What Sound Does It Make When Gold Goes Through the Roof?

This Little-Known Rule Could Send Gold to $10,000

By Porter Stansberry www.dailywealth.com

It’s one of those numbers that’s so unbelievable you have to actually think about it for a while…

Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that’s not counting any additional deficit spending, which is estimated to be around $1.5 trillion.

Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That’s an amount equal to nearly 30% of our entire GDP. And we’re the world’s biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then “rolling over” the loans when they come due. As they say on Wall Street, “a rolling debt collects no moss.”

What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt… at ever shorter durations… at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that’s when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt, it’s called a “default.” Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.

The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world’s largest money-management firm, PIMCO, explains the rule this way: “The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support.”

The principle behind the rule is simple. If you can’t pay off all of your foreign debts in the next 12 months, you’re a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It’s a guaranteed default.

The U.S. holds gold, oil, and foreign currency in reserve. It has 8,133.5 metric tonnes of gold (it is the world’s largest holder). At current dollar values, it’s worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that’s roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether… that’s around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we’ve been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So… where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we’re still going to come up nearly $3 trillion short. That’s an annual funding requirement equal to roughly 40% of GDP.

Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they’re not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None owns even 1% of its total reserves in gold.

I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry’s Investment Advisory. Coincidentally, the New York Timesrepeated my warnings – nearly word for word – a few weeks ago. They didn’t mention Greenspan-Guidotti, however… It’s a real secret of international speculators.

My readers know that Greenspan-Guidotti means the U.S. is likely to have a severe currency crisis within the next two years. How high will gold go during this crisis? Nobody can say for sure. We’ve never been in the situation we are now. The numbers have never been so large and dangerous. But I wouldn’t be surprised at all to see gold at $10,000 an ounce by 2012. Make sure you own some.

Good investing,

Porter Stansberry

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Obama and the Same Old Bush Lies, for the Same Reasons

Obama and the Same Old Bush Lies, for the Same Reasons

By:  Peter Chamberlin

The war in Afghanistan is being escalated on false pretenses.  There is zero chance to “win” the war with the “new” (which is the same old failed) strategy and everybody involved with it knows it.   When Obama and McChrystal use the words “win” and “victory,” they are not using the same dictionary used by the rest of the human race.  “Victory” to them, means that the greater undefined mission can continue, not come to an end.

Afghanistan, like Iraq, will never see the withdrawal of American/NATO forces; that’s why all the giant super-bases are needed in both countries.  That also applies to the massive super-embassy being built in Islamabad.  “Victory” is not winning, but is the point in the war when large numbers of troops fighting this war can be safely transferred to the next war.  This is what we are seeing in the so-called withdrawal from Iraq and will probably see in the anticipated withdrawal from Afghanistan in 2011.  There will never be a real American withdrawal from any of these countries, unless it is forced upon them by the people.

Just like Iraq, Afghanistan has been drawn-out until the start of the next war in Pakistan.  This is done with the fraudulent war strategy of training replacement armies to fight the enemies which America’s superior forces could not defeat.  Switching missions from an offensive war to a training mission merely gives the adversary time to reinforce.  All the generals and strategists are aware of this; it is simply a part of the plan.  The plan has nothing to do with defeating anyone, except maybe for eventually defeating the Russians.  We might also fight for the sake of denying energy resources to our greater adversaries, the Chinese.

The “war on terror” is in reality, a war on mediocrity.  We are waging this war in order to maintain our position as “Number One” boss of the world.  Our leaders have determined that we cannot accept any other nation becoming our equal, meaning that they would have to share the power that they have accumulated unto themselves.  The infamous document from the “neocon” Project for a New American Century, which clearly delineates this triumphal American ideology, is not an expression of a radical minority, but rather, a summation of the single American ideology which is common to both political parties.  There are two neoconservative parties in America, masquerading as opposites.

The escalation in southern Afghanistan is embraced by both parties, as American and NATO forces move against local Taliban, hoping to push all the fighters into Balochistan, or back into South Waziristan.  The entire war effort has consisted of herding the militants wherever central command planned to go next.  This is the reason that many of the posts along the Durand Line were closed before Pakistan moved into S. Waziristan.  Who ever heard of military planners opening the back door before coming in the front?  How can one pincer by itself perform a pincer movement?

