By Fred Burton and Scott Stewart
Courtesy of Strategic Forecasting

On Dec. 4, Samar Spinelli, a U.S. Marine captain, pleaded guilty in U.S. district court in Detroit to conspiring to commit citizenship and passport fraud. By pleading guilty, Spinelli admitted to having conspired with her former roommate, Nada Nadim Prouty, to fraudulently obtain U.S. citizenship. Prouty, a former FBI agent and CIA case officer, pleaded guilty in the same court in November to accessing a federal computer system to obtain information about the Lebanese-based militant group Hezbollah and conspiracy to defraud the U.S. government, among other charges. Spinelli’s other former roommate, Elfat El Aouar — Prouty’s sister — is serving an 18-month prison sentence for tax evasion. All three women were born in Lebanon.

The evidence, allegations and related cases suggest that Hezbollah has established a sophisticated intelligence apparatus that reaches into the United States. Moreover, it is possible — though certainly not proven — that Spinelli and Prouty used their positions in government agencies to provide Hezbollah with sensitive information. If these women were indeed Hezbollah plants, the magnitude of the information they provided to Hezbollah and Iran could be similar in importance to the information Robert Hanssen provided to the Soviets and Russians — and the damage could prove to be just as great.

By George Friedman
Courtesy of Strategic Forecasting

The single most interesting thing about today’s global economy is what has not occurred. In 1979, oil prices soared to slightly more than $100 a barrel in current dollars, and they are approaching that historic high again. Meanwhile, the subprime meltdown continues to play out. Many financial institutions have been hurt, many individual lives have been shattered and many Wall Street operators once considered brilliant have been declared dunderheads. Despite all the predictions that the current situation is just the tip of the iceberg, however, the crisis is progressing in a fairly orderly fashion. Distinguish here between financial institutions, financial markets and the economy. People in the financial world tend to confuse the three. Some financial institutions are being hurt badly. Those experiencing the pain mistakenly think their suffering reflects the condition of the financial markets and economy. But the financial markets are managing, as is the economy.

What we are seeing is the convergence of two massive forces. Oil prices, along with primary commodity prices in general, have soared. Also, one of the periodic financial bubbles — the subprime mortgage market — has burst. Either of these alone should have created global havoc. Neither has. The stock market has not plummeted. The Standard & Poor’s 500 fell from a high of about 1,565 in mid-October to a low of 1,400 on Oct. 19. Since then, it has rebounded as high as 1,550. Given the media rhetoric and the heads rolling in the financial sector, we would expect to see devastating numbers. And yet, we are not.

As my Irish ancestors often say when hearing something true, "Just so," and it’s just so on these two quotations:

"If absolute power corrupts absolutely, does absolute powerlessness make you pure?"– Harry Shearer

"The only difference between the Democrats and the Republicans is that the Democrats allow the poor to be corrupt, too."–Oscar Levant

By Fred Burton and Scott Stewart
Courtesy of Strategic Forecasting

More than 2 million Muslims from around the world are expected to travel to Saudi Arabia to perform the Hajj, that annual pilgrimage to Mecca that runs this year Dec. 18-21.

Because of the history of violence during the Hajj — some of it extreme — Saudi officials step up security during the period, and last week they concluded what they called the country’s largest-ever anti-terrorism security sweep — an operation that resulted in the arrest of more than 200 suspected al Qaeda militants. Riyadh said the operation was intended as a warning to militants who would seek to abuse the event and disturb the pilgrims. Because of past debacles during the Hajj, the Saudi government nowadays can be expected to deal with any militant activity quickly and harshly.

By George Friedman
Courtesy of Strategic Forecasting

The United States released a new National Intelligence Estimate (NIE) on Dec. 3. It said, "We judge with high confidence that in the fall of 2003, Tehran halted its nuclear weapons program." It went on to say, "Tehran’s decision to halt its nuclear weapons program suggests it is less determined to develop nuclear weapons than we have been judging since 2005." It further said, "Our assessment that Iran halted the program in 2003 primarily in response to international pressure indicates Tehran’s decisions are guided by a cost-benefit approach rather than a rush to a weapon irrespective of the political, economic and military costs."

With this announcement, the dynamics of the Middle Eastern region, Iraq and U.S.-Iranian relations shift dramatically. For one thing, the probability of a unilateral strike against Iranian nuclear targets is gone. Since there is no Iranian nuclear weapons program, there is no rationale for a strike. Moreover, if Iran is not engaged in weapons production, then a broader air campaign designed to destabilize the Iranian regime has no foundation either.

The NIE release represents a transformation of U.S. policy toward Iran. The Bush administration made Iran’s nuclear weapons program the main reason for its attempt to create an international coalition against Iran, on the premise that a nuclear-armed Iran was unacceptable. If there is no Iranian nuclear program, then what is the rationale for the coalition? Moreover, what is the logic of resisting Iran’s efforts in Iraq, rather than cooperating?