America’s Bubble Economy Is Going To Become An Economic Black Hole

What is going to happen when the greatest economic bubble in the history of the world pops?  Themainstream media never talks about that.  They are much too busy covering the latest dogfights in Washington and what Justin Bieber has been up to.  And most Americans seem to think that if the Dow keeps setting new all-time highs that everything must be okay.  Sadly, that is not the case at all.  Right now, the U.S. economy is exhibiting all of the classic symptoms of a bubble economy.  You can see this when you step back and take a longer-term view of things.  Over the past decade, we have added more than 10 trillion dollars to the national debt.  But most Americans have shown very little concern as the balance on our national credit card has soared from 6 trillion dollars to nearly 17 trillion dollars.  Meanwhile, Wall Street has been transformed into the biggest casino on the planet, and much of the new money that the Federal Reserve has been recklessly printing up has gone into stocks.  But the Dow does not keep setting new records because the underlying economic fundamentals are good.  Rather, the reckless euphoria that we are seeing in the financial markets right now reminds me very much of 1929.  Margin debt is absolutely soaring, and every time that happens a crash rapidly follows.  But this time when a crash happens it could very well be unlike anything that we have ever seen before.  The top 25 U.S. banks havemore than 212 trillion dollars of exposure to derivatives combined, and when that house of cards comes crashing down there is no way that anyone will be able to prop it back up.  After all, U.S. GDP for an entire year is only a bit more than 15 trillion dollars.

But most Americans are only focused on the short-term because the mainstream media is only focused on the short-term.  Things are good this week and things were good last week, so there is nothing to worry about, right?

Unfortunately, economic reality is not going to change even if all of us try to ignore it.  Those that are willing to take an honest look at what is coming down the road are very troubled.  For example, Bill Gross of PIMCO says that his firm sees “bubbles everywhere”…

We see bubbles everywhere, and that is not to be dramatic and not to suggest they will pop immediately. I just suggested in the bond market with a bubble in treasuries and bubble in narrow credit spreads and high-yield prices, that perhaps there is a significant distortion there. Having said that, it suggests that as long as the FED and Bank of Japan and other Central Banks keep writing checks and do not withdraw, then the bubble can be supported as in blowing bubbles. They are blowing bubbles. When that stops there will be repercussions.

And unfortunately, it is not just the United States that has a bubble economy.  In fact, the gigantic financial bubble over in Japan may burst before our own financial bubble does.  The following is from a recent article by Graham Summers…

First and foremost, Japan is the second largest bond market in the world. If Japan’s sovereign bonds continue to fall, pushing rates higher, then there has been a tectonic shift in the global financial system. Remember the impact that Greece had on asset prices? Greece’s bond market is less than 3% of Japan’s in size.

For multiple decades, Japanese bonds have been considered “risk free.” As a result of this, investors have been willing to lend money to Japan at extremely low rates. This has allowed Japan’s economy, the second largest in the world, to putter along marginally.

So if Japanese bonds begin to implode, this means that:

1)   The second largest bond market in the world is entering a bear market (along with commensurate liquidations and redemptions by institutional investors around the globe).

2)   The second largest economy in the world will collapse (along with the impact on global exports).

Both of these are truly epic problems for the financial system.

And of course the entire global financial system is a giant bundle of debt, risk and leverage at this point.  We have never seen anything like this in world history.  When you step back and take a good, hard look at the numbers, they truly are staggering.  The following statistics are from one of my previous articles entitled “Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers“…

-$70,000,000,000,000 - The approximate size of total world GDP.

-$190,000,000,000,000 - The approximate size of the total amount of debt in the entire world.  It has nearly doubled in size over the past decade.

-$212,525,587,000,000 - According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States.  But those banks only have total assets of about 8.9 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.

-$600,000,000,000,000 to $1,500,000,000,000,000 - The estimates of the total notional value of all global derivatives generally fall within this range.  At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.

The financial meltdown that happened back in 2008 should have been a wake up call for the nations of the world.  They should have corrected the mistakes that happened so that nothing like that would ever happen again.  Unfortunately, nothing was fixed.  Instead, our politicians and the central bankers became obsessed with reinflating the system.  They piled up even more debt, recklessly printed tons of money and kicked the can down the road for a few years.  In the process, they made our long-term problems even worse.  The following is a recent quote from John Williams of shadowstats.com…

The economic and systemic solvency crises of the last eight years continue. There never was an actual recovery following the economic downturn that began in 2006 and collapsed into 2008 and 2009. What followed was a protracted period of business stagnation that began to turn down anew in second- and third-quarter 2012. The official recovery seen in GDP has been a statistical illusion generated by the use of understated inflation in calculating key economic series (see Public Comment on Inflation). Nonetheless, given the nature of official reporting, the renewed downturn likely will gain recognition as the second-dip in a double- or multiple-dip recession.

What continues to unfold in the systemic and economic crises is just an ongoing part of the 2008 turmoil. All the extraordinary actions and interventions bought a little time, but they did not resolve the various crises. That the crises continue can be seen in deteriorating economic activity and in the panicked actions by the Federal Reserve, where it proactively is monetizing U.S. Treasury debt at a pace suggestive of a Treasury that is unable to borrow otherwise.

And there are already lots of signs that the next economic downturn is rapidly approaching.

For example, corporate revenues are falling at Wal-Mart, Proctor and Gamble, Starbucks, AT&T, Safeway, American Express and IBM.

Would revenues at Wal-Mart be falling if the economy was getting better?

U.S. jobless claims hit a six week high last week.  We aren’t in the danger zone yet, but once they hit 400,000 that will be a major red flag.

And even though we are still in the “good times” relatively speaking, the federal government is already talking about tightening welfare programs.  In fact, there are proposals in Congress right now to make significant cuts to the food stamp program.

If food stamps and other welfare programs get cut, that is going to make a lot of people very, very angry.  And that anger and frustration will get even worse when the next economic downturn strikes and millions of people start losing their jobs and their homes.

What we are witnessing right now is the calm before the storm.  Let us hope that it lasts for as long as possible so that we can have more time to prepare.

Unfortunately, this bubble of false hope will not last forever.  At some point it will end, and then the pain will begin.

Source: The Economic Collapse

Is America’s Economy Being Sovietized?

The foundation of the Soviet model of trade and investment was centralization under the guise of “universal public ownership”. The entire goal of communism in general was not to give more social and political power to the people, but to extinguish alternative options and focus power into the hands of a select few. The process used to reach this end result can vary, but the goal always remains the same. In most cases, such centralization begins with economic hegemony, and it is in our fiscal structure that we have the means to see the future. Sovietization in our financial life will inevitably lead to sovietization in our political life.

Does the U.S. economy’s path resemble the Soviet template exactly? No. And I’m sure the very suggestion will make the average unaware free market evangelical froth at the mouth. However, as I plan to show, the parallels in our fundamentals are disturbing; the reality is that true free markets in America died a long time ago.

The Tyranny Of Planned Economy

The characteristics of a free market society defy the use of centralized planning. Adam Smith’s original concept of free market trade stood as an antithesis to what was then referred to as “mercantilism,” a select few “joint stock companies” (corporations) monopolizing production while using government ties to destroy any new competition. Unfortunately, there are to this day economists and politicians who believe that corporate centralization is a “natural” function of a free market. In reality, corporate monopolies are an unnatural creation of collusion between governments and big-money interests designed to suffocate any entrepreneurship outside of their sphere of influence. Over time, as we now see in the United States today, government power and corporate power begin to hybridize, until one can barely be distinguished from the other.

The bottom line is that you cannot have planned structures, monopolized production or controlled capital flow within an economy and still claim it to be a “free market. There are no exceptions to this rule.

The Soviet system was the ultimate in centralization. Every aspect of financial life was dictated by the communist government, from industrial input and output to investment to food production and rationing to wages and retail prices. Some people might argue that this structure is a far cry from what we now have in the United States, but let’s look at the fundamentals.

Controlled Money Creation

One of the primary tenets of The Communist Manifesto was the creation of a central bank meant to keep tight controls over currency issuance. The existence of a central bank immediately disrupts any chance of a true free market. Central banking without competition allows an oligarchy, whether corporate or political or a meshing of the two, to manipulate interest rates as well as adjust prices through inflation. Lending standards (which the central bank determines arbitrarily) built on fractional reserve banking opens the door to murky debt instruments and toxic financial products that are further used to either fabricate a “high” standard of living (as we saw in the U.S. in the 90s and early 2000s) or execute a bubble implosion causing a lower standard of living (as the U.S. is experiencing today).

Since the establishment of the Federal Reserve through subversive collusion between banking interests and corrupt politicians in 1913, America has not had a free market system. From that point forward, every boom and bust, every interest rate disaster, every inflationary increase in prices has been scientifically engineered.

Dominance Of Industry

Soviet controls on industrial output are legendary. Every part of the resource allocation process became subject to bureaucracy, and this led to stunted manufacturing growth as well as a culture of misrepresented economic data. In the United States, the establishment has taken a slightly different approach but with the same end result.

Heavy taxation on business ventures within the U.S. against entrepreneurs not lucky enough to run in elitists circles has erased incentives for manufacturing experiments within our borders. In the meantime, members of the corporate glee club receive government subsidization while they simultaneously outsource industrial projects to Third World nations. Controlled industry within communist Russia was meant to force the population to depend upon the government for every means of survival. In the United States, dependency on government has been replaced by interdependency on the globalized model in general. Necessities are now compartmentalized, and only select international businesses with cooperation from government have the ability to bring all the pieces together to keep our domestic economy running smoothly. Our society has been so distanced from self-sufficiency that many people now consider the globalist dynamic indispensable.

The next step in this degradation of free market industry is the introduction of “public works projects” by the federal government, which gives the illusion that job creation through centralization is possible.  This is the same strategy used in the Soviet Union and to this day, socialists still argue that the communist design for industrial expansion was “effective”.  In truth, the soviet public works plan with all its trains and transits and bridges and buildings was an absolute failure, as the collapse of the country made clear.  Tax funded infrastructure is no replacement for free market invention, and at bottom, no public works enterprise can be undertaken without the government first stealing capital from one area in order to fund another.  Governments can never and will never create wealth or jobs.  They can only present the semblance of economic progress while siphoning wealth away from private citizens.

Bureaucracy And Food Production

U.S. Environmental Protection Agency and U.S. Food and Drug Administration regulations, based on dubious junk science and often instituted on high without congressional oversight, further erode business possibilities, especially for young companies as well as private agriculture, while giving free reign to elitist entities like Monsanto, an organization the government actually PROTECTS through specialized legislation making it nearly immune to civil litigation.

While farms in the United States are not exactly “controlled” by the Federal government in the Soviet sense, many of them are subsidized through welfare on the condition that they grow only particular kinds of crops, raise particular animals or grow nothing at all. This subsidization is an indirect form of price control, creating engineered scarcity or abundance. At the same time, agricultural empires like Monsanto make private farm ownership increasingly difficult by using their government protection to harass and squeeze out independent food producers.

This destabilization of private resource management by common citizens has culminated in the passage of President Barack Obama’s executive order National Defense Resource Preparedness, which allows under a “national emergency” (which the President can declare for any reason) the confiscation of any and all private resources, including farms and businesses, to be redistributed by the government to ensure security conditions. This is the Stalinist model, pure and simple.

Centralized Control Of Investment

We now know that since at least 2008, the U.S. stock market, often presented by the mainstream as a paragon of free market prowess, has actually been propped up and inflated by Federal Reserve fiat. Both former Fed Chairman Alan Greenspan and current branch head Richard Fisher have openly admitted in separate news interviews that the central bank spends considerable energy in “artificially sustaining” equity markets. This has been done, I suspect, with full knowledge of the U.S. Treasury and the Obama Administration.

The Soviet model for investment was to remove all uncertainties from their domestic markets, often in the name of preventing manipulation by “speculators.” The speculator rationale was generally a distraction away from the attempt to dictate the natural forces of supply and demand. The idea was that if the government could dismiss legitimate demand or lack of demand or hide excess supply or lack of supply, the perception of a balanced economy could be conjured for the population. This led to strict redirection of capital to areas where manipulation was needed to artificially pump up (or deflate) a particular part of the economy. The government became the sole investor of the Soviet system and, thus, the sole determinant of the success or failure of any particular market.

This is EXACTLY what is going on in America today, in what mainstream economists now call “the new normal”. Federal Reserve fiat is being printed and dumped into every financial mechanism that supposedly maintains our country’s fiscal health, including stocks, Treasuries and municipals, while trade volume remains low and private investment disappears. The Federal government now owes its very existence to the continued support of central bank dollars, and the Dow Jones does as well. If this is not the Soviet ideal, then I don’t know what is.

Labor Oppression, Dismal Living Standards And Government Dependency

Poverty levels within the United States are at record highs. Nearly 50 million Americans are now dependent on government-subsidized food stamps for their survival. Nearly 100 million Americans receive welfare (or Social Security) in one form or another from the establishment. That is almost one-third of our entire population that relies on the system for at least a part of their sustainment. If Obamacare is fully realized, millions more Americans will also be conditioned to become dependent on government-designated healthcare providers. The point is not to pass judgment on those people who get money or services from the government, only to make clear our progression away from freedom and into centralized servitude.

For a Soviet structure to thrive, poverty among common citizens has to be institutionalized. Dependency requires a constant state of desperation. In America, this has been accomplished through a combination of inflated prices and reduced wages in conjunction with the destruction of labor options.

At the height of the communist machine in Russia, employment was ample; but the kind of employment one could apply for was dependent on bureaucratic red tape and availability based on a worker’s record. Only the academic “elite” within the government-run cesspools of Soviet universities and military schools had their choice of employment; even then, they were often pressured into particular specialized fields, depending on the kind of labor the state needed done at that particular time.

In the United States anyone can certainly aspire to do whatever job he hopes to do. But again, options have been removed economically; and the same academic elitism pervasive in Soviet Union labor markets exists in America today. In a recent installment of his weekly radio show,New York Mayor Michael Bloomberg said it was better for “so-so” high school students to pursue a career in plumbing rather than go to college.

Though I rarely agree with Bloomberg on anything, my initial reaction was surprise at his willingness to steer American youth away from university indoctrination centers. However, upon further examination, it became clear that Bloomberg was not trying to save the next generation time and money. Instead, he is promoting a shift in the labor dynamic of the U.S. economy toward a Soviet-style foundation. Bloomberg knows well that the U.S. labor market will never return to its former glory, partly because he is a supporter of the globalist policies that ruined our economy in the first place. Instead of suggesting ways to reverse the trend of progressive poverty and the lack of high-end jobs that engender ingenuity and invention, elitists like Bloomberg are saying “forget your dreams and get used to being a drone.”

