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.
“When also all that generation were gathered unto their fathers; and there arose another generation after them, which knew not the Lord, nor yet the works which He had done for Israel. Then the Israelites did evil in the eyes of the Lord and served the Baals. They forsook the Lord, the God of their ancestors, who had brought them out of Egypt. They followed and worshiped various gods of the peoples around them. They aroused the Lord’s anger…they forsook him and served Baal and the Ashtoreths.” Judges 2:10-13
In his book “New Evangelicalism: the New World Order,” Paul Smith, the younger brother of Pastor Chuck Smith of Calvary Chapel, reports that the second generation sons of faithful evangelicals and evangelical pastors are going astray. Among those who have already done so are Daniel Fuller, Frank Schaeffer, Rick Warren, and Chuck Smith Jr. (p. 177)
“New” evangelicals are traveling the broad smooth road to compromise, syncretism, universalism and evolutionary pantheism taken years ago by mainline Protestantism. Already some apostate evangelicals have embraced and are teaching pantheist conceptions of Jesus Christ.
In the “The Christ of the New Age Movement,” Ron Rhodes notes that apostate evangelical, now New Age theologian David Spangler defines Christ as a cosmic principle:
“Any old Christ will not do, not if we need to show that we have something better than the mainstream Christian traditions. It must be a cosmic Christ, a universal Christ, a New Age Christ.” The Christ is not so much a religious figure, “but rather a cosmic principle, a spiritual presence whose quality infuses and appears in various ways in all the religions and philosophies that uplift humanity and seek unity with spirit.” (“The Christ of the New Age Movement: Part One in a Two-Part Series on New Age Christology,” cited in “A Quantum Cosmic Christ,” Herescope BlogSpot, June 2012)
The cosmic Christ is the Omega refashioned. The Omega is the Hermetic Hindu-pantheist divine One Substance featured by apostate Catholic theologian Teilhard de Chardin in his New Religion and now by Leonard Sweet in his Quantum Spirituality.
Leonard Sweet, preacher, scholar, and ordained United Methodist clergyman teaches a version of de Chardin’s New Religion that he calls Quantum Spirituality. Sweet has remolded Omega as an embodiment of God in process of evolving within the substance of creation:
“Quantum spirituality bonds us to all creation as well as to other members of the human family…. This entails a radical doctrine of embodiment of God in the very substance of creation…. But a spirituality that is not in some way entheistic (whether pan- or trans-), that does not extend to the spirit-matter of the cosmos, is not Christian.” (ibid, Leonard Sweet, Quantum Spirituality: A Postmodern Apologetic “)
The fall of the Christian Church is not limited to the Evangelical Church but rather the disaster is manifest over the entire denominational spectrum from the Presbyterian Church USA, which has lost hundreds of churches in the last few years, to the Episcopal and Catholic denominations.
In “Tidings of Discomfort and Joy,” Jamie Dean describes a scorched earth policy being conducted by the apostate Episcopal Church against faithful Anglicans leaving the TEC:
“TEC leaders have fought dozens of court battles to force congregations leaving the denomination to forfeit the buildings they, their parents, and their grandparents paid for.” (Jamie Dean, World Magazine, Dec. 28, 2013)
Phil Ashey of the American Anglican Council, an advocacy group for parishes and dioceses leaving the TEC, says these conflicts are a kind of “first fruits” of what faithful Christians outside TEC could face in coming years.
Since the TEC consecrated openly homosexual Gene Robinson as its first ’gay’ bishop a decade ago, hundreds of churches have fled the denomination. Departing churches emphasize TEC’s approval of open homosexuality as an outgrowth of deeper doctrinal problems: TEC leadership has questioned the authority of Scripture for decades.
Under Katherine Jefferts Schori, the first female presiding bishop, the scorched earth policy has reached new heights. The apostate Schori said this is because,
“Bad behavior must be confronted.” (ibid)
Schori preaches a brand of evolutionary pantheism while masquerading as a Christian bishop. As she mocks the crucial doctrines of the Christian faith, including the God of creation, the Incarnation, and the Trinity, she calls on Christians to boldly cross the frontier to become God while she taunts the Lord by use of the name Big Man,
“… and then points her finger at everyone listening and tells them that they have “missed the boat.” Jefferts Schori then proclaims that she has the answer for this. We all need the “act of crossing boundaries” to become God after which our hands become a “sacrament of mission.” In this way Schori continues “her mission of destroying the Christian faith through her rhetorical device of dismissive ridicule. (The False Theology of Episcopalian Bishop Katherine Jefferts Schori,” Sarah Frances Ives, PhD, VirtueOnline, Wednesday, July 11, 2012)
Within the Catholic Church losses have also been devastating, said Patrick Buchanan:
“…Catholic losses have been staggering (and) Catholics who remain in the Church are not nearly as firm in the faith or devout as their parents were. The institutional shrinkage mirrors a spreading disbelief in doctrines that define the faith. Millions of Catholic children are being taught their faith by heretics.” (Suicide of a Super Power: Will America Survive to 2025? pp. 91-93)
Evolutionary pantheism quietly infiltrated the Catholic Church years ago. Bishop Fulton J. Sheen identifies the infamous heretic Teilhard de Chardin as the main villain:
“As one looks at the various trends in our day, one sees that Teilhard’s conception of spirituality is in the forefront. He knew that he had to pass through many hazards, but he was directed principally to the cosmic world…..His fundamental orientation was “to attain heaven through the fulfillment of earth. Christify matter.” (Bishop Fulton J. Sheen, Footprints In A Darkened Forest, p. 73)
By any name, Quantum Spirituality, Evolutionary Christianity, Schori’s brand of evolutionary pantheism or Teilhard’s New Religion, all are a synthesis of heresies whose primary doctrine is evolution.
Dr. R. Albert Mohler, president of The Southern Baptist Theological Seminary, describes our age as marked by so much spiritual and theological confusion that the God of the Bible has largely disappeared from view and been replaced by,
“…less imposing deities that are more amenable to the modern mind.” (The Disappearance of God, Mohler, p. xiii)
We are witnessing the secularization, paganization and evaporation of orthodox Biblical theism to which must be added rebellion against every vestige of authority, an inversion of history caused by evolutionary thinking, the privatization of truth and,
“…..the fact that millions of Americans claim a divine right to their own spiritual cocoon and belief system.” Americans, “now lay claim to their ‘own personal Jesus.’ This personal vision of Jesus Christ may well bear little or no resemblance to Jesus as He is revealed in the Bible.” (xiii)
We are on the very brink of an anti-orthodox Christian mentality empowered and promoted by America’s apostate paganized ‘church.’ This development is approved and applauded by America’s cultural elites. For a long time our ‘highly evolved’ cultural elites–political, legal, judicial, academic, scientific, entertainment, education—have been not only been largely post-Christian in their mentality but openly hostile:
“NBC’s sitcom “The New Normal” isn’t just trying to remake society for the Gay Left. It’s trying to remake Christianity, which is to say, destroy it.” (Brent Bozell, “The New Normal Christianity?” Townhall.com, Oct 26, 2012)
Paganized, post-Christian, sexually emancipated America is in a very advanced state of moral decay. Years ago when its’ decay was not as advanced, Pitirim Sorokin even then compared it with the morally depraved, sexually decadent social conditions in the Old Kingdom of Egypt 4,500 years ago just prior to its collapse. In his book, “The American Sex Revolution,” Sorokin reported that in the Old Kingdom:
“Sexual anarchy assumed extreme forms and spread through a large part of the population. Side by side with an increase of sexual perversions, a shameless sexual promiscuity also greatly increased. They seduced members of the same family. Relations between father and daughter…..son and mother…….Adultery, rape……prostitution greatly increased………homosexual love entered the mores of the population……all the aberrations of morbid eroticism……..unnatural relations, flagellations, and sodomy.” (p. 93)
When sodomy becomes not just socially acceptable to a people but is rather a cause for celebration then collapse cannot be far behind:
“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. According to this year’s Autumn Gay Pride Calendar, 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)
One of the central realities of America’s moral decay was the dawning of a post-Christian culture now rapidly transitioning into an anti-orthodox Christian society.
