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’’ ’’ ’’ the TRUMPETweekly ‘‘ ‘‘ ‘‘ ‘‘ ‘‘ cancer PAGE 2 germany PAGE 4 new PAGE 6 farce PAGE 7 sex PAGE 9 ’’ A DIGEST OF SIGNIFICANT WORLD NEWS FROM THE PHILADELPHIA TRUMPET STAFF FOR THE WEEK OF DECEMBER 19-25, 2010 ’’ According to a new study, it is couples who delay sex until after the wedding that enjoy a stronger relationship later in life. This was just the latest squalid example of a British government selling key parts of this country’s infrastructure to foreign buyers. President Mubarak has made it clear that he sees Iran as Egypt’s—and the region’s—primary strategic threat. Riding the lamest of ducks, President Obama just won the Triple Crown. As Europe’s paymaster, Germany finds itself in a gorgeous position to exploit their weakness and reshape Europe on its own terms. I t is the most important story of 2010. The financial crisis in Europe has driven every nation on the Continent to its knees before Germany, and Berlin has exploited the crisis to tangibly and forcefully reshape the European Union. It’s also a scenario that was de- scribed by Herbert Armstrong—more than 50 years ago. “Germany is the economic and military heart of Europe,” he wrote in 1953. “Without Germany such a federation of nations is impossible. Yet the other na- tions of Europe will not trust Germany or a German leader. Still, in spite of this, it is probable that none but a German can provide the dynamic, inspired leadership required to organize such a political military federation” ( Good News, May 1953). For decades, Mr. Armstrong warned tirelessly that Germany would be revived and that it would success- fully create a European superstate! As we enter 2011, a year in which Germany will continue to exploit the financial crisis to further its own ambitions, it is important to consider: What is the next chapter in the emer- gence of this German-designed United States of Europe? Once again, we turn to the Bible-based, profoundly accu- rate forecasting of Herbert Armstrong for the answer. In August 1978, Mr. Armstrong wrote: “Europeans want their own united military power! … They have made a real effort toward union in the Common Market. … But they well know there is but one possibility of union in Europe— and that is through the V atican” ( Good News, emphasis his). Two years later, he warned that “world conditions may force European nations … to unite, bringing to pass the revived ‘Holy Roman Empire’ …. [European nations] have wanted to unite politically, with a common currency and common military force, for some time—but have been unable. it can be accomplished only through the V atican(Worldwide News, June 1980). In 1979, Mr. Armstrong described a scenario that is remarkably relevant in 2010. “The nations of Europe have been striving to become reunited. They desire a common currency, a single combined military force, a single united goVernment. They have made a start in the Common Mar- ket. They are now working toward a common currency. Yet, on a purely political basis, they have been totally UNABLE to unite” (Plain Truth, January 1979). In spite of these conflicting political interests, Mr. Armstrong explained, European countries will find a way to unite. How? in only one way can this resurrected Holy Roman Em- pire be brought to fruition—by the ‘good offices’ of the Vati- can, uniting church and state once again, with the Vatican astride and ruling.” This is the next chapter in Europe’s emergence as a German-led superstate: The axis between the Vatican and Europe, particularly Germany, will become much stronger and extremely powerful! Soon—perhaps this coming year—expect the V atican to take center stage in europe, and for a church-state rela- tionship to materialize! Of course, many smart geopolitical analysts will think this forecast preposterous. In our post-Reformation, “intel- lectually enlightened” world, the Vatican is rarely consid- ered a force in geopolitics. Catholicism is widely thought of as little more than an innocuous religion, the Vatican an archaic institution fighting to secure its place in a world in which secularism and Islam have it on the ropes. To too many people, the Vatican is considered a spent force, a relic of the Middle Ages—an institution with minimal influence on world affairs. In the months and years ahead, this perception will change dramatically! In fact, the Vatican is already making a resurgence as a force in international relations. On December 10, the Guardian reported on cables from U.S. officials, disclosed by WikiLeaks, that reveal the Vatican working behind the scenes to shape events in Europe. In one cable, Cardinal Ratzinger, now Pope Benedict xVi, is reported to have been secretly encouraging European leaders to oppose Turkey’s entrance into the European Union. Other documents reveal Catholic officials working to influence global debates on is- sues such as global warming and human cloning. Apparently, the Guardian found the cables somewhat eye-opening. “Roman Catholicism is the only religion in the world with the status of a sovereign state, allowing the pope’s most senior clerics to sit at the top table with world leaders,” it reported. “The [WikiLeaks] cables reVeal the V atican rou- tinely wielding influence through diplomatic channels while sometimes denying that it is doing so” (emphasis mine). If you’ve read a smidgen of European history, this rev- elation isn’t the least bit surprising! The Catholic Church has been the most significant and defining force in Europe for more than 1,500 years. From see NEXT page 10 BRAD MACDONALD COLUMNIST europe: The next chapter

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’’ ’’ ’’thetrumpetweekly

‘‘ ‘‘ ‘‘‘‘ ‘‘cancer page 2 germany page 4 new page 6 farce page 7 sex page 9’’

a digest of significant world news from the PhiladelPhia TrumPeT staff • for the week of december 19-25, 2010

’’according to a new study,

it is couples who delay sex until after the wedding

that enjoy a stronger relationship later in life.

this was just the latest squalid example of a

british government selling key parts of this country’s

infrastructure to foreign buyers.

president mubarak has made it clear that he sees

iran as egypt’s—and the region’s—primary

strategic threat.

riding the lamest of ducks, president obama

just won the triple crown.

as europe’s paymaster, germany finds itself in a gorgeous position to exploit their weakness and reshape europe on

its own terms.

It is the most important story of 2010.The financial crisis in Europe has

driven every nation on the Continent to its knees before Germany, and Berlin has exploited the crisis to tangibly and forcefully reshape the European Union.

It’s also a scenario that was de-scribed by Herbert Armstrong—more than 50 years ago. “Germany is the economic and military heart of Europe,” he wrote in 1953. “Without Germany

such a federation of nations is impossible. Yet the other na-tions of Europe will not trust Germany or a German leader. Still, in spite of this, it is probable that none but a German can provide the dynamic, inspired leadership required to organize such a political military federation” (Good News, May 1953). For decades, Mr. Armstrong warned tirelessly that Germany would be revived and that it would success-fully create a European superstate!

As we enter 2011, a year in which Germany will continue to exploit the financial crisis to further its own ambitions, it is important to consider: What is the next chapter in the emer-gence of this German-designed United States of Europe?

Once again, we turn to the Bible-based, profoundly accu-rate forecasting of Herbert Armstrong for the answer.

