Obama Seeks $205 Million for Israel Iron Dome System

14/05/2010 The budgetary difficulty that has been delaying Israel's armament with the anti-missile defense system Iron Dome has apparently been resolved. The Pentagon has issued a message to Israel's Defense Ministry that U.S. President Barack Obama has approved the transfer of special assistance totaling $205 million for the purchase of more than ten Iron Dome batteries.

The Iron Dome missile defense system aced a test run in January, and event that convinced senior defense officials that the defense system was on its way to becoming operational and that it will be able to effectively protect against short-range missiles, such as Katyushas and Qassams, which often hit Israeli settlements.

Produced by Israeli state-owned Rafael Advanced Defense Systems Ltd., Iron Dome uses small radar-guided missiles to blow up rockets with ranges of between 5 kilometers and 70 kilometer, as well as mortar bombs, in mid-air.

However, the plan was not allotted an adequate budget. The Israel Defense Forces ducked away from funding the project with its budget, explaining that offensive readiness was a higher priority, and the Defense Ministry has been looking for other budgetary avenues. Among other things, Israel has struck a deal with an unnamed eastern Asian country (Singapore, according to a recent report in a French magazine) to participate in the funding of future phases in the project.

Israel has recently raised the possibility that the U.S. assist in the funding of the project by transferring a sum of money beyond the U.S.'s annual defense assistance. The request was reviewed closely during Israeli Defense Minister Ehud Barak's last visit to Washington earlier this month, and during talks between Barak and Obama and other senior American defense officials.

Its development was spurred by the 2006 Lebanon war and the Gaza Strip war a year ago. In both cases, Israeli towns within reach of short-range rockets were in some respects defenseless.

"The president recognizes the threat missiles and rockets fired by Hamas and Hezbollah pose to Israelis, and has therefore decided to seek funding from Congress to support the production of Israel's short range rocket defense system called Iron Dome," White House spokesman Tommy Vietor said.

Two Iron Dome batteries are under construction, an Israeli defense official said in February. Designed to be towed by vehicle, they will be available for any Israeli front at a few hours' notice.

Bryan Whitman, Pentagon spokesman, said it was the first direct US investment in the Iron Dome system. "This funding will expand what they can produce and deploy, and how quickly they're able to do it," he said. The decision was made to pour funds into the system after US officials observed tests last fall, officials said.

The money comes on top of annual US assistance to Israel.

According to the State Department, US military aid to Israel in 2009 totaled $2.55 billion. This will increase to $3 billion in 2012, and will total $3.15 billion a year from 2013 to 2018.

Dollar Jump Resembles ‘08 Crash

On Wednesday, I wrote about the troubling signal given by the Volatility Index (VIX) as it surged in a manner which resembled the 2008 crash. Today we can add another market indicator to the “trouble” list – The US Dollar.

I’ve mentioned the inverse relationship between the US Dollar and stocks several times. This relationship began in 2002 and continues today. The chart below shows that as the market bottomed in March 2009, the Dollar index hit a major top.

Why is the dollar surging? Europe. The real reason (in my view) that our stock market has been so effected by European issues is the dollar dynamic. The US Dollar Index measures the US Dollar against a basket of foreign currencies, the largest of which is the Euro. As the Euro (The largest component of the basket) drops, the Dollar will rise.

For the record, the Dollar-Stock phenomena is not quite normal. During periods of strong economic expansion (such as the ’90s) both rose together as money flooded into our markets and pushed up demand for both. Since 2002, however, our economy has been reliant on excess liquidity to prop up our asset valuations. Assets did rise but only as the value of the currency used to buy them in fell.

Bottom Line: The VIX and US Dollar could mean trouble for stocks.

Could marijuana save California?

In the 60s hippies fled to the backwoods of northern California to grow pot. There they have been joined by growers of 'medical marijuana' – available with a doctor's recommendation – as well as by Mexican drug cartels. With cannabis now its largest cash crop, the state will soon vote on whether to legalise it fully – and even Governor Arnold Schwarzenegger is thinking the enormous tax revenues might just solve his budget deficit…

Jim Hill in his greenhouse where he and his wife Trelanie grow medical marijuana. Photograph: Sarah Baldik for the Observer

'When I see that, it's like looking at a shed full of cows. I see a whole lot of work," says Jim Hill, opening the little gate into his humid greenhouse in which a forest of marijuana grows, and from which a pungent, heady scent exudes at gale force. Not work as in hard labour, emphasises Hill – though there is a bit of that – but expertise growing some of the most potent weed on the planet.

Nearby there are vineyards and horses graze the sun-stroked farmland, but this verdant hillside near the town of Potter Valley in northern California lies in an area called the Emerald Triangle: three counties bordered by mountains to the east and the Pacific to the west that connect the lyrical terrain north of San Francisco with the wilderness of the Oregon state line. This breathtakingly beautiful corner of earth is the marijuana capital of the western hemisphere thanks to three conspiring factors: its perfect climate; the pervading culture; and topography – this is a maze of mountain dirt roads, locked access gates, isolated villages, secluded slopes and wooded glades, far from prying eyes.

