RBS tells clients to prepare for ‘monster’ money-printing by the Federal Reserve

RBS tells clients to prepare for ‘monster’ money-printing by the Federal Reserve

As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve.

By Ambrose Evans-Pritchard, International Business Editor

Entitled “Deflation: Making Sure It Doesn’t Happen Here“, it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.

The speech is best known for its irreverent one-liner: “The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost.”

Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE).

Investors basking in Wall Street’s V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing.

The ECRI leading indicator produced by the Economic Cycle Research Institute plummeted yet again last week to -6.9, pointing to contraction in the US by the end of the year. It is dropping faster that at any time in the post-War era.

The latest data from the CPB Netherlands Bureau shows that world trade slid 1.7pc in May, with the biggest fall in Asia. The Baltic Dry Index measuring freight rates on bulk goods has dropped 40pc in a month. This is a volatile index that can be distorted by the supply of new ships, but those who watch it as an early warning signal for China and commodities are nervous.

Andrew Roberts, credit chief at RBS, is advising clients to read the Bernanke text very closely because the Fed is soon going to have to the pull the lever on “monster” quantitative easing (QE)”.

“We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable,” he said in a note to investors.

Roberts said the Fed will shift tack, resorting to the 1940s strategy of capping bond yields around 2pc by force majeure said this is the option “which I personally prefer”.

A recent paper by the San Francisco Fed argues that interest rates should now be minus 5pc under the bank’s “rule of thumb” measure of capacity use and unemployment. The rate is currently minus 2pc when QE is factored in. You could conclude, very crudely, that the Fed must therefore buy another $2 trillion of bonds, and even more if Europe’s EMU debacle goes from bad to worse. I suspect that this hints at the Bernanke view, but it is anathema to hardliners at the Kansas, Richmond, Philadephia, and Dallas Feds.

Societe Generale’s uber-bear Albert Edwards said the Fed and other central banks will be forced to print more money whatever they now say, given the “stinking fiscal mess” across the developed world. “The response to the coming deflationary maelstrom will be additional money printing that will make the recent QE seem insignificant,” he said.

Despite the apparent rift with Europe, the US is arguably tightening fiscal policy just as hard. Congress has cut off benefits for those unemployed beyond six months, leaving 1.3m without support. California has to slash $19bn in spending this year, as much as Greece, Portugal, Ireland, Hungary, and Romania combined. The states together must cut $112bn to comply with state laws.

The Congressional Budget Office said federal stimulus from the Obama package peaked in the first quarter. The effect will turn sharply negative by next year as tax rises automatically kick in, a net swing of 4pc of GDP. This is happening as the US housing market tips into a double-dip. New homes sales crashed 33pc to a record low of 300,000 in May after subsidies expired.

It is sobering that zero rates, QE a l’outrance, and an $800bn fiscal blitz should should have delivered so little. Just as it is sobering that Club Med bond purchases by the European Central Bank and the creation of the EU’s €750bn rescue “shield” have failed to stabilize Europe’s debt markets. Greek default contracts reached an all-time high of 1,125 on Friday even though the €110bn EU-IMF rescue is up and running. Are investors questioning EU solvency itself, or making a judgment on German willingness to back pledges with real money?

Clearly we are nearing the end of the “Phoney War”, that phase of the global crisis when it seemed as if governments could conjure away the Great Debt. The trauma has merely been displaced from banks, auto makers, and homeowners onto the taxpayer, lifting public debt in the OECD bloc from 70pc of GDP to 100pc by next year. As the Bank for International Settlements warns, sovereign debt crises are nearing “boiling point” in half the world economy.

Fiscal largesse had its place last year. It arrested the downward spiral at a crucial moment, but that moment has passed. There is a time to love and a time to hate, a time for war and a time for peace. The Krugman doctrine of perma-deficits is ruinous – and has in fact ruined Japan. The only plausible escape route for the West is a decade of fiscal austerity offset by helicopter drops of printed money, for as long as it takes.

Some say that the Fed’s QE policies have failed. I profoundly disagree. The US property market – and therefore the banks – would have imploded if the Fed had not pulled down mortgage rates so aggressively, but you can never prove a counter-factual.

