One 77-year-old’s search for the truth: 9/11, election fraud, illegal wars, Wall Street criminality, a stolen nuke, the neocon wars, control of the U.S. government by global corporations, the unjustified assault on Social Security, media complicity, and the "Great Recession" about to become the second Great Depression. "The most important truths are hidden from us by the powerful few who strive to steal the American dream by keeping We the People in the dark."
Wednesday, October 30, 2013
The government lies. The mainstream media repeats these lies. If We The People can't find the truth, then we -- and the entire earth -- are in deep trouble. Paul Craig Roberts: "The only advice I can give is that when you hear the presstitute media smear a concern or explanation as 'conspiracy theory,' have a closer look."
OpEdNews Op Eds 10/29/2013 at 11:14:32
Ignored Reality Is Going To Wipe Out the Human Race
By Paul Craig Roberts (about the author) Permalink
Headlined to H2 10/29/13
opednews.com
To inform people is hard slugging. Everything is lined up against the public being informed, or the policymakers for that matter. News is contaminated by its service to special interests and hidden agendas. Many scientists or their employers are dependent on federal money. Even psychologists and anthropologists were roped into the government's torture and occupation programs. Economists tell lies for corporations and Wall Street. Plant and soil scientists tell lies for agribusiness and Monsanto. Truth tellers are slandered and persecuted. However, persistence can eventually win out. In the long-run, truth sometimes emerges. But not always. And not always in time.
I have been trying to inform the American people, economists, and policymakers for more than a decade about the adverse impacts of jobs offshoring on the US economy. The word has eventually gotten out. Last week I was contacted by 8th grade students competing for their school in CSPAN's StudentCam Documentary Contest. They want to interview me on the subject of jobs offshoring for their documentary film.
America is a strange place. Here are eighth graders far ahead of the economics profession, the President, the Congress, the Federal Reserve, Wall Street, and the financial press in their understanding of one of the fundamental problems of the US economy. Yet, people say the public schools are failing. Obviously, not the one whose students contacted me.
Is it too late? I know much, but not all. So this is not the final word. I think it might be too late. When skilled jobs are sent abroad, the skills disappear at home. So do the supply chains and the businesses associated with the skills. Things close down, and abilities are lost. Why take a major in college for a job that is offshored? A culture disappears.
But we can start them back up, right? Perhaps not. When a First World country exports its technology and know-how abroad to a Third World country in order to benefit from lower cost labor, how does the First World country get the work back? Living standards and the cost of living in Third World countries are much lower than in First World countries. The populations of First World countries cannot pay their mortgages, car payments, student loans, medical care, and grocery bills with the wages of Third World countries.
When First World wages drop, mortgage, car, credit card, and student loan payments do not drop. Americans cannot live on Chinese, Indian, and Indonesian wages. Once the technology and know-how is transferred, the low-wage country has the advantage in the absence of tariff protection.
For America to revive, our economy would have to be walled off with high tariffs, and subsidies would have to be provided in order to recreate US industry and manufacturing. But many corporations now produce offshore, and America is broke. The government has been $1 trillion dollars in the hole each year for the last 5 years.
Jobs offshoring diminished the US tax base. When a job is sent abroad, so is that job's contribution to US GDP and tax base. When millions of jobs are sent abroad, US GDP and tax base cannot support government spending levels. To the extent that there are any replacement jobs, they are in lowly paid domestic services, such as waitresses, bartenders, retail clerks, and hospital orderlies. These jobs do not provide a tax base or consumer spending power comparable to manufacturing jobs and tradable professional services such as software engineering and information technology.
Republicans and increasingly Democrats, as both parties are dependent on the same sources of campaign contributions, blame "entitlements." By entitlements they mean welfare.
In fact, entitlements consist of Social Security and Medicare. Entitlements are funded by the payroll tax, approximately 15% of payroll. The fact that a person pays the payroll tax all his working life is why the person is entitled to Social Security and Medicare if they live to retirement age. Welfare, such as food stamps and housing subsidies, are a small part of the federal budget and are not entitlements.
Every since President Reagan was betrayed three decades ago by Alan Greenspan and David Stockman, both of whom sold out to Wall Street and raised the Social Security payroll tax above what was needed to pay Social Security benefits in order to protect Wall Street's stock and bond portfolios from exaggerated deficit fears, Social Security payroll tax revenues have exceeded Social Security payments. As of today, Social Security revenues exceed payments to beneficiaries by an accumulated $2 trillion. The money was used by the federal government to pay for its wars and other spending programs. The Social Security Trust Fund holds non-marketable IOUs from the Treasury. These IOUs can only be made good from an excess of tax revenues over expenditures or by the Treasury selling $2 trillion in bonds, notes, and bills and paying off its IOUs to the Social Security Trust Fund. This is not going to happen.
The Federal Reserve could not care less about the US population. The Fed was established for the purpose of protecting and aiding banks. Currently, the Fed, as if America were a Banana Republic which America appears to be becoming, is printing one thousand billion dollars per year in order to support the banks and to finance the federal deficit.
This is bad news for Americans, as it means that their fiat money is being created at a far greater rate than the demand for the dollar. The implication for our future is a drop in the dollar's value. As there are no jobs, a drop in the dollar's value means high inflation on top of unemployment and double the misery of the Great Depression.
As bad as this is, it is minor compared to the destruction of the planet's environment. Online information shows that the Gulf of Mexico ecosystem is in crisis after the BP spill and use of Corexit, a dispersant used to hide, not clean up, the spilled oil.
The Fukushima catastrophe has hardly begun. Yet already the radioactive water pouring into the Pacific Ocean has made fish dangerous to eat unless a person is willing to accept a higher risk of cancer.
Fukushima has the potential of making Japan uninhabitable and of polluting the air, water, and soil of the US with radioactivity. Yet the crisis is seldom mentioned in the US media. In Japan the government just passed a law that could be used to imprison Japanese journalists who report truthfully on the dire situation.
Take the time to familiarize yourself with the online information about Fukushima... According to the presstitute media, Americans face threats from Iran and Syria and from whistleblowers such as Edward Snowden. The real threats are simply not in the news.
If you search Fukushima, you will find information that the presstitute media hides from you. See here for example.
There are a number of other threats to the environment on which our lives depend. One is the effort to extract more productivity from the soil by use of GMOs. Monsanto has altered the genes of several crops so that the crops can be sprayed with RoundUp to eliminate weeds. The results have been to deplete the soil of nutrients, to destroy the micro-biology of the soil so that new plant diseases and funguses are activated, and to produce superweeds that require heavier doses of the glyphosate in RoundUp. The heavier dose of RoundUp worsens the aforementioned problems. US agricultural soil is losing its potency.
Now we come to chemtrails, branded another "conspiracy theory." However, the US government's efforts to geo-engineer weather as a military weapon and as a preventative of global warming appear to be real. The DARPA and HAARP programs are well known and are discussed publicly by scientists. See Search Chemtrails and you will find much information that is kept from you. Also, see here and here.
Some describe chemtrails as a plot by the New World Order, the Rothchilds, the Bilderbergers, or the Masons, to wipe out the "useless eaters." Given the amount of evil that exists in the world, these conspiracy theories might not be as farfetched as they sound.
