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Pushing Ukraine To The Brink

July 12, 2014 by · Leave a Comment 

“The unipolar world model has failed. People everywhere have shown their desire to choose their own destiny, preserve their own cultural identity, and oppose the West’s attempts at military, financial, political and ideological domination.”

Vladimir Putin

“While the human politics of the crisis in Ukraine garner all the headlines, it is the gas politics that in many ways lies at the heart of the conflict.”

Eric Draitser, Waging war against Russia, one pipeline at a time, RT

What does a pipeline in Afghanistan have to do with the crisis in Ukraine?

Everything. It reveals the commercial interests that drive US policy. Just as the War in Afghanistan was largely fought to facilitate the transfer of natural gas from Turkmenistan to the Arabian Sea, so too, Washington engineered the bloody coup in Kiev to cut off energy supplies from Russia to Europe to facilitate the US pivot to Asia.

This is why policymakers in Washington are reasonably satisfied with the outcome of the war in Afghanistan despite the fact that none of the stated goals were achieved. Afghanistan is not a functioning democracy with a strong central government, drug trafficking has not been eradicated, women haven’t been liberated, and the infrastructure and school systems are worse than they were before the war. By every objective standard the war was a failure. But, of course, the stated goals were just public relations blather anyway. They don’t mean anything. What matters is gas, namely the vast untapped reserves in Turkmenistan that could be extracted by privately-owned US corporations who would use their authority to control the growth of US competitors or would-be rivals like China. That’s what the war was all about. The gas is going to be transported via a pipeline from Turkmenistan, across Afghanistan, Pakistan and India to the Arabian sea, eschewing Russian and Iranian territory. The completion of the so called TAPI pipeline will undermine the development of an Iranian pipeline, thus sabotaging the efforts of a US adversary.

The TAPI pipeline illustrates how Washington is aggressively securing the assets it needs to maintain its dominance for the foreseeable future. Now, check this out from The Express Tribune, July 5:

“Officials of Pakistan, India, Afghanistan and Turkmenistan are set to meet in Ashgabat next week to push ahead with a planned transnational gas pipeline connecting the four countries and reach a settlement on the award of the multi-billion-dollar project to US companies.

“The US is pushing the four countries to grant the lucrative pipeline contract to its energy giants. Two US firms – Chevron and ExxonMobil – are in the race to become consortium leaders, win the project and finance the laying of the pipeline,” a senior government official said while talking to The Express Tribune.

Washington has been lobbying for the gas supply project, called Turkmenistan, Afghanistan, Pakistan and India (Tapi) pipeline, terming it an ideal scheme to tackle energy shortages in Pakistan. On the other side, it pressed Islamabad to shelve the Iran-Pakistan gas pipeline because of a nuclear standoff with Tehran…

According to officials, Petroleum and Natural Resources Minister Shahid Khaqan Abbasi will lead a delegation at the meeting of the TAPI pipeline steering committee on July 8 in Ashgabat.

…At present, bid documents are being prepared in consultation with the Asian Development Bank, which is playing the role of transaction adviser. The documents will be given to the two companies only for taking part in the tender.

Chevron is lobbying in India, Pakistan and Afghanistan to clinch a deal, backed by the US State Department. However, other companies could also become part of the consortium that will be led either by Chevron or ExxonMobil.” (TAPI pipeline: Officials to finalise contract award in Ashgabat next week, The Express Tribune)

So the pipeline plan is finally moving forward and, as the article notes, “The documents will be given to the two companies only for taking part in the tender.”

Nice, eh? So the State Department applies a little muscle and “Voila”, Chevron and Exxon clinch the deal. How’s that for a free market?

And who do you think is going to protect that 1,000 mile stretch of pipeline through hostile Taliban-controlled Afghanistan?

Why US troops, of course, which is why US military bases are conveniently located up an down the pipeline route. Coincidence?

Not on your life. Operation “Enduring Freedom” is a bigger hoax than the threadbare war on terror.

So let’s not kid ourselves. The war had nothing to do with liberating women or bringing democracy to the unwashed masses. It was all about power politics and geostrategic maneuvering; stealing resources, trouncing potential rivals, and beefing up profits for the voracious oil giants. Who doesn’t know that already? Here’s more background from the Wall Street Journal:

“Earlier this month, President Obama sent a letter to (Turkmenistan) President Berdimuhamedow emphasizing a common interest in helping develop Afghanistan and expressing Mr. Obama’s support for TAPI and his desire for a major U.S. firm to construct it.

…Progress on TAPI will also jump-start many of the other trans-Afghan transport projects—including roads and railroads—that are at the heart of America’s “New Silk Road Strategy” for the Afghan economy.

The White House should understand that if TAPI isn’t built, neither U.S. nor U.N. sanctions will prevent Pakistan from building a pipeline from Iran.” (The Pipeline That Could Keep the Peace in Afghanistan, Wall Street Journal)

Can you see what’s going on? Afghanistan, which is central to Washington’s pivot strategy, is going to be used for military bases, resource extraction and transportation. That’s it. There’s not going to be any reconstruction or nation building. The US doesn’t do that anymore. This is the stripped-down, no-frills, 21st century imperialism. “No nation for you, buddy. Just give us your gas and off we’ll go.” That’s how the system works now. It’s alot like Iraq –the biggest hellhole on earth–where “oil production has surged to its highest level in over 30 years”. (according to the Wall Street Journal) And who’s raking in the profits on that oil windfall?

Why the oil giants, of course. (ExxonMobil, BP and Shell) Maybe that’s why you never read about what a terrible mistake the war was. Because for the people who count, it really wasn’t a mistake at all. In fact, it all worked out pretty well.

Of course, the US will support the appearance of democracy in Kabul, but the government won’t have any real power beyond the capital. It never did anyway. (Locals jokingly called Karzai the “mayor of Kabul”) As for the rest of the country; it will be ruled by warlords as it has been since the invasion in 2001. (Remember the Northern Alliance? Hate to break the news, but they’re all bloodthirsty, misogynist warlords who were reinstated by Rumsfeld and Co.)

This is the new anarchic “Mad Max” template Washington is applying wherever it intervenes. The intention is to dissolve the nation-state in order to remove any obstacle to resource extraction, which is why failed states are popping up wherever the US sticks its big nose. It’s all by design. Chaos is the objective. Simply put: It’s easier to steal whatever one wants when there’s no center of power to resist.

This is why political leaders in Europe are so worried, because they don’t like the idea of sharing a border with Somalia, which is exactly what Ukraine is going to look like when the US is done with it.

In Ukraine, the US is using a divide and conquer strategy to pit the EU against trading partner Moscow. The State Department and CIA helped to topple Ukraine’s elected President Viktor Yanukovych and install a US stooge in Kiev who was ordered to cut off the flow of Russian gas to the EU and lure Putin into a protracted guerilla war in Ukraine. The bigwigs in Washington figured that, with some provocation, Putin would react the same way he did when Georgia invaded South Ossetia in 2006. But, so far, Putin has resisted the temptation to get involved which is why new puppet president Petro Poroshenko has gone all “Jackie Chan” and stepped up the provocations by pummeling east Ukraine mercilessly. It’s just a way of goading Putin into sending in the tanks.

But here’s the odd part: Washington doesn’t have a back-up plan. It’s obvious by the way Poroshenko keeps doing the same thing over and over again expecting a different result. That demonstrates that there’s no Plan B. Either Poroshenko lures Putin across the border and into the conflict, or the neocon plan falls apart, which it will if they can’t demonize Putin as a “dangerous aggressor” who can’t be trusted as a business partner.

So all Putin has to do is sit-tight and he wins, mainly because the EU needs Moscow’s gas. If energy supplies are terminated or drastically reduced, prices will rise, the EU will slide back into recession, and Washington will take the blame. So Washington has a very small window to draw Putin into the fray, which is why we should expect another false flag incident on a much larger scale than the fire in Odessa. Washington is going to have to do something really big and make it look like it was Moscow’s doing. Otherwise, their pivot plan is going to hit a brick wall. Here’s a tidbit readers might have missed in the Sofia News Agency’s novinite site:

“Ukraine’s Parliament adopted .. a bill under which up to 49% of the country’s gas pipeline network could be sold to foreign investors. This could pave the way for US or EU companies, which have eyed Ukrainian gas transportation system over the last months.

…Prime Minister Arseniy Yatsenyuk was earlier quoted as saying that the bill would allow Kiev to “attract European and American partners to the exploitation and modernization of Ukraine’s gas transportation,” in a situation on Ukraine’s energy market he described as “super-critical”. Critics of the bill have repeatedly pointed the West has long been interest in Ukraine’s pipelines, with some seeing in the Ukrainian revolution a means to get access to the system. (Ukraine allowed to sell up to 49% of gas pipeline system, novinite.com)

Boy, you got to hand it to the Obama throng. They really know how to pick their coup-leaders, don’t they? These puppets have only been in office for a couple months and they’re already giving away the farm.

And, such a deal! US corporations will be able to buy up nearly half of a pipeline that moves 60 percent of the gas that flows from Russia to Europe. That’s what you call a tollbooth, my friend; and US companies will be in just the right spot to gouge Moscow for every drop of natural gas that transits those pipelines. And gouge they will too, you can bet on it.