In August 1978, Mr. Armstrong wrote: “Europeans want their own united military power! … They have made a real effort toward union in the Common Market. … But they well know there is but one possibility of union in Europe—and that is through the Vatican” (Good News, emphasis his).

Two years later, he warned that “world conditions may force European nations … to unite, bringing to pass the revived ‘Holy Roman Empire’ …. [European nations] have wanted to unite politically, with a common currency and common military force, for some time—but have been unable. it can be accomplished only through the Vatican” (Worldwide News, June 1980).

In 1979, Mr. Armstrong described a scenario that is remarkably relevant in 2010. “The nations of Europe have been striving to become reunited. They desire a common currency, a single combined military force, a single united goVernment. They have made a start in the Common Mar-ket. They are now working toward a common currency. Yet, on a purely political basis, they have been totally UNABLE to unite” (Plain Truth, January 1979). In spite of these conflicting political interests, Mr. Armstrong explained,

European countries will find a way to unite. How?“in only one way can this resurrected Holy Roman Em-

pire be brought to fruition—by the ‘good offices’ of the Vati-can, uniting church and state once again, with the Vatican astride and ruling.”

This is the next chapter in Europe’s emergence as a German-led superstate: The axis between the Vatican and Europe, particularly Germany, will become much stronger and extremely powerful!

Soon—perhaps this coming year—expect the Vatican to take center stage in europe, and for a church-state rela-tionship to materialize!

Of course, many smart geopolitical analysts will think this forecast preposterous. In our post-Reformation, “intel-lectually enlightened” world, the Vatican is rarely consid-ered a force in geopolitics. Catholicism is widely thought of as little more than an innocuous religion, the Vatican an archaic institution fighting to secure its place in a world in which secularism and Islam have it on the ropes. To too many people, the Vatican is considered a spent force, a relic of the Middle Ages—an institution with minimal influence on world affairs.

In the months and years ahead, this perception will change dramatically!

In fact, the Vatican is already making a resurgence as a force in international relations. On December 10, the Guardian reported on cables from U.S. officials, disclosed by WikiLeaks, that reveal the Vatican working behind the scenes to shape events in Europe. In one cable, Cardinal Ratzinger, now Pope Benedict xVi, is reported to have been secretly encouraging European leaders to oppose Turkey’s entrance into the European Union. Other documents reveal Catholic officials working to influence global debates on is-sues such as global warming and human cloning.

Apparently, the Guardian found the cables somewhat eye-opening. “Roman Catholicism is the only religion in the world with the status of a sovereign state, allowing the pope’s most senior clerics to sit at the top table with world leaders,” it reported. “The [WikiLeaks] cables reVeal the Vatican rou-tinely wielding influence through diplomatic channels while sometimes denying that it is doing so” (emphasis mine).

If you’ve read a smidgen of European history, this rev-elation isn’t the least bit surprising!

The Catholic Church has been the most significant and defining force in Europe for more than 1,500 years. From

see NeXT page 10

Brad maCdONaldCOlumNisT

europe: The next chapter

Middle eastIraq’s parliament

approved the reappointment of

Prime Minister Nouri al-Maliki and his new government on Tues-day, nine months after inconclusive elections left the country with no functioning govern-ment. While this is an achievement, some of the key ministries have yet to be filled, and the role of the newly formed National Council for Strategic Policies—which is intended to give Sunnis a greater voice—is yet to be agreed upon. After having fought hard himself to become the new prime minister, Iyad Allawi, leader of the Sunni-backed Iraqiya bloc, which won the most seats in the March election, told the assembly that his coalition would participate fully in the government. The most important ministries, including the Oil Ministry, which the Shia have retained, have been promised to Shiite and Kurdish parties—except the Finance Ministry, which has been given to Iraqiya. While U.S. President Barack Obama praised the formation of the cabinet, the new government actually represents a failure of U.S. policy in Iraq as the Iranian-supported Shiites maintain power.

Iran displayed an increased assertiveness when on Monday it demand-ed that Pakistan hand over members of the Sunni Baluchi Islamist mili-tant group Jundallah, which staged a deadly suicide attack against Shiites in Iran last week. The chief of the Joint Staff Command of Iran’s Armed Forces, the most senior military leader in Iran, threatened that Tehran would take unilateral action if Islamabad failed to prevent terrorist action against Iranian targets originating in Pakistan. The Iranian president also phoned his Pakistani counterpart, demanding that Islamabad take action against “known terrorists.” Stratfor reports that this is not the first time Jundallah has been a source of tension between the two countries.

“However,” the intelligence organization writes, “this time, the Iranian re-sponse was different: The apex leadership of Iran threatened to take mat-ters into its own hands” (December 21). This is particularly noteworthy, Stratfor reports, because the recent Jundallah attack was not especially significant compared to previous such attacks, and Islamabad has been cooperating with Tehran on this issue for several years. This indicates that the Iranian government is likely escalating matters with Pakistan at this time because it is feeling “confident in other foreign policy areas,” writes Stratfor. “It has been successful in having a Shiite-dominated government of its preference installed in Iraq. Also, for the first time, it appears to be negotiating from a position of relative strength on the nuclear issue. ... It is therefore likely that Iran is now flexing its muscles on its eastern flank to showcase its regional rise” (ibid.). This analysis would certainly fit with the prophesied rise of a “king of the south,” an Islamic power in the end time prophesied in Daniel 11.

The White House on Thursday released an overview of the Af-ghanistan and Pakistan Annual Review requested by President Barack Obama. Stratfor reports that the most significant aspect of the assess-ment of the Afghanistan war effort is the degree to which the American strategy is reliant on Pakistan: “[T]he United States—now more than ever before—needs Pakistan to offer its best, given that Washington has deployed the maximum amount of human and material resources to the war effort that it can feasibly allocate” (December 17). The war has been disastrous from the Pakistani point of view, with the Taliban problem

The TrumPeT weekly december 25, 2010 • 2

ali al-saadi/aFP/GeTTy imaGes

Prime minister maliki received the endorsement of iraq’s parliament this week.

egyptian president Hosni Mubarak compared Iran’s growing influence in the Middle East to a “cancer,” according to a cable released by the anti-secrecy website WikiLeaks.

“President Mubarak has made it clear that he sees Iran as Egypt’s—and the re-gion’s—primary strategic threat,” says the secret cable, sent April 28, 2009, from the U.S. Embassy in Cairo. “His already danger-ous neighborhood, he has stressed, has only become more so since the fall of Saddam, who, as nasty as he was, nevertheless stood as a wall against Iran, according to Mubarak. He now sees Tehran’s hand moving with ease throughout the region, ‘from the Gulf to Morocco,’ as he told a recent congressional delegation.”