In a 70% service and retail economy, where job availability is increasingly degraded and independent business is discouraged, Americans will have two choices:  Excel in the world of federally funded and propagandized education and sell your soul just for a chance at obtaining a professional career in a field of influence, or, settle for the leftovers.  Modern socialists often sing the praises of the soviet educational model for raising the literacy rates of once agricultural and isolated people to 98%, but what they fail to mention is that this literacy was only encouraged in order to create a more efficient servant class that was easier to propagandize.  The U.S. is moving into a similar paradigm.  For some people, being a plumber is a fine thing; but it should not be the only thing. In a true free market, a smart man can make his own way, even if he does not conform to the ideologies of the educational racket. In a Sovietized market, a smart man is prohibited from accomplishing anything unless he conforms to the ideologies of the educational racket.

Some people may respond that the centralization conspiracy within the American economy is an obvious thing today, and that there is little need to expose it any further.  I would point out that centralization is not the only issue here; the guidebook by which that centralization is being implemented is also important.  This has all been done before on the other side of the world only decades ago, and the end result was a horrifying cascade of social enslavement and mechanically inclined death.

In the end, the Soviet economy was so utterly fraudulent that the final breakdown of the system came as a complete surprise to many in political and economic fields of the era.  This is what happens when governments control all source data for financial statistics; transparency dies and collapse creeps in. Centralization is an absolute affront to the natural laws of supply and demand and an oppressive hindrance to the innovation that humanity thrives on. Such systems require constant theft from the populace in the form of reduced employment, reduced wages, reduced resources, increased taxes, increased price controls and a highly ignorant citizenry in order to function even for a short time. Sadly, the United States is well on its way in all of these areas, emulating a poisonous fiscal system and lending itself to a global economic tyranny in which all of us work much harder, for much less, and all for a government that seeks to use our very labor against us.

Source: Brandon Smith | Alt-Market

The Ethics of a Drone Contractor – Green Hills Software, Inc.

Around January 21st1998 a meeting, or series of meetings, took place at Green Hills Software, Inc., between Dan O’Dowd and Glenn Hightower. The meeting included on their agenda approval of a false stock option agreement to replace the award of shares made to Craig Franklin in 1996.

This was the final step Dan needed to take before exercising the sudden death partnership agreement between himself and Hightower, who had provided the original funding which allowed Green Hills to open its doors in 1982. More on Hightower

Dan had cut a deal with Franklin, agreeing to help him evade characterization of the stock award as marital property in exchange for Franklin’s assistance to prevent Hightower from exercising his right to buy out the company for 47 million, far less than the approximately 350 million it was actually worth.

Franklin’s wife, Melinda, had no idea her husband was divorcing her, though later she would find out he had filed the day he returned from their Hawaiian vacation with the entire family of six children on January 1st. It was planned not as a divorce but as take-no-prisoners war.

Melinda had every reason to believe their marriage was stable. The previous year she had saved Craig from the tax disaster his non-filing of returns had caused. He had, in fact, never filed until Melinda forced the issue the previous year when she discovered the reason they were bankrupt was Franklin’s non-filing.

Other things she did not know came very close to killing her and the couple’s son, Arthur. More

Hightower found out about the plan just after the meeting during which he was persuaded to sign off on Franklin’s new share agreement. Dan informed him the sudden death partnership agreement had been exercised.

Shocked, Hightower returned to Pasadena and began to make arrangements to raise the capital. This, he believed, would not be difficult for him. He had started and still owned other companies. He was wrong only because he did not know Craig was to persuade the other vice presidents and critical employees to agree to walk out if he owned Green Hills. Craig did just this the next summer. When the due diligence team came to Green Hills a walk-out occurred. Lavish promises of additional stock and other benefits had been made to the senior personnel. Not all promises were kept, but after the fact there was little they could do about it.

Dan and Craig are both psychopaths. More about them here, “When psychopaths cooperate”

Over the next nearly two years the outcome of the Hightower buyout remained in question because Glenn, outraged by Dan’s manipulations, which had begun with an restraining order keeping him from making contact with employees, filed a law suit after the orchestrated walk out. Law suit, Exhibit 7 “Morgan Pillsbury – Franklin Transcript”

Dan, who has all of the human skills of a piranha, evidently finally realized he needed someone to create a more human face for the corporation. Since Dan hoped to take Green Hills public this should also be someone with an impressive corporate resume able to make affirmative introductions to potentially useful board members, essential to acquiring credibility.
And thus entered a new member for the GHS Team.

John B. Douglas III, Unlikely Addition to the Green Hills Team

Douglas Bio from Green Hills Site

Douglas’ association with Green Hills Software actually began simultaneous with the time Dan was feverishly working to ensure he had the 47 million locked down to buy Green Hills himself. Reading the various and carefully worded resumes which abound on the Internet for Jack you find this phrasing at Bloomberg Business Week. “Mr. Jack Douglas has been Vice Chairman at Green Hills Software since April 2003. Mr. Douglas served as Chief Executive Officer to obtain multiple forms of debt and equity financing and on other strategic initiatives. Mr. Douglas also acts as a key advisor to other growing companies. ”

Chief Executive Officer of what, Green Hills Software, during the time they were attempting to go public? Of course, it could be a mis-statement by an online site which was perpetuated through reposting. But there are other indications money was tight during the period of 1998 – 2003 when Green Hills became a government contractor.

Dan borrowed a million dollars from Dr. Carl Franklin, Craig’s father, supposedly to pay for Craig’s stock options. It would have seemed reasonable for Craig to then use the generous dividends being paid from 1998 on to repay this, but evidently this did not happen. The money was extracted from Dan. Craig never repays loans since he has better uses for the money. This has been true his entire life, with only a few exceptions.

This ‘loan,’ for what ever reason it was made, was not repaid when expected and only firm action on the part of Dr. Franklin’s other two sons, Sterling and Larry, both attorneys, resulted in extracting the money from Dan.

Someone with Jack’s qualifications must have seemed like a dream come true for Dan at the time because along with Jack’s connections he also brought a far more normal personal manner than either Dan or Craig had to offer as officers of the company.

Also, there was Dan, strapped for money, with Hightower suing and only Craig to provide him with comfort and ideas.

Craig at this time, late 1998 through 1999, had became obsessed with having a hit man kill his wife, according to affidavits given later by those talking to him every day. (Affidavit, Middle of Page 2) This came about because Melinda was, like Hightower, not following the carefully scripted plan he and Dan had laid out. She was supposed to die during the divorce from her heart condition, as Hightower was supposed to just go away. Therefore, it is doubtful Dan found their daily lunches together very comforting. Craig’s public rantings probably made Dan, who is far more cautious, uneasy.

Craig looks far more normal here than he actually is. Despite appearances, he is highly intelligent with an I. Q. of 180, making him smarter than Einstein.

Jack not only looks normal, he looks charming, sophisticated, and intelligent. His resume, which includes his graduation, summa cum laude from Harvard Law, speaks for itself. Jack could be depended on not to shock potential investors with his table manners, too, an iffy proposition with Craig.

Additionally, Jack’s masterful analysis for running an in-house division for corporate counsel, “The Reebok Rules,” is filled with sage advice, some of which Jack might have found useful himself.

Now, what motivated John B. (Jack) Douglas III, to go to work at Green Hills, besides money? Jack had received stock when he was working for Apple and, presumably, his income from the stellar corporations, including Reebok, where he held senior executive positions , “helping Reebok grow to over $3 billion in revenue,” also provided substantial remuneration, as did Millennium Pharmaceuticals, Inc.

Each of these jobs seems to have grown shorter in duration. Jack was at Reebok for ten years, the others for far shorter periods, compressed into the time he had also assumed a consulting role with Green Hills.

By all reports, if they are to be believed, it was not any problem with his professional performance which caused him to move on. That leaves personal considerations and, of late, we have had indications all was not normal with Jack’s personal life.

On April 17th Jack was arrested for committing an act of, “Lewdness, open and gross, c 272 s16 (272/16)” in plain sight of a family seated for a meal at the Olive Garden Restaurant in Taunton, Massachusetts. The father of the children, an off duty police officer immediately confronted Jack, this leading to his arrest and arraignment. The event took place at 3:49pm. The facts are recounted in the POLICE REPORT.

Evidently, Jack is an exhibitionist, a form of sexual perversion, “known by several names including: flashing, apodysophilia, and Lady Godiva syndrome, according to Thrive Boston.

According to the same site ”Some exhibitionists have a conscious desire to shock or upset the person or persons they are exposing themselves to. In contrast, a high percentage of exhibitionists hope or fantasize that the target of their exposure will become sexually aroused and want to engage in sexual activity with them.

In some cases an exhibitionist will masturbate while exposing him or herself.”

The first part of this accords with Jack’s reported activity.

The Defense Human Resources Activity (DHRA) site provides the outcome of studies which state male exhibitionists may be sexually inhibited, or even impotent, this starting before age 18 in most cases. Most common in men in their twenties the impulse supposedly diminishes during the 30s and 40s, becoming less common. Another study found, “that the typical exhibitionist is married, has above average intelligence, is satisfactorily employed, and shows no other evidence of serious emotional problems.132 and that,” The absence of other emotional problems has been a consistent finding in a number of studies. 130 “

The condition is reported to be treatable and treatment programs are available which lower the rate of recidivism to ‘rare.’ Today Jack is entering his sixties, however, making him somewhat unusual for an exhibitionist.

It is therefore unlikely the incident in Taunton was the first time Jack exhibited himself, raising the possibility his changes in employment and frequent changes of address are not unrelated to this condition.

It is conceivable Green Hills provided a safe harbor for Jack because events in his personal life had overcome him. By leaving Millennium and ‘hiring on’ at Green Hills he could continue to live in Massachusetts and still have an active professional profile, even if it was one which radically changed his previous, far more prestigious, trajectory.

Also, he did not actually have to live in Santa Barbara and see very much of Dan and Craig. But he knew, through his interactions with them, beginning in 1998, the company would cover for him if questions about his personal life were raised. Dan had certainly provided this service to Craig, who was guilty of raping women in his office during working hours, to say nothing of his after hours activities.

And, given the arrest cited above, it is very likely he knew it would be well to have an understanding and helpful employer.

Despite not inconsiderable research on the web there is actually very little to be found about Jack’s personal life. Those with which he is associated are better understood as extensions of his professional life.

Unlike his fellow Team members Jeff Hazarian and Jason Issacs, he appears to be uninvolved in his local community in any not-for-profit organization. Hazarian and Issacs both joined Green Hills after the events of 1998 and are in stable marriages. Hazarian is very active in his church. Issacs and his wife contribute and participate in local charities, which other members of the GHS management team, do not appear to do.

In effect, Dan provided a sanctuary for those employees inclined to engage in personally unethical behavior. This became a perk of employment, where it obtained the services of individuals who otherwise would not have tolerated his unwillingness to share profits and a business strategy which included providing weapons used to commit human rights violations around the world.

The score card for the management team can be read like this.

Dan and Craig – Psychopathic.
Dave Kleidermacher and Dave Chandler – Caught by greed and their complicity in Dan’s 1998 fraud.
Jack – Sexually Deviant, needs assistance in finding an effective treatment program.
Chris Smith – Unknown.
Tim Reed – Cal Tech graduate, still researching.
Jeff and Jason – Tolerant of the corporate culture which financially benefits them.

Next: The genocides of the 20th Century and how they link to America’s present wars.

A continuing series of articles written for publication on Drone Free Zone in cooperation with PsychoBusters, a coordinated project carried out to awaken the public to the psychological nature, and motives, of those presently providing contracting services and products to the military and governmental agencies. 

FOR MORE INFORMATION:
William B. McReynolds
williambmcreynolds@gmail.com
T +1 (623) 209-2003

No Bank Deposits Will Be Spared From Confiscation

As alert Zero Hedge readers are aware, this week the EURO Politburo is busy debating the dodgy subject of deposit “bail-ins.”

The following article very succinctly explains this odious mode of fractal fractional reserve end-game chicanery.

The author encourages all of you to share it with others.

NO BANK DEPOSITS WILL BE SPARED FROM CONFISCATION

By Matthias Chang Esq, futurefastforward.com (with author’s permission)

I challenge anyone to prove me wrong that confiscation of bank deposits is legalized daylight robbery

Bank depositors in the UK and USA may think that their bank deposits would not be confiscated as they are insured and no government would dare embark on such a drastic action to bail out insolvent banks.

Before I explain why confiscation of bank deposits in the UK and US is a certainty and absolutely legal, I need all readers of this article to do the following:

Ask your local police, sheriffs, lawyers, judges the following questions:

1) If I place my money with a lawyer as a stake-holder and he uses the money without my consent, has the lawyer committed a crime?

2) If I store a bushel of wheat or cotton in a warehouse and the owner of the warehouse sold my wheat/cotton without my consent or authority, has the warehouse owner committed a crime?

3) If I place monies with my broker (stock or commodity) and the broker uses my monies for other purposes and or contrary to my instructions, has the broker committed a crime?

I am confident that the answer to the above questions is a Yes!

However, for the purposes of this article, I would like to first highlight the situation of the deposit / storage of wheat with a warehouse owner in relation to the deposit of money / storage with a banker.

First, you will notice that all wheat is the same i.e. the wheat in one bushel is no different from the wheat in another bushel. Likewise with cotton, it is indistinguishable. The deposit of a bushel of wheat with the warehouse owner in law constitutes a bailment. Ownership of the bushel of wheat remains with you and there is no transfer of ownership at all to the warehouse owner.

And as stated above, if the owner sells the bushel of wheat without your consent or authority, he has committed a crime as well as having committed a civil wrong (a tort) of conversion – converting your property to his own use and he can be sued.

Let me use another analogy. If a cashier in a supermarket removes $100 from the till on Friday to have a frolic on Saturday, he has committed theft, even though he may replace the $100 on Monday without the knowledge of the owner / manager of the supermarket. The $100 the cashier stole on Friday is also indistinguishable from the $100 he put back in the till on Monday. In both situations – the wheat in the warehouse and the $100 dollar bill in the till, which have been unlawfully misappropriated would constitute a crime.