Is that why the State Department cooked up this loony putsch, so their fatcat, freeloading friends could rake in more dough?

This also explains why the Obama crowd is trying to torpedo Russia’s other big pipeline project called Southstream. Southstream is a good deal for Europe and Russia. On the one hand, it would greatly enhance the EU’s energy security, and on the other, it will provide needed revenues for Russia so they can continue to modernize, upgrade their dilapidated infrastructure, and improve standards of living. But “the proposed pipeline (which) would snake about 2,400 kilometers, or roughly 1,500 miles, from southern Russia via the Black Sea to Bulgaria, Serbia, Hungary and ultimately Austria. (and) could handle about 60 billion cubic meters of natural gas a year, enough to allow Russian exports to Europe to largely bypass Ukraine” (New York Times) The proposed pipeline further undermines Washington’s pivot strategy, so Obama, the State Department and powerful US senators (Ron Johnson, John McCain, and Chris Murphy) are doing everything in their power to torpedo the project.

“What gives Vladimir Putin his power and control is his oil and gas reserves and West and Eastern Europe’s dependence on them,” Senator Johnson said in an interview. “We need to break up his stranglehold on energy supplies. We need to bust up that monopoly.” (New York Times)

What a bunch of baloney. Putin doesn’t have a monopoly on gas. Russia only provides 30 percent of the gas the EU uses every year. And Putin isn’t blackmailing anyone either. Countries in the EU can either buy Russian gas or not buy it. It’s up to them. No one has a gun to their heads. And Gazprom’s prices are competitive too, sometimes well-below market rates which has been the case for Ukraine for years, until crackpot politicians started sticking their thumb in Putin’s eye at every opportunity; until they decided that that they didn’t have to pay their bills anymore because, well, because Washington told them not to pay their bills. That’s why.

Ukraine is in the mess it’s in today for one reason, because they decided to follow Washington’s advice and shoot themselves in both feet. Their leaders thought that was a good idea. So now the country is broken, penniless and riven by social unrest. Regrettably, there’s no cure for stupidity.

The neocon geniuses apparently believe that if they sabotage Southstream and nail down 49 percent ownership of Ukraine’s pipeline infrastructure, then the vast majority of Russian gas will have to flow through Ukrainian pipelines. They think that this will give them greater control over Moscow. But there’s a glitch to this plan which analyst Jeffrey Mankoff pointed out in an article titled “Can Ukraine Use Its Gas Pipelines to Threaten Russia?”. Here’s what he said:

“The biggest problem with this approach is a cut in gas supplies creates real risks for the European economy… In fact, Kyiv’s efforts to siphon off Russian gas destined to Europe to offset the impact of a Russian cutoff in January 2009 provide a window onto why manipulating gas supplies is a risky strategy for Ukraine. Moscow responded to the siphoning by halting all gas sales through Ukraine for a couple of weeks, leaving much of eastern and southern Europe literally out in the cold. European leaders reacted angrily, blaming both Moscow and Kyiv for the disruption and demanding that they sort out their problems. While the EU response would likely be somewhat more sympathetic to Ukraine today, Kyiv’s very vulnerability and need for outside financial support makes incurring European anger by manipulating gas supplies very risky.” (Can Ukraine Use Its Gas Pipelines to Threaten Russia, two paragraphs)

The funny thing about gas is that, when you stop paying the bills, they turn the heat off. Is that hard to understand?

So, yes, the State Department crystal-gazers and their corporate-racketeer friends might think they have Putin by the shorthairs by buying up Ukraine’s pipelines, but the guy who owns the gas (Gazprom) is still in the drivers seat. And he’s going to do what’s in the best interests of himself and his shareholders. Someone should explain to John Kerry that that’s just how capitalism works.

Washington’s policy in Ukraine is such a mess, it really makes one wonder about the competence of the people who come up with these wacko ideas. Did the brainiacs who concocted this plan really think they’d be able to set up camp between two major trading partners, turn off the gas, reduce a vital transit country into an Iraq-type basketcase, and start calling the shots for everyone in the region?

It’s crazy.

Europe and Russia are a perfect fit. Europe needs gas to heat its homes and run its machinery. Russia has gas to sell and needs the money to strengthen its economy. It’s a win-win situation. What Europe and Russia don’t need is the United States. In fact, the US is the problem. As long as US meddling persists, there’s going to be social unrest, division, and war. It’s that simple. So the goal should be to undermine Washington’s ability to conduct these destabilizing operations and force US policymakers to mind their own freaking business. That means there should be a concerted effort to abandon the dollar, ditch US Treasuries, jettison the petrodollar system, and force the US to become a responsible citizen that complies with International law.

It won’t happen overnight, but it will happen, mainly because everyone is sick and tired of all the troublemaking.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Lifeboat USA – Sinking From Illegal Immigration

July 7, 2014 by · Leave a Comment 

The epidemic of stupidity in the USA has risen to new heights with the widespread public, political and media support for the tens of thousands of illegal immigrants from Central America invading the country from Mexico. Those protesting the way the government is behaving are being attacked.

The narrative goes like this: Oh those poor children and mothers escaping incredibly awful conditions want nothing more than a decent life in the USA, and why not? After all we are a nation of immigrants. How could we deny giving these suffering kids and mothers a place in our nation? Never mind the legitimate sanctity of our borders.

A sure sign of disgraceful and all too frequent media bias is use of the terms “migrants” and “undocumented immigrants” instead of illegal immigrants.

But here is where the real stupidity comes in. What could amount to from 50,000 to 100,000 of these illegal immigrants crashing into our nation at considerable expense is nothing compared to the many millions of kids and mothers in many places globally also suffering admittedly terrible conditions. What about all those in Africa, the Middle East and the desperately poor in India, for example? Sadly, in all too many places, children with or without their parents are plagued by disease, violence, starvation, exploitation and abandonment.

So it is rational to ask: What if millions of people, both parents and children, seeking nothing more than a better life in the USA were to make it across any of our borders? Should we not also let them come in and stay? Are those from a few Central American countries intrinsically deserving of better treatment? Are some illegal immigrants more deserving than others?

Can any nation maintain sovereign self respect and ensure its own economic future by allowing huge numbers of illegal immigrants to enter and stay in its country? I say absolutely NO!

I want to see a nationwide grassroots uprising that vigorously protests what is now happening. More Americans need to envision a lifeboat that sinks into the ocean because more and more floundering, desperate people beg to be let into the lifeboat and the idiots already in the lifeboat acquiesce. So they all sink and perish. Welcome to Lifeboat America.

Here is an idea for the insanely barbaric Islamic radicals filled with hatred for the USA: Start to replace your many ideas on how to use violence to defeat the USA with plans to ship suffering kids and mothers by any means across any of our borders. Think big. Think in terms of sending a few million sufferers to the USA. Get them on boats and airplanes. Don’t use explosives on airplanes. Use the worst off kids and mothers instead. Finance their transport to the USA. Then sit back and watch Lifeboat USA sink.

Wake up Americans. This illegal immigration situation is not about compassion and humanitarian assistance. It is sheer illogical stupidity. If we do not rationally and intelligently control illegal immigration, we have no future for most Americans. Our political system is clearly dysfunctional. Too many politicians seek an advantage by being illegal immigrant friendly; too many people in the business sector want to ensure low cost labor.

We cannot expect immediate rational action from the two-party duopoly and greed driven oligarchy. Not unless many millions of Americans understand that illegal immigration is a life or death issue for the country they profess to love. A big picture, longer term perspective supports government policy that requires all new illegal immigrants be immediately sent back to their country of origin. Anything other than this creates widespread motivation in foreign countries and among those making money from transporting illegal immigrants to keep sending more and more illegal immigrants across our borders. What would stop this madness? The longer it goes on, the more difficult it becomes to stop it.


Joel S. Hirschhorn is a regular columnist for Veracity Voice

He can be reached through www.delusionaldemocracy.com

The Death of Independence

July 5, 2014 by · Leave a Comment 

July 4th has been the national birth date since the inception of the country. Americans want to celebrate past glories because there are few reasons to believe that the current government or society is worthy of rejoicing. Deifying the Founding Fathers and their wisdom usually is rooted upon the construction of a constitution based on separations of powers and shared authorities with individual states. Lost in this commemoration is the concept of true and lasting independence.

After a heated ratification process, Rhode Island on May 29, 1790, became the last of the 13th original colonies to approve constitutional central authority dominance. The years between 1787 and 1790 witnessed a betrayal of the American Revolution with that confirmation. In government schools, students taught that the Articles of Confederation was a failure, began their indoctrination into the cult of jingoist Federal Government Nationalism.  Like most history, the version that becomes fact is the one written by the victor.

The undeniable reality of writing a constitution that provided exclusive powers over state governments creates a supreme national government, while destroying any effective restrictions upon the inevitable accumulation of absolute power. Bill of Right protections and the concept of “Federalism” are mere hollow promises when special esquire privileged “bar association” lawyers purport to possess the predominant right to determine and judge what the common law means.

The inevitability of a decent into despotism, built into the structure of Article VI, Paragraph 2 of the U.S. Constitution, commonly referred to as the Supremacy Clause, has proven true.  It establishes that the federal constitution and federal law generally, take precedence over state laws, and even state constitutions.

