My Money’s On Putin…
“History shows that the United States has benefited politically and economically from wars in Europe. The huge outflow of capital from Europe following the First and Second World Wars, transformed the U.S. into a superpower … Today, faced with economic decline, the US is trying to precipitate another European war to achieve the same objective.”… Sergey Glazyev, Russian politician and economist
“The discovery of the world’s largest, known gas reserves in the Persian Gulf, shared by Qatar and Iran, and new assessments which found 70 percent more gas in the Levantine in 2007, are key to understanding the dynamics of the conflicts we see today. After a completion of the PARS pipeline, from Iran, through Iraq and Syria to the Eastern Mediterranean coast, the European Union would receive more than an estimated 45 percent of the gas it consumes over the next 100 – 120 years from Russian and Iranian sources. Under non-conflict circumstances, this would warrant an increased integration of the European, Russian and Iranian energy sectors and national economies.” Christof Lehmann,Interview with Route Magazine
The United States failed operation in Syria, has led to an intensification of Washington’s proxy war in Ukraine. What the Obama administration hoped to achieve in Syria through its support of so called “moderate” Islamic militants was to topple the regime of Bashar al Assad, replace him with a US-backed puppet, and prevent the construction of the critical Iran-Iraq-Syria pipeline. That plan hasn’t succeeded nor will it in the near future, which means that the plan for the prospective pipeline will eventually go forward.
Why is that a problem?
It’s a problem because–according to Dr. Lehmann–”Together with the Russian gas… the EU would be able to cover some 50 percent of its requirements for natural gas via Iranian and Russian sources.” As the primary suppliers of critical resources to Europe, Moscow and Tehran would grow stronger both economically and politically which would significantly undermine the influence of the US and its allies in the region, particularly Qatar and Israel. This is why opponents of the pipeline developed a plan to sabotage the project by fomenting a civil war in Syria. Here’s Lehmann again:
“In 2007, Qatar sent USD 10 billion to Turkey´s Foreign Minister Davotoglu to prepare Turkey´s and Syria´s Muslim Brotherhood for the subversion of Syria. As we recently learned from former French Foreign Minister Dumas, it was also about that time, that actors in the United Kingdom began planning the subversion of Syria with the help of “rebels”’ (Christof Lehmann, Interview with Route Magazine)
In other words, the idea to arm, train and fund an army of jihadi militants, to oust al Assad and open up Syria to western interests, had its origins in an evolving energy picture that clearly tilted in the favor of US rivals in the region. (Note: We’re not sure why Lehmann leaves out Saudi Arabia, Kuwait or the other Gulf States that have also been implicated.)
Lehmann’s thesis is supported by other analysts including the Guardian’s Nafeez Ahmed who explains what was going on behind the scenes of the fake civil uprising in Syria. Here’s a clip from an article by Ahmed titled “Syria intervention plan fueled by oil interests, not chemical weapon concern”:
“In May 2007, a presidential finding revealed that Bush had authorised CIA operations against Iran. Anti-Syria operations were also in full swing around this time as part of this covert programme, according to Seymour Hersh in the New Yorker. A range of US government and intelligence sources told him that the Bush administration had “cooperated with Saudi Arabia’s government, which is Sunni, in clandestine operations” intended to weaken the Shi’ite Hezbollah in Lebanon. “The US has also taken part in clandestine operations aimed at Iran and its ally Syria,” wrote Hersh, “a byproduct” of which is “the bolstering of Sunni extremist groups” hostile to the United States and “sympathetic to al-Qaeda.” He noted that “the Saudi government, with Washington’s approval, would provide funds and logistical aid to weaken the government of President Bashir Assad, of Syria”…
According to former French foreign minister Roland Dumas, Britain had planned covert action in Syria as early as 2009: “I was in England two years before the violence in Syria on other business”, he told French television:
“I met with top British officials, who confessed to me that they were preparing something in Syria. This was in Britain not in America. Britain was preparing gunmen to invade Syria.”
… Leaked emails from the private intelligence firm Stratfor including notes from a meeting with Pentagon officials confirmed US-UK training of Syrian opposition forces since 2011 aimed at eliciting “collapse” of Assad’s regime “from within.”
So what was this unfolding strategy to undermine Syria and Iran all about? According to retired NATO Secretary General Wesley Clark, a memo from the Office of the US Secretary of Defense just a few weeks after 9/11 revealed plans to “attack and destroy the governments in 7 countries in five years”, starting with Iraq and moving on to “Syria, Lebanon, Libya, Somalia, Sudan and Iran.” In a subsequent interview, Clark argues that this strategy is fundamentally about control of the region’s vast oil and gas resources.”
(“Syria intervention plan fueled by oil interests, not chemical weapon concern“, The Guardian)
Apparently, Assad was approached by Qatar on the pipeline issue in 2009, but he refused to cooperate in order “to protect the interests of [his] Russian ally.” Had Assad fallen in line and agreed to Qatar’s offer, then the effort to remove him from office probably would have been called off. In any event, it was the developments in Syria that triggered the frenzied reaction in Ukraine. According to Lehmann:
“The war in Ukraine became predictable (unavoidable?) when the great Muslim Brotherhood Project in Syria failed during the summer of 2012. …In June and July 2012 some 20,000 NATO mercenaries who had been recruited and trained in Libya and then staged in the Jordanian border town Al-Mafraq, launched two massive campaigns aimed at seizing the Syrian city of Aleppo. Both campaigns failed and the ”Libyan Brigade” was literally wiped out by the Syrian Arab Army.
It was after this decisive defeat that Saudi Arabia began a massive campaign for the recruitment of jihadi fighters via the network of the Muslim Brotherhoods evil twin sister Al-Qaeda.
The International Crisis Group responded by publishing its report ”Tentative Jihad”. Washington had to make an attempt to distance itself ”politically” from the ”extremists”. Plan B, the chemical weapons plan was hedged but it became obvious that the war on Syria was not winnable anymore.” (“The Atlantic Axis and the Making of a War in Ukraine“, New eastern Outlook)
There were other factors that pushed the US towards a conflagration with Moscow in Ukraine, but the driving force was the fact that US rivals (Russia and Iran) stood to be the dominant players in an energy war that would increasingly erode Washington’s power. Further economic integration between Europe and Russia poses a direct threat to US plans to pivot to Asia, deploy NATO to Russia’s borders, and to continue to denominate global energy supplies in US dollars.
Lehmann notes that he had a conversation with “a top-NATO admiral from a northern European country” who clarified the situation in a terse, two-sentence summary of US foreign policy. He said:
“American colleagues at the Pentagon told me, unequivocally, that the US and UK never would allow European – Soviet relations to develop to such a degree that they would challenge the US/UK’s political, economic or military primacy and hegemony on the European continent. Such a development will be prevented by all necessary means, if necessary by provoking a war in central Europe”.
This is the crux of the issue. The United States is not going to allow any state or combination of states to challenge its dominance. Washington doesn’t want rivals. It wants to be the undisputed, global superpower, which is the point that Paul Wolfowitz articulated in an early draft of the US National Defense Strategy:
“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”
So the Obama administration is going to do whatever it thinks is necessary to stop further EU-Russia economic integration and to preserve the petrodollar system. That system originated in 1974 when President Richard Nixon persuaded OPEC members to denominate their oil exclusively in dollars, and to recycle their surplus oil proceeds into U.S. Treasuries. The arrangement turned out to be a huge windfall for the US, which rakes in more than $1 billion per day via the process. This, in turn, allows the US to over-consume and run hefty deficits. Other nations must stockpile dollars to purchase the energy that runs their machinery, heats their homes and fuels their vehicles. Meanwhile, the US can breezily exchange paper currency, which it can print at no-expense to itself, for valuable imported goods that cost dearly in terms of labor and materials. These dollars then go into purchasing oil or natural gas, the profits of which are then recycled back into USTs or other dollar-denominated assets such as U.S. stocks, bonds, real estate, or ETFs. This is the virtuous circle that keeps the US in the top spot.
As one critic put it: “World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy.”
The petrodollar system helps to maintain the dollar’s monopoly pricing which, in turn, sustains the dollar as the world’s reserve currency. It creates excessive demand for dollars which allows the Fed to expand the nation’s credit by dramatically reducing the cost of financing. If oil and natural gas were no longer denominated in USDs, the value of the dollar would fall sharply, the bond market would collapse, and the US economy would slip into a long-term slump.
This is one of the reasons why the US invaded Iraq shortly after Saddam had switched over to the euro; because it considers any challenge to the petrodollar looting scam as a direct threat to US national security.
Moscow is aware of Washington’s Achilles’s heel and is making every effort to exploit that weakness by reducing its use of the dollar in its trade agreements. So far, Moscow has persuaded China and Iran to drop the dollar in their bilateral dealings, and they have found that other trading partners are eager to do the same. Recently, Russian economic ministers conducted a “de-dollarization” meeting in which a “currency switch executive order” was issued stating that “the government has the legal power to force Russian companies to trade a percentage of certain goods in rubles.”
Last week, according to RT:
“The Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments. “The draft document between the Central Bank of Russia and the People’s Bank of China on national currency swaps has been agreed by the parties…..The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China,” the Russian regulator said.
Currently, over 75 percent of payments in Russia-China trade settlements are made in US dollars, according to Rossiyskaya Gazeta newspaper.” (“De-Dollarization Accelerates – China/Russia Complete Currency Swap Agreement“, Zero Hedge)
The attack on the petrodollar recycling system is one of many asymmetrical strategies Moscow is presently employing to discourage US aggression, to defend its sovereignty, and to promote a multi-polar world order where the rule of law prevails. The Kremlin is also pushing for institutional changes that will help to level the playing field instead of creating an unfair advantage for the richer countries like the US. Naturally, replacing the IMF, whose exploitative loans and punitive policies, topped the list for most of the emerging market nations, particularly the BRICS (Brazil, Russia, India, China and South Africa) who, in July, agreed to create a $100 billion Development Bank that will “will counter the influence of Western-based lending institutions and the dollar. The new bank will provide money for infrastructure and development projects in BRICS countries, and unlike the IMF or World Bank, each nation has equal say, regardless of GDP size.
According to RT:
“The big launch of the BRICS bank is seen as a first step to break the dominance of the US dollar in global trade, as well as dollar-backed institutions such as the International Monetary Fund (IMF) and the World Bank, both US-based institutions BRICS countries have little influence within…
“This mechanism creates the foundation for an effective protection of our national economies from a crisis in financial markets,” Russian President Vladimir Putin said.”
(“BRICS establish $100bn bank and currency pool to cut out Western dominance“, RT)
It’s clear that Washington’s aggression in Ukraine has focused Moscow’s attention on retaliation. But rather than confront the US militarily, as Obama and Co. would prefer, Putin is taking aim at the vulnerabilities within the system. A BRICS Development Bank challenges the IMF’s dominant role as lender of last resort, a role that has enhanced the power of the wealthy countries and their industries. The new bank creates the basis for real institutional change, albeit, still within the pervasive capitalist framework.
Russian politician and economist, Sergei Glazyev, summarized Moscow’s approach to the US-Russia conflagration in an essay titled “US is militarizing Ukraine to invade Russia.” Here’s an excerpt:
“To stop the war, you need to terminate its driving forces. At this stage, the war unfolds mainly in the planes of economic, public relations and politics. All the power of US economic superiority is based on the financial pyramid of debt, and this has gone long beyond sustainability. Its major lenders are collapsing enough to deprive the US market of accumulated US dollars and Treasury bonds. Of course, the collapse of the US financial system will cause serious losses to all holders of US currency and securities. But first, these losses for Russia, Europe and China will be less than the losses caused by American geopolitics unleashing another world war. Secondly, the sooner the exit from the financial obligations of this American pyramid, the less will be the losses. Third, the collapse of the dollar Ponzi scheme gives an opportunity, finally, to reform the global financial system on the basis of equity and mutual benefit.”
Washington thinks “modern warfare” involves covert support for proxy armies comprised of Neo Nazis and Islamic extremists. Moscow thinks modern warfare means undermining the enemy’s ability to wage war through sustained attacks on it’s currency, its institutions, its bond market, and its ability to convince its allies that it is a responsible steward of the global economic system.
I’ll put my money on Russia.
Over a year ago I published an essay entitled ‘The Linchpin Lie: How Global Collapse Will Be Sold To The Masses’. This essay addressed efforts by the ever malicious Rand Corporation to create a false narrative surrounding the possibility of global collapse. Linchpin Theory, as it was named by it’s originator and Rand Corp. employee, John Casti, is I believe the very future of propaganda. Every engineered crisis needs a clever cover story, and in Linchpin Theory, we are told that all human catastrophe is a mere natural product of the “overcomplexity” within various systems. Yes, there is no accounting of false flag geopolitics or elitist conspiracy, no acknowledgment of deliberately initiated chaos; such things do not exist in the world of “linchpins”. Rather, the Rand Corporation would have us believe that the world is a massive game of Jenga, and the supporting pieces just remove themselves from the teetering structure by magical and coincidental causality.
Today, the linchpin lie is now being carefully inserted into the mainstream narrative. I can’t say I was shocked to hear Alan Greenspan use its basic premise when he recently stated that:
“I have come to the conclusion that bubbles…are a function of human nature. We don’t have enough observations, but my tentative hypothesis to what we’re dealing with is that both a necessary and sufficient condition for the emergence of a bubble is a protracted period of stable economic activity at low inflation. So it is a very difficult policy problem. I do believe that central banks that believe they can quell bubbles are living in a state of unrealism.”
It is important that we understand what Greenspan is actually doing here. The former Fed chairman is asserting that economic bubbles like the derivatives bubble of 2008 are a “natural function”, like the seasons, and are out of the control of central bankers. The truth is that central bankers have never tried to “quell” economic bubbles, they have been deliberately creating them in order to position the global economy into a crisis which they can then exploit. Greenspan is not only diverting blame for all the past and future economic crashes central banks have engineered, he is also setting the propaganda stage for a great change in the dynamic of the central banking concept – what the IMF’s Christine Lagarde calls the “global economic reset”.
The current central banking structure gives the illusion of separation and sovereignty. Most people who have not researched the nature of the international banking cartel believe that the Federal Reserve, for instance, is a separate national entity from the Central Bank of Russia, or the Central Bank of China. They believe that these institutions act of their own accord rather than in concert with each other. The reality is, there is no Federal Reserve. There is no Central Bank of Russia. There are no separate entities. There are no Western banks and there are no BRICS. All of these banking edifices are merely front organizations for global financiers, as Council on Foreign Relations insider (and friend to the Rockefellers) Carroll Quigley made clear in his book, Tragedy And Hope:
“It must not be felt that the heads of the world’s chief central banks were themselves substantive powers in world finance. They were not. Rather they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up, and who were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks. “
A “global economic reset”, I suspect, will consist of a grand shift away from covert cooperation between central banks to an OPENLY centralized one world banking system, predicated on the concepts put forward by the IMF and led by the Bank of International Settlements, which has always been behind the scenes handing down commandments to the seemingly separate central banks of nations.
In order for this “reset” to be achieved, however, the establishment needs a historically monumental distraction. A distraction so confounding and terrifying that by the time the public has a chance to examine the situation rationally, the elites have already tightened the noose.
I have been warning ever since the beginning of the derivatives/debt collapse of 2007/2008 that the international financiers and globalists who created the artificially low interest rates and fiat lending bonanza would one day be required to fashion a considerably dangerous event in orderto trigger the final collapse of the dollar based monetary system and replace it with a new currency (or basket of currencies), along with a new centralized financial authority.
This distracting event would have to rely on three very important strategies in order to succeed -
1) The use of what I call the “scattershot effect”; a swarm of smaller crises growing exponentially until it blurs together to create one dynamic calamity.
2) The use of multiple false paradigms in order to confuse the masses and pit them against one another in an absurd fight over fake and meaningless causes.
3) The use of deceptive benevolence on the part of the financial elite as they tap dance in to act as global “mediators”, ready to save the public from itself.
The end result would be a new brand of “world war” rather unique to history.
When most people imagine WWIII, they immediately envision images of nuclear bombs and mushroom clouds, however, I believe that when world war erupts, it may progress far differently from our cinematic assumptions. Regional conflicts are very likely, there is no doubt, but if one places himself in the shoes of the elites, one realizes that all out mechanized nuclear Armageddon is not really necessary to achieve the desired result of global governance.