The cable notes, however, that “Mubarak’s focus on the Iranian threat differs somewhat from ours.” “While he will readily admit that the Iranian nuclear program is a stra-tegic and existential threat to Egypt and the region, he sees that threat as relatively ‘long term.’ What has seized his immediate attention are Iran’s non-nuclear destabilizing actions such as support for Hamas, media attacks, weapons and illicit funds smuggling, all of which add up in his mind to ‘Iranian influence spreading like a cancer from the gcc [Gulf Cooperation Council countries] to Morocco.’”

The cable was sent days after Egyptian security services rolled up a cell of opera-tives from Hezbollah, Iran’s Lebanese-based proxy, based in the Sinai.

After the arrests, according to the memo, “Egypt had sent a clear message to Iran that if they interfere in Egypt, Egypt will interfere in Iran, adding that egis had already begun recruiting agents in Iraq and Syria.”

Knowledge of this threat was attributed to Egyptian intelligence chief Omar Suleiman.

At the time, the Obama administration’s policy of engagement with the Iranians was getting under way, which frightened the Egyptians, according to the cable.

“[T]hey are worried that we are going to strike a ‘grand deal’ with the Iranians,” it says. …

Egyptian Foreign Minister Ahmed Aboul Gheit, the cable says, “has speculated that the new U.S. administration will engage with Iran, but will be disappointed in late 2009 or early 2010 when it realizes that Iran will not stop its enrichment activities.”

mubarak: ‘Iranian Influence spreading Like a cancer’ across arab world

washiNGTON Times | december 15

The TrumPeT weekly december 25, 2010 • 3

spilling over into Pakistan and leading to the “Talibanization” of the country. “What makes this situation even more problematic for the Paki-stanis is that they feel that they are not the only ones who are without options. Their benefactor, the United States, is in the same boat” (ibid.).

daily TeleGraPh | december 22

Iran recruiting nuclear scientists

Iran is operating a worldwide recruitment network for nuclear sci-entists to lure them to the country to work on its nuclear weapons program, officials have told the Daily Telegraph.

They claim that the country is particularly reliant on North Korean scientists but also recruits people with expertise from African coun-tries to work on developing missiles and nuclear production activities.

North Korea relies on a lucrative financing agreement with Iran to fund its expanding nuclear activities. In return for Iranian money and testing facilities, North Korea sends technology and scientists.

Mohamed Reza Heydari, a former Iranian consul in Oslo, told the Daily Telegraph, that he had personally helped scores of North Kore-ans enter the country while working for the foreign ministry’s office in Tehran’s Imam Khomenei airport. …

“The North Koreans were all technicians and military experts involved in two aspects of Iran’s nuclear program. One to enable Iran to achieve nuclear bomb capability, and the other to help increase the range of Iran’s ballistic missiles.”

He said: “In all our embassies abroad, especially in the African countries, the staff of foreign ministry were always looking for local scientists and technicians who were experts in nuclear technology and offered them lucrative contracts to lure them into Iran. “The façade of the nuclear program is that it is for peaceful purposes, but behind it they have a completely different agenda.”

europeViolence continued in Rome this week with several explosive

incidences. On December 21, a train conductor found a defective bomb under a seat on an underground train. The bomb, however

was “too rudimentary,” according to Mayor of Rome Gianni Alemanno. On December 22, students took to the streets to protest education reform. Then on December 23, parcel bombs exploded at the Swiss and Chilean embassies. “It’s a wave of terrorism against embassies, some-thing much more worrisome than a single attack,” said Alemanno. It is not at this time clear who is behind the attacks.

German Minister of State in the Foreign Ministry Werner Hoyer visited Moldova and met with Moldovan Minister of Foreign Affairs and European Integration Iurie Leanca on December 21. Moldova is currently undergoing some tricky coalition negotiations that will deter-mine whether the country has a pro-Western or pro-Russian govern-ment. Earlier in the month, foreign ministers from Poland and Sweden visited Moldova to try to sway the nation toward Europe. With Hoyer’s visit, Germany is also getting involved, trying to persuade this strategic territory to cast its lot in with Europe and not Russia.

The Catholic Church changed its mind about involving itself with the International Task Force on Holocaust Education, Remembrance and

rON Fraser | COlumNisT

tens of thousands of visitors have flocked to the Somme Valley over the nine decades that have elapsed since the last cannon was fired on the Western Front after the armistice fol-lowing World War i. Their mission has been one of remembrance—lest the world forget the massive sacrifice made by so many for so little gained. That war was billed as “the war to end all wars.” Yet all it achieved was a 20-year “peace” that enabled prep-arations for an even bigger and bloodier affair, one ending with the use of man’s most fearful weapon, the nuclear bomb.

It is impossible to visit the Somme and meditate on the horror of the Great War without thinking deeply about the current scenario of the dominance of Germany in Europe since the euro-crisis. It would be foolish to assume that such dominance may not tempt Germany one more time to reassert itself with military aggression. It is now becoming a distinct possibility.

At the same time, public recognition of Germany’s involvement in combat in foreign theaters of war is back in the headlines. Even Germany’s Chancel-lor Merkel has cast aside her mask and finally used the term.

Karl-Theodor zu Guttenberg became the first defense minister in Germany to take his wife into a combat zone. It was by no mere coincidence that inside of a week, Chancellor Merkel was the next woman to accompany Guttenberg to the war zone in Afghanistan. Nor was it coincidence that the chancellor would wrest that word “war” out of her mouth at the time.

Agence France-Presse quoted Merkel as stating, “What we have here is not just a warlike situation. You are involved in combat as in war. … This is a new experi-ence. We have heard such things from our parents talking of World War ii, but that was different because Germany was the aggressor” (December 18).

Well, today, being right on the scene of mass carnage in the Somme Valley brought on by Germany, it is most poi-gnant reading of these words confirming Germany is once again embroiled in war outside its own national borders. The question is, where will it end this time?

somme Valley meditations

Research (itf), probably because of pressure to release records from World War ii-era Pope Pius xii, according to a diplomatic cable released on December 21. The cable, dated Oct. 16, 2009, states that plans for the Vatican to become an observer in the itf “had fallen apart complete-ly … due to Vatican back-pedaling.” The Vatican continues to cover up the actions of the man whom some have labeled “Hitler’s pope.”