However, I do not know that. What does seem to be possibly true is that the scientific experiments to modify and control weather are having adverse real world consequences. The claim that aluminum is being sprayed into the atmosphere and when it comes to earth is destroying the ability of soil to be productive might not be imaginary. Those concerned about chemtrails say that weather control experiments have deprived the western United States of rainfall, while sending the rain to the east where there have been hurricane level deluges and floods.
In the West, sparse rainfall and lightening storms without rain are resulting in forests drying out and burning down. Deforestation adversely affects the environment in many ways, including the process of photosynthesis by which trees convert carbon dioxide into oxygen. The massive loss of forests means more carbon dioxide and less oxygen. Watershed and species habitat are lost, and spreading aridity further depletes ground and surface water. If these results are the consequences of weather modification experiments, the experiments should be stopped.
In North Georgia where I spend some summers, during 2013 it rained for 60 consecutive days, not all day, but every day, and some days the rainfall was 12 inches -- hurricane level -- and roads were washed out. I received last summer four automated telephone warnings from local counties not to drive and not to attempt to drive through accumulations of water on the highways.
One consequence of the excess of water in the East is that this year there are no acorns in North Georgia. Zilch, zero, nada. Nothing. There is no food for the deer, the turkeys, the bear, the rodents. Starving deer will strip bark from the trees. Bears will be unable to hibernate or will be able only to partially hibernate, forced to seek food from garbage. Black bears are already invading homes in search of food.
Unusual drought in the West and unusual flood in the East could be coincidental or they could be consequences of weather modification experiments.
The US, along with most of the world, already had a water problem prior to possible disruptions of rainfall by geo-engineering. In his book, Elixir, Brian Fagan tells the story of humankind's mostly unsuccessful struggle with water. Both groundwater and surface water are vanishing. The water needs of large cities, such as Los Angeles and Phoenix, and the irrigation farming that depends on the Ogallala aquifer are unsustainable. Fagan reminds us that "the world's supply of freshwater is finite," just like the rest of nature's resources. Avoiding cataclysm requires long-range thinking, but humanity is focused on immediate needs. Long-range thinking is limited to finding another water source to deplete. Cities and agriculture have turned eyes to the Great Lakes.
Los Angeles exists because the city was able to steal water from hundreds of miles away. The city drained Owens Lake, leaving a huge salt flat in its place, drained the Owens Valley aquifer, and diverted the Owens River to LA via aqueduct. Farming and ranching in the Owens Valley collapsed. Today LA takes water from the Colorado River, which originates in Wyoming and Colorado, and from Lake Perris 440 miles away.
Water depletion is not just an American problem. Fagan reports that "underground aquifers in many places are shrinking so rapidly that NASA satellites are detecting changes in the earth's gravity."
If the government is experimenting with weather engineering, scientists are playing God when they have no idea of the consequences. It is a tendency of scientists to become absorbed by the ability to experiment and to ignore unintended consequences.
Readers have asked me to write about Fukushima and chemtrails because they trust me to tell them the truth. The problem is that I am not qualified to write about these matters with anything approaching the same confidence that I bring to economic, war and police state matters.
The only advice I can give is that when you hear the presstitute media smear a concern or explanation as "conspiracy theory," have a closer look. The divergence between what is happening and what you are told is so vast that it pays to be suspicious -- cynical even -- of what "your" government and "your" presstitute media tell you. The chances are high that it is a lie.
http://www.paulcraigroberts.org/
Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available here: http://www.amazon.com/Failure-Capitalism-Economic-Dissolution-ebook/dp/B00BLPJNWE/ref=sr_1_17?ie=UTF8&qid=1362095594&sr=8-17&keywords=paul+craig+roberts
Tuesday, October 29, 2013
Published only 6 days ago, the YouTube version of this BBC Newsnight interview has already exceeded 8 million. Russell Brand certainly has his world view right! Uplifting!
Best of the Web
Viral Video: Russell Brand May Have Started a Revolution Last Night
http://youtu.be/3YR4CseY9pk
Monday, October 28, 2013
As a preamble, Paul Craig Roberts muses over the question of whether the American people search for the facts that will determine their future or they prefer to remain ignorant of such facts and hope for the best. Then he reproduces an article by Kelly Mitchell that lays out such facts for those may want to know them. In fact Americans really should know these facts so that they can prepare for the worst that's yet to come.
Gold Wars — Kelly Mitchell
October 25, 2013 | Original Here Go here to sign up to receive email notice of this news letter
Gold Wars
I do not know what role facts, evidence, or a desire to know the truth any longer play in American lives. This article http://www.alternet.org/media/most-depressing-discovery-about-brain-ever?paging=off confirms my experience as a scholar, journalist, public policy maker, and corporate director. The vast majority of people believe what they want to believe. Facts and evidence have little to do with it. People believe what serves their hopes and self-interests as they perceive their interests (often incorrectly) and what validates their emotional commitments. A select few can think independently, but their voices are usually drowned out.
To help those who are capable of independent thought, I am posting with permission the Introduction to a new book, GOLD WARS by Kelly Mitchell, from Clarity Press. http://www.claritypress.com/Mitchell.html I encourage you to order this book and to study it. American institutions are so corrupted that no leadership can rise from the political parties, media, corporations, or universities. We are on a many-faceted course of destruction. Leadership will have to come from non-traditional sources. Perhaps those who can think independently can produce the needed leadership.
The economics profession, Wall Street, and the financial media are committed to maintaining the status quo. There is no independent thought there. The voices maintaining the Matrix in which we live are far more numerous and loud than my voice and the voices of Michael Hudson, Herman Daly, John Williams (shadowstats.com), Mike Whitney, Nomi Prins, Pam Martens, Matt Taibbi, Gerald Celente, Dave Kranzler and the few others who endeavor to break people free of the false consciousness that blinds them to reality. “Free market” economists pretend that financial markets are efficient and do not need to be regulated. Kelly Mitchell shows us that financial markets are manipulated and serve narrow private interests at the expense of society.
PCR
INTRODUCTION
The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title – anonymous
At opening bell of April 30, 2012, an anonymous player sold short $1.24 billion worth of gold. At three quarters of a million ounces, the sale slammed through over 1000 bids, up to 8400 ounces apiece in a fraction of a second. Even the Wall Street Journal ran an article on manipulation – the dump exceeded an entire average day’s trading. The perpetrator broke the law and took rapid losses of $75 million as the gold price reasserted itself in a few hours.
The WSJ failed to note that these contracts were not longs liquidating, but naked shorts – a party selling gold they did not have. These are done without posting margin. The activity is blatantly illegal.
Nonetheless, sells of this type (though not this size) are fairly common. Many occur in a thinly traded period of the day – 3am – making it doubly suspect from a profit point of view. Without multiple buy orders to hold up the price, the seller gets less and less money with each bid filled. No trader would do this for profit – if they were seeking a profit, they would have parceled it out over a period to avoid dropping the price.