The anti-orthodox Christian consciousness is now well developed. Tolerance is perverted into a radical secularism that is wholly open to ‘gay’ marriage and sodomy, abortion as legalized ‘choice,’ perverse sex education for children, occult practices, Satanism, sorcery, Wicca, magic, nudity, pornography and Decadence Festivals but intolerant of God’s Authority, Moral Law and sexual ethics. The post-Christian mind is closed to the eternally unchanging higher truths of God but completely open to the idea that truth has no objective or absolute basis whatsoever. Indeed, the postmodern mind has a fanatical dedication to moral relativism, love of self, pleasure, and its own personal Jesus idols and gods, be they evolution-gods, science-gods, mystical passion-gods, Omegas, gods-of-reason or something else.
We are living in an age of deep and undeniable breakdown, an age of darkness and spreading evil where moral constraints and restraints have been thrown off in the name of a liberation that does not emancipate but enslave. Our increasingly bizarre age is marked by a fundamental failure of conviction in unison with deepening corruption and lawlessness characterized by pathological lying, hard-edged egotism and warped, distorted personalities; but then Scripture has told us that sinners love darkness rather than the light.
Something is happening to the consciousness of this age. A counter-conversion of consciousness is closing the soul to Jesus Christ while opening it to powers of darkness. If we listen closely said Albert Mohler, we can hear something,
“….like the closing of a steel door—a solemn, cataclysmic slamming of a door.” (p. 166)
No matter how much discomfort and suffering it causes us we nevertheless need to “wake up” and “see” and “comprehend” these developments in order to understand the challenges we are already facing and the those yet to come. We are in a time of shaking, and there is far worse to come. We are about to see what remains and what falls. There is a sense, said Dr. Mohler, that we are waiting for a signal for something to tell us which way we are going to go,
“Something is happening and about to happen. The landscape is changing, the skies are darkening—and this is something we know with a spiritual perception, a spiritual sense, a spiritual urgency. Something is happening that we as believers in the Lord Jesus Christ should see and understand. For we cannot say that we were not warned.” (pp. 158, 164, 166)
As the global financial crisis now enters its seventh year, it is time to start asking difficult questions about the right priorities for popular protest if we want to realise a truly united voice of the world’s people. There can be no revolution in a truly moral or global sense until the critical needs of the extreme poor are prioritised and upheld, which will require mass mobilisations in the streets like we have never seen before.
At the onset of 2014, many people are now anticipating the prospect of a ‘global revolution’. The intense revolutionary fervour of 2011 may have dissipated in North America and much of Western Europe in the past couple of years, but a new geography of protest continues to shift and transmute in different countries and world regions – the million people on the streets of Brazil in June last year; the earlier defence of the commons in Istanbul’s Taksim Gezi Park; the indigenous uprising and student protests across Canada; the Ukraine demonstrations that are still under way.
There is no way of predicting where a mass protest movement will kick off next or what form it will take, but analysts expect that an even larger-scale version of an Occupy Wall Street-type movement will emerge in 2014. The conditions for a truly global political awakening are firmly in place, and few can believe in the politician’s rhetoric about the world economy sorting out its problems during the year ahead. Wealth and income inequalities continue to spiral out of control, increasingly to the benefit of the 1% (or indeed the 0.001%). Austerity policies pushed by governments on both sides of the Atlantic continue to threaten the social gains made since the Second World War, which is deepening social divisions and creating a new situation of desperately poor and hungry people in Britain, America and many so-called wealthy countries.
And there is no shortage of analysis about the structural crisis of our political and economic systems, from chronic unemployment and falling real incomes to corporate-captured representative democracies and Orwellian state controls. At the same time, governments remain committed to the paradigm of endless growth for its own sake, and are nearly all beholden to the interests of giant energy corporations that are determined to burn more fossil fuels than the planet can absorb without becoming unliveable. Not to mention the escalation of climate and ecological disasters, dwindling oil reserves, the risk of food shortages and further food price volatility, or even the prospect of global terrorism. Hence the growing understanding among everyday people that we are in the midst of a crisis of civilization, and we cannot rely on our existing government administrations to affect a necessary transformation of the international political and economic order.
The revised meaning of ‘revolution’
As we continue along this chaotic and uncertain road, the very idea of social or political ‘revolution’ is taking on new and different meanings. A common understanding of the term is no longer limited to the revolutionary wave of actions of the 20th century, which were typically led by charismatic leaders and a strong ideology, and often involved the violent overthrow of state power (notwithstanding such heroic examples of non-violent political struggle as Gandhi, Luther King and Vaclav Havel). But now we have the examples of Occupy, the Arab Spring, the Taksim Square demonstrations and other mass protest movements that defy conventional explanation in their spontaneous and largely peaceful mobilisations, their leaderless structures and practice of horizontal democracy, as well as their disavowal of traditional left/right politics and ideologies or ‘isms’, such as socialism and communism.
Since 2011 there is also much serious talk of a revolution of love and a collective awakening to our spiritual potential as human beings, as captured in the now-famous words of Russell Brand who advocates a “total revolution of consciousness and our entire social, political and economic systems”. Others speak of a revolution in our sense of self as ‘global citizens’, in which we equate our own interests with those of people anywhere in the world, and we no longer conform to a financialised vision of society in which we are forced to compete with everyone else as ‘others’. In short, a renewed sense of idealism and hope is everywhere being felt for a new society to be built from within the existing one, and for a revolution in every sense of the word – in our values, our imaginations, our lifestyles and our social relations, as well as in our political and economic structures.
What still isn’t clear is how the growing call for revolutionary change and new economic models can be realised on a truly international basis, and for the common good of all people in all countries – not only for the citizens of individual nations (in particular within the most advanced economies). The new protest movements may draw on a concept of human rights that is necessarily international, and they may be driven by social networks and communications technology that is shared beyond national borders, but their various concerns and demands are still generally of a domestic and country-specific nature.
Following the artful state repression of Occupy Wall Street, the vision of a collectively organised alternative to neoliberal politics is too often lost in a fight for or against individual reforms, while the Occupy movement as a whole has become increasingly atomised and fragmented. The Arab Spring is fast fading in memory, as exemplified by the political chaos and recent crackdown on popular dissent in Egypt. And there is little evidence of a shared agenda for change that can unify citizens of the richest and poorest nations on a common platform, one that recognises the need for global as well as national forms of redistribution as a pathway towards sharing the world rather than keeping it divided.
Blueprints for a new world
This is not to say that realistic proposals for planetary change do not exist, as individuals and groups everywhere are discussing the necessary reforms and objectives for how the economy should be run democratically at all levels, from the local to global. An abundance of enlightened thinking outlines the need for a ‘revolution’ in every aspect of our economic and political systems – a commons revolution, a food sovereignty revolution, a renewable energy revolution, the next American revolution – which altogether articulate an effective blueprint for a new and better world. But great uncertainty remains around how this crucial transformation of our lives can be affected when such immensely powerful forces of economic and political self-interest control the current world direction, combined with political apathy and disengagement among a vast swathe of the population.
With the global financial and economic crisis now entering its seventh year, it is time to start asking some difficult questions about the right priorities for popular protest if we want to realise a truly united voice of the world’s people. It is inevitable that the gap between rich and poor will continue to increase in most countries, and the reality of poverty and hunger will worsen across the world – regardless of the distorted arguments by the World Bank and the Millennium Development Goals (MDGs) coterie at the UN. And as living standards decline for many middle-class families in developed countries, there is a risk that people will remain preoccupied with their own situations and solely national concerns, which is already where all the militant strength is being directed in European and U.S. protest movements.
But there is no escaping the enormous disparities in wealth and income between rich OECD countries and the less developed nations, where millions of people face such extreme deprivation and food insecurity that at least 40,000 people needlessly die each day from poverty-related causes. There can be no genuine revolution in a moral or global sense until the critical needs of these voiceless poor are prioritised and upheld, which will require mass mobilisations in the streets like we have never seen before – not only predicated on redistributing resources from the 1% to the 99% within our own countries, but also centred on a shared demand for a fairer distribution of wealth, power and resources across the entire world. Perhaps that is where the true meaning of ‘global revolution’ begins, and it could be our greatest hope for a sustainable and just future in the coming year and beyond.
Adam Smith said governments are “instituted for the defense of the rich against the poor.” Wars are waged to make them richer.
Howard Zinn called war “terrorism magnified a hundred times.” Make it many thousands of times.
