This article will be a departure from my usual fare. I will not claim there is some Absolute Truth deeming soccer the bane of humanity’s sports. I do not contend that some objective, divine standard places it in Dante’s ninth circle of athletic arenas, though I wish I could. Sport is a matter of taste, and, as G.K. Chesterton said (okay, so this isn’t a complete departure for me — I’m quoting Chesterton), “There are no uninteresting subjects, only uninterested people.” I get it. And I, I confess, like golf. So mock away. But in this piece I’ll ditch the Mr. Spock act, let my human side emote, may even contradict myself, and will say something.
I hate soccer.
I hear there’s something going on right now called the World Cup. I hear it’s in Brazil. I hear other pundits, such as Stephen Webb and Rick Moran, are commenting on it, taking opposing views. And I hear that the score between the two is 0-0 after 2000 words. But I won’t claim that soccer is un-American as did Webb or like Moran, claim it’s fun. I’ll say something truly intellectual.
I hate soccer.
When I grew up in the Bronx in the ‘70s, few played that infernal game. I was exposed to it, but could never relate. Why can’t I use my hands? I mean, I have hands. They’re remarkably dexterous appendages. They exist to manipulate all manner of things in the physical universe. I preferred tennis and ping pong to handball, sure, but that was understandable. The racquets and paddles are tools that facilitate the striking of a ball; with them you can achieve a degree of velocity and spin — which could curve the ball in fascinating ways — otherwise impossible. And velocity and spin are cool. It’s as if I need to pound a nail: I take my hand and pick up a hammer. I don’t use my foot.
That’s the crux of this entirely taste-oriented matter. It goes without saying that professional soccer players are highly skilled. But to me it’s like seeing those unfortunate double amputees who’ve learned to paint or play the piano with their toes. I say, “Wow, it’s amazing how man’s spirit can overcome.” Then I change the channel and look for something that can fill the hour’s remaining 59 minutes and 35 seconds.
So if soccer were in the Special Olympics, I’d understand it. Or maybe if it were played by birds. But why do human beings, with their particular anatomical configuration, want to use their feet for a task performed infinitely better by the hands? It’s no wonder the scoring in soccer tends to hover around Joe Biden I.Q. territory. How many baskets would be sunk in the NBA if the players had to kick the ball through the hoop, even if they could block only with their heads? How poor would the scores be in golf if you had to kick the ball down the fairway? A braggart may say, “I can beat you with one hand tied behind my back.” Soccer players try to beat each other with both tied.
Mr. Moran correctly pointed out that, contrary to Mr. Webb’s assumption, soccer is now tremendously popular in the US. I must attribute this, in part, to the influx of people from lands where they can’t afford to play much of anything but soccer. And while I’ve often “inveighed” against immigration, to use the word Rep. John Conyers (D-Soccer) did when citing my work upon waking up briefly in the House, our foreign soccer imports might be the best reason to rethink our immigration regime. “Do you play socc…er…fútbol, amigo?
Check the deportation column.
Call it the Immigration and Recreation Reform Act of 2014. Entry into the US would be limited to those with a history of participation in polo or yacht racing.
So save those feet for what they were meant to do, such as kicking illegals out of the country, kicking Cantors out of office and kicking the economy into gear. A hand is a terrible thing to waste.
Commenting recently on the Elliot Rodger killings, arch-leftist Michael Moore wrote that while “other countries have more violent pasts…more guns per capita in their homes…and the kids in most other countries watch the same violent movies and play the same violent video games that our kids play, no one even comes close to killing as many of its own citizens on a daily basis as we do….” From a man who used to take the simple-minded gun-control position “fewer guns=less homicide,” it was surprising evidence of growth. After making his point, however, Moore made a mistake in following up with, “and yet we don’t seem to want to ask ourselves this simple question: “Why us? What is it about US?” It’s not, however, that we don’t want to ask the question.
It’s that we don’t want to hear the answer.
We can begin seeking it by asking another question: Why is it that Vermont, with approximately the same rate of gun ownership as Louisiana, has less than one-eighth the murder rate? Even more strikingly, why does New Hampshire have both a far higher gun ownership rate and a lower murder rate than England, Piers Morgan’s favorite poster-boy nation for gun control?
Professor Thomas Sowell provided more of these seeming contradictions in 2012, writing:
When it comes to the rate of gun ownership, that is higher in rural areas than in urban areas, but the murder rate is higher in urban areas. The rate of gun ownership is higher among whites than among blacks, but the murder rate is higher among blacks.
… [There are also] countries with stronger gun control laws than the United States, such as Russia, Brazil and Mexico. All of these countries have higher murder rates than the United States.
You could compare other sets of countries and get similar results. Gun ownership has been three times as high in Switzerland as in Germany, but the Swiss have had lower murder rates. Other countries with high rates of gun ownership and low murder rates include Israel, New Zealand, and Finland.
So what’s the answer we don’t want to hear? The critical difference among these regions and nations is explained right in Sowell’s title: it’s “not guns.”
What “people” differences are relevant? Let’s start with race and ethnicity. In the cases of homicide in 2012 in which the races of the perpetrators were known, 55 percent were committed by blacks, 62 percent of whom were under 30 years of age. Black youths are 16 percent of the youth population, but constitute 52 percent of those arrested for juvenile violent crime.
The statistics for Hispanics are more difficult to ferret out because, unbeknownst to many, law enforcement agencies tend to lump them in with whites in crime statistics (the FBI has announced that it will finally categorize Hispanic crime — in its report on 2013). However, there is some information available. Examiner’s Ken LaRive tells us that “Hispanics commit three times more violent crimes than whites,” but that the disparity could be even greater because of their often being classified as white.
The National Youth Gang Survey Analysis reports that gang members are approximately 49 percent Hispanic, 35 percent black and 10 percent white. And while whites are 35 percent of NYC’s population, blacks and Hispanics commit 96 percent of all crime in the Big Apple and 98 percent of all gun crime.
Another good indicator is international crime statistics. Hispanic countries dominate the homicide-rate rankings, with Honduras topping the list with a rate eight times as high as that of our worst state, Louisiana. Also note that there are no European/European descent nations in the top 20 and not one Western-tradition nation in the top 30 (Russia and Moldova are 24 and 28, respectively).
And what can we say about these “people” differences? It’s much as with the question of why men are more likely to be drunkards than women. You could explore whether the differences were attributable to nature, nurture or both. But it would be silly to wonder if the answer lay in men having greater access to bars, alcohol or shot glasses.
This brings us to why covering up minority criminality encourages gun control:
Americans won’t understand that the critical factor is people differences if they aren’t told about the people differences.
They will then — especially since most citizens aren’t even aware that there are nations with more firearms but less murder — be much more likely to blame guns. Of course, this is precisely what you want if you’re a left-wing media propagandist.
There is a question that could now be posed by the other side: if the main difference in criminality is demographics, why not outlaw guns? After all, it won’t make a difference one way or the other, right? I’ll offer a couple of answers to this question.
First, for a people to maintain just liberties, a freedom must always be considered innocent until proven guilty; the burden of proof is not on those who would retain it, but on those who would take it away.
Second, while private gun ownership and just law enforcement can’t turn barbarians into civilized people any more than excellent schools can transform dunces into geniuses, they can act as mitigating factors that minimize criminality as much as possible given the “raw material” with which the particular society has to work. It’s much as how you can maximize your personal safety: you may be safer in a great neighborhood with no martial arts training than in a terrible one with that training. Nonetheless, it allows you to be safer than you would be otherwise whatever neighborhood you choose.
And what do the stats show in our fair to middling USA neighborhood? Florida State University criminologist Gary Kleck reported that guns are used by good citizens 2.2 to 2.5 million times per year to deter crime. That likely saves many more innocent lives than are lost in massacres every year, but these unseen non-victims don’t make headlines the way Sandy Hook tragedies do. That’s why I like to say, using a twist on a Frédéric Bastiat line, a bad social analyst observes only what can be seen. A good social analyst observes what can be seen — and what must be foreseen.
Lastly, one more truth becomes evident upon recognizing that demographics are the main factor in criminality: even if you do believe in gun control, imposing it federally and applying a one-size fits all standard is ridiculous. In terms of people and crime, there’s a world of difference between towns in New Hampshire or Vermont, with their England-level murder rates, and cities such as East St. Louis, IL, or Detroit, which rival El Salvador in citizen lethality. You can make gun control the same everywhere, but you can’t change the fact that people will be very, very different.
In 2008, Houston police pulled over CIA agent Roland Carnaby on what appeared to be a routine traffic stop. A few seconds later, Carnaby was dead.
It is illegal to detain a CIA agent under any circumstances. They may carry any weapon, anywhere, anytime, and request assistance from any law enforcement official with more than certainty.
Why then would this incident be part of a highly classified Russian intelligence report? Could it, perhaps, be that Carnaby, answering directly to former President and CIA Director, George H.W. Bush, was murdered to silence his participation in the theft and sale of American nuclear warheads?
Carnaby was holding a trove of documents outlining the theft and transfer of hundreds of nuclear warheads from the Pantex Plant near Amarillo, Texas. Weapons sent there for disassembly were transshipped to Israel and, from there, refurbished, their cores remachined and then sold around the world or stored in Israeli embassies and consulates around the world.
The Russian report outlines a very different view of the past 30 years, a “view” that “fits like a glove.”
DIMONA OUT OF ACTION
The report not only confirms Israel’s nuclear weapon inventory but outlines the program of subterfuge and piracy required to keep Israel as a nuclear power after their facility at Dimona suffered a critical “event” in 1988.
“Dimona is a standard 75-megawatt thermal open top reactor as used in France for their plutonium weapons production program, their version of Stanford (Editor’s note: Probably “Hanford”).
Due to overuse as a fast breeder reactor by the Israelis, Dimona suffered a “steam explosion” IE a flash over indecent due to neutron criticality back in the late 1980′s under Bush 1. This shut down its operation for many years until repairs could be made.
It know only operates at very low power levels due to neutron absorption damage to the containment vessel. Now mainly use for isotope production. This forced the Israelis to turn to stolen nuclear stockpiles from the US for the continuation of their nuclear program.”
The highly classified Russian report, released, experts believe, to demonstrate American hypocrisy over recent events in the Ukraine, is a litany of horror stories. If this is a “first shot over the bow” by Russian intelligence, American officials can only dread what may be to come.
48 hours ago, the retired chief of Russia’s counter-intelligence effort for the Middle East released a highly classified report designed to embarrass the United States and demonstrate their servitude to Israel and complicity in broad acts of nuclear proliferation.
The report, loaded with “shock value” intelligence and backed by reams of supporting documents including classified nuclear weapons plans demonstrated that Russia has been able to maintain a high level of penetration of not just American nuclear weapons labs but security agencies as well.