Economic warfare alone could be extremely effective in initiating full spectrum fiscal implosion as well as mass starvation, mass panic, and mass desperation. All the signs lead me to believe that financial combat and 4th generation warfare will be used in the place of large armies and missiles.
The Scattershot Effect
Consider the sheer scope and number of crisis situations that have reached explosive proportions just in the past six months.
Syria continues to destabilize due to ISIS insurgents supported by the U.S., Saudi Arabia, and Israel; it is a horrifying storm which is now bleeding into other nations such as Iraq.
Iraq is on the verge of complete disintegration as the same western organized ISIS movestowards the outskirts of Baghdad.
Libya has imploded, with the American embassy evacuated, as well as the French and British, as various militias battle for supremacy.
The Ukraine crisis is nearing mutation into another beast entirely after the attack on Malaysian flight MH17. In just the past week, the EU has instituted sanctions against Russia, fighting has become even more fierce around Donetsk, Russia has been accused of firing artillery into Ukraine, and the U.S. now claims that Russia has violated the terms of the Intermediate Range Nuclear Forces treaty.
In the meantime, the Federal Reserve continues to taper QE3 while ignoring the unprecedented equities bubble they have birthed in the stock market, as well as refusing to answer the question as to who will actually buy U.S. Treasury debt if they do not? Our secret friend from Belgium? And what if this secret friend is, as I suspect, actually the IMF/BIS global loan shark duo? What then? Do we become yet another third world African-style debtor owing our very infrastructure to a financial bureaucracy on the other side of the world?
And what about the Baltic Dry Index, one of the few measures of global shipping demand that cannot be manipulated by outside money interests? Well, the BDI is back down to historic lows,falling 65% since January, signaling that the so-called “economic recovery” is not at all what it is cracked up to be.
Add to this the deluge of illegal immigration on the southern border, aided by the Obama Administration, as well as possible presidential impeachment and lawsuit proceedings, and you have a recipe for total chaos of the fiscal variety.
If the first six to seven months of 2014 have been this frenetic, how bad will the next six months be?
We are all aware of the prevalence of the false Left/Right paradigm in American politics. Hopefully most people in the Liberty Movement understand, for example, that any impeachment or lawsuit proceedings against Barack Obama will be nothing more than a crafted circus designed to accomplish nothing – a con game to placate conservatives with useless top-down solutions while the country burns around their ears.
There are other false paradigms that are not so clear to some, though…
The false Israel/Hamas paradigm has certainly duped a particular subsection of Americans and even a few patriots, even though it is historical fact that the creation of Hamas itself wasfunded and supported by the Israeli government. Why do Israeli politicians put money and arms at the disposal of Muslim extremist groups like Hamas and ISIS, only to enter into brutal conflict with them later? Could it be that the Israeli government does not have the best interests of the Israeli people at heart? Could it be that Israel is being used by internationalists as a catalyst for chaos? It is vital that we question the intentions behind such contrary actions in the Middle East.
Why has the U.S. government (Democrats and Republicans), Saudi Arabia, and Israel put support behind the ISIS caliphate in Iraq after spending decades of time, billions in resources, and thousands of lives, attempting to overrun and dominate the region? Why are these governments creating enemies that will later try to harm us?
It is all about false paradigms; dividing the masses into numerous conflicting sides and pitting them against each other when they should be fighting against the elites.
The false East/West paradigm is perhaps the most dangerous lie facing free men today. It is a lie that may very well define our generation if not our century. I have outlined in multiple articlesthe substantial evidence that proves beyond a doubt that Russia and China are members of the globalist agenda, and that the tensions between our two hemispheres are completely fabricated.
The latest announcement of a BRICS bank to rival the IMF is yet another scheme to perpetuate the illusion that the elites of these nations are at odds. In fact, the BRICS conference mission statement makes it clear that developing nations have no intention of breaking from the IMF (and certainly not the BIS). Instead, the BRICS bank is meant to provide “leverage” to “force” the IMF to become more inclusive, and hand over more power and participation. Vladimir Putin had this to say at the latest summit:
“In the BRICS case we see a whole set of coinciding strategic interests. First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank’s decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this.”
Brazilian President Dilma Rousseff insisted that the BRICS were not seeking to distance themselves from the Washington-based International Monetary Fund:
Putin and the BRICS commonly rail against the “unipolar” financial system revolving around the U.S. dollar, but in the end they are only controlled opposition, and their solution is to place even more power into the hands of the IMF (a supposedly U.S. government controlled institution), creating a truly unipolar world order. If the U.S. loses its IMF veto status this year due to lack of allocated funds, and the BRICS dump the dollar as world reserve, this may very well happen.
As sanctions between Russia and the U.S. snowball, a perfect rationalization for a dollar decoupling will be created that very few people would have believed possible only a few years ago. It is only a matter of time before fiscal warfare escalates to destructive levels. Russia will inevitably cut off gas exports to the EU, and the BRICS will inevitably drop the U.S. dollar as a world reserve standard.
The U.S. relationship to the EU is also currently being presented as dubious, and this is not by accident. Failing relations between America and Germany are yet more theater for the masses to chew on. Western allies have been spying on each other for decades, but somehow the exposure of CIA activities in Germany is shocking news? The NY Fed suddenly attacks Deutsche Bank, seeking expanded monitoring and regulation? Germany’s business interests are highly damaged by U.S. sanctions against Russia? It would seem as though someone is trying to create an artificial divide between elements of the EU and the U.S.
I believe that the narrative is being prepared for a faked financial breakup between the U.S. and many of its former allies, isolating the U.S., and destroying the dollar, but to what end? To answer that question, we must ask WHO ultimately benefits from these actions?
The Rise Of The Hero Bankers
In June of last year, the Bank of International Settlements, the central bank of central banks whose history began with the financial support of the Third Reich, released a statementwarning that “easy money” from central banks was creating a dangerous bubble in stock markets around the world.
The IMF too has been pushing warnings of stock bubble collapse into the mainstream.
In June of this year, the BIS, a normally obscure and secretive organization, released another statement pronouncing that government had been led into a “false sense of security” by easy monetary policy and low interest rates, making the world economy perpetually unstable.
For an organization so covert and occult, the BIS sure has become rather candid lately. Frankly, I agree with everything they have said. However, I do not agree with the hypocrisy of the BIS, which dominates the decisions of all of its member banks, publicly criticizing policies which it most likely scripted itself. Why would the BIS suddenly denounce fiscal methods it used to promote? Because the BIS is setting itself up as the great prognosticator of a collapse that IT HELPED ENGINEER.
After the great financial war has subsided, and the people are suitably poverty stricken and desperate, it will be institutions like the BIS and IMF that swoop in to “save the day”. Their offer will be to consolidate economic control into the hands of an elite group of bankers “not affiliated” with any particular nation state, thereby insulating them from “political concerns”. The argument will be that national sovereignty is a bane on the back of humanity. They will claim that the catastrophe will continue until we “simplify” and streamline our economic and political systems. They will present themselves as the heroes of the age; the ones who predicted the crisis would occur, and the ones who had a solution ready to save the day (after sufficient death and destruction, of course).
As long as people remain obsessed with false paradigms and faux enemies, the establishment’s goal of complete centralized dominance will be predictably attainable. If we change our focus to the internationalists as the true danger instead of playing their game by their rules, then things will become far more interesting…
Source: Brandon Smith | Alt-Market
“The Christian religion is the religion of our country. From it are derived our prevalent notions of the character of God, the great moral governor of the universe. On its doctrines are founded the peculiarities of our free institutions.” (William McGuffey, d. May 4, 1873, professor at the University of Virginia, president of Ohio University, and author of McGuffey’s Readers; earstohear.net)
Andre Comte-Sponville, one of France’s preeminent atheist philosophers agrees. In his New York Times bestseller, “The Little Book of Atheist Spirituality,” Sponville observes that even though Western and American civilization has become nonreligious it is nevertheless profoundly rooted in transcendent Biblical morality and traditions. That overt and implied atheism has all but supplanted Biblical beliefs pleases yet simultaneously frightens Sponville as he clearly sees that if Western civilization entirely ceases to be Christian it will fall into something like a refined nihilism. And if we believe that nothing remains,
“….we might as well throw in the towel at once. We would have nothing left to oppose to either fanaticism from without or to nihilism from within—and, contrary to what many people seem to think, nihilism is the primary danger. We would belong to a dead civilization, or at least a dying one….Wealth has never sufficed to make a civilization, poverty, even less so. Civilizations require culture, imagination, enthusiasm and creativity, and none of these things come without courage, work and effort.” Without these necessities, “Good night…the Western world has decided to replace faith with somnolence.” (pp. 28-29)
Sponville admits that in his younger years he had believed in the supernatural God of Revelation and been raised a Christian. Up till around the age of eighteen his faith was powerful. But then he embraced evolutionary scientism and fell away, and this falling away said Sponville, was liberating because for the liberated autonomous ‘self’ whose life no longer has any ultimate meaning or purpose there is no valid reason why he personally should not do as he wants to do, or why his friends should not live in the way that they find most advantageous to themselves.
But the lies, amoralism and perverse license, the nihilism Sponville rejoices in becomes an unbearable source of horror and dread when reproduced in millions of souls. Sponville is right to fear the spread of nihilism, for when multiplied by millions it means there is no longer an ultimate, transcendent source of unchanging truth and moral law independent of sinful men, and as Sponville knows, therefore dreads, the lie is the father of violence:
“(The lie) is the word, act, sign of cunning or silence which makes use of wiles to deceive (all who seek) truth….the attitude of the liar, who full of subtlety, audacity and at times cruel cynicism, misleads his neighbor into the quick sands of falsity. The use of the lie reveals the liar as a person of evil intentions. He who tells lies as a way of getting ahead lacks a love of truth (he or she is) a self-centered dissimulator, cunningly manipulating his fellowmen for his own evil purposes.” (The Roots of Violence, Rev. Vincent P. Miceli, S.J., p.29)
Nihilism is the satanically inverted philosophy of violence, lies and license of America’s president, his cabinet, and the amoral progressive ruling class of which they are members. It is also the philosophy of the Marquis de Sade, Friedrich Nietzsche, Karl Marx and the Sophist Callicles in Plato’s ‘Georgias’ who declares:
“The fact is this: luxury and licentiousness and liberty, if they have the support of force, are virtue and happiness and the rest of these embellishments-—the unnatural covenants of mankind-—are all mere stuff and nonsense.” (Making Gay Okay, Reilly, pp. 31-32)
In other words, with a consensus of lies backed by force and the threat of violence, the Revelation of God, the Christian Church, virtue, true truth, marriage, gender, your children, your humanity, your wealth, your home, your business, and your Constitutional rights become whatever agents of violence and the mobs in back of them want them to be or not to be from one moment to the next.
What nihilism has already led to in England, said Nate Steuer of Jeremiah Cry Ministries, are buildings that once served as churches that are now museums, stores and even nightclubs, a strong belief in evolution and a strong homosexual-rights movement:
“They don’t want to hear the gospel. The gospel is pressed down,’ and the homosexual-rights movement is so rooted in England that Christians are afraid to go ‘into the streets and preach,’ fearing what the LBGT community will do.” (“Fate of Christianity in UK not too far from U.S., warns evangelist,” Chris Woodward, OneNewsNow.com, July 8, 2014)
Evolutionary scientism is a form of nihilism leading in practice to dehumanization, demoralization, reckless irresponsibility and genocide. It is a sham science said G.K. Chesterton. It is a license by which the stupidest,
“…or wickedest action is supposed to become reasonable or respectable, not by having found a reason in scientific fact, but merely by having found any sort of excuse in scientific language.” The program and attitude of scientism is a “serpent….as slippery as an eel,” a “demon…as elusive as an elf,” an “evil and elusive creature.” (The Restitution of Man: C.S. Lewis and the Case against Scientism, Michael D. Aeschliman, p. 43)
Evolutionary scientism has amply demonstrated itself as a virulently anti-human, catastrophically destructive, demonically murderous worldview. In just the first eighty-seven years of the twentieth century, violent spirits who love evil and devouring words and breathe out slaughter and death brutally exterminated between 100-170 million un-evolved ‘subhuman’ men, women, and children in the Soviet Union and Nazi Germany.
In the Soviet Union, the Triune God-and-human hating nihilist of violence, Vladimir Lenin, exulted that,
“Darwin put an end to the belief that the animal and vegetable species bear no relation to oneanother (and) that they were created by God, and hence immutable.” (Fatal Fruit, Tom DeRosa, p. 9)
In other words, the ‘death’ of the God of Revelation allows unfettered violence against millions of people because they are no longer the immutable image-bearers of the Triune God but rather expendable products of evolution on a par with slime, weeds, slugs and rocks. Empowered by evolutionary scientism, Lenin exercised godlike power over life and death. He saw himself as, “the master of the knowledge of the evolution of social species.”
Fueled by hate, contempt and murderous rage it was Lenin who “decided who should disappear by virtue of having been condemned to the dustbin of history.” From the moment Lenin made the “scientific” decision that the bourgeoisie represented a stage of humanity that evolution had surpassed, “its liquidation as a class and the liquidation of the individuals who actually or supposedly belonged to it could be justified.” (The Black Book of Communism, p. 752)
In Nazi Germany evolutionary scientism resulted in gas chambers, ovens, and the liquidation of eleven million “useless eaters” and other undesirables.
Alain Brossat draws the following conclusions about the two regimes of nihilism, the Soviet Union and Nazi Germany, and the ties that bind them:
“The ‘liquidation’ of the Muscovite executioners, a close relative of the ‘treatment’ carried out by Nazi assassins, is a linguistic microcosm of an irreparable mental and cultural catastrophe that was in full view on the Soviet Stage. The value of human life collapsed, and thinking in categories replaced ethical thought…In the discourse and practice of the Nazi exterminators, the animalization of Other…was closely linked to the ideology of race. It was conceived in the implacably hierarchical racial terms of “subhumans” and “supermen”…but in Moscow in 1937, what mattered…was the total animalization of the Other, so that a policy under which absolutely anything was possible could come into practice.” (Black Book of Communism, p. 751)
As in England, evolutionary scientism has replaced the God of Revelation, thus with the animalization of Americans millions of unborn humans have already been aborted, growing numbers of unwanted adults euthanized and late-term unborn babies cruelly dismembered.
Writing in, “New York Abortion Bill Allows Shooting Babies Through the Heart With Poison to Kill Them” Steven Ertelt reports that New York is already the abortion/murder capital of the United States, with practically no oversight of the industry. Throughout the second trimester, developing babies can be completely dismembered,
“… even when they can feel pain (by) pulling the baby out piece by piece until the mother’s uterus is empty. After the abortion, the abortionist must reassemble the child’s body to ensure nothing has been left inside the child’s mother.” (LifeNews.com | 5/20/14 6:28 PM)
What nihilists now demand for late-term abortions that will be legalized in New York by the abortion-expanding Women’s Equality Act, is the murder of babies,
“… by sliding a needle filled with a chemical agent, such as digoxin, into the beating heart, before being delivered.”
Then there is Wisconsin-based abortionist Dennis Christensen and his partner Bernard Smith who have performed 85,000 to 95,000 abortions in a 40 year period:
“So I see it as a calling, I guess,” Christensen said. “But I’ve been called, I’ve served and now I’d like to call someone else.” (Abortionist Who’s Killed 95,000 Babies in Abortions: “I See It as a Calling” Steven Ertelt, LifeNews.com, 7/7/14)
Something “called him” to murder 95,000 babies, but it wasn’t the Holy God of Revelation.
When for millions of nihilists the God of Revelation does not exist and life has no higher, fixed meaning or purpose with neither hope of an afterlife nor any accountability to their Maker for their actions here in this world, then men no longer have reason and purpose for being good, thus are free to be evil. They are at liberty to invoke meaningless law and perverted justice to destroy freedom, dismember babies, and force disordered appetites upon men, women, and children. They are free to accuse the good man of evil, to enslave other people and deprive them of life-sustaining electricity, gas, and water. With this freedom they vandalize and plunder the property and wealth of others and throw our borders open to floods of illegals, rapists, drug-lords, terrorists, pedophiles, murderers and other sinister individuals.