As long as the American people are willing to wage war without defined missions, our so-called leaders will be able to play these dangerous games.  One would think that the ever loyal American veterans would grow tired of watching their comrades and their own children die for wars based on nothing but lies.  The dishonor they bring upon all servicemen, by not speaking-up for their own, will haunt them until the day they die.  Soldiers who are martyred in the liberation of countries are rightly honored, but who will honor those who have given their lives in wars fought to enslave mankind?

The American people were enlisted in this war under the pretense of fighting against a malignant evil, only to see this war hijacked in the service of other causes.  The fight against terrorists has become a war against nuclear proliferation, a war for Israel’s security, a war for oil, a war for any reason they dream-up.

What has become of the moral sense of the people of the United States?  Has life for us become so hard and uncertain that we will support any effort to merely keep things from getting worse, even if that means turning every country, especially our own,  into a police state?  We surrender our rights to choose our own destinies when we submit to the extortion that to do otherwise will make things get a lot worse.  Isn’t this the same threat that Prince Bandar allegedly made to the British Crown over ending pay-offs–that failing to comply with his demands would mean that the terror against Britain would get a lot worse?

If we don’t support Obama and McChrystal’s surge, then what will happen?  They tell us that if we don’t let them have their way, then the terror in Afghanistan and Pakistan will only grow worse.  I say that is a total lie.  If they do escalate the Special Forces and Predator strikes into Pakistan, launching a powerful counter-insurgency campaign, then I guarantee that everywhere will become like Peshawar is today.  Peshawar is bombed daily, because the armies of militants were driven to the city’s doorstep.

Apparently these assholes haven’t figured-out the formula for this war yet—the more innocent people you kill, the more young men will volunteer to fight against the Americans to avenge them.  The anti-American terrorism that makes the whole world suffer is not a spontaneous phenomenon; it is a reaction against what we have been doing in that part of the world for a lot longer than this current war has been raging.  They fight because we kill their friends and relatives, simple as that.

America’s military leaders act as if they make policy for the politicians, instead of the other way around.  They make their plans and tell us that we must stick to them; else our “American way of life” will perish from the face of this earth.  Well, maybe that wouldn’t be such a bad thing, after all.  They don’t bother to own-up to the facts about our precious way of life, even though everything around us screams-out about the utter wrongness of our ways.

The continuing global economic collapse has been precipitated by American greed and profit-takers upsetting the balance of the international economic system.  The low-level world war we see before us is a direct result of the many unnecessary low-level wars we have started, trying to preserve our inflated status.  One day soon, the world will hold American leaders accountable for what they have done to the world in their greed.  But in the end, it will be the American people, who will pay the price for the havoc that has been unleashed, in addition to the hundreds of millions globally who live in our chosen war zones.   In the end, America as we know it will cease to exist within the global American empire, or in the catastrophic chaos that will result from failure of the empire.  Either way, the America of our youth is no more.

It will only be through our own uprising and chaining these criminal psychopaths who run and ruin our Nation that the world will be spared what is barreling down the road at us.  The war in Afghanistan is but an act of very desperate men.

peter.chamberlin@hotmail.com

End Game Warning

I have repeatedly warned that there’s an “end game” coming

if we do not cut out the monetization games.

I have repeatedly warned that the  “end of the world” scenario comes about if The Government cannot finance its operating requirements (e.g. interest cost exceeds income), as that event will result in an instantaneous “death spiral” of credit downgrades and ramping CDS spreads, which in turn drive up interest rates further, etc.

I have repeatedly warned that if we do not get our own house in order others will force it upon us, as we have given them the weapons to do so by selling trillions of dollars worth of Treasuries to overseas sovereigns and institutions over which we can exert no control (except by threatening to use our 6,000 nuclear weapons.)

This morning there’s a nasty rumor on the wire – that Japan may be intending to sell US Treasuries.