Jim Hill, however, is a respectable figure – neither old stoner nor criminal – and he is not afraid to show off his working practices. "You're just going to have to smell of weed for the rest of the week," he jokes as we clamber through his greenhouse. "Squeeze this," he enthuses, "take a sniff, feel the nice, rich oily texture…"

Ninety-eight per cent of growers would not think this sight possible in late April, he says, indicating the succulent, ripe buds oozing heavy on the branch. "You're looking at icebergs in July." Hill has worked out what to plant when: he talks about daylight hours at this latitude, "plant efficiency" and above all cross-pollination. And no wonder: his other business and passion is as a breeder of greyhounds. He shows me a video of one of his dogs streaking from penultimate place in a big race in Phoenix to win.

"Now, we develop and cross-breed different strands of marijuana," he beams. He talks about indica and sativa plants, about kush and his own speciality, scarecrow. "Just look at those purple leaves," he says. "You should see the messages of gratitude I get from my patients for this."

Not every law enforcement officer here in Mendocino County would agree – for the law here is labyrinthine – but Hill is operating legally. In 1996, following the comfortable success of a referendum on what was called Proposition 215, California passed its Compassionate Use Act, which allows patients with a doctor's "recommendation" (it is not a prescription) to cultivate and possess marijuana for personal use.

The act was subsequently expanded to help create a network of collectivised dispensaries. At first a handful appeared, now there are thousands, some small and dingy, others de luxe. In the city of Oakland, there is an entire neighbourhood called "Oaksterdam", which boasts a college for the study of cannabis growing as well as a range of dispensaries (one, called Blue Sky, offers arguably the world's biggest selection of different strains).

Jim Hill started growing marijuana because of its medicinal properties – his wife, Trelanie, suffered from a serotonin imbalance and he believed it could help her. Now his crop is destined for dispensaries in San Diego and Los Angeles. "It was the attitude of the government, hassling me, that turned me into an advocate."

Even here, cannabis cannot be grown for profit or sold, so what keeps Hill's greenhouse legal is that the marijuana itself is owned "not by me but the collective" – the First Choice Collective, it is called. Its 1,200 members will have been "recommended" marijuana by a doctor. To be legal, subsequent transactions take place within a closed loop. "All I sell," says Hill, "are my services." According to the law, the collective and its members "remunerate" Hill – he is not paid commercially. But he makes a tidy living.

If only the same could be said of the Californian economy. It may be the eighth largest in the world, but the state government has issued IOUs and unemployment is at its highest for 70 years. In his final budget in January, Governor Arnold Schwarzenegger proposed what he called "draconian" spending cuts aimed at fixing a $19.9bn (£13bn) budget deficit. He has said previously he would welcome a public debate on proposals to legalise and tax marijuana to help plug that hole.

Tax revenues from medical marijuana (amounting to roughly $200m) barely scratch the surface of what might be raised, given that marijuana is now by far the largest cash crop in what used to be known as the Orange State. It is this that has made an unlikely bedfellow of the actor who played the Terminator and those who might feel themselves closer in spirit to Dennis Hopper's character in Easy Rider.

In November – now that a referendum "initiative" has attracted sufficient signatures – there will be a state ballot on whether California should fully legalise marijuana. This will bring an industry worth an estimated $10bn in Mendocino County alone into the mainstream economy. "The state of California is in a very, very precipitous economic plight," Democratic state assemblyman Tom Ammiano, who introduced the legislation, said recently. "It's in the toilet… With any revenue ideas, people say you have to think outside the box, you have to be creative."

It is in this context that someone who embodies the spirit of Californian entrepreneurship can hope to prosper. Jim Hill is rightly proud of his expertise – "No one else is growing this stuff to the level we are here. I'm tellin' ya, we're good at this" – and growers in Mendocino County talk about the eventual "appellation" of marijuana (a system akin to that used in France and elsewhere to identify the best wines). Benign he might be, but Hill can see the potential. "What California does, the world tries to follow 20 years later," he says. "That's just the way it is. The seeds of alternative culture and digital technology were here and now it's marijuana."

But Hill represents only one side of this story. In the counties of Mendocino, Humboldt and Trinity, different forces are involved, some that represent another strain of California's founding optimism, and others much darker.

There is no mystery as to how northern California has become the Napa Valley of marijuana while other products "made in the USA" wither on the vines of deindustrialisation and recession. During the 60s, San Francisco was famously the capital of an experimental drug culture, when cannabis and LSD were ingredients in an earnest imaginative adventure. At the time of the Summer of Love in 1967, marijuana arrived largely from Asia, with some produced locally by motorcycle gangs, including the Hells Angels, in what is now the Emerald Triangle.

In the years that followed, as the dream turned sour around Haight-Ashbury, an exodus began of hippies and disillusioned Vietnam vets. They moved north to settle what became known as "the Lost Coast". From the mid-70s onwards, these communities became established – I remember touring them – with their vintage Volkswagen buses, coloured banners and totem poles on the land. And of course, in this climatically benign and secluded wilderness, they planted what they needed and liked to smoke.