Insatiable appetites and lust for power marks the ascendency of legislative, bureaucratic and judicial careers throughout the three branches of central government. Incrementalism and deception has evolved into open defiance and unfettered arrogance. The political class pretends that partisan parties actually offer loyal opposition, when both are camouflaged versions of the same vermin.  As likely that cockroaches will inherit the earth, it is more certain that parasitic politicians steal the hopes and dreams of citizens, while destroying any chance for the common-man to have a future worth living.

That is the actual political system, which exists and so many ignorant citizens revere. Facing the truth is so horrible, that most citizens refuse to deal with reality, and go to extraordinary lengths to maintain their cognitive dissident illusions. Even with the imminent collapse of society staring frightfully before the targets for social and economic elimination, the sheeple cling to their blindness and stupidity.

How may unnecessary and futile wars need waging before the eternal wisdom of George Washington’s non-interventionism becomes our enduring policy and entangling alliances avoided, as capsulated in his Farewell Address? For this country to endure a genuine Republic, needs to be established and the imperial empire must cease to exist.

Independence means exactly the intent of the concept – the exercise of self-government, and sovereignty, over a territory. The Disunited States of America is no longer a functioning society, much less a legitimate authority. Substituting governance for self-determination is not the same as championing a Democracy. The mob is no lawful or righteous replacement for individual inherent autonomy. Yet the establishment tyrants continue to sell their neo-feudalism as a cradle to grave paradise to a gullible public.

Assuredly, to partake in the rape of our crumbling institutions, the invading barbarian hordes cross an open border, while our self-anointed national leaders ignore the vast public sentiment that cries out for territorial integrity. National survival has no place in the globalist ordained North American Union. So much for American Independence . . . as the country is systematically destroyed.

Be that as it may, the alternative of secession from a decaying union is deemed as the ultimate sin against the ruling elites. Even a causal mention, of the War of Northern Aggression, gets the Statists in the District of Criminals in a panic, since the sovereign citizen is the most feared “terrorist” on the planet.

Without the effective ability to leave a dysfunctional, prohibitive and illegal authority, the quest of creating a social structure based upon liberty is impossible. Waging war for independence is the essence of the struggle that produced victory over European dynasty domination. Today, the ability to combat armed revolution is unrealistic. The forces of globalism rule over America and the beggary of politicians to sustain their careers is only surpassed by their evil deeds enacted by legislation, regulation or executive orders.

The Reign of Terror that permeates all levels of governance is the greatest achievement of international finance that commands governments and holds subjects in bondage. The eradication of national sovereignty is a central objective for all regimes, but especially for America.The retention of that imperfect Bill of Right codification is an existential peril for the forces imposing their global gulag on the throngs of all humanity. How then can an independent civilization survive when the immense elements of the prevailing establishment work their entire lives to destroy the principles and canons of individual natural law?

A tranquilized fog has sapped life’s vital aptitude and innate abilities from most people. Yes, those “Precious Bodily Fluids” sucked from your body, as the media indoctrinates their ecumenical propaganda and the Satanic “PC” culture, seeks to destroy your soul.

Looking to the average guy on the block for responsible citizenship is one windmill that has no breeze to turn much less a gale force that could tip the balance of power. The death of independence is a tragic certainty as long as men and women of good will escape from facing up to their responsibility to confront the established order of ruling psychopaths. The consequence for inaction is that the sociopath society will expand the zombification of the public into a digenetic playhouse of horrors.

Facts confuse most people, so the simple bliss of oblivion is the most preferable state of mind. For the defenders of the coercive governing and absurd system, look no further than the mirror in your personal hell to see the face of evil.

Human nature is acting out its most vial offenses that have an end game of planetary extinction. As the Luciferian elites want to party with Aleister Crowley, the “community of nations” leaders, conduct administrative séances among their advisors on how to ratchet up the next stage of totalitarian authoritarianism.

What was the American Revolution all about if not to live in a social order where free persons could exercise their faith and live decent lives? The Meaning of Independence Day essay, and the article, Independence Day for Whom?, along with the column, End of Independence Day offers a sound and sober assessment on this essential topic.

Where can there be any rational optimism as the public picnics with family, relatives and friends on the 4th of July? Relaxation and distractions from the difficult burdens of daily life is a luxury that this country can no long afford. In order for Independence Day to attain any semblance of meaning, gatherings need to abandon the social niceties and start acting like “Sons of Liberty”.

If you are unwilling to take your own life seriously, at what point and what will it take to grow a set of gonads? All politics is local may better be stated that all politics starts with your local jurisdiction. The governmental system responds to pressure. Without the weight of civic force opposition, the “so called” officials will simply continue their extortion crime racket.

Patriots of 1776 confronted the Loyalists of the Crown. Today’s Tories defend the establishment and target Tea Party supporters as traitors. By only the utmost twist of absurdity and deceit could any honest civil libertarian condone the oppressive practices of the corrupt governance that has replaced “government of the people, by the people, for the people”.  When Abraham Lincoln uttered those fateful words, the “politically correct” world praised his vision. How few actually understand that the foremost betrayer of original intend behind the Republic, shattered the very motivation for the American Revolution.

Well, just look at the tyrannical oligarchy that developed out of Lincoln’s precious union. Any governmental body that strays from the Jeffersonian principles in the Declaration of Independence is a traitor to our traditions and heritage.

Boycott commercial relations and companies that pledge their allegiance to the imperial empire.  Vow to engage in civil disobedience at every opportunity to challenge and overload the dictatorial agencies that constantly act as if they were above the law. Express your free speech First Amendment rights in every venue that provides the opportunity. Rebel against arbitrary and illicit governmental fiats and challenge any violation of basic and universal protections. Encourage a culture of dissent and individualism. Practice sedition when despotism becomes the operative governmental conduct.

When the State relinquishes any moral claim and acts as a tyrant, the only virtuous course of conduct is to refuse consent of compliance. Righteousness and honor is more important than living in fear from governmental reprisals. Achieving and adhering to American independence is the prime purpose of any government jurisdiction and is the only way to earn the fidelity of citizens. As circumstances now exist, the death of independence is at our doorstep.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

Central Bank Stock Buying Binge

June 29, 2014 by · Leave a Comment 

Central banks have shifted into stocks and are buying up everything that isn’t bolted to the floor.

That’s the gist of the story that breathlessly appeared in the Financial Times about a week ago and swept across the blogosphere like a Santa Anna brushfire. And there’s some truth to it too, if taken with a large grain of salt. Here’s a clip from the Omfif’s report the FT’s cites in the article:

“A cluster of central banking investors has become major players on world equity markets,” says a report to be published this week by the Official Monetary and Financial Institutions Forum (Omfif), a central bank research and advisory group. The trend “could potentially contribute to overheated asset prices”, it warns.” (Financial Times)

So, there you have it; stocks are rising, central banks are buying stocks like mad, therefore, central banks are driving the market. That’s all there is to it, right?

And we’re not talking chump change here either. According to the Omfif”s press release “global central banks and public sector institutions now account for an eye-watering “$29.1tn worth of investments … in 162 countries.”

Hmm. It’s easy to read that statement and assume that central banks have purchased $29 trillion in stocks, isn’t it? That’s what the folks over at Zero Hedge did. Check out the headline they ran shortly after the story appeared in the FT: “Cluster Of Central Banks” Have Secretly Invested $29 Trillion In The Market” (Zero Hedge)

But that’s not what the press release says, is it? It says “global central banks and public sector institutions”. There’s a big difference between the stocks a bank buys and all the investments in public pension funds, 401Ks, sovereign wealth funds etc. A huge difference. It looks like someone might be engaging in a bit of fear-mongering to get a rise out of readers.

That’s not to downplay the fact that CB’s are distorting prices by playing the market. They are. No one disputes that. Just like no one disputes that central banks should limit their activities to doing their job, which is maintaining price stability. (We’re deliberately omitting “full employment” since the Fed thinks it’s a big joke anyway.) But, hey, everyone knows these guys are a dodgy lot to begin with, so it’s hard to get whipped up into a lather every time they get caught in some new flimflam. Besides CB stock purchases are likely insignificant compared to corporate stock buybacks which are presently just-south of $600 billion per year. CB stock purchases are no where near that, regardless of what you read at Zero Hedge. Check this out in the Wall Street Journal:

“Last year, the corporations in the Russell 3000, a broad U.S. stock index, repurchased $567.6 billion worth of their own shares—a 21% increase over 2012, calculates Rob Leiphart, an analyst at Birinyi Associates, a research firm in Westport, Conn. That brings total buybacks since the beginning of 2005 to $4.21 trillion—or nearly one-fifth of the total value of all U.S. stocks today.” (Will Stock Buybacks Bite Back?, Wall Street Journal)

Yikes. “$4.21 trillion”! Now that’s what you call froth.