Keep this principle and issue at the back of your mind.

Now we shall proceed with the money that you have deposited with your banker.

I am sure that most of you have little or no knowledge about banking, specifically fractional reserve banking.

Since you were a little kid, your parents have encouraged you to save some money to instil in you the good habit of money management.

And when you grew up and got married, you in turn instilled the same discipline in your children. Your faith in the integrity of the bank is almost absolute. Your money in the bank would earn an interest income.

And when you want your money back, all you needed to do is to withdraw the money together with the accumulated interest. Never for a moment did you think that you had transferred ownership of your money to the bank. Your belief was grounded in like manner as the owner of the bushel of wheat stored in the warehouse.

However, this belief is and has always been a lie. You were led to believe this lie because of savvy advertisements by the banks and government assurances that your money is safe and is protected by deposit insurance.

But, the insurance does not cover all the monies that you have deposited in the bank, but to a limited amount e.g. $250,000 in the US by the Federal Deposit Insurance Corporation (FDIC), Germany €100,000, UK £85,000 etc.

But, unlike the owner of the bushel of wheat who has deposited the wheat with the warehouse owner, your ownership of the monies that you have deposited with the bank is transferred to the bank and all you have is the right to demand its repayment. And, if the bank fails to repay your monies (e.g. $100), your only remedy is to sue the bank and if the bank is insolvent you get nothing.

You may recover some of your money if your deposit is covered by an insurance scheme as referred to earlier but in a fixed amount. But, there is a catch here. Most insurance schemes whether backed by the government or not do not have sufficient monies to cover all the deposits in the banking system.

So, in the worst case scenario – a systemic collapse, there is no way for you to get your money back.

In fact, and as illustrated in the Cyprus banking fiasco, the authorities went to the extent of confiscating your deposits to pay the banks’ creditors. When that happened, ordinary citizens and financial analysts cried out that such confiscation was daylight robbery. But, is it?

Surprise, surprise!

It will come as a shock to all of you to know that such daylight robbery is perfectly legal and this has been so for hundreds of years.

Let me explain.

The reason is that unlike the owner of the bushel of wheat whose ownership of the wheat WAS NEVER TRANSFERRED to the warehouse owner when the same was deposited, the moment you deposited your money with the bank, the ownership is transferred to the bank.

Your status is that of A CREDITOR TO THE BANK and the BANK IS IN LAW A DEBTOR to you. You are deemed to have “lent” your money to the bank for the bank to apply to its banking business (even to gamble in the biggest casino in the world – the global derivatives casino).

You have become a creditor, AN UNSECURED CREDITOR. Therefore, by law, in the insolvency of a bank, you as an unsecured creditor stand last in the queue of creditors to be paid out of any funds and or assets which the bank has to pay its creditors. The secured creditors are always first in line to be paid. It is only after secured creditors have been paid and there are still some funds left (usually, not much, more often zilch!) that unsecured creditors are paid and the sums pro-rated among all the unsecured creditors.

This is the truth, the whole truth and nothing but the truth.

The law has been in existence for hundreds of years and was established in England by the House of Lords in the case Foley v Hill in 1848.

When a customer deposits money with his banker, the relationship that arises is one of creditor and debtor, with the banker liable to repay the money deposited when demanded by the customer. Once money has been paid to the banker, it belongs to the banker and he is free to use the money for his own purpose.

I will now quote the relevant portion of the judgment of #3b4d81;”>the House of Lords handed down by Lord Cottenham, the Lord Chancellor. He stated thus:

“Money when paid into a bank, ceases altogether to be the money of the principal… it is then the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him when he is asked for it.

The money paid into the banker’s, is money known by the principal to be placed there for the purpose of being under the control of the banker; it is then the banker’s money; he is known to deal with it as his own; he makes what profit of it he can, which profit he retains himself,…

The money placed in the custody of the banker is, to all intent and purposes, the money of the banker, to do with it as he pleases; he is guilty of no breach of trust in employing it; he is not answerable TO THE PRINCIPAL IF HE PUTS IT INTO JEOPARDY, IF HE ENGAGES IN A HAZARDOUS SPECULATION; he is not bound to keep it or deal with it as the property of the principal, but he is of course answerable for the amount, because he has contracted, having received that money, to repay to the principal, when demanded, a sum equivalent to that paid into his hands.” (quoted in UK Law Essays, #3b4d81;”>Relationship Between A Banker And Customer,That Of A Creditor/Debtor, emphasis added,)

Holding that the relationship between a banker and his customer was one of debtor and creditor and not one of trusteeship, #3b4d81;”>Lord Brougham said:

“This trade of a banker is to receive money, and use it as if it were his own, he becoming debtor to the person who has lent or deposited with him the money to use as his own, and for which money he is accountable as a debtor. I cannot at all confound the situation of a banker with that of a trustee, and conclude that the banker is a debtor with a fiduciary character.”

In plain simple English – bankers cannot be prosecuted for breach of trust, because it owes no fiduciary duty to the depositor / customer, as he is deemed to be using his own money to speculate etc. There is absolutely no criminal liability.

The trillion dollar question is, Why has no one in the Justice Department or other government agencies mentioned this legal principle?

The reason why no one dare speak this legal truth is because there would be a run on the banks when all the Joe Six-Packs wise up to the fact that their deposits with the bankers CONSTITUTE IN LAW A LOAN TO THE BANK and the bank can do whatever it likes even to indulge in hazardous speculation such as gambling in the global derivative casino.

The Joe Six-Packs always consider the bank the creditor even when he deposits money in the bank. No depositor ever considers himself as the creditor!

Yes, Eric Holder, the US Attorney-General is right when he said that bankers cannot be prosecuted for the losses suffered by the bank. This is because a banker cannot be prosecuted for losing his “own money” as stated by the House of Lords. This is because when money is deposited with the bank, that money belongs to the banker.

The reason that if a banker is prosecuted it would collapse the entire banking system is a big lie.

The US Attorney-General could not and would not state the legal principle because it would cause a run on the banks when people discover that their monies are not safe with bankers as they can in law use the monies deposited as their own even to speculate.

What is worrisome is that your right to be repaid arises only when you demand payment.

Obviously, when you demand payment, the bank must pay you. But, if you demand payment after the bank has collapsed and is insolvent, it is too late. Your entitlement to be repaid is that of a lonely unsecured creditor and only if there are funds left after liquidation to be paid out to all the unsecured creditors and the remaining funds to be pro-rated. You would be lucky to get ten cents on the dollar.

So, when the Bank of England, the FED and the BIS issued the guidelines which became the template for the Cyprus “bail-in” (which was endorsed by the G-20 Cannes Summit in 2011), it was merely a circuitous way of stating the legal position without arousing the wrath of the people, as they well knew that if the truth was out, there would be a revolution and blood on the streets. It is therefore not surprising that the global central bankers came out with this nonsensical advisory:

“The objective of an effective resolution regime is to make feasible the resolution of financial institutions without severe systemic disruption and without exposing taxpayers to losses, while protecting vital economic functions through mechanisms which make it possible for shareholders and unsecured and uninsured creditors to absorb losses in a manner that respects the hierarchy of claims in liquidation.”(quoted in #3b4d81;”> #3b4d81;”>FSB Consultative Document: Effective Resolution of Systemically …)

This is the kind of complex technical jargon used by bankers to confuse the people, especially depositors and to cover up what I have stated in plain and simple English in the foregoing paragraphs.

The key words of the BIS guideline are:

“without severe systemic disruptions” (i.ea bank runs),

“while protecting vital economic functions” (i.e. protecting vested interests – bankers),

“unsecured creditors” (i.e. your monies, you are the dummy),

“respects the hierarchy of claims in liquidation” (i.e. you are last in the queue to be paid, after all secured creditors have been paid).

This means all depositors are losers!

Please read this article carefully and spread it far and wide.

You will be doing a favour to all your fellow country men and women and more importantly, your family and relatives.

Source: zerohedge.co

IRS As A Political Hit Squad

When the Internal Revenue Service admits to violations of law by targeting limited government advocate organizations, you know that the non-divulged crimes are much worse. The discloser in the mainstream media is a pleasant astonishment. The usual pattern of protecting “Big Government” is still intact, while the noise and agency diversion on the abuses of the IRS avoid the fundamental problem with federal taxation, based upon a system of deductions, exemptions, incentives and grants. The extortion and intimidation in the enforcement of the tax code is the entrusted role assigned to the IRS by the political hacks that administer the social engineering experiment that is fundamentally changing America.

The politicalization of the system is premeditated. The revelation that Obama governance resulted in IRS scrutiny went beyond Tea Party, targeting of conservative groups broader than thought, should not be shocking. The sycophants in federal employment have a deranged hostility towards any voice that defends and promotes constitutional federalism. Foxnews reports:

“The internal IG timeline shows a unit in the agency was looking at Tea Party and “patriot” groups dating back to early 2010. But it shows that list of criteria drastically expanding by the time a June 2011 briefing was held. It then included groups focused on government spending, government debt, taxes, and education on ways to “make America a better place to live.” It even flagged groups whose file included criticism of “how the country is being run.”

By early 2012, the criteria were updated to include organizations involved in “limiting/expanding government,” education on the Constitution and Bill of Rights, and social economic reform.”

The game of citing partisan hypocrisy in describing respective “enemy lists” avoids the necessary task of replacing the taxation labyrinth, designed to select winners and losers. Every administration uses the bureaucracy to punish political foes and most presidencies intentionally engage in illegal retribution, but all share the virtual immunity from prosecution for their misdeeds. What can we reasonably expect from this Obama scandal? It certainly has the hallmark of being a far more severe constitutional violation than those committed in the heyday of the LBJ, Nixon and Clinton outlaws.

Now be forewarned, that the IRS is charged with overseeing compliance under Obamacare. Giving a mandate for expansion under this current cloud of criminality is the height of arrogance. Notwithstanding, the irreversible loss in credibility, the wholesale revamping of the method of taxation should be examined and a trustworthy replacement adopted. However, before reviewing one such alteration, it must be pointed out, that collecting taxes to finance governmental operations is not the primary purpose of the current system.

Perpetual trillion dollar deficits demonstrate that raising revenue to pay for federal programs lacks the ability to balance budgets. The principal function of the Internal Revenue Service is to facilitate the tax avoidance practices of corporatist transnational conglomerates. The retaliatory mission against working class citizens is ostensibly a disciplinary process to maintain control over the finances of producing contributors. Inhibiting upward mobility for the populace, while accelerating elite’s wealth accumulation, is the destructive result of the tax code.

The Hill offers a solution in the article, House GOP seeks to abolish IRS, replace income tax with consumption tax.

“The FairTax Act, from Rep. Rob Woodall (R-Ga.), would abolish the 16th Amendment, which was ratified 100 years ago this February. That amendment gives Congress the power to impose income taxes without having to spend the revenues evenly among the states.

Woodall’s bill, H.R. 25, would replace the current tax system with a 23 percent consumption tax on all new goods and services. He said Thursday that this change would eliminate the need for a complicated tax code, and would be the kind of tax reform that helps reinvigorate the economy.”

The merits or criticism of a consumption tax and certainly any final amount of the levy certainly deserves a vigorous national debate. However, the need for eliminating the byzantine complexity and inherent inequity in the present punitive tax collection system should be unanimous.

Obviously, the prospect that the establishment ruling class would allow the slaughter of their cash-cow is zero. The entire existence of the Tea Party movement grew out of a desire to restore the principle of no taxation without representation. Yet, the efforts out of the authoritarian globalists are to ramp up even more draconian measures to monitor and intrude into every financial affair of normal people.

The only prudent political response to this intolerable obliteration of our eternal right to the pursuit of happiness is to require a return to the pre income tax system of revenue collection. Just listen to the screams, from those progressive socialists, who demand that the State must use their penalizing power to force egalitarian redistribution upon every wealth creator or economic producer.

The calculated fear factor imbedded into the Internal Revenue Service goes well beyond targeting just conservative groups. Every self-respecting American shares a vested interest in restoring a constitutional government. As it stands now, the prospect of achieving even a reasonable prospect of legitimate authorities is incompatible as long as the IRS is allowed to run amok over the masses who are attempting to petition and redress their government.

USA Today reports, Obama calls purported IRS targeting “outrageous”, from the latest Obama presidential press conference.

“Obama says first learned about the IRS controversy from news reports. He called the purported targeting of conservative groups by IRS personnel “outrageous and there is no place for it.” The IRS has to have “absolute integrity, ” Obama adds.

“You don’t want the IRS ever being perceived to be biased,” Obama said.

The president adds that his administration will get to the bottom of what happened at the IRS. “I have no patience for it. I will not tolerate it.”

How can anyone believe that Obama has clean hands or that some faction within the Internal Revenue Service was operating without his knowledge? Well Mr. President, prove the meaning in your words and put forth the political capital to pass the H.R. 25 legislation.

Eroding Freedom In America

US democracy is illusory. America never was beautiful. It’s not the land of the free and home of the brave. It wasn’t created that way. More than ever, it’s not now.

Freedom is a four-letter word. It’s fast disappearing. It’s an endangered species. Wealth, power and privilege alone matter. America’s war on terror priorities advance them.

International, constitutional and US statute laws are spurned. Rogue state ruthlessness replaced them. Boston’s unprecedented lockdown suggests what’s coming. It covered a two hundred square mile area. An important threshold was crossed.

Martial law terrorized city residents. Constitutional rights were suspended. Perhaps it was prelude to what’s coming. It can happen anywhere across America. It can show up nationwide.

Thousands of heavily armed militarized police, National Guard troops, FBI Swat teams, Bureau of Alcohol, Tobacco, Firearms and Explosives operatives, Drug Enforcement Administration agents, and perhaps other federal, state and local enforcers showed what full-blown tyranny looks like.

Defying public diktats risked arrest or getting shot. Helicopters hovered low over neighborhoods. House-to-house searches ordered pajama-clad families outside.

Without probable cause, some were handcuffed and/or placed face down on sidewalks. Others were publicly strip-searched. Imagine what’s coming next time. Freedom in America’s on the chopping block for elimination.

What’s ongoing already includes:

• numerous police state laws;

• waging war on humanity;

• indefinite detentions without evidence, charges or trials;

• forced disappearances;

• targeted assassinations;

• torture and other forms of abuse;

• Big Brother surveillance;

• warrantless searches;

• other privacy invasions;

• false flag national security abuses;

• war on terror fear-mongering;

• military commission trials, including for US citizens;

• domestic military force deployments;

• secret FEMA concentration camps;

• racial profiling and persecution;

• militarized local police;

• criminalizing whistleblowers; and

• targeting non-believers for supporting right over wrong.