ROUND ONE, 9/11
The report, carefully structured for maximum shock value, begins with 9/11, the watershed event of our era:
“The type of nuclear devices used on 911 were a modified version of the W-54 nuclear artillery shells that were covertly provided to the Israelis between 1988 and 1998 from US surplus stockpiles illegally exported during the Bush/Clinton era.
Chemical analysis done by DOE Sandi was able to identify the chemical/radiation footprint or fingerprint of the warheads based on samples taken after 911 of the fallout at ground zero.”
According to the report, 911 was an Israeli operation facilitated by blackmail of Bush 41 and 43, threatening them with “outing” for their personal financial involvement in the sale of 350 primarily w54 nuclear artillery rounds, sold through Israel but distributed to a number of nations.
The Russian report further outlines that NATO partners, particularly Britain and France, were involved every step of the way. 911 was cover for stolen gold, stock fraud and the looting of the American economy. The “wars for profit” were the Bush boys cashing in on their own.
THE “HOW” OF 911
A number of theories have been introduced to explain the mysterious effects seen at ground zero on 9/11. In an article on the Press TV website, evidence of a widespread cover-up of an epidemic of radiation exposure-related cancers tied to 9/11, was presented.
Not only has Russia confirmed the Press TV findings, they present evidence of nuclear weapons use, evidence from a suppressed report based on findings by the Department of Energy’s Sandia Laboratories.
“Only a 2 kiloton device was needed to drop the buildings. A 2 kiloton device will produce a fireball of apx 150 to 200 feet in diameter at over 4000 degrees Centigrade. Just large enough to melt the I beams of the central core of the building and drop them in place. The light flash would last less than 1 second and primarily be in the UV light range. Overpressure would only be at 60PSI max and directed upwards with the blast.
Fallout would be minimal and located to within ground zero range only. Radiation would drop to acceptable levels within 72 hrs. after the blast. Most fall out was trapped in the cement dust thus causing all of the recent cancer deaths that we are now seeing in NYC amongst first responders.”
The report continues with details that close the door on speculation about 9/11, putting an end to conspiracy theories and, in particular, the wildest one of all, the pseudo-science fairy tale broadly rejected by the 9/11 Commission but allowed to stand as America descended into an Islamophobic frenzy.
“Fallout would be minimal and located to within ground zero range only. Radiation would drop to acceptable levels within 72 hrs. after the blast. Most fall out was trapped in the cement dust thus causing all of the recent cancer deaths that we are now seeing in NYC amongst first responders.
Melted steel and iron oxide or “nano thermite” is a byproduct of the very high gamma ray / Neutron flux induced into the central steel core. The radiation dissolves the steel into iron oxide consuming the carbon and silicone in the steel.”
This explains the missing steel columns and the very important clue of the “vaporized” 20 ton antenna tower atop the south tower. The upward blast of radiation literally vaporized it. Video evidence proves this to be true.
The total (redacted) data file from DOE Sandia on the 911 event is well over 72 MB. “P.S. Snowden didn’t have a Q clearance so he missed this one.”
The scope of the Bush/Cheney/Israeli nuclear proliferation operation, according to the report, is well beyond anything imagined. Here, Russia places the blame, naming not only Vice President Dick Cheney and former White House Chief of Staff Ram Emanuel but Tom Countryman, tasked, according to Russian sources, with actually managing the program that spread nuclear weapons to Brazil, North and South Korea, Saudi Arabia and a number of other nations.
“Illegal distribution of US nuclear material to foreign allies was not limited to Israel. Virtually all NATO allies were in on this scam too. Dick Cheney was the bad guy on this one. Bush2/Cheney traded nuclear pits to foreign country as IOU’s in order to get what they wanted. Tom Countryman a well-known Israeli operative is curiously now in charge of N.N.P. at the State Department under Obama. He was put there by Ram Emanuel.”
REACTIVATING “DEAD NUKES”
Only nuclear weapons that had deteriorated but could be recommissioned were of use to Israel. The Russian report outlines the basis for selecting the W-54 warhead and exacting details on how weapons were created out of America’s “nuclear scrap heap.”
“A total of over 350 pits were transferred to the Israelis over a 10 to 20 year period of time. The W-54 type of pit design were the most desirable due to the 2 point implosion pit design. This is the easiest to re manufacture and modify as compared to other circular pit designs.
The pill shaped design of the W-54 type weapon contains over 1.5 times more plutonium than a standard pit. This would allow enough Plutonium to be recovered that was still of weapons grade use even after 32 plus years of age. Americium build up in the pit over time eventually makes the Pit unusable as a weapon so they have a limited shelf life based on how fast or slow the Plutonium was produce in the reactor at Stanford.
Usually it was about 150 days max. Irradiation time in the reactor during production determines the shelf life of the pit as weapons grade material. All of the micro nukes used by the Israelis are re-manufactured W-54 type series devices.”
According to the Russian report, Israel used remanufactured W-54 warheads, reconfigured as micro-nukes, for terror bombings in Bali, London and to destroy the Fukashima nuclear reaction site in Japan.
With weapons around the world, stored in embassies and consulates, and their powerful friends in the American “right,” Israel has managed to maintain nuclear superpower status without a real production facility, using only pirates and traitors, something America, according to our Russian sources, seems to have no shortage of.
Gordon Duff is a Marine Vietnam veteran, a combat infantryman, and Senior Editor at Veterans Today. His career has included extensive experience in international banking along with such diverse areas as consulting on counter insurgency, defense technologies or acting as diplomatic representative for UN humanitarian and economic development efforts. Gordon Duff has traveled to over 80 nations. His articles are published around the world and translated into a number of languages. He is regularly on TV and radio, a popular and sometimes controversial guest.
Source: Veterans Today | Press TV
At the onset of the derivatives collapse in 2007/2008 it would have been easy to assume that most of America was receiving a valuable education in normalcy bias.
In 2006, the amount of ego on display surrounding mortgage investment was so disturbingly grotesque anyone with any true understanding of the situation felt like projectile vomiting. To watch the smug righteousness of MSNBC and FOX economic pundits as they predicted the infinite rise of American property markets despite all evidence to the contrary was truly mind blowing. When the whole system imploded, it was difficult to know whether one should laugh, or cry.
The saddest aspect of the credit crisis of 2008 was not the massive chain reaction of bankruptcies or the threat of institutional insolvency. Rather, it was the delusional assumptions of the public that the grand mortgage casino was going to go on forever. There is nothing worse than witnessing the victim of a Ponzi scheme defend the lie which has ultimately destroyed him. As much as I am for people waking up to the nature of the crisis, there comes a point when those who are going to figure it out will figure it out, and the rest are essentially hopeless.
The cultism surrounding the U.S. economy and the U.S. dollar is truly mind boggling, and by “cultism” I mean a blind faith in the fiat currency mechanism that goes beyond all logic, reason and evidence.
In recent weeks it has become more visible as global financiers play both sides of the Ukrainian conflict, luring Americans into a frenzy of false patriotism and an anti-Russo-sports-team-mentality. My personal distaste for Vladimir Putin revolves around my understanding that he is just as much a puppet of the International Monetary Fund and international banks as Barack Obama, but many Americans hate him simply because the mainstream media has designated him the next villain in the fantasy tale of U.S. foreign policy.
Open threats from Russia that they will dump U.S. treasury bond holdings and the dollar’s world reserve status if NATO interferes in the Ukraine have been met with wildly naive chest beating from dollar cultists. I am beginning to see the talking points everywhere.
“Let them dump the dollar, Russia’s holdings are minimal!” Or, “Let them throw out Treasuries, they’ll just be shooting themselves in the foot!” are the battle cries heard across the web. I wish I could convey how insane this viewpoint is, especially in light of the fact that many alternative economic analysts, including myself, have been predicting just such a scenario for years.
Despite the childish boastings of the dollar devout, there is an extraordinarily good possibility that the life of the greenback will be snuffed out in the near term. Here are the facts…
1) Russia will not be alone in its decouple from the dollar system. China, our largest foreign creditor, and India (a supposed ally) have clearly sided with Russia on the Ukranian issue. China has stated that it will back Russia’s play in the event that sanctions are brought to bear by NATO, or if a shooting conflict erupts.
2) China has already been slowly dumping the dollar as a world reserve currency using bilateral trade agreements with numerous countries, including Russia, India, Australia, Brazil, Germany, Japan, etc. These agreements allow FOREX currency swaps and export/import purchases to be made with China without the use of the dollar. China has been preparing itself for a divorce from U.S. economic dependence for at least a decade. The idea that they would actually follow through over political tensions should NOT surprise anyone if they have beenpaying attention.
3) A total drop of the dollar or U.S. treasury bonds by Russia and China would send shock waves through global markets. Russia is a major energy supplier for most of Europe. China is the largest export/import nation in the world. If they refuse to accept dollars as a trade mechanism, numerous countries will fall in line to abandon the greenback as well. The fact that so many Americans refuse to acknowledge this reality is a recipe for disaster.
The only advantage the U.S. has traditionally offered in terms of international trade has been the American consumer, whose unchecked debt spending partly fueled the rise of the industrialized East, not to mention the biggest credit bubble in history. The role of America as a consumer market is collapsing today, however. The mainstream media and the Federal Reserve can blame the steady decline in retail sales on the “weather” all they want, but negative indicators in global manufacturing often take many months to register in the statistics, meaning, this destabilization began long before the days turned cold.
4) China has been shifting away from export dependency since at least 2008, calling for a larger consumer based market at home. This process of enriching the Chinese consumer has almost been completed. The lie that China “needs the U.S.” in order to survive economically needs to be thrown out like the utter propaganda it is.
5) China (and most of the world) has ended new dollar purchases for their FOREX reserves, and has no plans to make new purchases in the future.
6) China executed the second largest dump of U.S. Treasury bonds in history in the past month.
7) Russia, China, and numerous other countries, including U.S. “allies”, have been calling for the end of the dollar’s world reserve status and the institution of a new global basket currencyusing the IMF’s Special Drawing Rights (SDR). Even Putin has suggested that the IMF take over administration of the global economy and issue the SDR as a world currency system. This flies in the face of those who argue that the IMF is somehow “American run”. The truth is, the IMF is run by global banks and no more answers to the U.S. government than the Federal Reserve answers to the U.S. government.
8) The Federal Reserve has been creating trillions of dollars in fiat just to prop up U.S. markets since 2008, and we are still seeing a considerable decline in global manufacturing, retail, personal home sales, and a general malaise in consumer demand. Without a full audit, there is no way to know exactly how much currency has been generated or how much is floating around in foreign markets. Any loss of world reserve status would send that flood of dollars back into the U.S., most likely ending in a hyperinflationary environment.