Anyway, the reason CBs are buying equities is to hedge their losses on the mountain of low-yielding bonds they purchased in their effort to recapitalize the insolvent banking system. They’re already taking it in the shorts for an estimated $250 billion per year, and when rates start marching upward, (as they inevitably will) they’re going to be bleeding red ink from both eyeballs. That’s why they want to diversify their portfolio; to staunch the hemorrhaging. Even so, the whole matter looks shabby and underhanded, which of course it is. It also calls into question present stock valuations which have been soaring with the zero rates, QE and positive earnings reports, the trifecta which pushes equities into the stratosphere regardless of the shitty condition of the underlying “real” economy. So–just like everyone else–the banks want to get on the winning side of the trade. But what a firestorm they’ve set off with these latest shenanigans! Here’s a sample of the outrage you’ll find on the Internet. This is from a Bill Bonner article titled “Proof the Stock Market Is Being Rigged”:

“We are still reeling.
Yesterday, we reported that central banks are major buyers of stocks…
We hardly know where to begin…

Outraged, we sputter and spit… we search for words… we look for metaphors and narratives… anything that will put this extraordinary situation in the right light…

Ah yes… central banks create new money… it gets passed around the financial community in many ways… and ultimately ends up in the equity markets…

In short, a grand slam of deceit. The World Series of financial catastrophe will follow. But that could be a long way off.” (Proof the Stock Market Is Being Rigged, Bonner and Partners)

“A grand slam of deceit”?

Fair enough. A little hyperbolic, but that’s to be expected, right? But, c’mon now, given the long list of scandals in the last few years–High-Frequency Trading (HFT), “toxic” mortgage-backed securities, Libor, London Whale, Robo-signing, structured finance, Madoff etc etc–it’s hard not to be little blasé about the whole deal, isn’t it? I’m not sure where Bonner’s been, but if you were to ask Joe Blow on the street, whether he thought the “market was rigged or not”, he’d undoubtedly nod his head affirmatively as if it was the most obvious thing in the world. Because it is the most obvious thing in the world. Heidi Moore summed it up pretty well in a recent article at the Gurdian. She said:

“Most Americans don’t think much about the stock market, and that’s just fine with Wall Street. Because once you wake up to how screwed up the stock market really is, the financial industry knows you’re likely to get very nervous and take your money out.

Many are catching on: between 2007 and 2014, investors pulled $345bn from the stock market. E-Trades are down and worries are up, with 73% of Americans still not inclined to buy stocks, five years after the financial crisis…

Let’s get one thing straight: Investor confidence is not the problem. The screwed-up stock market is the problem. It’s time to break down the polite fiction that investing in the stock market is something that sane, rational, sensible people do. It is a high-risk contact sport for your money…

The US stock market depends entirely on the ignorance of regular people who are supposed to just shovel their money into retirement funds and 401(k)s, pay a whopping one-third of your retirement in fees to high-priced managers, and never whisper a complaint.

It’s a wonder that anyone (trusts the market) at all.” (Wall Street and Washington want you to believe the stock market isn’t rigged. Guess what? It still is, Heidi Moore, Guardian)

The market is totally rigged from stem to stern, which is why it is so hard to feign outrage at this latest sign of corruption. It’s just par for the course. What we found more interesting, was the OMFIF’s contention that the experimental monetary policies, the centrals banks initiated to deal with the Financial Crisis, have changed the system to what the author calls “state capitalism”.

“Whether or not this trend is a good thing”, he opines, “may be open to question. What is incontestable is that it has happened”.

While you can’t expect the media to cover something like this, it’s certainly worth mulling over. The fact is, CBs have taken over economic policy altogether. They’re running the whole shooting match. The various congresses and parliaments across the western world now merely act as a rubber stamp for the austerity measures demanded by their corporate bosses. Fiscal policy is a dead letter in the US, Japan, Australia, Canada, UK and the Eurozone. Everywhere the bank cartel has extended it’s grip, fiscal policy has been jettisoned altogether. It’s bailouts and lavish subsidies for the 1 percenters and belt-tightening, shock therapy for everyone else. Isn’t that how it works? State Capitalism isn’t a conspiracy theory. It’s just class warfare taken to the next level. Check this out from Dave Marsh at Marketwatch:

“Central banks’ foreign-exchange reserves have grown unprecedentedly fast, especially in the developing world. The same authorities that are responsible for maintaining financial stability are often the owners of the large funds that add to liquidity in many markets…

Evidence of an increase in equity-buying by central banks and other public-sector investors has emerged from a survey of publicly owned or managed investments compiled by the Official Monetary and Financial Institutions Forum (OMFIF)… There are worries that central banks may be over-stretching themselves by operating in too many areas.

Jens Weidmann, president of Germany’s Bundesbank — spoke yearningly last week of the need for “central banks to shed their role as decision-makers of last resort and, thus, to return to their normal business.”

He said this “would help to preserve the independence of central banks, which is a key precondition to maintaining price stability in the long run.” (Central banks becoming major investors in stock markets, Dave Marsh, Marketwatch)

You might want to read that first part over again to savor what the author is saying. Here it is: “The same authorities that are responsible for maintaining financial stability are often the owners of the large funds that add to liquidity in many markets.”

That’s what you call corruption with a capital “C”. But then the author does a 180 and waxes-on about “preserving the independence of central banks, which is a key precondition to maintaining price stability in the long run.”

Right. The whole independence thing is a big joke. Why would anyone in their right mind bestow such extraordinary powers (“independence”) on a group of voracious, cutthroat bankers who have repeatedly shown that they can’t be trusted?

Huh?

It’s insanity. This latest outrage just proves that the central bank system needs to be either reformed or terminated. Preferably, terminated.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

The ISIS Fiasco: It’s Really An Attack On Iran

June 21, 2014 by · Leave a Comment 

There’s something that doesn’t ring-true about the coverage of crisis in Iraq. Maybe it’s the way the media reiterates the same, tedious storyline over and over again with only the slightest changes in the narrative. For example, I was reading an article in the Financial Times by Council on Foreign Relations president, Richard Haass, where he says that Maliki’s military forces in Mosul “melted away”. Interestingly, the Haass op-ed was followed by a piece by David Gardener who used almost the very same language. He said the “army melts away.” So, I decided to thumb through the news a bit and see how many other journalists were stung by the “melted away” bug. And, as it happens, there were quite a few, including Politico, NBC News, News Sentinel, Global Post, the National Interest, ABC News etc. Now, the only way an unusual expression like that would pop up with such frequency would be if the authors were getting their talking points from a central authority. (which they probably do.) But the effect, of course, is the exact opposite than what the authors intend, that is, these cookie cutter stories leave readers scratching their heads and feeling like something fishy is going on.

And something fishy IS going on. The whole fable about 1,500 jihadis scaring the pants off 30,000 Iraqi security guards to the point where they threw away their rifles, changed their clothes and headed for the hills, is just not believable. I don’t know what happened in Mosul, but, I’ll tell you one thing, it wasn’t that. That story just doesn’t pass the smell test.

And what happened in Mosul matters too, because nearly every journalist and pundit in the MSM is using the story to discredit Maliki and suggest that maybe Iraq would be better off without him. Haass says that it shows that the army’s “allegiance to the government is paper thin”. Gardener says its a sign of “a fast failing state.” Other op-ed writers like Nicolas Kristof attack Maliki for other reasons, like being too sectarian. Here’s Kristof:

“The debacle in Iraq isn’t President Obama’s fault. It’s not the Republicans’ fault. Both bear some responsibility, but, overwhelmingly, it’s the fault of the Iraqi prime minister, Nouri Kamal al-Maliki.”

Of course, Kristof is no match for the imperial mouthpiece, Tom Friedman. When it comes to pure boneheaded bluster, Friedman is still numero uno. Here’s how the jowly pundit summed it up in an article in the Sunday Times titled “Five Principles for Iraq”:

“Iraq’s Shiite prime minister, Nuri Kamal al-Maliki, has proved himself not to be a friend of a democratic, pluralistic Iraq either. From Day 1, he has used his office to install Shiites in key security posts, drive out Sunni politicians and generals and direct money to Shiite communities. In a word, Maliki has been a total jerk. Besides being prime minister, he made himself acting minister of defense, minister of the interior and national security adviser, and his cronies also control the Central Bank and the Finance Ministry.

Maliki had a choice — to rule in a sectarian way or in an inclusive way — and he chose sectarianism. We owe him nothing.” (Five Principles for Iraq, Tom Freidman, New York Times)

Leave it to Friedman, eh? In other words, the reason Iraq is such a mess, has nothing to do with the invasion, the occupation, the death squads, Abu Ghraib, the Salvador Option, the decimated infrastructure, the polluted environment, or the vicious sectarian war the US ignited with its demented counterinsurgency program. Oh, no. The reason Iraq is a basketcase is because Maliki is a jerk. Maliki is sectarian. Bad Maliki.

Sound familiar? Putin last week. Maliki this week. Who’s next?

In any event, there is a rational explanation for what happened in Mosul although I cannot verify its authenticity. Check out this post at Syria Perspectives blog:

“…the Iraqi Ba’ath Party’s primary theoretician and Saddam’s right-hand man, ‘Izzaat Ibraaheem Al-Douri, himself a native of Mosul…was searching out allies in a very hostile post-Saddam Iraq … Still on the run and wanted for execution by the Al-Maliki government, Al-Douri still controlled a vast network of Iraqi Sunni Ba’athists who operated in a manner similar to the old Odessa organization that helped escaped Nazis after WWII … he did not have the support structure needed to oust Al-Maliki, so, he found an odd alliance in ISIS through the offices of Erdoghan and Bandar. Our readers should note that the taking of Mosul was accomplished by former Iraqi Ba’athist officers suspiciously abandoning their posts and leaving a 52,000 man military force without any leadership thereby forcing a complete collapse of the city’s defenses. The planning and collaboration cannot be coincidental.” (THE INNER CORE OF ISIS – THE INVASIVE SPECIES, Ziad Fadel, Syrian Perspectives)

I’ve read variations of this same explanation on other blogs, but I have no way of knowing whether they’re true or not. But what I do know, is that it’s a heckuva a lot more believable than the other explanation mainly because it provides enough background and detail to make the scenario seem plausible. The official version–the “melts away” version– doesn’t do that at all. It just lays out this big bogus story expecting people to believe it on faith alone. Why? Because it appeared in all the papers?