Michael Parenti said “the best way to win a Nobel Peace Prize (is) to wage war or support those who wage (it) instead of peace.”
In his book titled “The Face of Imperialism,” he discusses a richly financed military/industrial complex. Peter Phillips and Mickey Huff call it the “military-industrial media complex.”
Waging wars requires selling them. Public support is needed. Edward Herman and Noam Chomsky call it “Manufacturing Consent.”
Propaganda works as intended. Minds are manipulated to support war. Truth is suppressed. Fear is stoked. Patriotism, national security, and democratic values are highlighted.
Longstanding US policy facilitates earning obscene amounts from militarism, wars, homeland security, and related operations.
Doing so has nothing to do with external or internal threats. It’s unrelated to spreading democracy. It isn’t about humanitarian intervention.
It about advancing America’s imperium. Parenti calls the process “the most powerful force in world history over the last four or five centuries. (It) “carves up whole continents.”
“(T)he dominant politico-economic interests of one nation expropriate for their own enrichment the land, labor, raw materials, and markets of another people.”
Capitalist imperialism differs from earlier forms. It dominates other economies and political systems. It accumulates enormous amounts of wealth.
It uses money to make more of it. It gains market control. It exploits resources and labor.
According to Marx and Engels:
Bourgeois capital “chases over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere…It creates a world after its own image.”
Societies are destroyed and remade to do it. Nations are pillaged for profit. Populations become disenfranchised. Workers become serfs. Local cultures become mass-market consumer ones.
Agribusiness replaces local farming. Competitive industries are eliminated. Foreign investment crowds out local capital.
Dominance legitimizes capital’s divine right. Plunder assures obscene profits. Capital accumulation demands more. Profiteering becomes a be-all-and-end-all.
Businesses price according to what the market will bear. Profiteers take advantage of emergency or other out-of-ordinary conditions to cash in excessively.
WikiLeaks calls profiteering “a pejorative term for the act of making profit by methods considered unethical.”
Price fixing is illegal. Price gouging reflects grabbing all you can. It’s charging more than what’s considered reasonable and fair.
War profiteers are in a class by themselves. They thrive on war. They depend on it. Their businesses require conflicts and instability to prosper. The more ongoing, the greater the potential profits.
Lot of players profit from wars. Companies develop technologies with military applications. Black marketeers cash in.
Politicians taking campaign contributions, special favors or bribes benefit handsomely. Nations do by acquiring control over territory, resources and exploitable people.
Private military contractors include companies offering a wide range of services. They provide everything from tactical combat to security to consulting to logistics to technical support.
In his book titled “Halliburton’s Army: How a Well-Connected Texas Oil Company Revolutionized the Way America Makes War,” Pratap Chatterjee describes a company tainted by sweetheart deal no-bid contacts, bribes, kickbacks, inefficiency, shoddy work, corruption, fraud, gross overcharging, worker exploitation, and other serious offenses.
Other companies operate the same way. Military spending is hugely wasteful. Fraud and abuse are rampant. War is extremely profitable. Why else would so many be waged.
Mercenaries are guns for hire. They’re for sale to the highest bidder. They’re in it for the money. They’re unchecked, unaccountable and unprincipled.
Arms and munitions companies benefit most. Amounts spent are mind-bogging.
Bloomberg says defense budgets “contain hundreds of billions of dollars for new generations of aircraft carriers and stealth fighters, tanks that even the Army says it doesn’t need and combat vehicles too heavy to maneuver in desert sands or cross most bridges in Asia, Africa, or the Middle East.”
According to BusinessWeek, redundancy wastes lots of money. “One need only spend 10 minutes walking around the Pentagon or any major military headquarters to see” it.
Why doesn’t Congress trim fat? Because politicians want lots of pork for constituents. It’s a great vote-getter.
BusinessWeek explained more, saying:
“Why is sensible military budgeting so difficult? Because lawmakers, including small-government Republicans, protect defense business in their home states with the ferocity of Spartans.”
“Even if the Pentagon offered up (sensible) cuts…Congress would almost certainly reject them.”
“The senators and representatives don’t have the political courage to face voters and tell them that the republic simply does not need the weapon under construction in their hometown.”
Trillions of dollars are spent. Former Defense Secretary Leon Panetta once said DOD “is the only major federal agency that cannot pass an audit today.”
Even during October’s 16 day shutdown, huge amounts of wasteful spending continued.
Ralph Nader calls now the time to address bloated military spending. Let’s “start shutting down the waste and fraud in our military budget,” he stresses.
Billions get tossed around mindlessly. Profiteers never had it better. Government watchdogs identify hundreds of billions of potential savings from unneeded weapons, defective ones, no-bid excess, overpayments, and outright fraud.
The Stockholm International Peace Research Institute (SIPRI) conducts research on security, war and peace.
“A world in which sources of insecurity are identified and understood, conflicts are prevented or resolved, and peace is sustained,” it says.
It reports on “recent trends in military expenditure(s).”
Amounts spent are huge. In 2012, nominal global military spending exceeded $1.7 trillion. It’s around historic highs.
In real terms, it exceeds peak amounts spent during the Cold War. Post-9/11, spending increased sharply. America led the way.
In 2012, 15 nations accounted for over 80% military spending. SIPRI lists them as follows:
- America: $682 billion – 39%
- China: $166 billion – 9.5%
- Russia: $90.7 billion – 5.2%
- Britain: $60.8 billion – 3.5%
- Japan: 59.3 billion – 3.4%
- France: $58.9 billion – 3.4%
- Saudi Arabia: $56.7 billion – 3.2%
- India: $46.1 billion – 2.6%
- Germany: $45.8 billion – 2.6%
- Italy: $34 billion – 1.9%
- Brazil: $33.1 billion – 1.9%
- South Korea: $31.7 billion – 1.8%
- Australia: $26.2 billion – 1.5%
- Canada: $22.5 billion – 1.3%
- Turkey: $18.2 billion – 1%
- Others 18%
SIPRI calculates nominal military spending. Amounts America spends far exceeds annual defense authorizations.
Other allocations are for the Energy Department, State Department, Department of Veterans Affairs, Homeland Security, Treasury, NASA, military construction, various categories related to security, and interest attributable to past defense outlays.
Black intelligence, Pentagon and other budgets add many tens of billions more. So do supplemental military allocations. Foreign aid is mostly military related.
The Library of Congress listed the top 10 2012 recipients and amounts as follows:
Israel: $3.075 billion
Note: Israel gets special benefits provided no other nations.
They include annual $3 billion + direct appropriations, undisclosed additional amounts, state-of-the-art weapons and technology, billions in loan guarantees, military loans as grants, privileged contracts for Israeli companies, trade exemptions, and more.
Special allocations are buried in various agency budgets. Low or no-interest loans are provided. Some are never repaid. Most often, whatever Israel wants it gets.
- Afghanistan: $2.327 billion
- Pakistan: $2.102 billion
- Iraq: $1.683 billion
- Egypt: $1.557 billion
- Jordan: $676 million
- Kenya: $652 million
- Nigeria: $625 million
- Ethiopia: $580 million
- Tanzania: $531 million
US defense related spending exceeds $1.5 trillion annually. It’s half or more what other nations spend in total.
Militarism defines America. So do permanent wars. They’re a national addiction. They’re part of the national culture.
Violence is the American way. Wars are glorified. Pacifism is considered sissy. Peace is deplored. Conflicts persist with no end.
War profiteers gorge themselves at the public trough. Their operations thrive on war. They depend on it.
They’re waged for profit and dominance. They continue without end. Peace is verboten. It’s a convenient illusion.
Howard Zinn once asked “(h)ow can you have a war on terrorism when war itself is terrorism?”
“There is no flag large enough to cover the shame of killing innocent people.”
Why most Americans put up with it they’ll have to explain. Doing so lets Washington get away with mass murder and then some. It lets war profiteers benefit at our expense.
Stephen Lendman lives in Chicago. He can be reached at firstname.lastname@example.org.
His new book is titled “Banker Occupation: Waging Financial War on Humanity.”
Visit his blog site at sjlendman.blogspot.com.
No one can question the fact that the demand for silver has grown exponentially in the past few years, record sales for American Eagle coins being one small example, record buying in India, another larger example. Demand has never been greater. Supply, on the other hand, keeps diminishing.