9) Another rather dubious argument I see often is the claim that the Federal Reserve and the U.S. Treasury could simply “negate” a Treasury dump by refusing to acknowledge creditor liabilities. Or, that they could simply print what they need to snap up the bonds, much like the German government tried to do during the Weimar collapse. Unfortunately, this plan did not work out so well for the Germans, nor has it worked for any other nation in history, so I’m not sure why people think the U.S. could pull it off. However, this is the kind of cultism we are surrounded by. These folks think the U.S. economy and the dollar are untouchable.
Yes, the Fed and the Treasury could hypothetically erase existing liabilities, but what dollar cultists do not seem to grasp is that the dollar’s value is not built on Treasury purchases. The dollar’s value is built on faith and reputation. If a nation refuses to pay out on its debts, this is called default. A default by the U.S. would immediately damage the reputation of bonds and dollars as a good investment. Global markets will refuse to purchase or hold any mechanism that they think will not earn them a profit. How many investors today are anxious to jump into Greek treasury bonds, for instance?
Finally, it is unwise to operate on the assumption that foreign creditors will accept dollars as payment on U.S. Treasury bonds if they believe the Federal Reserve is monetizing the debt. When Weimar imploded under the weight of currency devaluation, many foreign governments refused to accept the German mark as payment. Instead, they demanded payment in raw commodities, like coal, lumber and ore. Expect that China and other debt holders will demand payment in U.S. goods, infrastructure, or perhaps even land.
10) Most treasury holdings in foreign coffers are not long term bonds. Rather, they are short term bonds which mature in weeks or months, instead of years. Dollar proponents constantly cite the continued accumulation of treasury bonds by other governments as a sign that the dollar is still desirable as ever. Unfortunately, they have failed to look at the nature of these bond purchases. When China rolls over millions in short term bonds and replaces them with other short term bonds, this does not suggest they have much faith in America’s long term ability to service its debt. It would also make sense that if China had plans to remove itself from the dollar system, they would move into short term bonds which can be liquidated quickly.
11) China is on the fast track to becoming the largest holder of physical gold in the world. Russia has also greatly expanded its gold purchases. Whatever losses they might suffer from a dump of their Treasury bond investments; it will be more than made up in the incredible explosion in precious metals prices that would follow.
12) The most common argument against the dollar losing world reserve status has been that such a shift would be “impossible” because no other currency in the world has the adequate liquidity needed to replace the dollar in global trade. These people have apparently not been paying attention to the Chinese yuan. China has been quietly issuing trillions in yuan denominated bonds, securities and currency around the world. Current estimates calculate around $24 trillion created by the PBOC and the banks under its control.
Mainstream talking heads are calling this a “debt bubble.” However, this debt creation makes perfect sense if China’s plan is to create enough liquidity in its currency in order to offer a viable alternative to the U.S. dollar. Linking the yuan to the IMF’s basket currency would complete the picture, forming a perfect dollar replacement while dollar cheerleading-economists stand dumbstruck.
13) China’s retreat away from dollar denominated investments has left a hole in the U.S. bond market. Recently, that negative space was filled by an unexpected source; namely Belgium. A country whose GDP represents less than 1% of total global GDP buying more U.S. bonds than China? The whole concept sounds bizarre. Here is the capital coming from?
Think about it this way – Belgium is the political center of the European Union and a haven for international financiers. There are more corporate cronies, lobbyists, bureaucrats, and foreign dignitaries in Belgium than in all of Washington D.C. But more importantly, Belgium struck a deal with the IMF in 2012 to begin pumping SDR denominated funds into “low income economies”. I would suggest that this funding flows both ways, and that now, the IMF is feeding capital into Belgium in order to buy U.S. Treasury Bonds. That is to say, the IMF is going to start using smaller member countries with limited savings as proxies to purchase U.S. debt using IMF money.
The ultimate danger of the IMF (run by internationalists, not the U.S. government) pre-positioning itself as the primary buyer of U.S. debt is that when the U.S. finally defaults (and it will), the IMF is likely to become the “guardian angel” of the U.S. economy, offering aid in exchange for total administrative control of our financial system, and the institution of the SDR as a world reserve replacement for the dollar.
14) The serious prospect of regional conflict or world war over tensions between the Ukraine and Russia, Japan and China, the U.S. and Syria, the U.S. and Iran, the U.S. and North Korea, etc., could make the effort of exposing the plan to shift economic power into a one world system centralized under the IMF almost meaningless. How many people will truly care about the financial power grab by banking elites if it drifts under the surface of catastrophic engineered wars? They’ll be too busy hating and fighting artificially created boogeymen to pay attention to the real globalist culprits.
I have been pointing out for quite a long time that globalists need a “cover event”; a disaster, an economic war or a shooting war, in order to provide a smokescreen for the collapse of the dollar. Alternative analysts have been consistently correct in predicting the trend towards the dump of the dollar. Years ago, we were laughed at for suggesting China would shift towards a consumer based economy and away from U.S. dependence. Today, it is mainstream news. We were laughed at for suggesting that nations like Russia and China would drop the dollar as a reserve currency. Today, they are already in the process of doing it. And, we were laughed at for suggesting that Russia or China would use their debt holdings as leverage against the U.S. in the event of a geopolitical conflict. Today, they are openly making threats.
I have to say, I’ve grown tired of the dollar cultists. How many times can a group of people be wrong and still argue with those who have been consistently right? The answer is that zealots never actually escape their own delusions, even when their delusions lead them and those around them to ruin. I suspect that in the face of complete dollar collapse, they will still be rationalizing the chaos and pontificating on our “lack of understanding” while the theater burns down around them.
Source: Brandon Smith | Alt-Market
The big currency reset. It’s not a case of ‘if’ – it’s a case ofwhen.
Don’t expect your provincial Secretary of Treasury or Chancellor Exchequer to warn you about what is coming around the corner, because they are either too stupid to know, or too busy covering their own backsides.
To understand where we are, it’s very important to understand how we got here (another point which bureaucrats and backers do not want the general populace to know).
A quick history lesson then…
The Opposite of Emerging is Submerging
Lulled and distracted by the antics of developed country central banks and emerging economy central banks – to constantly “pump-up the jam” and flood the economy with paper casino chips from either Fort Knox or Mount Gox, the real tectonic shift of the global economy since 2008 has been more or less ignored by financial gurus and sages. It is taken as “normal” that deflation, ordisinflation is operating in the developed economies, but now we can see that rip-roaring inflation operating in the emerging economies.
Supposedly, this is ‘Muddle Through’, but since 2008 the North-South paradigm has all but dissolved – the developed OECD economies are locked in a death embrace with the Emerging economies. The developed economies are now locked into chronic globalization – exporting monetary inflation while importing cheap industrial goods, services and resources.
Since 2008 the always-promised ‘world shift’ of the economy from west to east, and from north to south has happened, but the net result is a shock. Pretending “we didn’t know” is comforting, but ultimately stupid.
This is an unstable equilibrium, or an interregnum – even a sideshow, because the current global economic context and process is the exact opposite of sustainable. Harm to both North and South is now the main impact of the post-2008 process of overreach and intense fiat paper shuffling. Listing the consequences and causes of this overreach is not easy and always open to argument, but possibly the best summary is to suggest that since 2008, ‘Ricardo’s comparative advantage‘ paradigm has been inverted. Economic and above all monetary globalization is now the path to ruin and poverty. From win-win to lose-lose. The worse it gets, expect the architects of ruin – establishment politicians, central bankers and financial pundits, to retreat into even deeper denial.
The Production Bubble That Triggers the Collapse
Another simple way to argue the global economy has overreached is that industrial and economic production capacity in the Emerging economies (EMs), starting with the BRICs, is now massively over-sized. This means the EMs can and will saturate the post-industrial, deflating North with industrial supply at every stage and opportunity as technology, design and product development throw up a new market openings everywhere. Examples like the car and cellphone, fashion wear and off-shore call center industries are relatively “classic”. All of these are already saturated with capacity – but the EMs are still adding more. Previous historical “classic examples” of this process for example included the ship building industry, but the scale paradigm has been woefully ignored.
BRAZILIAN SKILLZ: Production of top-line automobiles in Brazil has surpassed many of its ‘developed’ counterparts.
Since 2008, the process has intensified, creating an increasingly certain outlook for a forced and fiat end to the willingness of the EMs to accept the fiat currency endlessly printed to finance the deflating, de-industrializing DMs (developed economies).
This will not necessarily be a politicized process, of the type hinted at by India’s central bank governor (see http://finance.fortune.cnn.com/tag/raghuram-rajan/), due to the rapidity and scale of the crisis, but instead trigger the collapse of the current global fiat monetary orderdictated by national economic self-defence and survival in the EMs.
The economic jump start of the Ricardo model, which has run riot for the last quarter-century, and went into over-drived from 2008 – will be abandoned.
Deflation/Inflation: Two Sides of the Same Bitcoin
Ricardo’s original model held sunny Portugual as a producer of cork and sherry, while rainy England could produce wine casks from its oak forests and wool from its sheep flocks. The money used in a basically resource-based exchange using then-rapidly growing maritime transport capabilities was held to be stable and gold-linked (or based). Later on, low-cost labor resources were built into Ricardo’s paradigm called “comparative advantage”. The EMs since the 1980s have played the role of resource providers while the DMs were the solvent market suppliers.
While there was a clear limit on cork, wine, oak casks and woolens supply and demand, this does not really apply to modern global fiat money and modern industrial technology. These are high gain positive feedback processes which only stop when they hit a brick wall.
The Ricardo comparative advantage model does not apply to post-1980′s globalization and super economies – like those of China and India, where industrial technology has raced ahead of infrastructure development. This is simply a bomb waiting to explode, alongside the industrial capacity growth, the EMs engaged massive growth of credit, mushroom growth urbanization, neglect of the agriculture and food sector, and turning a blind eye to rampant or even “structural” corruption. Inflation was the sure and certain result.
The results do not stop there. While inflation took off inside the EMs, with their economies producing more than they can consume, and exporting to the DMs which consume more than they produce, the EMs are also exported deflation to the developed market economies. At the same time, the emerging market economies mined out their capital bases to maintain their breakneck growth of industrial capacity.
On an almost daily basis now, the EMs are all shifting to current account deficit with the inevitable consequences of national currency devaluation, further inflation, and of course – higher interest rates.
Win-Win to Lose-Lose: Global Fiat Currency Crisis
The post-1980′s economic globalization paradigm can be called an initial ‘Win-Win’ model which eventually morphed to Lose-Lose.