The president of the Lutheran World Federation wants to celebrate the 500th anniversary of the Protestant Reformation by forging an agreement with the Vatican allowing Lutherans to receive Communion at Roman Catholic Mass. On December 16, the recently elected president of the Lutheran World Federation met with Pope Benedict xVi in private audience at the Vatican to discuss the prospects of such an agreement in the run-up to the 500th anniversary of Martin Luther’s historic break with the Catholic Church, set to be held in 2017. “Our intention is to arrive at 2017 with a common Roman Catholic-Lutheran declaration on Eucharistic hospitality,” Bishop Munib Younan told Italian Protestant news agency neV before his meeting with the pope. Under the concept of Eucharistic hospitality, Catholics and Lutherans would be able to receive Communion at either type of religious service, Catholic or Lutheran. Benedict has clearly made the re-evangelization of Europe the corner-stone of his papacy. He has already offered a free ticket to Rome for all Anglicans who choose to reject the policies of their liberalized hierarchy. Now he is in discussions with the Lutheran World Federation that may result in a similar offer to the Lutheran Church.

The Vatican announced that Archbishop Antonio Mennini will become the new apostolic nuncio to Britain. Nuncios are the Vatican’s ambassadors to other nations. They also have the responsibility of rec-ommending candidates for the office of a bishop to the Vatican. Men-nini has been working as apostolic nuncio to Russia and Uzbekistan. Conservative Catholics hope that Mennini will promote more orthodox priests to bishops. This would completely change the face of the Catho-lic Church in Britain.

rzeCzPOsPOliTa, POlaNd | december 21

Toward a euronato?Today, the trajectories of Europe and the United States are obvi-

ously divergent when it comes to Afghanistan. At the same time, nato’s current structure is increasingly an obstacle to its further

development, and will have to be overhauled. The main problem is that the clear vision of a common threat, which justified the existence of the alliance between the United States and Europe in the Cold War pe-riod, no longer prevails. As it stands, the allies could restructure their defense around a shared vision of a world order in which the United States would take charge via nato of the security of the Western world. However, the wars in Iraq and Afghanistan have demonstrated the failure of the American strategy which consists of the unilateral instru-mentalization of nato as the Western world’s main weapon in the global war against Islamic terrorism.

A progressive Europeanization of nato accompanied by the military emancipation of the European Union could provide a solution to the in-compatibility of interests between allies, and space that is freed by a U.S. withdrawal from nato could pave the way for a benevolent European hegemony, in which Europe would utilize its potential to establish peace and a new moral order on an equal standing with the United States.

The recent Franco-British military cooperation agreement is a testa-ment to the growing appeal of this vision in Europe. …

As long as nato exists in its current form and as long as the European Union remains militarily fragmented, it will be unable to enter into an equal partnership with the United States, or with Russia, and even less

The TrumPeT weekly december 25, 2010 • 4

germany’s ‘frau nein’ calls the shotsgerman chancellor Angela Merkel certainly earned her Frau Nein moniker in 2010. Like a stern schoolteacher, she said no to euro bonds, no to boosting the size of the bailout fund and scolded the eurozone’s lesser mem-bers for their shabby financial behavior.

She gave the impression that the 16-coun-try eurozone is largely composed of feckless underachievers who should know better that to jeopardize the common currency. Her mes-sage: Smarten up or get lost.

Maybe the lady protests too much. So far Germany appears to have suffered little from the hare-brained economic and financial management of Europe’s debt brats—Greece, Ireland, Portugal and Spain. She may be secretly pleased by their troubles, for as Europe’s paymaster, Germany finds itself in a gorgeous position to exploit their weakness and reshape Europe on its own terms. The European Union might evolve into German Europe in a few years, and might be the better for it.

Despite the bailouts of Greece and Ireland, the widespread austerity programs and the lingering effects of the recession across Eu-rope, Germany had a terrific year. Growth in 2010 should come in at 3.7 percent—the best performance since the unification of West and East Germany 20 years ago. Exports are booming. Falling unemployment, rising wages and new investment are pushing up domestic demand. …

Germany seems to be in a no-lose situa-tion. The eurozone is not damaged enough to hurt Germany’s performance, but is dam-aged enough to allow it to dictate terms. That was plainly obvious throughout 2010, as Ms. Merkel ruled the eurozone’s agenda. Virtu-ally nothing of significance happened without her approval. …

Ms. Merkel’s go-it-alone strategy isn’t win-ning her friends in the weak EU countries. …Germany seems oblivious to the criticism. It has allies; France, the Benelux countries and Scandinavia are happy to play in the Ger-man orchestra. It also has moral authority. EU countries from Ireland to Italy marvel at Germany’s growth surge and falling unem-ployment. …

A Europe dictated on Germany’s economic and political terms may not be many Eu-ropeans’ idea of a “union,” one with shared goals, interests and vision. But what’s the alternative when at least half the eurozone used mountains of debt to sabotage their economies? Germany is making the best of a bad situation. You can hardly blame it for being bossy.

GlOBe aNd mail | december 23

so with China. Military force continues to be an integral component of the foreign policies adopted by Washington and the Kremlin, and unfortunately this is not the case in Brussels. It is striking to see how Russia, even though it is economically weaker than the EU, succeeds in exerting a considerable diplomatic weight on Brussels, simply by allud-ing to the extent of its armed forces and its nuclear arsenal.

Without an army and a common defense policy, the European Union will be obliged to follow a political line that is alternately dictated by the United States and Russia, like a rudderless ship adrift without a destination. And as long as this situation prevails, different countries within the EU (like Poland for example) will continue to seek protection from outside of the European Union.

The military emancipation of Europe and the establishment of an army to provide support for a “European hegemony” would split the Western world into two powers of comparable capacity. In such a sce-nario—with American power counterbalanced by an equal partner in the form of the European Union—Western civilization would have every chance of holding its own in the competition for world leadership.

TeleGraPh, amBrOse evaNs-PriTChard | december 21

citigroup warns of wave of Bank failures

Prof. willem Buiter, the bank’s chief economist, said the eurozone was paralyzed by a “game of chicken” between the European Cen-tral Bank and emu governments.

Both sides are trying to shift responsibility on to the other for shoring up southern Europe and Ireland, raising the risk of contagion spreading. “The market is not going to wait until March for the EU authorities to get their act together. We could have several sovereign states and banks going under. They are being far too casual,” he said.

Mark Schofield, Citigroup’s global head of interest rate strategy, said Portugal would need an EU rescue soon and that it was “highly likely that Spain will go the same way.” This risks overpowering the €440 bil-lion ($578 billion) bailout fund.

“Restructuring of some sovereign debt is inevitable. There is a chance that Spain could still make it, but the debt trajectory looks unsustain-able if a broader EU-wide solution isn’t found,” he said. The warnings came after Moody’s said it might downgrade Portugal’s A1 rating by one or two notches on growth worries, but said the country’s solvency was

“not in question” ….