But for a second time, they were pursued. Seekers of the new dawn were soon joined by farmers with an eye for business, by motorbike gangs affiliated to criminal distribution channels in the big cities and, latterly, by Mexican narco-cartels. Now they face new arrivals: agribusiness, big pharmaceutical companies and possibly tobacco giants. (The RJ Reynolds Tobacco Company, which makes Camel cigarettes, dismisses as "rumours and speculation" reports that it is about to buy up tranches of land.)

People of the counterculture – there are still many here, growing a little marijuana legally and perhaps practising herbal medicine professionally – as well as savvy growers like Jim Hill, now find themselves cultivating their crops alongside farmers who would never touch the stuff themselves. Criminal syndicates that grow their crops in buried freight containers, for example, and others who hire armed guards to oversee their "trimming" operations.

Tensions take root: between legal and illegal growers; between those who grow their cannabis naturally and outdoors and those who mass-cultivate under lights; between those who grow organically, with an emphasis on quality, and those who use fertilisers or cause diesel spillage from their hydroponic hothouses, with an emphasis on quantity. Plus, of course, between big interests at opposite ends of the spectrum: vicious cartels and syndicates making best use of an illegal market while it lasts, and the big tobacco and pharma companies salivating at the thought of legalisation.

Local and state authorities are sorely tempted to see some of the marijuana money through regulation and taxation. But for the same reason, opponents of cannabis are extremely wary, and California's marijuana laws are endlessly being jostled over and amended at county level, and can even be contradicted outright at federal level, so that the spirit and letter of law combine into a kaleidoscope of plant limits and rules on transportation and remuneration.

Jim Hill is forever getting caught between the layers of the law. Mendocino County passed a "Measure G" allowing growers to cultivate up to 25 plants per parcel of land, but that was cut back by a "Measure B". Hill grows substantially more than 25, insisting that "county law can't pre-empt state law – which sets no limit". Meanwhile, agents from the federal Drug Enforcement Administration (DEA) arrived at Hill's farm one morning last October to enforce national law. "They were very nice guys. They said 'we've come to cut down all your plants,'" recalls Hill. The federal charges were dismissed – making fewer headlines in the local press than when they were levelled.

Hill is no hippy – he wears a smart yellow golf shirt – but he is a supporter of legalisation who takes a surprising line on the role of the cartels and criminal gangs up in mountains. To his mind, cannabis is a battleground on which you cannot always choose your allies. "It's like paedophile priests in the Catholic church," he says. "I don't accept it when the church says, 'oh, they're not good Christians', because the church knows it's going to have to count their votes against the atheists one day. And that's how it is for us with the Mexican cartels. The cartels are breaking the system, and it's a system that's got to be broken."

Marvin Levin of the Mendocino Farmers Collective, which grows high-quality organic marijuana, takes a different position, wanting "nothing to do with people whose interests and ties are in selling this stuff for profit, and not growing it right, whether they're the men with guns in the woods, or pharmaceutical companies or big tobacco. We're nothing to do with people growing for Goldman Sachs with 100 grow lights, or the mafia."

The politics and economy of the Emerald Triangle come inevitably to be dominated by its most famous, ubiquitous and potentially lucrative product. When you wake up in the county seat of Ukiah ("haiku" spelt backwards, as locals point out), the scent of marijuana hangs heavy on the dewy mist that rolls off the mountains. Among the morning newspapers is the latest edition of West Coast Leaf, "the cannabis newspaper of record", with pictures of men in suits poring over plants and pages of adverts for marijuana-specialist lawyers, "medical cannabis valuations", "the pre-rolled MediCone cannabis delivery system", and Organicann, "the best medibles [marijuana edibles] on the planet. Whether it's savoury pot pies, robust infused tea or delectable cookies."

Mendocino is the county for which Dan Hamburg is campaigning to be supervisor – a role akin to county council chairman – with a fair chance of success. His wife, Carrie, joins our discussion. It was her experience of cancer, which pot "made just about bearable", that persuaded Hamburg to position himself behind the cause of medical marijuana.

Hamburg lives on a hillside, past solar panels that power his wooden house, with a thumbed encyclopedia on a lectern in the hallway. He was, from 1992 to 1994, congressman for northern California on Capitol Hill. In the past, his political enemies have endeavoured to use his Californian good looks and intelligent, easy manner against him – as well as his history of campaigning for the decriminalisation of marijuana – but it rarely worked.

"People ask me, 'Are you the growers' candidate?'" he says. "I reply, 'It depends which growers.' I'd like to think I was a candidate for small, legal, medical growers, but not a big indoor growers' candidate. I think marijuana should be grown organically and in the sun, not under grow-lights." An environmental consultant by profession, he says, "I'm against the noise and diesel spills that indoor growing involves. I'm extremely wary of big tobacco taking over the growing of marijuana because the quality would go down. We've heard of tobacco companies preparing to buy land near here, and I sure am not their candidate."

Among Hamburg's opponents, he says, are interests not involved in marijuana growing. "Their problem? That the marijuana crop is so successful, it's driving up wages. People can't pay their labourers the minimum pay, when the pot trimmers are earning upwards of $20 an hour."

