. Indian state has failed in its duty. I remember Indian ministers trotting out to various world capitals and complaining about Pakistan's terror activities. A Turkish Prime Minister once said that Pakistan must be aware that the same can be done to Pakistan. Till date there is little evidence of punishing Pakistan.

Incredible India

India now resembles the end of the Moghul era, when every job was up for sale and groups of Marathas, Jats, Rohillas, Sikhs and invaders (now Foreign investors) roamed around the country looting and inflicting misery on the suffering masses of Hindustan, irrespective of their religion or caste. Now the same ethnic, religious, caste and regional groups use all means, fair and foul, to win at the ballot and have established rich dynasties which have grown fat extorting money from the suffering masses of India. The political elite controls a highly corrupt police and security establishment which is used to harass, blackmail political opponents and common public.

Regarding the Mafia don Dawood Ibrahim, involved in 1993 Mumbai blasts, who must have provided local support for 26/11, Raja Murthy wrote on Dec. 9 in Asia Times, "The catch is that India's most infamous mafia boss has stories that powerbrokers on both sides of the border might not want the world to hear. Therein lays a reason why Ibrahim apparently continues to live lavishly'alternating between Karachi and Dubai in the United Arab Emirates, according to various reports including from the Pakistan media."

Added Ramtanu Maitra in Economic Intelligence Review,  "Be that as it may, it is nonetheless true that there is hardly anyone with "power and authority" in Mumbai' and that includes Shiv Sena leaders and mainstream politicians including chief ministers and other political luminaries, law-and-order bigwigs, and almost the entire group of tax-evading Mumbai movie moguls'who is not on the take from this drug-pushing, murderous creature, now under the wings and threats of the Pakistani Inter-Services Security (ISI), British MI6, and the CIA.'"

The affluence seen in India by investment of US fictional funds which existed only on computer screens is fast eroding. To any discernible eye the coming decline and fall of US financial house of cards and hegemony was evident since mid-2006 but Indian ministers and corporate media till seven eight months ago kept pointing to the Casino style rise of Sensex and hence India's economic progress. By the end this year economic growth might even dwindle to 5%. The islands of information technology and call center prosperity in India are like the factories established by foreign companies from the 16th to the 18th centuries. India cannot even assure uninterrupted electric power to the citizens of its capital city Delhi. It requires scientific temper hence regular maintenance and checks and no leakage. This failure of character affects every sector of Indian institution and hence systemic failures.

US economic model has remained an ideal for India's corporate and even political elite which fattens on it, with many key decision makers in the Indian establishment being pensioners of Washington dominated and financed institutions like IMF and World Bank. Like US scamster Madoff's ponzi scheme, India now has unveiled its own ponzi czar in Ramalingam Raju of Satyam. He admitted that Rs 5,000 crore (Rs 50 billion), or 94 per cent of total cash on Satyam's books is non-existent. Wait till the effects of on rushing financial Sunami in USA come rippling down to India. Did not our leaders repeated that Indian economy was decoupled from USA's and had strong fundamentals. The relationship between the government, regulators and private sector in India is even more incestuous than in USA, with insider trading and other malpractices, in which the poor public exhorted to invest comes out a cropper. In India no one who is big is ever punished for criminal acts, in political, economic and any other sectors.

After the halving of Sensex in eight months and 26/11, now one now talks of Chinindia, the two emerging powers of Asia and the India-Pakistan hyphen is back, with President elect Barrack Obama planning to even appoint an envoy to resolve the J&K problem so that the US and NATO can control Afghanistan.

Metaphysics and Strategic Intuition!

Great speculators in metaphysics and matters of soul, through out history Indians have rarely shown much strategic acumen and the ruthlessness and resolve to implement strategic objectives.  Some thing goes wrong in the sycophantic climate of Delhi and Hindustan, whether the leaders are Hindus or Muslims. In the history of Hindustan, there have been very few rulers with strategic perception and skills. These are the Mauryas who had their capital at Pataliputra but kept the crown prince at Ujjain to guard against enemy ingress from the Hindukush and meet the invader on the route chosen i.e. Sindh- Gujarat or Punjab and the Himalayan foot hills.

