Thursday, August 31, 2006

Rearming Hezbollah fast

I previously noted Hezbollah's estimated cost of U$180M for reconstruction, courtesy of Iranian funding. Consider the price of a Katyusha rocket on the black market. From 2001:

The Katyusha costs about $1,000 on the black market," says Tom Romesser, who heads TRW's space and technology division. "You can stop one with a Patriot missile, but you can't keep putting a $1 million weapon against a $1,000 threat."

Even if a Katyusha rocket were to cost $2K on the black market now, a mere U$8M would be sufficient to acquire 4,000 rockets. If even 10% of the U$180M were ultimately diverted to arms purchases (Hezbollah also runs construction companies, and thus can recycle profits), that would amount to quite a few rockets and launchers, allowing Hezbollah to rearm quickly for yet another round of massive rocket fire.

Tuesday, August 29, 2006

Hezbollah credibility undermined by Iranian forgers?

It's been alleged that Hezbollah is distributing counterfeit US $100 bills to Lebanese families, based on casual analysis of photos of the bills that have been published in the press.

Blaming Hezbollah for the alleged forgery may be premature. Earlier I commented on Iran's financial backing of Hezbollah, funnelling "unlimited" reconstruction money through them instead of the Lebanese government. The money is coming from Iran, which is known to have the equipment to counterfeit supernotes.

At first, investigators thought they originated in Lebanon. Another theory from the 1990s held that Iran produced them on equipment purchased by the Shah two decades earlier and then shipped the bills to Lebanon via Syria.

At this point, I think it's safe to conclude that Iran appears to be the source of supernotes in the Middle East.

Addendum: Even if the money were legitimate, Iran can use aid money to launder arms transfers. Consider the amount of money Hezbollah has claimed that will be required. The amount is in the ballpark of U$180M.

Hizbullah has been handing out $12,000 in cash to families who lost their homes in the Israeli bombing campaign. According to Hizbullah calculations, more than 15,000 housing units were destroyed.

There's nothing to keep money from being fraudulently claimed and funneled to rearm Hezbollah. It's also possible additional money could also be sent under the table to be skimmed and used for arms purchases. There's no chance the parties involved would open up their aid operation to an outside auditor.

Wednesday, August 23, 2006

Dollar hegemony safe for now

This August 17 piece in The Australian indicates that Gulf countries are recycling petrodollars back into US assets.

The IIF warns that poor capital account data makes it impossible to track capital flows from the region with any precision. But it says "the bulk of the region's surplus is used to finance portfolio investment. We suspect that the bulk of the surpluses are finding their way - one way or another - into the major capital markets, predominantly in the US"...
While some GCC countries have pledged to increase the proportion of their central bank reserves held in euros, these reserves account for only a small proportion of their total foreign assets, most of which are held in investment companies.
"With their fixed currency pegs, there is little incentive for GCC countries to undermine the (US) dollar," the report notes.

Needless to say, this would imply that the petroeuro is not about to take off and demolish US dollar hegemony any time soon. If petrodollars are being invested mostly in US capital markets, then US dollars are precisely the currency they need in order to minimize frictional loss due to currency exchange, while the currency pegs reduce risk due to currency fluctuation. A petroeuro, a petroyuan, or even a petrorupee would only be viable if portfolio investments were to shift significantly to the respective regions. Combined with Asian countries buying US Treasuries, it's a collective global vote of confidence in the dollar, at least for now

This could also be framed as global funding of the US-led War on Terror by both China and US-friendly GCC countries.

Friday, August 18, 2006

Iranian backing of Hezbollah

Iran is funding Hezbollah reconstruction to an unlimited amount. Note that they are funding Hezbollah in particular, not the Lebanese government.

Nehme Y Tohme, a member of Parliament from the anti-Syrian reform bloc and the country's minister for the displaced, said he had been told by Hezbollah officials that when the shooting stopped, Iran would provide Hezbollah with an "unlimited budget" for reconstruction.
In his 'victory speech', Hezbollah's leader, Sheik Hassan Nasrallah, offered money for "decent and suitable furniture" and a year's rent on a house to any Lebanese who lost his home in the month-long war. "Completing the victory," he said, "can come with reconstruction."

Completing the victory? I would expect Hezbollah reconstruction crews to integrate ammunition and supply depots and bunkers in any new construction, as such were key to their recent neutralization of Israeli military doctrine. Such funds transfers would also provide a means of laundering money with which Hezbollah could then use to recompose its missile arsenal, no doubt with am aim toward longer-range missiles.

It's also worth recalling Nasrallah's earlier threat:

Hizbullah leader, Sheikh Hassan Nasrallah, warned in a taped television speech that rockets would be fired at Tel Aviv if the centre of Beirut was attacked. "If you bomb our capital Beirut, we will bomb the capital of your usurping entity ... We will bomb Tel Aviv," he said.

Such a threat would be lack credibility if he were merely relying on Katyusha rockets and even Fajr-5 missiles, as they lack sufficient range (100 km in the case of the Fajr-5), given that Tel Aviv is approximately 120 km south of the border with Lebanon. This implies Hezbollah possessed the Iranian-made Zilzal-2. This was later confirmed by an Iranian official.

An Iranian MP who helped found the Hezbollah terrorist group has confirmed for the first time that Teheran has equipped it with long-range missiles capable of hitting "any target in Israel"...
"There are countries that have weapons but don't have the courage to use them," said Ali Akbar Mohtashemi-Pur, Iran's former ambassador to Damascus, who holds a government-appointed post as secretary-general to the Palestinian uprising (intifada) conference.
"Hezbollah's arsenal not only includes Katyusha missiles, but also Zelzal-2 missiles, which could hit targets as far as 160 miles (250 km), leaving no spot in Israel unreachable."