The case for fresh QE is not to inflate away the debt or default on Chinese creditors by stealth devaluation. It is to prevent deflation.

Bernanke warned in that speech eight years ago that “sustained deflation can be highly destructive to a modern economy” because it leads to slow death from a rising real burden of debt.

At the time, the broad money supply war growing at 6pc and the Dallas Fed’s `trimmed mean’ index of core inflation was 2.2pc.

We are much nearer the tipping today. The M3 money supply has contracted by 5.5pc over the last year, and the pace is accelerating: the ‘trimmed mean’ index is now 0.6pc on a six-month basis, the lowest ever. America is one twist shy of a debt-deflation trap.

There is no doubt that the Fed has the tools to stop this. “Sufficient injections of money will ultimately always reverse a deflation,” said Bernanke. The question is whether he can muster support for such action in the face of massive popular disgust, a Republican Fronde in Congress, and resistance from the liquidationsists at the Kansas, Philadelphia, and Richmond Feds. If he cannot, we are in grave trouble.

Obama warns Azerbaijan against using force

Obama warns Azerbaijan against using force

U.S. President Barack Obama promised in a letter released on Monday to tackle “serious issues” in straining relations with Azerbaijan.”

U.S. Defense Secretary Robert Gates handed Obama’s letter to Azerbaijani President Ilham Aliyev during a visit meant to ease tensions with the oil-rich Caspian Sea country, Reuters reports.

A U.S.-backed push for a historic rapprochement between Armenia and Turkey has damaged ties between Washington and Azerbaijan, which worries its interests will be damaged by the reconciliation efforts.

Baku in April accused the United States of siding with Armenia over Nagorno-Karabakh and threatened to “reconsider” its relationship with Washington.

“I am aware of the fact that there are serious issues in our relationship, but I am confident that we can address them,” Obama wrote in the letter delivered on Sunday by Gates.

Obama praised Azerbaijan’s commitment to efforts to resolve the Nagorno-Karabakh conflict, mediated by the United States, Russia and France, and warned against using force. “I believe that a peaceful resolution to the Nagorno-Karabakh conflict is essential for the long-term stability of the South Caucasus region, and support for this outcome will remain a priority for the United States.”

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Atmosphere in the region unfavorable for Clinton’s visit

Richard Giragosian: Atmosphere in the region unfavorable for Clinton’s visit

Lena Badeyan

The atmosphere in the region is not favorable for US State Secretary Hillary Clinton’s visit, Director of the Armenian Center for National and International Studies Richard Giragosian told reporters today. The reason of this unfavorable atmosphere is Azerbaijan’s policy, which resulted in the adoption of the Obama-Medvedev-Sarkozy statement.

According to Richard Giragosian, the statement was an attempt by the international community to bring Azerbaijan back to negotiations.

Richard Giragosyan thinks the OSCE Minsk Group will not succeed unless Karabakh becomes a negotiating party.

Referring to Azerbaijani provocation of June 18 in the line of contact, the expert said such incidents could become more frequent during the summer, though, he said he didn’t think Azerbaijan could officially declare war to Armenia. At the same time Richard Giragosyan stressed that an unexpected, sudden war might be possible and Armenia should be ready for any developments.

“Armenia is getting ready for the 21st century war, while Azerbaijan is preparing for the wars of the past, the wars typical to Napoleon era,” he added.

Armenia should show Azerbaijan that any attack will first of all cause damages to itself.

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Terms of Engagement–Secretary Clinton’s Visit to Azerbaijan

Terms of Engagement: Secretary Clinton’s Visit to Azerbaijan

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By Elmar Chakhtakhtinski

The news about the upcoming visit by Secretary Clinton to Azerbaijan, following the Defense Secretary Robert Gates’ trip to Baku on June 15, have already been interpreted as a change in Obama administration’s attitude towards that country’s authoritarian regime. If Azerbaijan was a democracy or at least the government there took some visible steps in that direction, a re-engagement with this strategically important nation could be a move in the right direction. But under the present conditions such visit might have undesirable consequences for the future of democracy in Azerbaijan and for the US interests in the region.

