Has The Butterfly Just Flapped Its Wings

Has the butterfly just flapped its wings? The Butterfly Effect is a scientific theory based on mathematical modeling and the effects of very small fractions appearing in a series, which can later end up causing a far more drastic change in the number series. Geological and Meteorological Sciences in particular studies this theory with great regard, and now defense strategists, economists, bankers and treasury experts, stock and commodity brokers are all beginning to understand the beauty of this theory. The theory suggests that it is very much possible that "A Storm which may end up crashing into the beaches of Caracas might have been started with the wind which originated off the flapping of wings of a butterfly in South China!!" This article is an attempt to understand what does the Butterfly Effect manifests in terms of recent global events and how it can potentially change various situations around us, and to best capture the benefits from the possible outcomes. It is possible very much possible that we are right on the verge of the 3rd World War. The Russian Invasion of Georgia on 8th of August 2008, may not sound too big a news item to the rest of the world, but neither did the German invasion of Poland in 1936 nor the assassination of Austrian Crown Prince and Princess in 1914 off the borders of Bosnia Herzegovina; both these events were the triggers of the Second and First World Wars. Although The Russian Federation has just announced a Halt of Mission in Georgia, however its forces will remain in Georgian Territories of Abkhazia and Ossetia for indefinite period.

So what does this means to region and the world, and how it may end up altering the status quo of Global Politics and Economy,

Russian forces entering South Ossetia

or can push us into a world war situation? Lets consider all the scenarios.

The Troubled Ellipse The strategic ellipse is an allusive dream, it has always been on the fulcrums of dispute and this is how its will always be. Even long before Gas and Oil were considered of any economic importance, this is where most global disputes have been staged, this has been the hot spot of the international trade, human development, learning, evolution of science and cradle for art and literature. This is where the Indus Valley Civilization thrived, followed by the Mesopotamians, Assyrians, Huns, Aryans, Egyptians, Persians, Arabs and Turks. The geography of the region has made it resource rich, with fresh water, rivers and lakes, green pastures, forests, farmlands, minerals and ores and lately deserts of middle east, the most docile of the areas, have stepped up to plate as Oil and Gas got discovered and has since transformed the world.

The Impact on the Region The failure of most Central Asian countries to emerge as serious geopolitical players since their independence from the USSR in early 1990s, despite of having adequate infrastructural and educational resources, has led to a potentially unstable region, one which is mostly run by either Pro USA or Pro Kremlin governments. All such rulers naturally have loose footings in their countries and mostly rely on their patrons abroad.

Poland has hastily signed the Missile Defense Shield Agreement with US, which may turn out to be a great disaster for the Polish future. It is synonymous to the ill decision of Pakistani Government in 1950, when it was given the chance of choosing between the US or the Soviet camps to join. The situation is a signal of a new era of strength to the Regional Governments which are backed by the Russians, while the American allies have much to fear The Shanghai Cooperation Organization The Shanghai Cooperation Organization (SCO) will emerge as a strong opponent to NATO, and the within the SCO there will be a new struggle of memberships and pole positions.

The SCO Top Crowd

India and Pakistan both have the observer status with the SCO, while Pakistan is backed by China and other 'stan' states and even a slight agreement by the Russians, the Indians are not yet welcomed, the biggest oppositions, comes from China, and less-surprisingly, ever since the Indo-American Nuclear Pact, Russia has embarked on the Indian opposition bandwagon. Due to the growing Indo-US ties, the Russian opposition to Indian inclusion in SCO is increasing, in particular, the Indian Airforce Forward Base in Dushanbe, Tajikistan is a major cause of concern for the Russians. A Terrible Dead End for the Joker in the Cloak The Afghan government has a huge delimma on its hands, clearly the country is facing regional isolation, having US and NATO forces operating deep inside the country, is a major disconcerting point for Russia, Iran, China and Pakistan.

All the Kings Men: Afghan Army running for cover as Rockets struck an official ceremony

The Made in America clown, Hamid Karzai, will feel a lot more lonely as the emphasis of US and NATO operatives shift to deal with the Russian threat in Georgia and the Caspian Basin, away from Afghanistan where the internal threat of Taliban is growing with the prospects of harsh backlash of an angry Pakistan, which faced humiliation despite of feeding and nurturing two generations of 4.0 million Afghan refugees, spanned over a 30 year period.