The industrial nations of the DMs, which formerly benefited from the resource nations of the EMs under the previous ‘Ricardo-type’ model, are now mired in debt and de-industrialization, making it impossible for them to “grow their way out of crisis”. The EMs on their present industrial expansion path can only grow themselves into rapidly-deepening crisis.
The “money-in-the-middle” especially concerns the US dollar and its subsidiary partner, theeuro, both of which are vastly overvalued fiat currencies – but against what? Almost inevitably, this will feature a big rebound for gold, playing the starring role of in this latest episode of “Canary in the Monetary Coal Mine”. From a personal standpoint, or national (for those who have any), physical gold and silver could end up providing solid protection against the exposure of a monetary reset.
Conversely, commodities are unlikely to profit on an enduring sustained basis, due to economic restructuring, re-centering and contraction being almost certain.
Commenting on the IMF’s latest report on global capital flows since 1980, Reuters on 30 January said that while the IMF estimates net capital inflows to emerging economies as $7 trillion or more only since 2005, this was a “legacy trend” hinged on the EMs running a much higher GDP growth differential above the DMs than present. The IMF report noted that for 2014, economic growth in the BRICs will go on declining, and for Russia and Brazil, they will be less even than the GDP growth of the US and Britain. While the IMF’s economists do not allow themselves to project break-of-series change to the global economy, the process of what Gordon T. Long calls “Global collateral impairment” can easily default as the net result of apparently ‘unrelated and complex’ runaway processes.
This collateral impairment will inevitably trigger multi-national currency protection measures, a situation already clear in countries like Turkey, India, Argentina and other EMs.
For DMs in the North, plans are likely already underway. Will the reset feature a brand new reserve currency, or the introduction a fledgling single global, or virtual currency? If so, what will it be backed by (or maybe it won’t). It’s hard to know right now, but a shift of that magnitude could provide for the introduction of something new in the mix.
It’s a case of problem, reaction, solution, and one can assume that this Hegelian equation has already been mapped out on the back of a napkin in an executive dining floor of the one of the world leading central banks, possibly written using Christine Lagarde’s lip stick.
As a result, sacrificing GDP growth to protect the national money in the EMs will be inevitable. In turn, this will send a severe shock wave North to the DMs ,which have surfed on the latter-day version of the Ricardo paradigm for the last 30 years, and are now left unable to adapt.
The basic conclusion is that a global monetary reset is now overdue.
There will be shock waves, and haircuts too.
Brace yourself for impact, because it’s coming.
Only Washington Knows Best…
The control freaks in Washington think that only the decisions that Washington makes and imposes on other sovereign countries are democratic. No other country on earth is capable of making a democratic decision.
The world has witnessed this American self- righteousness for eons as Washington overthrows one democratic government after the other and imposes its puppet, as Washington did in Iran in 1953 when the CIA, as it now admits, and as Ervand Abrahamian proves in his book The Coup (The New Press, 2013), overthrew the elected government of Mossadeq, and more recently the elected government of Honduras and many governments in between.
Currently Washington is working overtime to overthrow the governments of Syria, Iran again, and Ukraine. Washington has also targeted Venezuela, Bolivia, Ecuador, and Brazil, and in its wildest dreams the governments of Russia and China.
On January 26 Syrian government advisor Bouthaina Shaaban asked Wolf Blitzer, a propagandist for Washington and the Israel Lobby, on US TV why the US government, speaking through Secretary of Stare John Kerry, has the right to decide who is to be the government of Syria instead of the Syrian people. [Polls show that Syrian president Assad’s approval ratings exceed those of every Western leader.] Even the slimy Blitzer wasn’t slimy enough to answer, “because we are the exceptional, indispensable people.” But that’s what Washington thinks.
Washington will soon be back at work on destabilizing the government of Iran again, a habit I suppose, but for the moment Washington is focused on destabilizing Ukraine.
Ukraine has a democratically elected government, but Washington doesn’t like it because Washington didn’t pick it. The Ukraine or the western part of it is full of Washington funded NGOs whose purpose is to deliver Ukraine into the clutches of the EU where US and European banks can loot the country, as they looted, for example, Latvia, and simultaneously weaken Russia by stealing a large part of traditional Russia and converting it into US/NATO military bases against Russia.
Perhaps Putin, an athlete, is distracted by the Olympic Games in Russia. Otherwise, it is something of a puzzle why Russia hasn’t put its nuclear missiles on high alert and occupied the western Ukraine with troops in order to prevent Ukraine’s overthrow by Washington’s money. Every country has citizens that will sell the country out for money, and western Ukraine is overflowing with such traitors.
As we have seen for decades, Arabs and Muslims will sell out their people for Western money. So will western Ukrainians. The NGOs financed by Washington are committed to delivering Ukraine into Washington’s hands where Ukrainians can become American serfs and this integral part of Russia can become a staging ground for the US military.
Of all the violent protests that we have witnessed, the Ukrainian one is the most orchestrated.
On February 6, Zero Hedge, one of the intelligent and informed Internet sites, posted a leaked recording from the despicable Victoria Nuland, an Assistant Secretary of State in the Obama Regime. Nuland is caught discussing with the US envoy to Ukraine, Geoffrey Pyatt, Washington’s choice for who heads the next Ukrainian government.
Nuland is incensed that the European Union has not joined Washington in imposing sanctions on the Ukrainian government in order to complete Washington’s takeover of Ukraine. Nuland speaks as if she is God with the God-given right to select the government of Ukraine, which she proceeds to do.
The EU, as corrupt as it is by Washington’s money, nevertheless understands being made rich by Washington is no protection agains Russian nuclear missiles. Nuland’s response to Europe’s hesitancy to risk its existence for the benefit of US hegemony is:
“Fuck the EU.”
So much for Washington’s attitude toward its captive allies and the peoples of the world.
Марионетки Майдана – “Puppets of Maidan”
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.
Source: Paul Craig Roberts
“Bias in favor of the orthodox is frequently mistaken for ‘objectivity’. Departures from this ideological orthodoxy are themselves dismissed as ideological.” – Michael Parenti
An exchange in January with Paul Farhi, Washington Post columnist, about coverage of US foreign policy:
Dear Mr. Farhi,
Now that you’ve done a study of al-Jazeera’s political bias in supporting Mohamed Morsi in Egypt, is it perhaps now time for a study of the US mass media’s bias on US foreign policy? And if you doubt the extent and depth of this bias, consider this:
There are more than 1,400 daily newspapers in the United States. Can you name a single paper, or a single TV network, that was unequivocally opposed to the American wars carried out against Libya, Iraq, Afghanistan, Yugoslavia, Panama, Grenada, and Vietnam? Or even opposed to any two of these wars? How about one? In 1968, six years into the Vietnam war, the Boston Globe surveyed the editorial positions of 39 leading US papers concerning the war and found that “none advocated a pull-out”.
Now, can you name an American daily newspaper or TV network that more or less gives any support to any US government ODE (Officially Designated Enemy)? Like Hugo Chávez of Venezuela or his successor, Nicolás Maduro; Fidel or Raúl Castro of Cuba; Bashar al-Assad of Syria; Mahmoud Ahmadinejad of Iran; Rafael Correa of Ecuador; or Evo Morales of Bolivia? I mean that presents the ODE’s point of view in a reasonably fair manner most of the time? Or any ODE of the recent past like Slobodan Milosevic of Serbia, Moammar Gaddafi of Libya, Robert Mugabe of Zimbabwe, or Jean-Bertrand Aristide of Haiti?
Who in the mainstream media supports Hamas of Gaza? Or Hezbollah of Lebanon? Who in the mainstream media is outspokenly critical of Israel’s treatment of the Palestinians? And keeps his or her job?
Who in the mainstream media treats Julian Assange or Chelsea Manning as the heroes they are?
And this same mainstream media tell us that Cuba, Venezuela, Ecuador, et al. do not have a real opposition media.
The ideology of the American mainstream media is the belief that they don’t have any ideology; that they are instead what they call “objective”. I submit that there is something more important in journalism than objectivity. It is capturing the essence, or the truth, if you will, with the proper context and history. This can, as well, serve as “enlightenment”.
It’s been said that the political spectrum concerning US foreign policy in the America mainstream media “runs the gamut from A to B”.
Sincerely, William Blum, Washington, DC
(followed by some of my writing credentials)
Reply from Paul Farhi:
I think you’re conflating news coverage with editorial policy. They are not the same. What a newspaper advocates on its editorial page (the Vietnam example you cite) isn’t the same as what or how the story is covered in the news columns. News MAY have some advocacy in it, but it’s not supposed to, and not nearly as overt or blatant as an editorial or opinion column. Go back over all of your ODE examples and ask yourself if the news coverage was the same as the opinions about those ODEs. In most cases. I doubt it was.
Dear Mr. Farhi,
Thank you for your remarkably prompt answer.
Your point about the difference between news coverage and editorial policy is important, but the fact is, as a daily, and careful, reader of the Post for the past 20 years I can attest to the extensive bias in its foreign policy coverage in the areas I listed. Juan Ferrero in Latin America and Kathy Lally in the Mideast are but two prime examples. The bias, most commonly, is one of omission more than commission; which is to say it’s what they leave out that distorts the news more than any factual errors or out-and-out lies. My Anti-Empire Report contains many examples of these omissions, as well as some errors of commission.
Incidentally, since 1995 I have written dozens of letters to the Post pointing out errors in foreign-policy coverage. Not one has been printed.
Happy New Year
I present here an extreme example of bias by omission, in the entire American mainstream media: In my last report I wrote of the committee appointed by the president to study NSA abuses – Review Group on Intelligence and Communications Technologies – which actually came up with a few unexpected recommendations in its report presented December 13, the most interesting of which perhaps are these two:
“Governments should not use surveillance to steal industry secrets to advantage their domestic industry.”
“Governments should not use their offensive cyber capabilities to change the amounts held in financial accounts or otherwise manipulate the financial systems.”
So what do we have here? The NSA being used to steal industrial secrets; nothing to do with fighting terrorism. And the NSA stealing money and otherwise sabotaging unnamed financial systems, which may also represent gaining industrial advantage for the United States.
Long-time readers of this report may have come to the realization that I’m not an ecstatic admirer of US foreign policy. But this stuff shocks even me. It’s the gross pettiness of “The World’s Only Superpower”.
A careful search of the extensive Lexis-Nexis database failed to turn up a single American mainstream media source, print or broadcast, that mentioned this revelation. I found it only on those websites which carried my report, plus three other sites: Techdirt, Lawfare, and Crikey (First Digital Media).
For another very interesting and extreme example of bias by omission, as well as commission, very typical of US foreign policy coverage in the mainstream media: First read the January 31, page one, Washington Post article making fun of socialism in Venezuela and Cuba.