The Fat Finger has been offered as an explanation. A trader could have keyed in an extra zero after the number of contracts. While this is possible, it’s highly unlikely that a sophisticated trader or trading system would have no safeguards against hundred million dollar losses because of a single accidental keystroke. The accident theory is implausible. The move more or less screams manipulation. Somebody controlling a lot of money wanted to slam the price of gold and could afford to take a sizeable loss. But why do it?
One potential seller works at the Bank for International Settlements (BIS). Mikael Charozé’s bio at the BIS listed “interventions [and]… proprietary positions on all currencies including gold,” until the Zerohedge website posted it. A few days later, those parts of his job description had been removed from the BIS site. It cannot be proved, of course, because everything lies under layers of what seems to be intentional confusion. And central banks have a wall of silent policy against any criticism, especially from the people they claim to serve. It’s all part of the gold wars.
The logic is simple enough from the bird’s eye view. A swiftly rising gold price reveals the mismanagement of the currency, like the expiring canary in the mine. Therefore it is suppressed surreptitiously. Because paper currencies rely totally on faith, central bankers take it as part of their duty to manage that faith and maintain confidence in the currency. If gold shot up to $10,000, world banks and investors would become very, very concerned about their dollar holdings. Most other items are openly managed – food and oil prices (through subsidies and reserves), inflation, inflation perception, interest rates, money supply and financial risk. Those who question the manipulation of gold should be asking the polar opposite question: why wouldn’t it be manipulated? It’s the key metric of faith-based currencies. Managing the gold price is a central banker’s job.
The gold wars are the cornerstone of a much larger overall context – currency, trade and actual wars. As part of the gold wars presentation, it’s important to establish that the financial system is secretive, corrupt and highly beneficial to a few. In short, it’s rigged. To prove this contention, it’s necessary to establish motive, means, and escape. The motive here is to preserve a failing system, the means is control of regulators, and escape from public detection is through control of public perception – the cover-up. People never know what really happened. The MF Global fiasco and other financial crimes that we will explore are an easy way to prove corruption and elite benefit. The Petrodollar/ global reserve currency system and its stunning hegemony over world politics is the principal motive. The primary means is by control of the currency. The secondary means include repeal of the Glass-Steagall Act, emplacement of corporate execs into regulatory bodies, the entrenchment of too big to fail notions and policies, and countless other methods. The escape vehicles include the loss of independent media, consolidation of media into a few companies, ignoring the public, foot- dragging investigations, obfuscation, ridicule of opposition, and secrecy by claiming national security interests. These are among the topics to be covered.
The diminishing marginal productivity of debt in the US is scary. Around 1965, the debt to GDP ratio crossed 1:1. Before then, a dollar of debt created at least a dollar of GDP increase. That’s sustainable. Since then, the long-term chart is vicious and steadily downward. In 2010, it crossed the zero bound – more debt created no GDP increase. It’s actually been forced to occur sooner because of the enormous extent of monetary creation since 2008. The sharp jag below zero is clear and striking. Debt saturation is in full swing. Incomes have not kept pace – they can no longer service the debt. It’s tough to say what happens now, but probably (and strangely) new debt will contract GDP. As the zero bound is more clearly left behind, economic dislocations become more and more violent. Volatility goes haywire. The debt creation becomes a black hole. As this book shows, we’re already there.
The central economic problem in the world today is debt saturation. This is a direct offshoot of the current monetary system – fractional reserve banking. The public has almost no understanding of how money is created and that’s extremely unfortunate. “It is well enough that people of the nation do not understand our banking and money system,” Henry Ford said. “For if they did, I believe there would be a revolution before tomorrow morning.” Money, in today’s world, is created from debt. All money is created when a bank loans it into existence. It is extinguished when the loan is paid off, but sufficient money to also pay the interest (bank profit) is not created. Consequently, there is always much more debt than money to pay it – scarcity is built in to the system. Numerous problems result, some obvious, some not. We will explore this strange system in much greater detail, but one salient fact is most disturbing. It requires perpetual growth at an increasing rate to sustain the system without implosion because of the inbuilt shortages of money. It inevitably leads to a debt crisis, as Ludwig von Mises postulated six decades ago. He called it a systemic crack-up – a global reset. Leaders have greatly increased sovereign debt in response, but the solution to debt is not more debt. It is default. What cannot go on forever not only must but will end.
In the past, money was directly issued and backed by precious metals. Or it was coinage. This required no debt and no perpetual growth. It was stable. Gold systems are not perfect – no system is. However, they have proved far more durable and self-sustaining than debt based money. True gold standard economies do not need to be centrally planned – they have built in self-corrections to prevent modern excesses. Central bankers express great disdain for such systems publicly because they prevent excesses. Gold is the mortal enemy of modern money.
Without the gold anchor, the world economy has become seriously unbalanced. Greek one-year debt hit a high of 140% interest in 2011. Under Generally Accepted Accounting Principles, the 2011 US deficit exceeds $5 trillion – far more than the government-accounted $1.5 trillion. The entire US obligations would be $60 to $200 trillion, depending on who did the estimating. The total of accounted for derivatives is $600 trillion by BIS measures and undisclosed bets might easily double that total to over a quadrillion – twenty times the world’s economy. Central bank balance sheets are bleeding red from buying worthless paper to prop up failing banks. Financial giants are leveraged at many times their reserve assets, making them insolvent in even a slight downdraft. The Federal Reserve has issued $23 trillion in zero interest loans since 2008. Something is seriously wrong. The global economic system is dying and the illness is being hidden from view.
Trust is one of the great missing elements of today’s system. That lack is a primary reason that precious metals will continue to steepen in demand –they alone require no trust. There are many components of trust necessary for a strongly functioning economic system. Virtually all of these components are now AWOL. A citizenry must believe that its leadership has their best interests at heart, even if the actions taken are less than perfect. If the leaders are seen not as flawed, but as corrupt, deeply self-interested, or worse, tyrannical, then many decades of trust will evaporate in a few years. We are close to that point.
Likewise, the citizens must believe the banks are functional utilities serving a basic societal need rather than profit-driven entities focused on investment and returns. Today, most people think that banks are wildly speculative enterprises, risking the nation’s very health. The truth is less important than the perception. Some make the case that in actuality leadership and finance have been utterly self-interested for a very long time and have simply managed to disguise that fact from the public through skillful and extensive PR. Because the increasing systemic strains are making it impossible to paper over, the truth is emerging. The evidence of long-scale deception is an interesting topic we will address.
One very strange lacuna in our civilization is the lack of monetary knowledge. In a well-educated system which prides itself on fundamental capitalist values, a knowledge of money would seem to be de rigeur. America lives and breathes money: it “makes the world go ’round.” Yet mysteriously, almost no one understands this most basic and essential fact of our lives. What is money? Where does it come from? The old saw that money does not grow on trees is no longer true – money is paper. Gold has been de-monitized. It is less than paper in the case of electronic money – it is just a number in a computer.