When President Obama named Azerbaijan along with Zimbabwe among the world’s worst violators of press freedom last April, the US-Azerbaijani relations seemed to plunge into a downward spiral. The United States has not had an ambassador in Azerbaijan since July 2009. The Azerbaijani president Ilham Aliyev was also conspicuously absent from the list of world leaders invited to Obama’s high-profile nuclear summit in DC this April, although the presidents of Armenia and Georgia, both of Azerbaijan’s neighbors in South Caucasus, attended the event.

Apart from diplomatic troubles, in March this year the Washington Post published a report about the corruption within the Azerbaijani leadership, including a reference to a $45 million luxury mansion in Dubai apparently belonging to the President Aliyev’s 11-years old son. It was followed by an Azeri opposition leader’s article in the same newspaper.

These developments led to speculations in Baku about the Aliyev regime’s falling out of favor with Washington. They also fuelled the hopes of Azerbaijani opposition that under President Obama the US might show a more principled stance in support of democracy than the previous US administration.

In its turn, the government in Baku accused Washington in supporting Armenia in its conflict with Azerbaijan over Nagorno Karabakh, cancelled the scheduled joint military exercises with the US, and directed the state-controlled media to ratchet up anti-American rhetoric to unprecedented levels. The Azerbaijani officials issued statements about further “adequate retaliation”, including threats to evict Western oil companies and pull out of the Nabucco project, deemed important as an alternative to Europe’s dependence on Russian natural gas.

Azerbaijan’s Deputy Foreign Minister Araz Azimov also hinted on ending Baku’s cooperation with the coalition efforts in Afghanistan, for which Azerbaijan presents a vital transit route. During his speech at Columbia University in New York in November 2009, he even went as far as predicting the failure of the US troop surge, thus stepping right into the heat of America’s internal policy debate on Afghan policy.

Meanwhile, the regime in Baku gradually accelerated its attacks on the opposition and independent media.

Under such circumstances, the expected visit by a US Secretary of State can easily be perceived by the officials in Azerbaijan as a sign of the United States finally succumbing to their pressure and agreeing to turn a blind eye to the continuing suppression of dissent in Azerbaijan. Still, some added ingredients may help to make the best out of Secretary Clinton’s planned trip and maintain a degree of consistency in the US foreign policy towards that country.

For starters, she can meet with the leaders of major opposition parties and the representatives of remaining free press and truly independent NGOs, in addition to government officials. This would serve as an indication that America’s intentions are not limited to the temporal benefits from befriending the ruling regime, but rather include a long-term alliance with the Azerbaijani people and support in their aspirations to join the community of free nations.

Mrs. Clinton can recall the two pro-democracy bloggers, Adnan Hajizada and Emin Milli, imprisoned under bogus “hooliganism” charges, whose case has drawn numerous official protests from the US and European governments. She might also draw attention to the fate of journalist Eynulla Fatullayev, whom the Azerbaijani authorities are keeping behind bars in a blatant violation of a verdict by the European Court of Human Rights, which is mandatory for Azerbaijan as a member of Council of Europe.

Ideally, the US would insist on the release of these dissidents before Secretary Clinton departs for Baku. As a minimum, these issues should be raised openly and publicly before the Azerbaijani leadership during the trip.

Short of a strong emphasis on human rights and democracy, Secretary Clinton’s visit will only embolden the authorities in Azerbaijan to adopt even more brutal tactics against the opponents of the regime.

The inconsistency of a sudden “warm-up” in Washington’s approach towards the Azerbaijani dictatorship might also signal a weakness of US positions in the greater area around that country, which includes Russia, Iran and Afghanistan. Coming in the midst of the Iranian nuclear dilemma, this apparent pullback from the proclaimed support for democracy in Azerbaijan would not only damage the US reputation in the region, but also reinforce the already entrenched belief in America’s susceptibility to energy and security blackmail.

About the author: Elmar Chakhtakhtinski is the chairman of Azerbaijani-Americans for Democracy (AZAD), a US organization that advocates support for democracy in Azerbaijan and other countries.

Building a “Strategic Road” To Batken–First Action By New Govt.