Nihilists can freely lie so as to “normalize” whatever wicked fantasies and schemes they desire, such as global warming/cooling/change, redistributive justice, common core, ‘gay’ equality and Decadence Festivals:
“The Southern Decadence Festival is one of our nation’s most notorious celebrations of sodomy, public sex acts, prostitution, drunkenness, and worse, but is by no means the only such festival….decadence festivals are held over and across post-Christian America and Western Europe as well as in Canada, Hong Kong, Australia, Thailand, Brazil, Belarus, Ireland, Japan, Scotland, China, S. Africa, India and Taipei.” (Sex slaves, sexual anarchy and decadence festivals: ominous signs of something really rotten,” L. Kimball, Renew America, Oct. 25, 2012)
A society of nihilists is a welcome mat to human predators of every stripe from drug lords, ISIS, and the Muslim Brotherhood to flesh-peddlers and the world’s criminal elite: the occult Luciferian New World Order super-wealthy criminal consortium and their merciless leftwing and rightwing allies. This cohort of sinister nihilists believe in nothing, know only hate, contempt, violence, greed and egotism and share a foundational hatred of the Tri-Personal God of Revelation, faithful Christians and Jews and traditional Christian grounded Western and American civilization.
In the impeccably documented book, “Sinisterism: Secular Religion of the Lie,” Bruce Walker describes the super-wealthy consortium and their like-minded allies as Sinisterists, making political labels like Far Right (Nazis/Fascists), liberals and Far Left (Progressives, Bolsheviks, Marxists, Communists) and even like-minded Radical Muslims the same thing.
What unite all Sinisterists are their hatreds:
“They hate Christians…Jews…America (and) Israel. They hate truth. They hate the very idea of truth. They hate the idea of humans as unique and special in the universe. They hate the idea of a great moral purpose unfolding in our lives. Sinisterism is a bundle of connected hatreds. For the sake of their hatreds, Sinisterists lust for power.”(preface)
Because Sinisterists hate the idea of man as God’s spiritual image-bearer they have ‘killed’ the Triune God and forced nihilistic Darwinism upon us because it reduces mankind to less than nothing. They also invent words and sound-bite phrases such as heterosexist, homophobe, global change and nonexistent categories of mankind such as “racial species” and “emerging genders” that imprison thought. Following are some other examples:
1. Multiculturalism: the stealthy destruction of America’s traditional Christian based culture by insidious elevation of pagan and pantheist cultures and belief systems in the name of politically correct tolerance, pluralism and inclusion.
2.’Gay rights/’gay’ marriage: rebellion against and negation of the two created sexes, procreation, and the idea of normal.
3. Political correctness, speech codes, sensitivity training, and hate crime laws: psychic-cages for the minds of traditional-values Americans.
4. Perverse sex education: As was the case in the Soviet Union, its ultimate purpose is the subversion and perversion of our youth—the awakening of the Devil, as Karl Marx’s comrade Bakunin admitted.
5. Critical theory: the mindless vomiting out of destructive criticism upon everything good, true, excellent, normal, and traditional.
6. Global change, Agenda 21, Green Movement, redistributive justice: the evisceration of our standard of living and individual liberties in order to ‘save the planet’ — in other words, penury, misery, death and slavery on behalf of Gaia.
7. Sustainability: Extreme population control calling for the annihilation of billions of people to achieve spiritual communism.
8. Religious pluralism: the erasure of faithful Judaism, Christian theism and America’s founding Christian-based worldview by way of elevating Wicca, animism, Islam, New Age occult spirituality, Gnostic paganism, Buddhism, shamanism, goddess worship, Luciferian Masonry and atheism in the name of politically correct tolerance and inclusion.
In order to destroy rational thinking, nihilists use words and phrases (i.e., change, “make love not war,” “we are Trayvon” “evolution is an established fact of science”) to create images rather than ideas and then concentrate on endless repetition of the same word-pictures,
“…to create a hypnotic effect to defend an otherwise hopeless case. Sinisterists use the same words over and over again.” (p.12)
Nihilism’s black heart is the worship of lies, particularly the Big Lie of evolution. ‘Elite’ transnational Robert Muller, father of Common Core Curriculum and former Assistant Secretary-General of the UN and former Chancellor of the UN University for Peace in Costa Rica speaks of the fate that will befall all politically incorrect thinkers, especially anti-evolutionists:
“…all those who hold contrary beliefs” to politically correct thought favored for the “next phase of evolution” will “disappear.” A hellish fate awaits all who resist political and spiritual globalization, “…those who criticize the UN are anti-evolutionary, blind, self-serving people. Their souls will be parked in a special corral of the universe for having been retarding forces, true aberrations in the evolution and ascent of humanity.” (False Dawn, Lee Penn, p. 133)
With malice aforethought, sinister nihilists have dumbed-down Westerners and Americans by infiltrating our education institutions and even our seminaries with nihilist philosophies, propaganda and schemes such as evolutionary scientism, perverse sex education, so-called ‘higher Biblical criticism,’ critical theory, multiculturalism and revised history.
As evolutionary scientism and the relativity of truth are fatal doctrines– types of nihilism that deny objective truth and reality— they result in the rapid disintegration of critical thinking, faith in God, respect and manners resulting in a twisted, inverted society dominated by moral imbeciles—narcissistic despots, thugs, human parasites and bizarre polymorphously perverse beings— at every level of government and society who know how they feel and what they covet and are thus entitled to but can’t think straight, can’t spell, and don’t know right from wrong.
It should be obvious by now, said Walker, that the relations of people in American and Western society are growing coarser,
“…..more dishonest….shallower….lonelier…more desperate for the narcotics of power, applause and fear as we perceive ourselves moving closer to the status of gods and goddesses. If we choose, as individuals, that idolatry, then we are doomed. All the dystopian nightmares of Orwell, Bradbury, Huxley and others will become real all too soon….we will (either) surrender to thugs governing enslaved nations or embittered terrorists.” (p. 252)
Our so-called “scientifically enlightened” age is an age of nihilism. Ecstatic with the voluptuous delight of destruction which rolls humans into satanic depths; nihilists keep pushing society to the brink of social chaos and suicide:
“The Modern Liberal will invariably (and) inevitably side with evil over good, wrong over right and the behaviors that lead to failure over those that lead to success. When I say the Modern Liberal is morally and intellectually retarded at the level of the five-year old child, it is not hyperbole: its diagnosis.” (Evan Sayet, The Kindergarten of Evil,evansayet.com)
Nihilism is lawlessness, idolatry, violence, perversion, fear, terrors of mind, and horrors of conscience and loss of true freedom since the despair of nihilism ends in man’s slavery to his dark side, death and damnation.
In his poem “The Second Coming,” Yeats reveals the murderous delight of de Sade’s, Nietzsche’s, Marx’s, and Callicles modern offspring:
“Things fall apart; the center cannot hold
The blood-dimmed tide is loosed and everywhere
The ceremony of innocence is drowned
The best lack all conviction, while the worst are
Full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.”
If Western and American nihilists continue to set the God of Revelation aside in favor of “self” and what they really do know are lies and empty, shallow, meaningless evil, then a tyranny of evil will come upon us swiftly and terribly. But there is another path before us: the way of repentance, truth, decency and God’s Divine Truth. His eternally unchanging Truth will set us free. We should choose the path of Truth and goodness:
“On that choice hangs the fate of humanity. People will either embrace goodness or deny that goodness can exist and commit moral suicide (and) worship The Lie.” (ibid, Walker, p. 252)
People who choose the way of true truth will find the goodness and Light of God. As they follow the Way of Truth they will stumble sometimes, occasionally journey down blind alleys, and perhaps be on the wrong side of causes at times, but they,
“…will never lose hope or the help of other normal people and the Blessed Creator of the Universe.” (ibid, p. 233)
The narrow way leads ever up toward truth, light, beauty, goodness, courage, hope, peace and eternal physical life in an unimaginably beautiful Paradise. The other way is a broad highway spilling into a downward spiraling vortex marked by the despair of nihilism, the darkness of lies, the sulphuric stench of soul-destroying hate, and the horror of nothingness finally issuing into an eternity in outer darkness.
The belief that calling for and instituting sanctions against Russia is a sound policy, illustrates the economic disconnect of the Obama administration. With the fervor for starting a new cold war, the propaganda machine is working overtime to paint a picture that ignores real economic synergism. Note the conflicting reports regarding the EU. Nine EU countries ready to block economic sanctions against Russia, quotes a diplomatic source to ITAR-TASS:
“France, Germany, Luxembourg, Austria, Bulgaria, Greece, Cyprus, Slovenia, and EU President Italy see no reason in the current environment for the introduction of sectorial trade and economic sanctions against Russia and at the summit, will block the measure.”
“According to the source, the US sees slapping Russia with sanctions as a way to promote its own trade agenda with Europe, a side rarely explored in mainstream media. The Transatlantic Trade and Investment Partnership (TTIP) between the US and Europe would create the world’s largest free trade zone, but some worry it could balloon into an “economic NATO” or could end up putting corporation interest above national.”
An article, EU and the USA have adopted new sanctions against Russia reports that the European Council has agreed to extend the restrictive measures for the entities in the Russian Federation. Romanian president Traian Basescu believes the EU needs to adopt tougher sanctions against Russia.
“My point of view was that unless the European Union takes tougher actions and moves on to the third stage of these sanctions, Ukraine might no longer be ready to move towards the European Union and would end up in a situation like that in the Republic of Moldova, currently facing the breakaway tendencies of the region of Transdniester, only with a greater impact for the EU, because Ukraine is a bigger country.”
This contradiction between individual national economic interests and the quest for a technocrat administered system of trade that fosters and facilitates an internationalist foreign policy under NATO and EU rule, is the actual objective of Washington and Brussels interventionism. This arrogance and self-delusion treats economic commerce as conducted in a vacuum. As The Hill article cites Putin. “Sanctions are “driving into a corner” relations between the two countries and will damage the interests of U.S. companies and “the long-term national interests of the U.S. government and people.”
Russian warns that the US campaign will have consequences as the Alliance News writes, that Moscow Blasts US Sanctions As “Primitive,” Promises Retaliation.
“Sergei Ryabkov, a deputy Foreign Minister, told the Interfax news agency that Moscow will hit back with measures that “will be felt in Washington painfully and sharply.”
The Russian Foreign Ministry said US measures against a number of state corporations are “a primitive attempt at revenge because events in Ukraine are not developing according to Washington’s scenario,” and added that it reserves the right to retaliate.”
The preposterous strategy that international finance can force a country like Russia, with the world’s largest energy resources, into a capitulation dependent status is absurd. The minimal effect according to Russia’s Finance Ministry, Says Harsher Sanctions Would Cost Russia 0.3% of GDP, does not sound like much of a threat. Then consider the counter response of Russian Sanctions Retaliation Escalates: Dumps Intel/AMD And Now Foreign Cars.
The cavalier and condescending manner by which the Western central banks assist the New World Order’s goal of global dominance has fortified opposition with the emergence of theBRICS Development Bank. Use your common sense, when Putin Wants Measures to Protect BRICS Nations From U.S. Sanctions, much of the rest of the world is listening.
“In an interview published as a two-day BRICS summit got under way in Brazil on Tuesday, Putin said he would urge Brazil, China, India and South Africa to draw “substantive conclusions” from sanctions imposed on Russia over its actions in the Ukraine crisis, and said it was time to dilute the dominance of the U.S.-led West and the U.S. dollar by boosting the role of the BRICS on the global stage.”
The American press and media, especially is fueling the fires to demonize Putin’s Russia as a resurrected Stalinist Soviet belligerent. Absent in this narrative is an honest chronicle of NATO’s expansion to encircle the Russian Federation. At what point will Western journalists and academic scholars admit that the convergence of EU authoritarianism and American hegemony propagates an internationalist foreign policy, designed to isolate and destroy any opposition to this New World Order.
The lesson of these failed attempts for economic bullying a country, with real weapons of mass destruction, has the potential of starting a hot war. The essay, IMF and EU Capture of Ukraine, explains the circumstances and false justification of initiating “regime change“. This Ukraine flashpoint may well commence a tangible economic union among countries, who recognize that American sanctions are nothing more than a desperate attempt to prop up a decaying globalist economic structure.
EU antagonism towards the citizens of their member countries is growing expediently. Within this context, US sanctions hurt Europe more than America.
“The Association of European Businesses (AEB), a Moscow-based business lobby, said that new US sanctions against Russia have a more severe effect on European than on American business.
The AEB says it “regrets” the US sanctions, and warns that they will stunt economic growth “not only in Russia“.
“These sanctions are more focused on the partners of European businesses than on the partners of American companies,” the group said in a statement on Thursday.”
Obama’s State Department bears a heavy responsibility for promoting a civil war in Ukraine. Using sanctions to push Russia into accelerating a BRICS economic block will have far more adverse effects than can be envisioned by the lunatic proponents of “selective” Free Trade. The moneychanger’s financial system is imploding and their rescue plan requires a massive global crisis to bail out their “To Big to Fail” model. Mutually productive commerce will be among the first causalities of the prelude to World War III. Soon clamors for sanctions against American companies will begin, as the blame game diverts the real cause of this fabricated debacle.
This article will be a departure from my usual fare. I will not claim there is some Absolute Truth deeming soccer the bane of humanity’s sports. I do not contend that some objective, divine standard places it in Dante’s ninth circle of athletic arenas, though I wish I could. Sport is a matter of taste, and, as G.K. Chesterton said (okay, so this isn’t a complete departure for me — I’m quoting Chesterton), “There are no uninteresting subjects, only uninterested people.” I get it. And I, I confess, like golf. So mock away. But in this piece I’ll ditch the Mr. Spock act, let my human side emote, may even contradict myself, and will say something.
I hate soccer.
I hear there’s something going on right now called the World Cup. I hear it’s in Brazil. I hear other pundits, such as Stephen Webb and Rick Moran, are commenting on it, taking opposing views. And I hear that the score between the two is 0-0 after 2000 words. But I won’t claim that soccer is un-American as did Webb or like Moran, claim it’s fun. I’ll say something truly intellectual.
I hate soccer.
When I grew up in the Bronx in the ‘70s, few played that infernal game. I was exposed to it, but could never relate. Why can’t I use my hands? I mean, I have hands. They’re remarkably dexterous appendages. They exist to manipulate all manner of things in the physical universe. I preferred tennis and ping pong to handball, sure, but that was understandable. The racquets and paddles are tools that facilitate the striking of a ball; with them you can achieve a degree of velocity and spin — which could curve the ball in fascinating ways — otherwise impossible. And velocity and spin are cool. It’s as if I need to pound a nail: I take my hand and pick up a hammer. I don’t use my foot.
That’s the crux of this entirely taste-oriented matter. It goes without saying that professional soccer players are highly skilled. But to me it’s like seeing those unfortunate double amputees who’ve learned to paint or play the piano with their toes. I say, “Wow, it’s amazing how man’s spirit can overcome.” Then I change the channel and look for something that can fill the hour’s remaining 59 minutes and 35 seconds.
So if soccer were in the Special Olympics, I’d understand it. Or maybe if it were played by birds. But why do human beings, with their particular anatomical configuration, want to use their feet for a task performed infinitely better by the hands? It’s no wonder the scoring in soccer tends to hover around Joe Biden I.Q. territory. How many baskets would be sunk in the NBA if the players had to kick the ball through the hoop, even if they could block only with their heads? How poor would the scores be in golf if you had to kick the ball down the fairway? A braggart may say, “I can beat you with one hand tied behind my back.” Soccer players try to beat each other with both tied.
Mr. Moran correctly pointed out that, contrary to Mr. Webb’s assumption, soccer is now tremendously popular in the US. I must attribute this, in part, to the influx of people from lands where they can’t afford to play much of anything but soccer. And while I’ve often “inveighed” against immigration, to use the word Rep. John Conyers (D-Soccer) did when citing my work upon waking up briefly in the House, our foreign soccer imports might be the best reason to rethink our immigration regime. “Do you play socc…er…fútbol, amigo?
Check the deportation column.
Call it the Immigration and Recreation Reform Act of 2014. Entry into the US would be limited to those with a history of participation in polo or yacht racing.
So save those feet for what they were meant to do, such as kicking illegals out of the country, kicking Cantors out of office and kicking the economy into gear. A hand is a terrible thing to waste.