Why the ignorance? It seems fair to blame the educational system. According to John Taylor Gatto, the missing substance is deliberate. Gatto, named Teacher of the Year, the highest honor in education, condemned the system in his acceptance speech. He roundly criticized it for deliberate mal- education of the entire population. The Department of Education was more or less designed by large private endowments. Big capital, Gatto claimed, wants a society of citizens poorly informed about many things, especially money creation and its link to their exploitation and manipulation. Citizens are kept more compliant due to their ignorance and far less willing to question the system of big capital presently in place, or who benefits. This is breeding a society of workers, not entrepreneurs capable of innovative and nimble planning, whether on a micro scale suited to meager resources, or larger. We have a system of unbridled paper money creation, a citizenry totally ignorant of its mechanics, and a deliberate veiling of the powers that actually control it. If money is power, then the government-given authority to create it affords the exponential manifestation of that power. Keeping citizens uninformed safeguards the power holders from revolution – or at least, revolution directed at them. Cattle are easy to control.
The deeper implications of these facts are frightening when fully understood, and history bears this out many times over. Governments with too much centralized power – whether from misguided public trust or harsh repression – inevitably abuse the privilege of unbacked currencies. We’ll get into some instances in the hyperinflation section. The warfare/welfare state is as old as repressive government. Rome achieved citizen compliance through a system of public dole and extravaganzas, featuring slaughter of undesirables; historians called it ‘bread and circuses.’ Politicians buy loyalty or enforce obedience. Both are extraordinarily expensive, beyond a sound currency’s ability to support. Paper (or digital) currencies permit terrible abuses, including unrestrained war, and tyranny because there is no check on spending (or rather, printing.) The current system is out of all control. Black Swan events are causing bouts of alternating debt deflation and the policy response of firehose monetary inflation. The real economy is being destroyed by the far larger speculative economy. Short term solutions are only making the long-term problems worse.
There is now a tremendous amount of confusion, complexity, and uncertainty in the financial system. It might even be described as chaos. New terms are emerging – debt holocaust, Europocalypse, and financial Armageddon. Phrases such as “uncharted territory,” “never before seen conditions,” seem to be popping up all over the net and even in the mainstream. No one fully comprehends the depth and breadth of the issues – it’s too vast. Therefore no one can create a real solution to save the existing mechanisms. Indeed, no solution may be possible. The reset button has been hit before – four times in the twentieth century. But this time the problems are much larger and aggravated by real resource constraints. The planet is tapped out. Growth is at its maximum. The wall is right in front of us and we are flying towards it at full speed. The system may somehow muddle through, but fools ignore these problems at their peril. In such situations, vast wealth has a historical tendency to disappear. That’s because this paper-based wealth is largely illusory.
Some wealth denominators, like derivatives, are far more insubstantial than others, like the value of precious metals. Derivatives require trust in the system and the organizations holding the other end of the contracts. The system must hold fast the value of the currency, the other party must honor the letter and intent of a complex contract, a regulatory agency might be needed to enforce it, that agency must not be compromised, and the other institution must have both the solvency and liquidity to back it up. That’s actually a lot of links requiring trust. It’s been taken for granted – up to now. We will examine recent events that have shaken the system upside down. Hordes of honest investors and deep pockets are jumping out of major markets. They cite manipulation, lack of confidence, and even fear of outright theft.
Precious metals (PMs), held in one’s own possession, require very little trust. Gold is corruption insurance. It has no counterparty obligation. There is no other entity required to uphold the value of PMs – society as a whole is the guarantor of value (though a concern remains re their market manipulation). Metals have retained value for thousands of years – their manipulation is only short-term, and largely unsustainable. Unlike paper, gold never goes to zero. Other than that, the only risk is theft of actual physical holdings – a relatively low risk, especially if holdings are kept secret and are well-secured. In times of massive distrust, fear, and economic corruption, gold and silver become highly valued for many reasons. Systems which seek power and control hate gold. The gold wars are not new. In ancient China, people were put to death for refusing the paper currency and demanding gold. Likewise in 18th Century France. Examples are plentiful and we will cover some very instructive ones.
Nowadays, serious problems, even crises, are popping up more frequently. Fear and suspicion reign. Class war is raising its head. According to Warren Buffet, class war is already ongoing and his class, the wealthy, is winning. That’s because only the wealthy understand the need to pay attention to economics. This failure by the middle class is already destroying it. People who are otherwise well educated have lost their life savings in a puff of rehypothecated smoke. Today’s financial markets are little more than casinos. The long cold trade war between the uneasy great power allies – China and the US – is heating up. It is becoming a currency war. Bank runs are already happening silently (because uncovered by the mainstream media) in southern Europe. The Greek government has failed. Portugal, Spain, and even Italy are teetering on the cliff of default. The derivatives based on their sovereign bonds number in the hundreds of trillions of dollars – they’re like quicksand under the global banking system. Sovereign debt is going parabolic — rising at an ever-increasing rate. Realistic unemployment numbers are approaching Great Depression levels. Tent cities are appearing nationwide. Municipalities are going bankrupt. Bizarre crime is escalating.
States are beginning to rise against the Federal government. Federal laws like Obamacare and NDAA are being rejected by state governments as unconstitutional. Some even declare a right and intent to arrest federal agents enforcing unconstitutional laws. Ron Paul made a serious run at the presidency by bucking the establishment. He fathered a groundswell of public outcry to audit the Federal Reserve, even shut it down. Occupy Wall Street became a global movement against the bankers. Particularly targeted is Goldman Sachs, which has or has had former executives as head of the European Central Bank, the Federal Reserve, the Bank of Canada, the NY Fed, the US Treasury, and in line for the Bank of England, as well as serving as unelected prime ministers of Greece and Italy, and as creators of the Euro currency. GSax has a less flattering moniker – the great vampire squid with its tentacles sucking blood from the world economy. The policy of too big to fail has created moral hazard on a scale that threatens the world’s financial system.
The drums of war beat louder every day against the oil-rich Middle East and especially Iran to forestall or divert attention from financial collapse. Bizarre political issues arise, such as birthers questioning Obama’s natural born citizenship status and claiming he is thereby an unconstitutional president. Meanwhile, the executive branch conducts wars without Congressional approval, burdening the nation with out-of-control debt. The world grows increasingly skeptical of US good intentions and perhaps more worrying for its leadership, of its capacity to enforce its will, leading to increasingly open hostility towards the United States. No one trusts anyone anymore. Amidst these situations, the idea of the world economy erupting in flames appears not only more and more possible. To those paying attention, it’s already happening.
***
And here is former Goldman Sachs executive Pam Martens on the impunity of the financial gangsters:
http://wallstreetonparade.com/2013/09/jpmorgan-found-to-have-violated-both-banking-and-securities-laws-in-920-million-settlement/
Friday, October 25, 2013
Excerpt: "Washington served as cheerleader, as did most economists and libertarians, while US corporations, greedy for short-term profits and executive bonuses, offshored US industry and manufacturing, calling it free trade. The obvious and predicted result is that China’s demand for resources needed to fuel its industrial and manufacturing power now dominates markets. This means that the US dollar is being displaced as world currency. The only market that America dominates is the market for financial fraud."
As Ye Sow, So Shall Ye Reap — Paul Craig Roberts
October 23, 2013 | Original Here Go here to sign up to receive email notice of this news letter
As Ye Sow, So Shall Ye Reap
Paul Craig Roberts
The year 2014 could be shaping up as the year that the chickens come home to roost.