GlOBaleurOPe aNTiCiPaTiON BulleTiN | december 16

explosion of the western Public Debt Bubble

The second half of 2011 will mark the point in time when all the world’s financial operators will finally understand that the West will not repay in full a significant portion of the loans advanced

over the last two decades. For leap/E2020 it is, in effect, around October 2011, due to the plunge of a large number of U.S. cities and states into an inextricable financial situation following the end of the federal funding of their deficits, while Europe will face a very significant debt refinancing

The TrumPeT weekly december 25, 2010 • 5

europe is so besieged by problems that on some days it looks as if its common cur-rency and hopes for unity are disintegrating. All the same, Nicolas Sarkozy will head to Washington early in January for a conversa-tion about reorganizing the world monetary system in a way that might just mark the United States as the real global force in decline.

For the last two years, the French presi-dent has been arguing that the dollar’s role as the single global reserve currency doesn’t reflect what he insists is a multipolar world with no further reason to kowtow to the greenback.

Now, as president and agenda setter in 2011 of the Group of 20 consultative body of leading economic nations, Mr. Sarkozy is leaving his bully pulpit’s specific aims and tactics on the dollar fluid—an imprecision difficult to avoid against a background of the euro’s daily ducks and dives.

Still, in the words of Le Monde last month, he is “counting on making the G-20 his magnum opus and finding a solution to the world’s monetary imbalances with, if necessary, a common French-Chinese front against the United States.”

This much is sure: The governor of the People’s Bank of China did indicate in 2009 that he wanted the U.S. dollar’s reserve status transferred to a basket of currencies called Special Drawing Rights that comes under the aegis of the International Mon-etary Fund.

But this much is not certain: that the Chinese, who often deal with the European Union with disdain, have any interest in in-volving third parties as anything but “useful idiots” (a descriptive applied by Jean-Joseph Boillot, a French researcher and writer) on currency issues basically concerning the renminbi’s relation to the dollar.

Barack Obama, according to Mr. Sar-kozy’s annotators, is scheduled to receive him on January 9. They say Mr. Sarkozy will be asking Mr. Obama what his “red lines” on the dollar are. Mr. Obama, it is assumed, will have read the French president’s list of grand intentions and pronouncements.

At the same time … Mr. Obama won’t find it easy to avoid a response.

In his own pre-election-year circum-stances, Mr. Obama seemingly could not let pass an argument that tacitly centers on nudging or shoving the dollar aside or to a diminished role among the world’s curren-cies, and is based on a premise (or creed) of American decline. …

sarkozy vs. Obama: a Test for the Dollar

New yOrk Times | december 20

requirement, that this explosive situation will be fully revealed. Media escalation of the European crisis regarding sovereign debt of

euroland’s peripheral countries will have created the favorable context for such an explosion, of which the U.S. “Muni” market incidentally has just given a foretaste in November 2010 with a mini-crash that saw all the year’s gains go up in smoke in a few days. This time this crash took place discreetly since the Anglo-Saxon media machine succeeded in focusing world attention on a further episode of the fantasy sitcom “The End of the Euro ….”

Yet the contemporaneous shocks in the United States and Europe make for a very disturbing set-up comparable, according to our team, to the

“Bear Stearn” crash which preceded Lehman Brothers’ bankruptcy and the collapse of Wall Street in September 2008 by eight months. But the [GlobalEurope Anticipation Bulletin] readers know very well that major crashes rarely make headlines in the media several months in advance ….

The lOCal | december 22

guttenberg Demands ronald reagan memorial in Berlin

German de-fense Minister Karl-Theodor

zu Guttenberg on Wednesday called on Berlin to honor Ronald Reagan by naming a square or a street after the late U.S. president.

“I would welcome nam-ing a street after this great honorary citizen and it would be evi-dence that the grati-tude of (the city’s left-wing government) didn’t stop at (leftist student leader) Rudi Dutschke,” Guttenberg told daily Bild.

Guttenberg and other conservative politicians are upset that the German capital has no plans to mark what would have been Reagan’s 100th birthday on February 6. The former U.S. president, who died in 2004, famously demanded Soviet leader Mikhail Gorbachev tear down the Berlin Wall in a speech before the city’s Brandenburg Gate in 1987.

“Ronald Reagan’s determi-nation and clear message brought down the Iron Cur-tain in Europe,” said Chris-tian Democratic mp Ruprecht Polenz, adding he believed German reunification would not have been possible without Reagan. “We should permanently remember this

great friend of Germany in a prominent place.”Martin Lindner, a state legislator in Berlin for the pro-business Free

Democrats, said city officials were being “blind to history” by overlooking the Republican president. “Germany and especially Berlin owe a lot to Ronald Regan,” he told Bild. …

The TrumPeT weekly december 25, 2010 • 6

JOhN maCdOuGall/aFP/GeTTy imaGes

defense minister karl-Theodor zu Guttenberg

“winston Churchill said Germany had a history of surprise attacks against enemies and nations who thought they were friends with Germany. God says our ‘lovers’ are going to betray us, and one of our greatest lovers is the assyrian nation, or modern-day Germany.”

—Gerald Flurry, Trumpet, January 1995

riding the lamest of ducks, President Obama just won the Triple Crown. He ful-filled (1) his most important economic pri-ority, passage of Stimulus ii, a.k.a. the tax cut deal …. (2) his most important social policy objective, repeal of “don’t ask, don’t tell”; and (3) his most cherished (achiev-able) foreign policy goal, ratification of the New start treaty with Russia.

Politically, these are all synergistic. The bipartisan nature of the tax deal instantly re-positioned Obama back to the center. … Even more subtly and understatedly, the repeal of [“don’t ask, don’t tell”] represents the taming of the most conservative of the nation’s insti-tutions, the military, by a movement histori-cally among the most avant-garde. Whatever your views, that is a cultural landmark.

Then came start, which was important for Obama not just because of the dearth of foreign policy achievements these past two years but because treaties, especially grand-sounding treaties on strategic arms, carry the aura of presidential authority and diplomatic mastery. No matter how useless they are, or even how damaging. New start was significantly, if subtly, damaging, which made the rear-guard Republican opposi-tion it engendered so salutary. The debate it sparked garnered the treaty more attention than it would have otherwise and thus gave Obama a larger PR victory. But that debate also amplified the major flaw in the treaty—the gratuitous reestablishment of the link between offensive and defensive weaponry.

One of the great achievements of the past decade was the Bush administration’s sever-ing of that link—first by its withdrawal from the abm Treaty, which had expressly prevent-ed major advances in missile defense, and then with the 2002 Treaty of Moscow, which regulated offensive weapons but ostenta-tiously contained not a single word about any connection to missile defense. Why is this important? Because missile defense is essential for protecting ourselves from the most menacing threat of the coming cen-tury—nuclear hyper-proliferation.