That seems like a particularly bad reason for believing anything.

And the “army melting away” story is just one of many inconsistencies in the official media version of events. Another puzzler is why Obama allowed the jihadis to rampage across Iraq without lifting a finger to help. Does that strike anyone else as a bit odd?

When was the last time an acting president failed to respond immediately and forcefully to a similar act of aggression?

Never. The US always responds. And the pattern is always the same. “Stop what you are doing now or we’re going to bomb you to smithereens.” Isn’t that the typical response?

Sure it is. But Obama delivered no such threat this time. Instead, he’s qualified his support for al-Maliki saying that the beleaguered president must “begin accommodating Sunni participation in his government” before the US will lend a hand. What kind of lame response is that? Check out this blurb from MNI News:

“President Barack Obama Friday warned Iraqi Prime Minister Nouri al-Maliki that the United States wants him to begin accommodating Sunni participation in his government, or see the United States withhold the help he needs, short of U.S. troops on the ground, to ward off an attack on Baghdad.

Obama added the emphasis of an appearance before TV cameras to his midday message, that while he will be considering options for some military intervention in the days ahead, the next move is up to Maliki.”
(Obama Warns Iraq’s Maliki,Looking for Sunni-Shia Accommodation, MNI)

Have you ever read such nonsense in your life? Imagine if , let’s say, the jihadi hordes had gathered just 50 miles outside of London and were threatening to invade at any minute. Do you think Obama would deliver the same message to UK Prime Minister David Cameron?

“Gee, Dave, we’d really like to help out, but you need to put a couple of these guys in your government first. Would that be okay, Dave? Just think of it as affirmative action for terrorists.”

It might sound crazy, but that’s what Obama wants Maliki to do. So, what’s going on here? Why is Obama delivering ultimatums when he should be helping out? Could it be that Obama has a different agenda than Maliki’s and that the present situation actually works to his benefit?

It sure looks that way. Just take a look at what Friedman says further on in the same article. It helps to clarify the point. He says:

“Maybe Iran, and its wily Revolutionary Guards Quds Force commander, Gen. Qassem Suleimani, aren’t so smart after all. It was Iran that armed its Iraqi Shiite allies with the specially shaped bombs that killed and wounded many American soldiers. Iran wanted us out. It was Iran that pressured Maliki into not signing an agreement with the U.S. to give our troops legal cover to stay in Iraq. Iran wanted to be the regional hegemon. Well, Suleimani: “This Bud’s for you.” Now your forces are overextended in Syria, Lebanon and Iraq, and ours are back home. Have a nice day.” (5 Principles for Iraq, Tom Friedman, New York Times)

Interesting, eh? Friedman basically admits that this whole fiasco is about Iran who turned out to be the biggest winner in the Iraq War sweepstakes. Naturally, that pisses off people in Washington, Tel Aviv and Riyadh to no end, so they’ve cooked up this goofy plan to either remove Maliki altogether or significantly trim his wings. Isn’t that what’s going on? And that’s why Obama is holding a gun to Maliki’s head and telling him what hoops he has to jump through in order to get US help. Because he’s determined to weaken Iran’s hegemonic grip on Baghdad.

Friedman also notes the Status of Forces agreement which would have allowed U.S. troops to stay in Iraq. Al Maliki rejected the deal which enraged Washington setting the stage for this latest terrorist farce. Obama intends to reverse that decision by hook or crook. This is just the way Washington does business, by twisting arms and breaking legs. Everybody knows this.

To understand what’s going on today in Iraq, we need to know a little history. In 2002, The Bush administration commissioned the Rand Corporation “to develop a Shaping Strategy for pacifying Muslim populations where the US has commercial or strategic interests.” The plan they came up with–which was called “US Strategy in the Muslim World after 9-11”– recommended that the US, “Align its policy with Shiite groups who aspire to have more participation in government and greater freedoms of political and religious expression. If this alignment can be brought about, it could erect a barrier against radical Islamic movements and may create a foundation for a stable U.S. position in the Middle East.”

The Bushies decided to follow this wacky plan which proved to be a huge tactical error. By throwing their weight behind the Shia, they triggered a massive Sunni rebellion that initiated as many as 100 attacks per day on US soldiers. That, in turn, led to a savage US counterinsurgency that wound up killing tens of thousands of Sunnis while reducing much of the country to ruins. Petraeus’ vicious onslaught was concealed behind the misleading PR smokescreen of sectarian civil war. It was actually a genocidal war against the people who Obama now tacitly supports in Mosul and Tikrit.

So there’s been a huge change of policy, right? And the fact that the US has taken a hands-off approach to Isis suggests that the Obama administration has abandoned the Rand strategy altogether and is looking for ways to support Sunni-led groups in their effort to topple the Al Assad regime in Damascus, weaken Hezbollah, and curtail Iran’s power in the region. While the strategy is ruthless and despicable, at least it makes sense in the perverted logic of imperial expansion, which the Rand plan never did.

What is happening in Iraq today was anticipated in a 2007 Seymour Hersh article titled “The Redirection.” Author Tony Cartalucci gives a great summary of the piece in his own article. He says:

“The Redirection,” documents…US, Saudi, and Israeli intentions to create and deploy sectarian extremists region-wide to confront Iran, Syria, and Hezbollah in Lebanon. Hersh would note that these “sectarian extremists” were either tied to Al Qaeda, or Al Qaeda itself. The ISIS army moving toward Baghdad is the final manifestation of this conspiracy, a standing army operating with impunity, threatening to topple the Syrian government, purge pro-Iranian forces in Iraq, and even threatening Iran itself by building a bridge from Al Qaeda’s NATO safe havens in Turkey, across northern Iraq, and up to Iran’s borders directly…

It is a defacto re-invasion of Iraq by Western interests – but this time without Western forces directly participating – rather a proxy force the West is desperately attempting to disavow any knowledge of or any connection to.” (America’s Covert Re-Invasion of Iraq, Tony Cartalucci, Information Clearinghouse)

So, now we’re getting to the crux of the matter, right? Now we should be able to identify the policy that is guiding events. What we know for sure is that the US wants to break Iran’s grip on Iraq. But how do they plan to achieve that; that’s the question?

Well, they could use their old friends the Baathists who they’ve been in touch with since 2007. That might work. But then they’d have to add a few jihadis to the mix to make it look believable.

Okay. But does that mean that Obama is actively supporting Isis?

No, not necessarily. Isis is already connected to other Intel agencies and might not need direct support from the US. (Note: Many analysts have stated that the Islamic State of Iraq and al-Sham (ISIS) receives generous donations from Saudi Arabia and Qatar, both of whom are staunch US allies. According to London’s Daily Express: “through allies such as Saudi Arabia and Qatar, the West (has) supported militant rebel groups which have since mutated into ISIS and other al‑Qaeda connected militias. ( Daily Telegraph, June 12, 2014)

What’s important as far as Obama is concerned, is that the strategic objectives of Isis and those of the United States coincide. Both entities seek greater political representation for Sunnis, both want to minimize Iranian influence in Iraq, and both support a soft partition plan that former president of the Council on Foreign Relations, Leslie H. Gelb, called “The only viable strategy to correct (Iraq ‘s) historical defect and move in stages toward a three-state solution: Kurds in the north, Sunnis in the center and Shiites in the south.” This is why Obama hasn’t attacked the militia even though it has marched to within 50 miles of Baghdad. It’s because the US benefits from these developments.

Let’s summarize:

Does the US Government “support” or “not support” terrorism depending on the situation?
Yes.

Have foreign Intel agencies supplied terrorist organizations in Syria with weapons and logistical support?
Yes.

Has the CIA?
Yes.

Has the Obama administration signaled that they would like to get rid of al Maliki or greatly reduce his power?
Yes.

Is this because they think the present arrangement strengthens Iran’s regional influence?
Yes.

Will Isis invade Baghdad?
No. (This is just a guess, but I expect that something has been already worked out between the Obama team and the Baathist leaders. If Baghdad was really in danger, Obama would probably be acting with greater earnestness.)

Will Syria and Iraq be partitioned?
Yes.

Is Isis a CIA creation?
No. According to Ziad Fadel, “ISIS is the creation of the one man who played Alqaeda like a yo-yo. Bandar bin Sultan.”

Does Isis take orders from Washington or the CIA?
Probably not, although their actions appear to coincide with US strategic objectives. (which is the point!)

Is Obama’s reluctance to launch an attack on Isis indicate that he wants to diminish Iran’s power in Iraq, redraw the map of the Middle East, and create politically powerless regions run by warlords and tribal leaders?

