Mexican president Felipe Calderon has lost the war against drug cartels for control of his nation, and the candidates for next July’s presidential election have all but surrendered to the drug lords already, creating a failed state on the U.S. border and undermining national security, analysts have said in a report from Joseph Farah’s G2 Bulletin.

“Relative peace and calm could set in during the second half of 2012 in Mexico, but if it does it will only represent the fruits of defeat rather than victory,” according to the open source intelligence group Langley Intelligence Network, or LIGNET, which is made up of former Central Intelligence Agency analysts and officials.

As far back as 2009, the Pentagon had warned in a report that Mexico was perilously close to become a failed state. Since then, conditions have only grown worse.

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