April 12, 2013


As the US troops prepare to thin themselves out of Afghanistan starting from next year,India has to worry whether 1996 can repeat itself in Afghanistan, when the Taliban, with the help of Pakistan's Inter-Services Intelligence (ISI), captured power from the Afghan Mujahideen in Kabul and enforced its rule.
2. In searching for an answer to this question, one has to remember what happened after the Soviet troops withdrew from Afghanistan in 1988:
1989:The Afghan Mujahideen, with ISI's help, tried to have Najibullah's army defeated at Jalalabad, so that they could set up a base there. They were defeated by Najibullah, who demonstrated the strength of his army.
1992:The Afghan Mujahideen succeeded in overthrowing Najib by taking advantage of a US-encouraged split between Najibullah and Rashid Dostum and setting up their Govt in Kabul.
1994: Naseerullah Babar, Benazir Bhutto's Interior Minister, promoted the formation of the Taliban in Kandahar to escort Asif Ali Zardari's cotton convoys from Turkmenistan.The US established secret contacts with the Taliban to secure its support for a gas-oil pipeline from Turkmenistan to Pakistan via Afghanistan being planned by UNOCAL.
1996: The Taliban, with the ISI's support, overthrew the Mujahideen Government in Kabul and set up its Government.
1996: Ahmed Shah Masood set up his Northern Alliance to counter the Taliban.
1996: Osama bin Laden shifted from Khartoum to Jalalabad and from there to Kandahar where Mulla Omar, the Amir of the Taliban, was based.
1998: bin Laden formed the International Islamic Front for Jihad Against the Crusaders and the Jewish People for fighting against the US and Israel.
1998:Al Qaeda carried out explosions outside the US Embassies in Nairobi and Dar-es-Salaam.US carried out reprisal Cruise missile attacks on Al Qaeda camps in Jalalabad.Not successful.
1999:The US demanded that the Taliban should hand over bin Laden to it. It also demanded that Pakistan should force the Taliban to hand over bin Laden to it.Both the Taliban and Pakistan evaded the US demand
11/9/2001:Al Qaeda carried out its terror strikes in the US homeland.
October,2001:The US declared its war on the Taliban and Al Qaeda and ordered military action in Afghanistan. The Taliban was overthrown, but Omar and bin Laden crossed over to Pakistan, where they were given shelter by the ISI. The Northern Alliance collaborated with the US in its operations.
3.The sequence of events mentioned above was due to the following reasons:
·       The sudden and abrupt withdrawal of the Soviet troops from Afghanistan.
·       The differences between the Pashtoons and the Uzbeks and the consequent lack of unity in the Najibullah Government.
·       The ambivalent US policy towards the Taliban. It hobnobbed with it initially in the hope of getting its support for the projected UNOCAL pipeline project and realised too late the pernicious nature of the Taliban.
·       The USA's misplaced faith in Pakistani co-operation against the Taliban and Al Qaeda.
4. What is the position now as the US prepares to thin itself out?
·       Just as the Soviet troops withdrew in 1988 before effectively defeating the Mujahideen, the US is going to thin itself out before effectively defeating the Neo Taliban and the Haqqani Network, both of which continue to operate from Pakistan.
·       The command and control of Al Qaeda based in Pakistan has been badly disrupted, but not eliminated.
·       There could be political instability in Afghanistan after President Hamid Karzai completes his term next year leading once again to ethnic differences between the Pashtoons and non-Pashtoons.
·       The ambivalent US policy towards a possible political role for the so-called good Taliban post-2014 could add to uncertainties and instability.
·       In 1988, to facilitate the Soviet withdrawal, Pakistan ensured that there were no attacks on the withdrawing Soviet troops by the Mujahideen. Pakistan had better control over the tribal areas on the Afghan border.Today. Pakistan has little control over the Tehrik-e-Taliban Pakistan (TTP) and will have little ability to facilitate the withdrawal of US troops and equipment.
5. Qualitatively, the ground situation post-2014 will differ from that which prevailed in 1988 as follows:
·       The Soviet withdrawal in 1988 was abrupt and total with no Soviet presence left in Afghanistan. There was no air cover for the Soviet troops due to the effective use of the US-supplied Stinger missiles by the Mujahideen. The US withdrawal is going to be gradual and not abrupt and total. The US will still have some presence with the required air cover in Afghan territory to enable the Afghan troops perform their security role.The Soviet troops left Najibullah all alone without any back-up support to counter the Mujahideen.The US is unlikely to leave the Karzai (his successor's) Government all alone.
·       The US fleet of Drones and their effective use will enable the US to prevent the Neo Taliban, the Haqqani network and Al Qaeda under Ayman Al-Zawahiri from re-grouping.
6. From 2014, the US will have the limited objective of preventing a come-back by a Neo Al Qaeda that could again pose a threat to the US homeland. The Neo Al Qaeda is presently focusing on Yemen, Syria, Iraq and Africa. After the US thin-out, it might be tempted to re-focus on the Af-Pak region. To prevent this, the US will need a continued capability to maintain a limited ground presence in Afghanistan and operate its fleet of Drones.
7. What should be India's options and policies? If the post-1996 events are repeated in Afghanistan, India may again face serious security problems in Jammu & Kashmir and even in hinterland India.To prevent this, Indian policies should be focused on the following:
·       Continue to strengthen the Afghan security forces through training and supply of arms and ammunition.
·       Strengthen trilateral intelligence co-operation involving the intelligence agencies of India, Afghanistan and the US.
·       Encourage the US not to repeat the Soviet mistake of total withdrawal, but to maintain a minimum presence in Afghan territory to keep weakening the Neo Taliban and Neo Al Qaeda.
·       Encourage the US to continue using its Drone fleet and if the US faces any difficulty in using them from Afghan territory, allow the US to operate them from Indian bases.
·       Work for a smooth political transition after Karzai completes his term. ( 13-4-13)
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. Twitter: @SORBONNE75 )