Tyranny isn’t in the eye of the beholder. It’s escalating in plane sight. It’s just a matter of time until it’s full-blown. Washington’s bipartisan criminal class plans it.

It’s hard-right, unbridled, reactionary, and pro-corporate. It’s anti-democratic, anti-dissent, anti-freedom, anti-civil and human rights, anti-social justice, anti-environmental sanity, and anti-government of, by and for everyone.

It’s dangerous living in America at the wrong time. Supporting right over wrong is threatened. Anyone can be targeted for any reason or none at all. Guilt by accusation is policy. Diktat authority has final say.

The National Coalition to Protect Civil Freedoms (NCPCF) includes national and local organizations. Its mission is:

“To educate the public about the erosion of civil and political freedoms in the society, and the abuses of prisoners within the US criminal justice system especially after 9/11, and to advocate for the preservation of those freedoms and to defend those rights according to the US Constitution, the Universal Declaration of Human Rights and its related UN Conventions, and the Geneva Conventions.”

Civil liberties are threatened, it warns. Public safety at the expense of freedom assures neither.

Post-9/11, thought crime prosecutions followed. Individuals and groups were targeted for “their beliefs, thoughts, or associations.”

Doing so violates constitutional protections. First Amendment freedoms are compromised. They’re fundamental. Without them, all others are at risk.

They include free speech, a free press, free thought, culture and intellectual inquiry, assembly, freedom to practice the religion of one’s choice, and to petition government for redress of grievances.

The Bill of Rights Defense Committee (BORDC) “defend(s) the rule of law and rights and liberties challenged by overbroad national security and counter-terrorism policies.”

It “support(s) an ideologically, ethnically, geographically, and generationally diverse grassroots movement to protect and restore these principles by encouraging widespread civic participation; educating people about the significance of our rights; and cultivating grassroots networks to convert concern, outrage, and fear into debate and action.”

Its “Campaign for the Constitution” headlines: “Building a Movement. Restoring Rights. Reclaiming Our Constitution.” At issue is restoring lost rights. Bipartisan complicity compromised them en route to eliminating them altogether.

Rule of law protections “withered under warrantless surveillance, rampant racial and religious profiling, and torture – and even human experimentation – with impunity.”

The ACLU highlights lost digital age civil liberties. New technologies compromised existing protections. Post-9/11, they’ve undergone serious erosion.

Web site visits are tracked. Cell phones log our movements. Emails and social network communications are monitored and stored. Warrantless spying is policy.

“Things we once thought could only happen in far-away enemy states or distant dystopias are suddenly happening here in America” said ACLU.

Privacy laws haven’t kept up with technology. War on terror priorities matter most.

Protecting civil liberties in the digital age requires “ensur(ing) that expressive, associational, and privacy rights are strengthened rather than compromised by new technology.”

It’s also about “protect(ing) these core democratic rights against intrusive corporate and government practices that rely on new technology to invade these rights.”

They’re being systematically destroyed. According to the Center for Constitutional Rights (CCR), Washington “consistently (doesn’t) recognize the protections afforded by the US Constitution and international law, and in doing so, it has failed in its responsibility to maintain a democratic society that is both open to, and accountable to, the people.”

Government is shrouded in secrecy. Checks and balances no longer matter. Bill of Rights freedoms are fading. They’re fundamental in democratic societies.

War on terror priorities breached First, Fourth, Fifth and Sixth Amendment freedoms. At issue are search and surveillance authority, indefinitely detaining citizens and non-citizens uncharged, and undermining free expression, due process, and equal protection.

Washington’s criminal class is bipartisan. Ahead expect much worse. Old time radio listeners recall a memorable Jack Benny skit. “Your money or your life,” a robber asked?

After a pause, he was asked again. He responded saying “I’m thinking it over.”

Today no one’s asked. It isn’t either-or. It’s both.

A Final Comment

Fixing America’s dysfunctional system demands fundamental change. It starts by reforming the nation’s sham electoral process. Throwing out bums assures new ones.

Both major parties are two sides of the same coin. Not a dime’s worth of difference separates them. Secrecy and back room deals substitute for a free, fair and open process. Duopoly power rules.

Party bosses chose candidates. Big money owns them. Voters have no say. They get the best democracy money can buy. It happens every time.

The entire process was constitutionally flawed by design. Over time, things got worse. Bipartisan politics serves serves wealth, power, and privilege. Popular interests go begging.

Money power runs America. It games the system. It does so destructively. Controlling money, credit and debt for private enrichment assures speculation, booms, busts, inflation, deflation, instability, crisis, recessions and depressions.

It assures transferring enormous amounts of wealth from ordinary people to corporate giants and super-rich elites already with too much.

Washington is Wall Street occupied territory. What financial giants want, they get. They’re waging financial war on humanity. They’re more powerful than standing armies.

Economies are strip-mined for profit. Communities are laid waste. Ordinary people are impoverished and left out. Vital needs go begging.

Money power in private hands and democracy can’t co-exist. Complicit politicians betray the public trust. They do so for benefits they derive.

Social injustice defines official policy. Class war rages more than ever. America’s on a fast track toward tyranny. Stopping it requires free, fair and open elections. It’s also about returning money to public hands where it belongs.

Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net.

His new book is titled “Banker Occupation: Waging Financial War on Humanity.”

http://www.claritypress.com/LendmanII.html

Visit his blog site at sjlendman.blogspot.com.

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs Fridays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour

 

Source: ICH

Enormous $6.3 Trillion Cost of Immigration Amnesty

Not only will Senate Bill 744, called the Comprehensive Immigration Reform Act, add 33 million immigrants to the USA within the next 10 years, it will cost American taxpayers a mind-numbing $6.3 trillion.  That amount of money piles on top of our already crippling $16.5 trillion national debt.  When you consider 12 to 20 million illegal alien migrants taping into our social security, schools, medical systems, assisted housing and food stamp benefits—the costs skyrocket beyond imagination.

Robert Rector of the Heritage Foundation stated, “Unlawful immigration and amnesty for current unlawful immigrants can pose large fiscal costs for U.S. taxpayers.”

Government provides four types of benefits and services that are relevant to this issue:

• Direct benefits. These include Social Security, Medicare, unemployment insurance, and workers’ compensation.
• Means-tested welfare benefits. There are over 80 of these programs which, at a cost of nearly $900 billion per year, provide cash, food, housing, medical, and other services to roughly 100 million low-income Americans. Major programs include Medicaid, food stamps, the refundable Earned Income Tax Credit, public housing, Supplemental Security Income, and Temporary Assistance for Needy Families.
• Public education. At a cost of $12,300 per pupil per year, these services are largely free or heavily subsidized for low-income parents.
• Population-based services. Police, fire, highways, parks, and similar services, as the National Academy of Sciences determined in its study of the fiscal costs of immigration, generally have to expand as new immigrants enter a community; someone has to bear the cost of that expansion.

“The cost of these governmental services is far larger than many people imagine,” said Rector. “For example, in 2010, the average U.S. household received $31,584 in government benefits and services in these four categories.

“The governmental system is highly redistributive. Well-educated households tend to be net tax contributors: The taxes they pay exceed the direct and means-tested benefits, education, and population-based services they receive. For example, in 2010, in the whole U.S. population, households with college-educated heads, on average, received $24,839 in government benefits while paying $54,089 in taxes. The average college-educated household thus generated a fiscal surplus of $29,250 that government used to finance benefits for other households.

“Other households are net tax consumers: The benefits they receive exceed the taxes they pay. These households generate a “fiscal deficit” that must be financed by taxes from other households or by government borrowing. For example, in 2010, in the U.S. population as a whole, households headed by persons without a high school degree, on average, received $46,582 in government benefits while paying only $11,469 in taxes. This generated an average fiscal deficit (benefits received minus taxes paid) of $35,113.

“The high deficits of poorly educated households are important in the amnesty debate because the typical unlawful immigrant has only a 10th-grade education. Half of unlawful immigrant households are headed by an individual with less than a high school degree, and another 25 percent of household heads have only a high school degree.”

Imbedding intractable human poverty into the American fabric

“Some argue that the deficit figures for poorly educated households in the general population are not relevant for immigrants,” said Rector. “Many believe, for example, that lawful immigrants use little welfare. In reality, lawful immigrant households receive significantly more welfare, on average, than U.S.-born households. Overall, the fiscal deficits or surpluses for lawful immigrant households are the same as or higher than those for U.S.-born households with the same education level. Poorly educated households, whether immigrant or U.S.-born, receive far more in government benefits than they pay in taxes.

“In contrast to lawful immigrants, unlawful immigrants at present do not have access to means-tested welfare, Social Security, or Medicare. This does not mean, however, that they do not receive government benefits and services. Children in unlawful immigrant households receive heavily subsidized public education. Many unlawful immigrants have U.S.-born children; these children are currently eligible for the full range of government welfare and medical benefits. And, of course, when unlawful immigrants live in a community, they use roads, parks, sewers, police, and fire protection; these services must expand to cover the added population or there will be “congestion” effects that lead to a decline in service quality.

“In 2010, the average unlawful immigrant household received around $24,721 in government benefits and services while paying some $10,334 in taxes. This generated an average annual fiscal deficit (benefits received minus taxes paid) of around $14,387 per household. This cost had to be borne by U.S. taxpayers. Amnesty would provide unlawful households with access to over 80 means-tested welfare programs, Obamacare, Social Security, and Medicare. The fiscal deficit for each household would soar.

“If enacted, amnesty would be implemented in phases. During the first or interim phase (which is likely to last 13 years), unlawful immigrants would be given lawful status but would be denied access to means-tested welfare and Obamacare. Most analysts assume that roughly half of unlawful immigrants work “off the books” and therefore do not pay income or FICA taxes. During the interim phase, these “off the books” workers would have a strong incentive to move to “on the books” employment. In addition, their wages would likely go up as they sought jobs in a more open environment. As a result, during the interim period, tax payments would rise and the average fiscal deficit among former unlawful immigrant households would fall.

“After 13 years, unlawful immigrants would become eligible for means-tested welfare and Obamacare. At that point or shortly thereafter, former unlawful immigrant households would likely begin to receive government benefits at the same rate as lawful immigrant households of the same education level. As a result, government spending and fiscal deficits would increase dramatically.”

If passed, S744 not only breaks the back of American taxpayers with jobs, it continues to take jobs away from American workers with an infusion of 1.5 million legal immigrants annually. That number equates to over 125,000 new green card workers per month.

The Ideological War For Freedom Is Over

It Lost…

“Wherever private property disappears, man’s liberty is gone.  Man is placed completely at the mercy of the state.  Wherever private ownership is weakened, man’s liberty is weakened also.  There is an essential relationship between liberty and property.”  R. J. Rushdoony

The Heritage Foundation provides an excellent summary of property rights.  They describe a rating of 100 this way: “Private property is guaranteed by the government. The court system enforces contracts efficiently and quickly. The justice system punishes those who unlawfully confiscate private property. There is no corruption or expropriation.”  At 50, “The court system is inefficient and subject to delays. Corruption may be present, and the judiciary may be influenced by other branches of government. Expropriation is possible but rare.”  At 0, “Private property is outlawed, and all property belongs to the state. People do not have the right to sue others and do not have access to the courts. Corruption is endemic.

In 1995 world property rights were rated at 56.  In 2013 they are rated at 43, a reduction of over 20 percent. (See the graph in the Heritage Link below.)

Though freedom is tending down throughout the world it remains highest in Western nations and lowest in the Third World. 

The Heritage link rates the United States of America tenth behind Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Chile, Mauritius, and Denmark.  

Click here for the Heritage Foundation Property Rights link.

The U. S. Government now owns over 50 percent of the nation’s land and the incremental incursion of United Nation’s Agenda 21 continues to add to the coffer.  On Michael Shaw’s “Freedom Advocates”page he writes, “Agenda 21 seeks to transform America while eliminating the middle class. It plans to reach these goals on several fronts: by restructuring agriculture, creating broad wildlife corridors void of human activity, determining where and how people live, controlling human reproduction and human movement, constraining and controlling energy consumption and water use—in short, by eliminating private property.”

“The institution of private property makes possible three things essential to our liberty:  It encourages productive activity, allowing us to turn our ideas into actions and to realize the benefits of those actions. It allows us to engage in voluntary trade with others, multiplying the benefits of individual action a thousand-fold.  It enables us to safeguard and develop our resources responsibly and to secure peace and prosperity as a result. To appreciate the importance of private property in your own life, you need only to consider the significance of these two facts:  Private property represents everything you obtain through productive effort or voluntary trade.  Its essence is your right to determine its use”

The right to private property is being eroded in the United States and around the world.  World government seeks to exert absolute control; treating people like herds of cattle to be used as labor on the world plantation.  Like a bee hive the world will be filled with worker bees whose sole task is to provide an opulent leisure for the ruling class.  National pride will give way to a multicultural social order with intermarriages blurring racial identities. Only the Nation of Israel will remain intact.  Other nations and races are destined to become worker bees indistinguishable from one another.  This is the plan.  It is the logic behind the deliberate dumbing down of America and the massive push for multicultural integration. It is the impetus for the destruction of Christianity with its emphasis on the individual. The plan is diabolical, a direct download from Satan himself.

The snake of humanism is very prolific when it invades a society rationality disappears and as humans stray farther and farther from their Creator, foolishness grows with exponential rapidity.

We live with and have accepted an increasing number of social insanities: Our president who may be Constitutionally ineligible has been elected to a second term; our government has enslaved its citizens with a national debt of $16 trillion dollars which amounts to over $50 thousand per citizen; in direct defiance of the natural order we are training women to fight against men in defense of our nation and sanctioning homosexual marriage; the hallowed halls of our educational institutions have accepted the weakening results of multiculturalism as a desirable goal;  our citizens have been convinced that relatively weak and militarily insignificant nations in the Arab world are a danger to us; with text book insanity Americans continue to participate in a political system that is progressively enslaving them; and while all this subterfuge goes on our government supports an international court that prosecutes crimes against humanity while they are the biggest perpetrator.