Commenting recently on the Elliot Rodger killings, arch-leftist Michael Moore wrote that while “other countries have more violent pasts…more guns per capita in their homes…and the kids in most other countries watch the same violent movies and play the same violent video games that our kids play, no one even comes close to killing as many of its own citizens on a daily basis as we do….” From a man who used to take the simple-minded gun-control position “fewer guns=less homicide,” it was surprising evidence of growth. After making his point, however, Moore made a mistake in following up with, “and yet we don’t seem to want to ask ourselves this simple question: “Why us? What is it about US?” It’s not, however, that we don’t want to ask the question.
It’s that we don’t want to hear the answer.
We can begin seeking it by asking another question: Why is it that Vermont, with approximately the same rate of gun ownership as Louisiana, has less than one-eighth the murder rate? Even more strikingly, why does New Hampshire have both a far higher gun ownership rate and a lower murder rate than England, Piers Morgan’s favorite poster-boy nation for gun control?
Professor Thomas Sowell provided more of these seeming contradictions in 2012, writing:
When it comes to the rate of gun ownership, that is higher in rural areas than in urban areas, but the murder rate is higher in urban areas. The rate of gun ownership is higher among whites than among blacks, but the murder rate is higher among blacks.
… [There are also] countries with stronger gun control laws than the United States, such as Russia, Brazil and Mexico. All of these countries have higher murder rates than the United States.
You could compare other sets of countries and get similar results. Gun ownership has been three times as high in Switzerland as in Germany, but the Swiss have had lower murder rates. Other countries with high rates of gun ownership and low murder rates include Israel, New Zealand, and Finland.
So what’s the answer we don’t want to hear? The critical difference among these regions and nations is explained right in Sowell’s title: it’s “not guns.”
What “people” differences are relevant? Let’s start with race and ethnicity. In the cases of homicide in 2012 in which the races of the perpetrators were known, 55 percent were committed by blacks, 62 percent of whom were under 30 years of age. Black youths are 16 percent of the youth population, but constitute 52 percent of those arrested for juvenile violent crime.
The statistics for Hispanics are more difficult to ferret out because, unbeknownst to many, law enforcement agencies tend to lump them in with whites in crime statistics (the FBI has announced that it will finally categorize Hispanic crime — in its report on 2013). However, there is some information available. Examiner’s Ken LaRive tells us that “Hispanics commit three times more violent crimes than whites,” but that the disparity could be even greater because of their often being classified as white.
The National Youth Gang Survey Analysis reports that gang members are approximately 49 percent Hispanic, 35 percent black and 10 percent white. And while whites are 35 percent of NYC’s population, blacks and Hispanics commit 96 percent of all crime in the Big Apple and 98 percent of all gun crime.
Another good indicator is international crime statistics. Hispanic countries dominate the homicide-rate rankings, with Honduras topping the list with a rate eight times as high as that of our worst state, Louisiana. Also note that there are no European/European descent nations in the top 20 and not one Western-tradition nation in the top 30 (Russia and Moldova are 24 and 28, respectively).
And what can we say about these “people” differences? It’s much as with the question of why men are more likely to be drunkards than women. You could explore whether the differences were attributable to nature, nurture or both. But it would be silly to wonder if the answer lay in men having greater access to bars, alcohol or shot glasses.
This brings us to why covering up minority criminality encourages gun control:
Americans won’t understand that the critical factor is people differences if they aren’t told about the people differences.
They will then — especially since most citizens aren’t even aware that there are nations with more firearms but less murder — be much more likely to blame guns. Of course, this is precisely what you want if you’re a left-wing media propagandist.
There is a question that could now be posed by the other side: if the main difference in criminality is demographics, why not outlaw guns? After all, it won’t make a difference one way or the other, right? I’ll offer a couple of answers to this question.
First, for a people to maintain just liberties, a freedom must always be considered innocent until proven guilty; the burden of proof is not on those who would retain it, but on those who would take it away.
Second, while private gun ownership and just law enforcement can’t turn barbarians into civilized people any more than excellent schools can transform dunces into geniuses, they can act as mitigating factors that minimize criminality as much as possible given the “raw material” with which the particular society has to work. It’s much as how you can maximize your personal safety: you may be safer in a great neighborhood with no martial arts training than in a terrible one with that training. Nonetheless, it allows you to be safer than you would be otherwise whatever neighborhood you choose.
And what do the stats show in our fair to middling USA neighborhood? Florida State University criminologist Gary Kleck reported that guns are used by good citizens 2.2 to 2.5 million times per year to deter crime. That likely saves many more innocent lives than are lost in massacres every year, but these unseen non-victims don’t make headlines the way Sandy Hook tragedies do. That’s why I like to say, using a twist on a Frédéric Bastiat line, a bad social analyst observes only what can be seen. A good social analyst observes what can be seen — and what must be foreseen.
Lastly, one more truth becomes evident upon recognizing that demographics are the main factor in criminality: even if you do believe in gun control, imposing it federally and applying a one-size fits all standard is ridiculous. In terms of people and crime, there’s a world of difference between towns in New Hampshire or Vermont, with their England-level murder rates, and cities such as East St. Louis, IL, or Detroit, which rival El Salvador in citizen lethality. You can make gun control the same everywhere, but you can’t change the fact that people will be very, very different.
In 2008, Houston police pulled over CIA agent Roland Carnaby on what appeared to be a routine traffic stop. A few seconds later, Carnaby was dead.
It is illegal to detain a CIA agent under any circumstances. They may carry any weapon, anywhere, anytime, and request assistance from any law enforcement official with more than certainty.
Why then would this incident be part of a highly classified Russian intelligence report? Could it, perhaps, be that Carnaby, answering directly to former President and CIA Director, George H.W. Bush, was murdered to silence his participation in the theft and sale of American nuclear warheads?
Carnaby was holding a trove of documents outlining the theft and transfer of hundreds of nuclear warheads from the Pantex Plant near Amarillo, Texas. Weapons sent there for disassembly were transshipped to Israel and, from there, refurbished, their cores remachined and then sold around the world or stored in Israeli embassies and consulates around the world.
The Russian report outlines a very different view of the past 30 years, a “view” that “fits like a glove.”
DIMONA OUT OF ACTION
The report not only confirms Israel’s nuclear weapon inventory but outlines the program of subterfuge and piracy required to keep Israel as a nuclear power after their facility at Dimona suffered a critical “event” in 1988.
“Dimona is a standard 75-megawatt thermal open top reactor as used in France for their plutonium weapons production program, their version of Stanford (Editor’s note: Probably “Hanford”).
Due to overuse as a fast breeder reactor by the Israelis, Dimona suffered a “steam explosion” IE a flash over indecent due to neutron criticality back in the late 1980′s under Bush 1. This shut down its operation for many years until repairs could be made.
It know only operates at very low power levels due to neutron absorption damage to the containment vessel. Now mainly use for isotope production. This forced the Israelis to turn to stolen nuclear stockpiles from the US for the continuation of their nuclear program.”
The highly classified Russian report, released, experts believe, to demonstrate American hypocrisy over recent events in the Ukraine, is a litany of horror stories. If this is a “first shot over the bow” by Russian intelligence, American officials can only dread what may be to come.
48 hours ago, the retired chief of Russia’s counter-intelligence effort for the Middle East released a highly classified report designed to embarrass the United States and demonstrate their servitude to Israel and complicity in broad acts of nuclear proliferation.
The report, loaded with “shock value” intelligence and backed by reams of supporting documents including classified nuclear weapons plans demonstrated that Russia has been able to maintain a high level of penetration of not just American nuclear weapons labs but security agencies as well.
ROUND ONE, 9/11
The report, carefully structured for maximum shock value, begins with 9/11, the watershed event of our era:
“The type of nuclear devices used on 911 were a modified version of the W-54 nuclear artillery shells that were covertly provided to the Israelis between 1988 and 1998 from US surplus stockpiles illegally exported during the Bush/Clinton era.
Chemical analysis done by DOE Sandi was able to identify the chemical/radiation footprint or fingerprint of the warheads based on samples taken after 911 of the fallout at ground zero.”
According to the report, 911 was an Israeli operation facilitated by blackmail of Bush 41 and 43, threatening them with “outing” for their personal financial involvement in the sale of 350 primarily w54 nuclear artillery rounds, sold through Israel but distributed to a number of nations.
The Russian report further outlines that NATO partners, particularly Britain and France, were involved every step of the way. 911 was cover for stolen gold, stock fraud and the looting of the American economy. The “wars for profit” were the Bush boys cashing in on their own.
THE “HOW” OF 911
A number of theories have been introduced to explain the mysterious effects seen at ground zero on 9/11. In an article on the Press TV website, evidence of a widespread cover-up of an epidemic of radiation exposure-related cancers tied to 9/11, was presented.
Not only has Russia confirmed the Press TV findings, they present evidence of nuclear weapons use, evidence from a suppressed report based on findings by the Department of Energy’s Sandia Laboratories.
“Only a 2 kiloton device was needed to drop the buildings. A 2 kiloton device will produce a fireball of apx 150 to 200 feet in diameter at over 4000 degrees Centigrade. Just large enough to melt the I beams of the central core of the building and drop them in place. The light flash would last less than 1 second and primarily be in the UV light range. Overpressure would only be at 60PSI max and directed upwards with the blast.
Fallout would be minimal and located to within ground zero range only. Radiation would drop to acceptable levels within 72 hrs. after the blast. Most fall out was trapped in the cement dust thus causing all of the recent cancer deaths that we are now seeing in NYC amongst first responders.”
The report continues with details that close the door on speculation about 9/11, putting an end to conspiracy theories and, in particular, the wildest one of all, the pseudo-science fairy tale broadly rejected by the 9/11 Commission but allowed to stand as America descended into an Islamophobic frenzy.
“Fallout would be minimal and located to within ground zero range only. Radiation would drop to acceptable levels within 72 hrs. after the blast. Most fall out was trapped in the cement dust thus causing all of the recent cancer deaths that we are now seeing in NYC amongst first responders.
Melted steel and iron oxide or “nano thermite” is a byproduct of the very high gamma ray / Neutron flux induced into the central steel core. The radiation dissolves the steel into iron oxide consuming the carbon and silicone in the steel.”
This explains the missing steel columns and the very important clue of the “vaporized” 20 ton antenna tower atop the south tower. The upward blast of radiation literally vaporized it. Video evidence proves this to be true.
The total (redacted) data file from DOE Sandia on the 911 event is well over 72 MB. “P.S. Snowden didn’t have a Q clearance so he missed this one.”
The scope of the Bush/Cheney/Israeli nuclear proliferation operation, according to the report, is well beyond anything imagined. Here, Russia places the blame, naming not only Vice President Dick Cheney and former White House Chief of Staff Ram Emanuel but Tom Countryman, tasked, according to Russian sources, with actually managing the program that spread nuclear weapons to Brazil, North and South Korea, Saudi Arabia and a number of other nations.
“Illegal distribution of US nuclear material to foreign allies was not limited to Israel. Virtually all NATO allies were in on this scam too. Dick Cheney was the bad guy on this one. Bush2/Cheney traded nuclear pits to foreign country as IOU’s in order to get what they wanted. Tom Countryman a well-known Israeli operative is curiously now in charge of N.N.P. at the State Department under Obama. He was put there by Ram Emanuel.”
REACTIVATING “DEAD NUKES”
Only nuclear weapons that had deteriorated but could be recommissioned were of use to Israel. The Russian report outlines the basis for selecting the W-54 warhead and exacting details on how weapons were created out of America’s “nuclear scrap heap.”
“A total of over 350 pits were transferred to the Israelis over a 10 to 20 year period of time. The W-54 type of pit design were the most desirable due to the 2 point implosion pit design. This is the easiest to re manufacture and modify as compared to other circular pit designs.
The pill shaped design of the W-54 type weapon contains over 1.5 times more plutonium than a standard pit. This would allow enough Plutonium to be recovered that was still of weapons grade use even after 32 plus years of age. Americium build up in the pit over time eventually makes the Pit unusable as a weapon so they have a limited shelf life based on how fast or slow the Plutonium was produce in the reactor at Stanford.
Usually it was about 150 days max. Irradiation time in the reactor during production determines the shelf life of the pit as weapons grade material. All of the micro nukes used by the Israelis are re-manufactured W-54 type series devices.”
According to the Russian report, Israel used remanufactured W-54 warheads, reconfigured as micro-nukes, for terror bombings in Bali, London and to destroy the Fukashima nuclear reaction site in Japan.
With weapons around the world, stored in embassies and consulates, and their powerful friends in the American “right,” Israel has managed to maintain nuclear superpower status without a real production facility, using only pirates and traitors, something America, according to our Russian sources, seems to have no shortage of.
Gordon Duff is a Marine Vietnam veteran, a combat infantryman, and Senior Editor at Veterans Today. His career has included extensive experience in international banking along with such diverse areas as consulting on counter insurgency, defense technologies or acting as diplomatic representative for UN humanitarian and economic development efforts. Gordon Duff has traveled to over 80 nations. His articles are published around the world and translated into a number of languages. He is regularly on TV and radio, a popular and sometimes controversial guest.
Source: Veterans Today | Press TV
At the onset of the derivatives collapse in 2007/2008 it would have been easy to assume that most of America was receiving a valuable education in normalcy bias.
In 2006, the amount of ego on display surrounding mortgage investment was so disturbingly grotesque anyone with any true understanding of the situation felt like projectile vomiting. To watch the smug righteousness of MSNBC and FOX economic pundits as they predicted the infinite rise of American property markets despite all evidence to the contrary was truly mind blowing. When the whole system imploded, it was difficult to know whether one should laugh, or cry.
The saddest aspect of the credit crisis of 2008 was not the massive chain reaction of bankruptcies or the threat of institutional insolvency. Rather, it was the delusional assumptions of the public that the grand mortgage casino was going to go on forever. There is nothing worse than witnessing the victim of a Ponzi scheme defend the lie which has ultimately destroyed him. As much as I am for people waking up to the nature of the crisis, there comes a point when those who are going to figure it out will figure it out, and the rest are essentially hopeless.
The cultism surrounding the U.S. economy and the U.S. dollar is truly mind boggling, and by “cultism” I mean a blind faith in the fiat currency mechanism that goes beyond all logic, reason and evidence.
In recent weeks it has become more visible as global financiers play both sides of the Ukrainian conflict, luring Americans into a frenzy of false patriotism and an anti-Russo-sports-team-mentality. My personal distaste for Vladimir Putin revolves around my understanding that he is just as much a puppet of the International Monetary Fund and international banks as Barack Obama, but many Americans hate him simply because the mainstream media has designated him the next villain in the fantasy tale of U.S. foreign policy.
Open threats from Russia that they will dump U.S. treasury bond holdings and the dollar’s world reserve status if NATO interferes in the Ukraine have been met with wildly naive chest beating from dollar cultists. I am beginning to see the talking points everywhere.
“Let them dump the dollar, Russia’s holdings are minimal!” Or, “Let them throw out Treasuries, they’ll just be shooting themselves in the foot!” are the battle cries heard across the web. I wish I could convey how insane this viewpoint is, especially in light of the fact that many alternative economic analysts, including myself, have been predicting just such a scenario for years.
Despite the childish boastings of the dollar devout, there is an extraordinarily good possibility that the life of the greenback will be snuffed out in the near term. Here are the facts…
1) Russia will not be alone in its decouple from the dollar system. China, our largest foreign creditor, and India (a supposed ally) have clearly sided with Russia on the Ukranian issue. China has stated that it will back Russia’s play in the event that sanctions are brought to bear by NATO, or if a shooting conflict erupts.
2) China has already been slowly dumping the dollar as a world reserve currency using bilateral trade agreements with numerous countries, including Russia, India, Australia, Brazil, Germany, Japan, etc. These agreements allow FOREX currency swaps and export/import purchases to be made with China without the use of the dollar. China has been preparing itself for a divorce from U.S. economic dependence for at least a decade. The idea that they would actually follow through over political tensions should NOT surprise anyone if they have beenpaying attention.
3) A total drop of the dollar or U.S. treasury bonds by Russia and China would send shock waves through global markets. Russia is a major energy supplier for most of Europe. China is the largest export/import nation in the world. If they refuse to accept dollars as a trade mechanism, numerous countries will fall in line to abandon the greenback as well. The fact that so many Americans refuse to acknowledge this reality is a recipe for disaster.