Their purported reason for this, of course, would be to weaken the Yen.  Selling Treasuries would have this effect since it would strengthen the dollar, and in a fiat monetary system all values are relative.

Here’s the problem: The first seller wins in these circumstances, since price is essentially “coupon x duration.”

If Japan starts selling in size rates on the long end will go materially higher.  This will whack the daylights out of the cash price for these bonds.  Who else has a lot of these things? China.

Stampede risk here?  Yep.

Danger to our government’s ability to finance its profligate spending?

Uh huh.

How Many of India’s Hungry Could You Feed for the Price of Forty Ships?

Indian Navy to increase fleet strength from 130 to 170 ships

NEW DELHI: The Indian Navy plans to increase its fleet strength from 130 to 170 warships within the next decade in a bid to establish hegemony in the Indian Ocean and Arabian Sea. Naval Chief Admiral Mirmal Verma said 60 more aircraft and 60 helicopters are also to be inducted in the aviation wing of the fleet during the same period. “The Navy has placed orders for 34 ships with Indian shipyards and another six ships with foreign shipyards,” he added. app

Anne Patterson’s Blackwater-gate

Fasi Zaka

When people would obsess over the supposed clandestine take-over of Pakistan by the security firm formerly known as Blackwater (now Xe), I often wished that they be that animated over the problem of drinking water in our country.

I now feel that my dismissiveness was entirely wrong. It looked like a conspiracy theorist’s dream to me initially, a private army outside the remit of the law doing the bidding of the Americans in Pakistan.

Well, the definitive truth is now out; it is present in Pakistan. It may not be doing some of the more ridiculous assertions attributed to its operations in the country by an opportunistic Taliban, like carrying out suicide bombings, but Blackwater is here. It shouldn’t be.

The January edition of Vanity Fair 2010 (they operate with a crazy dating system) has a feature of Blackwater founder Erik Prince by Adam Ciralsky (who accompanied him on trips to overseas Blackwater operations). Erik Prince has been a media shy-figure; not much was known about him for sure until this interview, which he did presumably because Blackwater has suffered from terrible PR in the US and around the world as war profiteers and mercenaries.

In the piece by Ciralsky, Erik Prince confirms his relationship with the CIA in a foreign assassination programme, working in Pakistan to load Hellfire missiles onto drones and in Afghanistan (where they are present close to the border). The US ambassador in Afghanistan is protected by Blackwater.

That’s a slap in the face admission against the statement of the US Ambassador Anne Patterson that the firm was not operating in the country just this November. With the recent exhortations for Pakistan to do more against the Taliban, this is rich coming from a nation that is outsourcing some of its war effort.

The US needs to realise that they have not occupied Pakistan, unlike Iraq and Afghanistan who were not able, therefore, to articulate their positions to their new masters. Pakistan is still relatively free, and Pakistanis have a legitimate concern given the trigger-happy, allegedly bribing and illegal weapons smuggling prone company that Blackwater is.

If the international community wants to see Pakistan as a country that can overcome its problems with the murderous hordes of the Taliban, then there is only one long-term solution which is affecting the rule of law. That cannot be done seriously if the US has no interest in it.

There are now monthly reports of US officials or their contractors who are let free after being found with illegal weapons. Smacking us in the face with such impunity does not engender rule of law.

When Hillary Clinton came to Pakistan, she said she wanted a new beginning of trust. How she achieves that with an ambassador who brazenly misleads Pakistani media is anyone’s guess.

If there are Blackwater personnel doing more than Erik Prince’s admission that they operate loading missiles for drones, what happens if they use lethal force when they mistakenly sense danger and kill innocent Pakistanis? Once again, rule of law will be undermined severely because we know from the experience in Iraq that they will not be tried locally.

The article mentions Dr Abdul Qadeer Khan as one of the people who was considered an assassination target by the CIA, presumably through Blackwater. While the source for that nugget is not given in the story (Erik Prince does not verify this in the article; it is an aside by the author), again, Pakistan has demonstrated that it can use its own legal recourse to apprehend someone who is accused of wrong-doing. While what Pakistan may have done in the case of Dr Qadeer is obviously an imperfect compromise if evidence against him holds up, but at least it has prevented further proliferation.