Rogue state Pak not serving purpose for which it was created: Harbiyar Marri

   Apr 12, 1:28 pm   
London, April 12 (ANI): A senior Baloch leader has described Pakistan as a rogue state that has and will never serve the purpose for which it was created by the British in 1947.

Harbiyar Marri,Nationalist Leader, Balochistan, said in an interview given to ANI here recently that Pakistan has conducted five military operations in Balochistan which had claimed thousands of lives and resulted in the abduction and disappearance of several others.

"Since 1948, Pakistan has conducted five military operations in Balochistan in which, thousands of people have lost their lives, people have been abducted, and, we don't know the whereabouts of 14000 people. The international community is not taking any action against Pakistan, maybe because Pakistan is blackmailing them systematically through the Taliban, through these jihadi groups," Marri said.

"Pakistan is a rogue state right now. It isn't serving the purpose it was created for by the British, and now, it has created so many jihadi groups just to further their own interests, and those jihadi groups are working against the British, the Americans and against humanity, " he added.

Marri further said that the Baloch people are going in the right direction,and emphatically stated that their demands are justified.

"Pakistan makes false history, saying Balochistan has been a part of Pakistan. Actually, the idea of Pakistan as far as I know was hatched by the British at Whitehall, so that they could just have their say in that region. In 1948, they had a plan which backfired," Marri said.

He said that the Baloch demand for independence from Pakistan and the right to self-determination is justified.

"We were an independent state, and they came and occupied us. This rogue state (of Pakistan) must be stopped. They are not only committing atrocities in Balochistan, they are committing atrocities in Sindh, they are sending jihadi groups to Chechnya, to Kashmir, all over the world, just to create havoc. This is what we are against," Marri said.

"We want a peaceful Balochistan, a peaceful Sindh, but as an independent state, rather than being a part of Pakistan. I think Pakistan has come to its natural end, where it's destroying itself, where its policies have been created to advance its purposes, but actually they have backfired. The West knows that Pakistan has double crossed them," he added.

Marri maintained that the Americans have funded Pakistan for the last six years, and that those funds have been used by Islamabad to make their military and jihadi groups stronger.

He, therefore , said that it was imperative to have a serious dialogue between the Baloch and the Western powers on the way forward to achieving the goal of independent homeland.

This would ensure stability in the region, peace, tranquility and economic development, he added.

He said that Baloch independence movement has changed over the years, from one which was spearheaded by a few sardars, to it now being a movement of the masses.

"They should work together for an independent, democratic country. The educated Balochs are coming together with the sardars who want the independence of Balochistan. It's a good thing that we are coming together. That's why we need a roadmap to bring all the pro-independence people together. The more people join us, the quicker we get to our aim," he said.

Pakistan, Marri said, is a collapsing state that was selling, or giving its ports and other important places to China for next to nothing.