The only advantage the U.S. has traditionally offered in terms of international trade has been the American consumer, whose unchecked debt spending partly fueled the rise of the industrialized East, not to mention the biggest credit bubble in history. The role of America as a consumer market is collapsing today, however. The mainstream media and the Federal Reserve can blame the steady decline in retail sales on the “weather” all they want, but negative indicators in global manufacturing often take many months to register in the statistics, meaning, this destabilization began long before the days turned cold.
4) China has been shifting away from export dependency since at least 2008, calling for a larger consumer based market at home. This process of enriching the Chinese consumer has almost been completed. The lie that China “needs the U.S.” in order to survive economically needs to be thrown out like the utter propaganda it is.
5) China (and most of the world) has ended new dollar purchases for their FOREX reserves, and has no plans to make new purchases in the future.
6) China executed the second largest dump of U.S. Treasury bonds in history in the past month.
7) Russia, China, and numerous other countries, including U.S. “allies”, have been calling for the end of the dollar’s world reserve status and the institution of a new global basket currencyusing the IMF’s Special Drawing Rights (SDR). Even Putin has suggested that the IMF take over administration of the global economy and issue the SDR as a world currency system. This flies in the face of those who argue that the IMF is somehow “American run”. The truth is, the IMF is run by global banks and no more answers to the U.S. government than the Federal Reserve answers to the U.S. government.
8) The Federal Reserve has been creating trillions of dollars in fiat just to prop up U.S. markets since 2008, and we are still seeing a considerable decline in global manufacturing, retail, personal home sales, and a general malaise in consumer demand. Without a full audit, there is no way to know exactly how much currency has been generated or how much is floating around in foreign markets. Any loss of world reserve status would send that flood of dollars back into the U.S., most likely ending in a hyperinflationary environment.
9) Another rather dubious argument I see often is the claim that the Federal Reserve and the U.S. Treasury could simply “negate” a Treasury dump by refusing to acknowledge creditor liabilities. Or, that they could simply print what they need to snap up the bonds, much like the German government tried to do during the Weimar collapse. Unfortunately, this plan did not work out so well for the Germans, nor has it worked for any other nation in history, so I’m not sure why people think the U.S. could pull it off. However, this is the kind of cultism we are surrounded by. These folks think the U.S. economy and the dollar are untouchable.
Yes, the Fed and the Treasury could hypothetically erase existing liabilities, but what dollar cultists do not seem to grasp is that the dollar’s value is not built on Treasury purchases. The dollar’s value is built on faith and reputation. If a nation refuses to pay out on its debts, this is called default. A default by the U.S. would immediately damage the reputation of bonds and dollars as a good investment. Global markets will refuse to purchase or hold any mechanism that they think will not earn them a profit. How many investors today are anxious to jump into Greek treasury bonds, for instance?
Finally, it is unwise to operate on the assumption that foreign creditors will accept dollars as payment on U.S. Treasury bonds if they believe the Federal Reserve is monetizing the debt. When Weimar imploded under the weight of currency devaluation, many foreign governments refused to accept the German mark as payment. Instead, they demanded payment in raw commodities, like coal, lumber and ore. Expect that China and other debt holders will demand payment in U.S. goods, infrastructure, or perhaps even land.
10) Most treasury holdings in foreign coffers are not long term bonds. Rather, they are short term bonds which mature in weeks or months, instead of years. Dollar proponents constantly cite the continued accumulation of treasury bonds by other governments as a sign that the dollar is still desirable as ever. Unfortunately, they have failed to look at the nature of these bond purchases. When China rolls over millions in short term bonds and replaces them with other short term bonds, this does not suggest they have much faith in America’s long term ability to service its debt. It would also make sense that if China had plans to remove itself from the dollar system, they would move into short term bonds which can be liquidated quickly.
11) China is on the fast track to becoming the largest holder of physical gold in the world. Russia has also greatly expanded its gold purchases. Whatever losses they might suffer from a dump of their Treasury bond investments; it will be more than made up in the incredible explosion in precious metals prices that would follow.
12) The most common argument against the dollar losing world reserve status has been that such a shift would be “impossible” because no other currency in the world has the adequate liquidity needed to replace the dollar in global trade. These people have apparently not been paying attention to the Chinese yuan. China has been quietly issuing trillions in yuan denominated bonds, securities and currency around the world. Current estimates calculate around $24 trillion created by the PBOC and the banks under its control.
Mainstream talking heads are calling this a “debt bubble.” However, this debt creation makes perfect sense if China’s plan is to create enough liquidity in its currency in order to offer a viable alternative to the U.S. dollar. Linking the yuan to the IMF’s basket currency would complete the picture, forming a perfect dollar replacement while dollar cheerleading-economists stand dumbstruck.
13) China’s retreat away from dollar denominated investments has left a hole in the U.S. bond market. Recently, that negative space was filled by an unexpected source; namely Belgium. A country whose GDP represents less than 1% of total global GDP buying more U.S. bonds than China? The whole concept sounds bizarre. Here is the capital coming from?
Think about it this way – Belgium is the political center of the European Union and a haven for international financiers. There are more corporate cronies, lobbyists, bureaucrats, and foreign dignitaries in Belgium than in all of Washington D.C. But more importantly, Belgium struck a deal with the IMF in 2012 to begin pumping SDR denominated funds into “low income economies”. I would suggest that this funding flows both ways, and that now, the IMF is feeding capital into Belgium in order to buy U.S. Treasury Bonds. That is to say, the IMF is going to start using smaller member countries with limited savings as proxies to purchase U.S. debt using IMF money.
The ultimate danger of the IMF (run by internationalists, not the U.S. government) pre-positioning itself as the primary buyer of U.S. debt is that when the U.S. finally defaults (and it will), the IMF is likely to become the “guardian angel” of the U.S. economy, offering aid in exchange for total administrative control of our financial system, and the institution of the SDR as a world reserve replacement for the dollar.
14) The serious prospect of regional conflict or world war over tensions between the Ukraine and Russia, Japan and China, the U.S. and Syria, the U.S. and Iran, the U.S. and North Korea, etc., could make the effort of exposing the plan to shift economic power into a one world system centralized under the IMF almost meaningless. How many people will truly care about the financial power grab by banking elites if it drifts under the surface of catastrophic engineered wars? They’ll be too busy hating and fighting artificially created boogeymen to pay attention to the real globalist culprits.
I have been pointing out for quite a long time that globalists need a “cover event”; a disaster, an economic war or a shooting war, in order to provide a smokescreen for the collapse of the dollar. Alternative analysts have been consistently correct in predicting the trend towards the dump of the dollar. Years ago, we were laughed at for suggesting China would shift towards a consumer based economy and away from U.S. dependence. Today, it is mainstream news. We were laughed at for suggesting that nations like Russia and China would drop the dollar as a reserve currency. Today, they are already in the process of doing it. And, we were laughed at for suggesting that Russia or China would use their debt holdings as leverage against the U.S. in the event of a geopolitical conflict. Today, they are openly making threats.
I have to say, I’ve grown tired of the dollar cultists. How many times can a group of people be wrong and still argue with those who have been consistently right? The answer is that zealots never actually escape their own delusions, even when their delusions lead them and those around them to ruin. I suspect that in the face of complete dollar collapse, they will still be rationalizing the chaos and pontificating on our “lack of understanding” while the theater burns down around them.
Source: Brandon Smith | Alt-Market
The big currency reset. It’s not a case of ‘if’ – it’s a case ofwhen.
Don’t expect your provincial Secretary of Treasury or Chancellor Exchequer to warn you about what is coming around the corner, because they are either too stupid to know, or too busy covering their own backsides.
To understand where we are, it’s very important to understand how we got here (another point which bureaucrats and backers do not want the general populace to know).
A quick history lesson then…
The Opposite of Emerging is Submerging
Lulled and distracted by the antics of developed country central banks and emerging economy central banks – to constantly “pump-up the jam” and flood the economy with paper casino chips from either Fort Knox or Mount Gox, the real tectonic shift of the global economy since 2008 has been more or less ignored by financial gurus and sages. It is taken as “normal” that deflation, ordisinflation is operating in the developed economies, but now we can see that rip-roaring inflation operating in the emerging economies.
Supposedly, this is ‘Muddle Through’, but since 2008 the North-South paradigm has all but dissolved – the developed OECD economies are locked in a death embrace with the Emerging economies. The developed economies are now locked into chronic globalization – exporting monetary inflation while importing cheap industrial goods, services and resources.
Since 2008 the always-promised ‘world shift’ of the economy from west to east, and from north to south has happened, but the net result is a shock. Pretending “we didn’t know” is comforting, but ultimately stupid.
This is an unstable equilibrium, or an interregnum – even a sideshow, because the current global economic context and process is the exact opposite of sustainable. Harm to both North and South is now the main impact of the post-2008 process of overreach and intense fiat paper shuffling. Listing the consequences and causes of this overreach is not easy and always open to argument, but possibly the best summary is to suggest that since 2008, ‘Ricardo’s comparative advantage‘ paradigm has been inverted. Economic and above all monetary globalization is now the path to ruin and poverty. From win-win to lose-lose. The worse it gets, expect the architects of ruin – establishment politicians, central bankers and financial pundits, to retreat into even deeper denial.
The Production Bubble That Triggers the Collapse
Another simple way to argue the global economy has overreached is that industrial and economic production capacity in the Emerging economies (EMs), starting with the BRICs, is now massively over-sized. This means the EMs can and will saturate the post-industrial, deflating North with industrial supply at every stage and opportunity as technology, design and product development throw up a new market openings everywhere. Examples like the car and cellphone, fashion wear and off-shore call center industries are relatively “classic”. All of these are already saturated with capacity – but the EMs are still adding more. Previous historical “classic examples” of this process for example included the ship building industry, but the scale paradigm has been woefully ignored.
BRAZILIAN SKILLZ: Production of top-line automobiles in Brazil has surpassed many of its ‘developed’ counterparts.
Since 2008, the process has intensified, creating an increasingly certain outlook for a forced and fiat end to the willingness of the EMs to accept the fiat currency endlessly printed to finance the deflating, de-industrializing DMs (developed economies).
This will not necessarily be a politicized process, of the type hinted at by India’s central bank governor (see http://finance.fortune.cnn.com/tag/raghuram-rajan/), due to the rapidity and scale of the crisis, but instead trigger the collapse of the current global fiat monetary orderdictated by national economic self-defence and survival in the EMs.
The economic jump start of the Ricardo model, which has run riot for the last quarter-century, and went into over-drived from 2008 – will be abandoned.
Deflation/Inflation: Two Sides of the Same Bitcoin
Ricardo’s original model held sunny Portugual as a producer of cork and sherry, while rainy England could produce wine casks from its oak forests and wool from its sheep flocks. The money used in a basically resource-based exchange using then-rapidly growing maritime transport capabilities was held to be stable and gold-linked (or based). Later on, low-cost labor resources were built into Ricardo’s paradigm called “comparative advantage”. The EMs since the 1980s have played the role of resource providers while the DMs were the solvent market suppliers.
While there was a clear limit on cork, wine, oak casks and woolens supply and demand, this does not really apply to modern global fiat money and modern industrial technology. These are high gain positive feedback processes which only stop when they hit a brick wall.
The Ricardo comparative advantage model does not apply to post-1980′s globalization and super economies – like those of China and India, where industrial technology has raced ahead of infrastructure development. This is simply a bomb waiting to explode, alongside the industrial capacity growth, the EMs engaged massive growth of credit, mushroom growth urbanization, neglect of the agriculture and food sector, and turning a blind eye to rampant or even “structural” corruption. Inflation was the sure and certain result.
The results do not stop there. While inflation took off inside the EMs, with their economies producing more than they can consume, and exporting to the DMs which consume more than they produce, the EMs are also exported deflation to the developed market economies. At the same time, the emerging market economies mined out their capital bases to maintain their breakneck growth of industrial capacity.
On an almost daily basis now, the EMs are all shifting to current account deficit with the inevitable consequences of national currency devaluation, further inflation, and of course – higher interest rates.
Win-Win to Lose-Lose: Global Fiat Currency Crisis
The post-1980′s economic globalization paradigm can be called an initial ‘Win-Win’ model which eventually morphed to Lose-Lose.
The industrial nations of the DMs, which formerly benefited from the resource nations of the EMs under the previous ‘Ricardo-type’ model, are now mired in debt and de-industrialization, making it impossible for them to “grow their way out of crisis”. The EMs on their present industrial expansion path can only grow themselves into rapidly-deepening crisis.
The “money-in-the-middle” especially concerns the US dollar and its subsidiary partner, theeuro, both of which are vastly overvalued fiat currencies – but against what? Almost inevitably, this will feature a big rebound for gold, playing the starring role of in this latest episode of “Canary in the Monetary Coal Mine”. From a personal standpoint, or national (for those who have any), physical gold and silver could end up providing solid protection against the exposure of a monetary reset.
Conversely, commodities are unlikely to profit on an enduring sustained basis, due to economic restructuring, re-centering and contraction being almost certain.
Commenting on the IMF’s latest report on global capital flows since 1980, Reuters on 30 January said that while the IMF estimates net capital inflows to emerging economies as $7 trillion or more only since 2005, this was a “legacy trend” hinged on the EMs running a much higher GDP growth differential above the DMs than present. The IMF report noted that for 2014, economic growth in the BRICs will go on declining, and for Russia and Brazil, they will be less even than the GDP growth of the US and Britain. While the IMF’s economists do not allow themselves to project break-of-series change to the global economy, the process of what Gordon T. Long calls “Global collateral impairment” can easily default as the net result of apparently ‘unrelated and complex’ runaway processes.
This collateral impairment will inevitably trigger multi-national currency protection measures, a situation already clear in countries like Turkey, India, Argentina and other EMs.
For DMs in the North, plans are likely already underway. Will the reset feature a brand new reserve currency, or the introduction a fledgling single global, or virtual currency? If so, what will it be backed by (or maybe it won’t). It’s hard to know right now, but a shift of that magnitude could provide for the introduction of something new in the mix.
It’s a case of problem, reaction, solution, and one can assume that this Hegelian equation has already been mapped out on the back of a napkin in an executive dining floor of the one of the world leading central banks, possibly written using Christine Lagarde’s lip stick.
As a result, sacrificing GDP growth to protect the national money in the EMs will be inevitable. In turn, this will send a severe shock wave North to the DMs ,which have surfed on the latter-day version of the Ricardo paradigm for the last 30 years, and are now left unable to adapt.
The basic conclusion is that a global monetary reset is now overdue.
There will be shock waves, and haircuts too.
Brace yourself for impact, because it’s coming.
Only Washington Knows Best…
The control freaks in Washington think that only the decisions that Washington makes and imposes on other sovereign countries are democratic. No other country on earth is capable of making a democratic decision.
The world has witnessed this American self- righteousness for eons as Washington overthrows one democratic government after the other and imposes its puppet, as Washington did in Iran in 1953 when the CIA, as it now admits, and as Ervand Abrahamian proves in his book The Coup (The New Press, 2013), overthrew the elected government of Mossadeq, and more recently the elected government of Honduras and many governments in between.
Currently Washington is working overtime to overthrow the governments of Syria, Iran again, and Ukraine. Washington has also targeted Venezuela, Bolivia, Ecuador, and Brazil, and in its wildest dreams the governments of Russia and China.
On January 26 Syrian government advisor Bouthaina Shaaban asked Wolf Blitzer, a propagandist for Washington and the Israel Lobby, on US TV why the US government, speaking through Secretary of Stare John Kerry, has the right to decide who is to be the government of Syria instead of the Syrian people. [Polls show that Syrian president Assad’s approval ratings exceed those of every Western leader.] Even the slimy Blitzer wasn’t slimy enough to answer, “because we are the exceptional, indispensable people.” But that’s what Washington thinks.
Washington will soon be back at work on destabilizing the government of Iran again, a habit I suppose, but for the moment Washington is focused on destabilizing Ukraine.
Ukraine has a democratically elected government, but Washington doesn’t like it because Washington didn’t pick it. The Ukraine or the western part of it is full of Washington funded NGOs whose purpose is to deliver Ukraine into the clutches of the EU where US and European banks can loot the country, as they looted, for example, Latvia, and simultaneously weaken Russia by stealing a large part of traditional Russia and converting it into US/NATO military bases against Russia.