Americans, even well-informed ones, don’t know all of the mistakes made by neoconized and corrupted Washington in the past two decades. However, enough is known to see that the US has lost economic and political power, and that the loss is irreversible.
The economic cost of this lost will be born by what remains of the middle class and the increasingly poverty-stricken lower class. The one percent will have offshore gold holdings and large sums of money in foreign currencies and other foreign assets to see them through.
In the political arena, the collapse of the Soviet Union presented Washington with the grand opportunity to reallocate the Pentagon budget to other uses. Part of the reduction could have been returned to taxpayers for their own use. Another part could have been used to improve worn out infrastructure. And another part could have been used to repair and improve the social safety net, thus insuring domestic tranquility. A final, but perhaps most important part, could have been used to begin repaying the Treasury IOUs in the Social Security Trust Fund from which Washington has borrowed and spent $2 trillion, leaving non-marketable IOUs in the place of the Social Security payroll tax revenues that Washington raided in order to fund its wars and current operations.
Instead, influenced by neoconservative warmongers who advocated America using its “sole superpower” status to establish hegemony over the world, Washington let hubris and arrogance run away with it. The consequence was that Washington destroyed its soft power with lies and war crimes, only to find that its military power was insufficient to support its occupation of Iraq, its conquest of Afghanistan, and its financial imperialism.
Now seen universally as a lawless warmonger and a nuisance, Washington’s soft power has been squandered. With its influence on the wane, Washington has become more of a bully. In response, the rest of the world is isolating Washington.
The prime minister of India, Manmohan Singh, recently declared China and Russia to be India’s “most important partners” with whom India shares “common strategic interests.” Prime Minister Singh said: “ India and Russia have always had a convergence of views on global and regional issues, and we value Russia’s perspective on international developments of mutual interest.”
India joined China in expressing concerns about the Federal Reserve’s practice of printing money in order to cover Washington’s vast red ink. The BRICS (Brazil, Russia, India, China, South Africa) are taking steps to create their own method of settling trade accounts in order to protect themselves from the looming dollar implosion,
China has forcefully called for a “de-Americanized world.” After watching the “superpower” offshore a large part of its GDP to China and then add to the diminished tax base the burden of $6 trillion in wars that brought no booty and served no US interest, China has concluded that American power is spent. The London Telegraph thinks “it is only a matter of time before the renminbi replaces the dollar as the primary currency for trading commodities and resources.”
The Obama regime attempted to attack Syria based on the sort of lies that the Bush regime used to invade Iraq, only to be slapped down by the British Parliament and Russian government. This rebuke was followed by the childishness of the government shutdown and threat of default. Consequently, the Washington morons have lost their monopoly on economic and political leadership. A few days ago the British government announced a historic agreement that permits British investors direct access to China’s markets and allows Chinese banks to expand their operations in Great Britain.
In Australia, the US dollar will no longer be used as the currency in which to settle the Australian trade accounts with China. Instead of dollars, trade will be settled in the Chinese currency.
Washington served as cheerleader, as did most economists and libertarians, while US corporations, greedy for short-term profits and executive bonuses, offshored US industry and manufacturing, calling it free trade. The obvious and predicted result is that China’s demand for resources needed to fuel its industrial and manufacturing power now dominates markets. This means that the US dollar is being displaced as world currency. The only market that America dominates is the market for financial fraud.
When industrial, manufacturing, and tradeable professional service jobs are offshored, they take US GDP and tax base with them. The foreign country gets the benefit of the relocated economic activity. Due to the revenues lost from jobs offshoring, there is a large gap between federal revenues and federal expenditures. As Washington’s irresponsible behavior has raised so many doubts about the dollar’s value and the government’s commitment to stand behind its massive debt, foreign countries with trade surpluses with the US are less and less willing to recycle those surpluses into the purchase of US Treasury debt.
Today the two largest holders of US Treasury debt are not investors or even foreign central banks. The two largest holders are the Federal Reserve and the Social Security Trust Fund.
As for those $6 trillion wars, that’s to pay for national defense to protect us from women, children, and village elders in far away countries devoid of air forces and navies, and to provide those recycled taxpayer monies from the military/security complex that find their way into political contributions.
The Wall Street gangsters sighed for relief over the last minute debt ceiling agreement. This shows how short-term Wall Street’s outlook is. All the October agreement did was to push off the crisis to January and February. The “debt ceiling agreement” did not produce a new debt ceiling that would last beyond February, and it did not resolve the large difference between federal revenues and expenditures. In other words, the can was again kicked down the road. A repeat of the October fiasco won’t play well.
Obamacare is causing the premiums on private insurance polices to rise substantially, almost doubling in some situations unless people move to the uncertain exchanges, and Obamacare’s raid on Medicare payroll tax revenues has resulted in a cut in Medicare payments to health care providers. The result is a further reduction in consumer discretionary income and a further drop in the economy.
This in turn means a larger federal budget deficit and the need for the Federal Reserve to purchase more debt.
Another reason the Federal Reserve is faced with increasing, not tapering, quantitative easing (money printing) is the decline in foreign purchases of US Treasury bills, notes, and bonds. As the instruments pay interest that is less than the rate of inflation, holding Treasury debt makes no sense when the dollar’s value and the potential of default are open questions.
According to reports, not only are foreign governments, such as China, ceasing to buy US Treasury debt, China has started to sell off its holdings, substituting gold in the place of US Treasury debt.
This means that the bonds must be purchased by the Fed or interest rates will rise as the increased supply of bonds on the market drives down bond prices. The only way the Fed can purchase a larger supply of bonds is by printing more money, that is, by more quantitative easing.
With the world moving away from using the dollar to settle international accounts, as the Fed prints more dollars the rate at which foreign holders of dollar assets sell off their holdings will rise.
To get out of dollars requires that the dollar proceeds from selling Treasuries, US stocks and US real estate be sold in the currency markets. The selling of dollars drives down the exchange value of the US dollar and results in rising US inflation. The Fed can print money with which to purchase Treasury debt, but it cannot print foreign currencies with which to purchase dollars.
The decline in the dollar’s exchange value and the domestic inflation that results will force the Fed to stop printing. What then covers the gap between revenues and expenditures? The likely answer is private pensions and any other asset that Washington can get its hands on.
Initially, private pensions will be taxed at a rate to recover the tax-free accumulation in the pensions. The second year a national emergency will be used to confiscate some share of pensions. Those relying on the pensions will find themselves with less income. Consumer spending will decline. The economy will worsen. The deficit will widen.
You can see where this is going, and there seems to be no way out. Policymakers, economists, and corporation executives are in denial about the adverse effects of offshoring, which they still, despite all the evidence, maintain is good for the economy. So nothing will be done about offshoring. Republicans will blame the budget deficit on welfare and entitlements, and if those are cut consumer spending will decline further, widening the budget deficit. Inflation will rise as incomes fall, and social cohesion will break down.
Now you know why Homeland Security purchased 1.6 billion rounds of ammunition, enough ammunition to fight the Iraq war for 12 years, has its own para-military force and 2,700 tanks. If you think the “terrorist threat” in America warrants a domestic armed force of this size, you are out of your mind. This force has been assembled to deal with starving and homeless people in the streets of America.