Global mining production is at its lowest in the past decade. The annual Consumption/ Production ratio is indicative of acute deficits. Whenever there is a situation where demand rises sharply, while supply commensurately declines, it is a recipe for higher prices, and usually, much higher prices. This is true, unless one is talking about the silver market. Under the conditions of record rising demand and considerably less supply, the price of silver is at its lowest levels in the past three years.
With talk of silver going anywhere from $150 to $500 higher, it currently struggles to hold $20, why is this so?
The answer is not to be found in the myriad supply and demand figures, no matter how cogently presented: as absolute numbers, or dramatically presented graphs, and with so many comparisons to other times/situations. Facts and figures do not lie. Politicians and bankers do.
The reason why silver continues to languish is purely a political one. Silver, along with gold, compete against fiat currencies. All [Western]currencies are issued by central banks. All central banks are owned by the elites, New World Order, [NWO], the moneychangers, call them whatever you will. These elites have a vested interest in preserving the Ponzi monopoly they have enjoyed ever since Mayer Amschel Rothschild discovered the power of interest collected on debt, over 200 years ago.
Debt = Wealth. That is the motto for the elites who charge their central banks with running up as much debt as possible for every man, woman, child. and country. The more debt, the more interest owed to the 1/10th of 1% who own the world’s wealth. As an example, what was the answer to resolve Greece’s unmanageable debt problems? Have that country borrow even more!
The problem today is that the NWO is losing its grip as the growth of debt escalates to previously unimagined levels. The biggest threat to fiat currencies is sound money, such as being backed by gold and silver. This is why the United States eliminated the backing of United States Notes with silver and gold. This move was instigated by the elites who have controlled the United States since it was forced into bankruptcy in 1933.
The next move was to have President Nixon repudiate gold backing in 1971. The stage was set to flood the world with Federal Reserve Notes, backed by oil, hence the petro-dollar as the world’s reserve currency. The US has been exporting its debt-ridden society on the world ever since. What it did not count on was China, even Russia, to a lesser extent, emerging as world powers, and world powers that now have the gold.
The Western central bankers have been leasing, hypothecating and re-hypothecating gold with impunity, no country ever strong enough to challenge Western financial supremacy. Then, in the 1990s, China wanted its gold back from the United States. “Sorry, Chinks!” was the arrogant response from the US. It was gone, “leased” out to keep a controlled lid on the world’s price of gold. Central bankers were running a scam, one of the largest Ponzi schemes, ever.
It is now payback by the Chinese. Now aligned with Russia, Brazil, India, and South Africa, the BRICS nations have formed a trading alliance outside of the US petro-dollar. The world’s reserve currency has not only been challenged, it has fast become irrelevant, except in West and EU, and even in the EU, that is changing.
The golden genie was let out of the bottle over a decade ago, and all the central bankers cannot put it back. Every attempt has been made to keep a lid on the price of silver and gold by central bankers desperate to hang onto their waning power. This is why Germany was told it would have to wait seven years to get its gold back from the Federal Reserve Bank of New York. It simply ain’t there, anymore. Gone. Guess where it is?
China. Retribution can be a bitch. The East is over taking the West, and they are doing it by buying all the available physical silver and gold. Even more. China has been on a shopping spree, buying as many precious metals mining operations around the world as are available. Here is your largest demand factor, followed by the remaining BRICS nations.
What about diminishing supply? What about the almost empty vaults at COMEX and LBMA? What about the demand of 68:1 claim for each ounce of gold? What about… insert your own example of how supply is being exhausted. All factual, all true.
The elephant in the room no one is addressing is the political one. The elites have kept pressure on PMs to keep their last gasp efforts of control alive. The current price of silver has nothing to do with supply and demand, nothing. It is all about central banks being used by the elites to prevent silver and gold from exposing the fraud.
There was a reason why, in the Wizard of OZ, the theme was to “follow the yellow brick road.” The all-controlling Wizard behind the curtain was a fraud. The all-controlling elites behind the central bank curtain are also a fraud, but a more sinister one that has been cornered like a rat, and they are fighting back.
The way in which the elites are fighting back is why silver is under $20, right now. If the price of silver were allowed to rally and reflect reality, the exponentially higher prices would expose what lies behind the central bank fraud. The market is rigged. The sad truth is all markets are rigged. The Libor interest rate market, the Federal Reserve taper-on stock market, the OPEC oil market, the De Beers diamond market, the US world-wide drug trade market, the pharmaceutical market, the food supply market. Each factor that controls a specific market is also ultimately controlled by the elites, the New World Order.
If you want an idea of what to expect for the future price of silver, one only has to look at Bitcoin. It is not a government regulated market, and it is one that has taken the world by surprise. Just a few years ago, Bitcoin was under $1. Recently, it ran up to over $1,200. The appetite for any fiat alternative is huge. Bitcoin is not a currency, nor does it have the history of being currency-backed like silver and gold do. Once the lid is taken off the precious metals markets, they will leave Bitcoin in the dust.
The good news is: every single fiat currency throughout the history of the world has failed. An ounce of silver is still the same ounce of silver from thousands of years ago. The bad news is: no one knows for how much longer the elites can keep control, via their central banks, in suppressing the price. The good news to the bad news is that the end is near.
We are looking at the sale of the century for the price of silver, right now. There is a reason why China, Russia, and India have been huge buyers of physical silver and gold. Because of silver’s properties of being an indispensable necessity for industrial use, it has been used up considerably more than has gold. Both will rise incredibly in the not too distant future, and odds based on the gold/silver ratio favor silver.
One is likely to experience a greater return on investment in silver over gold. There is never any guarantee, but using historical relationships between the two makes silver a better buy and hold. The ratio is around 62:1. As both metals rise, once freed from central bank tentacles, the probability is that the ratio will move more toward 20:1. Wherever it goes, anything less than 62:1 makes silver preferred, on that basis.
This remains the best opportunity to be buying and holding physical silver. Only buy the physical metal, in coin or bar form, as you can afford. Do not buy silver in any form of paper, for you are unlikely to ever received physical, if promised. Plus, the fine print will tell you that delivery can be made in some form of paper payment in place of physical delivery.
If one has learned anything over the past few years, it is that governments cannot be trusted, and there is zero credibility in banks, all thieves, given the opportunity. Does it make sense to wait for the “best price possible?” Not as far as we are concerned. Silver may not be available at any price, or in very limited quantities, at some point. Plus, the reasons for buying are about wealth preservation that will eventually lead to increased wealth, when price finds its eventual true level. It is not worth the risk if you intend to accumulate silver and then not be able to buy any.
There could be one more new low in the near future, but that does not mean the physical will be commensurately lower. It is a personal choice. The time to buy is now, in the present. When silver eventually reaches over $150 the ounce, will it have made any material difference if you paid a dollar or two more or less the ounce? We live in an increasingly Orwellian world. Name, address, and SSN may be required, at some point. Anonymity will be lost.
The past cannot be changed, the future has not yet happened, so we can only deal with the present tense. The use of charts has its detractors, many simply from an inability to understand them, some from misapplying them, and a few from saying the charts are not real because they reflect the paper market, which is rigged. True, true, and true. However, paper valued or not, even the price for the physical is dictated by the paper market, [at least for now]. Until that changes, it is the only game in town.
Most people have something to say about the silver market. Here is how we see what the silver market has to say about the people trading it. For anyone not overly used to looking at charts, they do convey a certain degree of logic, and the message can, at times, be incredibly helpful.
A chart reflects the directional momentum of price behavior exhibited by participants. It is a way of tracking the results of all bets being placed, and it is the best way to see how the most skilled and informed, what we call smart money that moves markets, operate. Smart money trades with prevailing price direction, called the trend. They buy low and sell high, axiomatically, so it pays to have an idea of what they are doing.
A monthly chart provides the overall history and context of a market, and it is closely followed by smart money. Most traders/investors do not even look at monthly charts. We look for any existing synergy between the various time frames, for it tells a more compelling “story” about what is likely to happen. To the degree any synergy may be apparent, the greater the degree of logic one can glean from the charts.
According to the charts, the price of silver is not ready to reverse its trend. The monthly chart, and the lower time frames, clearly indicate the trend as down. Knowledge of the trend is the most important piece of information one can have, as a starting point.