Perhaps Putin, an athlete, is distracted by the Olympic Games in Russia. Otherwise, it is something of a puzzle why Russia hasn’t put its nuclear missiles on high alert and occupied the western Ukraine with troops in order to prevent Ukraine’s overthrow by Washington’s money. Every country has citizens that will sell the country out for money, and western Ukraine is overflowing with such traitors.
As we have seen for decades, Arabs and Muslims will sell out their people for Western money. So will western Ukrainians. The NGOs financed by Washington are committed to delivering Ukraine into Washington’s hands where Ukrainians can become American serfs and this integral part of Russia can become a staging ground for the US military.
Of all the violent protests that we have witnessed, the Ukrainian one is the most orchestrated.
On February 6, Zero Hedge, one of the intelligent and informed Internet sites, posted a leaked recording from the despicable Victoria Nuland, an Assistant Secretary of State in the Obama Regime. Nuland is caught discussing with the US envoy to Ukraine, Geoffrey Pyatt, Washington’s choice for who heads the next Ukrainian government.
Nuland is incensed that the European Union has not joined Washington in imposing sanctions on the Ukrainian government in order to complete Washington’s takeover of Ukraine. Nuland speaks as if she is God with the God-given right to select the government of Ukraine, which she proceeds to do.
The EU, as corrupt as it is by Washington’s money, nevertheless understands being made rich by Washington is no protection agains Russian nuclear missiles. Nuland’s response to Europe’s hesitancy to risk its existence for the benefit of US hegemony is:
“Fuck the EU.”
So much for Washington’s attitude toward its captive allies and the peoples of the world.
Марионетки Майдана – “Puppets of Maidan”
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.
Source: Paul Craig Roberts
“Bias in favor of the orthodox is frequently mistaken for ‘objectivity’. Departures from this ideological orthodoxy are themselves dismissed as ideological.” – Michael Parenti
An exchange in January with Paul Farhi, Washington Post columnist, about coverage of US foreign policy:
Dear Mr. Farhi,
Now that you’ve done a study of al-Jazeera’s political bias in supporting Mohamed Morsi in Egypt, is it perhaps now time for a study of the US mass media’s bias on US foreign policy? And if you doubt the extent and depth of this bias, consider this:
There are more than 1,400 daily newspapers in the United States. Can you name a single paper, or a single TV network, that was unequivocally opposed to the American wars carried out against Libya, Iraq, Afghanistan, Yugoslavia, Panama, Grenada, and Vietnam? Or even opposed to any two of these wars? How about one? In 1968, six years into the Vietnam war, the Boston Globe surveyed the editorial positions of 39 leading US papers concerning the war and found that “none advocated a pull-out”.
Now, can you name an American daily newspaper or TV network that more or less gives any support to any US government ODE (Officially Designated Enemy)? Like Hugo Chávez of Venezuela or his successor, Nicolás Maduro; Fidel or Raúl Castro of Cuba; Bashar al-Assad of Syria; Mahmoud Ahmadinejad of Iran; Rafael Correa of Ecuador; or Evo Morales of Bolivia? I mean that presents the ODE’s point of view in a reasonably fair manner most of the time? Or any ODE of the recent past like Slobodan Milosevic of Serbia, Moammar Gaddafi of Libya, Robert Mugabe of Zimbabwe, or Jean-Bertrand Aristide of Haiti?
Who in the mainstream media supports Hamas of Gaza? Or Hezbollah of Lebanon? Who in the mainstream media is outspokenly critical of Israel’s treatment of the Palestinians? And keeps his or her job?
Who in the mainstream media treats Julian Assange or Chelsea Manning as the heroes they are?
And this same mainstream media tell us that Cuba, Venezuela, Ecuador, et al. do not have a real opposition media.
The ideology of the American mainstream media is the belief that they don’t have any ideology; that they are instead what they call “objective”. I submit that there is something more important in journalism than objectivity. It is capturing the essence, or the truth, if you will, with the proper context and history. This can, as well, serve as “enlightenment”.
It’s been said that the political spectrum concerning US foreign policy in the America mainstream media “runs the gamut from A to B”.
Sincerely, William Blum, Washington, DC
(followed by some of my writing credentials)
Reply from Paul Farhi:
I think you’re conflating news coverage with editorial policy. They are not the same. What a newspaper advocates on its editorial page (the Vietnam example you cite) isn’t the same as what or how the story is covered in the news columns. News MAY have some advocacy in it, but it’s not supposed to, and not nearly as overt or blatant as an editorial or opinion column. Go back over all of your ODE examples and ask yourself if the news coverage was the same as the opinions about those ODEs. In most cases. I doubt it was.
Dear Mr. Farhi,
Thank you for your remarkably prompt answer.
Your point about the difference between news coverage and editorial policy is important, but the fact is, as a daily, and careful, reader of the Post for the past 20 years I can attest to the extensive bias in its foreign policy coverage in the areas I listed. Juan Ferrero in Latin America and Kathy Lally in the Mideast are but two prime examples. The bias, most commonly, is one of omission more than commission; which is to say it’s what they leave out that distorts the news more than any factual errors or out-and-out lies. My Anti-Empire Report contains many examples of these omissions, as well as some errors of commission.
Incidentally, since 1995 I have written dozens of letters to the Post pointing out errors in foreign-policy coverage. Not one has been printed.
Happy New Year
I present here an extreme example of bias by omission, in the entire American mainstream media: In my last report I wrote of the committee appointed by the president to study NSA abuses – Review Group on Intelligence and Communications Technologies – which actually came up with a few unexpected recommendations in its report presented December 13, the most interesting of which perhaps are these two:
“Governments should not use surveillance to steal industry secrets to advantage their domestic industry.”
“Governments should not use their offensive cyber capabilities to change the amounts held in financial accounts or otherwise manipulate the financial systems.”
So what do we have here? The NSA being used to steal industrial secrets; nothing to do with fighting terrorism. And the NSA stealing money and otherwise sabotaging unnamed financial systems, which may also represent gaining industrial advantage for the United States.
Long-time readers of this report may have come to the realization that I’m not an ecstatic admirer of US foreign policy. But this stuff shocks even me. It’s the gross pettiness of “The World’s Only Superpower”.
A careful search of the extensive Lexis-Nexis database failed to turn up a single American mainstream media source, print or broadcast, that mentioned this revelation. I found it only on those websites which carried my report, plus three other sites: Techdirt, Lawfare, and Crikey (First Digital Media).
For another very interesting and extreme example of bias by omission, as well as commission, very typical of US foreign policy coverage in the mainstream media: First read the January 31, page one, Washington Post article making fun of socialism in Venezuela and Cuba.
Then read the response from two Americans who have spent a lot of time in Venezuela, are fluent in Spanish, and whose opinions about the article I solicited.
I lived in Chile during the 1972-73 period under Salvadore Allende and his Socialist Party. The conservative Chilean media’s sarcastic claims at the time about shortages and socialist incompetence were identical to what we’ve been seeing for years in the United States concerning Venezuela and Cuba. The Washington Post article on Venezuela referred to above could have been lifted out of Chile’s El Mercurio, 1973.
[Note to readers: Please do not send me the usual complaints about my using the name “America(n)” to refer to “The United States”. I find it to be a meaningless issue, if not plain silly.]
JFK, RFK, and some myths about US foreign policy
On April 30, 1964, five months after the assassination of President John F. Kennedy, his brother, Attorney General Robert F. Kennedy, was interviewed by John B. Martin in one of a series of oral history sessions with RFK. Part of the interview appears in the book “JFK Conservative” by Ira Stoll, published three months ago. (pages 192-3)
RFK: The president … had a strong, overwhelming reason for being in Vietnam and that we should win the war in Vietnam.
MARTIN: What was the overwhelming reason?
RFK: Just the loss of all of Southeast Asia if you lost Vietnam. I think everybody was quite clear that the rest of Southeast Asia would fall.
MARTIN: What if it did?
RFK: Just have profound effects as far as our position throughout the world, and our position in a rather vital part of the world. Also it would affect what happened in India, of course, which in turn has an effect on the Middle East. Just as it would have, everybody felt, a very adverse effect. It would have an effect on Indonesia, hundred million population. All of those countries would be affected by the fall of Vietnam to the Communists.
MARTIN: There was never any consideration given to pulling out?
MARTIN: … The president was convinced that we had to keep, had to stay in there …
MARTIN: … And couldn’t lose it.
These remarks are rather instructive from several points of view:
- Robert Kennedy contradicts the many people who are convinced that, had he lived, JFK would have brought the US involvement in Vietnam to a fairly prompt end, instead of it continuing for ten more terrible years. The author, Stoll, quotes a few of these people. And these other statements are just as convincing as RFK’s statements presented here. And if that is not confusing enough, Stoll then quotes RFK himself in 1967 speaking unmistakably in support of the war.
It appears that we’ll never know with any kind of certainty what would have happened if JFK had not been assassinated, but I still go by his Cold War record in concluding that US foreign policy would have continued along its imperial, anti-communist path. In Kennedy’s short time in office the United States unleashed many different types of hostility, from attempts to overthrow governments and suppress political movements to assassination attempts against leaders and actual military combat; with one or more of these occurring in Vietnam, Cambodia, Laos, British Guiana, Iraq, Haiti, Dominican Republic, Cuba and Brazil.
- “Just have profound effects as far as our position throughout the world, and our position in a rather vital part of the world.”
Ah yes, a vital part of the world. Has there ever been any part of the world, or any country, that the US has intervened in that was not vital? Vital to American interests? Vital to our national security? Of great strategic importance? Here’s President Carter in his 1980 State of the Union Address: “An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America”.
“What a country calls its vital economic interests are not the things which enable its citizens to live, but the things which enable it to make war.” – Simone Weil (1909-1943), French philosopher
- If the US lost Vietnam “everybody was quite clear that the rest of Southeast Asia would fall.”
As I once wrote:
Thus it was that the worst of Washington’s fears had come to pass: All of Indochina – Vietnam, Cambodia and Laos – had fallen to the Communists. During the initial period of US involvement in Indochina in the 1950s, John Foster Dulles, Dwight Eisenhower and other American officials regularly issued doomsday pronouncements of the type known as the “Domino Theory”, warning that if Indochina should fall, other nations in Asia would topple over as well. In one instance, President Eisenhower listed no less than Taiwan, Australia, New Zealand, the Philippines and Indonesia amongst the anticipated “falling dominos”.
Such warnings were repeated periodically over the next decade by succeeding administrations and other supporters of US policy in Indochina as a key argument in defense of such policy. The fact that these ominous predictions turned out to have no basis in reality did not deter Washington officialdom from promulgating the same dogma up until the 1990s about almost each new world “trouble-spot”, testimony to their unshakable faith in the existence and inter-workings of the International Communist Conspiracy.
Suicide bombers have become an international tragedy. One can not sit in a restaurant or wait for a bus or go for a walk downtown, in Afghanistan or Pakistan or Iraq or Russia or Syria and elsewhere without fearing for one’s life from a person walking innocently by or a car that just quietly parked nearby. The Pentagon has been working for years to devise a means of countering this powerful weapon.
As far as we know, they haven’t come up with anything. So I’d like to suggest a possible solution. Go to the very source. Flood selected Islamic societies with this message: “There is no heavenly reward for dying a martyr. There are no 72 beautiful virgins waiting to reward you for giving your life for jihad. No virgins at all. No sex at all.”
Using every means of communication, from Facebook to skywriting, from billboards to television, plant the seed of doubt, perhaps the very first such seed the young men have ever experienced. As some wise anonymous soul once wrote:
A person is unambivalent only with regard to those few beliefs, attitudes and characteristics which are truly universal in his experience. Thus a man might believe that the world is flat without really being aware that he did so – if everyone in his society shared the assumption. The flatness of the world would be simply a “self-evident” fact. But if he once became conscious of thinking that the world is flat, he would be capable of conceiving that it might be otherwise. He might then be spurred to invent elaborate proofs of its flatness, but he would have lost the innocence of absolute and unambivalent belief.
We have to capture the minds of these suicide bombers. At the same time we can work on our own soldiers. Making them fully conscious of their belief, their precious belief, that their government means well, that they’re fighting for freedom and democracy, and for that thing called “American exceptionalism”. It could save them from committing their own form of suicide.
The Fed’s easy money policies have pushed margin debt on the New York Stock Exchange (NYSE) to record levels laying the groundwork for a severe correction or another violent market crash.
In December, margin debt rose by $21 billion to an all-time high of $445 billion.
Buying equities on margin, that is, with loads of borrowed cash, is a sign of excessive risk taking the likes of which invariably takes place whenever the Central Bank creates subsidies for speculation by keeping interest rates pegged below the rate of inflation or by pumping trillions of dollars into the bloated financial system through misguided liquidity programs like QE.
Investors have shrugged off dismal earnings reports, abnormally-high unemployment, flagging demand, droopy incomes, stagnant wages and swollen P/E ratios and loaded up on stocks confident that the Fed’s infusions of liquidity will keep prices going higher. It’s only a matter of time before they see the mistake they’ve made.
The chart below illustrates how zero rates and QE lead to excessive risk taking. The correlation between the stratospheric rise of margin debt and the Fed’s destabilizing monetary policy is hard to avoid. This is what bubblemaking looks like in real time.
Chart: Seeking Alpha.
In the minutes of the FOMC’s December meeting, FOMC officials acknowledge the froth they’ve created in financial assets which is why they’ve begun to scale back their asset purchases. The Fed hopes that by gradually winding down QE they’ll be able to stage a soft landing rather than a full-blown crash. Here’s an excerpt from the FOMC’s minutes:
“In their discussion of potential risks, several participants commented on the rise in forward price-to-earnings ratios for some smallcap stocks, the increased level of equity repurchases, or the rise in margin credit. One pointed to the increase in issuance of leveraged loans this year and the apparent decline in the average quality of such loans.”
There you have it, the Fed sees the results of its work; the distortions in P/E ratios, the exuberant stock buybacks (“equity repurchases”), the deterioration in the quality of leveraged loans, and the steady rise in margin debt. They see it all, all the bubbles they’ve created with their gargantuan $3 trillion surge of liquidity. Now they have started to reverse the policy by reducing their asset purchase from $85 bil to $65 bil per month, the effects of which can already be seen in the Emerging Markets.
The bubble in Emerging Markets has burst sending foreign currencies plunging and triggering a sharp reversal in capital flows. The hot money that flooded the EMs,–(which lowered the cost of borrowing for businesses and consumers)–is entirely attributable to the Fed’s policy. QE pushes down long-term interest rates forcing investors to search for higher yield in other markets. Thus, the cost of money drops in EMs creating a boom that abruptly ends when the policy changes (as it has).
Capital is fleeing EMs at an unprecedented pace precipitating a dramatic slowdown in economic activity, higher consumer prices and widespread public distress. The Fed is 100% responsible for the turmoil in emerging markets, a fact which even mainstream news outlets blandly admit. Here’s an excerpt from an article in Bloomberg just this week:
“Investors are pulling money from exchange-traded funds that track emerging markets at the fastest rate on record…More than $7 billion flowed from ETFs investing in developing-nation assets in January, the most since the securities were created, data compiled by Bloomberg show…
Emerging economies have benefited from cheap money as three rounds of Fed bond buying pushed capital into their borders in search of higher returns…
The Fed’s asset purchases had helped fuel a credit boom in developing nations from Turkey to Brazil. Accumulated capital inflows to developing-country’s debt markets since 2008 reached $1.1 trillion, or $470 billion more than their long-term trend, according to a study by the International Monetary Fund in October.” (“Record Cash Leaves Emerging Market ETFs on Lira Drop“, Bloomberg)
The Fed doesn’t care if other countries are hurt by its policies. What the Fed worries about is how the taper is going to effect Wall Street. If the slightest reduction in asset purchases causes this much turbulence abroad, then what’s it going to do to US stock and bond markets?