Hamburg intends to drive a wedge "between legalisation and decriminalisation. I favour the latter. No, I don't think schoolchildren should smoke it. What we are aiming for is people to be able to grow marijuana, take it to a place where it can be tested for quality, and for the consumer and the grower to benefit."

This is a position that finds sympathy with another important member of the local community. Bert Mosier arrived to become president of the Greater Ukiah Chamber of Commerce from Kansas, where he had been an economic development officer at county level. We meet in America's first organic brewpub. "This is a county where the economy was built on lumber, which went into decline, to be replaced by fishing, which has also declined," he explains. "In that situation, marijuana is the big dead fish in the middle of the room – everyone talks about it, but people are afraid to get out of the comfort zone. It's impossible to calculate how much it's worth, or the exact impact of an underground economy. But I've heard estimates of $10.6bn." He emphasises the importance of the marijuana economy to the local economy as a whole. "Businesses have told me that the marijuana crop is the difference between staying open and going bankrupt – no, not just the smoke shops and tie-dye: these are restaurants and stores.

"All I'm saying is that I want this county to succeed and I'll join the conversation, and remain in the middle," he continues. "Though of course, those opposed to pot say that to join the conversation in the middle is not neutral at all, but an endorsement."

Marijuana country, and marijuana culture, are not lands of milk and honey. For some they may be paradise, but there is a price to pay for paradise. One day, that price may be the arrival of executives from Philip Morris, RJ Reynolds and British American Tobacco; from Pfizer, Johnson & Johnson and Roche. But for now, the price is paid in crime – big crime, and the petty crime it causes. Each morning around 7am, a group of itinerants with matted hair, in ragged clothes, clutching their belongings, gathers outside Walmart in Ukiah. One particular group has come from St Louis, Missouri, to wait for trucks that arrive and take them up to work as trimmers on the bigger marijuana farms. In the evening, they hang around encamped by the river, littering the banks and smoking their payment in kind.

They don't like to talk much about where they are going and have been: a boy called Skip does say that they sometimes work on farms "in the forest" under armed guard. These are "a ways up, in the mountains," he says, along winding dirt roads in thick woodland and deep valleys over which Drug Enforcement Administration helicopters fly, and into which patrols sometimes venture to make arrests. These are marijuana farms that do not entertain reporters, the kinds of growers who keep their distance from Dan Hamburg and Bert Mosier, and vice versa.

According to California's Bureau of Narcotics Enforcement, organised crime has moved into the marijuana business in the north of the state in different guises. The most recent arrivals are gangs affiliated to the Mexican Sinaloa and Arellano-Felix cartels, who send illegal migrant workers into remote and unguarded slopes and canyons on public parkland to cultivate marijuana. On almost "every raid" into such places, "we find weapons", says the bureau's spokeswoman, Michelle Gregory. Since California's economic crisis has forced cuts in the park service, covert planting has become easier off hiking trials through the state's 31 million acres of public wilderness. Much of the cartels' activity, says a law enforcement source, involves hijacking other people's marijuana, or armed invasion of the homes of growers who are then reluctant to call in the police.

Other criminal syndicates are hangovers from the original dope-growers in the region, the Hells Angels, who – having serviced the Bay Area in the 60s – never went away. But they did change, and adapt; they streamlined, says a DEA source, developing their cultivation methods "to grow dope that's strong but growable in bulk" and establishing criminal distribution networks throughout urban gangland.

Tom Allman is sheriff of Mendocino County, and has served 28 years in law enforcement. We meet at his office at 7am, between appointments, and he tells a funny story about a British military guest he hosted at an event held by the National Rifle Association ("If it wasn't for the British, we'd never have needed a Second Amendment!"). Allman also draws a line between who is growing what in Mendocino County. "The problem," he says, "is not old hippies. Marijuana has always been part of life around here, and they're harmless. But we've also got the Mexicans, the Russians and Bulgarians – with guns. They're organised, plus people from Italy, England, Germany get in on this. They come, stay a year, and move to a different county. Where there are drugs, there is crime. That's the problem."

He recalls how "one time we busted a guy – you know those freight containers that trucks pull around? Well, this guy had eight of 'em buried underground and arranged like this around an underground water supply." Allman draws a pattern like the petals of flower. "He had 8,000 plants. This kind of thing is happening all over – big hydroponic operations in a county of only 90,000 people… In 2009, we destroyed 541,000 plants, which means there are about 5 million illegal plants we do not get, using 4 to 5 million gallons of water a day," he adds. "Try telling that to the environmentalists."

Allman is also concerned about the "tourism" that might follow legalisation in November. "If that thing passes, it'll be like America got tilted to one side and every degenerate in the country not bolted down is going to drift here." He makes the point that marijuana in Mendocino County can sell for as little as $1,500 a pound. "In Georgia, it's $4,200 a pound. Think about it."

The previous morning, at my motel, a wild couple were loading up their car which had Tennessee plates, the scent hanging heavy over the parking lot. The man's ranting was for all to hear. "Yeah, there was blood all over the floor, but I got some shit from out of my head!" These presumably are the sort of tourists of whom Allman is wary.