"Because, they know they have lost it all, and China has a strategic interest in Gwadar, in Balochistan, in this region, so, they want to have a stranglehold over the Strait of Hormuz, and they will use it if they have a problem against the Americans or against India. Pakistan has this agreement with China without the consent of the Baloch," Marri said.

He also blamed the Pakistan armed forces and jihadi groups like the Lashkar-e-Jhangvi for the mayhem that people in Balochistan were currently being subjected to.

He concluded by saying that there is a good coordination between the people who are in exile and those who are in Balochistan, and added that the goal of independence would be achieved soon. (ANI)

Financial Refuge From Mutually Assured Destruction

By Dan Denning

Uh-oh. "The moment of explosion is approaching fast," says an official from the North Korean military. The formal statement from a spokesman for the General Staff of the Korean People's Army read as follows:
"We formally inform the White House and Pentagon that the ever- escalating U.S. hostile policy toward the DPRK [North Korea] and its reckless nuclear threat will be smashed by the strong will of all the united service personnel and people and cutting-edge smaller, lighter and diversified nuclear strike means of the DPRK and that the merciless operation of its revolutionary armed forces in this regard has been finally examined and ratified."
That sure sounds like a threat. Chuck Hagel, the U.S. defense secretary, says North Korea represents "a real and clear danger and threat." Hagel also announced that the Pentagon would send an $800 million land-based missile system (the Terminal High Altitude Area Defense system, or THAAD) to the island of Guam, where the U.S. has military assets.

There hasn't been a real military crisis to take financial markets to the boiling point in some time. In fact, since the collapse of the American real estate bubble in 2007, stock markets have been driven more by monetary policy than anything else. The "Arab Spring" was big news. But markets largely ignored it. Will they ignore the possibility of a war on the Korean peninsula?

Probably. The longer something you expect to happen doesn't happen, the less expectant you get. It doesn't mean the expected event is less likely to happen. It means you become less vigilant over time. You lower your guard. You become complacent. That's when it usually happens.

Still, you'd think that no one who has anything at stake in the Korean peninsula wants a conflict. The adults in the room -- China, the U.S., Japan, South Korea and Russia -- have no interest in an actual shooting war. But stranger things have happened.

The action on Wall Street suggests investors are paying more attention to the Federal Reserve and economic growth than Kim Jong Un. The S&P 500 fell by 1.1% last week. But it was metals and energy stocks, led by the underlying commodities, that got hammered the most. The S&P GSCI index of 24 commodities fell by 2% last Wednesday. That was the largest one-day drop since November.

For more, let's look at David Stockman's article on American decline from The New York Times:
"The future is bleak. The greatest construction boom in recorded history -- China's money dump on infrastructure over the last 15 years -- is slowing. Brazil, India, Russia, Turkey, South Africa and all the other growing middle-income nations cannot make up for the shortfall in demand. The American machinery of monetary and fiscal stimulus has reached its limits. Japan is sinking into old-age bankruptcy and Europe into welfare-state senescence. The new rulers enthroned in Beijing last year know that after two decades of wild lending, speculation and building, even they will face a day of reckoning, too."
Emphasis added there is ours. Stockman's logic is easy to follow. China's 15-year urbanization and fixed asset boom corresponds with an era of "irrational exuberance" in global credit markets. Alan Greenspan coined that famous phrase in 1996. When it spooked markets, Greenspan backed off and then got in the habit of lowering interest rates anytime stock prices fell.

The phenomena -- lower U.S. interest rates and higher Chinese fixed asset investment -- are inseparable in two ways. First, lower U.S. rates led to America's housing boom and consumer credit/spending boom. This increase in consumption created demand for goods from China. China made things and Americans bought them and the world basked in the glow of a two-piston engine of growth.

The second way low U.S. rates and Chinese investment are inseparable is China's currency peg to the U.S. dollar. This requires China to inflate when the U.S. inflates. And the trouble with inflation is that it never goes where you want it to. In the U.S., the Fed's policies have led to a new all-time high on the major stock indexes.

In China, the corresponding credit boom from low rates led to a building and real estate boom. But now there's turbulence.

Martin Wolf of the Financial Times has even gone so far as to pen an article titled, "Why China's Economy Might Topple." Wolf generally speaks on behalf of conventional and institutional thinking. A contrarian would be tempted to view his bearish comments on China quite bullishly. But his main point is that after 35 years of double-digit GDP growth, China will grow more like the advanced economies of Japan in the 1970s and South Korea in the 1990s, at about 6.5% a year.