[One of the government’s first actions was to begin construction of this strategic road to Batken.  If this is because of the proposed American Special Forces training center then it will confirm the new govt. intention to appease the US.   SEE: US Assists Kyrgyzstan in Constructing Anti-Terrorist Center in Batken]

In Kyrgyzstan begins construction of a strategically important route linking the Batken region of Osh

Mamadzhan Berdishev:

29/06 13:42, Bishkek – IA “24.kg”, Tolgonai OSMONGAZIEVA

“In Kyrgyzstan, begins construction of a strategically important route Batken – Pulgon”, – said IA “24.kgspokesman for Acting Governor of Batken region of the CD Mamadzhan Berdishev.

According to him, in order to get in the Osh region, residents of Batken have to go through the enclave Soh, which creates a lot of inconvenience.

“The road is designed by the European Bank for Reconstruction and Development, which provided for its implementation was $ 35 million in grants. Tender shall act Chinese construction company. She currently conducts engineering and topographic surveys, building a base and deliver the necessary equipment, – says Mamadzhan Berdishev. – From September 1, will begin construction of a road stretching about 60 kilometers. It will take 2 years. But this will create additional jobs for local residents. ”

Peace On the Eve of the War–Azerbaijan To Be Starting Point

Peace on the eve of the war. Azerbaijan has turned into the main “site jumping” to the U.S. and Israel in the preparation of an attack on Iran

P. Ivanchenko:

World on the eve of war

Azerbaijan has turned into the main “site jumping” to the U.S. and Israel in the preparation of an attack on Iran

Preparation of U.S. and Israeli aggression against Iran is in the final stage. According to Western media, Tehran declared martial law on its north-western borders. Personnel and equipment of the Islamic Revolution Guards Corps (IRGC) in large numbers being transferred to the area of the Azerbaijani border and the Caspian Sea.

This is understandable – at the airfields in Azerbaijan in full readiness for a strike on Iran’s facilities are concentrated shock of Israel and the U.S..

According to some reports, over the past few days Israel has successfully transferred the large number of bombers to bases in Azerbaijan, via Georgia. The Americans used the same way.

Commander of the IRGC, General Mehdi Moeini said: “The mobilization is associated with the presence of American and Israeli forces on the western border. In addition, according to Moin, some Western countries are trying to ignite ethnic conflict in the Iranian province of West Azerbaijan, and destabilize the region.

Indeed, Western and Israeli intelligence have long been heated separatist and nationalist sentiment in the province, creating terrorist groups and anti-government underground from the chauvinist-minded ethnic Azeris. Therefore, it is possible that foreign intelligence services are preparing a rebellion, which will be used as another excuse to attack Iran (under the pretext of protecting national minorities).

Recall that the Iranian (Iranian terminology – West) Azerbaijan, where relocating the guards, bordered by Turkey, Iraq and Armenia. Media reported that a long convoy of tanks, artillery, air defense and infantry stretches along the main highway in the direction of Azerbaijan and further to the north to the Caspian Sea.

Meanwhile, June 18-22, the US-Israeli-German squadron, which arrived in the Persian Gulf from the Mediterranean Sea, continues to air and sea maneuvers. Are processed attacks on Iranian targets, intercepting missiles fired by Iran, Syria and Hezbollah on American and Israeli targets in the Middle East. In the squadron, headed by the aircraft carrier USS Harry S. Truman “in addition to the Israeli ship is German frigate Hessen-F221. The exercises in the Mediterranean Sea took place from June 6 to June 10, from the aircraft carrier were carried out day and night flights of strike aircraft that bombed targets on the range and Nabatiyeh in southern Israel.American planes took off from bases in Germany and Romania, refueled at Air Force bases and Israel in cooperation with the Israeli air strikes on the remote worked out goals for the Red and Mediterranean Seas. The pilots also trained to conduct air combat.

In addition, in early August this year, Washington intends to focus on the coast of Iran and within the operational range of him, at least 4 or 5 aircraft carriers. A June 22 closest adviser of Israeli Prime Minister Benjamin Netanyahu said that taken during the last meeting of the UN Security Council sanctions against Iran “not adequate” threat and can not stop Iran’s nuclear program. “Pre-emptive military strike is obviously necessary,” – he said.