For someone like Allman, the situation as it stands at the moment, with the law constantly subject to revision, can be frustrating. "I have officers who are leaving the police, saying they just can't be cops any more, having to walk out of houses leaving all those plants," he says. "Even I get a little tired of being sued and having people come in here with court orders and I have to give them back their marijuana. I've never yet had to give back to anyone in a wheelchair, but I've often had to give plants back to some kid of college age."

He goes to his computer and pulls up the website potdoc.com, noting its ethos with disdain. "You go to a doctor who asks if you have $200 in your pocket and from then on, you're self-medicating, for whatever ailment you say you got."

Later on the same day, Sheriff Allman joins 200 others from the county, most of them marijuana growers, who pack themselves into the venue of Ukiah's Saturday Afternoon Club from lunchtime until way past dark. These growers have set aside their shovels – even on the first sunny Saturday in months, badly needed to prepare for the growing season – to drive for hours from places with names like Spyrock and Whale Gulch. Cannabis workers, medical marijuana patients and "cannabusiness" owners mingle, too, with government officials, political candidates and representatives of business.

This novel event is organised by the Mendocino Medical Marijuana Advisory Board and the Cannabis Law Institute, and has been convened to discuss what happens if California votes to legalise marijuana. And here they are in one place: these Vietnam-era pioneers of pot returned from the war, who headed for the hills to create the finest cannabis strains in the world and who today face a new enemy in the crosshairs of agribusiness, big pharma, big tobacco and the possibility of marijuana monoculture following legalisation.

At one table, beefy guys with buzz-cuts and folded arms exude the wariness of life under the radar: in hushed tones, ex-loggers-turned-ganja-farmers talk about shakedowns and sawn-off padlocks. One asks those at his table to respond to a question from a workshop survey: "What assets do we bring to this industry?" "Seizable ones," responds another man, his voice rife with sarcasm. There is laughter, but no one smiles. "This county is third in the nation for seized assets," says a third man.

"I have relatives who buy cannabis in LA," says another, "but the strains are depleted. It looks and smells like the real thing, but it's so bad the dispensaries are issuing refunds!"

"If I shared my seeds with you," someone challenges, "how do I know you're not gonna sell out to Monsanto?"

Two people in the audience have especially interesting things to say. The first is Dan Rush, special operations director for UFCW5, the north California branch of America's third largest trade union, United Food and Commercial Workers. "Schools are closing. Police officers are being laid off. If government opposes legalisation, they've lost their minds," says Rush. He claims that his union represents 1,200 cannabis workers in the Bay area.

Sheriff Allman chats informally to people he knows. He then appears, speaking to camera, in a film shown to the meeting, in which he insists: "I'm not saying that marijuana is this innocent little herb that doesn't affect people, but it doesn't have the serious impact on society that other serious problems do. I'm spending 30 per cent of my time on marijuana. There's other things I need to be doing." The audience, which has found itself watching Allman watching himself on screen, breaks into unabashed applause. "We'll hold him to his views," whispers one man, adding that he already respects the sheriff for once extracting a woman from a burning car with his bare hands.

Eight long hours later, Dan Rush from the union helps fold away the chairs and a man with a mop of silver-grey hair loads a last item into his truck – a painting of the earth with the slogan: "Respect the land for future generations. Organic outdoor." Then he climbs aboard and drives back up Highway 101 – to a place he runs called Area 101.

The road north from Ukiah cuts through a breathtaking landscape of mountain meadows coloured luminous green by heavy rain this year. In the town of Willits ("Gateway to the Redwoods"), Roxie's Rock Shop advertises a tool called a Mendo Mulcher, which grinds marijuana buds into a fluffy, smokeable form – reportedly designed by a Nasa engineer. Stands of oak trees give way to conifers and wilder country, where the local newspaper is the Anderson Valley Advertiser, which, with its blocks of close print, looks as it might have done in 1900. The slogan on the masthead promises it's been "Fanning the flames of discontent", and articles about President Obama's foreign policy sit besides tales of local cannabis growers' brushes with the law.

Just past the farm where Wavy Gravy – compere of the Woodstock Festival in 1969 – holds an annual Earth Dance event, outbuildings with alien spaceships, a moonrise and Buddhist deities painted in fluorescent colours announce you've reached Area 101. The name is a play on the number of the route we've driven and on Area 51, the counterculture name for an airforce base in Nevada where aliens are supposedly developing aviation technology. Area 101, conversely, is a place "dedicated to personal growth and spiritual enlightenment", as the business card says. This venue for music and happenings is run by Tim Blake, the man with the silver-grey hair, who also co-owns a nearby farm that grows what is agreed on the grapevine in Mendocino to be "the best cannabis in the world". The intention is to turn the farm into a licensed dispensary for marijuana, too.

Blake has a Virgin of Guadalupe tattooed on his upper arm and the same figure cut with stained glass in the window, "which means the Mexicans leave me alone," he claims. Blake's enthusiasm for what he does has been boundless since he first came to northern California from the coast at Santa Cruz in the 60s, and it is informative to hear his account of history since then.