“The tribal mentality effectively indoctrinates an individual into the tribe’s beliefs, ensuring that all believe the same; the structure of reality, what is and what is not possible for the members of the group is thus agreed upon and maintained by the group.”— Carolyn Myss.
To fully understand how societies operate, one must go back to where everything started, to the very beginning, from the days when people left the caves and started to come together to form small tribes.
In order to survive, people started gathering for food, then sharing it, and trading it between themselves (natural human interaction), people were minding their own business living their own lives, taking care of their young, as it is normal in any species. But there was always someone who wanted to control them all, whom we call a sociopath in these days, but that’s a subject for another day. In this article we will talk about their historical antagonists.
There was once a young man, fresh out puberty, and just before starting his first hunting with his fellow adult males he was repeatedly told what is expected from him in life: start hunting, get a wife, give your offerings to the gods, etc. “That is the real world!” he was told time and time again, but one day he started to wonder, “What else is there in the world? This can’t be all there is!” He wasn’t satisfied with the answers he was given. He wanted to explore, he wanted to break free from the inflexible tribe mentality, and make his own destiny. So after uncountable afternoons wondering if there was something else behind that hill he was told marked the end of the world, one day he decided to take action. He was set on discovering for himself. His journey was about to start then.
Due to his nature, the ruler of the tribe (almost certainly a sociopath), couldn’t possibly have one of his tribe members, whom he saw merely as human cattle, just pick up and leave. What if more people decided to leave as well? Or even worse, what if the young man came back with news about some wonderful new place where the trees were filled with fruits, or rivers filled with fishes, or plains filled with animals? After all, sociopaths always rule by means of scarcity and fear (they are incapable of love after all.) So faced with the situation, the ruler convinced the rest of the tribe that this was all there was to the world, and that thinking that there might be something more was a ludicrous fantasy, and whoever thinks differently was a threat to the tribe!
And people believed the ruler. He talked a big game about unity and hope, and how he cared about their well-being, and folks ate it all up! It was an easy sell in fact, because for most people, whoever think differently must be the enemy.
The ruler then escalated, as it is most common among sociopaths. He went further and told his tribe members (human stock) that they should punish and execute the curious young man, wait for it… For his own safety! And people bought it. It’s astonishing to observe how to this date people still believe that sociopaths are making up all kinds of rules for their own safety. But let’s return to our story.
The rest of the tribe had no trouble at all executing the young man for daring to explore for himself. Worse than that they had no problem justifying their crime by claiming that they did it for his own safety. Unbelievable, I know, but trying to explain to them the absurdity and of their actions is like teaching a dog how to drive a car, although if I had to bet, I’d probably put my money on the dog.
They bought into those imaginary, made-up rules, and the problem was they wanted to subject everyone else to them as well, which showcases the dangers of collectivism. As I always say: Collectivism to a sociopath is like the bible to a priest, a tool without which everyone would realize that their power is in fact imaginary.
[Side issue: It becomes clear that rulers are exactly what's holding us back as a species, and that without them people would have left the caves literally centuries ago.]
So when the ruler (almost inevitably a sociopath) realized that he could just make some rules up, and torture, imprison, and kill with total impunity, it was then just a matter of a time before the real question became, how many more rules should he invent to have absolute control over his fellow tribe members’ entire lives?
Rulers then began to make up all kinds of crazy stories, about the history of the world, gods and deities only they could speak to. They invented all kinds of bogeymen as well, and how did people respond? They believed it all! For some strange reasons those stories, right out of the imagination of a sociopath, didn’t seem as ludicrous fantasies to them, no matter how insane they sounded, even worse than that they began to pass them onto their own children as true facts, and if that wasn’t enough, some of them let their whole lives revolve around those fables.
Unfortunately, trying to explain to them how insane those stories sound, is like trying to teach a baboon how to post pictures on Instagram, although if I had to bet, I’d put my money on the baboon.
The sociopaths, observing the reactions of people to those fables, couldn’t believe their eyes! They realized that controlling people was basically child’s play, so they started treating people as children, and how does most people effectively control a child? You give them a treat if they do what you ask for them, and you punish or scare them with some bogeyman story if they don’t do as you say (the statist way of parenting). The thing is, rulers are all about taking, and not so much about giving, so why would they reward people with real things, if they can offer them imaginary tales of eternity in paradise?
Talking about taking, it was then just a matter of time until the sociopathic rulers started to figure out ways to take more from people. Soon enough they convinced people that those deities they previously made up were now demanding a piece of every fruit that is gathered, a portion of every wild boar that is hunted, and a slice of every fish that is caught. And the portion then became bigger and bigger. The sad part is that those tribe members believed that that was their duty. The problem however was that they wanted to subject everyone else to the same.
You don’t relate do you?
Let’s try this again:
There was a young man, fresh out of his local indoctrination center just about to enroll in some university. He was repeatedly told what is expected from him in life: finish university, get a job, pay your taxes, etc. “That is the real world!” He was told time and time again, but one day he started to wonder, “what else is there in the world? This can’t be all there is!” He wasn’t satisfied with the answers he were given and he wanted to explore life on his own, he wanted to break free from the inflexible societal group mentality, and make his own destiny, so after uncountable afternoons wondering what if there are other ways to live life, one day he decided to take action. He was set on discovering for himself how the world really works, his journey was about to start.
So once he took his first step, stopped accepting and complying with all those imaginary rules he was supposed to just accept, he started to question them. At first he couldn’t figure out why the government is constantly coming up with all these new rules and regulations, so he started analyzing the parameters on which the state bases its restrictions.
So he started with “drugs”. Since our young protagonist didn’t know much about the nature of the government he just couldn’t understand how pharmaceutical drugs companies were given free range, facing little to no regulations despite the high numbers of people who lose their lives due to secondary effect of prescription drugs, and despite the fact that all the latest shootouts had as presumed authors people who were hooked on similar substances: James Holmes (the Aurora massacre), Adam Lanza (Sandy Hoax), Aaron Alexis (Navy Yard shooting), etc.
On the other side peaceful consumption of marijuana seemed to be one of the reasons behind landing good and decent people in jail, making the US the largest prison population on the planet, despite the fact that marijuana is scientifically proven to calm people down. So the government (generally with a selection of sociopaths, Pareto’s law) rules by scarcity (oil, shortage) and fear (they are incapable of love after all), and that’s why they always create all these artificial divisions, race, religion, income, social and educational background, sexual orientations. All they can do to keep people operating on law vibrations.
Due to their nature, the government (generally with a selection of sociopaths), wouldn’t possibly have one of their fellow citizens whom they see merely as human cattle, just smoke some joiny in peace and live and let live. What if more people decided to live in peace as well? Or even worse, what if they all realized that all these divisions are artificial, and that those enemies they were supposed to fear are fabled? What if people realized that the nature of the con job?
So faced with the situation, the government convinced the rest of society that they should punish and imprison the curious young man, wait for it… For his own safety! And people bought it. They had no trouble believing that the reason government is sending all those “substance users” to rape camps where they are sexually tortured and beaten up on a daily basis, until the day they may or may not end their lives to stop the agony and the suffering, is simply because the government is a benevolent organization that cares about them.
Unbelievable, I know, but trying to explain to them the absurdity of their actions, is like teaching a propagandist to say the truth, but If I had to bet…You know who I’m putting my money on.
Society (modern day tribe members) bought into those imaginary, made-up rules, and accepted and enforced those barbaric punishments the bully inflicts on their victims if they don’t comply with his made-up rules. The problem is they wanted to subject everyone else to them as well, which showcases the dangers of collectivism.
“Society’s leaders, through illegal dictum, deception and force define a space in which life is supposed to occur”. — Jon Rappaport.
So when the government (generally with a selection of sociopaths) realized that they could just make some rules up, and torture, imprison, and kill with total impunity, it was then just a matter of a time before the real question became, how many more rules should he invent to have absolute control over their fellow citizens’ entire lives?
Sociopaths then began to make up all kinds of crazy stories, about two planes that took down three buildings, passports that don’t burn… They invented all kinds of bogeymen as well, some bearded man who lives in caves, and how did people respond? They believed it all! For some strange reasons those stories, right out of the imagination of a sociopath, didn’t seem as ludicrous fantasies to them, no matter how insane they sounded, so they consented to all kinds of violations on their privacy.