The relinking that we acquiesced to in the preamble to New start is a major reversal of that achievement. Sure, Obama sought to reassure critics with his letter to the Senate promising unimpeded develop-ment of our European missile defense sys-tem. But the Russians have already watched this president cancel our painstakingly planned Polish and Czech missile defenses in response to Russian protests and threats. That’s why they insisted we formally ac-knowledge an “interrelationship” between offense and defense.

Obama’s new start

washiNGTON POsT, Charles krauThammer | december 23

The TrumPeT weekly december 25, 2010 • 7

TheTrumPeT.COm, rON Fraser aNd CraiG millar | december 23

assange extradition shows eU Power

The swedish case against WikiLeaks founder Julian Assange is a clear example of the loss of the once-globally admired system of British justice caused by the implementation of the European Ar-

rest Warrant (eaw). Whether or not Mr. Assange is guilty of the accusations brought

against him in Sweden, this case clearly demonstrates that, under the eaw, the British courts have no right to take into account the evidence against an accused Briton or foreign guest in Britain. It is a clear case of the once-sovereign British law being trumped by EU imperial law.

In fact, under the all-powerful eaw, EU law even trumps the sover-eign law of any nation to which a foreign national is subject in his own country, if that foreign national is charged under EU law while resident in Britain. …

Speaking to a crowd of journalists from around the world, Member of the European Parliament Gerard Batten said: “The ancient rights of the English (and our guests) to be protected by the courts has been removed because of the headlong flight to create a common European system of criminal law. Unfortunately for Mr. Assange his case will shine a light on the diabolical injustices being done to British citizens by the European Arrest Warrant.” …

Michael Howie wrote in the Telegraph on December 18 that “judges are sending people abroad with ‘no questions asked’ at the behest of foreign countries, often over allegations of petty crimes or offenses committed many years ago, and with little regard to potentially seri-ous human rights abuses. Last year Britain received more than 4,000 extradition requests from other EU states. …”

And the “justice deficit” in the EU is only going to get much worse. In January 2011, the European Evidence Warrant will come into effect. It requires all EU states to give automatic recognition to search warrants issued by other member states and gives EU member countries the right to demand surveillance on a UK resident who has returned home, and access to his or her bank records.

This whole process has echoes of darker days that prevailed in Eu-rope under a similarly inquisitorial system some 70 years ago.

asiaThe relationship between India and China, long marked by suspicion

and rivalry, veered into new harmonious territory last week when the two sides moved toward an over-arching bilateral trade deal.

These two Asian giants, which together are home to two fifths of the world’s population, are taking steps to work together in an alliance that could deeply impact the global economy. Chinese Premier Wen Jiabao took a rare visit to New Delhi December 15 to 17 to promote bilateral trade between these two Eastern powerhouses. Wen had set the goal dur-ing his last trip to India, in 2005, of boosting combined Sino-Indian trade from $18 billion to $30 billion by 2010. His goal has been far exceeded, with 2010 bilateral commerce totaling around $60 billion. In the last 10 years, trade between these two economic behemoths has increased a staggering 30-fold, and they have now set the goal of boosting trade to $100 billion annually. China already ranks as India’s largest trading part-ner, and the relationship is gearing up to get much deeper. The favor India is showing to China has deep implications, particularly in light of the less

“There are … grave potentialities in having British ports, communications and energy firms run by overseas directors and shareholders, whose loyalties lie outside the uk.”

—Trumpet, april 2010

The Heathrow farce among the hundreds of thousands of people caught up in the international chaos caused by the crisis at Heathrow this week was none other than Chancellor George Osborne. He has been in New York seeking to persuade Wall Street’s financial giants that Britain is still a great place for the world’s top bankers to work ….

It will have hardly helped his cause that the chancellor was held up in New York—unable to return to London—for nearly two days while pictures of the Third World conditions at Lon-don’s premier airport … filled American televi-sion screens. This was as far as it is possible to get from the image of the efficient, modern, bustling commercial center that the chancellor was seeking to promote. But who is to blame?

Step forward the dopey, inefficient baa (the former British Airports Authority) who owns Heathrow. The real scandal is that despite Heathrow’s economic and strategic importance to Britain, the government is virtually power-less to do anything because the Authority is owned by a foreign company.

And it is a scandal that goes back to 2006, when the Labour government stood idly by while a little-known, family-controlled Span-ish construction group called Ferrovial was allowed to buy all of Britain’s airports at the knockdown price of £10.3 billion. What’s more, the purchase was made despite the firm already having huge debts.

This was just the latest squalid example of a British government selling key parts of this country’s infrastructure to foreign buyers. … The problem with our airports is that the gov-ernment is powerless to force the foreign own-ers to ensure there are the necessary systems to prevent flights being grounded in bad weather. While sensible investment is made in other countries’ airports, ministers have been unable to get baa to buy adequate snow-clearing and de-icing equipment.

Equally culpable is the regulator, the Civil Aviation Authority, which has been supine in its refusal to raise any serious objections over Fer-rovial’s behavior. The truth is that the Spanish owners of baa and its main asset, Heathrow (with annual passenger numbers of more than 66 mil-lion) had no experience of running airports, or indeed consumer-orientated businesses, and was only interested in taking advantage of easy credit conditions in order to make quick profits.

daily mail, aleX Brummer | december 22

The TrumPeT weekly december 25, 2010 • 8

fruitful trip American President Barack Obama recently made to India. While Obama left Delhi with $14 billion in investment project contracts, Wen obtained $23 billion from the U.S. We can expect their interlocking trade relationships to knit India and China closer together and for Delhi’s steps toward Beijing to edge it away from Washington.

On Tuesday, North Korea threatened to wage a “holy war” against South Korea, including the use of nuclear weapons, if the South en-croached on its turf. Earlier this month Pyongyang had said it would strike the South if Seoul conducted live-fire artillery exercises, but, on Monday, South Korea went ahead with the exercise—its largest of the year—in spite of North Korea’s threat. Although the North has taken no action against the South, pundits are worried about the escalating tensions on the Korean peninsula. In typical times, Pyongyang’s bluster would not be taken seriously, but these times are far from typical. Vic-tor Cha, the U.S.’s former top adviser on North Korean affairs, said in a recent interview: “I’m worried this is not just another cycle of provoca-tion and that the cycle is getting much worse. We haven’t seen this sort of premeditated conventional attack really since 1968. They may really believe … that they are a nuclear weapons state and therefore they can act with impunity and I think that’s an incorrect perception.” In March of this year, Pyongyang sunk one of South Korea’s warships resulting in the death of 46 sailors. Then, on November 23, North Korea attacked Yeonpyeong Island killing four South Koreans, and injuring several oth-ers. In light of this recent belligerence, North Korea’s threats should not be viewed as the usual empty bluster. We can expect tensions on the Korean peninsula to continue to escalate.