Veiled encouragement for Hezbollah to use the Zilzal-2, as well as a connection to Syria. If the claimed range is accurate, this also means that a Tel Aviv strike would be feasible from north of the Litani River.

Wednesday, August 16, 2006

Harvesting biometric data from the web

A web application comparing oneself to celebrities? Cute, sure. It's hosted off a genealogy site.

The technology got me curious. The application was powered by Cognitec GmbH.

One of their product applications: biometric border control.

The present: gathering biometric data from around the world enables them to refine their face recognition algorithms to handle the variety expressed by the human race.

The future: biometrics combined with genealogy data could be used to assess genetic background on the fly at borders and airports, enabling scans for relatives of suspects.

Tuesday, August 08, 2006

A nuclear Iran within the decade is possible

Recently, Iran's nuclear negotiator Larenjani announced that Iran would be expanding its enrichment capability.

Iran said it plans to install 3,000 centrifuges at its enrichment plant in Natanz, central Iran, by the last quarter of 2006. Industrial production of enriched uranium in Natanz would require 54,000 centrifuges.

Even if one uses a lower-end estimate of 2-3 work units per centrifuge, that still means 6,000-9,000 work units annually, sufficient to fuel 1-1.5 nuclear weapons. It would do Iran less good to test a nuclear weapon without having another one in reserve; thus having enough fuel for 2-3 weapons would be prudent on their part. This leads to a possible timeline of 2009 for an Iran capable of nuclear attacks.

It is also worth noting that Iran is capable of launching dirty bomb attacks if it is willing to employ reactor-grade uranium.

Monday, August 07, 2006

Al Qaida in a race against Iran?

There is an apparent rift among al Qaida over Hezbollah.

31 July (AKI) - Al-Qaeda representatives in Saudi Arabia are refusing to toe the line with the group's leadership in supporting the Lebanese Shiite group, Hezbollah... "Support for Hezbollah, and its eventual victory would cause enormous problems for our relationship with the people," according to the latest [online] issue of "The Voice of Jihad".
Such views appear sharply at odds with those expressed by al-Qaeda's No. 2, Ayman al-Zawahiri, who in an appeal televised by ... al-Jazeera last week, called on Sunni Muslims to help their Shiite brother from Hezbollah fight the Israelis.

Al Qaida is Sunni and hostile to Shiites, as evidenced by Zawahiri's backing of Zarqawi. Hezbollah is Shiite, so Zawahiri's support for them requires some explanation.

Zawahiri may see this as a race against Iran. If Iran gets the bomb, that's a big ace in its hand when it comes to a Sunni-Shia showdown over who gets to control the holy sites. If Israel falls before Iran gets nukes, then the Sunni can maintain a numerical advantage in ensuing sectarian warfare. Thus, support for Hezbollah is tactical and does not contradict al Qaida's overall anti-Shiite strategic stance. If so, al Qaida is under pressure to make things happen before Iran gains military nuclear capability.

Thursday, August 03, 2006

The use of an evacuated hospital

On the 2nd, CNN reported on an Israeli raid on a Lebanese hospital being used as a Hezbollah post:

Israel's military released video Wednesday that it said proved a hospital it raided overnight in Lebanon was a Hezbollah headquarters. Hezbollah disputed the account.
Israeli special forces raided the hospital near Baalbeck, snatching five militants and killing 10 others, Israel's army said.
Hezbollah, however, said Israel arrested five civilians who were not members of the Islamic militia.
Israeli video of the scene appeared to show weapons that Israeli soldiers discovered during a search of the hospital...

There's one thing wrong with the Hezbollah denial above: it was apparently contradicted by an earlier Hezbollah claim. From the 1st:

Hezbollah denied the claim, saying “the citizens kidnapped in Baalbek are normal civilians”. A statement broadcast by Hezbollah’s Al Manar television said: “The Resistance announces that it has foiled an Israeli landing operation in Baalbek and denies that the enemy has captured any of its members.”
A Hezbollah spokesman had earlier said that Israeli troops were surrounded after attacking Dar Al Hikmeh Hospital, which is run by the rebel group, about two kilometres southwest of Baalbek.
The spokesman said all patients had been evacuated from the hospital on July 12, when Hezbollah fighters captured two Israeli soldiers in a cross-border raid.

If all patients were evacuated weeks ago, what was the hospital being used for?

Wednesday, August 02, 2006

Fingerprinting the world

The EU is drafting plans to fingerprint all children. From July 30:

Under laws being drawn up behind closed doors by the European Commission's 'Article Six' committee, which is composed of representatives of the European Union's 25 member states, all children will have to attend a finger-printing centre to obtain an EU passport by June 2009 at the latest.

The apparent reason they are not considering requiring prints from children younger than six is biological; children's prints have not fully developed before that age. It's still unclear how far the resulting data will eventually be shared between member countries.

Meanwhile, the US will expand its fingerprinting program to cover all resident aliens. From July 27:

[Over 11 million] legal permanent residents will soon have to be fingerprinted and photographed before reentering the United States by sea or air, in a significant expansion of a long-stalled border security program, officials announced...

At the bottom of the piece, we are warned to expect full ten-finger print databases to deployed in a few years on a global scale.

The Homeland Security system now collects two fingerprints from each person, but officials hope to pilot a 10-print system next year and deploy it in 2008 or 2009. The smaller system cannot tap into an FBI fingerprint database or include enough data to accurately identify individuals in the entire population, Mocny said. The European Union, Britain and Japan now are looking at fingerprint requirements for their border systems.

It follows that, given the scope of the draft EU rules, technical requirements will force them to require the full ten prints from children.