The sociopaths then, observing the reactions of people to those fables, couldn’t believe their eyes! They realized that controlling people was basically child’s play. I mean which grown up would consent to be scratched and felt up by some creep every time they wanted to board a plane?
It was then just a matter of time until the sociopathic rulers started to figure out ways of how to attack innocent people and take their resources. Soon enough they convinced people that those fables enemies they previously made up, should be stopped, so they started taking a portion of everybody’s income to pay for all those horrific wars, to pay for the murder, torture, an dismemberment of literally millions of innocent people. And the portion then became bigger and bigger… The sad part is that those tribe members (civilized people? Really?) believed that that was their duty to finance the genocide and the genetic wrecking of young children, the problem however is that they wanted to subject everyone else to the same.
“There’s a lot of ways of dividing people in two classes, but let me give you the one that’s relevant now: There’s two ways you can deal with your fellow human beings, one, there are people who believe you should deal with people voluntarily, without using violence without using force, that’s one type. The other type is a person that believes that you should deal with people, or you have to deal with people coercively, by force. Now, guess which type is inevitable attracted to government? It’s the worst criminal type of personalities.”— Doug Casey
You might want to get a second passport to escape from these sociopaths.
Adil Elias is The Dollar Vigilante’s Rio de Janeiro group moderatorand TDV Latin America (TDVLA) Editor (email@example.com). After living in several different countries, he finally based himself in Rio de Janeiro, Brazil seeking a relaxed environment away from all the large numbers of increasingly stressed people in Europe, without missing on the happy vibe and the laidback beach culture the city of Rio de Janeiro has to offer.
It hugely enriches providers. It does so at the expense of giving everyone universal single payer coverage. More on that below.
Obamacare is rife with problems. It leaves millions uninsured. It leaves millions more underinsured. It makes healthcare coverage more expensive.
Mandated market rules include rude awakenings. Many consumers are left paying much more than they thought.
Most plans include huge deductibles and co-pays. Doing so means tens of millions face unaffordable out-of-pocket costs.
Federal subsidies for America’s poor are woefully inadequate. Millions live from paycheck to paycheck. Limited resources make expensive treatments unaffordable.
Insurers have plenty of wiggle room. They can’t deny preexisting conditions. They can delay. They can block in backdoor ways.
They can game the system for profit. They wrote the law that way. They assured it benefits them hugely.
Obama’s Affordable Care Act (ACA) made a fiasco debut. Healthcare.gov doesn’t work. Accessing it is nightmarish. When it’ll be fixed, who knows.
Since launched on October 1, federal and state exchanges enrolled only 106,185. Healthcare.gov managed only 26,794. Administration officials hoped for at least half a million.
On November 14, Obama addressed a press conference. He sought to put lipstick on a pig. He tried to quell growing anger.
Insurers sent cancellation notices to hundreds of thousands of policyholders. They don’t meet ACA rules. Consumers have no choice. They’re stuck with mandated provisions. It doesn’t matter if they like them or not.
Obama promised Americans they could keep their coverage if they wish. They can keep their providers, he said. He lied.
His fix is too little, too late. Instead of canceling unqualified plans on January 1, consumers get to keep them through 2014.
Obama’s announcement came ahead of House Republican sponsored legislation. It passed 261 to 157.
Doing so included 39 Democrats. It lets all consumers keep their plans. It lets others buy whatever type coverage they wish.
It undercuts Obamacare. It has no chance to become law. Some Senate Democrats aren’t happy with Obama’s fix.
Legislation is being considered to change it. ItMajority Leader Harry Reid (D. NV) isn’t likely to permit it. At least not any time soon.
Senators Mary Landrieu (D. LA) and Mark Udall (D. CO) have competing bills. Landrieu wants consumers able to keep their current plans indefinitely. Udall wants them available though 2015.
Democrat senators up for reelection next year express greatest concern. Senator Kay Hagan (D. NC) called Obama’s fix a “step in the right direction.” It’s “not enough, and we need to do more,” she said.
Other Senate Democrats said they’ll wait to see how insurers respond. Will cancelled policyholders be given their coverage back?
Some congressional Democrats expressed anger. Obama didn’t alert them. Some learned about his fix from press reports. Others knew nothing until he announced it.
He operates this way. Transparency isn’t his long suit. He upsets members of his own party. An observer called it “par for the course.”
Obamacare’s future may depend on how things go from here. If problems stay unresolved, growing dissatisfaction will follow.
Cost and inadequate coverage are major issues. Millions will discover they’ve been had. How they react remains to be seen.
Obama’s popularity is slipping. A new Quinnipiac University poll shows only 39% approval. It’s a new low.
Gallup’s latest poll has Congress at 9%. It’s an all-time low. In its congressional ratings for 39 years, Capitol Hill’s average was 33%. Post-9/11, affirmation hit a 56% high.
Americans today deplore both sides of the aisle. They do so for good reason. They sold out their constituents. They do it consistently.
Republicans oppose Obamacare for the wrong reasons. Democrats support its worst features. Quinnipiac’s poll showed only 19% of Americans believe ACA will improve their healthcare quality.
Another 43% expect it to worsen. About one-third expect no change either way. America is the only developed country without some form of universal coverage.
Many developing ones have it. Thais get it. So do Taiwanese. Brazilians have what Americans lack. All Venezuelans and Cubans are fully covered.
It’s constitutionally guaranteed. It’s state-funded. It’s not commodified. It’s not run by marketplace rules. It’s not based on the ability to pay. It’s free.
Chavez called healthcare “a fundamental social right, and the state will assume the principal role in the construction of a participatory system for national public health.”
It’s not just a right. It’s essential for participatory democracy. It’s preventative as well as treating symptoms when they occur.
It includes emergency services, mental health, surgeries, cancer care and other expensive illnesses, dental and eye treatment, prescription drugs, as well as free eyeglasses and contact lenses.
Healthcare is based on need, not bottom line priorities. Venezuelans in every barrio are covered. An “army of white jackets” provide universal care. It’s a reality throughout the country.
Comprehensive community medicine is policy. It’s part of a Chavez/Fidel Castro agreement. It swaps oil for Cuban medical professionals.
They provide care. They help train Venezuelan doctors. They staff Venezuela’s “Barrio Adentro” (Inside the Barrio) public health program.
They provide healthcare based on Cuba’s preventative, community-based model.
Article 50 of Cuba’s Constitution guarantees everyone the “right to health protection and care. The state guarantees (it) by:
providing free medical and hospital care by means of the installations of the rural medical service network, polyclinics, hospitals, preventative and specialized treatment centers;
providing free dental care;
promoting the health publicity campaigns, health education, regular medical examinations, general vaccination and other measures to prevent the outbreak of disease.”
“All the population cooperates in these activities and plans through the social and mass organizations.”
All Cubans get state-sponsored healthcare. They get it free. It matches what developed countries provide.
It’s a model for developing ones. Medical professionals live in communities they serve. They know the people they treat.
They call their system medicina general integral (comprehensive general medicine). It focuses on prevention.
It treats illnesses and diseases as soon as possible. It works as intended. It controls health problems effectively.
It’s unmatched in treating infectious diseases. It deals effectively with chronic ones. It works wonders with limited resources.
It provides medical services in over 150 countries. Venezuelans benefit. So do Haitians, Peruvians, Nicaraguans, Bolivians, Ecuadorians, Ghanaians, Angolans and Namibians among others.
Cuba matches America’s life expectancy. It has double or more the number of physicians per 1,000 population.
It has an overall lower mortality rate. It has an exemplary national health and nutrition education program.
It emphasizes chemical-free, non-GMO, organically grown fresh produce.
It delivers top quality healthcare at a minuscule cost compared to America. It shows treatment doesn’t have to be expensive.
Extensive services include rehabilitation, x-rays, ultrasound, optometry, ophthalmology, endoscopy, thrombolysis, emergency services, traumatology, clinical lab services, family planning, dentistry, pre and postnatal child care, immunization, diabetic and elderly care.
Others include dermatology, psychiatry, psychology, cardiology, general medicine, pediatrics, obstetrics, gynecology, and mouth diseases.
Acupuncture and message therapy are provided. So are electromagnetic therapy, mud therapy, reflex therapy, heat therapy, speech therapy, physical therapy, and more.
Quality care, results, and patient satisfaction are stressed. Americans deserve the same type universal coverage.