Officials at China's Development Research Centre of the State Council (DRC) have written a paper called Ten-year Outlook: Decline of Potential Growth Rate and Start of New Phase of Growth. The clunkily titled paper lays out five reasons why China may experience a sharp decline in growth, starting now. Wolf writes:
"First, the potential for infrastructure investment has 'contracted conspicuously,' with its share in fixed asset investment down from 30% to 20% over the past decade. Second, returns on assets have fallen and overcapacity has soared. The 'incremental capital output ratio' -- a measure of the growth generated by a given level of investment -- reached 4.6 in 2011, the highest since 1992. China is getting less growth bang for its investment buck. Third, growth of the labor supply has fallen sharply. Fourth, urbanization is still rising, but at a decelerating rate. Finally, risks are growing in the finance of local governments and real estate."
Between Wolf's five points and Stockman's point about the end of the infrastructure boom, it is impossible to ignore the fact that China can't keep spending money it doesn't have on infrastructure and development projects that generate no real return on capital.

The laws of economics, to the extent that they exist, apply across all borders and all oceans. Money borrowed must be put to productive use. If it's not, assets have to be written down in value or losses have to be taken. The whole of the last five years have been a central bank exercise in making sure the losses don't destroy the world's banking system.

Is there any refuge? Well, for years we've advocated physical gold and silver as a way to extract wealth from the financial system and store it in tangible form. After the confiscation of bank deposits in Cyprus, this seems more prudent than ever. 

But what's this? Gold is getting absolutely pounded too. Sentiment is bearish. Is it time to sell your gold?

If you were a trader, the time to sell gold would have been when it reached $1,900. But if you're not a trader, if you're a wealth accumulator, then you'll relish the chance to buy gold at these prices. You should also be prepared for it to go lower still. Have a look at the chart below.

Gold-Berkshire Chart

The chart shows how many Berkshire Hathaway "B" shares it takes to buy an ounce of gold. It's a 15-year chart with weekly prices. Berkshire is a basket of productive enterprises that trades as a stock. You can view it as a proxy for the Fed's efforts to reflate financial asset prices. Gold is gold.

As we've written before, if the ratio goes back to 14 (it's currently at 14.95), it will represent a bottom in gold and a top in stocks. You'd have to assume this would coincide with a big shift in market sentiment. Investors would be back to "risk off." You'd see heavy selling of stocks in the second quarter. And after a merciless liquidation of the gold bulls, a bottom in the gold price.

It's all proceeding as planned. The fall in the gold price, and the carnage in gold stocks, will no doubt make many investors and speculators nervous. But that's exactly what has to happen for the bull market to resume its long-term upward trend. If it were a certain trade, everyone would be in it on the same side. The time to hold your nose and buy is approaching.


Dan Denning 
for The Daily Reckoning

Golg Jumps off a cliff

Gold Price, April 12, 2013

April 10, 2013

Polls in Pak just a sideshow of the ruling military-dominant civilian leadership: Tarek Fatah

   Apr 10, 5:08 pm   
New Delhi, April 10 (ANI): Mr. Tarek Fatah, a Canadian citizen of Pakistan origin, an author and a journalist, said on Wednesday that the forthcoming general elections in Pakistan should just be seen as a sideshow of the ruling military-dominant civilian leadership, adding that it wouldn't matter who wins or loses, as political power will remain in the hands of Pakistan's armed forces and its intelligence wing - the Inter Services Intelligence (ISI).

Speaking to ANI in an exclusive interview here, Fatah said: "For the Pakistani ruling establishment, which is the military civilian complex that rules the country ,elections are a side show at the federal level. Who wins and who loses, power will still remain in the hands of the Pakistan armed forces and the ISI."

"This has been the case for a long time, because of U.S. Congress restrictions. Even if the military stages a coup, they (the U.S. Congress) can in an instant, immediately stop all military and civilian aid," Fatah said.

"Elections will have a greater impact at the provincial and not much at the federal level. Take for example the situation in Khyber Pakhtunkhwa where the Awami National Party (ANP) is in power. They have been decimated and systematically assassinated by the Taliban and other Jehadi groups that are funded and supported by the Pakistan military. The real question is what will happen if the ANP is overthrown and defeated in the next election? Then, there is the 2014 withdrawal of U.S. troops and other foreign troops from Afghanistan, which could mean that the Pakistan-based Taliban will take over Kabul. That is a broader strategic issue," Fatah said.