Most Americans harbor a lackadaisical confidence that things will improve.  They ignore the world debt crisis and fail to consider that ultimately the lenders will call on the citizens of the United States to pay the debt their government has accumulated. Think of the austerity required for an American family of four to pay off a debt of $200,000.00.  That figure is quickly rising as our politicians continue to use the public credit card.  The debtor is a slave to the lender and the United States of America is a plantation populated by slaves whose willful ignorance allows them to go about their daily tasks as if all were well. 

The One True God is at odds with the new world order; it seeks to tyrannize us while He seeks to free us through obedience to His Commandments.  When God and His Law are forsaken despotism is inevitable.  We were not created to govern ourselves and since we have failed to encode this truth we are experiencing the results of our failure.

Partisan politics warned us about the dictatorial nature of the Obama Administration but the erstwhile Bush cabal was equally malignant.  Changing political partoes is useless. We have long ago lost control of our government and our opinions no longer matter.   Congress persons and senators vote the will of the money powers and the money powers reward them with re-election.

In Boston and Watertown, Massachusetts local, state, and federal authorities deployed a frightening array of coordinated force to apprehend two young men they described as terrorists.  Acting as judge and jury they violated the legal rights of the suspects and encroached on property rights by invading homes and restricting the movement of their occupants.  The entire operation resembled aiming a howitzer at a house fly.

The citizens of the United States of America have been put on notice that neither they nor their properties can claim protections from the unrestrained power of those that rule them.

Several times I have written that Americans need to repent from theirs and their father’s wicked ways. This admonition has fallen on deaf ears and some have advised me that I should stop writing about it because it will never happen.

In a recent email from American Vision Dr. Joel McDurmon wrote that “a corrupt government is the product of a corrupt people”. He quoted H. L. Mencken, “Democracy is the theory that the common people know what They want, and deserve to get it good and hard.” and went on to contend that God often punishes a wicked populace by exposing them to their own sins. “Thus do the politically deluded live in a denial which dismisses even God’s Word in favor of the assertion of human wisdom.  So often do men shelter their pet political beliefs from even divine criticism.  So often do men deny God’s Word to advance their own desires. So often do men rest on false assurances built on their own godless dreams.  And just as often do societies weather and decay from the blights of human vanity.”   Read here.

America and its people have supported illegal aggression and encouraged murderous wars.  We have pride fully maintained our national superiority and encouraged the use of weapons of mass destruction. We have supported our government in the role of a deity and now, since we have granted it that role, it has begun reflecting it in action.  We have winked at sin, dallied in its fringes, and taken an occasional bath.  Dishonest measurements have been accepted for decades; our buildings are constructed with dishonest two-by-fours that are actually only one and a half by three and three quarters.  Now even our Pound Cakes weigh only fourteen ounces.  Dishonesty has permeated our culture!  Our media uses lies, gross omissions, and misrepresentations in reporting the news and our government regularly distorts facts and figures.  While all this defiance of God continues our churches disregard their proper function by seeking peace and respectability.  Abortion is a horrendous sin but it is only one sin; our cancerous pride covers scores of others.

One of my nieces is married to a lawyer.  He employs a logical mind that makes conversation interesting.  He is a Democrat who supports Obama and believes he is doing a reasonably good job.  His approach to life is pragmatic, he considers himself moral, and understands that there is room for disagreement.  We did not set parameters for our talk but I believe he would agree with Democrat Harry Reid that government is inherently good and with Libertarian Jacob Hornberger that it should be constrained by natural law.

Natural law alone would never have created the freedom and order the United States of America has enjoyed.  It was Christianity and the Laws God gave to Moses that buttressed a secular government and made our nation great. Though not always pronounced it was almost universally supported even by many whose personal beliefs were different.  Pragmatism is a pagan procedure that allows compromise with evil and the end to justify the means.  Freedom is always endangered by pragmatism.

Because we are no longer a righteous nation we are quickly losing our freedom. The longer we linger in secular humanism the greater the constraints.  Private property was flagrantly invaded in Watertown, Massachusetts. When tyrants are successful in exercising inordinate power they will continue to do so.

We no longer have private property in America.  The internet is devoid of privacy with everything subject to the prying eyes and ears of big brother.  Private homes are no longer sanctuaries but can now be invaded by heavily armed, jack booted government troops who can kill with impunity.  Public safety trumps individual rights leaving citizens without privacy or even the right to occupy of their own property. 

Life is no longer restrained by absolutes.  Power prevails and the full force of the United States military can be used to enforce the whims of those that wield it.

When we forsake God’s Law we subject ourselves to the whims of human power!

The Last Step For War – Keeping Saddam Hussein In Iraq

Why did Saddam Hussein stay in Iraq? There was every motive to leave. He had seen what happened to leaders who attempt to withstand the corporate interests who are looking for an opportunity to loot a country. While John Perkins had not yet written his book, “Confessions of an Economic Hitman,” he knew the score. He could never withstand an invasion by America. He was not suicidal. He had gotten his start as a hire for the CIA and knew what was poised to happen to him, his family, and his nation.

Cast you mind back to those dark days when we were reeling, the images of towers falling from the sky still engraved on our retinas.

Voices were being raised in objection and silenced.

Look over the time line appearing in Mother Jones, September/October 2006 Issue, titled, “Lie by Lie: A Timeline of How We Got Into Iraq,” by Jonathan Stein and Tim Dickinson.

The war against Iraq began June, 2002, with intense bombing. The U. S. military flew 21,736 sorties and attacked 349 targets between June and the official start of the war in 2003.

Bombing is an act of war.

Rove, Cheney, and the Bush Administration, thwarted with the lack of evidence Saddam had nothing to do with 9/11, falsified evidence of Weapons of Mass Destruction. Reports by debunked sources, specifically Curveball, who is known to be unreliable, are treated as trusted sources.

Every conceivable action is taken to suppress the truth and allow the spin campaign, which began as the White House Iraq Group in August of 2002. This included, Rove, Libby, Rice, as well as Karen Hughes and Mary Matalin.

Cheney personally lied, over and over again, to get Congress to acquiesce, to the media and to the public.

The Administration knew they were manufacturing, spinning, to start a war even while Saddam Hussein was offering to allow UN inspectors in (September 18, 2002) and all reports from returning CIA moles affirmed Saddam had abandoned WMD programs. This information is buried in the CIA bureaucracy.

Anything which disagrees with the drive for war in Iraq is suppressed. Lies, ‘sexing up,’ reports, are reported publicly.

The use of torture has been rationalized and is being used, despite the Geneva Conventions and Protocols on Human Rights and the Conduct of Hostilities.

The Bush Administration is, collectively, behaving like a bunch of chimps working themselves up to violence, to a person, ignoring their actions are, effectively, converting a nation dedicated to individual freedom and human rights into its antitheses.

One September 26, 2002, during a Rose Garden speech, Bush said, “”The Iraqi regime possesses biological and chemical weapons.”" The same day, during a speech in Houston Bush said of Saddam, “After all, this is a guy who tried to kill my dad.”

Two days later Bush said in his address to nation: ”‘The Iraqi regime possesses biological and chemical weapons, is rebuilding the facilities to make more, and, according to the British government, could launch a biological or chemical attack in as little as 45 minutes after the order is given.”‘

In an ominous foreshadowing of what was to come, Bush delivered a speech on October 7, 2002, in which he stated, “‘Facing clear evidence of peril, we cannot wait for the final proof—the smoking gun—that could come in the form of a mushroom cloud.”‘ Today we know effective deployment of drone technology was far beyond anything available to anyone – but the U. S.

Battered and intimidated, on October 11th, “Congress—including all serious Democratic contenders—votes to grant Bush power to go to war.”  On November 5th, control of the Congress moved to the GOP. The campaign of lies, using fear and their love of country, had allowed the ongoing theft of elections by Karl Rove to work again.

On November 10th the UN Security Council passed Resolution 1441 offering Iraq ‘”a final opportunity to comply with its disarmament obligations.”” Iraq immediately agreed and UN weapons inspectors returned.

Saddam Hussein would have known of every comment and been forced to consider his options. His country was being hammered by bombs, his plans to sell oil to partners other than the U. S. were, therefore stymied. It would be a compelling reality for him to consider an exit strategy at this point.

Only one event could now stop the War in Iraq from going forward, for Saddam to offer to leave Iraq. Given his options, this would have been the only safe thing for him to do. All previous events, now clear to us and documented, show he was being set up. His very life, and those of his family members, were on the line.

Saddam made just this offer in November of 2002.

Clearly, the Bush Administration would ignore this request. Saddam, therefore, made contact with the previous administration. The Clintons, through their associate Sidney Blumenthal, former White House and his son, Max, pulled out all of the stops to ensure the one event which could derail plans to invade Iraq.

The offer was made by Saddam, via email, through Max Blumenthal, this forwarded on to his father. With the Clintons assurances, they were able to persuade Saddam to stay in Iraq.

Sidney was then unaware his computer had been hacked. A keylogger was sending his emails to another party, who reported this to the CIA. The same party then found themselves subject to a barrage of harassment and threats beginning as the Iraqi Invasion began.

How much was it worth to keep Saddam in place? Could pay-offs have been made to ensure the cooperation, and silence, of the Clintons and Blumenthals?

According to a Los Angeles Times article, titled, “Clintons disclose wealth,”published April 05, 2008| written by Peter Nicholas, Robin Fields and Dan Morain,when the Clinton’s left the White House, “in January 2001, they (The Clintons) had amassed more than $11 million in legal debts, incurred during investigations into the Whitewater controversy and the former president’s affair with Monica S. Lewinsky.” Within the next year or so their, “returns show that the family’s annual income shot up after her husband left the White House, rising from $358,000 in 2000 to $16 million a year later, when Bill Clinton listed his occupation as “speaking and writing.” “

Sidney Blumenthal also left the White House in less than prosperous financial condition. The cause was also a law suit stemming from elements of the NeoCon cabal which went into the White House in 2001.

In 1997, Blumenthal had filed a $30 million libel lawsuit against Internet blogger Matt Drudge and AOL, Drudge’s employer, because of a false claim Drudge made of spousal abuse.

In fact, the article was the brain child of Drudge and John Fund, then still on the Editorial Board of the Wall Street Journal. Drudge had attributed the story to “top GOP sources.” Drudge later retracted the story.

Drudge publicly apologized to the Blumenthals and the lawsuit was dropped with Blumenthal, who, ironically, settled by making a small payment to Drudge over a missed deposition.

In his book, The Clinton Wars, Blumenthal claimed he was forced to settle because he could no longer financially afford the suit, which had proven to be expensive. Drudge, who was guilty, had managed to receive support from both solicitations, claiming he was being harassed, and likely from operatives working for the NeoCons.

Saddam’s actions, in offering to leave, were entirely predictable.

Soliciting support from the Clintons, by the Bush White House, resulted a cooperative relationship between the former and then president which was mutually beneficial, ending any threat from the Clintons and sealing them into a role within the power elite, which they continue to enjoy today.

Afghanistan: Gut Check On What We Are Doing To Ourselves

Over the weekend, three more American soldiers lost their lives to IED roadside bombs in Afghanistan while two lost their lives to Afghanistan troops turning the weapons that we provided them—and shot our own young men.  Military people call those deaths: “insider attacks.”  (Source: Associated Press report)   The Afghanistans we gave billions of dollars and sent our finest men to “free” them—continue killing our military personnel at the drop of a hat.

Five young kids serving our country in that 11 year war lived in constant danger of dying every day in that backward, goat herder and Islamic-dominated crazy country.  Understand this: illiteracy runs at 80+ percent in Afghanistan.  That country suffers dozens of war lords competing for dominance for the last 1,400 years of Islamic mayhem.  NBC’s Brian Williams reported last week that our CIA funneled suitcases full of millions of U.S. taxpayer dollars to Afghanistan President Karzai to pay off tribal leaders—so they would support our troops.  Otherwise, those warlords just as soon kill our boys.

What did Congress, George W. Bush and now Barack Obama get us into?  What have we accomplished in Iraq and Afghanistan?  Why didn’t we leave a week after bin Laden saw the raw end of an M-14 in via Seal Team Six?  What in the name of common sense are we doing to ourselves and our young men serving in uniform?

Answer: in the final analysis, we killed a lot of people and their kids, and they killed a lot of our kids.  Result: a lot of death, but we accomplished nothing in the way of national security as proven by our Islamic bomber immigrants at the Boston Marathon two weeks ago.

All those kids died in Vietnam, Iraq and Afghanistan for the Military Industrial Complex run by massive munitions corporations, Halliburton and anyone else who benefits from making war products.

All of it based on a lie!  Saddam Hussein did not own one, single weapon of mass destruction that he could turn onto the people of the United States.  Not one!  George Bush lied, then lied some more, and Obama continued and continues the lie in Afghanistan.   Our complicit Congress and the past two presidents should be brought up on criminal charges for killing so many people without any warrant whatsoever.

After 10 years in Iraq and 4,200 deaths along with tens of thousands of our finest kids being blown up or emotionally blown to pieces with Post Traumatic Stress Syndrome.  Several thousand of our kids already committed suicide from their experiences in Iraq and Afghanistan.  Experts expect no less than 150,000 to 200,000 former U.S. combat troops will commit suicide in the years ahead from their horrific experiences in the Middle East.  As I documented in an earlier column two years ago, 200,000 to 225,000 Vietnam combat troops who walked out of Vietnam in one piece—later killed themselves.  Endless thousands more dove into drugs, alcohol, divorces and homelessness.  Thousands of kids lost their fathers to war’s long term insanity and emotional destruction.

Every single one of our “kids” that died in Vietnam, Desert Storm, Iraq and Afghanistan—died for nothing but money by mega-corporations.  I am astounded how the American Military Industrial Complex can manipulate the American people like sheep to follow their propaganda for 10 friggin’ long years of lying to us.  Back when I attended college during Vietnam, we marched in the streets to “Stop the war…hell no, we won’t go….”    Why? We didn’t want to get killed for no reason whatsoever.

Why do those five kids’ deaths in Afghanistan this week distress me?  My father served in the US Marine Corps and died while in service to our country. His death wrecked our family.  From my infant brother John who never saw his father to my own emotional turmoil for years if not decades.  My brother Rex suffered horrific emotional trauma and my sister Linda became a zombie for five years.  My mother kept us together with her heroic strength.  But none of our lives recovered and our dad’s death changed our destinies.