Thousands of protesters assembled in Minsk on Sunday evening to contest Belarusian President Alexander Lukashenko’s stealing of another presidential election. The demonstrations prompted a harsh police response in the capital city and detention of seven presidential hopefuls from opposition parties. Lukashenka, who has been called

“the European Mugabe,” had appeared over the last several years to be mellowing, as he worked to secure EU support for funds from the imf, the World Bank, and various European banks for his beleaguered nation. But now that he has secured the assistance he needed, and now that Russia is again providing Belarus with subsidized oil, Lukashenka can abandon his charade and be true to his dictatorial inclinations. Moscow has ignored Europe’s suggestions that it deal with Lukash-enka’s rampant human rights violations and is even expected to allow Lukashenka to re-sell Russia’s subsidized oil to Western nations and use the profits to keep himself surrounded by bodyguards, police and soldiers. The Russian bear is waking up from its hibernation, and should be expected to work behind the scenes to prop up tyrants like Lukashenka, whose allegiance is to Moscow.

reuTers | december 23

china speeds Plans to Launch aircraft carrier

China may be ready to launch its first aircraft carrier in 2011, Chinese military and political sources said on Thursday, a year ahead of U.S. military analysts’ expectations.

Analysts expect China to use its first operational aircraft carrier to ensure the security of its oil supply route through the Indian Ocean and near the disputed Spratly Islands, but full capability is still some years away. “The period around July 1 next year to celebrate the (Chinese Communist) Party’s birthday is one window (for launch),” one source with ties to the leadership told Reuters, requesting anonymity because

JOel hilliker | COlumNisT

eVery year, amid the noise of commercialism, material-ism and excess, some few endeavor to remind everyone that Christmas is supposed to be about the Son of God. He is, they say, “the reason for the season.” But is He really? Have you ever looked it up?

That December 25 isn’t Christ’s birthday is easy to prove. According to ChristianHis-tory.net (a service of Christianity Today), it was the day of the Roman “birth of the un-conquered sun” and the birthday of the Ira-nian “Sun of Righteousness,” Mithras. The New Schaff-Herzog Encyclopedia of Reli-gious Knowledge says the pagan celebrations of Saturnalia and Brumalia were popularly held on that date. Further into antiquity, the Egyptians marked December 25 to celebrate the birth of the son of Isis. Around three centuries after Jesus’s death, church leaders decided to preserve the celebration but affix Christ’s name to it.

Christian History says, “The pagan origins of the Christmas date, as well as pagan origins for many Christmas customs (gift-giving and merrymaking from Roman Saturnalia; greenery, lights, and charity from the Roman New Year; Yule logs and various foods from Teutonic feasts)”—and to this list we could add Santa Claus, an import from Nordic mythology—“have always fueled argu-ments against the holiday. ‘It’s just paganism wrapped with a Christian bow,’ naysayers argue.”

Count me among the naysayers. What is astonishing is how unconcerned people are about these pagan roots. Christian History concludes: “But while kowtowing to worldli-ness must always be a concern for Christians, the church has generally viewed efforts to re-shape culture—including holidays—positively. As a theologian asserted in 320, ‘We hold this day holy, not like the pagans because of the birth of the sun, but because of him who made it.’” Thus, the appropriation of a whole closetful of pagan customs moves from “kow-towing to worldliness” to “efforts to reshape culture.” They assume God smiles on such ef-forts. But read Jeremiah 10:2-4. Doesn’t God have the right to tell us how and how not He wants to be worshiped?

“We hold this day holy,” this theologian said. On whose authority? It was not holy to begin with. And human beings cannot make anything holy. The best we can do is to keep holy what God has made holy. This pagan celebration, He certainly did not.

“we Hold This Day Holy”?

The TrumPeT weekly december 25, 2010 • 9

the carrier program is one of China’s most closely guarded secrets.The Defense Ministry spokesman’s office declined to comment. The

possible launch next year of the ex-Soviet aircraft carrier Varyag … will be one step toward building an operating aircraft carrier group, ana-lysts said. The U.S. Office of Naval Intelligence estimates the Varyag will be launched as a training platform by 2012, and China will have an operational domestically built carrier after 2015.

Andrew Erickson and Andrew Wilson of the U.S. Naval College wrote that it was “conceivable that carrier-relevant research, develop-ment, and even production … could proceed with a rapidity that might surprise Western analysts.” … The 300-meter (1,000-foot) Varyag is undergoing refit at a state-run shipyard in northeastern city Dalian, sources said. … “The Varyag will allow us to familiarize ourselves with aircraft carrier tactics of war,” one Chinese military source said.

The United States and China’s neighbors are nervous about how Chi-na could use its growing navy, and speeding up preparations for an air-craft carrier group could add to those jitters. “Just the prospect of China building aircraft carriers has already made neighbors uneasy,” former Taiwan Deputy Defense Minister Lin Chong-Pin said in an interview.

China has refused to rule out the use of force to unify with Taiwan, a self-ruled island over which Beijing claims sovereignty. …

africaAn explosion at a bus station in Nairobi killed three people and

wounded 39 on December 20. It was cause by a grenade, probably detonated by a Tanzanian, according to Kenya’s police commission-

er. Uganda said that Somali terrorist group al-Shabab may be linked to the attack. The attack may have been meant for Uganda, as a bus at the station was heading in that direction and Uganda is an enemy of al-Shabab.

Somali terrorist group Hizbul Islam has been absorbed by al-Shabab. Hizbul Islam announced that it would join with al-Shabab “politically and militarily,” on December 20. This gives al-Shabab greater power and fewer rivals.

anglo-aMericaThe outgoing United States Congress and President Barack Obama

signed into law a slew of new legislation in late December. The 111th Congress struck down the U.S. military’s “Don’t Ask, Don’t

Tell” policy, which will soon allow homosexuals to serve openly in all branches of the armed forces all over the world. Congress also ratified Obama’s signature foreign-policy measure, a new start arms reduction pact with Russia. Contentious spending issues between Democrats and Republicans were temporarily resolved and an omnibus spending bill passed. The solution: Keep spending the same amount of money on all government agencies as the government already has been.

The next 40 years will be the most important in human history, Ian Morris wrote Tuesday in the Christian Science Monitor. Morris says that Asia’s rise is inevitable and that the world is living through the big-gest shift in wealth, power and prestige since the Industrial Revolution 200 years ago.

American college students are becoming more hopeless, literally. That is the finding of a study by the Center for the Study of Collegiate Mental Health published in the New York Times on Sunday. The center found that the prevalence and severity of mental health concerns has increased significantly in the past decade or two. Almost half of students said in the

want a Happy marriage? Don’t Have sex Before weddingthe beckhams say that quality time is the secret behind their happy marriage …. But, according to a new study, it is couples who delay sex until after the wedding that enjoy a stronger relationship later in life.