There is no denying that the Americans need their own security in Pakistan. Unfortunately, some Taliban success against military targets has bolstered their case. But they need to come clean what their security is and under what remit it will operate in the country to prevent the further accumulation of the anti-US sentiment, and also to protect Pakistani lives. Any incident will not stop at just the lives lost in it, but conflagrate into mob violence soon after when the demagogues take to the streets.

I wonder if Anne Patterson is using the Bill Clinton defense, when he tried to wiggle out of confessing to an extra-marital affair by claiming that oral acts do not cover that definition. Is she denying Blackwater (which technically doesn’t exist anymore), by evading responses on Xe? If that is the case, it is disingenuous and untrustworthy.

Blackwater changed its name to Xe (which is short for Xenon, an inert element) to appear harmless in the wake of bad press around the world. Maybe they should have changed their name to Hydro, which would not refer to a neutral, water-like substance but hydrogen, the most inflammable of elements.

The writer is a Rhodes scholar and former academic. Email: fasizaka@yahoo.com

US Nukes Threaten to Fracture Japanese Ruling Coalition

Japan’s SDP threatens to leave govt

TOKYO: The leader of Japan’s Social Democratic Party (SDP) threatened on Thursday to leave the ruling coalition if her views on a US military base were ignored, the latest sign of strains complicating policy decisions.

Prime Minister Yukio Hatoyama has formed an awkward coalition with the pacifist Social Democrats, whose support he needs to pass legislation, but whose stance on Tokyo’s security alliance with Washington clashes with that of many in his own party. Japan is under Washington pressure to implement a plan to shift a US Marine base from the centre of a city on Okinawa to a more remote part of the southern island. But the Social Democratic Party (SDP) supports the view of local people who want it moved off Okinawa. SDP leader Mizuho Fukushima told party members that if the government decided to go ahead with the existing plan, “the Social Democratic Party and I will have to make an important decision”.

Hatoyama, who heads the main coalition party, the Democratic Party of Japan, said he would take the SDP’s views seriously and that he does not necessarily aim to reach a conclusion by year-end, risking further irritating the United States as he tries to keep the coalition together. “As I have been saying, I have never said that this must be solved within this year, but I would like to rush as much as possible,” he told reporters.

Fukushima announced the previous day that she would run for the leadership of the SDP again in this month’s party election.

Media reports say she will likely stay on, as an SDP lawmaker from Okinawa who was seen as a possible candidate said on Thursday he will not be running after meeting Fukushima. He said he shares her strong view on the US base issue.

The United States has repeatedly urged Japan to reach a quick conclusion on the position of the base in line with a2006 agreement made after years of what one US Defence official called “painful” negotiation.

Failure to implement the deal would hinder a wide-ranging realignment of the 47,000 US troops in Japan, including a plan to move up to 8,000 Marines to the Pacific island of Guam.

Hatoyama will have no need of the coalition if his Democrats win a majority in the upper house election set formid-2010.

Though Hatoyama has a large majority in the more powerful lower house of parliament after his landslide election win in August, he needs the support of the SDP and another tiny coalition partner to pass legislation in the upper house.

Rawalpindi mosque suicide attack toll mounts to 40

RAWALPINDI: Forty persons have been martyred, including children, and over 80 others injured in the terror attack at Parade Lane mosque in Rawalpindi. DG ISPR has put the death toll to 32. 
A portion of the mosque caved in as a result of the attack.
The fire and hand grenade attack in Rawalpindi mosque left 40 people martyred and 83 others injured, RPO Rawalpindi Aslam Tarin said 
Rescue operation has been completed in and around the mosque and all the bodies and wounded shifted to different hospitals. 
Search operation continues in the residential area around the mosque where all the buildings are being combed by security forces.
Security forces have seized a car at the site of the incident, which is suspected to have been used for carrying the terrorists to their target point.
Sources say that three of the terrorists were also killed by the security forces’ retaliatory firing.
Military helicopters hovered over the attack site following the attack.
The incident took place when at least six to seven gunmen entered the Parade Lanes mosque located near Qasim market. They threw hand grenades followed by indiscriminate firing. Security forces stationed there opened retaliatory fires. 
A large number of people were present inside the mosque when the blasts went off.
Ambulances of 1122 and Pak Army ferried the injured to Military Hospital, CMH and other nearby hospitals. 
Security forces have blocked Peshawar Road and Marri Road for all kinds of vehicular traffic.