My pain reaches out to those five kids’ families who just received the news that their citizen-soldiers died over the weekend.  They’re all crying right now. They weep in shock, pain and bewilderment.    They will suffer for years and decades to come. If those troops enjoyed wives and families, their offspring will forever be changed without dad.

Ironically, our all volunteer Army ingests young men, turns them into killers and spits them out emotionally wrecked or returns them back home in caskets.

War Is a Racket

U.S. Major General Smedley Butler said, “WAR is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one in which the profits are reckoned in dollars and the losses in lives.

“A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes. In the WWI, a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy? How many of them were wounded or killed in battle?”

You can bet that draft dodging Dick Cheney never shouldered a rifle, but he made millions with Halliburton.  George W. Bush smoked weed and snorted cocaine while in the safety of the Texas National Guard, but 58,300 less fortunate American kids got blown away.  Today, Bush’s worth exceeds multiple millions while our country stands trillions in debt from the wars he and Cheney started in Iraq.

Sickening: the American people sit on their fat rear ends without so much as a whimper.  Just serve up their kids and watch the death continue.

No Bank Deposits Will Be Spared From Confiscation

I challenge anyone to prove me wrong that confiscation of bank deposits is legalized daylight robbery

Bank depositors in the UK and USA may think that their bank deposits would not be confiscated as they are insured and no government would dare embark on such a drastic action to bail out insolvent banks.

Before I explain why confiscation of bank deposits in the UK and US is a certainty and absolutely legal, I need all readers of this article to do the following:

Ask your local police, sheriffs, lawyers, judges the following questions:

1) If I place my money with a lawyer as a stake-holder and he uses the money without my consent, has the lawyer committed a crime?

2) If I store a bushel of wheat or cotton in a warehouse and the owner of the warehouse sold my wheat/cotton without my consent or authority, has the warehouse owner committed a crime?

3) If I place monies with my broker (stock or commodity) and the broker uses my monies for other purposes and or contrary to my instructions, has the broker committed a crime?

I am confident that the answer to the above questions is a Yes!

However, for the purposes of this article, I would like to first highlight the situation of the deposit / storage of wheat with a warehouse owner in relation to the deposit of money / storage with a banker.

First, you will notice that all wheat is the same i.e. the wheat in one bushel is no different from the wheat in another bushel. Likewise with cotton, it is indistinguishable. The deposit of a bushel of wheat with the warehouse owner in law constitutes a bailment. Ownership of the bushel of wheat remains with you and there is no transfer of ownership at all to the warehouse owner.

And as stated above, if the owner sells the bushel of wheat without your consent or authority, he has committed a crime as well as having committed a civil wrong (a tort) of conversion – converting your property to his own use and he can be sued.

Let me use another analogy. If a cashier in a supermarket removes $100 from the till on Friday to have a frolic on Saturday, he has committed theft, even though he may replace the $100 on Monday without the knowledge of the owner / manager of the supermarket. The $100 the cashier stole on Friday is also indistinguishable from the $100 he put back in the till on Monday. In both situations – the wheat in the warehouse and the $100 dollar bill in the till, which have been unlawfully misappropriated would constitute a crime.

Keep this principle and issue at the back of your mind.

Now we shall proceed with the money that you have deposited with your banker.

I am sure that most of you have little or no knowledge about banking, specifically fractional reserve banking.

Since you were a little kid, your parents have encouraged you to save some money to instil in you the good habit of money management.

And when you grew up and got married, you in turn instilled the same discipline in your children. Your faith in the integrity of the bank is almost absolute. Your money in the bank would earn an interest income.

And when you want your money back, all you needed to do is to withdraw the money together with the accumulated interest. Never for a moment did you think that you had transferred ownership of your money to the bank. Your belief was grounded in like manner as the owner of the bushel of wheat stored in the warehouse.

However, this belief is and has always been a lie. You were led to believe this lie because of savvy advertisements by the banks and government assurances that your money is safe and is protected by deposit insurance.

But, the insurance does not cover all the monies that you have deposited in the bank, but to a limited amount e.g. $250,000 in the US by the Federal Deposit Insurance Corporation (FDIC), Germany €100,000, UK £85,000 etc.

But, unlike the owner of the bushel of wheat who has deposited the wheat with the warehouse owner, your ownership of the monies that you have deposited with the bank is transferred to the bank and all you have is the right to demand its repayment. And, if the bank fails to repay your monies (e.g. $100), your only remedy is to sue the bank and if the bank is insolvent you get nothing.

You may recover some of your money if your deposit is covered by an insurance scheme as referred to earlier but in a fixed amount. But, there is a catch here. Most insurance schemes whether backed by the government or not do not have sufficient monies to cover all the deposits in the banking system.

So, in the worst case scenario – a systemic collapse, there is no way for you to get your money back.

In fact, and as illustrated in the Cyprus banking fiasco, the authorities went to the extent of confiscating your deposits to pay the banks’ creditors. When that happened, ordinary citizens and financial analysts cried out that such confiscation was daylight robbery. But, is it?

Surprise, surprise!

It will come as a shock to all of you to know that such daylight robbery is perfectly legal and this has been so for hundreds of years.

Let me explain.

The reason is that unlike the owner of the bushel of wheat whose ownership of the wheat WAS NEVER TRANSFERRED to the warehouse owner when the same was deposited, the moment you deposited your money with the bank, the ownership is transferred to the bank.

Your status is that of A CREDITOR TO THE BANK and the BANK IS IN LAW A DEBTOR to you. You are deemed to have “lent” your money to the bank for the bank to apply to its banking business (even to gamble in the biggest casino in the world – the global derivatives casino).

You have become a creditor, AN UNSECURED CREDITOR. Therefore, by law, in the insolvency of a bank, you as an unsecured creditor stand last in the queue of creditors to be paid out of any funds and or assets which the bank has to pay its creditors. The secured creditors are always first in line to be paid. It is only after secured creditors have been paid and there are still some funds left (usually, not much, more often zilch!) that unsecured creditors are paid and the sums pro-rated among all the unsecured creditors.

This is the truth, the whole truth and nothing but the truth.

The law has been in existence for hundreds of years and was established in England by the House of Lords in the case Foley v Hill in 1848.

When a customer deposits money with his banker, the relationship that arises is one of creditor and debtor, with the banker liable to repay the money deposited when demanded by the customer. Once money has been paid to the banker, it belongs to the banker and he is free to use the money for his own purpose.

I will now quote the relevant portion of the judgment of the House of Lords handed down by Lord Cottenham, the Lord Chancellor. He stated thus:

“Money when paid into a bank, ceases altogether to be the money of the principal… it is then the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him when he is asked for it.

The money paid into the banker’s, is money known by the principal to be placed there for the purpose of being under the control of the banker; it is then the banker’s money; he is known to deal with it as his own; he makes what profit of it he can, which profit he retains himself,…

The money placed in the custody of the banker is, to all intent and purposes, the money of the banker, to do with it as he pleases; he is guilty of no breach of trust in employing it; he is not answerable TO THE PRINCIPAL IF HE PUTS IT INTO JEOPARDY, IF HE ENGAGES IN A HAZARDOUS SPECULATION; he is not bound to keep it or deal with it as the property of the principal, but he is of course answerable for the amount, because he has contracted, having received that money, to repay to the principal, when demanded, a sum equivalent to that paid into his hands.” (quoted in UK Law Essays,  Relationship Between A Banker And Customer,That Of A Creditor/Debtor, emphasis added,)

Holding that the relationship between a banker and his customer was one of debtor and creditor and not one of trusteeship, Lord Brougham said: 

“This trade of a banker is to receive money, and use it as if it were his own, he becoming debtor to the person who has lent or deposited with him the money to use as his own, and for which money he is accountable as a debtor. I cannot at all confound the situation of a banker with that of a trustee, and conclude that the banker is a debtor with a fiduciary character.”

In plain simple English – bankers cannot be prosecuted for breach of trust, because it owes no fiduciary duty to the depositor / customer, as he is deemed to be using his own money to speculate etc. There is absolutely no criminal liability.

The trillion dollar question is, Why has no one in the Justice Department or other government agencies mentioned this legal principle?

The reason why no one dare speak this legal truth is because there would be a run on the banks when all the Joe Six-Packs wise up to the fact that their deposits with the bankers CONSTITUTE IN LAW A LOAN TO THE BANK and the bank can do whatever it likes even to indulge in hazardous speculation such as gambling in the global derivative casino.

The Joe Six-Packs always consider the bank the creditor even when he deposits money in the bank. No depositor ever considers himself as the creditor!

Yes, Eric Holder, the US Attorney-General is right when he said that bankers cannot be prosecuted for the losses suffered by the bank. This is because a banker cannot be prosecuted for losing his “own money” as stated by the House of Lords. This is because when money is deposited with the bank, that money belongs to the banker.

The reason that if a banker is prosecuted it would collapse the entire banking system is a big lie.

The US Attorney-General could not and would not state the legal principle because it would cause a run on the banks when people discover that their monies are not safe with bankers as they can in law use the monies deposited as their own even to speculate.

What is worrisome is that your right to be repaid arises only when you demand payment.

Obviously, when you demand payment, the bank must pay you. But, if you demand payment after the bank has collapsed and is insolvent, it is too late. Your entitlement to be repaid is that of a lonely unsecured creditor and only if there are funds left after liquidation to be paid out to all the unsecured creditors and the remaining funds to be pro-rated. You would be lucky to get ten cents on the dollar.

So, when the Bank of England, the FED and the BIS issued the guidelines which became the template for the Cyprus “bail-in” (which was endorsed by the G-20 Cannes Summit in 2011), it was merely a circuitous way of stating the legal position without arousing the wrath of the people, as they well knew that if the truth was out, there would be a revolution and blood on the streets. It is therefore not surprising that the global central bankers came out with this nonsensical advisory:

“The objective of an effective resolution regime is to make feasible the resolution of financial institutions without severe systemic disruption and without exposing taxpayers to losses, while protecting vital economic functions through mechanisms which make it possible for shareholders and unsecured and uninsured creditors to absorb losses in a manner that respects the hierarchy of claims in liquidation.”(quoted in  FSB Consultative Document: Effective Resolution of Systemically …)

This is the kind of complex technical jargon used by bankers to confuse the people, especially depositors and to cover up what I have stated in plain and simple English in the foregoing paragraphs.

The key words of the BIS guideline are:

“without severe systemic disruptions” (i.e. bank runs),

“while protecting vital economic functions” (i.e. protecting vested interests – bankers),

“unsecured creditors” (i.e. your monies, you are the dummy),

“respects the hierarchy of claims in liquidation” (i.e. you are last in the queue to be paid, after all secured creditors have been paid).

This means all depositors are losers!

Please read this article carefully and spread it far and wide.

You will be doing a favour to all your fellow country men and women and more importantly, your family and relatives.

Source: Global Reasearch

Farm Supports And Social Welfare

The planting season is in full swing as is the transfer of subsidies to big agriculture and social welfare food stamps. Which has more worth, paying the Monsanto and property tax bill or running a public assistance program that allows for the buying of lottery tickets? Well, if you are Congress, both have benefit, but mostly for their political value.Why are food stamps part of the Farm Bill? Nancy Marshall-Genzer makes a shrewd observation.

“There’s been an explosive expansion of the food stamp program. To understand why, you have to go back to the ’90s and President Clinton’s welfare reform, which trimmed welfare rolls. To help those cut off, Congress and President Bush made it easier to qualify for food stamps. That was in 2002. Since then, the food stamp program has more than doubled.

That’s about one in seven Americans. Many of them lost their jobs during the great recession. But why is the food stamp program in the farm bill, anyway? Like most things in Washington, it all boils down to politics.

Chad Hart is an economist at Iowa State. He says farm-state legislators needed a way to connect with more urban members of Congress, so the city slickers would support farm subsidies.”

Is it necessary to expand exponentially the Supplemental Nutrition Assistance Program (SNAP), to relieve starvation when a “Happy Meal” can be purchased at every turn? Yet the socialization culture boasts of the dietary benefits of being on the government dole, as the urban society continues to consume every cuisine of fast foods.

The Washington Times notes that under the Food stamp president: Enrollment up 70 percent under Obama and that present legislation “allow for those with higher incomes to take food stamps — the logic being that helping people before they reach crisis financial level will actually stimulate the economy.”

What did people do for food before the era of the “Great Society”? Farming was a way of life for rural America from the inception of the country. In spite of struggling out a livelihood from an often-harsh pastoral environment, agriculture capacity grew into the breadbasket of the world. Today, the gentleman farmer needs to master the skills of trading future contracts and applications for assistance.

A starting point for subsidies ”can supplement a farmer’s income and as well as provide funds for rental payments for land and assistance when the market price of a crop is low. Farm subsidies also play a role in the cost and availability of certain agricultural commodities.”

1. Contact the Farm Service Agency office in your state
2. Determine which farm subsidy you will apply for
3. Find out what type of government subsidized crop and animal insurance is available in your area
4. Determine if your farm is eligible for the Direct Payment subsidy program
5. Ask about the special loan programs the federal government has available for new farmers and ranchers who have been in business for at least three years but less than ten years

Farming as a productive enterprise is rapidly becoming big business. The family farm is no longer an independent endeavor based upon market prices and ingenious management. The quasi-government debt and subsidy cycle, demands a public partnership with federal and state agencies that distort production and consumer prices at every level. Economy of scale seems to be the only path left to plow the fertile fields of government subsidies.

The corporate agriculture conglomerates have become integral constituents of the seed, fertilizer and chemical industry. Both collaborators hire their political lobbyists to expand financial supports, resistive food labeling disclosures and apply economic pressure to stamp out holistic food competition.

The taxpayer should be concerned over the institutionalization and dependency of the SNAP mentality that eats at the fabric of a viable market economy. However, even more diabolical is the destructive subsidization of farming that dramatically benefits corporatist agriculture at the expense of organic agrarian alternatives.

US News takes the position that the Farm Bill’s Corporate Welfare Is Unacceptable.

“Under current law, businesses that produce commodity crops-corn, soy, cotton, or wheat for example-receive a variety of federal supports. One of these, direct payments, provides a per-acreage subsidy for certain farmland owners, regardless of prices, crop yield, or profitability. As a result some farm businesses making hundreds of thousands or even millions of dollars each year also receive a generous annual check from the federal government even if they don’t grow a crop.