Afghanistan still is divided on stark ethnic lines, with the Pashtuns firmly in control in the South and South West, the Uzbek-Tajik-Hazara ethnic groups control the North and North West. In addition to the ethnic divisions there is a Shia - Sunni angle to the whole situation, Pashtuns are mainly Sunnis while the Uzbek-Tajik-Hazaras are predominantly Shias, with centuries old feuds running between these two groups, the division of Afghanistan is all but certain. With this new Russian threat looming and the weaknesses of American Central Command now absolutely exposed in Iraq and Afghanistan, US has to scamper all the force it can get to refocus on Central and Eastern Europe. This will lead to the second isolation of Afghanistan, where Pashtun Talibans will eventually sweep into power. Out of all this, India will emerge as one of the biggest losers in the conflict as its strategic involvement in Afghanistan will be short lived. The Tumbling Domino Falls on India Pakistan fueled the insurgency in Indian Occupied Kashmir in late 1980s and 1990s, by directly aiding the freedom fighters, however the weakened and humiliated ISI (Pakistani Intelligence Agency) and the incapable current government of Pakistan does not have the might to redo its Kashmir show. Pakistan was looking for a miracle or a stupid mistake from India to rock the boat, sheepishly, India provided them with the perfect opportunity. The renewed freedom struggle in Kashmir started as a result of land allocation to the Hindu Temple by the Delhi government, the owners of the land announced a settlement scheme at the adjoining area, where thousands of Hindu families were to be housed. The Muslims found this development an attempt of reshuffling the Hindu-Muslim demographics of the area and feared that this will give ultimate power to Hindu participants in the next elections. An agitation was started, as the violence grew, the Indian government decided to roll back its decision and annulled the land allocation. The Hindu faction of Jammu found this insulting and started an agitation of their own,

which soon converted into full blown HinduMuslim riots. The Muslims viewed the situations as the Indian Army using force against them, and the memories of 1990s came hurling back. Now the entire Kashmir valley is chanting with the slogans of "AZADI" (Freedom) and "Kamshir Banay Ga Pakistan" (Kashmir will become Pakistan). Trouble in Paradise; Riots in Indian Occupied Kashmir, Again!

It is becoming imminent that USA will pull troops out of Afghanistan, and NATO will have to redirect to strengthen the defense of motherland Europe against a resurgent Russia, Afghanistan will soon be calling for a Peace Keeping force, and the recent events, such as those after the Kabul Indian Embassy bombings, show that Indian forces may very well be deployed in Afghanistan. Initially, it may sound like a brilliant move for Delhi, to encircle Pakistan from West and North as well as East, but the historical eventuality for all the foreign arm bearers in Afghanistan has never been a Bollywood happy ending. If India do take this step, it may very well understand this fact better than any of the previous armed forces, so it may try to achieve all its strategic targets inside Pakistan as soon as possible and try to leave before things get too hot to handle. If India do get on board the Kabul's sinking ship, it will qualify itself as the defecto enemy of the over taking Afghan power, and if this turns out to be Afghan Taliban, then God Help India! It will not take another brilliantly planed Pakistani misadventure in Kashmir this time around, rather, Delhi will find itself battling against the self motivated, free flowing Afghan fighters fully immersed in Kashmir Valley. From a RED Nepal With Love to The "Seven Sisters" The Tsunami ripples of Current events are not only a threat for India on the Western Borders but will also invoke trouble on the eastern edge, where the famous badlands of Seven Sister Estates of India are situated. Assam, Nagaland, Tripura, Meghalaya, Manipur, Mizoram and Arunachal Pradesh - the most impoverish and under developed regions of India, the explosive law and order and political situation of these regions made sure that they Seven Sisters

remained closed for tourists and foreign visitors for a long time. Other than the seven sisters, the problem has spread to Jharkhand, Orissa, Chattisgarh and Bengal. The operating elements are various factions of Maoist Rebels who are given a single name of Naxilites Rebels, which operate freely in these areas. These elements born out of the SinoSoviet split in the communist ideology and after the Sino-India war, were backed by the Chinese Government and adopted the Maoist ideologies. After a decade of armed struggle, the Maoists have recently swept into democratically assigned power in the neighboring Nepal and now becoming a major element of support for the Naxilites of India. Backed by Chinese Reds, the Nepali success story can play havoc on the Delhi nerves. What remains to be seen is how China and Russia will play their role in the Maoist Rebellion in India to rein in the Indian dreams of penetrating the Central Asian politics Damn you spot! As it grows A Greater Pakistan, Anyone? Pakistan will not only prevail in defiance of its darkest hours, but will most likely to emerge as the biggest indirect benefactor when the dust will finally settle. Let’s understand why. The strategic location of Pakistan makes it the perfect negotiator on the table. NATO and US will require the assurance of geographical integrity of Afghanistan from Pakistan, and the China Russian alliance will require Pakistani assistance in seeing off the Northern Alliance government in Afghanistan. Option 2 is easier, and has the most benefits for Pakistan. With the NATO forces moving out, the resurgent Afghan Taliban will surely sweep into power by third quarter of 2009, soon after the second fighting season of next year will come to a close in the Mountains. The question of PAKISTANI TALIBAN may arise in the minds of many a readers, who pose a huge challenge to Pakistan. The TALIBAN MOVEMENT of PAKISTAN has got nothing to do with the traditional Afghan Talibans, The Pakistan Talibans are a force which is funded