Commenting on developments in the south of the country i.e. Balochistan, Fatah said there was a rift between Baloch nationalists, Akhtar Mengal and the national party of Bizenjo.

There are leaders like Harbiyar Marri , Mehran and Brahamdagh Bugti who have declared the elections invalid because the Pakistan Army is still picking up Baloch youth and dropping them from helicopters, Fatah claimed.

"The latest is they are stealing organs of dead Baloch youth and selling them in markets. So, there is a division in the Baloch nationalist vote, but I think Akthar Mengal of the BNP has some understanding, therefore, he is popular and will form the government in the province. He will, however, face restrictions because the Pakistan armed forces will be on the margins, watching his every move and decision," Fatah said.

The Canadian citizen of Pakistan origin author and a journalist further said that Pakistan is a country that has been living under the shadow of gun since its creation in August 1947.

"Since 1953, Pakistan is been under military rule or military authority. The difference this time is that there is widespread insurgency, that has resulted in sectarian killings, and where every political party now has their own armed wings. Previously, politicians used to campaign in jeeps or trucks with few supporters. Now, they have to move around in armed convoys. So, Pakistan will always be under a gun, and it is not some foreign gun, it is their own military guns, plus their own creation of Jihadi groups like the Pakistani Taliban, which in the end, will cause Pakistan to self destruct," Fatah said.

Commenting on the situation prevailing in Punjab in the east, Fatah said that the Nawaz Sharif-led Pakistan Muslim League (Nawaz) or PML-N, appears to have emerged as the best manager of the administration and the economy in comparison to other parties.

"They have a threat from Imran Khan, who has linked up quite openly with the Jamat-e Islami. People fear that he is a populist that can turn into a Fascist overnight, something similar to the Zulfiqar Ali Bhutto like rule. It really doesn't matter at the federal level who wins. The People's Party is going to lose the elections, that we know. The fact that they survived five years is victory enough for them, because it is the first government ever to complete a full term of office. That itself Is a laurel that they can rest on, but they cannot form the next government," Fatah added.

He also described Pakistan's former President General Pervez Musharraf as a "court jester' who has seen too many Bollywood movies.

"He (Musharraf) is the Gope (Gope Kamlani, one of Hindi cinemas most popular comedians) of the 1950's. He is simply there and playing for someone's constituency, which I can't figure out, but he is the entertainment that will be seen around. He has absolutely nothing to do with Chitral, he has nothing to do with Karachi. He is a complete rogue, a person who should be tried for treason by a military court because he overthrew not the civilian government, but the commander-in-chief. He is the general who overthrew the chief of army staff. So, he is there for entertainment purposes. He can't win, he can't lose," said Fatah

Fatah said that as of now he saw the PML-N probably winning the most electoral seats because of its better administrative skills and its management of the economy.

However, he cautioned that its partnerships with radical Jihadi groups could go against it.

He also described President Asif Ali Zardari as the smartest politician, "because his term of office continues, the chief justice would have gone, the army chief, General (Asfaq Pervez) Kayani would have gone, and who knows, Mr. Zardari can pull up a coalition with the PML-N as the leading partner and PPP as the junior partner."

"In Pakistan, politics is not based on priciples or ethics, which shouldn't surprise India. You know how it is," he said.

Fatah described Imran Khan as "just a pretty old face".

"He is a cricketer. He has no political past. It took him 40 years to understand the genocide that took place in East Pakistan. He didn't have ability to say that he has just now learnt that three million people died. He is filling the vacuum in a certain space. Pakistanis need a white knight every few months, with shining arms and comily dressed. Sometimes, it is Ayub Khan, sometimes it is Zulfiqar Ali Bhutto and sometimes it is Moulana Qadri. It is a very feural mindset that hopes that someone will deliver them, as if Sallahudin Ayubi is coming to take the crusaders out of Pakistan. It is not going to happen. He (Imran) might win about 20-30 seats, but cannot go beyond that," Fatah said.

"Pakistan was created on a lie. It is a fraudulent concept, which never had a standing, by any rational means anywhere in the world. Islam is not a nation. When a Bengali can't talk to a Kashmiri, what sort of a nation is it? You don't find Turks mingling with Somalis, it's simply not true. Mr. (Mohammad Ali) Jinnah pulled off a fraud, and, the very existence of Pakistan is based on that lie, and if there was any evidence needed, then the 1971 war with East Pakistan, and the creation of Bangladesh, proved that there is no two- nation theory," Fatah said.