So were the early Moghuls. Akbar having built his beautiful capital at Fatehpur Sikri spent a decade near Lahore watching Mongols and others invaders gathering across the Hindukush. In modern times we had Indira Gandhi, who instead of pleading around the world (as we are doing now) against refugee influx from East Pakistan, took advantage of the situation and broke up Pakistan into two. There are some other rulers also like Maharaja Ranjit Singh and Tippu Sultan but their canvas was much limited.

A wag said that except for the legendry King Porus who put up a valiant fight against Alexander the Great, the area between Panipat and Peshawar has always remained 'porous' for invaders from north west. Survival against all odds is the quality of the people in the region. They are dynamic, hard working, good managing directors but not perspicacious enough to be the chairmen of the board. They rarely established a large enough kingdom as Rajiv Gandhi pointed during the Pakistan supported insurgency in Punjab, that the only state in that region was founded by Sikh Maharaja Ranjit Singh at Lahore.

The people now dominating Pakistan, throughout history have felt jealous of the riches of the rulers of Hindustan with their capital on Jamuna in Delhi or Agra. The religion was immaterial. They had invited the Moghuls when Afghans were ruling Delhi. Later they invited Afghans and Iranians when Moghuls ruled over Delhi.  And the Punjabis joined in the loot and robbed the invader if he did not succeed. For its strategic defense, Hindustan should control Kabul if not Kandhar as was done by early Moghuls. Once Kabul and Kandahar were lost, the Hindustan became a plaything of invaders.

Joining Washington in Afghanistan after 11/9 was a non-starter as USA's objectives were to create a puppet regime, where most of the aid is funneled out and President Hamid Karzai protected by US mercenaries. No foreigner or a puppet ruler has succeeded n Afghanistan. In any case the raison d'etre of a buffer state between Russian and British empires has disappeared after the collapse of the two empires. India should prepare for the likely break up of Afghanistan and its ramifications on the unity of Pakistan.

The rulers in Pakistan starting with Ayub Khan and outside powers have exploited the same geo-political matrix of South Asia. It started with the British, who after dividing Hindustan to create a weak aligned Pakistan to protect its oil wells in Middle East from possible Russian ingress passed on the torch to the new western overlords, USA. Even China continues to exploit the same geo-political equation. The leaders of Pakistan, mostly the military brass, for their short term gains have allowed their policies to be shaped by UK, USA, China, Saudi Arabia, Iran and others. But it has delivered Pakistan literally into the hands of Frankenstein monster of terrorism, with its Kalashnikov culture and billions dollars worth of narcotic trade and addiction. It survives on infusions of money from outside. Tens of billions of dollars were poured by US and others during 1980s and 10 billion dollars since 11/9 when US coerced Islamabad to join US led west against the so called war on terror, but most of the aid has enriched the establishment dominated by the Pakistan army and ISI. Other major source of wealth remains the opium grown in Afghanistan, from which also the Pakistan establishment takes a major share. So chaos suits the ISI and others. But if the Talebans took over Pakistan, where would the so called liberal beer drinking intelligentsia and middle classes of Pakistan go to.


History of Western colonization up to second world war followed by neo-colonization before the Fall of the Berlin Wall and since then under the garb of free trade and globalization demonstrate a policy of divide and rule to dominate and exploit the nations of Asia, Latin America and Africa and by their control of weapons of mass destruction including nuking of two Japanese cities. Another important lever has been control of weapons of mass disinformation to brainwash colonized natives and their descendents and even their own peoples. Just look at the spins, half truths and blatant lies and propaganda in western media regarding its naked aggression on Iraq against UN Charter and brutal occupation and destruction of that country. False propaganda and lies continue from Winston Churchill down to Tony Blair and US leaders led by Vice President Dick Cheney.

To counter nationalist and socialist movements and regimes which opposed colonization and exploitation, Europe, specially Britain and then USA encouraged extreme Muslim and other religious elements through out history to maintain their rule. This has been clearly brought out in my piece mentioned earlier. And the policy continues.