September employment report: According to the Bureau of Labor Statistics (BLS), September brought 148,000 new jobs, enough to keep up with population growth but not reduce the unemployment rate. Moreover, John Williams (shadowstats.com) says that one-third of these jobs, or 50,000 per month on average, are phantom jobs produced by the birth-death model that during difficult economic times overestimates the number of new jobs from business startups and underestimates job losses from business failures.
The BLS reports that 22,000 of September’s jobs were new hires by state governments, which seems odd in view of the ongoing state budgetary difficulties.
In the private sector, wholesale and retail trade produced 36,900 new jobs, which seems odd in light of the absence of growth in real median family income and real retail sales.
Transportation and warehousing produced 23,400 new jobs, concentrated in transit and ground passenger transportation. This also seems odd unless the price of gasoline and pinched budgets are forcing people onto public transportation.
Professional and business services accounted for 32,000 jobs of which 63% are temporary help jobs.
So here you have the job picture that the presstitutes, hyping “the jobs gain,” don’t tell you. The scary part of the September job report is that the usual standby, the category of waitresses and bartenders, which has accounted for a large part of every reported jobs gain since I began reporting the monthly statistics, shows job loss. Seven thousand one hundred waitresses and bartenders lost their jobs in September. If this figure is not a fluke, it is bad news. It signals that fewer Americans can afford to eat and drink out.
The unemployment rate that is reported is the rate that does not count as unemployed discouraged workers who are unable to find jobs and cease to look. This favored rate, the darling of the regime in power, the presstitutes, and Wall Street, also is not adjusted for the category of “involuntary part-time workers,” those whose hours have been cut back or because they are unable to find a full-time job. Obamacare, as is widely reported, is causing employers to shift their work forces from full time to part time in order to avoid costs associated with Obamacare. The BLS places the number of involuntary part-time workers at 7,900,000.
The announced 7.2% unemployment rate is a meaningless number. The rate can decline for no other reason than people unable to find jobs drop out of the work force. You are not counted in the work force if you are discouraged about finding a job and no longer look for a job.
The phenomena of discouraged workers shows up in the measure of the labor force participation rate, which has declined in the 21st century. The opportunities for American labor are so restricted that a rising percentage of the working age population have given up looking for jobs.
Yet, the Obama regime, the Wall Street gangsters, and the pressitute media tell us how much better the economic situation is becoming as more small businesses close, as memberships decline in golf clubs, as more university graduates return home to live with their parents, who are drawing down their savings to live, as Fed Chairman Bernanke has made it impossible for them to live on interest payments on their savings.
According to the US census bureau, real median household income in 2012 was $51,017, down 9% from $56,080 in 1999, 13 years ago. In contrast, annual compensation in 2012 for US CEOs broke all records. Two CEOs were paid more than $1 billion, and the worst paid among the top ten took home $100 million. When the presstitutes speak of economic recovery, they mean recovery for the one percent.
America is in the toilet, and the rest of the world knows it. But the neocons who rule in Washington and their Israeli ally are determined that Washington start yet more wars to create lebensraum for Israel.
Early in the 21st century the liberal Democrat Senator from New York, Chuck Schumer, and I coauthored an article in the New York Times about the adverse effects on the US economy of jobs offshoring. The article caused a sensation. The Brookings Institution in Washington quickly convened a conference which was covered by C-SPAN. C-SPAN rebroadcast the conference several times. During the conference I said that if jobs offshoring continued, the US would be a third world economy in 20 years.
Wall Street quickly shut up Senator Schumer, but I am sticking by my forecast. Indeed, I think we are already there.
Friday, October 18, 2013
Chase Bank's recent covert imposition on its small-business depositors is a warning that "the end is near." Not the end for the banks and banksters, rather for their depositors who they will rob. The 1999 repeal of the Glass-Steagall Act that had separated depository and investment banking now allows banks to commingle their deposits and investments. And because of the Dodd-Frank Act, banks can no longer be bailed out by the government. So the next crash will result in Cyprus-style “bail-ins,” meaning (legal!) confiscation of depositor funds in order to recapitalize the failed (criminal) banks. The FDIC doesn't have enough money to reimburse more than 0.25% of the victims, which may include you if you don’t take precautionary action soon. To learn more about this impending outrage, go here:
http://impactglassman.blogspot.mx/2013/09/not-only-are-your-savings-and-checing.html
.
Home › Headlines › Chase Bank confirms to Infowars that all business account holders were being subjected to cash & transfer restrictions
Chase Bank confirms to Infowars that all business account holders were being subjected to cash & transfer restrictions
Posted on October 16, 2013 by Stacy Herbert
Stacy Summary: While the US is negotiating ‘free trade’ deals, more and more domestic companies are not so free to trade. No doubt, the propaganda on tv will tell you that these small companies in America are FREE to compete with the likes of Walmart, etc. and that it’s their own failings which make them unable to outdo the clever, competitive Walmarts of the world. What we’re witnessing, however, is increasingly open system of systemic financial discrimination against all but the oligarchs and monopolists. And, finally, the whole Western world is being Cyprus’d, first slowly and then it will be as suddenly as in Cyprus.
Chase Bank Limits Cash Withdrawals, Bans International Wire Transfers
Money Is Not Safe In The Big Banks
http://youtu.be/jPsOopzp7e4
.
.
Home › Headlines › Chase Bank confirms to Infowars that all business account holders were being subjected to cash & transfer restrictions
Chase Bank confirms to Infowars that all business account holders were being subjected to cash & transfer restrictions
Posted on October 16, 2013 by Stacy Herbert
Stacy Summary: While the US is negotiating ‘free trade’ deals, more and more domestic companies are not so free to trade. No doubt, the propaganda on tv will tell you that these small companies in America are FREE to compete with the likes of Walmart, etc. and that it’s their own failings which make them unable to outdo the clever, competitive Walmarts of the world. What we’re witnessing, however, is increasingly open system of systemic financial discrimination against all but the oligarchs and monopolists. And, finally, the whole Western world is being Cyprus’d, first slowly and then it will be as suddenly as in Cyprus.
Chase Bank Limits Cash Withdrawals, Bans International Wire Transfers
UPDATE: Chase Bank confirmed to Infowars that all business account holders were being subjected to these new regulations. They indicated that customers would have to pay a fee on every dollar withdrawn over the limit. Given that even a relatively small grocery store or restaurant is likely to turnover more than $50k a month in cash payments, this appears to be part of a wider move to shut down businesses who mainly deal in cash. The bottom line is that banks think your money is their money and will do everything in their power to prevent you from withdrawing it.
Blogger's Note: The excellent video below provides definite proof of what will happen to depositors' money when (not if!) the big banks fail. Please take heed!!!
Money Is Not Safe In The Big Banks
http://youtu.be/jPsOopzp7e4
Wednesday, October 16, 2013
Paul Craig Roberts: "All the proof that you need that you cannot trust the mainstream media." The Blogger: "Those who do trust the mainstream media will be the last to realize what cruelties your government has in store for you."