Political Ponerology

[A brilliant study in evil and psychopaths.]

HOME

PSYCHOPATHS: ALMOST HUMAN

Introduction
Aquired Deviations
Inherited Deviations
Case Studies

PONEROLOGY: EVIL IS A DISEASE

Introduction
Psychopathy: The Cause of Evil
Ponerology: A New Science

Diagnosis
Susceptibility: The Natural World View
The Genesis of Evil
Signs and Symptoms of Evil
Causes of Evil
Communicability or Ponerization

Immunization

“This is an extraordinary book.”

Ilan Pappe, author of The Ethnic Cleansing of Palestine

“Political Ponerology is fascinating, essential reading.”

Philip Zimbardo, author of The Lucifer Effect

PONEROLOGY: THE STUDY OF EVIL

“In the author’s opinion, Ponerology reveals itself to be a new branch of science born out of historical need and the most recent accomplishments of medicine and psychology. In light of objective naturalistic language, it studies the causal components and processes of the genesis of evil, regardless of the latter’s social scope. We may attempt to analyze these ponerogenic processes which have given rise to human injustice, armed with proper knowledge, particularly in the area of psychopathology. Again and again, as the reader will discover, in such a study, we meet with the effects of pathological factors whose carriers are people characterized by some degree of various psychological deviations or defects.”(Lobaczewski, 42)

With very few exceptions down the ages, discussions in moral philosophy – the study of right conduct – have failed to systematically investigate the origin, nature, and course of evil in a manner free from supernatural imaginings. Evil was often considered something to be endured rather than something that could be understood and eliminated by rational measures. And – as Lobaczewski demonstrates – the origin of evil actually lies outside the boundaries of the conventional worldview within which the earlier moral inquiries and literary explorations were conducted. Evil requires a truly modern and scientific approach to lay bare its secrets. This approach is called “ponerology”, the study of evil, from the Greek “poneros” = evil.

The original manuscript of this book went into the furnace minutes before a secret police raid in Communist Poland. The second copy, painfully reassembled by scientists working under impossible conditions of violence and repression, was sent via courier to the Vatican. Its receipt was never acknowledged – the manuscript and all valuable data lost. In 1984, the third and final copy was written from memory by the last survivor of the original researchers: Andrew Lobaczewski. Zbigniew Brzezinski blocked its publication.

After half a century of suppression, this book is finally available.

Political Ponerology is shocking in its clinically spare descriptions of the true nature of evil. It is poignant in its more literary passages revealing the immense suffering experienced by the researchers contaminated or destroyed by the disease they were studying.

Political Ponerology is a study of the founders and supporters of oppressive political regimes. Lobaczewski’s approach analyzes the common factors that lead to the propagation of man’s inhumanity to man. Morality and humanism cannot long withstand the predations of this evil. Knowledge of its nature – and its insidious effect on both individuals and groups – is the only antidote.

Read an interview with the author, Andrew Lobaczewski.

Pakistan and the “Wild Goose Chase” for Dead Bin Laden

Usama bin Laden is seen at an undisclosed location.

A Taliban detainee in Pakistan claims Al Qaeda leader Usama bin Laden was seen in Afghanistan in January or February of this year, the BBC reports.

The inmate, who said he met bin Laden numerous times before the Sept. 11 attacks, said he met with a contact who had seen the Al Qaeda leader days before in Afghanistan.

"In 2009, in January or February I met this friend of mine. He said he had come from meeting Sheikh Osama, and he could arrange for me to meet him," he said.

The detainee reportedly said the contact is a Mehsud tribesman.

"He helps Al Qaeda people coming from other countries to get to the sheikh, so he can advise them on whatever they are planning for Europe or other places,” he told the BBC.

His claims couldn’t be verified, but a former CIA analyst told the BBC they should be probed.