Analysts say that a particular intensity of military preparations purchased shortly after the resolution, the Group of Eight. Leaders of eight major industrialized countries (group G8) have condemned North Korea for sinking a South Korean ship, and demanded that the Iranian human rights. This was discussed in the final communique of the group after the summit in Canada Toronto.

This “coincidence” suggests that the G8 decision gave carte blanche to potential aggressors. In this regard, particularly interesting role of Russian representatives in the formation of the communique. According to Japanese participants, the only country that resisted tightening of the official statements of the group, was Russia. But, as reported by AP, a representative of the Russian delegation, on condition of anonymity said that Russia did not consider the commission’s decision as final G8 and considers that the additional allegations against North Korea will only lead to negative consequences. From this it follows that the objection Russia caused only “Korean” part of the communiqué, and on “the Iranian issue” reigned consent.

Meanwhile, anti-war stance of Russia in this case has long been a serious obstacle to the aggressive US-Israeli plans. Recently, however, Russia views the “Iranian problem” began to change rapidly, and the G8 meeting to come to full agreement with the West, thereby eliminating the last obstacle on the path to war. Obviously, this evolution had its own reasons – typically, some underhand agreement. In any case, it has already been named in the media reincarnated Covenant “Molotov – Ribbentrop. However, this comparison is hardly correct. Although, if only because the same pact, no doubt, the public interest of the USSR. If only because that pushed for a time, our encounter with Nazi Germany. You can not say about the current situation.

After the aggression the U.S. and Israel against Iran will not bring our country is nothing but new troubles. If the attack is successful, then under the control of the U.S. and Iran will deposit energy, which seriously complicate the situation of our country on the international oil market. In addition to this we get another “black hole” of terror and instability in dangerous proximity to our borders. There is one more important detail – an attack on Iran will put in an extremely unfavorable situation of Armenia – the last Russian ally in the Caucasus. In this regard, it should be noted one more “coincidence” intensify anti-Iranian actions and aggravation on the Karabakh front – no doubt sanctioned by the American-Israeli leaders.

Clearly, a new war in Karabakh, which is whatever the outcome will lead to total exclusion of Russia from the South Caucasus region, could become a logical continuation of the anti-Iran policy of the USA and at the same time – a preparatory stage for large-scale armed conflict in the Middle East. And finally, the sooner our “strategic partners” to the right with the “Iranian problem”, the faster will take on the “final decision of the Russian question.”

What was our guide for the review of position on Iran? Some analysts believe that this series of personal guarantees to support the conduct of a domestic policy. But be that as it may, it must be remembered that all the recent years Americans have consistently “throw” of their partners, and their promises turn into broken pottery, as chervontsi Basavryuk a famous story by Gogol.

If we compare the current situation with the period before World War II, then Russia, following the logic of its foreign policy aspirations and decisions, rather like France during the “Munich Agreement”.

Peter Ivanchenko

Source – Segodnya.Ru

Georgia bemoans a dangerous embargo

[The Saakashvili government is in great danger of an American-sponsored overthrow, partly to gain Putin’s trust.  This silent embargo of military equipment to Georgia, coupled with the recent flurry of visits to the US Congress made by Georgian opposition party leaders, is sure sign that the US equation for power-sharing within Georgia is changing.  SEE: Georgian Democrats leader to discuss security issues in United States ; Georgian opposition fanned “Irangeyt”]

Georgia bemoans a dangerous embargo

Georgia claims it is being prevented from buying the equipment it needs to defend itself. Reuben F Johnson reports from the recent Eurosatory exhibition
By Reuben F Johnson

Georgian emotions were running high at the Eurosatory defence exhibition in Paris in mid-June as officials expressed their frustration at being unable to purchase defence equipment.

At the same event representatives of US and Israeli companies stated that sales of defence equipment to Georgia remain obstructed by both US government policy and pressure from the Russian government.

The barriers to these sales originate from the brief war between Georgian and Russian armed forces in August 2008 and the subsequent settlement negotiated by the French president, Nicolas Sarkozy. The ceasefire agreement resulted in a sizeable number of Russian troops remaining in the separatist provinces of Abkhazia and South Ossetia.