"The trailer we were pulling forward in the 60s got disconnected in the 70s. Big dealers moved in and derailed the psychedelic movement. Weed was grown under lights, cocaine was $10 an ounce. People were losing their minds, crack on the streets, speed everywhere, and the 80s and 90s were a mess.

"But then the energy started coming back. We've gone back to fetch the trailer. God put us right here, just north of the fault line system, just south of the volcano chain, where the pasture's good and the air stays clean. Where the marijuana is our saviour and nourishment. We believe it can change things, change the system, as well as being a safe place to change your headspace.

"I'm talking about the good stuff," he adds. "It's got to be the good stuff."

A woman called Pam arrives. Her face is beautiful, but weary and lined with tribulation. With her is her niece, Lisa, aged 18. Pam's son has committed suicide and so has her nephew, Lisa's brother. "I used to pass this place every day, driving between here and Reno, Nevada," says Pam, "but I never came in, never needed to. Now I've found it." Tim Blake chants a mantra, by way of demonstration, not meditation. Then out comes a bong, which Pam puffs before weeping and starting to feel better.

Marvin Levin of the Mendocino Farmers Collective is from Los Angeles and "too young to remember what it was like first time around." But he manages the farm here now, and he has a point to make. "We're not just using cannabis for smoking, we're using it in a dozen different medical ways and as a dietary supplement. For this, we need to grow it right. If you want to grow as much as you can as fast as you can, you'll grow something entirely different, pumped full of fertilisers."

For those at Area 101, who represent a set of Californian values that find expression in the language of hippiedom, the prospect of marijuana being legalised in November's state ballot seems welcome. None the less, to meet the denizens of Area 101 is to worry that their aspirations and message will be lost if pharmaceutical and tobacco companies arrive – that they will get squeezed out of the picture by Governor Schwarzenegger's embrace of what once was the counterculture.

It is with a note of optimism you hope isn't misplaced that Marvin Levin says: "We work in a non-profit closed loop, so we can ask people for feedback, and cultivate accordingly. We're not like the bikers or men with guns up in the woods. We're trying to do this for a better world, yes – but also for the neighbourhood."

As we say our goodbyes, I see a lovely old sign from the days before Area 101 on the wall, reading "Country Store and Deli".

"We've left it there," says Levin, "because that's what we're going to be. Why take down something you're going to need again some day? That's what we are: the Lost Coast Country Store and Deli!"

Additional reporting by Carole Brodsky

Peak soil: it’s like peak oil, only worse

Resource collapse is bigger than peak oil, and bigger even than the projected depletion of natural gas, coal and uranium – it encompasses each and every natural resource extracted, exploited or otherwise processed on an industrial scale.

This is not to deny peak oil, or the subsequent decline of all the other hydrocarbons that are essential to our lives and economies; the point is that even if we switched to renewable energy tomorrow, we would still not be out of the mess that we’re in. We’re experiencing problems with our living environment – climate, soil and water – that are more than just energy issues.

Once again, Hubbert’s model can be applied to any finite resource we extract from the Earth. If it’s tragic that we are burning through all available resources with no thought for future consequences, it’s worse still to think that the payback will likely happen all together. We will probably find ourselves dealing with a widespread hydrocarbons collapse right when we have to face a greatly reduced global capacity to grow crops and find people enough water to drink.

The peak debate, although on the surface about energy security, comes back to food supply. So here I’m going to look at peak soil, peak water and peak phosphorous.

Peak soil

The world is losing soil 10 to 20 times faster than it is replenishing it. At the same time, population is growing exponentially – 9.3 billion by 2050, according to UN projections.

Areas of the world – particularly northern China, sub-Saharan Africa, and parts of Australia are already losing large tracts of arable land. Soil management is about more than heaping on chemical fertilizers. A 2008 New York Times article, Scientists focus on making better soil to help with food concerns, that examined the complex nature of simple dirt found that:

Soil does not arise quickly. In nature it starts with a layer of glacial grit,
or windblown sand, or cooled lava, or alluvial silt, or some other crumbled
mineral matter. A few pioneer plants put down shallow roots, and living
things begin to make their homes in and on the surface, enriching it with
their excrement, and enriching it further when they die and rot.

The resulting organic matter feeds a whole underground ecology that aerates the
soil, fixes nutrients, and makes it more hospitable for plant life, and over
time the process feeds back on itself. If the soil does not wash away or get
parched by drought, it very gradually thickens. It takes tens of thousands
of years to make 15 centimeters of topsoil, about 6 inches' worth.

The UN’s Global Environment outlook, published 2007, states: “Deficiency of plant nutrients in the soil is the most significant biophysical factor limiting crop production across very large areas in the tropics.”

Peak water

The term peak water comes from the fact that much of the world’s drinking water lies in underground aquifers and in lakes, which behaves like a finite resource by being depleted. According to the UN’s Global Environment Outlook:

By 2025, about 1.8 billion people will be living in countries or regions with
absolute water scarcity, and two-thirds of the world population could be
under conditions of water stress – the threshold for meeting the water
requirements for agriculture, industry, domestic purposes, energy and the
environment (UN Water 2007). This will have major impacts on activities such
as farming. . .

