Israel Lobby Routs Obama As Dollar Dies

It did not take the Israel Lobby
long to make

out of the Obama administration`s
new settlements
position.  Israeli Prime Minister Netanyahu is
bragging about Israel`s latest victory over the US
government as Israel continues to build illegal
settlements on occupied Palestinian land.

In May President Obama read the
Israelis the riot act, telling the Israeli government
that he was serious about ending the Israeli conflict
with the Palestinians and that a lasting peace agreement
required the Israeli government to abandon all
construction of new settlements in the occupied West

On November 10 Obama`s White House
chief of staff, Rahm Israel Emanuel, surrendered for his
boss at the

annual conference of the United Jewish Communities.

The ongoing Israeli settlements, he
said, should not be a
to a peace agreement.

Allegedly, the US is a superpower
and Israel is a client state whose very existence
depends entirely on US military and economic aid and
diplomatic protection.  Yet, in the real world it
works the other way.  Israel is the superpower and
the US is its client state.

This true fact is proved to us at
least once every week and sometimes two or three times
in one week.    A few days, ago the
US House of Representatives voted 344 to 36 i
n favor
of disavowing the UN report by the distinguished Jewish

Richard Goldstone
that found that Israel had
committed war crimes in its attack on the civilian
population in the Gaza Ghetto.  The Israel Lobby
demanded that the House repudiate the fact-filled
report, and the servile House did as its master ordered.

US Rep. Dennis Kucinich

to his colleagues for 2 minutes in an effort
to make them see that their vote against the Goldstone
report would be a great embarrassment to the US
government and demean the House in the eyes of the

But none of that matters when
Israel gives its servants an order.  The US House
of Representatives preferred to demean itself and to
embarrass the US Government rather than to cross the
Israel Lobby.

Retribution quickly fell upon
Kucinich for his 2 minute speech.  On November 9,
Kucinich was forced to withdraw as the keynote speaker
for the Palm Beach County (Florida) Democratic Party`s
annual fundraising dinner. The Israel Lobby gave the
order—dump Kucinich or there`s no money and no one is
coming to the dinner.  County Commissioner
Burt Aaronson called Kucinich
"an absolute

Kucinich is the rare Democrat who
stands up for his party`s principles, the working
class, and tried to get health care for those Americans
the corporations have thrown out on the street. But
helping Americans doesn`t count.  Israel über

Meanwhile, the US dollar continues
to decline relative to other traded currencies. 
Since spring, anyone could have made a double-digit rate
of return betting on most any currency against the US

The International Monetary Fund
(IMF) recently expressed concern that despite the
dollar`s continuing slide, it might still be
over-valued.  The Federal Reserve`s low interest
rate policy encourages speculators to use the dollar for
the "carry
  Speculators, whether individuals or
financial institutions borrow dollars at rock bottom
interest rates and use the almost free capital to
purchase higher yielding instruments in other countries. 
The demand for dollars to finance the
"carry trade"
keeps the dollar higher than it would otherwise be.

Last year it was the Japanese Yen
that was used for the
"carry trade"
due to the practically zero Japanese interest rates. The
next scare that unwinds the
"carry trade"
will cause another big drop in financial asset values. 
This means that the stock market is very volatile. 
It is based on speculation, not on fundamentals.

When the
"carry trade"
next unwinds, the demand for US dollars to pay off the
loans will temporarily boost the dollar.  But don`t
be fooled.  The large US trade and budget deficits
are the dollar`s death warrant.

When the dollar finally goes, so
will the government`s ability to conduct wars of
aggression, underwrite Israel, finance its red ink and
pay for imports.  That`s when the printing press
will really get going.

Paul Craig Roberts [email
] was Assistant
Secretary of the Treasury during President Reagan`s
first term.  He was Associate Editor of the
Street Journal.  He has held numerous academic
appointments, including the William E. Simon Chair,
Center for Strategic and International Studies,
Georgetown University, and Senior Research Fellow,
Hoover Institution, Stanford University. He was awarded
the Legion of Honor by French President Francois
Mitterrand. He is the author of

Supply-Side Revolution : An Insider`s Account of
Policymaking in Washington
and the Soviet Economy

Meltdown: Inside the Soviet Economy
and is the co-author
with Lawrence M. Stratton of

The Tyranny of Good Intentions : How Prosecutors and
Bureaucrats Are Trampling the Constitution in the Name
of Justice
. Click

for Peter
Forbes Magazine interview with Roberts
about the recent epidemic of prosecutorial misconduct.