Then read the response from two Americans who have spent a lot of time in Venezuela, are fluent in Spanish, and whose opinions about the article I solicited.
I lived in Chile during the 1972-73 period under Salvadore Allende and his Socialist Party. The conservative Chilean media’s sarcastic claims at the time about shortages and socialist incompetence were identical to what we’ve been seeing for years in the United States concerning Venezuela and Cuba. The Washington Post article on Venezuela referred to above could have been lifted out of Chile’s El Mercurio, 1973.
[Note to readers: Please do not send me the usual complaints about my using the name “America(n)” to refer to “The United States”. I find it to be a meaningless issue, if not plain silly.]
JFK, RFK, and some myths about US foreign policy
On April 30, 1964, five months after the assassination of President John F. Kennedy, his brother, Attorney General Robert F. Kennedy, was interviewed by John B. Martin in one of a series of oral history sessions with RFK. Part of the interview appears in the book “JFK Conservative” by Ira Stoll, published three months ago. (pages 192-3)
RFK: The president … had a strong, overwhelming reason for being in Vietnam and that we should win the war in Vietnam.
MARTIN: What was the overwhelming reason?
RFK: Just the loss of all of Southeast Asia if you lost Vietnam. I think everybody was quite clear that the rest of Southeast Asia would fall.
MARTIN: What if it did?
RFK: Just have profound effects as far as our position throughout the world, and our position in a rather vital part of the world. Also it would affect what happened in India, of course, which in turn has an effect on the Middle East. Just as it would have, everybody felt, a very adverse effect. It would have an effect on Indonesia, hundred million population. All of those countries would be affected by the fall of Vietnam to the Communists.
MARTIN: There was never any consideration given to pulling out?
MARTIN: … The president was convinced that we had to keep, had to stay in there …
MARTIN: … And couldn’t lose it.
These remarks are rather instructive from several points of view:
- Robert Kennedy contradicts the many people who are convinced that, had he lived, JFK would have brought the US involvement in Vietnam to a fairly prompt end, instead of it continuing for ten more terrible years. The author, Stoll, quotes a few of these people. And these other statements are just as convincing as RFK’s statements presented here. And if that is not confusing enough, Stoll then quotes RFK himself in 1967 speaking unmistakably in support of the war.
It appears that we’ll never know with any kind of certainty what would have happened if JFK had not been assassinated, but I still go by his Cold War record in concluding that US foreign policy would have continued along its imperial, anti-communist path. In Kennedy’s short time in office the United States unleashed many different types of hostility, from attempts to overthrow governments and suppress political movements to assassination attempts against leaders and actual military combat; with one or more of these occurring in Vietnam, Cambodia, Laos, British Guiana, Iraq, Haiti, Dominican Republic, Cuba and Brazil.
- “Just have profound effects as far as our position throughout the world, and our position in a rather vital part of the world.”
Ah yes, a vital part of the world. Has there ever been any part of the world, or any country, that the US has intervened in that was not vital? Vital to American interests? Vital to our national security? Of great strategic importance? Here’s President Carter in his 1980 State of the Union Address: “An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America”.
“What a country calls its vital economic interests are not the things which enable its citizens to live, but the things which enable it to make war.” – Simone Weil (1909-1943), French philosopher
- If the US lost Vietnam “everybody was quite clear that the rest of Southeast Asia would fall.”
As I once wrote:
Thus it was that the worst of Washington’s fears had come to pass: All of Indochina – Vietnam, Cambodia and Laos – had fallen to the Communists. During the initial period of US involvement in Indochina in the 1950s, John Foster Dulles, Dwight Eisenhower and other American officials regularly issued doomsday pronouncements of the type known as the “Domino Theory”, warning that if Indochina should fall, other nations in Asia would topple over as well. In one instance, President Eisenhower listed no less than Taiwan, Australia, New Zealand, the Philippines and Indonesia amongst the anticipated “falling dominos”.
Such warnings were repeated periodically over the next decade by succeeding administrations and other supporters of US policy in Indochina as a key argument in defense of such policy. The fact that these ominous predictions turned out to have no basis in reality did not deter Washington officialdom from promulgating the same dogma up until the 1990s about almost each new world “trouble-spot”, testimony to their unshakable faith in the existence and inter-workings of the International Communist Conspiracy.
Suicide bombers have become an international tragedy. One can not sit in a restaurant or wait for a bus or go for a walk downtown, in Afghanistan or Pakistan or Iraq or Russia or Syria and elsewhere without fearing for one’s life from a person walking innocently by or a car that just quietly parked nearby. The Pentagon has been working for years to devise a means of countering this powerful weapon.
As far as we know, they haven’t come up with anything. So I’d like to suggest a possible solution. Go to the very source. Flood selected Islamic societies with this message: “There is no heavenly reward for dying a martyr. There are no 72 beautiful virgins waiting to reward you for giving your life for jihad. No virgins at all. No sex at all.”
Using every means of communication, from Facebook to skywriting, from billboards to television, plant the seed of doubt, perhaps the very first such seed the young men have ever experienced. As some wise anonymous soul once wrote:
A person is unambivalent only with regard to those few beliefs, attitudes and characteristics which are truly universal in his experience. Thus a man might believe that the world is flat without really being aware that he did so – if everyone in his society shared the assumption. The flatness of the world would be simply a “self-evident” fact. But if he once became conscious of thinking that the world is flat, he would be capable of conceiving that it might be otherwise. He might then be spurred to invent elaborate proofs of its flatness, but he would have lost the innocence of absolute and unambivalent belief.
We have to capture the minds of these suicide bombers. At the same time we can work on our own soldiers. Making them fully conscious of their belief, their precious belief, that their government means well, that they’re fighting for freedom and democracy, and for that thing called “American exceptionalism”. It could save them from committing their own form of suicide.
The Fed’s easy money policies have pushed margin debt on the New York Stock Exchange (NYSE) to record levels laying the groundwork for a severe correction or another violent market crash.
In December, margin debt rose by $21 billion to an all-time high of $445 billion.
Buying equities on margin, that is, with loads of borrowed cash, is a sign of excessive risk taking the likes of which invariably takes place whenever the Central Bank creates subsidies for speculation by keeping interest rates pegged below the rate of inflation or by pumping trillions of dollars into the bloated financial system through misguided liquidity programs like QE.
Investors have shrugged off dismal earnings reports, abnormally-high unemployment, flagging demand, droopy incomes, stagnant wages and swollen P/E ratios and loaded up on stocks confident that the Fed’s infusions of liquidity will keep prices going higher. It’s only a matter of time before they see the mistake they’ve made.
The chart below illustrates how zero rates and QE lead to excessive risk taking. The correlation between the stratospheric rise of margin debt and the Fed’s destabilizing monetary policy is hard to avoid. This is what bubblemaking looks like in real time.
Chart: Seeking Alpha.
In the minutes of the FOMC’s December meeting, FOMC officials acknowledge the froth they’ve created in financial assets which is why they’ve begun to scale back their asset purchases. The Fed hopes that by gradually winding down QE they’ll be able to stage a soft landing rather than a full-blown crash. Here’s an excerpt from the FOMC’s minutes:
“In their discussion of potential risks, several participants commented on the rise in forward price-to-earnings ratios for some smallcap stocks, the increased level of equity repurchases, or the rise in margin credit. One pointed to the increase in issuance of leveraged loans this year and the apparent decline in the average quality of such loans.”
There you have it, the Fed sees the results of its work; the distortions in P/E ratios, the exuberant stock buybacks (“equity repurchases”), the deterioration in the quality of leveraged loans, and the steady rise in margin debt. They see it all, all the bubbles they’ve created with their gargantuan $3 trillion surge of liquidity. Now they have started to reverse the policy by reducing their asset purchase from $85 bil to $65 bil per month, the effects of which can already be seen in the Emerging Markets.
The bubble in Emerging Markets has burst sending foreign currencies plunging and triggering a sharp reversal in capital flows. The hot money that flooded the EMs,–(which lowered the cost of borrowing for businesses and consumers)–is entirely attributable to the Fed’s policy. QE pushes down long-term interest rates forcing investors to search for higher yield in other markets. Thus, the cost of money drops in EMs creating a boom that abruptly ends when the policy changes (as it has).
Capital is fleeing EMs at an unprecedented pace precipitating a dramatic slowdown in economic activity, higher consumer prices and widespread public distress. The Fed is 100% responsible for the turmoil in emerging markets, a fact which even mainstream news outlets blandly admit. Here’s an excerpt from an article in Bloomberg just this week:
“Investors are pulling money from exchange-traded funds that track emerging markets at the fastest rate on record…More than $7 billion flowed from ETFs investing in developing-nation assets in January, the most since the securities were created, data compiled by Bloomberg show…
Emerging economies have benefited from cheap money as three rounds of Fed bond buying pushed capital into their borders in search of higher returns…
The Fed’s asset purchases had helped fuel a credit boom in developing nations from Turkey to Brazil. Accumulated capital inflows to developing-country’s debt markets since 2008 reached $1.1 trillion, or $470 billion more than their long-term trend, according to a study by the International Monetary Fund in October.” (“Record Cash Leaves Emerging Market ETFs on Lira Drop“, Bloomberg)
The Fed doesn’t care if other countries are hurt by its policies. What the Fed worries about is how the taper is going to effect Wall Street. If the slightest reduction in asset purchases causes this much turbulence abroad, then what’s it going to do to US stock and bond markets?
The answer, of course, is that stocks are going to fall…hard. It can’t be avoided. And while the amount of margin debt is not a reliable tool for calling a top; it’s safe to say that the recent spike in investor leverage has moved the arrow well into the red zone. Investors are going to cash out long before the Fed ends QE altogether, which means the selloff could persist for some time to come much like after the dot.com bubble popped and stocks drifted lower for a full year. Now check out this clip from Alhambra Investment Partners newsletter titled “The Year of Leverage”:
“For the year, total margin debt usage jumped by an almost incomprehensible $123 billion, while cash balances declined by $19 billion. That $142 billion leveraged bet on stocks far surpasses any twelve month period in history. The only times that were even close to as leveraged were the year leading up to June 2007 (-$89 billion) and the twelve months preceding February and March 2000 (-$77 billion). Both of those marked significant tops in the market.” ( Alhambra Investment Partners newsletter titled “The Year of Leverage“)
Repeat: “The $142 billion leveraged bet on stocks far surpasses any twelve month period in history.”