As things stand right now, every 20 seconds a child dies from a water-related disease. Water is an urgent issue. Especially as, due to climate change, many parts of the world are becoming drier.

Himalayan glaciers that are the principal dry-season water sources of Asia's biggest rivers - Ganges, Indus, Brahmaputra, Yangtze, Mekong, Salween and Yellow - could disappear. An international conferrence in Kathmandu recently heard a UN report that, if temperatures continue to rise "there will be no snow and ice in the Himalayas in 50 years." Under the headline Vanishing Himalayan Glaciers Threaten a Billion, we read of the unimaginably vast scope of climate change:

Thousands of glaciers in the Himalayas are the source of water for nine major
Asian rivers whose basins are home to 1.3 billion people from Pakistan to
Myanmar, including parts of India and China. . .

Peak phosphorus

Phosphorus is essential for plant life. It is removed from the soil by plants, and, in the case of agriculture, returned through fertilizers – along with nitrogen and potassium. Most of the world’s agricultural land does not have enough phosphate, so this is vital if an increasing global population is to be fed.

Phosphate rocks are mined to produce the fertilizer; when their output drops, so does that of our agriculture. The paper Peak phosphorus, by Patrick Déry and Bart Anderson, states:

In the literature, estimates before we "run out" of phosphorus range from 50 to
130 years. This date is conveniently far enough in the future so that immediate
action does not seem necessary. However, as we know from peak oil analysis,
trouble begins not when we "run out" of a resource, but when production peaks.
From that point onward, the resource becomes more difficult to extract and more
expensive.

An April 2010 Foreign Policy article by James Elser and Stuart White, again titled Peak phosphorus, is essential reading because it shows just how insidious the current phosphorus issue is:

Increased demand for fertilizer and the decreased supply of phosphorus exports
will result in higher prices, significantly affecting millions of farmers in the
developing world who live on the brink of bankruptcy and starvation. Rising
fertilizer prices could tip this balance.

Already, signs are emerging that our current practices cannot continue for long. Between 2003 and 2008, phosphate fertilizer prices rose approximately 350 percent. In 2008, rising food prices sparked riots in more than 40 countries. Although the spike in fertilizer prices was only partially responsible for the higher food prices, the riots illustrate the social upheaval caused by disruptions to the world's food supply. The 2008 food riots were only stopped by government promises of food subsidies -- a viable strategy only as long as governments can afford the ever-increasing costs of food support.

Phosphorous is not destroyed when it’s used and so could be recovered and recycled. It’s more productive to work harder to prevent soil erosion, and come up with more precise ways to apply fertilizer. The Foreign Policy article continues that if we fail to use the limited phosphorous that remains in a sustainable way, millions will starve:

If we fail to meet this challenge, humanity faces a Malthusian trap of
widespread famine on a scale that we have not yet experienced. The geopolitical
impacts of such disruptions will be severe, as an increasing number of states
fail to provide their citizens with a sufficient food supply.

A decline in phosphorous output has the potential to cause more death, especially in developing countries, than that of oil.

Conclusions

It’s wrong to assume these issues will only apply to the poorest of the poor in the developing nations – it’s just that they, like the proverbial canary in the coalmine, will be hit first to die. When post-peak oil prices cause the already weakened Western economies to slump into terminal recession/depression, we too will find ourselves living marginal lives. Then it may well be our turn.

Just as we will face a global energy crisis, we will be forced to come to terms with some equally urgent issues. The global population is rising exponentially. Soil is becoming poorer throughout most of the world, and access to clean water more scarce. According to the UN, by the mid-2020s, two-thirds of the world’s population may struggle to find enough water to meet their needs. A decline in phosphorous by itself could pose a “Malthusian trap of widespread famine on a scale that we have not yet experienced.”

In addition, we are facing the very real prospect of global climate change. (Stepping around the political games, climate is changing. Parts of the world are becoming drier, and some more prone to flooding.)

So, the world is facing a hydrocarbons peak, right as we are beginning to struggle with soil, the nutrients required for large scale agriculture, environmental change and availability of water. When you put the disparate elements together, it begins to look like a perfect storm.

(Abridged from the page Environmental Resource Collapse. Pictures are from the 2009 drought in China that left 3.7 million people without access to water.)

Financial Chaos And The Smell Of Napalm In The Morning

May 13, 2010 "Information Clearing House" -- What in God’s name should we make of it all? On Thursday, the New York Stock Exchange had its most severe plunge in history - nearly 1000 points, before it recovered minutes later. On Monday, it shot up 400 points, one of the biggest spikes in memory. All told, the variance was around 1400 points over the period of a couple of days.

The context for this, of course, is the financial turmoil that has spread from Greece and is sweeping across Europe, threatening the very existence of the European Union and the Euro as a common currency. Last week alone, it is estimated that global stock markets lost $3.7 trillion of their value as a result of this crisis (1). According to the Canadian finance minister Jim Flaherty, not even the Canadian economy is immune from the financial contagion.