They currently pay over twice as much as other industrialized nations. They’ll pay more when Obamacare is fully implemented. Millions will be left uncovered. Millions more will get much less than they need.
Pay more, get less is official US healthcare policy. Anyone can get whatever they want provided they pay for it. Millions can’t afford expensive care. Expect it to become more out of reach ahead.
Universal single payer coverage alone works effectively. Insurers provide no care whatever. They’re predatory middlemen. They add over $400 billion annually in administrative costs.
Eliminating them assures big savings. Americans deserve coverage for all medical services.
They include physician visits, hospitalizations, surgeries, preventive care, longterm when needed, mental health, dental, vision, prescription drugs, rehabilitation, and alternative treatments among others.
Eliminating administrative waste means more available resources. Everyone in/no one out would replace marketplace medicine.
Financial barriers no longer would exist. Insurance premiums would disappear. So would co-pays and deductibles.
Patients could choose providers freely. Doctors would regain autonomy over delivering care. It would feature prevention and healing.
It would de-commodify medicine. It would end providing the least care for the most profit. It would deliver healthcare responsibly.
It would take fear out of getting ill. At least in terms of receiving and paying for it. Treatment would be readily available no matter the problem or cost.
Isn’t that what healthcare is supposed to be? It’s a fundamental human right.
Stephen Lendman lives in Chicago. He can be reached at firstname.lastname@example.org.
His new book is titled “Banker Occupation: Waging Financial War on Humanity.”
Paul Craig Roberts thinks the Fed has backed itself into corner. A rise in interest rates would strengthen the dollar, give the dollar new life as world reserve currency, and halt the movement into gold, but a rise in rates would collapse the bond and stock markets and reduce the value of derivatives on the banks’ balance sheets. I asked Dr. Roberts if the Fed would sacrifice the dollar in order to save the banks and what the effect would be on Washington’s power viv-a-vis the rest of the world. His answers to these three questions suggest that Washington’s days of financial hegemony and world leadership are numbered.
Mike Whitney: Is the US dollar at risk of losing its position as reserve currency? How would this loss affect US leadership and other countries?
Paul Craig Roberts: In a way the dollar has already lost its reserve currency status, but this development has not yet been officially realized; nor has it hit the currency markets. Consider that the BRICS (Brazil, Russia, India, China, and South Africa) have announced their intention to abandon the use of the US dollar for the settlement of trade imbalances between themselves, instead settling their accounts in their own currencies. (There is now a website, the BRICSPOST, that reports on the developing relations between the five large countries.) There are also reports that Australia and China and Japan and China are going to settle their trade accounts without recourse to the dollar.
Different explanations are given. The BRICS imply that they are tired of US financial hegemony and have concerns about the dollar’s stability in view of Washington’s excessive issuance of new debt and new money to finance it. China, Australia, and Japan have cited the avoidance of transaction fees associated with exchanging their currencies first into US dollars and then into the other currencies. They say it is a cost-saving step to reduce transaction costs. This may be diplomatic cover for discarding the US dollar.
The October 2013 US government partial shutdown and (exaggerated) debt default threat resulted in the unprecedented currency swap agreements between the Chinese central bank and the European central bank and between the Chinese central bank and the Bank of England. The reason given for these currency swaps was necessary precaution against dollar disruption. In other words, US instability was seen as a threat to the international payments system. The dollar’s role of reserve currency is not compatible with the view that precautions must be taken against the dollar’s possible failure or disruption. China’s call for “a de-Americanized world” is a clear sign of growing impatience with Washington’s irresponsibility.
To summarize, there has been a change in attitudes toward the US dollar and acceptance of US financial hegemony. As the October deficit and debt ceiling crisis has not been resolved, merely moved to January/February, 2014, a repeat of the October impasse would further erode confidence in the dollar.
Regardless, most countries have come to the conclusion that not only has the US abused the reserve currency role, but also the power of Washington to impose its will and to act outside of law stems from its financial hegemony and that this financial power is more difficult to resist than Washington’s military power.
As the world, including US allies, made clear by standing up to Washington and blocking Washington’s military attack on Syria, Washington’s days of unchallenged hegemony are over. From China, Russia, Europe, and South America voices are rising against Washington’s lawlessness and recklessness. This changed attitude toward the US will break up the system of dollar imperialism.
Mike Whitney: How is the Federal Reserve’s Quantitative Easing impacting the dollar and financial instruments?
Paul Craig Roberts: The Federal Reserve’s policy of creating large amounts of new money in order to support the balance sheets of “banks too big to fail” and to finance continuing large budget deficits is another factor undermining the dollar’s reserve currency role. The liquidity that the Federal Reserve has pumped into the financial system has created enormous bubbles in bond and stock markets. US bond prices are so high as to be incompatible with the Federal Reserve’s balance sheet and massive creation of new dollars.
Moreover, central banks and some investors have realized that the Federal Reserve is locked into the policy of supporting bond prices. If the Federal Reserve ceases to support bond prices, interest rates will rise, the prices of debt-related derivatives on the banks’ balance sheets will fall, and the stock and bond markets would collapse. Therefore, a tapering off of quantitative easing risks a financial panic.
On the other hand, continuing the policy of supporting bond prices further erodes confidence in the US dollar. Vast amounts of dollars and dollar-denominated financial instruments are held all over the world. Holders of dollars are watching the Federal Reserve dilute their holdings by creating 1,000 billion new dollars per year. The natural result of this experience is to lighten up on dollar holdings and to look for different ways in which to hold reserves.
The Federal Reserve can print money with which to purchase bonds, but it cannot print foreign currencies with which to purchase dollars. As concerns over the dollar rise, the dollar’s exchange value will fall as more dollars are sold in currency markets. As the US is import-dependent, this will translate into higher domestic prices. Rising inflation will further spook dollar holders.
According to recent reports, China and Japan have together reduced their holdings of US Treasuries by some $40 billion. This is not a large sum compared to the size of the market, but it is a change from continuing accumulation. In the past, Washington has been able to count on China and Japan recycling their trade surpluses with the US into US Treasury debt. If foreign willingness to acquire Treasury debt declines and the federal budget deficit does not, the Federal Reserve would have to increase quantitative easing, thus putting even more pressure on the dollar.
In other words, in order to avoid an immediate crisis, the Federal Reserve has to continue a policy that will produce a crisis down the road. It is either a financial crisis now or a dollar crisis later.
Eventually, the Federal Reserve’s hand will be forced. As the dollar’s exchange value declines, so will the value of dollar-denominated financial instruments regardless of how many bonds the Federal Reserve purchases.
Mike Whitney: How is China likely to respond to America’s changing economic position?
Paul Craig Roberts: When I met with Chinese policymakers in 2006, I advised them that there was a limit to how long they could rely on the US consumer market as jobs offshoring was destroying it. I pointed out that China’s large population provided policymakers with the potential for an enormous economy. They replied that the one-child policy, which had been necessary in early years to keep population from outrunning social infrastructure, was blocking the development of a domestic consumer economy. As peasant farmers no longer could rely on multiple children for old age insurance, they hoarded their earnings in order to provide for their old age. Chinese policymakers said that they intended to develop a social security system that would give the population confidence to spend more of their earnings. I do not know to what extent China has moved in this direction.
Since 2006 the Chinese government has let the yuan appreciate 25% or 33%, depending on the choice of base. The increase in the currency’s exchange value has not hurt exports or the economy. Moreover, the US no longer manufactures many of the items for which it is dependent on China, and other developing countries do not have the combination of the technology that US corporations have given to China and China’s large excess supply of labor. So it is unlikely that China faces any threat to its development except for US policies designed to cut China off from resources, such as the new US military focus on the Pacific announced by the Obama regime.
China’s large dollar holdings are the consequence of the technological prowess that China acquired from Western corporations offshoring jobs to China. What is important to China is the technology and business know-how, which they have now acquired. The paper wealth represented by dollar holdings is not the important factor.
China could destabilize the US dollar by converting its holdings into dollar currency and dumping the dollars into the exchange markets. The Federal Reserve would not be able to arrange currency swaps with other countries large enough to buy up the dumped dollars, and the dollar’s exchange value would fall. Such an action could be a Chinese response to military encirclement by Washington.
In the absence of a confrontation, the Chinese government is more likely to gradually convert its dollars into gold, other currencies and real assets such as oil and mineral deposits and food businesses.