The perfect epitaph for establishment journalism
'If MI5 warns that this is not in the public interest who am I to disbelieve them?', says the former editor of The Independent
Glenn Greenwald
theguardian.com, Monday 14 October 2013 13.23 BST
Some journalists view this as an inviolable decree that may not be questioned or defied Photograph: Alamy |
In other words, if the government tells me I shouldn't publish something, who am I as a journalist to disobey? Put that on the tombstone of western establishment journalism. It perfectly encapsulates the death spiral of large journalistic outlets.
Lest you think that the headline does not fairly represent the content of the column, Blackhurst, in explaining why he would never have allowed his newspaper to publish any of the documents from NSA whistleblower Edward Snowden, actually wrote:
If the security services insist something is contrary to the public interest, and might harm their operations, who am I (despite my grounding from Watergate onwards) to disbelieve them?"Most people, let alone journalists, would be far too embarrassed to admit they harbor such subservient, obsequious sentiments. It's one thing to accord some deference or presumption of good will to political officials, but the desire to demonstrate some minimal human dignity, by itself, would preclude most people from publicly confessing that they have willingly sacrificed all of their independent judgment and autonomy to the superior, secret decrees of those who wield the greatest power. Chris Blackhurst has obviously liberated himself from these inhibitions, though not entirely, as he infuses insincere caveats like this into his paean to the virtues of obedience: "I'm cynical about officialdom, having seen too many cover-ups and appalling injustices carried out in our name." One would think that most journalists (particularly those who edit a newspaper called "The Independent") would want to maintain at least a pretense of independent thought and thus refrain from acknowledging such cringe-inducing things about themselves.
Still, what Blackhurst is revealing here is indeed a predominant mindset among many in the media class. Journalists should not disobey the dictates of those in power. Once national security state officials decree that what they are doing should be kept concealed from the public - once they pound their mighty "SECRET" stamp onto their behavior - it is the supreme duty of all citizens, including journalists, to honor that and never utter in public what they have done. Indeed, it is not only morally wrong, but criminal, to defy these dictates. After all, "who am I to disbelieve them?"
That this mentality condemns - and would render outlawed - most of the worthwhile investigative journalism over the last several decades never seems to occur to good journalistic servants like Blackhurst. National security state officials also decreed that it would "not be in the public interest" to report on the Pentagon Papers, or the My Lai massacre, or the network of CIA black sites in which detainees were tortured, or the NSA warrantless eavesdropping program, or the documents negating claims of Iraqi WMDs, or a whole litany of waste, corruption and illegality that once bore the "top secret" label. Indeed, one of the best reporters in the UK, Duncan Campbell, works for Blackhurst's newspaper, and he was arrested and prosecuted by the UK government in the 1970s for the "crime" of disclosing the existence of the GCHQ. When Blackhurst sees Campbell in the hallways, does he ask him: "who are you to have decided on your own to disclose that which UK officials had told you should remain concealed?"
The NSA reporting enabled by Snowden's whistleblowing has triggered a worldwide debate over internet freedom and privacy, reform movements in numerous national legislatures, multiple whistleblowing prizes for Snowden, and the first-ever recognition of just how pervasive and invasive is the system of suspicionless surveillance being built by the US and the UK. It does not surprise me that authoritarian factions, including (especially) establishment journalists, prefer that none of this reporting and debate happened and that we all instead remained blissfully ignorant about it. But it does still surprise me when people calling themselves "journalists" openly admit to thinking this way. But when they do so, they do us a service, as it lays so vividly bare just how wide the gap is between the claimed function of establishment journalists and the actual role they fulfill.
Tuesday, October 15, 2013
It appears that the House Republicans changed the rules of the House to make them the only ones who can stop the government shutdown once started. The last government shutdown of 21 days cost the economy $2 BILLION. I move that We The People demand that these rogue Republicans pay the cost of their caper out of their own pockets or be sent to debtors' prison.
http://youtu.be/0Jd-iaYLO1A The GOP's little rule change they hoped you wouldn't notice
Chris Van Hollen
Published on Oct 12, 2013
http://twitter.com/ChrisVanHollen
http://facebook.com/ChrisVanHollen
Late in the evening on September 30, 2013, the House Rules Committee Republicans changed the Rules of the House so that the ONLY Member allowed to call up the Senate's clean CR for a vote was Majority Leader Eric Cantor or his designee -- all but guaranteeing the government would shut down a few hours later and would stay shut down. Previously, any Member would have had the right to bring the CR up for a vote. Democracy has been suspended in the House of Representatives.
Senator Bernie Sanders is interviewed on CNN by presstitute Wolf Blitzer RE what should be done about the Republican blackmail
http://youtu.be/yJWe1v5KO8o
Sen. Bernie Sanders on The Situation Room with Wolf Blitzer (CNN)
Bernie Sanders
Published on Oct 11, 2013
Monday, October 14, 2013
This is the lowest government satisfaction rating in Gallup's history. Why am I not surprised?
October 10, 2013
Americans' Satisfaction With U.S. Gov't Drops to New Low
Democrats remain most likely to be satisfied, but much less so than in Septemberby Joy Wilke
This article is part of an ongoing series analyzing how the government shutdown and the debate over raising the debt ceiling are affecting Americans' views of government, government leaders, political parties, the economy, and the country in general.
PRINCETON, NJ -- Eighteen percent of Americans are satisfied with the way the nation is being governed, down 14 percentage points from the 32% recorded last month before the partial government shutdown began. This is the lowest government satisfaction rating in Gallup's history of asking the question dating back to 1971.
The previous low of 19% was recorded in September 2011, just after Washington lawmakers reached a last-minute agreement that forestalled a government default. More broadly, less than half of Americans have been satisfied with the government since 2004.
These most recent data are based on an Oct. 3-6 Gallup poll, and are the latest in a series of reports underscoring the negative impact the shutdown is having on Americans' attitudes toward their government.
Prior to 2011, the lowest level of satisfaction with the way the nation is being governed was 26% recorded in September 1973 -- in the middle of the Watergate scandal.
Democrats' Satisfaction Sinks Sharply Amid Government Shutdown
Democrats are more likely to be satisfied with the way the nation is being governed (28%) than are Republicans (8%) or independents (15%). This partisan difference was even greater last month, when 54% of Democrats were satisfied, compared with 11% of Republicans. Thus, Democrats' higher satisfaction with government has apparently been significantly eroded by the current events in Washington, while Republicans have maintained their already low satisfaction levels.
Monday, October 07, 2013
The first part of this post by Ellen Brown is apocalyptic whereas the second part optimistically describes a solution to the apocalypse THAT MAY VERY POSSIBLY OCCUR ON OCTOBER 17 AND IS VERY LIKELY NOT TO BE SETTLED QUICKLY! Moral: stock up on food, things that could be traded for food, and cash dollars before the 17th! It would be tragic to be caught unprepaired!
Is Homeland Security Preparing for the Next Wall Street Collapse?