Yes, yes and yes.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

My Syria Report #2: How To Outsource A War

June 11, 2014 by · Leave a Comment 


While staying here in Damascus, I have heard the same thing said again and again from a whole array of sources, including foreign journalists, Syrian citizens and even Christian nuns.  “This war on Syria is being fought by Al Qaeda operatives, fanatic Islamist jihadis, foreign fighters, terrorists and mercenaries for hire.  And they are being financed by American money and given American weapons.”  Yikes!

    What this means to me personally is that my very own head (which I have actually become quite attached to) could possibly be blown off at any minute by fanatics and/or weapons bought and paid for by my very own tax dollars.  Now that is a really confusing thought.

“War by proxy” is becoming a more and more frequently-used phrase here in Syria.  The American military-industrial complex is now out-sourcing their war.

   But, hey, that’s better than having American soldiers over here fighting and dying for Wall Street and War Street like they did in Iraq.  Our soldiers’ jobs are being shipped overseas?  That’s one example of outsourcing that is just fine by me.

Except, in the words of one local college professor I interviewed the other day, “We Syrians are fighting dirty enemies.  This is a dirty war.  The jihadists attack hospitals, power plants and schools.  But the Syrian people are fighting back.”  The professor also mentioned the discovery of vast new oil fields off the Syrian coast.  And he found it ironic that the very first place that the jihadis, inquisionists, Taliban wannabes and Al Qaeda death squads attacked was in this oil-rich region.  The original peaceful protests by Syrians themselves — before the Taliban wannabes arrived in force from overseas and turned Syria into a slaughterhouse — took place in Daraa, not in the oil fields.  Hmmm.

  “I also find it ironic that Americans are citing democracy as their primary reason for attacking Syria — while their biggest ally in this region is Saudi Arabia, a known dictatorship.”  Not to mention the doubts that everyone has about American elections.  Take Diebold for instance.  And Florida and Ohio and that weird Supreme Court ruling that forced GWB down our throats.  And voter ID cards and 92-year-old women turned away from the polls.  But, hey, America is famous for exporting hypocrisy.  Get over it, prof.

  In Sweida, I talked with a young woman who spoke English and she said, “Living in Syria is like living in one of those Hollywood horror movies.”  Slasher flicks.  “These terrorists come here and they bomb our hospitals and schools, kill and rape women and children and even eat our flesh like cannibals.  We Syrians just want this horror movie to stop.”  And she was proud of Bashar Assad for standing up to these wannabe Freddy Kruegers.  And most of the Syrians I have talked with feel the same way.  “And you would too — if it happened to you.”

And it did happen to me too — sort of.  I can hear the shelling outside Damascus going on night and day.  Nerve-racking.   I almost felt like a heroic citizen of London during the Blitz.

Syria’s president, Bashar Assad, has been playing the Great Game of political chess in this region like he is a grand master — and perhaps that’s why the American military-industrial complex hates him so much.  But Syrians love him.  They just do.  It’s a Syrian thing.  Remember what Maya Angelou said in “I know Why the Caged Bird Sings”?  How she was being raped as a child and prayed for the Green Lantern to save her?  Well President Assad, like it or not, is Syria’s Green Lantern.

Assad might have been a bit to enthusiastic in the past about suppressing dissidence.  But please be aware that the inquisionist crazies and Al Qaeda freaks that have tried to invade Syria are so very much worse.  Syrians weren’t totally behind Assad before the invasion — but they certainly are now, thanks to America’s military-industrial complex.  Eisenhower warned us about the complex.  He shoulda warned the Syrians too.

The only thing that I can truly fault Assad on presently are all those all-pervasive giant posters of him that you see everywhere — on buildings, in shops, on cars and buses, on T-shirts and even in elevators.  Everywhere.  He should stop doing that.  He’s not just some Ken doll or even the next Brad Pitt.  He’s a political genius who is trying save Syria from the bad guys.  He should have understood by now that he has found a place in the hearts of the Syrians and just leave it at that.

PS:  Observing the elections was fun.  It was like attending a country-wide block party.  Or, as Mother Agnes-Mariam said to me in an interview at the Dama Rose Hotel, “It would be impossible to coerce that many Syrians to vote out of fear. People actually went out from rebel-held territory to vote.  Even the rebels voted.”  So. Who are you going to believe about the authenticity of the Syrian elections?   Mother Agnes-Mariam who said that they were valid — or Wall Street and War Street, who claim they were a fraud?

Are you going to believe the same people who lied to us about Iraq having weapons of mass destruction – or a mother-superior Christian nun?

PPS:  In Homs, those nasty American-sponsored jihadists blew up a historic old Christian church — only to find an even older church lay buried under the newer church’s foundations.  Built in 59 AD, this older church might actually been visited by the Apostles and Saint Paul himself.  And these Taliban wannabes were happily trying to blow this older church up too.  But apparently they got distracted by trying to break up the bones of some nearby Christian saints’ relics — and the old church was saved!

PPPS:  I never did get to meet President Assad.  “Apparently he has to keep his eye out for being assassinated by drones,” one journalist explained to me as to why Assad hadn’t come to the Dama Rose hotel.  But still…I could have worn my cool “Berkeley High Water Polo Team” T-shirt that I had swiped from my daughter Ashley.  I’m sure Assad would have been quite impressed.


Jane Stillwater is a regular columnist for Veracity Voice
She can be reached at: jpstillwater@yahoo.com

European Central Bank Goes Sub Zero

June 7, 2014 by · Leave a Comment 

On Thursday, European Central Bank chief Mario Draghi dropped rates on overnight deposits to minus 0.1% thereby charging commercial banks to keep their money at the ECB. The move, which was applauded by the media as a “historic measure to fight deflation”, is nothing of the kind. Negative rates have been used in both Sweden and Denmark in recent years, but to little effect. The policy will not “get the banks lending again” as the ECB suggests, nor will it ease the high unemployment and slow growth that have plagued the Eurozone for the last six years. In truth, the rate change will have no impact at all. It’s merely public relations stunt designed to create the impression that the ECB is aggressively addressing the crisis for which it is largely responsible. Here’s how the World Socialist Web Site summed it up:

“The move is an expression of the fact that, nearly six years since the collapse of Lehman Brothers, the world economy remains mired in deep crisis, for which the world’s central banks have no solution outside of pumping trillions into banks and financial firms. While trillions are handed out to the banks, workers throughout the continent are told that there is “no money” to pay for pensions, social programs, and healthcare benefits.” (European Central Bank cuts interest rate below zero, WSWS)

Stock traders loved the news that the ECB was going “sub zero”. As we’ve seen before, any indication that the easy money regime is here-to-stay is enough to send equities skyrocketing, which it did. All the main indices notched substantial gains on the day while the SandP 500 surged to a new record of 1,940.

The idea that charging the banks a small fee on overnight deposits will induce them to lend more freely, demonstrates a laughable misunderstanding of how the system really works. Banks don’t need piles of reserves to issue loans. What they need is creditworthy customers and strong demand. But, of course, demand is weak because the ECB has taken steps to keep the EU in a permanent state of Depression through its austerity policies. What this shows, is that the objectives of the class war precede the requirements for a healthy economy. Draghi and his cohorts would rather decimate the welfare state and reduce EU working people to abject poverty, then implement the policies that would generate a strong economic recovery.

But won’t the lower rates lead to more lending, you ask? After all, when the price of money falls, borrowing becomes more attractive, right?

It’s a persuasive theory, but it doesn’t work that way. For example, check out this blurb from Reuters and you’ll see what I mean:

“Lending to companies in the euro zone contracted at the fastest pace on record in November, piling pressure on the European Central Bank to do more to revive the currency bloc’s economy…

“Worryingly, there is still no sign of any trend change in bank lending to euro zone businesses…” said Howard Archer, chief European economist at IHS Economics…

Corporate borrowing in the euro zone overall declined at the fastest pace on record, November’s 3.9 percent drop comparing with a 3.8 percent decline on the year in the previous month.

Bank lending to Italian firms fell at an annual pace of 5.9 percent in November, the sharpest decline in the measure’s 10-year history. That was also true for the euro zone’s smallest economy, Malta, which recorded a 10.4 percent drop….The biggest decline was in Spain, where lending to companies fell 13.5 percent.” (Euro zone corporate lending shrinks at record pace in November, Reuters)

The reason bank lending saw “the sharpest decline in the measure’s 10-year history”, is because the economy is in a depression, and people don’t borrow tons of dough in a depression. They cut back, hunker down and squirrel-away whatever they can. Draghi knows this. He’s just going through the motions to make it look like he cares. It’s all PR. What he really cares about is his constituents, and what they want, is an end of the welfare state.

What’s so irritating about all of this, is that we know how fix the economy. We know how to increase activity. We know how to boost demand, create jobs, and raise GDP. None of this is new.

When the private sector (consumers and businesses) can’t spend for some reason, then the government has to step up and spend like crazy to keep the economy going. The only alternative is to allow consumption to fall sharply, which will push up unemployment, push down GDP and do vast damage to both the economy and financial system. Why would anyone want to do that, especially when all they have to do is increase the budget deficits temporarily while consumers patch their balance sheets and get back on their feet again?