During a visit to the Georgian capital of Tbilisi prior to Eurosatory Jane’s was briefed by representatives of the Georgian Ministry of Internal Affairs’ (MIA’s) intelligence directorate, Ministry of Defence and Foreign Intelligence Service (FIS) on the precarious situation facing the country.

Georgia’s concerns focus on the composition of the Russian units in the two provinces, which it claims are capable of far more than just protecting the borders of the separatist enclaves.

“These Russian formations include several hundred [Uralvagonzavod] T-90S main battle tanks, which you only need if you are preparing for an invasion. This is not just a strictly defensive posture,” said an MIA officer who gave a tour of the line of control where Georgian troops face off against Russian forces within 100 m of their position.

“Also, a significant portion of these Russian troops are not regular army but armed formations of the Federal Security Service [the FSB: the current-day equivalent of the former Soviet KGB],” he continued.

Georgia’s hardware requirements are focused around three main types of systems, according to Deputy Defence Minister Nodar Kharshiladze. “[Firstly] we need some over-the-horizon radars that can give us advance warning of any Russian movement across the border because we would have very little early warning given the distance between South Ossetia and [the Georgian city of] Gori,” he told Jane’s.

“Secondly, since Georgia would be fighting a defensive war to buy time for a ceasefire to be negotiated again, our ground units need the best possible man-portable anti-tank weapons in order to delay the advance of any Russian armoured offensive. Thirdly we need more current-day tactical radios in case of any breakdown in the land-line communications network.”

The latter issue may represent the most significant threat to Georgian security. The country’s main rail line runs from Poti, on the east coast, to Gori, just south of South Ossetia, and on further west to Tbilisi. “If a Russian offensive were to break out of South Ossetia and push through to Gori,” explained a defence contractor based in Tbilisi and working with the Georgian military, “they could not only cut the country in half and shut down all heavy rail transport but they would also cut the main fibre- optic line that runs parallel to the rail network and disable all communications. This makes the ability of the Georgians to have a back-up radio network that is not dependent upon a fibre-optic network all the more crucial.”

However, none of these systems have been made available for the Georgians to purchase, according to US and NATO personnel based in Tbilisi. This was confirmed by US and Israeli company representatives at Eurosatory.
A Georgian national at the defence exhibition who works for a major US provider of communications equipment told Jane’s : “I have worked with this company for years and I know all of their products, all of the technology.

And yet, when we opened a new European office, I was not even permitted to attend its opening or see what was inside – all because of the current US administration’s policy against allowing any further sales to my country.

“No one can understand what the US government’s goal is in blocking these sales. Radios and radars are not offensive weapons,” said the Tbilisi-based defence contractor, whose company is involved in training the Georgian military to NATO standards. “The Georgians also lost some of their air-defence radars during the conflict with Russia and now they cannot replace them – nor can they replenish any of the SAMs [surface-to-air missiles] that they fired at Russian air forces.”

Other Georgian officials expressed their frustration with the situation by pointing out that “the US even prohibits the sale to us of blank ammunition to be used for training. Obviously pushing the ‘reset’ button with Russia is more important than our military.”

The reservations of Israeli defence companies about trade with Georgia derive not from fear of an unofficial blockade by Washington but from Tel Aviv’s concerns about its relations with Russia. “Russia is not an unimportant nation for us in a number of respects,” said one Israeli industry representative at Eurosatory.

Both Israeli and Georgian defence analysts claim that an ‘under the table’ veto exists that Moscow can exercise on any arms sales to Georgia and that, in the words of a Georgian analyst, “this is not the first case of this sort as Russia constantly exerts pressure on the countries that sell weapons to the states whose relations with Moscow are not good. Russia has also succeeded in thwarting [any] negotiations with Bulgaria and other former countries of the Warsaw Pact”.

In the meantime, according to Georgia’s FIS chief, Gela Bezhuashvili: “Eighty per cent of our activity outside Georgia is consumed with dealing with the Russian threat to our country.” Counter-intelligence officials with the MIA also revealed that “at least two persons of some level of importance in the [Georgian] government are arrested here every month because they have been ‘bought’ by the Russians to work against their own country”.

Reuben F Johnson is a JDW Correspondent, based in Paris
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