Mercifully all things bad or good come to end in spite of the praise of colonial rule by those who benefited and continue to do so by virtue of imbibing their language and the culture in India and elsewhere and collaboration in economic exploitation by the Western powers .The excesses of flagrant capitalist exploitation from the sweat of workers in conjunction with natural law of rise and decline of big powers and empires, USA and Europe have reached a low point, from which it is impossible to regain the power exercised it appeared to exercise till 2003, when Washington was even described as the New Rome. USA's GDP which was 50% of world GDP at the end of the WW II has now been reduced to 33%. This was possible because of the role of US dollar as the reserve currency and looting of resources in the Middle East and elsewhere.

Absolute Power Corrupts Absolutely

Since last few decades US corporate elites have indulged in incestuous financial jiggery pokery as brought out in the creation of a financial bubbles and the ensuing vortex now engulfing USA and the West, which will also affect other nations. The US recession is likely to drag on well into 2009 with a "moderate recovery" in 2010. The housing market, where the economic crisis began, "was expected to contract further --- All told, real GDP was expected to fall much more sharply in the first half of 2009 than previously anticipated, before slowly recovering over the remainder of the year," according to the December meeting minutes of US Federal Reserve. At best it is a very optimistic assessment.

"The [US] financial system is out of control and has led the economy into a wildly turbulent sea of heavily leveraged speculation.-- the road ahead is dark and unknown," forecast Steve Fraser, author of "Wall Street: America's Dream Palace." "Credit easing does not and cannot substitute for earnings, wages or tax revenues," said economist Max Fraad Wolff. "The recession train has left the station, but it's going to be 18 months, instead of five years," an optimistic forecast by economist Prof. Nouriel Roubini on the recent bailouts.

David Rosenberg, the brilliant economist from Merrill Lynch, describes what has happened and what is to come: "This is an epic event; we're talking about the end of a 20-year secular credit expansion that went absolutely parabolic from 2001-2007. Before the US economy can truly begin to expand again, the savings rate must rise to pre-bubble levels of 8pc, that the US housing stocks must fall to below eight months' supply, and that the household interest coverage ratio must fall from 14pc to 10.5pc.

"It's important to note what sort of surgery that is going to require. We will probably have to eliminate $2 trillion of household debt to get there," he predicts, saying this will happen either through debt being written off, as major financial institutions continue to do, or for consumers themselves to shrink their own "balance sheets". The elimination of $2 trillion of household debt will lead to the closing of thousands of retail stores, strip malls, restaurants, and bank branches.

The socialization of private sector losses in USA through massive bailouts will temporarily send stocks high but in the absence of any savings by US households, a declining industrial production, galloping unemployment, massive budget deficits, a debt of around nine trillion dollars, trade deficit of 700 billion and an expenditure of over 600 billions, almost as much as the rest of the world put together, will see a crushing decline in US economy beginning in a few months time.

The Barrack Obama administration is just another Bill Clinton mark III, his election financed by the same Wall Street barons and staffed by the same old faces. It can not overcome the Financial Sunami engulfing USA. Militarily Washington has already been forced to sign a forces agreement even with the puppet government in Baghdad.  The success of the so called 'Surge' in Iraq is a mirage. A 'Surge 'in Afghanistan, as proposed is unlikely to succeed.

The world is now entering a new epoch, like after the defeat of the Ottoman Turks from the gates of Vienna in 16th century . Europe and Russia then rolled back the empire from the East, colonized and exploited Middle East, Asia and Africa.  India, instead of mortgaging its future with a declining and falling power, should make up with Russia, which it has ignored, Iran which it has acted against and even China.

K Gajendra Singh, Indian ambassador (retired), served as ambassador to Turkey and Azerbaijan from August 1992 to April 1996. Prior to that, he served terms as ambassador to Jordan, Romania and Senegal. He is currently chairman of the Foundation for Indo-Turkic Studies. Copy right with the author.


More by :  K. Gajendra Singh

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