Investors are “all-in” because they think that the Fed has their back. They think that Bernanke (or Yellen) will not allow stocks to fall too far without intervening. (This is called the “Bernanke Put”) So far, that’s been a winning strategy, but that might be changing. The Fed’s determination to taper suggests that it wants to withdraw its stimulus to avoid being blamed for the bursting bubble. (“Plausible deniability”?) That’s what’s driving the current policy. Here’s more on margin debt from Wolf Richter at Testosterone Pit:
“On the New York Stock Exchange, margin credit has been hitting new records for months. All three mega-crashes in my investing lifetime have been accompanied by record-setting peaks in margin debt. In September 1987, a month before the crash, margin credit peaked at 0.88% of GDP. In March 2000, when the crash began, margin credit peaked at 2.7% of GDP. In July 2007, three months before the downdraft started, margin credit peaked at 2.6% of GDP. Now, margin credit has already reached 2.5% of GDP.” (“Plagued By Indigestion, Fed Issues Asset-Bubble Warning”, Testosterone Pit)
Stock market crashes are always connected to massive leverage, loosey-goosey monetary policy and irrational exuberance (“excessive risk taking”), the toxic combo that presently rules the markets. The Federal Reserve is invariably the source of all bubblemaking and financial instability.
As we noted earlier, equity repurchases or stock buybacks are another sign of froth. Here’s an excellent summary on the topic by Alhambra Investment Partners:
“In the third quarter of 2013, share repurchases totaled $128.2 billion, the highest level since Q4 2007. For the twelve months ended in September 2013, aggregate share repurchases were an astounding $445.3 billion; the only twelve-month period greater than that total was the calendar year of 2007 and its $589 billion.
The common argument advanced in favor of such share repurchases is that companies are using cash to recognize undervalued stocks, but that is total hogwash…
…corporate managers are no different than the reviled stereotypical retail investor. Both leverage themselves further and further as the market goes higher, not in recognizing undervalued stocks or companies but in full froth of chasing obscene values via rationalizations.” ( Alhambra Investment Partners newsletter titled “The Year of Leverage”)
In other words, corporate managers are doing the same thing as your average margin investor. They are loading up on financial assets–not because they think they are a good value or because they expect higher earnings –but because Fed policy supports artificially-high prices. That’s what’s driving the bull market, the Fed’s thumb on the scale. Remove the thumb, and you have a whole new ballgame (as we see in the EMs). There’s also a bubble in high yield “junk” bonds which just had their second biggest year on record (Total issuance $324 billion) Investors are only too happy to dump their money into high-risk debt believing that companies never default or that the Fed will save the day again credit tightens and the dominoes start tumbling through the debt markets. According to Testosterone Pit:
“The cost of a high-yield bond on an absolute coupon basis is as low as it’s ever been,” explained Baratta, king of Blackstone’s $53 billion in private equity assets. Even the riskiest companies are selling the riskiest bonds at low yields… Why would anyone buy this crap?” (“Bubble Trouble: Record Junk Bond Issuance, A Barrage Of IPOs, “Out Of Whack” Valuations, And Grim Earnings Growth”, Testosterone Pit)
Why, indeed? Of course, the author is just being rhetorical, after all, he knows why people are piling into junk. It’s because the Fed has kept a gun to their heads for 5 years, forcing them to grab higher yield wherever they can find it. That’s how Bernanke’s dogwhistle monetary policy works. By slashing rates to zero, the Fed coerces investors to speculate on any type of garbage that’s available. That why junk “just had its second biggest year on record.” You can thank Bernanke.
Housing is also in a bubble due to the Fed’s zero rates, withheld inventory, government modification programs, and an unprecedented uptick in all-cash investors. Clearly, there’s never been a market more manipulated than housing. It’s a joke.
The surge of Wall Street liquidity has spilled over into housing distorting prices and reducing the number of first time homebuyers to an all-time low. The homeownership rate is actually falling even while prices climb higher, which is just one of many anomalies created by the Fed’s policy. (Who’s ever heard of a housing boom, where the number of firsttime homebuyers is dropping?)
Also, the Central Bank has purchased more than $1 trillion in mortgage-backed securities (MBS) via QE, which begs the question: How can housing prices NOT be in a bubble?
As we noted earlier, the Fed understands the impact its policies have had. They know the markets are overheated and they’re determined to do something about it. A recent article in Bloomberg explains the Fed’s plan for winding down QE “without doing damage to the economy”. Here’s a short excerpt from the piece:
“Janet Yellen probably will confront a test during her tenure as Federal Reserve chairman that both of her predecessors flunked: defusing asset bubbles without doing damage to the economy…
Yellen is ‘going to be trying to do something that no one has ever done,’ said Stephen Cecchetti, former economic adviser for the Bank for International Settlements, the Basel, Switzerland-based central bank for monetary authorities. She needs ‘to ensure that accommodative monetary policy doesn’t create significant financial stability risks,’ he said in an interview…
The Fed’s ‘first, second and third lines of defense” for dealing with such imbalances is to rely on supervision, regulation and so-called macro-prudential policies, such as mortgage loan-to-value restrictions, Bernanke told the Brookings Institution in Washington on Jan. 16. ….Only as a last resort would it consider raising interest rates.’ (“Yellen Faces Test Bernanke Failed: Ease Bubbles“, Bloomberg)
You got that?
So the Fed is going into the “bubble-deflating” biz.
And uber-dove Yellen is going to put things right. She’s going to eliminate the price distortions and gradually return the markets to normalcy.
She’s going to wind down QE and start to reduce the Fed’s $4 trillion balance sheet.
And she’s going to do all of this without raising interest rates or sending stocks into freefall?
Right. It’s a pipedream. The first sign of trouble and old Yellen will be scuttling across the floor of the New York Stock Exchange with a punch bowl the size of Yankee Stadium.
You can bet on it.
In 1979, Iran shocked the world—and directly confronted America’s hegemonic ambitions in the Middle East — by charting its own revolutionary course toward participatory Islamist governance and foreign policy independence. Over the past thirty-five years the Islamic Republic of Iran has held dozens of presidential, parliamentary, and local council elections and attained impressive developmental outcomes—including more progressive results at alleviating poverty, delivering health care, providing educational access, and (yes) expanding opportunities for women than the last shah’s regime ever achieved. Furthermore, the Islamic Republic has done these things while withstanding significant regional challenges and mounting pressure from the United States and its allies. Below, Flynt Leverett and Hillary Mann Leverett suggest that like 1979, 2014 is likely to be, in unique ways, another Year of Iran, when Tehran’s foreign policy strategy will either finally compel Western acceptance of Iran’s sovereign rights—especially to enrich uranium under international safeguards—or fundamentally delegitimise America’s already eroding pretensions to Middle Eastern hegemony.
Hassan Rohani’s election as Iran’s president seven months ago caught most of the West’s self-appointed Iran “experts” by (largely self-generated) surprise. Over the course of Iran’s month-long presidential campaign, methodologically-sound polls by the University of Tehran showed that a Rohani victory was increasingly likely. Yet Iran specialists at Washington’s leading think tanks continued erroneously insisting (as they had for months before the campaign formally commenced) that Iranians could not be polled like other populations and that there would be “a selection rather than an election,” engineered to install Supreme Leader Ayatollah Ali Khamenei’s “anointed” candidate—in most versions, former nuclear negotiator Saeed Jalili. On election day, as Iranian voters began casting their ballots, the Washington Post proclaimed that Rohani “will not be allowed to win”—a statement reflecting virtual consensus among American pundits.
Of course, this consensus was wrong—as have been most of the consensus judgments on Iran’s politics advanced by Western analysts since the country’s 1979 revolution. After Rohani’s victory, instead of admitting error, America’s foreign policy elite manufactured two explanations for it. One was that popular disaffection against the Islamic Republic—supposedly reflected in Iranians’ determination to elect the most change-minded candidate available to them—had exceeded even the capacity of Khamenei and his minions to suppress. This narrative, however, rests on agenda-driven and false assumptions about who Rohani is and how he won.
“The Islamic Republic aims to replace American hegemony with a more multi-polar distribution of power and influence. It seeks to achieve this by using international law and by leveraging participatory Islamist governance and foreign policy independence to accumulate real “soft power”.”
At sixty-five, Rohani is not out to fundamentally change the Islamic Republic he has worked nearly his entire adult life to build. The only cleric on the 2013 presidential ballot, Rohani belongs to Iran’s main conservative clerical association, not its reformist antipode. While he has become the standard bearer for the Islamic Republic’s “modern” (or “pragmatic”) right, with considerable support from the business community, his ties to Khamenei are also strong. After Rohani stepped down as secretary of Iran’s Supreme National Security Council in 2005, Khamenei made Rohani his personal representative on the Council.
Backing Rohani was thus an unlikely way for Iranian voters to demand radical change, especially when an eminently plausible reformist was on the ballot—Mohammad Reza Aref, a Stanford Ph.D. in electrical engineering who served as one of reformist President Mohammad Khatami’s vice presidents. (Methodologically-sound polls showed that Aref’s support never exceeded single digits; he ultimately withdrew three days before Iranians voted.) The outcome, moreover, hardly constituted a landslide—not for Rohani and certainly not for reformism: Rohani won by just 261,251 votes over the 50-percent threshold for victory, and the parliament elected just one year before is dominated by conservatives.
The other explanation for Rohani’s success embraced by American elites cites it as proof that U.S.-instigated sanctions are finally “working”—that economic distress caused by sanctions drove Iranians to elect someone inclined to cut concessionary deals with the West. But the same polls that accurately predicted Rohani’s narrow win also show that sanctions had little to do with it. Iranians continue to blame the West, not their own government, for sanctions. And they do not want their leaders to compromise on what they see as their country’s sovereignty and national rights—rights manifest today in Iran’s pursuit of a civil nuclear program.
The Iranian Challenge
Iran’s presidential election and the smooth transfer of office to Rohani from term-limited incumbent Mahmoud Ahmadinejad stand out in today’s Middle East. Compared to Afghanistan, Bahrain, Egypt, Iraq, Jordan, Lebanon, Libya, Palestine, Syria, and Tunisia, the Islamic Republic is actually living up to former U.S. President Jimmy Carter’s description of Iran as “an island of stability” in an increasingly unsettled region. And compared to some Gulf Arab monarchies, where perpetuation of (at least superficial) stability is purchased by ever increasing domestic expenditures, the Islamic Republic legitimates itself by delivering on the fundamental promise of the revolution that deposed the last shah thirty-five years ago: to replace Western-imposed monarchical rule with an indigenously generated political model integrating participatory politics and elections with principles and institutions of Islamic governance.
“Partnering with Tehran would require Washington and its friends in London and Paris to accept the Islamic Republic as the legitimate government of a fully sovereign state with legitimate interests.”