squarely by the Indian and Afghan government to destabilize Pakistan and to act as a counter force against the Afghan Talibans, however, as soon as the Afghan government gets engaged defending Kabul from AFGHAN TALIBAN, the threat in Pakistan will subside automatically. Another interesting age old American war tactics has been "if you cant win the war, shift the war", that’s what happened during the Vietnam war, when the war reached to the bordering Laos and Cambodia, in an US effort to shift the gravity center of the war, this is what’s been happening in Pakistan, US has realized that War in Afghanistan has just got no Economics of its own, having it as a watch tower into China and Russia, when atleast Russia does not want to hide any of its hostile intentions. So, the war has been shifted into main land Pakistan. As situation has changed its face, the best laid plans have gone to waste and as pressure mounts on Afghanistan, this geographical representation may very well be a reality soon, with the southern part being annexed to Pakistan and the Northern Part may remain to exist as a Natural Afghanistan. Although like most Pakistanis, I am very skeptical about the intentions and the capability of the current political elite of this country, however Asif Ali Zardari's announcement of visiting China soon after his presidential election and the bold statement of Chinese Foreign Minister, while standing on Indian soil, regarding China's wish to see Pakistan being admitted to the Nuclear Club officially, is seen as the indicator of things to come. Grand Pakistan: Annexing the Pashtun Afghanistan

A Desperate NATO NATO in Afghanistan is running out of time, and has resorted to desperate measures to achieve its targets in Pakistan Afghanistan boarder areas. The Invasion of Pakistani boarder area "Angoor Adda" on the mornings of 3rd September 08 and then further attacks on the next two consecutive days, were an open sign of the grave desperation of the situation that NATO is facing.

The attempt is to achieve all strategic targets in Pakistan and then create enough instability to trigger a civil war situation in Pakistan, leaving the country in ruins and unable to take sides in a developing all out war which is soon going to be staged on the Central Asian slopes. Its The OIL Stupid! Yes it really is, The Caspian Basin has become a major source of world's Oil supply and distribution. Major Oil Rigs in Turkmenistan, Kazakhstan, Azerbaijan, Russia and even Iran are necklaced around this region. the whole region is lined with either Oil rigs or the Oil and Gas Pipelines, mainly supplying to Central and Western Europe. To better understand the battle for the control of Oil supply and exploration, lets take a look at the structure of the Regional Oil producing and transporting companies, and establish who are their controlling entities. Russia's biggest Oil corporations such as Yokus and Baikal Financial Group have been absorbed by the state controlled Rosneft, and later the Publicly listed Oil distribution company Gazprom, which controls the major Siberian Oil Reserves through its subsidiary Gazprom Neft (formerly; Sibneft) and the distribution pipelines to entire Europe, accepted to sell its major share to Rosneft, coming under state's direct control. The by the who took Gazprom

power of this deal can be gauged fact that the Chairman of Gazprom the decision of selling 11% of shares to Rosneft, Dmitri Medvedev, has been appointed as the President of a strictly FSB (formerly; KGB) controlled Russian Empire. Gazprom Building, Moscow

British Petroleum's Russian subsidiary TNK-BP, which is Russia's 3rd Largest Oil company and operates in Russia through a deal with Gazprom in which BP has 50% shares of company and the rest is

divided among four Russian Oligarchs, has been under severe state pressure since June 2007, after which it has to sell various of its Oil fields in Siberia to Gazprom. In a later move, just two months ago, Russian interior ministry canceled the work permits of the TNK-BP management staff alongwith the British appointed head of the company. A fiercely hostile takeover. The next possible target is LUKoil, the largest Russian Oil producer with a Net income of $12 Billions in 2007 and a revenue of $80 Billions. ConocoPhilips is a direct 20% sharegholder of LUKoil. Those who found themselves bitten by the BP's debacle in Russia, must be worried about their money in ConocoPhilips stocks, value of which can be spiraling down if a similar move is planned and executed. LUKoil Head Quarters, Moscow.