Monetary policy has not and will not fix the economy. How many years are we going to repeat the same mistake before we acknowledge that? The whole presumption that this pointless, circle-jerk policy is designed to do anything other than provide another bailout for underwater, insolvent financial institutions and the crooked bank bondholders who own the whole friggin’ planet is laughable in the extreme. Check this out from Bloomberg:

“In a bid to get credit flowing to parts of the economy that need it, the ECB also opened a 400-billion-euro ($542 billion) liquidity channel tied to bank lending and officials will start work on an asset-purchase plan. While conceding that rates are at the lower bound “for all practical purposes,” he signaled the the ECB is willing to act again.” (Bloomberg)

So that’s what this is really all about, eh? Draghi is just laying the groundwork for a European version of QE?

Yep. Sure is. And that means another $542 billion will go to the chiseler class. Another $542 billion propping up crooked banks by purchasing their unwanted, toxic Asset-Backed Securities. (ABS) Do you think I’m kidding? I’m not. That’s what the money is earmarked for.

The point is, monetary policy alone will not produce a strong, self sustaining recovery, which is a point that Keynes makes in Chapter 12 of “The General Theory of Employment, Interest and Money”. Here’s what he says:

“For my own part I am now somewhat skeptical of the success of a merely monetary policy directed towards influencing the rate of interest. I expect to see the State, which is in a position to calculate the marginal efficiency of capital-goods on long views and on the basis of the general social advantage, taking an ever greater responsibility for directly organizing investment; since it seems likely that the fluctuations in the market estimation of the marginal efficiency of different types of capital, calculated on the principles I have described above, will be too great to be offset by any practicable changes in the rate of interest.” (John Maynard Keynes, “The General Theory of Employment, Interest and Money”, marxists.org, 2002)

Keynes is just stating the obvious, that during periods of weak demand, the sensible option is for the government to take up the slack by “directly organizing investment”, in other words, spending money to keep the economy running. Doesn’t that seem infinitely more reasonable than the Draghi approach which involves a decade of experimental monetary policy that ends in social upheaval, high unemployment, and political unrest?

And here’s the thing: Keynes “The General Theory” was published in 1936. That’s nearly 80 years ago! This isn’t some new-fangled theory concocted by pointy-head crackpots like Bernanke. This is settled science. Fiscal stimulus works. If the government spends, unemployment will drop. If the government spends, the economy will grow. What else do you need to know?

We’ve been hoeing this same row for 6 years now and the economy is still in the dumps. And, in the EU, it’s even worse. Youth unemployment is above 50 percent in Spain and Greece, GDP stuck at a miserable 0.2 percent, business and consumer lending still shrinking, bond yields on sovereign debt are in the toilet, civil disorder and fascism are on the rise, and with the entire 17-member union is rushing headlong into deflation.

And Draghi thinks that negative rates are going to fix all this and put the economy back on the road to recovery?

In your dreams! The only way out of a mess like this is to spend like a madman, which is what Keynes recommended in his famous statement about bottles stuffed with banknotes. Here’s what he said:

“If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again… there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.” (p. 129)

Okay, so it sounds crazy, but it’s really no different than Bernanke’s “helicopter drop” theory, that is, that –during a severe downturn–the government needs to find a way to stimulate demand. The best way to do that, is to avoid the normal transmission mechanisms (which don’t function properly during a slump) and get money directly into the hands of the people who will spend it quickly and get the economy growing again. It’s all about spending, spending, spending. It doesn’t matter if people buy Ipads or Ant Farms. Just spend, dammit. Spending is activity, activity is growth, growth reduces unemployment, which leads to more investment, more jobs and a virtuous circle.

If it seems to you, dear reader, that Keynes antidote for the ailing economy is more likely to succeed than Draghi’s, then you are certainly right. Massive doses of fiscal stimulus WILL revive the EU economy, lower unemployment, and boost growth. The question is whether that’s a goal the public should really support or not? In other words, is there any point in trying to restore a system which, at its very core, is unstable, self destructive and exploitative? Here’s how Counterpunch economics writer Rob Urie sums it up:

“John Maynard Keynes created a host of economic patch-jobs to save capitalism from more effective solutions. In the pit of the Great Depression FDR implemented programs based on Mr. Keynes’ ideas (which) produced minor relief now deemed by the economic insightful-lite to be a ‘robust’ economic recovery….. But the cause, leveraged (finance) capitalism gone wild, was only temporarily tamped down by regulation while its intrinsic instability was left intact…

Calls for re-regulation, managed capitalism, beg the question: re-regulate what? As demonstrated by history, the system of finance capitalism is intrinsically unstable and economically destabilizing. Under the guise of reviving a functioning financial system a dysfunctional system has been revivified, not revived, and nearly all benefits continue to accrue to a tiny economic elite.” (Financial Crises and Economic Depressions, Rob Urie, CounterPunch)

So, yeah, Keynes’ remedies will work. They’ll definitely get the economy up-and-running again and keep it sputtering-along until the next crisis. But why bother?

Why not just scrap the whole thing and move on to Plan B.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

The New World Order And The Rise Of The East

June 4, 2014 by · Leave a Comment 

“Actually, as Winston well knew, it was only four years since Oceania had been at war with Eastasia and in alliance with Eurasia. But that was merely a piece of furtive knowledge, which he happened to possess because his memory was not satisfactorily under control. Officially the change of partners had never happened. Oceania was at war with Eurasia: therefore Oceania had always been at war with Eurasia. The enemy of the moment always represented absolute evil, and it followed that any past or future agreement with him was impossible…” – George Orwell, 1984

Nations, cultures and populations are best controlled through the use of false paradigms. This is a historically proven tactic exploited for centuries by oligarchs around the world. Under the Hegelian dialectic (the very foundation of the Marxist and collectivist ideology), one could summarize the trap of false paradigms as follows:

If (A) my idea of freedom conflicts with (B) your idea of freedom, then (C) neither of us can be free until everyone agrees to be a slave.

In other words: problem, reaction, solution. Two sides are pitted against each other in an engineered contest. Each side is led to believe that its position is the good and right position. Neither side questions the legitimacy of the conflict, because each side fears this will lead to ideological weakness and disunity.

The two sides go to war, sometimes economically, sometimes militarily. Both governments demand that individuals relinquish freedom, independence and self-reliance, a sacrifice that “must be made” so that victory can be achieved. In the end, neither nation nor society has truly won. The only winners are the oligarchs, who sing words of loyalty to their respective camps, while acting in league from the very beginning. The oligarchs, who never intended to target each other in the first place. Their target, their ONLY target, was the citizenry itself — the dumbfounded masses now mesmerized with shock, awe and terror.

The false paradigm method and the Hegelian dialectic are in full force today. Only a few years ago, Russia, China and the United States were considered close economic and political allies. Today, those alliances are being quickly scrapped in order to make room for conflict, a conflict useful only to a select international elite. As I have outlined in numerous articles, includingRussia Is Dominated By Global Banks, Too and False East/West Paradigm Hides The Rise Of Global Currency, when one looks beyond all the theatrical rhetoric being thrown around between Barack Obama and Vladimir Putin, the ultimate reality is that the relationship of both governments to the global banking elite is the same.

During both of Obama’s Presidential terms, he has flooded his cabinet with current and formeremployees of Goldman Sachs, a longtime proving ground for elitist financiers with globalist aspirations.

And who is the primary economic adviser to Vladimir Putin and the Russian state? WhyGoldman Sachs, of course!

U.S. and European elites have been calling for a centralization of economic power under the control of the International Monetary Fund, as a well as a new global currency.

Not surprisingly, Putin also wants a new global currency under the control of the IMF.

Obama is closely advised by globalists like Zbigniew Brzezinski, a member of the Council on Foreign Relations and cofounder of the Trilateral Commission, who in his book Between Two Ages: America’s Role In The Technetronic Era states:

“The nation-state is gradually yielding its sovereignty …[F]urther progress will require greater American sacrifices. More intensive efforts to shape a new world monetary structure will have to be undertaken, with some consequent risk to the present relatively favorable American position…”

As long as he has been in power, Putin has been closely advised by Henry Kissinger, yet another member of the CFR and proponent of the Trilateral Commission, who has said:

“In the end, the political and economic systems can be harmonized in only one of two ways: by creating an international political regulatory system with the same reach as that of the economic world; or by shrinking the economic units to a size manageable by existing political structures, which is likely to lead to a new mercantilism, perhaps of regional units. A new Bretton Woods kind of global agreement is by far the preferable outcome…”

Both Kissinger and Brzezinski refer to this harmonized global economic and political structure as the “New World Order.” The fact that the political leaders of Russia and the United States are clearly being directed by such men should not be taken lightly.

China, too, has made demands for a restructuring of the global monetary system into acentralized currency basket under the dominance of the IMF.

China’s ties to the banking elite of London are well documented.

The call on both sides for a new monetary system and the end of the dollar as world reserve seems to greatly contradict the fantasy that the East and West are fundamentally at odds.  The progression towards a world currency and/or economic governance also appears to be growing along with the consolidation of economic and military ties between Eastern nations. This would suggest that the rise of the East and the crippling of Western elements is actually advantageous to global bankers in the long term.

While disinformation agents and media shills have attempted to downplay any danger to the strength of America and the dollar, Eastern governments have been swiftly establishing alliances and decoupling from U.S. influence.