"If it’s true—a big if—this is an extraordinary and important story," the analyst told the BBC. "The entire Western intelligence community, CIA and M16, have been looking for Osama Bin Laden for the last seven years and haven’t come upon a source of information like this," he said.

We Can’t Beat the Taliban, But We Can Train Other Guys to Fight Them

[The author of the following article writes as if he knows the absolute truth about what is happening on the ground in Pakistan, in particular, in Balochistan.  He seems to know for certain the whereabouts of Mullah Omar, somehow.  Then he must also know where to find the tall dead guy and his partner Zawahiri.] 

Take the War to Pakistan

 

By SETH G. JONES

PRESIDENT OBAMA’S decision on a timetable for withdrawal of American troops only makes official what everyone here has known for a while: the clock is ticking in Afghanistan. The Taliban have long recognized this, and many captured militants have reminded their interrogators that “you have the watches, but we have the time.”

As we quicken the pace, the top American commander here, Gen.

Stanley McChrystal, has repeatedly noted that there are many issues to focus on: building more competent Afghan Army and police forces, adopting more effective anticorruption measures and reintegrating “moderate” Taliban and other insurgent fighters into Afghan society and politics.

But perhaps the most difficult issue is largely outside of General McChrystal’s control (and got short shrift in President Obama’s speech at West Point): undermining the Taliban’s sanctuary in Pakistan. Thus far, there has been no substantive action taken against the Taliban leadership in Baluchistan Province, south of the Pashtun-dominated areas of Afghanistan. This is the same mistake the Soviets made in the 1980s, when they failed to act against the seven major mujahadeen groups headquartered in Pakistan.

This sanctuary is critical because the Afghan war is organized and run out of Baluchistan. Virtually all significant meetings of the Taliban take place in that province, and many of the group’s senior leaders and military commanders are based there. “The Taliban sanctuary in Baluchistan is catastrophic for us,” a Marine told me on a recent trip to Afghanistan’s Helmand Province, across the border from Baluchistan. “Local Taliban fighters get strategic and operational guidance from across the border, as well as supplies and technical components for their improvised explosive devices.”

Like a typical business, the Taliban in Pakistan have an organizational structure divided into functional committees. It has a media committee; a military committee; a finance committee responsible for acquiring and managing funds; and so forth. The Taliban’s inner shura, or governing council, exerts authority over lower-level Taliban fighters. It is composed of the supreme Taliban leader, Mullah Muhammad Omar, his principal deputy, Mullah Abdul Ghani Baradar, his military commander, Abdullah Zakir, and roughly a dozen other key leaders. Many Taliban leaders have moved their families to Baluchistan, and their children attend Pakistani schools.

Mullah Baradar is particularly important because he runs many of the shuras involving senior Taliban commanders, virtually all of which are in Pakistan. “Omar is reclusive and unpolished,” one Taliban figure recently said to me, “and has preferred to confide in a small number of trusted advisers rather than address larger groups.”

Yet Pakistan and the United States have failed to target them systematically. Pakistani Army and Frontier Corps forces have conducted operations in Pakistan’s tribal areas to the north, and the United States has conducted many drone strikes there. But relatively little has been done in Baluchistan.

The United States and Pakistan must target Taliban leaders in Baluchistan. There are several ways to do it, and none requires military forces.

The first is to conduct raids to capture Taliban leaders in Baluchistan. Most Taliban are in or near Baluchi cities like Quetta. These should be police and intelligence operations, much like American-Pakistani efforts to capture Khalid Shaikh Mohammed and other Qaeda operatives after 9/11. The second is to hit Taliban leaders with drone strikes, as the United States and Pakistan have done so effectively in the tribal areas.

The cost of failing to act in Baluchistan will be enormous. As one Russian diplomat who served in the Soviet Army in Afghanistan recently told me: “You are running out of time. You must balance counterinsurgency efforts in Afghanistan by targeting the leadership nodes in Pakistan. Don’t make the same mistake we did.”

Seth G. Jones, the author of “In the Graveyard of Empires: America’s War in Afghanistan,” is a civilian adviser to the American military.