Posted on October 7, 2013 by Ellen Brown
Reports are that the Department of Homeland Security (DHS) is engaged in a massive, covert military buildup. An article in the Associated Press in February confirmed an open purchase order by DHS for 1.6 billion rounds of ammunition. According to an op-ed in Forbes, that’s enough to sustain an Iraq-sized war for over twenty years. DHS has also acquired heavily armored tanks, which have been seen roaming the streets. Evidently somebody in government is expecting some serious civil unrest. The question is, why?
Recently revealed statements by former UK Prime Minister Gordon Brown at the height of the banking crisis in October 2008 could give some insights into that question. An article on BBC News on September 21, 2013, drew from an explosive autobiography called Power Trip by Brown’s spin doctor Damian McBride, who said the prime minister was worried that law and order could collapse during the financial crisis. McBride quoted Brown as saying:
How to deal with that threat? Brown said, “We’d have to think: do we have curfews, do we put the Army on the streets, how do we get order back?”If the banks are shutting their doors, and the cash points aren’t working, and people go to Tesco [a grocery chain] and their cards aren’t being accepted, the whole thing will just explode.
If you can’t buy food or petrol or medicine for your kids, people will just start breaking the windows and helping themselves.
And as soon as people see that on TV, that’s the end, because everyone will think that’s OK now, that’s just what we all have to do. It’ll be anarchy. That’s what could happen tomorrow.
McBride wrote in his book Power Trip, “It was extraordinary to see Gordon so totally gripped by the danger of what he was about to do, but equally convinced that decisive action had to be taken immediately.” He compared the threat to the Cuban Missile Crisis.
Fear of this threat was echoed in September 2008 by US Treasury Secretary Hank Paulson, who reportedly warned that the US government might have to resort to martial law if Wall Street were not bailed out from the credit collapse.
In both countries, martial law was avoided when their legislatures succumbed to pressure and bailed out the banks. But many pundits are saying that another collapse is imminent; and this time, governments may not be so willing to step up to the plate.
The Next Time WILL Be Different
What triggered the 2008 crisis was a run, not in the conventional banking system, but in the “shadow” banking system, a collection of non-bank financial intermediaries that provide services similar to traditional commercial banks but are unregulated. They include hedge funds, money market funds, credit investment funds, exchange-traded funds, private equity funds, securities broker dealers, securitization and finance companies. Investment banks and commercial banks may also conduct much of their business in the shadows of this unregulated system.
The shadow financial casino has only grown larger since 2008; and in the next Lehman-style collapse, government bailouts may not be available. According to President Obama in his remarks on the Dodd-Frank Act on July 15, 2010, “Because of this reform, . . . there will be no more taxpayer funded bailouts – period.”
Governments in Europe are also shying away from further bailouts. The Financial Stability Board (FSB) in Switzerland has therefore required the systemically risky banks to devise “living wills” setting forth what they will do in the event of insolvency. The template established by the FSB requires them to “bail in” their creditors; and depositors, it turns out, are the largest class of bank creditor. (For fuller discussion, see my earlier article here.)
When depositors cannot access their bank accounts to get money for food for the kids, they could well start breaking store windows and helping themselves. Worse, they might plot to overthrow the financier-controlled government. Witness Greece, where increasing disillusionment with the ability of the government to rescue the citizens from the worst depression since 1929 has precipitated riots and threats of violent overthrow.
Fear of that result could explain the massive, government-authorized spying on American citizens, the domestic use of drones, and the elimination of due process and of “posse comitatus” (the federal law prohibiting the military from enforcing “law and order” on non-federal property). Constitutional protections are being thrown out the window in favor of protecting the elite class in power.
The Looming Debt Ceiling Crisis
The next crisis on the agenda appears to be the October 17th deadline for agreeing on a federal budget or risking default on the government’s loans. It may only be a coincidence, but two large-scale drills are scheduled to take place the same day, the “Great ShakeOut Earthquake Drill” and the “Quantum Dawn 2 Cyber Attack Bank Drill.” According to a Bloomberg news clip on the bank drill, the attacks being prepared for are from hackers, state-sponsored espionage, and organized crime (financial fraud). One interviewee stated, “You might experience that your online banking is down . . . . You might experience that you can’t log in.” It sounds like a dress rehearsal for the Great American Bail-in.
Ominous as all this is, it has a bright side. Bail-ins and martial law can be seen as the last desperate thrashings of a dinosaur. The exploitative financial scheme responsible for turning millions out of their jobs and their homes has reached the end of the line. Crisis in the current scheme means opportunity for those more sustainable solutions waiting in the wings.
Other countries faced with a collapse in their debt-based borrowed currencies have survived and thrived by issuing their own. When the dollar-pegged currency collapsed in Argentina in 2001, the national government returned to issuing its own pesos; municipal governments paid with “debt-canceling bonds” that circulated as currency; and neighborhoods traded with community currencies. After the German currency collapsed in the 1920s, the government turned the economy around in the 1930s by issuing “MEFO” bills that circulated as currency. When England ran out of gold in 1914, the government issued “Bradbury pounds” similar to the Greenbacks issued by Abraham Lincoln during the US Civil War.
Today our government could avoid the debt ceiling crisis by doing something similar: it could simply mint some trillion dollar coins and deposit them in an account. That alternative could be pursued by the Administration immediately, without going to Congress or changing the law, as discussed in my earlier article here. It need not be inflationary, since Congress could still spend only what it passed in its budget. And if Congress did expand its budget for infrastructure and job creation, that would actually be good for the economy, since hoarding cash and paying down loans have significantly shrunk the circulating money supply.
Peer-to-peer Trading and Public Banks
At the local level, we need to set up an alternative system that provides safety for depositors, funds small and medium-sized businesses, and serves the needs of the community.
Much progress has already been made on that front in the peer-to-peer economy. In a September 27th article titled “Peer-to-Peer Economy Thrives as Activists Vacate the System,” Eric Blair reports that the Occupy Movement is engaged in a peaceful revolution in which people are abandoning the established system in favor of a “sharing economy.” Trading occurs between individuals, without taxes, regulations or licenses, and in some cases without government-issued currency.
Peer-to-peer trading happens largely on the Internet, where customer reviews rather than regulation keep sellers honest. It started with eBay and Craigslist and has grown exponentially since. Bitcoin is a private currency outside the prying eyes of regulators. Software is being devised that circumvents NSA spying. Bank loans are being shunned in favor of crowdfunding. Local food co-ops are also a form of opting out of the corporate-government system.
Peer-to-peer trading works for local exchange, but we also need a way to protect our dollars, both public and private. We need dollars to pay at least some of our bills, and businesses need them to acquire raw materials. We also need a way to protect our public revenues, which are currently deposited and invested in Wall Street banks that have heavy derivatives exposure.
To meet those needs, we can set up publicly-owned banks on the model of the Bank of North Dakota, currently our only state-owned depository bank. The BND is mandated by law to receive all the state’s deposits and to serve the public interest. Ideally, every state would have one of these “mini-Feds.” Counties and cities could have them as well. For more information, see http://PublicBankingInstitute.org.
Preparations for martial law have been reported for decades, and it hasn’t happened yet. Hopefully, we can sidestep that danger by moving into a saner, more sustainable system that makes military action against American citizens unnecessary.
______________
Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200-plus blog articles are at EllenBrown.com.
Subscribe to:
Posts (Atom)