Federal crop insurance is out of control. In fiscal year 2012, the total cost of the crop insurance program set a new record at $14 billion-$3 billion more than FY2011. And here’s the kicker-2012 was a year of near record profits for agriculture, even before crop insurance payouts, despite and in part because of the drought many parts of the country experienced this past summer. In every state, participants in the crop insurance program have received more in claims payments than in premium dollars put in over the past 15 years. And remember, for every $1 in premiums, agribusinesses only chip in 38 cents to insure their own crops while taxpayers pick up the remaining 62 cents. That is not insurance or a safety-net, that’s a hand out.”

A comprehensive overhaul of government agriculture policy may not seem very probable from a political will perspective. Nevertheless, the gravy train of public money cannot be a substitute for tilling the soil and weeding the crops. When government legislation attempts to maintain an inexpensive retail food price with public grants, loans and subsidies, the true cost of national nourishment is unsustainable.

The urbanization of the political electorate dictates that the bottom feeders expect their groceries be delivered from a full service supermarket. As any rural resident knows, the nature of the land has its own set of rules and demands. Famine and undernourishment applies to much more than the food supply. It resides in the destructive and distorted government protection racket that leaves the public with a deep hunger in their belly.

Congress Repeating The Second Basic Law of Stupidity: Mass Amnesty

As you read in the First Basic Law of Stupidity, our U.S. Congress works on yet another mass amnesty for 20 million illegal alien migrants now working and residing in our country in violation of dozens of our laws. Notice that Congress failed to enforce the employment laws from the 1965 Immigration Reform Law as well as the 1986 Amnesty that gave four million Mexicans instant citizenship. All totaled, those two new laws by Congress flooded this country with over 120 million more people since 1965. This next amnesty will flood the country with yet another 100 million immigrants at the bare minimum.

Today, we live in 2013 with a few other interesting facts Congress bestowed on the American people:

• Congress placed our country into a $16.5 trillion national debt. It’s wrecking the foundation of our republic and our financial ability to survive.
• Congress waged two useless, worthless and meaningless wars for the past 10 years at a cost of $3 trillion. Trillions more when it comes to the emotional, physical and psychological chaos incurred by our military veterans.
• Congress outsource, insourced and offshored millions of US jobs so we now suffer 14 million unemployed and 7 million underemployed.
• Congress killed so many jobs and job training that 47 million Americans subsist on food stamps in April of 2013.
• Congress refuses to enforce internal immigration employment, housing and transport laws—so that we face 20 million illegal aliens scamming American workers out of jobs as well as using $346 billion annually in taxpayer services like education, medical care, anchor babies, incarceration, drug distribution, shop lifting and more.
• Congress refuses to aid lawful American citizens with jobs, but it works its magic in allowing over eight million illegal aliens full time work in our country—and much of it off the books and no taxes collected, but we subsidize their children, health care and prison costs.
• Congress huddles in Washington, DC to gift another 20 million illegal aliens with instant citizenship and all the cash and welfare benefits that entails. Heritage Foundation estimates $3 to $5 trillion for the cost of this new amnesty paid for by you, the legal American taxpayer.

Which brings us to the “Second Basic Law of Stupidity” by Carlo M. Cipolla, Professor of
Economics, UC Berkeley in Whole Earth Review, Spring 1987
Cipolla said in the Second Basic Law of Stupidity, “Cultural trends now fashionable in the West favor an egalitarian approach to life. People like to think of human beings as the output of a perfectly engineered mass production machine. Geneticists and sociologists especially go out of their way to prove, with an impressive apparatus of scientific data and formulations that all men are naturally equal and if some are more equal that others, this is attributable to nurture and not to nature.

“I take an exception to this general view. It is my firm conviction, supported by years of observation and experimentation, that men are not equal, that some are stupid and others are not, and that the difference is determined by nature and not by cultural forces or factors. One is stupid in the same way one is red-haired; one belongs to the stupid set as one belongs to a blood group. A stupid man is born a stupid man by an act of Providence.”

The collective IQ of America declines below three digits. Notice that 7,000 high school kids drop out or flunk out of high school every day in America. Notice those failure rates correspond to the millions of third world immigrants imported into America. Not only does our Congress import illiteracy, it imports poverty and cultures of poverty. One look at Los Angeles today provides ample proof where a teenager cannot read the bus schedule. Unemployment screams off the charts and immigrants ride the welfare gravy train like a new art form.

“Although convinced that fractions of human beings are stupid and that they are so because of genetic traits,” said Cipolla. “I am not a reactionary trying to reintroduce surreptitiously class or race discrimination, I firmly believe stupidity is an indiscriminate privilege of all human groups and is uniformly distributed according to a constant proportion. This fact is scientifically expressed by the Second Basic Law with states that: The probability that a certain person be stupid is independent of any other characteristic of that person.”

Today in America 42 million Americans cannot read, write or perform simple math problems. Another 50 million cannot read past the 4th grade level. It will be interesting when we import the projected 100 million more immigrants from the burgeoning third world by 2050—as to what kind of a completely stupid, dumb, dysfunctional and totally illiterate civilization the majority of our citizens will have become.

The democrats and republicans will probably tell us we need more immigrants to revitalize the nation, freshen it and bring new ideas to solve all our problems.

The Wall Street Ticking Time Bomb That Could Blow Up Your Bank Account

Derivatives turn the financial system into a casino. And the House always wins.

Cyprus-style confiscation of depositor funds has been called the “new normal.”  Bail-in policies are appearing in multiple countries directing failing TBTF banks to convert the funds of “unsecured creditors” into capital; and those creditors, it turns out, include ordinary depositors. Even “secured” creditors, including state and local governments, may be at risk.  Derivatives have “super-priority” status in bankruptcy, and Dodd Frank precludes further taxpayer bailouts. In a big derivatives bust, there may be no collateral left for the creditors who are next in line.  

Shock waves went around the world when the IMF, the EU, and the ECB not only approved but mandated the confiscation of depositor funds to “bail in” two bankrupt banks in Cyprus. A “bail in” is a quantum leap beyond a “bail out.” When governments are no longer willing to use taxpayer money to bail out banks that have gambled away their capital, the banks are now being instructed to “recapitalize” themselves by confiscating the funds of their creditors, turning debt into equity, or stock; and the “creditors” include the depositors who put their money in the bank thinking it was a secure place to store their savings.

The Cyprus bail-in was not a one-off emergency measure but was consistent with similar policies already in the works for the US, UK, EU, Canada, New Zealand, and Australia, as detailed in my earlier articles here and here.  “Too big to fail” now trumps all.  Rather than banks being put into bankruptcy to salvage the deposits of their customers, the customers will be put into bankruptcy to save the banks.

Why Derivatives Threaten Your Bank Account

The big risk behind all this is the massive $230 trillion derivatives boondoggle managed by US banks. Derivatives are sold as a kind of insurance for managing profits and risk; but as Satyajit Das points out in Extreme Money, they actually increase risk to the system as a whole.

In the US after the Glass-Steagall Act was implemented in 1933, a bank could not gamble with depositor funds for its own account; but in 1999, that barrier was removed. Recent congressional investigations have revealed that in the biggest derivative banks, JPMorgan and Bank of America, massive commingling has occurred between their depository arms and their unregulated and highly vulnerable derivatives arms. Under both the Dodd Frank Act and the 2005 Bankruptcy Act, derivative claims have super-priority over all other claims, secured and unsecured, insured and uninsured. In a major derivatives fiasco, derivative claimants could well grab all the collateral, leaving other claimants, public and private, holding the bag.

The tab for the 2008 bailout was $700 billion in taxpayer funds, and that was just to start. Another $700 billion disaster could easily wipe out all the money in the FDIC insurance fund, which has only about $25 billion in it.  Both JPMorgan and Bank of America have over $1 trillion in deposits, and total deposits covered by FDIC insurance are about $9 trillion. According to an article on Bloomberg in November 2011, Bank of America’s holding company then had almost $75 trillion in derivatives, and 71% were held in its depository arm; while J.P. Morgan had $79 trillion in derivatives, and 99% were in its depository arm. Those whole mega-sums are not actually at risk, but the cash calculated to be at risk from derivatives from all sources is at least $12 trillion; and JPM is the biggest player, with 30% of the market.

It used to be that the government would backstop the FDIC if it ran out of money. But section 716 of the Dodd Frank Act now precludes the payment of further taxpayer funds to bail out a bank from a bad derivatives gamble. As summarized in a letter from Americans for Financial Reform quoted by Yves Smith:

Section 716 bans taxpayer bailouts of a broad range of derivatives dealing and speculative derivatives activities. Section 716 does not in any way limit the swaps activities which banks or other financial institutions may engage in. It simply prohibits public support for such activities.

There will be no more $700 billion taxpayer bailouts. So where will the banks get the money in the next crisis? It seems the plan has just been revealed in the new bail-in policies.

All Depositors, Secured and Unsecured, May Be at Risk

The bail-in policy for the US and UK is set forth in a document put out jointly by the Federal Deposit Insurance Corporation (FDIC) and the Bank of England (BOE) in December 2012, titled Resolving Globally Active, Systemically Important, Financial Institutions.

In an April 4th article in Financial Sense, John Butler points out that the directive does not explicitly refer to “depositors.”  It refers only to “unsecured creditors.”  But the effective meaning of the term, says Butler, is belied by the fact that the FDIC has been put on the job. The FDIC has direct responsibility only for depositors, not for the bondholders who are wholesale non-depositor sources of bank credit. Butler comments:

Do you see the sleight-of-hand at work here? Under the guise of protecting taxpayers, depositors of failing institutions are to be arbitrarily, de-facto subordinated to interbank claims, when in fact they are legally senior to those claims!

. . . [C]onsider the brutal, unjust irony of the entire proposal. Remember, its stated purpose is to solve the problem revealed in 2008, namely the existence of insolvent TBTF institutions that were “highly leveraged and complex, with numerous and dispersed financial operations, extensive off-balance-sheet activities, and opaque financial statements.” Yet what is being proposed is a framework sacrificing depositors in order to maintain precisely this complex, opaque, leverage-laden financial edifice!

If you believe that what has happened recently in Cyprus is unlikely to happen elsewhere, think again. Economic policy officials in the US, UK and other countries are preparing for it. Remember, someone has to pay. Will it be you? If you are a depositor, the answer is yes.

The FDIC was set up to ensure the safety of deposits. Now it, it seems, its function will be the confiscation of deposits to save Wall Street. In the only mention of “depositors” in the FDIC-BOE directive as it pertains to US policy, paragraph 47 says that “the authorities recognize the need for effective communication to depositors, making it clear that their deposits will be protected.” But protected with what? As with MF Global, the pot will already have been gambled away. From whom will the bank get it back? Not the derivatives claimants, who are first in line to be paid; not the taxpayers, since Congress has sealed the vault; not the FDIC insurance fund, which has a paltry $25 billion in it. As long as the derivatives counterparties have super-priority status, the claims of all other parties are in jeopardy.

That could mean not just the “unsecured creditors” but the “secured creditors,” including state and local governments. Local governments keep a significant portion of their revenues in Wall Street banks because smaller local banks lack the capacity to handle their complex business. In the US, banks taking deposits of public funds are required to pledge collateral against any funds exceeding the deposit insurance limit of $250,000. But derivative claims are also secured with collateral, and they have super-priority over all other claimants, including other secured creditors. The vault may be empty by the time local government officials get to the teller’s window. Main Street will again have been plundered by Wall Street.

Super-priority Status for Derivatives Increases Rather Than Decreases Risk

Harvard Law Professor Mark Row maintains that the super-priority status of derivatives needs to be repealed. He writes:

. . . [D]erivatives counterparties, . . . unlike most other secured creditors, can seize and immediately liquidate collateral, readily net out gains and losses in their dealings with the bankrupt, terminate their contracts with the bankrupt, and keep both preferential eve-of-bankruptcy payments and fraudulent conveyances they obtained from the debtor, all in ways that favor them over the bankrupt’s other creditors.

. . . [W]hen we subsidize derivatives and similar financial activity via bankruptcy benefits unavailable to other creditors, we get more of the activity than we otherwise would. Repeal would induce these burgeoning financial markets to better recognize the risks of counterparty financial failure, which in turn should dampen the possibility of another AIG-, Bear Stearns-, or Lehman Brothers-style financial meltdown, thereby helping to maintain systemic financial stability.

In The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences, David Skeel agrees. He calls the Dodd-Frank policy approach “corporatism” – a partnership between government and corporations. Congress has made no attempt in the legislation to reduce the size of the big banks or to undermine the implicit subsidy provided by the knowledge that they will be bailed out in the event of trouble.

Undergirding this approach is what Skeel calls “the Lehman myth,” which blames the 2008 banking collapse on the decision to allow Lehman Brothers to fail. Skeel counters that the Lehman bankruptcy was actually orderly, and the derivatives were unwound relatively quickly. Rather than preventing the Lehman collapse, the bankruptcy exemption for derivatives may have helped precipitate it.  When the bank appeared to be on shaky ground, the derivatives players all rushed to put in their claims, in a run on the collateral before it ran out. Skeel says the problem could be resolved by eliminating the derivatives exemption from the stay of proceedings that a bankruptcy court applies to other contracts to prevent this sort of run.

Putting the Brakes on the Wall Street End Game

Besides eliminating the super-priority of derivatives, here are some other ways to block the Wall Street asset grab:

(1) Restore the Glass-Steagall Act separating depository bankingfrom investment banking. Support Marcy Kaptur’s H.R. 129.

(2) Break up the giant derivatives banks.  Support Bernie Sanders’ “too big to jail” legislation.

(3) Alternatively, nationalize the TBTFs, as advised in the New York Times by Gar Alperovitz.  If taxpayer bailouts to save the TBTFs are unacceptable, depositor bailouts are even more unacceptable.

(4) Make derivatives illegal, as they were between 1936 and 1982 under the Commodities Exchange Act. They can be unwound by simply netting them out, declaring them null and void.  As noted by Paul Craig Roberts, “the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system.”

(5) Support the Harkin-Whitehouse bill to impose a financial transactions tax on Wall Street trading.  Among other uses, a tax on all trades might supplement the FDIC insurance fund to cover another derivatives disaster.

(5) Establish postal savings banks as government-guaranteed depositories for individual savings. Many countries have public savings banks, which became particularly popular after savings in private banks were wiped out in the banking crisis of the late 1990s.

(6) Establish publicly-owned banks to be depositories of public monies, following the lead of North Dakota, the only state to completely escape the 2008 banking crisis. North Dakota does not keep its revenues in Wall Street banks but deposits them in the state-owned Bank of North Dakota by law.  The bank has a mandate to serve the public, and it does not gamble in derivatives.