The answer, of course, is that stocks are going to fall…hard. It can’t be avoided. And while the amount of margin debt is not a reliable tool for calling a top; it’s safe to say that the recent spike in investor leverage has moved the arrow well into the red zone. Investors are going to cash out long before the Fed ends QE altogether, which means the selloff could persist for some time to come much like after the dot.com bubble popped and stocks drifted lower for a full year. Now check out this clip from Alhambra Investment Partners newsletter titled “The Year of Leverage”:
“For the year, total margin debt usage jumped by an almost incomprehensible $123 billion, while cash balances declined by $19 billion. That $142 billion leveraged bet on stocks far surpasses any twelve month period in history. The only times that were even close to as leveraged were the year leading up to June 2007 (-$89 billion) and the twelve months preceding February and March 2000 (-$77 billion). Both of those marked significant tops in the market.” ( Alhambra Investment Partners newsletter titled “The Year of Leverage“)
Repeat: “The $142 billion leveraged bet on stocks far surpasses any twelve month period in history.”
Investors are “all-in” because they think that the Fed has their back. They think that Bernanke (or Yellen) will not allow stocks to fall too far without intervening. (This is called the “Bernanke Put”) So far, that’s been a winning strategy, but that might be changing. The Fed’s determination to taper suggests that it wants to withdraw its stimulus to avoid being blamed for the bursting bubble. (“Plausible deniability”?) That’s what’s driving the current policy. Here’s more on margin debt from Wolf Richter at Testosterone Pit:
“On the New York Stock Exchange, margin credit has been hitting new records for months. All three mega-crashes in my investing lifetime have been accompanied by record-setting peaks in margin debt. In September 1987, a month before the crash, margin credit peaked at 0.88% of GDP. In March 2000, when the crash began, margin credit peaked at 2.7% of GDP. In July 2007, three months before the downdraft started, margin credit peaked at 2.6% of GDP. Now, margin credit has already reached 2.5% of GDP.” (“Plagued By Indigestion, Fed Issues Asset-Bubble Warning”, Testosterone Pit)
Stock market crashes are always connected to massive leverage, loosey-goosey monetary policy and irrational exuberance (“excessive risk taking”), the toxic combo that presently rules the markets. The Federal Reserve is invariably the source of all bubblemaking and financial instability.
As we noted earlier, equity repurchases or stock buybacks are another sign of froth. Here’s an excellent summary on the topic by Alhambra Investment Partners:
“In the third quarter of 2013, share repurchases totaled $128.2 billion, the highest level since Q4 2007. For the twelve months ended in September 2013, aggregate share repurchases were an astounding $445.3 billion; the only twelve-month period greater than that total was the calendar year of 2007 and its $589 billion.
The common argument advanced in favor of such share repurchases is that companies are using cash to recognize undervalued stocks, but that is total hogwash…
…corporate managers are no different than the reviled stereotypical retail investor. Both leverage themselves further and further as the market goes higher, not in recognizing undervalued stocks or companies but in full froth of chasing obscene values via rationalizations.” ( Alhambra Investment Partners newsletter titled “The Year of Leverage”)
In other words, corporate managers are doing the same thing as your average margin investor. They are loading up on financial assets–not because they think they are a good value or because they expect higher earnings –but because Fed policy supports artificially-high prices. That’s what’s driving the bull market, the Fed’s thumb on the scale. Remove the thumb, and you have a whole new ballgame (as we see in the EMs). There’s also a bubble in high yield “junk” bonds which just had their second biggest year on record (Total issuance $324 billion) Investors are only too happy to dump their money into high-risk debt believing that companies never default or that the Fed will save the day again credit tightens and the dominoes start tumbling through the debt markets. According to Testosterone Pit:
“The cost of a high-yield bond on an absolute coupon basis is as low as it’s ever been,” explained Baratta, king of Blackstone’s $53 billion in private equity assets. Even the riskiest companies are selling the riskiest bonds at low yields… Why would anyone buy this crap?” (“Bubble Trouble: Record Junk Bond Issuance, A Barrage Of IPOs, “Out Of Whack” Valuations, And Grim Earnings Growth”, Testosterone Pit)
Why, indeed? Of course, the author is just being rhetorical, after all, he knows why people are piling into junk. It’s because the Fed has kept a gun to their heads for 5 years, forcing them to grab higher yield wherever they can find it. That’s how Bernanke’s dogwhistle monetary policy works. By slashing rates to zero, the Fed coerces investors to speculate on any type of garbage that’s available. That why junk “just had its second biggest year on record.” You can thank Bernanke.
Housing is also in a bubble due to the Fed’s zero rates, withheld inventory, government modification programs, and an unprecedented uptick in all-cash investors. Clearly, there’s never been a market more manipulated than housing. It’s a joke.
The surge of Wall Street liquidity has spilled over into housing distorting prices and reducing the number of first time homebuyers to an all-time low. The homeownership rate is actually falling even while prices climb higher, which is just one of many anomalies created by the Fed’s policy. (Who’s ever heard of a housing boom, where the number of firsttime homebuyers is dropping?)
Also, the Central Bank has purchased more than $1 trillion in mortgage-backed securities (MBS) via QE, which begs the question: How can housing prices NOT be in a bubble?
As we noted earlier, the Fed understands the impact its policies have had. They know the markets are overheated and they’re determined to do something about it. A recent article in Bloomberg explains the Fed’s plan for winding down QE “without doing damage to the economy”. Here’s a short excerpt from the piece:
“Janet Yellen probably will confront a test during her tenure as Federal Reserve chairman that both of her predecessors flunked: defusing asset bubbles without doing damage to the economy…
Yellen is ‘going to be trying to do something that no one has ever done,’ said Stephen Cecchetti, former economic adviser for the Bank for International Settlements, the Basel, Switzerland-based central bank for monetary authorities. She needs ‘to ensure that accommodative monetary policy doesn’t create significant financial stability risks,’ he said in an interview…
The Fed’s ‘first, second and third lines of defense” for dealing with such imbalances is to rely on supervision, regulation and so-called macro-prudential policies, such as mortgage loan-to-value restrictions, Bernanke told the Brookings Institution in Washington on Jan. 16. ….Only as a last resort would it consider raising interest rates.’ (“Yellen Faces Test Bernanke Failed: Ease Bubbles“, Bloomberg)
You got that?
So the Fed is going into the “bubble-deflating” biz.
And uber-dove Yellen is going to put things right. She’s going to eliminate the price distortions and gradually return the markets to normalcy.
She’s going to wind down QE and start to reduce the Fed’s $4 trillion balance sheet.
And she’s going to do all of this without raising interest rates or sending stocks into freefall?
Right. It’s a pipedream. The first sign of trouble and old Yellen will be scuttling across the floor of the New York Stock Exchange with a punch bowl the size of Yankee Stadium.
You can bet on it.
In 1979, Iran shocked the world—and directly confronted America’s hegemonic ambitions in the Middle East — by charting its own revolutionary course toward participatory Islamist governance and foreign policy independence. Over the past thirty-five years the Islamic Republic of Iran has held dozens of presidential, parliamentary, and local council elections and attained impressive developmental outcomes—including more progressive results at alleviating poverty, delivering health care, providing educational access, and (yes) expanding opportunities for women than the last shah’s regime ever achieved. Furthermore, the Islamic Republic has done these things while withstanding significant regional challenges and mounting pressure from the United States and its allies. Below, Flynt Leverett and Hillary Mann Leverett suggest that like 1979, 2014 is likely to be, in unique ways, another Year of Iran, when Tehran’s foreign policy strategy will either finally compel Western acceptance of Iran’s sovereign rights—especially to enrich uranium under international safeguards—or fundamentally delegitimise America’s already eroding pretensions to Middle Eastern hegemony.
Hassan Rohani’s election as Iran’s president seven months ago caught most of the West’s self-appointed Iran “experts” by (largely self-generated) surprise. Over the course of Iran’s month-long presidential campaign, methodologically-sound polls by the University of Tehran showed that a Rohani victory was increasingly likely. Yet Iran specialists at Washington’s leading think tanks continued erroneously insisting (as they had for months before the campaign formally commenced) that Iranians could not be polled like other populations and that there would be “a selection rather than an election,” engineered to install Supreme Leader Ayatollah Ali Khamenei’s “anointed” candidate—in most versions, former nuclear negotiator Saeed Jalili. On election day, as Iranian voters began casting their ballots, the Washington Post proclaimed that Rohani “will not be allowed to win”—a statement reflecting virtual consensus among American pundits.
Of course, this consensus was wrong—as have been most of the consensus judgments on Iran’s politics advanced by Western analysts since the country’s 1979 revolution. After Rohani’s victory, instead of admitting error, America’s foreign policy elite manufactured two explanations for it. One was that popular disaffection against the Islamic Republic—supposedly reflected in Iranians’ determination to elect the most change-minded candidate available to them—had exceeded even the capacity of Khamenei and his minions to suppress. This narrative, however, rests on agenda-driven and false assumptions about who Rohani is and how he won.
“The Islamic Republic aims to replace American hegemony with a more multi-polar distribution of power and influence. It seeks to achieve this by using international law and by leveraging participatory Islamist governance and foreign policy independence to accumulate real “soft power”.”
At sixty-five, Rohani is not out to fundamentally change the Islamic Republic he has worked nearly his entire adult life to build. The only cleric on the 2013 presidential ballot, Rohani belongs to Iran’s main conservative clerical association, not its reformist antipode. While he has become the standard bearer for the Islamic Republic’s “modern” (or “pragmatic”) right, with considerable support from the business community, his ties to Khamenei are also strong. After Rohani stepped down as secretary of Iran’s Supreme National Security Council in 2005, Khamenei made Rohani his personal representative on the Council.
Backing Rohani was thus an unlikely way for Iranian voters to demand radical change, especially when an eminently plausible reformist was on the ballot—Mohammad Reza Aref, a Stanford Ph.D. in electrical engineering who served as one of reformist President Mohammad Khatami’s vice presidents. (Methodologically-sound polls showed that Aref’s support never exceeded single digits; he ultimately withdrew three days before Iranians voted.) The outcome, moreover, hardly constituted a landslide—not for Rohani and certainly not for reformism: Rohani won by just 261,251 votes over the 50-percent threshold for victory, and the parliament elected just one year before is dominated by conservatives.
The other explanation for Rohani’s success embraced by American elites cites it as proof that U.S.-instigated sanctions are finally “working”—that economic distress caused by sanctions drove Iranians to elect someone inclined to cut concessionary deals with the West. But the same polls that accurately predicted Rohani’s narrow win also show that sanctions had little to do with it. Iranians continue to blame the West, not their own government, for sanctions. And they do not want their leaders to compromise on what they see as their country’s sovereignty and national rights—rights manifest today in Iran’s pursuit of a civil nuclear program.
The Iranian Challenge
Iran’s presidential election and the smooth transfer of office to Rohani from term-limited incumbent Mahmoud Ahmadinejad stand out in today’s Middle East. Compared to Afghanistan, Bahrain, Egypt, Iraq, Jordan, Lebanon, Libya, Palestine, Syria, and Tunisia, the Islamic Republic is actually living up to former U.S. President Jimmy Carter’s description of Iran as “an island of stability” in an increasingly unsettled region. And compared to some Gulf Arab monarchies, where perpetuation of (at least superficial) stability is purchased by ever increasing domestic expenditures, the Islamic Republic legitimates itself by delivering on the fundamental promise of the revolution that deposed the last shah thirty-five years ago: to replace Western-imposed monarchical rule with an indigenously generated political model integrating participatory politics and elections with principles and institutions of Islamic governance.
“Partnering with Tehran would require Washington and its friends in London and Paris to accept the Islamic Republic as the legitimate government of a fully sovereign state with legitimate interests.”
These strengths have enabled the Islamic Republic to withstand sustained regional and Western pressure, and to pursue a foreign policy strategy likely to reap big payoffs in 2014. This strategy aims to replace American hegemony, regionally and globally, with a more multi-polar distribution of power and influence. It seeks to achieve this by using international law and institutions, and by leveraging the Islamic Republic’s model of participatory Islamist governance, domestic development, and foreign policy independence to accumulate real “soft power”—not just with a majority of Iranians living inside their country, but (according to polls) with hundreds of millions of people across the Muslim world and beyond, from Brazil to China and South Africa. Such soft power was on display, for example, in the last year of Ahmadinejad’s presidency, when, during a trip to China, he won a standing ovation from a large audience at Peking University, where a representative sample of next-generation Chinese elites showed themselves deeply receptive to his call for a more equitable and representative international order.
In the current regional and international context, the West is increasingly challenged to come to terms with the Islamic Republic as an enduring entity representing legitimate national interests. In Tehran, the United States and its European allies could have a real partner in countering al-Qa’ida-style terrorism and extremism, in consolidating stable and representative political orders in Syria and other Middle Eastern trouble spots, and in resolving the nuclear issue in a way that sets the stage for moving toward an actual WMD-free zone in the region. But partnering with Tehran would require Washington and its friends in London and Paris to accept the Islamic Republic as the legitimate government of a fully sovereign state with legitimate interests—something that Western powers have refused to accord to any Iranian government for two centuries.
President Obama’s highly public failure to muster political support for military strikes against the Assad government following the use of chemical weapons in Syria on August 21, 2013 has effectively undercut the credibility of U.S. threats to use force against Iran. On November 24, 2013, this compelled an American administration, for the first time since the January 1981 Algiers Accords that ended the embassy hostage crisis, to reach a major international agreement with Tehran—the interim nuclear deal between Iran and the P5+1—largely on Iranian terms. (For example, the interim nuclear deal effectively negates Western demands—long rejected by Tehran but now enshrined in seven UN Security Council resolutions—that Iran suspend all activities related to uranium enrichment).
But recent Western recognition of reality is still partial and highly tentative. The United States and its British and French allies continue to deny that Iran has a right to enrich uranium under international safeguards. They also demand that, as part of a final deal, Tehran must shut down its protected enrichment site at Fordo, terminate its work on a new research reactor at Arak, and allow Western powers to micromanage the future development of Iran’s nuclear infrastructure. Such positions are at odds with the language of the interim nuclear deal and of the Nuclear Non-Proliferation Treaty (NPT). They are also as hubristically delusional as the British government’s use of the Royal Navy to seize tankers carrying Iranian oil on the high seas after a democratically-elected Iranian government nationalised the British oil concession in Iran in 1951—and as London’s continued threat to do so even after the World Court ruled against Britain in the matter.
If Western powers can realign their positions with reality on the nuclear issue and on various regional challenges in the Middle East, Iran can certainly work with that. But Iranian strategy takes seriously the real prospect that Western powers may not be capable of negotiating a nuclear settlement grounded in the NPT and respectful of the Islamic Republic’s legal rights—just as Britain and the United States were unwilling to respect Iran’s sovereignty over its own natural resources in the early 1950s. Under such circumstances, more U.S.-instigated secondary sanctions that illegally threaten third countries doing business with Iran will not compel Tehran to surrender its civil nuclear program. Rather, Iran’s approach—including a willingness to conclude what the rest of the world other than America, Britain, France, and Israel would consider a reasonable nuclear deal—seeks to make it easier for countries to rebuild and expand economic ties to the Islamic Republic even if Washington does not lift its own unilaterally-imposed sanctions.
“Continuing hostility toward the Islamic Republic exacerbates America’s inability to deal with popular demands for participatory Islamist governance elsewhere in the Middle East.”
Likewise, Iranian strategy takes seriously the real prospect that Washington cannot disenthrall itself from Obama’s foolish declaration in August 2011 that Syrian President Bashar al-Assad must go—and therefore that America cannot contribute constructively to the quest for a political settlement to the Syrian conflict. If the United States, Britain, and France continue down their current counter-productive path in Syria, Tehran can play off their accumulating policy failures and the deepening illegitimacy of America’s regional posture to advance the Islamic Republic’s strategic position.
How Will the West Respond?
Coming to terms with the Islamic Republic will require the United States to abandon its already eroding pretensions to hegemony in the Middle East. But, if Washington does not come to terms with the Islamic Republic, it will ultimately be forced to surrender those pretensions, as it was publicly and humiliatingly forced to do in 1979. Moreover, continuing hostility toward the Islamic Republic exacerbates America’s inability to deal with popular demands for participatory Islamist governance elsewhere in the Middle East. Less than a month after Rohani’s election, it was widely perceived that the United States tacitly supported a military coup that deposed Egypt’s first democratically elected (and Islamist) government. The coup in Egypt hardly obviates the fact that, when given the chance, majorities in Middle Eastern Muslim societies reject Western intervention and choose to construct participatory Islamist orders. Refusing to accept this reality will only accelerate the erosion of U.S. influence in the region.