Quantitative easing is rapidly increasing the supply of dollars, but as other countries move to other arrangements for settling their trade imbalances, the demand for dollars is not rising with the supply. Thus, the dollar’s price must fall. Whether the fall is slow over time or sudden due to an unanticipated Black Swan event remains to be seen.
Beirut — Being subjected to the Zionist lobby can get tedious — particularly its chronic parading of an often disoriented and fast-deteriorating fellow, who should surely be tending a vegetable or flower garden somewhere in Occupied Palestine, where he lives on stolen land. International lawyers, even some at Hebrew University, have come to recognize the half century of crimes against humanity meted out by Shimon Peres upon hundreds of thousands of Palestinian refugees, and thus one could be forgiven for rolling eyes at the Israeli president’s concerns over demons said to be haunting his sleeping and waking moments, as he complains that perhaps, just maybe, he was wrong in his calculations 70 years ago.
Those demons are Palestinians, and it is perhaps the supreme irony of ironies that Peres now finds himself lamenting over what became of the ideals of Judaism—the very same ideals he spent half a century of his life destroying in the name of fascist Zionism. “I could not face my parents were I ever to see them again,” the Israeli president, an avowed agnostic, told a member of Congress a few months back.
‘Peres’ Complaint’ has been increasingly heard over the past couple of years, confided to some of his US and EU Zionist lobby hosts during fundraising and legacy-reinforcing appearances. It often manifests itself as a continuous monologue, much as if narrated at his psychoanalytic group therapy session, and often about the same subjects he claims have haunted him for decades. One of these reportedly is the whole concept of an eretz Israel land grab as a divinely-ordained destiny for a “chosen” Jewish people.
At a cocktail party last year, Peres was overheard telling Vice President Biden, “Who knows if there is a god or not? But if so, I doubt he deals in real estate!” Biden appeared shocked, quickly summoning a waiter for replacement glasses of scotch, hoping to cheer the president of Israel up a bit. “He needs to be more philosophical,” Biden said, reporting on his “psychoanalytic session” with Peres, later explaining, “Sure the hand writing is on the wall regarding a future for Israel is clear for all to see, but it could be worse!”
Peres’ Complaint, like Portnoy’s in Philip Roth’s 1969 novel, revolves around the dilemma of, as Roth penned, “his sense of himself, his past, and that his ridiculous destiny is so fixed“.
Portnoy’s Complaint is a disorder in which claimed ethical impulses are perpetually warring, almost Hamlet-like, with extreme longings, often of a perverse nature, reminding some of a sort of sexual dysfunction.
Peres’s Complaint is similar in many ways, but takes a varied form. In an interview published by the Brazilian newspaper the Folha de Sao Paulo, Peres was asked what he would say to Iran’s President Rouhani if the two were to pick up the telephone and speak directly.
“I would tell him nobody in the world is threatening Iran. So why does Iran threaten other countries? Tell me. I don’t understand why Iran threatens Israel. Why?” he replied.
Peres knows that Iran has not threatened other countries, but rather that it is Israel which has threatened the whole region, and which did so within minutes of his Zionist-Labor terrorist-backed associates declaring themselves a “country.”
Peres ended his short interview with Folha de Sao Paulo with this bit of sage erudition:
“In politics, and in life, you can only judge things based on facts. There has been no change on Iran—the facts contradict the speeches.”
The words were spoken as if the speaker were satisfactorily contemplating the last remaining 19th century European colonial enterprise…along with his own role in setting up and governing it.
Peres’ Complaint to colleagues is that he has to say things to the public that are beginning to sound hollow after six decades of trying to parry and neutralize the Palestinian resistance to Zionist theft and colonization. Peres no longer believes what he used to “about the Zionist BS,” as one congressional source put it.
During his last visit to Washington, while rushing from a meeting at the Rayburn House Office Building with AIPAC and some Congressional staffers, Peres in his haste handed half an armload of documents and reports to an aid to carry for him. Unnoticed at the time, one of the documents slipped under the table where the meeting was held, and was found later. On it were some handwritten comments, in Hebrew, in Peres’ hand.
Common respect for individual privacy bars this observer from revealing what the handwritten notes said, but the document itself is most certainly in the public domain and includes some of the latest reports on the status of the Zionist occupation.
The first few pages are a summary of the UN Human Rights Council’s report criticizing the deep water drillings by the Israeli national water company Mekorot and the Israeli agri-industrial firm Mehadrin in the occupied Jordan Valley. These drillings have caused the drying up of Palestinian wells and springs. As Dr. Elias Akleh reminds us, nearly 80% of all drilled water from the Jordan Valley is consumed by Israeli illegal colonies in the West Bank. The Palestinians are not allowed to drill their own water wells, and the Israeli government routinely destroys Palestinian pools for collecting rain water, claiming “construction without permits”—permits which, of course, are impossible for Palestinians to obtain. Many other wells and water springs have also been destroyed, poisoned and contaminated as Israeli colonies have intentionally channeled their raw sewage into Palestinian towns and agricultural areas.
But getting back to the document, circled in pen is a statement in a 1941 speech by David Ben-Gurion: “We have to remember that for the Jewish state’s ability to survive it must have within its borders, the waters of the [rivers] Jordan and Litani.”
And there is another excerpt of note—documenting the decades-old practice of declaring a coveted piece of land a “military area” and then evicting its residents, surrounding it with barbed wire, uprooting all trees, stripping the land of vegetation, and facilitating the arrival of extremist squatters with mobile homes who later start building their colonies.
Still other findings relate to the intensification of home demolitions, citing recent figures showing that armed, religious-extremist squatters are allowed to illegally build their small colonies on top of confiscated Palestinian hills while enjoying the protection of the Israeli army. Palestinians are forbidden to build new homes or even remodel existing ones to make additional space for family expansion. The Israeli terrorist forces increasingly exercise their early hour routine of driving their bulldozers into some Palestinian suburbs to demolish a Palestinian home that was built without a permit.
“The army breaks into the Palestinian home, gives the Palestinian family ten minutes to evacuate and starts demolishing the home,” says Dr. Akleh. “Palestinians are denied building permits. Many Palestinians are given the order to demolish their own homes, otherwise the Israeli army would demolish it and the home owner will be charged exorbitant fees. In contrast, Israel continues its plans of illegal colonies (settlements) building. This Israeli systematic policy of Palestinian home demolishing and colony building on confiscated Palestinian land contravenes the 4th Geneva Convention.”
On and on the president’s document reads…
Included in bold type are excerpts from the recent Tadamun Foundation for Human Rights report documenting what Palestinian schools and students have suffered in recent weeks—a remarkable escalation in attacks by Israeli soldiers and extremist settlers. The report claims the attacks, including school raids, destruction of school property, as well as detaining and assaulting students, have become more frequent, especially by settlers. Recent examples include the Jalud School and Beit Dajan School in Nablus, and the Khader School in Bethlehem. The international community is increasingly reacting to these terrorist practices. Recently a letter by a group of British intellectuals, entitled “Action for Palestine” and calling upon Israeli authorities to end the pattern of abuse of Palestinian children, was published in the UK Guardian newspaper.
But the army has also intensified its arrests and kidnapping of Palestinian children accused of stone throwing. Many children are routinely intercepted on their way to school at Israeli military checkpoints, searched, humiliated, and at times arrested. Israeli forces conduct routine middle of the night raids of Palestinian homes, where they break into the homes, smash furniture, and terrorize the families, dragging young boys from their beds and blindfolding them before dumping them on the floor of a military jeep and driving them to a prison in Israel. In the prison, where their parents are not allowed to see them, the children are harshly interrogated, threatened, tortured; some raped and imprisoned.
The 213 page document was presumably heavy reading for the polish-born Szymon Perski, ardent protégé of Ben-Gurion and Dayan and an early supporter of the West Bank settlers during the 1970s.
Shimon Peres’ guilt-edged insecurity these days is far more important when it comes to the masking—and unmasking—of an abettor of racist Zionism. His complaint, like Portnoy’s Complaint, is also emblematic of the times during which he has lived and his uncertainty as to whether he has squandered his life in an evil cause.
“I am marked like a road map from head to toe with my repressions. You can travel the length and breadth of my body over superhighways of shame and fear.”
Portnoy’s Complaint…or Peres’?