These strengths have enabled the Islamic Republic to withstand sustained regional and Western pressure, and to pursue a foreign policy strategy likely to reap big payoffs in 2014. This strategy aims to replace American hegemony, regionally and globally, with a more multi-polar distribution of power and influence. It seeks to achieve this by using international law and institutions, and by leveraging the Islamic Republic’s model of participatory Islamist governance, domestic development, and foreign policy independence to accumulate real “soft power”—not just with a majority of Iranians living inside their country, but (according to polls) with hundreds of millions of people across the Muslim world and beyond, from Brazil to China and South Africa. Such soft power was on display, for example, in the last year of Ahmadinejad’s presidency, when, during a trip to China, he won a standing ovation from a large audience at Peking University, where a representative sample of next-generation Chinese elites showed themselves deeply receptive to his call for a more equitable and representative international order.
In the current regional and international context, the West is increasingly challenged to come to terms with the Islamic Republic as an enduring entity representing legitimate national interests. In Tehran, the United States and its European allies could have a real partner in countering al-Qa’ida-style terrorism and extremism, in consolidating stable and representative political orders in Syria and other Middle Eastern trouble spots, and in resolving the nuclear issue in a way that sets the stage for moving toward an actual WMD-free zone in the region. But partnering with Tehran would require Washington and its friends in London and Paris to accept the Islamic Republic as the legitimate government of a fully sovereign state with legitimate interests—something that Western powers have refused to accord to any Iranian government for two centuries.
President Obama’s highly public failure to muster political support for military strikes against the Assad government following the use of chemical weapons in Syria on August 21, 2013 has effectively undercut the credibility of U.S. threats to use force against Iran. On November 24, 2013, this compelled an American administration, for the first time since the January 1981 Algiers Accords that ended the embassy hostage crisis, to reach a major international agreement with Tehran—the interim nuclear deal between Iran and the P5+1—largely on Iranian terms. (For example, the interim nuclear deal effectively negates Western demands—long rejected by Tehran but now enshrined in seven UN Security Council resolutions—that Iran suspend all activities related to uranium enrichment).
But recent Western recognition of reality is still partial and highly tentative. The United States and its British and French allies continue to deny that Iran has a right to enrich uranium under international safeguards. They also demand that, as part of a final deal, Tehran must shut down its protected enrichment site at Fordo, terminate its work on a new research reactor at Arak, and allow Western powers to micromanage the future development of Iran’s nuclear infrastructure. Such positions are at odds with the language of the interim nuclear deal and of the Nuclear Non-Proliferation Treaty (NPT). They are also as hubristically delusional as the British government’s use of the Royal Navy to seize tankers carrying Iranian oil on the high seas after a democratically-elected Iranian government nationalised the British oil concession in Iran in 1951—and as London’s continued threat to do so even after the World Court ruled against Britain in the matter.
If Western powers can realign their positions with reality on the nuclear issue and on various regional challenges in the Middle East, Iran can certainly work with that. But Iranian strategy takes seriously the real prospect that Western powers may not be capable of negotiating a nuclear settlement grounded in the NPT and respectful of the Islamic Republic’s legal rights—just as Britain and the United States were unwilling to respect Iran’s sovereignty over its own natural resources in the early 1950s. Under such circumstances, more U.S.-instigated secondary sanctions that illegally threaten third countries doing business with Iran will not compel Tehran to surrender its civil nuclear program. Rather, Iran’s approach—including a willingness to conclude what the rest of the world other than America, Britain, France, and Israel would consider a reasonable nuclear deal—seeks to make it easier for countries to rebuild and expand economic ties to the Islamic Republic even if Washington does not lift its own unilaterally-imposed sanctions.
“Continuing hostility toward the Islamic Republic exacerbates America’s inability to deal with popular demands for participatory Islamist governance elsewhere in the Middle East.”
Likewise, Iranian strategy takes seriously the real prospect that Washington cannot disenthrall itself from Obama’s foolish declaration in August 2011 that Syrian President Bashar al-Assad must go—and therefore that America cannot contribute constructively to the quest for a political settlement to the Syrian conflict. If the United States, Britain, and France continue down their current counter-productive path in Syria, Tehran can play off their accumulating policy failures and the deepening illegitimacy of America’s regional posture to advance the Islamic Republic’s strategic position.
How Will the West Respond?
Coming to terms with the Islamic Republic will require the United States to abandon its already eroding pretensions to hegemony in the Middle East. But, if Washington does not come to terms with the Islamic Republic, it will ultimately be forced to surrender those pretensions, as it was publicly and humiliatingly forced to do in 1979. Moreover, continuing hostility toward the Islamic Republic exacerbates America’s inability to deal with popular demands for participatory Islamist governance elsewhere in the Middle East. Less than a month after Rohani’s election, it was widely perceived that the United States tacitly supported a military coup that deposed Egypt’s first democratically elected (and Islamist) government. The coup in Egypt hardly obviates the fact that, when given the chance, majorities in Middle Eastern Muslim societies reject Western intervention and choose to construct participatory Islamist orders. Refusing to accept this reality will only accelerate the erosion of U.S. influence in the region.
The United States is not the first imperial power in decline whose foreign policy debate has become increasingly detached from reality—and history suggests that the consequences of such delusion are usually severe. The time for American elites to wake up to Middle Eastern realities before the United States and its Western allies face severe consequences for their strategic position in this vital part of the world is running out.
About the Authors
Flynt Leverett and Hillary Mann Leverett are authors of Going to Tehran: America Must Accept the Islamic Republic of Iran (New York: Metropolitan, 2013), which has just been released in paperback, with a new Afterword. They had distinguished careers in the U.S. government before leaving their positions on the National Security Council in March 2003, in disagreement with Middle East policy and the conduct of the war on terror. They teach international relations, he at Penn State, she at American University.
Source: The World Financial Review
The New Wave of Financial Instability…
Global stocks were hammered on Friday for a second straight day on news of a slowdown in China and turbulence in emerging markets. The Dow Jones Industrials suffered its worse drubbing in more than two years, tumbling 318 points on Friday to end a 490 point two-day rout. Emerging markets currencies were whipsawed by capital flight as foreign investors fled to the safety of U.S. Treasuries. Turkey’s lira and the Argentine peso were particularly hard hit setting record lows in the 48 hour period. The scaling back of the Fed’s $85 billion per month asset purchase program, called QE, has altered the dynamic that made emerging markets the “engines for global growth”. The policy reversal has triggered a selloff in risk assets and sent EM currencies plunging. Here’s a summary from Bloomberg:
“The worst selloff in emerging-market currencies in five years is beginning to reveal the extent of the fallout from the Federal Reserve’s tapering of monetary stimulus, compounded by political and financial instability.
Investors are losing confidence in some of the biggest developing nations, extending the currency-market rout triggered last year when the Fed first signaled it would scale back stimulus. While Brazil, Russia, India, China and South Africa were the engines of global growth following the financial crisis in 2008, emerging markets now pose a threat to world financial stability.” (“Contagion Spreads in Emerging Markets as Crises Grow,” Bloomberg)
Paradoxically, Bloomberg editors blame the victims of the Fed’s failed policy for the current ructions in the markets. In an article titled, “What’s Behind the Emerging-Market Meltdown” the editors say,”emerging-market governments … should recognize that this week’s financial-market turmoil was, to varying degrees, their own fault.” … “the best way for emerging-market governments to restore confidence would be to improve their policies.”
Logically, one would assume that the editors would throw their support behind capital controls or other means of stemming the destructive flow of speculative capital into domestic markets. But that’s not the case. What the editors really want, is policies that trim deficits, slash public spending, and allow foreign investors to continue to wreak havoc on vulnerable economies that follow their free market diktats. The article is a defense of the status quo, of maintaining the same ruinous policies so that profit-taking can continue apace.
The Fed was warned early on that its uber-accommodative monetary policy was spilling over into emerging markets and creating conditions for another financial crisis. Take a look at this excerpt from an article in Bloomberg back in 2010 where Nobel prize winning economist, Joseph Stiglitz, explicitly warns the Fed of the dangers of QE.
“The U.S. Federal Reserve’s plan to boost purchases of bonds poses “considerable” risks by increasing capital inflows to emerging markets, Nobel Prize- winning economist Joseph Stiglitz said in Santiago today.
“All this liquidity that they’re creating is not going back to grow the American economy and is going to Asia and other emerging markets where it’s not wanted,” Stiglitz said…..Increased capital inflows could cause emerging market currencies to appreciate and could create asset bubbles, he said.” (“Stiglitz Says Fed Stimulus Poses `Considerable’ Risks for Emerging Markets,” Bloomberg, Dec 2010)
Events have unfolded exactly as Stiglitz predicted they would, which means the Fed is 100% responsible the carnage in the stock and currencies markets.
The policy has pumped nearly “$7 trillion of foreign funds” into EMs since QE was first launched in 2009. According to the Telegraph’s Ambrose Evans-Pritchard, “much of it “hot money” going into bonds, equities and liquid instruments that can be sold quickly….Officials are concerned that this footloose capital could leave fast in a crisis, setting off a cascade effect,” Pritchard adds ominously.
Whether last week’s bloodbath was just a prelude to a bigger crash is impossible to say, but it is worth noting that the Fed has only reduced its purchases by a mere $10 billion per month while still providing $75 billion every 30 days. That suggests that markets will probably face greater turmoil in the months ahead. Check out this clip from USA Today:
“Emerging markets need the hot money but capital is exiting now,” says (Blackrock’s Russ) Koesterich. “What you have is people saying, ‘I don’t want to own emerging markets.’…
The bigger fear is if the current crisis in currency markets morphs into a full-blown economic crisis and leads to financial contagion, says Matthias Kuhlmey, managing director of HighTower’s Global Investment Solutions.
“The currency story is fascinating and can be a slippery slope – be cautious,” says Kuhlmey, adding that the Asian crisis in the summer of 1997 that started with a sharp drop in the value of Thailand’s baht, turned into a broader economic crisis that engulfed Indonesian, South Korea and a handful of other countries. It also rocked financial markets.” (“Why emerging markets worry Wall Street,” USA Today)
So, is this the Big One, the beginning of the next financial crisis?
It’s too early to say, but investors and analysts are worried. Fed tightening (via “taper”) will be felt in markets around the world. The trouble in emerging markets will intensify deflationary pressures in the Eurozone and put a damper on China’s growth. Slower global growth, in turn, will create balance sheets problems for undercapitalized and over-leveraged banks and other financial institutions which will increase the probability of another Lehman Brothers-type default.
According to Reuters, a normalizing of interest rates in the US, (which most analysts expect) “could cut financial inflows to developing countries by as much as 80 percent for several months. In such a case, nearly a quarter of developing countries could experience sudden stops in their access to global capital, throwing some economies into a balance of payments or financial crisis, the Bank said.” (“Rout in emerging markets may only be in Phase One,” Reuters)
Clearly, the potential for another financial meltdown is quite real.