"Everyone in Pakistan harps about the two-nation theory. I don't think that they either have the courage to face the truth, that it is based on a permanent wound that would keep on providing victims, people will keep on dying to keep the theory right," he added.

"Pakistan was created to stop the advance of the Soviet Union towards the Arabian Sea. The Soviet Union is dead. Pakistan is still alive, but in a fractured form. It is a state that was created for a purpose that is no longer needed. It is like a worker in a factory that has stopped production, still around, but has nothing to offer. Pakistan was not created for Islam or for Muslims. Indians might believe that. Pakistan was created by an Anglo-American enterprise to stop the Soviet advance towards the warm waters of the Indian Ocean," Fatah claimed.

He also said it would be narve of Indians to think that greater people-to-people contact between the two countries would encourage moves for peace.

"It's not going to change the predominantly Pakistani contempt for Hindus. The widespread education of over two generations is not just disgust, but hatred or a superiority complex; that they ruled India for a thousand years, and they will go back and conquer Delhi again. The only reason that (feeling) has lessened today is because of Arab money flowing into Pakistan. The Arabs want them (Pakistanis) to hate America more than they do India," he said.

He added: "As long as Pakistan is in its current form, as a militarised state, the military is not going to give up its wealth creating machine by saying we should have peace with India. No, there is a need to have war with India to sustain the military-civilian establishment. Number two as long as Pakistan's Punjabi majority, which has a serious inferiority complex about their own identity, is unwilling to acknowledge the fact that they are Punjabis of Indian ancestry, not of Arab, Turk or Persian, this identity complex will play out in hostility towards India. The moment hostility towards India stops, there is no reason for Pakistan to exist. So to sustain Pakistan, you have to hate India, and to hate India, you have to demonise Hindus."

Asked what would be the situation prevailing in Afghanistan after the withdrawal of foreign troops, he said that it all depended on who formed the next provincial government in Balochistan and Khyber Pakhtunkhwa.

"If the Pashtun nationalists lose the elections, there is 100 percent certainity that Taliban will take over Afghanistan, if in the next Pakistan elections in May, the secular nationalist Pasthun wins, there is less of a likelihood," he said.

He concluded by saying that elections in the NWFP will be of significance for the whole world, because, "the moment secular nationalists lose, the Taliban will win".

He described Pakistan as the Taliban and the country's armed forces as Al Qaeda.

"The enemy that the world is fighting is not the Taliban, Al Qaeda, it is the Pakistan armed forces, it is the Americans who fund the Pakistan armed forces, and it is the Indians who pay respect and do trade with those who seek to destroy India. It doesn't matter who wins in Islamabad, it is who wins in NWFP that will matter," he said. (ANI)

April 08, 2013

Indian Gold Reserves. Forgotten History! New Opportunity?

For the last 20 years, World Gold Council has shown India's annual gold consumption fluctuating from 400 tons to 800tons. Estimated Indian gold reserves at 25,000-30,000 tons are double of the next largest country – the USA with 14,000 tons. India has 20% of the world population and also 20% of the world's above-the-ground gold

April 07, 2013

Indian Gunpowder – the Force Behind Empires

In 1800, a son from a rich family of refugees from the French Revolution in America,after a survey of business opportunities in America, wrote

There already exist in the United States two or three mills which make very bad powder and which do however a very good business. They use saltpeter from India which is infinitely better than that which is produced in France but they refine it badly.

The son was Eleuthère Irénée du Pont, the family was the Du Pont family – and their firm is now known as EI du Pont de Nemours and Co. EU du Pont's expertise in manufacturing saltpeter came from his training with the French Agency for Powder and Saltpeter (Regie royale des poudres et Salpetres) – and under the tutelage of Antoine Lavoisier, the French chemist, he boasted.

Behind the Dupont fortune was Indian saltpetre. Behind Lincoln's success in the American Civil War was saltpetre. Behind Anglo-French confidence against Germany in WW1 was the control of the saltpetre deposits from India. Germans were able to sink many of these British saltpetre shipments. In turn, Germans with the Haber-Bosch process, in BASF factories, continued the war – without Indian saltpetre or Chilean nitrate supplies 

READ MORE http://2ndlook.wordpress.com/2010/06/18/indian-gunpowder-the-force-behind-empires/