A motivated state legislature could set up a publicly-owned bank very quickly. Having its own bank would allow the state to protect both its own revenues and those of its citizens while generating the credit needed to support local business and restore prosperity to Main Street.

For more information on the public bank option, see here. Learn more at thePublic Banking Institute conference June 2-4 in San Rafael, California, featuring Matt Taibbi, Birgitta Jonsdottir,Gar Alperovitz and others.

Source: Ellen Brown | Alternet

Will Globalists Use North Korea To Trigger Catastrophe?

Whenever discussion over North Korea arises in Western circles, it always seems to be accompanied by a strange mixture of sensationalism and indifference. The mainstream media consistently presents the communist nation as an immediate threat to U.S. national security, conjuring an endless number of hypothetical scenarios as to how they could join forces with Al-Qaeda and attack with a terroristic strategy. At the same time, the chest puffing of the late Kim Jong-iL and the standard fare of hyper-militant rhetoric on the part of the North Korean government in general seem to have lulled the American public into a trance of non-concern.

In the midst of the latest tensions with the North Koreans, I have found that most people are barely tracking developments and that, when confronted by the idea of war, they shrug it off as if it is a laughable concept. “Surely” they claim, “The North is just posturing as they always have.”

The high-focus propaganda attacking North Korea on our side and the puffer fish methodology on their side have created a social and political atmosphere surrounding our relations with the Asian nation that I believe places both sides of the Pacific in great danger. North Korea has the potential to become a trigger point for multiple economic catastrophes, and there are people in this world who would be happy to use such crises to serve their own interests.

The mainstream view being espoused by globalist-minded politicians and corporate oligarchs with an agenda is that North Korea is a nuclear armed monstrosity ready to use any subversive means necessary to strike the United States. The idea that the North is working closely with Al-Qaeda has been suggested in everything from White House briefings to cable news to movies and television. The concept of pan-global terrorist collusion and the cartoon-land “axis of evil” has been prominent in our culture since the Administration of George W. Bush. It has even been making a resurgence lately in the MSM, which presented countries like Iran, Syria And North Korea as the primary culprits interfering with the success of the U.N. Small Arms Treaty.

Of course, what remains less talked about in the mainstream is the fact that these nations refuse to adhere to the treaty because carefully placed loopholes still allow major powers like the United States to feed arms into engineered insurgencies. Why would Syria or any other targeted nation sign a treaty that restricts its own sovereign ability to trade while giving teeth to internal enemies trained and funded by foreign intelligence agencies?

The establishment brushes aside such facts and consistently admonishes these countries as the last holdouts standing in the way of a new world order, a worldwide socioeconomic cooperative and pseudo-Utopia. The path to this wonderful global village is always presented as a battle against stubborn isolationists, non-progressives who lack vision and cling desperately to the archaic past. The values of personal and national sovereignty are painted as outdated, decrepit and even threatening to the newly born world structure. The image of North Korea is used by globalists as a kind of straw man argument against sovereignty. North Koreans’ vices and imbalances as a culture are many; but this is due in far larger part to their communist insanity, rather than any values of national independence. It is their domestic hive-mind collectivism we should disdain, not their wish to maintain a comfortable distance as a society from the global game.

As far as being an imminent physical threat to the United States, it really depends on the scenario. The North Koreans have almost no logistical capability to support an invasion of any kind. The nation has been suffering from epidemic famine for well more than a decade.

To initiate a war outright has never been in the best interests of the North Koreans, simply because their domestic infrastructure would not be able to handle the strain. However, there is indeed a scenario in which North Korea could be influenced to use military force despite apprehension.

With the ever looming threat of famine comes the ever looming threat of citizen revolution.  When any government is faced with the possibility of being supplanted, it will almost always lash out viciously in order to maintain power and control, no matter the cost. Sanctions like those being implemented by the West against North Korea today, at the very edge of national famine, could destabilize the country entirely. I believe the North would do anything to avoid an internal insurgency scenario, including attacking South Korea to acquire food stores and energy reserves, as well as other tangible modes of wealth.

North Korea’s standing army, obtained through mandatory two year conscription, is estimated at about 1.1 million active personnel; very close to the numbers active in the U.S. armed forces. But North Korean reserves are estimated at more than 8 million, compared to only 800,000 in the United States. If made desperate by economic sanctions, the North Koreans could field a massive army that would wreak havoc in the South and be very difficult to root out on their home turf. Asian cultures have centuries of experience using asymmetric warfare (the kryptonite of the U.S. military), and I do not believe it is wise to take such a possible conflict lightly, as many Americans seem to do. It is easy to forget that the last Korean War did not work out so well for us. At best, we would be mired in on-ground operations for years (just like Iraq and Afghanistan) or perhaps even decades. Like North Korea, we also do not have the logistical economic means to enter into another such war.

The skeptics argue that we will never get to this point, though, because North Korea has brandished and blustered many times before, all resulting in nothing. I see recent events being far different and more urgent than in the past, and here’s why:

1) The West needs to realize that North Korea is under new leadership. The blowhard days of Kim Jung Il are over, and little is known about his son, Kim Jong Un. So far, the young dictator has followed through on everything he said he would do, including the multiple nuclear tests that the West is using as an excuse to exert sanctions. To assume that the son will be exactly like the father is folly.

2) Many people claimed that North Korean threats to abandon the Armistice in place since 1953 were empty, yet they dropped it exactly as they said they would at the beginning of March.

3) The North has begun cutting off direct communication channels to the South, including a cross-border hotline meant to help alleviate tensions through diplomatic means.

4) The North has officially declared a state of war against the South. This has been called mere “tough talk” by the U.S. government, but the speed at which these multiple developments have occurred should be taken into consideration.

5) North Korea has just announced the reopening of a shuttered nuclear reactor used to render weapons grade materials.

6) The DPRK has suddenly locked down the Kaesong Industrial Zone; a region which holds manufacturing centers for both North and South Korea. Southern manufacturers operating there employ nearly 50,000 Northern workers. Nearly 1000 Southerners also work there. The arrangement generates approximately $2 billion a year for the North. The joint industrial zone has existed since 2000, and the North has never locked down access until this past week.  The fact that the DPRK is willing to restrict this area and possibly lose a sizable income signals that the situation is not as “mild” as some would like to believe.

7) At the beginning of this year, silver purchases by the North from China surged. For the entire year of 2012, the government purchased $77,000 worth of precious metals. In the first few months of 2013, North Korea has already purchased $600,000 in silver. The exact size of the North’s precious metals stockpile is unknown. Though seemingly small in comparison to many purported metal holdings by major powers, this sudden investment expansion would indicate a government move to protect internal finances from an exceedingly frail economic environment.  Metals are also historically accumulated at a high rate by nations preparing for war or invasionin the near term.

Again, all that is needed to instigate an event on the Korean Peninsula are tightened sanctions. The establishment knows this, though another Gulf of Tonkin incident (an openly admitted false flag event) may be on the menu as well.

Given that the chances of a shooting war are high if sanctions continue, it might be wise to consider the consequences of conflagration in Korea.

Dealing with a large army steeped in asymmetric and mountain warfare will be difficult enough.  In fact, an invasion of North Korea would be far more deadly than Afghanistan, if only because of the sheer number of maneuver elements (guerilla-style units) on the ground. But let’s set aside North Korea for a moment and consider the greatest threat of all: dollar collapse.

As I have discussed in numerous articles, China, the largest foreign holder of U.S. debt, has positioned itself to decouple from the American consumer and the dollar. This is no longer a theoretical process as it was in 2008, but a very real and nearly completed one. Mainstream analysts often claim China would never break from the dollar because it would damage their export markets and their investment holdings. The problem is, China is already dumping the dollar using bilateral trade agreements with numerous developing nations, Australia being the latest to abandon the greenback.

China isn’t just talking about it; China is doing it.

The development of a decoupled China is part of a larger push by international banks to remove the dollar as the world reserve currency and replace it with a new global currency. This currency already exists. The International Monetary Fund’s Special Drawing Rights (SDR) is a mechanism backed by a basket of currencies as well as gold. The introduction of the SDR on a wide scale is dependent on only two things:

First, China has been designated the replacement consumer engine in the wake of a U.S. collapse. They have already surpassed the United States as the No. 1 trading power in the world. However, they must spread their own currency, the Yuan, throughout global markets in order to aid the IMF in removing the dollar. China has recently announced a program to sell more than $6 trillion in Yuan denominated bonds to foreign investors, easily fulfilling this need.

Second, China and the IMF need a scapegoat event, a rationale for dumping the dollar that the masses would accept as logical. A U.S. invasion of North Korea could easily offer that rationale.

While China has been playing the good Samaritan in relations with the United States in dealing with North Korea and has supported (at least on paper) certain measures including sanctions, China will never be in support of Western combat actions in the Pacific so close to their territory. The kind of U.S. or NATO presence a war with North Korea would generate would be entirely unacceptable to the Chinese, who do not need to respond using arms. Rather, all they have to do to get rid of us would be to fully dump the dollar and threaten to cut off trade relations with any other country that won’t do the same. The domino effect would be devastating, causing U.S. costs to skyrocket and forcing us to pull troops out of the region. At the same time, the dollar would be labeled a “casualty of war” rather than a casualty of conspiratorial global banking designs, and the financial elites would be removed from blame.

Ultimately, we should take the North Korean situation seriously not because of the wild-eyed propaganda of the mainstream media and not because they are “doing business with terrorists” or because they are a “violent and barbaric relic of nationalism,” but because a war in North Korea serves the more malicious interests of globalization. No matter what happens in the near future, it is important for Americans to always question the true motives behind any event and ask ourselves who, in the end, truly benefited.

Source: Brandon Smith | Alt-Market

Move Over IMF For The BRICS Development Bank

The International Monetary Fund is an extortion financier’s outfit for a gang of exploiter banksters. The colonists of global mercantilism operate on extending credit with strings attached and assets targeted for attachment. Poor and underdeveloped economies beg for roll over extensions of old debt in an endless circle of currency debasement and resource transfer. So why anyone would get excited over a competing banking house, seems to escape implications within the news publications.

The Global Post describes in the article, BRICS countries to form new development bank.

“The bank is intended to fund development and infrastructure projects in BRICS nations and elsewhere. First discussed a year ago, it has been described as an alternative to the IMF and World Bank for developing countries.

Although the plan is the biggest announcement to come out of a summit of BRICS leaders in Durban, South Africa, where they signed an accord today, details such as how much capital the bank will have, its structure and its location have yet to be worked out.”

Would this development bank become simply a Chinese dynasty investment structure based upon the weight of their financial leverage within the system? Or would the union of eager modernizing countries really be the future formula for economic growth and wealth? On the surface the positive foreign reserves and lower indebtedness seem to answer a resounding yes, but look a little deeper.

Without specific details, the viability of such a scheme is unknown. The article, BRICS Seek to Cement Position in Global Economic Landscape, does not exactly envision a smooth maturation.

“The planned development bank “is feasible and viable,” leaders confirmed in a statement on Wednesday. Such a bank would “supplement the existing efforts of multilateral and regional financial institutions for global growth and development.”

However, officials speaking earlier during the summit admitted that various key details remain to be worked out before the proposed bank can become fully operational – a process that is expected to take years. For instance, disagreements have already surfaced among the BRICS on the specifics of the bank’s mandate, and how exactly the institution would be financed.”

The question, missing from the depths and significance of news analysis is whether a competing fund for international lending from a group of rival countries will improve on the sorry record of Western banking.

Venky Vembu from First Post in BRICS Bank is just a castle in the air, points out the infighting among participating partners.

“Analysts who attend the BRICS deliberations point out: ”By day they talk grandly of multilateral action to tip the playing field in favour of poorer nations, while by night they scheme shamelessly against each other, often in conjunction with their supposed economic oppressors in the West.” There is, he adds, virtually nothing that unites them other than resentment and suspicion of Western monopoly – not all of which is justified.”

Another viewpoint that brings the discussion down to earth is written by Ruchir Sharma in The Economic Times article, Brics summits are so last decade: All members are slowing down.

“All the Brics are slowing sharply. China’s economy has slowed from an average annual growth rate of 11% in the last decade to less than 8% in 2012. That has taken the wind out of economies that set sailBSE 0.56 % by selling raw materials to China, particularly Brazil and Russia, where GDP growth slipped to 1% and 3.5%, respectively, last year. Investors are heading for other destinations, and in dollar terms the Brics stock markets are trading 30-40 % below the peaks of the last decade. But, once again, the politicians are a step behind.

The Brics no longer look like a rising economic axis. On average, the growth rate of Brazil, Russia and South Africa is likely to be around 2.5% over the next few years, about the same pace as the US. That would be a terrible disappointment for these developing nations eager to catch up to the West, as their per capita income is much lower than that of the US. Owing in good part to the Brics slowdown, the US economy is now growing at the same pace as the global average for the first time since 2003, leading to stabilisation in its share in the world economy at around the long-term average of 23%.”

 

These foreign press items reflect a much different understanding from the news report on the BRICS announcement video, ‘Hegemonic corporations scared as BRICS plan bank to rival IMF‘.An optimistic projection that the global economy will generate sensible growth and prosperity because of BRICS leadership, is a stretch at best. This concern is certainly no endorsement of the existing Western debt created money-banking model. However, the power of the IMF and World Bank is based upon the military enforcement arm of the NATO machine.

The concept of central banking is immutably defined by the dominance of empire. The peaceful relinquishment of international finance to the BRICS is about as probable as a soft landing from the world debt bubble.

Evolving is a testing of world markets for a transfer to a different banking centercolossus. In order for that hypothesis to be even remotely possible, the world reserved currency status of the U.S. Dollar must be replaced with a basket of other currencies.

The BRICS countries have their own set of internal economic shortcomings. Much of their cash flow is export trade related. The collapse of global trade is the biggest risk that looms over a brighter future for especially undeveloped economies. Another quasi-IMF stratagem that presents a top down banking compliance is not an alternative to the existing fraud.

Looking for altruistic benefactors that are willing to finance capital requirements, from usury lenders is a fools dream. Setting off a turf war, results in collateral damage, for everyone. Financial conflict is predictable when business is based upon a destructive banking version for an imbalance in commerce obligations. A butting of heads between the BRICS, the EU and the USA is just as inevitable.

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