For more than four years, the Fed has buoyed stock prices and increased corporate margins through massive injections of free cash into the financial markets. Now the Central Bank wants to change the policy and ease its foot off the gas pedal. That’s causing investors to rethink their positions and take more money off the table. What started as a selloff in emerging markets could snowball into a broader panic that could wipe out the gains of the last four years.
The Federal Reserve is entirely responsible for this new wave of financial instability.
Any analysis of domestic fossil fuel production and use must acknowledge that independence for U.S. energy has not been the national goal. Contrary to utopian dreamers and radical environmentalists, oil, natural gas and coal are the backbone of power in any modern economy. This power extends both to the fuels themselves and to the political security that is required for any economy to prosper. Therefore, it seems counterproductive to encourage corporatist to export our own precious resources for the mere motive of higher profits. Unfortunately, their ill-conceived greed is at the core of much of our countries instability.
Often ignored, coal was once the dominate resource in the generation of electricity. The utterly destructive and suicidal EPA regulations and Obama’s determination to bankrupt the coal industry has put into motion an export strategy that threatens the entire utility sector.
The Motley Fool writes in the article, Can Exports Save U.S. Coal?
“Although it remains the country’s largest private sector provider of jobs, the U.S. coal industry is hurting. Domestic utilities are turning to lower-priced natural gas. Environmental opponents are working hard to keep the mineral in the ground.
The idea of expanding exports to the world’s biggest customers — currently China, the Netherlands (a large transshipment point), the U.K., South Korea and Brazil — sounds good. And the U.S. Energy Information Administration (EIA) reports shipments of 6.3 million short tons of steam coal and 7.4 million short tons of metallurgical coal in March set a monthly record. Increased Asian demand contributed to the standout month.”
The absurd notion at clean coal is impossible; drive this train directly to ports that ship our own most prolific natural resource overseas. So much for national security considerations and who in their right mind thinks that advance scrubbers will be used in all the Chinese plants being built.
Natural gas is the new boom fuel, especially because of the questionable hydrofracking process. Leaving aside the risks to our finite water aquifer, extraction from deep field using this fracking method is the primary argument to drill. In the essay, Hydrofracking Boom or Bust, cites Deborah Rogers, points out the most significant economic consequence from hydrofracking.
“Exporting is a last ditch effort to shore up a failing balance sheet. Exportation will drive the price higher in the U.S. There’s no doubt about it. The question is how high will it go. When you are producing a commodity and have produced it to such a high extent, you want to find someone who will buy it, and in this case, it will be the Asians.”
The Wall Street Journal reports how this economic model will take place in, U.S. Approves Expanded Gas Exports.
“The decision reflects a turnaround in the U.S. energy trade. Five years ago, many companies built natural-gas import terminals, anticipating greater U.S. demand for imported fuel.
Proponents of greater exports, including the oil and gas industry, say that exporting inexpensive natural gas will help the U.S. trade balance, help advance the adoption of clean-burning fuels around the world and shore up energy-poor U.S. allies.”
Let’s be real. The corporatist only care about the margins they can squeeze out of any resource extracted from mother earth. Importing when the price is right or exporting when the world price goes the other way, but never any concern about energy INDEPENDENCE for our own people and country.
Now look at the grand daddy of all, petroleum. The Oil Roustabout Economy explains the way the oil policy actually plays out. Virtually no real apprehension for domestic oil autonomy is factored into the economic schemes, that drive the economic, political and foreign policies, which keep the global a permanent tinderbox. “Remember that drilling in Anwar is prohibited, while waging war for oil is celebrated.”However, the scale of refining raw crude into a range of utilitarian end user products, lends merit to the resale for export, especially if the original crude comes from an imported source. A valid benefit is achieved by enhancing a natural resource, with value added functionality for exporting. Nonetheless, draining your own oil fields for an immediate infusion of short-term profit, only hastens the day when domestic oilfields run dry.
The Washington Post illustrates the latest insanity coming out of the political class servants of the oil barons. The article, U.S. oil exports have been banned for 40 years. Is it time for that to change?, has a chilling message.
“Some people think so — especially now that the United States is producing more oil than it has in decades. Overturning the ban, in theory, would allow companies to sell even more oil and keep expanding.
On Tuesday, Sen. Lisa Murkowski (R-Alaska) gave a speech at the Brookings Institution calling on the Obama administration and Congress to loosen restrictions on crude-oil exports in order to boost domestic production. “We need to act,” she said, “before the crude export ban raises problems and hurts American jobs.” Jack Gerard, the head of the American Petroleum Institute, expressed similar sentiments later in the day.”
Ah, that long journey to save jobs cry is most flexible depending where the campaign contributions come from. When was the last time you heard a national debate on the necessity to conserve and the prudent use of our own energy resources, strictly for domestic usage?
Not in this lifetime, instead of exporting our natural gas overseas, what happened to How to Convert the Country to Natural Gas, by T. Boone Pickens. Read the Pickens Plan and ask where are all those converted from diesel to LNG trucks?
Folks, the selling of our coal, gas and oil resources for export are more important to the internationalists that own the corporate businesses, which control the global resources, than true national energy independence. It is that simple. The establishment plutocrats are the designers, perpetuators and exploiters of an American economy that is held hostage to energy extortion. Not until this pattern is broken, will genuine prosperity return.
With Ben Shalom Bernanke set to depart on the last day of January 2014, the critique and speculation of his tenure as Chairman of the Federal Reserve begins. The mainstream financial press is giving mostly favorable accounts. Heretofore, such praiseworthy acclamations strike a shape contrast with the actual record of the state of the economy. However, the admirers of the Fed and his specific enactments live in a time warp that only masters of the universe encounter. For the remaining population, an intense struggle for survival is the actual experience, remembered from the Bernanke years.
Investopedia expresses a complimentary score of The Legacy Of Ben Bernanke, and cites distinguished highlights and concludes that “Under Bernanke’s stewardship, the Fed became the most transparent it has ever been in its history.”
Yet, they are compelled to mention that from 2008 onward, Bernanke and the Fed embarked on a series of unparalleled – and often unconventional – rescue programs and stimulus measures. These included:
- ratcheting interest rates down to the lowest levels in American history;
- force-feeding the U.S. economy with trillions of dollars through successive rounds of “quantitative easing”;
- bailing out troubled Wall Street firms and institutions;
- orchestrating the rescue of other troubled financial institutions through shotgun weddings; and
- lending funds to diverse sectors of the U.S. economy to revive stalled credit markets.
Ben Bernanke’s Great Inflation Coverup, is an assessment that one would expect from the Mother Jones publication.
“Bernanke’s problem is pretty simple here: he almost certainly wants higher inflation . . . Once the Fed has reduced interest rates to zero, it can’t go any further. But what if the economy is so bad that all the standard models suggest you need negative interest rates to get the economy back on track? The only answer is higher inflation. If inflation is running at 2% and interest rates are at zero, the real interest rate is -2%. If you borrow money, you’re effectively being allowed to pay back less than you borrowed.”
Then there is the valid point made by Bill Sardi in LewRockwell.com. “The Fed been printing new money at the rate of $85 billion a month which is being distributed to close member banks who are gambling it on the Wall Street stock market to recapitalize themselves rather than lending it out into the economy so citizens can buy new homes, automobiles.”
The example of Paying back retirees with cheaper dollars illustrates the real costs of built in systemic inflation, not just for citizens on a fix income, but for everyone. This lost in purchasing value of the currency is obvious to any honest person.
“The average social security check was $321 in 1980 and in 2011 it was $1183 (adjusted for inflation). But if that $321 pension check were to be fully adjusted for inflation according to way inflation was calculated in 1980 (cost of gasoline and food included), then that $321 should be $3636 to have the same purchasing power today.”
The severity of income disparity has reached staggering levels. Elite insiders game the system with insider speculation certainty, while the constructive producers that keep the real components of the economy functioning, are pushed to the margins.
Bernanke’s real legacy produced the following outcomes. The always-reliable ZeroHedge site states some undeniable facts under Bernanke’s watch.
- The US has never experienced 3% GDP growth.
- The labor participation rate has fallen to levels not seen since the ‘70s.
- Inflation-adjusted median incomes have fallen 7%.
- The US’s debt load has risen from $8.4 trillion to over $16 trillion.
- The Fed’s balance sheet has increased from $800 billion to over $4 trillion (larger than the economies of Brazil, France and even Germany).
- Food prices have hit record highs fomenting revolutions in the Middle East and untold suffering around the globe.
- The Fed has funneled trillions of Dollars into both US banks and European banks.
- The Fed has allowed fraud, insider trading, and corruption.
The banksters demanded a bailed out because their derivative greed exacted losses that required an immense infusion of liquidity to rescue their balance sheets. Under Bernanke, the titans of finance have an unlimited line of near zero rate interest of new credit. When the establishment financial press applauds the savior of the economy, their loyalty towards corporatist governance, dictates that the economic interests and the public welfare of ordinary people is expendable.
Look to a prime example of this concentration of wealth and control. The Global 1%: Exposing the Transnational Ruling Class by Peter Phillips and Kimberly Soeiro, focus on BlackRock.
“BlackRock is one of the most concentrated power networks among the global 1 percent. The eighteen members of the board of directors are connected to a significant part of the world’s core financial assets. Their decisions can change empires, destroy currencies, and impoverish millions. Some of the top financial giants of the capitalist world are connected by interlocking boards of directors at BlackRock, including Bank of America, Merrill Lynch, Goldman Sachs, PNC Bank, Barclays, Swiss Reinsurance Company, American International Group (AIG), UBS A.G., Arab Fund for Economic and Social Development, J. P. Morgan Chase & Co., and Morgan Stanley.”
These crony capitalists are the prototypes that benefited from Bernanke decisions.
During the Bernanke era, the debt bubble entered the point of no return to solvency. His place in the history of shame sets the stage for further economic turmoil. The Federal Reserve after Ben Bernanke article indicates that the Fed is boxed into a pattern that is likely to escalate out of control.
“With the uninterrupted, increase in federal debt, much of which is held by the Federal Reserve, the prospects of achieving prosperity by growing the economy, when interests rates have been near zero, failed miserably. It becomes almost absurd to believe that higher rates on Treasury Bonds will succeed. The new chair of the Fed will be hard pressed shutting down Quantitative Easing.”
A depression in the real economy is foreordained with the retraction of credit to most enterprises. This starving of access to funding is a conscious and deliberate strategy to force competition out of business. The grand scale that the banksters operate on has little room for upstarts or hanger-on’s. At the end of this very destructive Bernanke term, the rich got fabulous more wealthy, as the country sinks into decline on so many levels.
“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 email@example.com.
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.