Scientists at the School of Family Life at Brigham Young University in Utah inter-viewed 2,035 married people about when they first had sex with their partner.

Analysis of the results showed that couples who waited until marriage before having sex enjoyed a much healthier relationship with their partner than those who started having sex in the early part of their relationship.

In particular, relationship stability was rated 22 percent higher, relationship satisfac-tion was 20 percent higher, quality of sex was 15 percent better and even communication between partners was 12 percent better.

For couples who became sexually involved later in their relationship, but before marriage, the benefits were about half as strong.

The research supports the decisions made by celebrities such as actress Lisa Kudrow, who had not had sex before she married her advertising executive husband Michel Stern, and pop stars The Jonas Brothers. …

[T]he researchers argued that too much emphasis is put on the physical side of a relationship, and too little on trust, loyalty and commitment. Prof. Dean Busby, who led the study, said: “Most research on the topic is focused on individuals’ experiences of sex and not the timing within a relationship.

“There’s more to a relationship than sex, but we did find that those who waited longer were happier with the sexual aspect of their relationship. I think it’s because they’ve learned to talk and have the skills to work with issues that come up.”

Mark Regnerus, author of Premarital Sex in America, echoed Professor Busby’s opinion. He said: “Couples who hit the honeymoon too early—that is, prioritize sex promptly at the outset of a relationship—of-ten find their relationships underdeveloped when it comes to the qualities that make relationships stable and spouses reliable and trustworthy.”

Given that religious beliefs often play a role for couples who choose to wait, the researchers took any influence of religion into account. “Regardless of how religious a couple are, waiting helps the relationship form better a communication process and this improves long-term stability and rela-tionship satisfaction,” added Professor Busby.

daily mail | december 23

The TrumPeT weekly december 25, 2010 • 10

NeXT from page 1

past year that they felt things were hopeless, 58 percent felt lonely, and 31 percent felt so depressed it was difficult to function, the study found.

For 170 years, every Briton who sent, received or handled a piece of mail saw the queen or king of England. That’s because the monarch has appeared on every postage stamp in Britain since Sir Rowland Hill invented them in 1840. However, rushed-through legislation that is selling off the Royal Mail to the highest private bidder has failed to secure the guarantee that the stamps will survive. Current rules allow the future owners of the post, which might be Germany’s Deutsche Post, to use whatever design they please on British stamps.

markeTwaTCh | december 20

a Bad year for californiaGet away from California’s coastline, and watch your fortunes dip.

For 2010 at least, that seems to be the lesson as six of the Golden State’s metro areas fell to the bottom 10 in MarketWatch’s an-

nual survey of the best U.S. cities for business. …Along with Riverside, Fresno, Stockton, Modesto, Sacramento and

Bakersfield sunk to the bottom of the pack. And jobs are the main culprit. “If you’re looking at unemployment and job growth, it was not a good year for California,” said Stephen Levy, director of the Center for Continuing Study of the California Economy.

California holds the third-highest unemployment rate in the nation at 12.4 percent, but four of those cities are at the very top of that list. Stockton is the worst of the cities in the survey with a 16.6 percent job-less rate, followed by Modesto at No. 2 with 16.2 percent, Fresno at No. 3 with 15.2 percent and Bakersfield at No. 4 with 15.1 percent.

Las Vegas is No. 5 with a 15 percent, but it is closely followed by Riv-erside at 14.8 percent. Sacramento is 11th at 12.5 percent.

But it’s not as if those cities closer to the Pacific are going great guns either. The highest-rated California city in the overall MarketWatch survey is San Francisco—and in the No. 33 spot, it barely cracks the top third of the 102 cities included. … All California cities in the survey are in the bottom fourth when it comes to unemployment rates. …

the time that Emperor Constantine institutionalized Catholicism as the state religion of the Roman Empire at the Council of Nicea in a.d. 325, Catholic officials and the Vatican have maintained ties with virtually all the major monarchies and governments in Europe.

The Vatican was behind Emperor Justinian in the sixth century when he purged Germanic tribes from Rome, reuniting the western Roman Empire with the east. In the eighth century, the pope provided moral and spiritual cover to Charlemagne as his armies swept across Europe, converting via the sword an entire continent to Catholicism. Similar church-state relationships existed under Otto the Great and the Holy Roman Empire, the Habsburgs in the 16th century, Napoleon in the early 19th, and Nazi Germany in the 20th.

Fifteen hundred years of European history testify to this reality: When seismic events occur in Europe, the Vatican always plays a central role!

Many now recognize that Europe is currently experiencing a politi-cal, economic and military shift of tremendous proportions. In the time ahead, as Germany continues to reshape the Continent, Europe will enter the next chapter of its emergence as a global superstate. Expect the Vatican to reclaim its historic and prophetic role as the most power-ful force in Europe—this time sitting astride the now-imminent United States of Europe!

caught sleepingthe summer of 1914 is a warning. Back then, as to-day, financial markets were zinging along. Inflation seemed to be under control. Commodity prices were rising. Emerging markets were attracting inves-tors. The world, especially governments, were leverag-ing up on debt. The lessons of the stock market crash several years earlier had been forgotten.

Even after Archduke Franz Ferdinand of Austria was assassinated, the markets collectively yawned and went back to busi-ness as usual.

Stop and ponder that! The world was on the brink of the most disruptive political and economic event in history, and the markets were completely asleep! It wasn’t until Austria actually sent its severe ulti-matum to Serbia—almost a month later—that the markets woke up to the impend-ing slaughter.

“In 1914, everyone knew that a war be-tween Britain and Germany was possible. The popular press was full of it,” says Harvard historian Niall Ferguson. “But it’s as if investors didn’t want to factor that in until it was upon them.”

What a lesson about human nature. People don’t like to think about catastro-phes—let alone plan or prepare for them—until they are forced to. And by then, it is often too late!

To investors, the First World War was a shock. The stock markets were routed and officials shut down bourses in New York, London and Vienna. By July 30, all continental markets had shut their doors. New York didn’t fully reopen for business as usual until April 1915. Global bond markets cratered too and lenders to many countries were never repaid.

The question for America is, if the smart money and the big investors of 1914 were so wrong, could they be wrong in 2011? At the end of 2010, the bond market has been in bull mode for 30 years. The stock market is hitting two-year highs, commodity prices are soaring. Yet look at the world around you. It is a messy place.

The truth is that the list of 10-sigma, black-swan type unforeseen events that carry the potential to crash global markets is probably bigger than ever today. But if Ferguson is right, the flash points staring us in the face are what should cause the most worry.

rOBerT mOrley | COlumNisT