There is no doubt about it – the global financial sector is still in a period of extreme volatility and instability despite massive and unprecedented bailouts from the coffers of governments around the world a year ago. Now the European financial sector is to receive “the mother of all bailouts” amounting to an astounding $1 trillion more.

But there is a troubling feature of this situation - a “financial war”, so to speak – that is not getting the attention it should. As Anders Borg, Swedish Finance Minister has put it, one of the main contributing factors to the extreme volatility in the financial sector is that “wolf packs” of speculators are roaming around Europe looking to feast upon the economic carnage (2). These include bond and currency speculators, as well as hedge funds, banks and other financial institutions.

The situation has become so grave that German Chancellor Angela Merkel has said that “the [financial] speculators are our adversaries” and that financial markets have become “perfidious” (3). What she does not clarify, of course, is that German financial institutions, along with U.S.-based Goldman Sachs and others, have played a big role in precipitating the turmoil, including that which is currently unfolding in Greece.

The barbarity of all of this is no secret, giving rise to great tragedies in previous years as well as today in Europe. David Cohen, an economist with Action Economics, comments that “the bond market vigilantes are still hungry, they smell blood” (4). In his opinion, despite the massive bailout package, the situation could become like the 1997-1998 Asian crisis, where “countries were attacked one by one”

Edmund Conway, Economics Editor of The Telegraph newspapers and website, dismisses the idea that the $1 trillion bailout “will help clamp down on the ‘wolfpack’ of speculators baying around the wreckage of the euro area.” According to him, “if anything, it is rather likely to make billions for the speculators, who will make a killing on the big increases in [stock] prices today, and will make another killing when there is another dip” (5).

Thus these financial speculators seek out or - as has been suggested by various analysts - actually cause or precipitate financial and economic chaos. Like the Robert Duvall character in the movie “Apocalypse Now”, they “love the smell of napalm in the morning.”

Just who are these financial speculators? Well some are no doubt respected “pillars of the establishment” and “respected business leaders”. But, as Danny Schechter comments, “despite all the rules that govern the markets or regulations designed to assure transparency and accountability, crooks, swindlers, and even gangsters are commonplace” (6).

Whether “pillars of the establishment” or crooks or gangsters or just individuals who “love the smell of napalm”, they all have one thing in common though - when it comes to financial speculation, the flag they hoist is black as night and has the skull and cross bones emblazoned across it.

How can such individuals have so much power over the futures of millions of people and, indeed, of entire countries? One of the features of the last several decades in North America, Europe and elsewhere has been the tremendous growth in the financial sector relative to other sectors of the economy. Large parts of this financial sector have become parasitic and a danger to economic stability, as can be seen in the sub-prime mortgage crisis in the U.S., the debt crisis in Greece, and other examples.

Politically, financial institutions have become extremely powerful. As even some members of Congress have admitted, “the banks own the U.S. Congress” and have contributed massive amounts to the election campaigns of Barack Obama and other prominent political leaders, both Democrat and Republican (7).

What can people do in the face of this extremely volatile situation, whether they live in Europe, North America or elsewhere?

One of the things we can do is to take the discussion out of the hands of the financiers, as well as the political pundits and politicians who are in their service. They are desperately trying to blame ordinary people for the financial chaos, claiming that is their high wages, pension funds and benefits that are the source of the problem – i.e. people are living “beyond their means”. Furthermore, they claim that banks, hedge funds and other financial institutions are absolutely vital for the economy and cannot be allowed to fail. Let the population fall, let the country be ruined, but whatever you do, keep propping up the financiers and moneybags.

Now it is true that financial services are a necessary part of a modern economy. Indeed, they are as necessary as utilities, such as water, gas, and electricity. So then, why couldn’t financial services actually be converted into a type of public utility and be owned, operated, and stringently regulated as such?

In other words, stop bailing out the banks and financiers. Let them fall. In their place, set up public non-profit banking institutions, similar to credit unions, and ban the hedge funds, currency manipulators, and other speculators as pirates who constitute a threat to human society.

Jesus cleared the moneylenders from the temple. Given the financial chaos of the last several years, maybe it’s high time to follow his example.

Peter Ewart is a writer, columnist and community activist based in Prince George, BC. He can be reached at: peter.ewart@shaw.ca

References

(1) Nazareth, Rita. Bloomberg.com. May 10, 2010.

(2) Neuger, James. Bloomberg.com. May 10, 2010.

(3) Today Online. May 10, 2010.

(4) Cohen, David. CBC.ca. May 10, 2010.

(5) Conway, Edmund. TelegraphUK. May 10, 2010.

(6) Schechter, Danny. Information Clearing House. May 9, 2010.

(7) Grim, Ryan. Huffington Post. March 29, 2009.

Keiser Report № 42: Markets! Finance! Scandal!

Click this link ...... http://eclipptv.com/viewVideo.php?video_id=11868

The New World Order Currency Crisis

Click this link ...... http://www.youtube.com/watch?v=EGYGyGbr0vA&feature=player_embedded