The United States is not the first imperial power in decline whose foreign policy debate has become increasingly detached from reality—and history suggests that the consequences of such delusion are usually severe. The time for American elites to wake up to Middle Eastern realities before the United States and its Western allies face severe consequences for their strategic position in this vital part of the world is running out.
About the Authors
Flynt Leverett and Hillary Mann Leverett are authors of Going to Tehran: America Must Accept the Islamic Republic of Iran (New York: Metropolitan, 2013), which has just been released in paperback, with a new Afterword. They had distinguished careers in the U.S. government before leaving their positions on the National Security Council in March 2003, in disagreement with Middle East policy and the conduct of the war on terror. They teach international relations, he at Penn State, she at American University.
Source: The World Financial Review
The New Wave of Financial Instability…
Global stocks were hammered on Friday for a second straight day on news of a slowdown in China and turbulence in emerging markets. The Dow Jones Industrials suffered its worse drubbing in more than two years, tumbling 318 points on Friday to end a 490 point two-day rout. Emerging markets currencies were whipsawed by capital flight as foreign investors fled to the safety of U.S. Treasuries. Turkey’s lira and the Argentine peso were particularly hard hit setting record lows in the 48 hour period. The scaling back of the Fed’s $85 billion per month asset purchase program, called QE, has altered the dynamic that made emerging markets the “engines for global growth”. The policy reversal has triggered a selloff in risk assets and sent EM currencies plunging. Here’s a summary from Bloomberg:
“The worst selloff in emerging-market currencies in five years is beginning to reveal the extent of the fallout from the Federal Reserve’s tapering of monetary stimulus, compounded by political and financial instability.
Investors are losing confidence in some of the biggest developing nations, extending the currency-market rout triggered last year when the Fed first signaled it would scale back stimulus. While Brazil, Russia, India, China and South Africa were the engines of global growth following the financial crisis in 2008, emerging markets now pose a threat to world financial stability.” (“Contagion Spreads in Emerging Markets as Crises Grow,” Bloomberg)
Paradoxically, Bloomberg editors blame the victims of the Fed’s failed policy for the current ructions in the markets. In an article titled, “What’s Behind the Emerging-Market Meltdown” the editors say,”emerging-market governments … should recognize that this week’s financial-market turmoil was, to varying degrees, their own fault.” … “the best way for emerging-market governments to restore confidence would be to improve their policies.”
Logically, one would assume that the editors would throw their support behind capital controls or other means of stemming the destructive flow of speculative capital into domestic markets. But that’s not the case. What the editors really want, is policies that trim deficits, slash public spending, and allow foreign investors to continue to wreak havoc on vulnerable economies that follow their free market diktats. The article is a defense of the status quo, of maintaining the same ruinous policies so that profit-taking can continue apace.
The Fed was warned early on that its uber-accommodative monetary policy was spilling over into emerging markets and creating conditions for another financial crisis. Take a look at this excerpt from an article in Bloomberg back in 2010 where Nobel prize winning economist, Joseph Stiglitz, explicitly warns the Fed of the dangers of QE.
“The U.S. Federal Reserve’s plan to boost purchases of bonds poses “considerable” risks by increasing capital inflows to emerging markets, Nobel Prize- winning economist Joseph Stiglitz said in Santiago today.
“All this liquidity that they’re creating is not going back to grow the American economy and is going to Asia and other emerging markets where it’s not wanted,” Stiglitz said…..Increased capital inflows could cause emerging market currencies to appreciate and could create asset bubbles, he said.” (“Stiglitz Says Fed Stimulus Poses `Considerable’ Risks for Emerging Markets,” Bloomberg, Dec 2010)
Events have unfolded exactly as Stiglitz predicted they would, which means the Fed is 100% responsible the carnage in the stock and currencies markets.
The policy has pumped nearly “$7 trillion of foreign funds” into EMs since QE was first launched in 2009. According to the Telegraph’s Ambrose Evans-Pritchard, “much of it “hot money” going into bonds, equities and liquid instruments that can be sold quickly….Officials are concerned that this footloose capital could leave fast in a crisis, setting off a cascade effect,” Pritchard adds ominously.
Whether last week’s bloodbath was just a prelude to a bigger crash is impossible to say, but it is worth noting that the Fed has only reduced its purchases by a mere $10 billion per month while still providing $75 billion every 30 days. That suggests that markets will probably face greater turmoil in the months ahead. Check out this clip from USA Today:
“Emerging markets need the hot money but capital is exiting now,” says (Blackrock’s Russ) Koesterich. “What you have is people saying, ‘I don’t want to own emerging markets.’…
The bigger fear is if the current crisis in currency markets morphs into a full-blown economic crisis and leads to financial contagion, says Matthias Kuhlmey, managing director of HighTower’s Global Investment Solutions.
“The currency story is fascinating and can be a slippery slope – be cautious,” says Kuhlmey, adding that the Asian crisis in the summer of 1997 that started with a sharp drop in the value of Thailand’s baht, turned into a broader economic crisis that engulfed Indonesian, South Korea and a handful of other countries. It also rocked financial markets.” (“Why emerging markets worry Wall Street,” USA Today)
So, is this the Big One, the beginning of the next financial crisis?
It’s too early to say, but investors and analysts are worried. Fed tightening (via “taper”) will be felt in markets around the world. The trouble in emerging markets will intensify deflationary pressures in the Eurozone and put a damper on China’s growth. Slower global growth, in turn, will create balance sheets problems for undercapitalized and over-leveraged banks and other financial institutions which will increase the probability of another Lehman Brothers-type default.
According to Reuters, a normalizing of interest rates in the US, (which most analysts expect) “could cut financial inflows to developing countries by as much as 80 percent for several months. In such a case, nearly a quarter of developing countries could experience sudden stops in their access to global capital, throwing some economies into a balance of payments or financial crisis, the Bank said.” (“Rout in emerging markets may only be in Phase One,” Reuters)
Clearly, the potential for another financial meltdown is quite real.
For more than four years, the Fed has buoyed stock prices and increased corporate margins through massive injections of free cash into the financial markets. Now the Central Bank wants to change the policy and ease its foot off the gas pedal. That’s causing investors to rethink their positions and take more money off the table. What started as a selloff in emerging markets could snowball into a broader panic that could wipe out the gains of the last four years.
The Federal Reserve is entirely responsible for this new wave of financial instability.
Any analysis of domestic fossil fuel production and use must acknowledge that independence for U.S. energy has not been the national goal. Contrary to utopian dreamers and radical environmentalists, oil, natural gas and coal are the backbone of power in any modern economy. This power extends both to the fuels themselves and to the political security that is required for any economy to prosper. Therefore, it seems counterproductive to encourage corporatist to export our own precious resources for the mere motive of higher profits. Unfortunately, their ill-conceived greed is at the core of much of our countries instability.
Often ignored, coal was once the dominate resource in the generation of electricity. The utterly destructive and suicidal EPA regulations and Obama’s determination to bankrupt the coal industry has put into motion an export strategy that threatens the entire utility sector.
The Motley Fool writes in the article, Can Exports Save U.S. Coal?
“Although it remains the country’s largest private sector provider of jobs, the U.S. coal industry is hurting. Domestic utilities are turning to lower-priced natural gas. Environmental opponents are working hard to keep the mineral in the ground.
The idea of expanding exports to the world’s biggest customers — currently China, the Netherlands (a large transshipment point), the U.K., South Korea and Brazil — sounds good. And the U.S. Energy Information Administration (EIA) reports shipments of 6.3 million short tons of steam coal and 7.4 million short tons of metallurgical coal in March set a monthly record. Increased Asian demand contributed to the standout month.”
The absurd notion at clean coal is impossible; drive this train directly to ports that ship our own most prolific natural resource overseas. So much for national security considerations and who in their right mind thinks that advance scrubbers will be used in all the Chinese plants being built.
Natural gas is the new boom fuel, especially because of the questionable hydrofracking process. Leaving aside the risks to our finite water aquifer, extraction from deep field using this fracking method is the primary argument to drill. In the essay, Hydrofracking Boom or Bust, cites Deborah Rogers, points out the most significant economic consequence from hydrofracking.
“Exporting is a last ditch effort to shore up a failing balance sheet. Exportation will drive the price higher in the U.S. There’s no doubt about it. The question is how high will it go. When you are producing a commodity and have produced it to such a high extent, you want to find someone who will buy it, and in this case, it will be the Asians.”
The Wall Street Journal reports how this economic model will take place in, U.S. Approves Expanded Gas Exports.
“The decision reflects a turnaround in the U.S. energy trade. Five years ago, many companies built natural-gas import terminals, anticipating greater U.S. demand for imported fuel.
Proponents of greater exports, including the oil and gas industry, say that exporting inexpensive natural gas will help the U.S. trade balance, help advance the adoption of clean-burning fuels around the world and shore up energy-poor U.S. allies.”
Let’s be real. The corporatist only care about the margins they can squeeze out of any resource extracted from mother earth. Importing when the price is right or exporting when the world price goes the other way, but never any concern about energy INDEPENDENCE for our own people and country.
Now look at the grand daddy of all, petroleum. The Oil Roustabout Economy explains the way the oil policy actually plays out. Virtually no real apprehension for domestic oil autonomy is factored into the economic schemes, that drive the economic, political and foreign policies, which keep the global a permanent tinderbox. “Remember that drilling in Anwar is prohibited, while waging war for oil is celebrated.”However, the scale of refining raw crude into a range of utilitarian end user products, lends merit to the resale for export, especially if the original crude comes from an imported source. A valid benefit is achieved by enhancing a natural resource, with value added functionality for exporting. Nonetheless, draining your own oil fields for an immediate infusion of short-term profit, only hastens the day when domestic oilfields run dry.
The Washington Post illustrates the latest insanity coming out of the political class servants of the oil barons. The article, U.S. oil exports have been banned for 40 years. Is it time for that to change?, has a chilling message.
“Some people think so — especially now that the United States is producing more oil than it has in decades. Overturning the ban, in theory, would allow companies to sell even more oil and keep expanding.
On Tuesday, Sen. Lisa Murkowski (R-Alaska) gave a speech at the Brookings Institution calling on the Obama administration and Congress to loosen restrictions on crude-oil exports in order to boost domestic production. “We need to act,” she said, “before the crude export ban raises problems and hurts American jobs.” Jack Gerard, the head of the American Petroleum Institute, expressed similar sentiments later in the day.”
Ah, that long journey to save jobs cry is most flexible depending where the campaign contributions come from. When was the last time you heard a national debate on the necessity to conserve and the prudent use of our own energy resources, strictly for domestic usage?
Not in this lifetime, instead of exporting our natural gas overseas, what happened to How to Convert the Country to Natural Gas, by T. Boone Pickens. Read the Pickens Plan and ask where are all those converted from diesel to LNG trucks?
Folks, the selling of our coal, gas and oil resources for export are more important to the internationalists that own the corporate businesses, which control the global resources, than true national energy independence. It is that simple. The establishment plutocrats are the designers, perpetuators and exploiters of an American economy that is held hostage to energy extortion. Not until this pattern is broken, will genuine prosperity return.
With Ben Shalom Bernanke set to depart on the last day of January 2014, the critique and speculation of his tenure as Chairman of the Federal Reserve begins. The mainstream financial press is giving mostly favorable accounts. Heretofore, such praiseworthy acclamations strike a shape contrast with the actual record of the state of the economy. However, the admirers of the Fed and his specific enactments live in a time warp that only masters of the universe encounter. For the remaining population, an intense struggle for survival is the actual experience, remembered from the Bernanke years.
Investopedia expresses a complimentary score of The Legacy Of Ben Bernanke, and cites distinguished highlights and concludes that “Under Bernanke’s stewardship, the Fed became the most transparent it has ever been in its history.”
Yet, they are compelled to mention that from 2008 onward, Bernanke and the Fed embarked on a series of unparalleled – and often unconventional – rescue programs and stimulus measures. These included:
- ratcheting interest rates down to the lowest levels in American history;
- force-feeding the U.S. economy with trillions of dollars through successive rounds of “quantitative easing”;
- bailing out troubled Wall Street firms and institutions;
- orchestrating the rescue of other troubled financial institutions through shotgun weddings; and
- lending funds to diverse sectors of the U.S. economy to revive stalled credit markets.
Ben Bernanke’s Great Inflation Coverup, is an assessment that one would expect from the Mother Jones publication.
“Bernanke’s problem is pretty simple here: he almost certainly wants higher inflation . . . Once the Fed has reduced interest rates to zero, it can’t go any further. But what if the economy is so bad that all the standard models suggest you need negative interest rates to get the economy back on track? The only answer is higher inflation. If inflation is running at 2% and interest rates are at zero, the real interest rate is -2%. If you borrow money, you’re effectively being allowed to pay back less than you borrowed.”
Then there is the valid point made by Bill Sardi in LewRockwell.com. “The Fed been printing new money at the rate of $85 billion a month which is being distributed to close member banks who are gambling it on the Wall Street stock market to recapitalize themselves rather than lending it out into the economy so citizens can buy new homes, automobiles.”
The example of Paying back retirees with cheaper dollars illustrates the real costs of built in systemic inflation, not just for citizens on a fix income, but for everyone. This lost in purchasing value of the currency is obvious to any honest person.
“The average social security check was $321 in 1980 and in 2011 it was $1183 (adjusted for inflation). But if that $321 pension check were to be fully adjusted for inflation according to way inflation was calculated in 1980 (cost of gasoline and food included), then that $321 should be $3636 to have the same purchasing power today.”
The severity of income disparity has reached staggering levels. Elite insiders game the system with insider speculation certainty, while the constructive producers that keep the real components of the economy functioning, are pushed to the margins.
Bernanke’s real legacy produced the following outcomes. The always-reliable ZeroHedge site states some undeniable facts under Bernanke’s watch.
- The US has never experienced 3% GDP growth.
- The labor participation rate has fallen to levels not seen since the ‘70s.
- Inflation-adjusted median incomes have fallen 7%.
- The US’s debt load has risen from $8.4 trillion to over $16 trillion.
- The Fed’s balance sheet has increased from $800 billion to over $4 trillion (larger than the economies of Brazil, France and even Germany).
- Food prices have hit record highs fomenting revolutions in the Middle East and untold suffering around the globe.
- The Fed has funneled trillions of Dollars into both US banks and European banks.
- The Fed has allowed fraud, insider trading, and corruption.
The banksters demanded a bailed out because their derivative greed exacted losses that required an immense infusion of liquidity to rescue their balance sheets. Under Bernanke, the titans of finance have an unlimited line of near zero rate interest of new credit. When the establishment financial press applauds the savior of the economy, their loyalty towards corporatist governance, dictates that the economic interests and the public welfare of ordinary people is expendable.
Look to a prime example of this concentration of wealth and control. The Global 1%: Exposing the Transnational Ruling Class by Peter Phillips and Kimberly Soeiro, focus on BlackRock.
“BlackRock is one of the most concentrated power networks among the global 1 percent. The eighteen members of the board of directors are connected to a significant part of the world’s core financial assets. Their decisions can change empires, destroy currencies, and impoverish millions. Some of the top financial giants of the capitalist world are connected by interlocking boards of directors at BlackRock, including Bank of America, Merrill Lynch, Goldman Sachs, PNC Bank, Barclays, Swiss Reinsurance Company, American International Group (AIG), UBS A.G., Arab Fund for Economic and Social Development, J. P. Morgan Chase & Co., and Morgan Stanley.”
These crony capitalists are the prototypes that benefited from Bernanke decisions.
During the Bernanke era, the debt bubble entered the point of no return to solvency. His place in the history of shame sets the stage for further economic turmoil. The Federal Reserve after Ben Bernanke article indicates that the Fed is boxed into a pattern that is likely to escalate out of control.
“With the uninterrupted, increase in federal debt, much of which is held by the Federal Reserve, the prospects of achieving prosperity by growing the economy, when interests rates have been near zero, failed miserably. It becomes almost absurd to believe that higher rates on Treasury Bonds will succeed. The new chair of the Fed will be hard pressed shutting down Quantitative Easing.”
A depression in the real economy is foreordained with the retraction of credit to most enterprises. This starving of access to funding is a conscious and deliberate strategy to force competition out of business. The grand scale that the banksters operate on has little room for upstarts or hanger-on’s. At the end of this very destructive Bernanke term, the rich got fabulous more wealthy, as the country sinks into decline on so many levels.