Europe dwells on the Russian Oil and Gas supplies and Russia is aware of the dependency. On the 1st of January 2007, Gazprom imposed a 135% increment in the Gas prices to Ukraine, very much irked by the success of the Orange revolution, which the Russian authorities saw as a Western attempt of rising interference in the Russian backyard.

A similar action is then repeated a few months later against Belarus and Georgia, followed by a series of extremely hawkish flights of Tupolev Tu160 Supersonic Russian bombers in War formations, over the British and NATO fleets in the Arctic Oceans.

Reclaiming Sovereignty; Mighty Tupolev now flies unchallenged over Arctic Seas

Getting Piping Hot Three of the most important Oil and Gas Supply lines run through Georgia, the Baku-Tbilisi-Ceyhan (BTC), owned by British Petroleum, is of immense strategic importance, not only because it supplies to

Europe, but also its status as a fuel guarantee for Israel in case of any future Oil Embargo by the Arab States. Having declining Oil production in Saudi Arabia and rest of the Middle East, infact the whole world's reserves have gone down, Russian and Central Asian Oil fields which remained docile for a period of 15 years due to spliting up of Soviet Union and followed by a huge economic recession in the region, now all of a sudden have become all important. the 15 year slumber in these areas means that these Oil wells have retained their deposits while the rest of the world was in a supply The Georgian Connection: 3 most important Oil and Gas Supply Lines to Europe

fest. Most of the 90s saw the average Oil prices at $13 a barrel, due to supply abundance in a uni-polar world, where the Arabs sold themselves cheap. Now as the supplies are dwindling elsewhere, these Central Asian and Russian reserves have become Gold Mines, supplying Oil at $100 and above, Russia has announced its Re-entry resulting in a bi-polar world.

A Dispute in the Pipeline

This is how the Entire region's pipeline network looks like. See closely, and one can figure out that other than Georgia no other country controls the Oil Pipeline corridors to Europe except Russia itself. Once these Georgian corridors also in Russian controls, the Federation has complete monopoly over the land routes. Black Sea may Soon have a change of color Putin has already sounded alarms of "calmly" tackling the presence of NATO warships in Black Sea. The next possible target can be the Crimean peninsula of Ukraine, which serves as an important naval base for controlling the Black Sea.

The Return of Crimean wars may be approaching

Controlling Black Seas means the effective blockade of South Europe.

More importantly, it will serve as a deterrent to the US Air force's forward Base in Turkey. Red October Russia is well prepared to put its feet on the pedal. Winter is fast approaching, and Europe will soon be having an upsurge in Oil demand, Kremlin knows this and has already acted. Mid of October can see a price hike of estimated 60% to the current crude levels. How bad the situation can be, it depends on how the US and Europe will respond to a move of this stature, a very harsh reaction will definitely push crude oil and gas prices a lot further in the vicinity of $200 and above. So if you are an Oil Trader, theres is only one advice, BUY! A Perfect Timing for US? It is of a strange and quite a conspiratorial view, that whenever USA went into a war, it evaded an economic recession which was certain to hit the US economy. The Great American Depression which started in 1929, remained till 1940, when 1 out of every 5 farm workers was unemployed, and all of a sudden Japan came in with a surprise invitation to war at Pearl Harbor. Similarly, in 1980, another recession hit America, and Russians came in with a surprise bail out for US in Afghanistan. In 1987 the Dow Jones Industrial Average was struck by a fall bigger than that of 1929's, the Index shed 22.6% of its value, a recovery was instituted through deposits and savings bonds but it was short lived and the market continued to slide even further, again, an American Allied Saddam Hussain's forces crashed into Oil rich Kuwait, and over night was condemned as a dictator and aggressor by the US, Operation Desert Storm was raged, USA was out of recession again. Then in year 2000, the dot com bubble busted and the US economy went into a recession for a period of 8 months from March 2001 to November 2001. US had no Russia or Germany or Japan left to go into a War with, and hence a War was invented, September 11 2001 was doctored and US again had a war to itself to rescue its economy. The government spending which increases due to a war, lifts the economy out a deep recession. All American Macro-Economists from MacNamara to Leebs are convinced of the fact that America uses war as a last resort to bail its economy out of trouble.

The current Sub-Prime mortgage crises is the eventuality in motion, the superficial economic setup of an exhausted Fractional Reserve System has finally crumbled and has started feeding off itself, starting to sweep away the Global Banking empires with it. America and subsequently the world, may very well be in the deepest economic slowdown ever. With this evidence it is not a surprise if later it will be established that it was USA rather than Russia which preempted the situation. Given the circumstances, the Russian interference is another chance for US to quickly jump over and seize the moment; or it atleast looks like it! Sub Prime Crisis; The Alarm that disturbed the American Dream!