The historic 30-year Russia/China gas deal has, of course, been finalized. This deal is already eating up market space and influencing the way in which the energy trade traditionally behaves.

China and Russia have also expanded on their bilateral agreements made in 2010, which remove the dollar as the reserve currency in transactions between the two nations.

China’s thirst for gold continues, while the country is now building its own gold exchange to rival the U.S. Comex.

Russia has recently established what Putin calls the “Eurasian Economic Union,” a deal which includes Kazakhstan and Belarus, two countries that hold large, freshly discovered oil fields.

In response to the engineered conflict over Ukraine, as well as the “Asian-Pacific Pivot” by the U.S., China has openly called for a new security pact with Russia and Iran.

Let’s also not forget that China is set to surpass the U.S. as the world’s largest economy by 2016, according to the Organization for Economic Co-operation and Development (OECD).

While the rise of the East is being painted in Western circles as a threat to U.S. and NATO dominance, the bigger picture is being hidden from view. Yes, indeed, the consolidation of the East is a considerable threat to the dollar and the U.S. economy — most importantly in the event that China refuses to accept dollars as payment on exports and debts. With the world’s largest exporter/importer refusing to take dollars as a reserve, most nations will inevitably follow their lead.  The argument against this development is, of course, that there is no rational trigger for such a violent fiscal attack. I would remind skeptics that there was no rational trigger for the current strengthened relations between Russia and China until the Ukraine crisis. Is anyone really foolish enough to bet against another direct or indirect conflict between NATO and the East? And is anyone really ignorant enough to assume that said event would not be used as an excuse to cut the legs out from under the dollar completely?

The New World Order players have positioned the East and West for just such a scenario. Why? In my article Who Is The New Secret Buyer Of U.S. Debt?, I give evidence indicating that the Bank of International Settlements and the IMF are preparing the financial world for a new global monetary system, brought into existence by a second Bretton Woods conference. The debasement of the dollar and the rise of the East are NOT obstacles to this plan.  Rather, they are required factors. There can be no truly global economic system without “harmonization”, the demise of the dollar’s world reserve status, and the end of sovereign economic governance.

For those who doubt this scenario, read Paul Volcker’s latest statement, as reported by Zero Hedge.

Volcker, the same man who was directly involved in the destruction of the first Bretton Woods agreement and the final death rattle of the gold standard, is now promoting a NEW Bretton Woods-style agreement in which currencies are pegged to a controlled market system — in essence, a centralized international monetary system. Volcker also suggests that a single nation-based reserve currency like the dollar may be a danger to overall fiscal health.

Volcker is right. The dollar-dominated forex casino and fiat fraud is a danger to the world. Volcker helped make it that way! And what a surprise, the former Federal Reserve chairman has a solution on a silver platter for the American people — all we need is GLOBALcentralization and bureaucratic oversight.

The propaganda is being carefully planted within the mainstream. Christine Lagarde of the IMF now spends the whole of her media interviews inserting the phrase “global economic reset” without explaining exactly what that would entail, while central banking elites like Volcker suggest a Bretton Woods II conference leading to a global monetary authority. In the meantime, Russian government-funded media outlets like RT produce pieces accusing the U.S. of being a nuclear menace while we Americans get to watch manipulative Hollywood films like “Jack Ryan: Shadow Recruit,” which depicts a Russian plot to collapse the U.S. economy.  China and U.S. representatives squabble with each other at geopolitical meetings fueling fears of diplomatic breakdown, while the Pentagon “suggests” they may have to revamp their military strategies in consideration of yet another World War.  Just as in Orwell’s book, 1984, old enemies become allies and then enemies once again, and at the top of the pyramid, it’s all a farce.

The best lies contain elements of truth. The truth here is that the East is forming alliances in opposition to the West, the West is involved in underhanded covert operations all over the planet, and both “sides” are in fact on the verge of a catastrophic battle for supremacy. The great lie is that important details have been left out of our little story. Both sides are merely puppet pieces in a grand game of global chess, and any conflict will ultimately benefit the small group of men standing over the board. They include the international financiers who have influenced the very policy fabric of each government toward a climactic crisis which they hope will finally give them the “New World Order” they have always dreamed of.

Source: Brandon Smith | Alt-Market

Why War Is Inevitable

May 26, 2014 by · 1 Comment 

Memorial Day is when we commemorate our war dead. Like the Fourth of July, Memorial Day is being turned into a celebration of war.

Those who lose family members and dear friends to war don’t want the deaths to have been in vain. Consequently, wars become glorious deeds performed by noble soldiers fighting for truth, justice, and the American way. Patriotic speeches tell us how much we owe to those who gave their lives so that America could remain free.

The speeches are well-intentioned, but the speeches create a false reality that supports ever more wars. None of America’s wars had anything to do with keeping America free. To the contrary, the wars swept away our civil liberties, making us unfree.

President Lincoln issued an executive order for the arrest and imprisonment of northern newspaper reporters and editors. He shut down 300 northern newspapers and held 14,000 political prisoners. Lincoln arrested war critic US Representative Clement Vallandigham from Ohio and exiled him to the Confederacy. President Woodrow Wilson used WWI to suppress free speech, and President Franklin D. Roosevelt used WWII to intern 120,000 US citizens of Japanese descent on the grounds that race made them suspect. Professor Samuel Walker concluded that President George W. Bush used the “war on terror” for an across the board assault on US civil liberty, making the Bush regime the greatest danger American liberty has ever faced.

Lincoln forever destroyed states’ rights, but the suspension of habeas corpus and free speech that went hand in hand with America’s three largest wars was lifted at war’s end. However, President George W. Bush’s repeal of the Constitution has been expanded by President Obama and codified by Congress and executive orders into law. Far from defending our liberties, our soldiers who died in “the war on terror” died so that the president can indefinitely detain US citizens without due process of law and murder US citizens on suspicion alone without any accountability to law or the Constitution.

The conclusion is unavoidable that America’s wars have not protected our liberty but, instead, destroyed liberty. As Alexander Solzhenitsyn said, “A state of war only serves as an excuse for domestic tyranny.”

Southern secession did pose a threat to Washington’s empire, but not to the American people.Neither the Germans of WWI vintage nor the Germans and Japanese of WWII vintage posed any threat to the US. As historians have made completely clear, Germany did not start WWI and did not go to war for the purpose of territorial expansion. Japan’s ambitions were in Asia. Hitler did not want war with England and France. Hitler’s territorial ambitions were mainly to restore German provinces stripped from Germany as WWI booty in violation of President Wilson’s guarantees. Any other German ambitions were to the East. Neither country had any plans to invade the US. Japan attacked the US fleet at Pearl Harbor hoping to remove an obstacle to its activities in Asia, not as a precursor to an invasion of America.

Certainly the countries ravaged by Bush and Obama in the 21st century–Iraq, Afghanistan, Libya, Somalia, Syria, Pakistan, and Yemen posed no military threat to the US. Indeed, these were wars used by a tyrannical executive branch to establish the basis of the Stasi State that now exists in the US.

The truth is hard to bear, but the facts are clear. America’s wars have been fought in order to advance Washington’s power, the profits of bankers and armaments industries, and the fortunes of US companies. Marine General Smedley Butler said, “ I served in all commissioned ranks from a second Lieutenant to a Major General. And during that time, I spent most of my time being a high-class muscle man for Big Business, for Wall Street, and for the bankers. In short, I was a racketeer for capitalism.”

It is more or less impossible to commemorate the war dead without glorifying them, and it is impossible to glorify them without glorifying their wars.

For the entirety of the 21st century the US has been at war, not war against massed armies or threats to American freedom, but wars against civilians, against women, children, and village elders, and wars against our own liberty. Elites with a vested interest in these wars tell us that the wars will have to go on for another 20 to 30 years before we defeat “the terrorist threat.”

This, of course, is nonsense. There was no terrorist threat until Washington began trying to create terrorists by military attacks, justified by lies, on Muslim populations.

Washington succeeded with its war lies to the point that Washington’s audacity and hubris have outgrown Washington’s judgment.

By overthrowing the democratically elected government in Ukraine, Washington has brought the United States into confrontation with Russia. This is a confrontation that could end badly, perhaps for Washington and perhaps for the entire world.

If Gaddafi and Assad would not roll over for Washington, why does Washington think Russia will? Russia is not Libya or Syria. Washington is the bully who having beat up the kindergarden kid, now thinks he can take on the college linebacker.

The Bush and Obama regimes have destroyed America’s reputation with their incessant lies and violence against other peoples. The world sees Washington as the prime threat.

Worldwide polls consistently show that people around the world regard the US and Israel as the two countries that pose the greatest threat to peace. http://www.ibtimes.com/gallup-poll-biggest-threat-world-peace-america-1525008 and
http://www.jewishfederations.org/european-poll-israel-biggest-threat-to-world-peace.aspx

The countries that Washington’s propaganda declares to be “rogue states” and the “axis of evil,” such as Iran and North Korea, are far down the list when the peoples in the world are consulted. It could not be more clear that the world does not believe Washington’s self-serving propaganda. The world sees the US and Israel as the rogue states.

The US and Israel are the only two countries in the world that are in the grip of ideologies. The US is in the grip of the Neoconservative ideology which has declared the US to be the “exceptional, indispensable country” chosen by history to exercise hegemony over all others. This ideology is buttressed by the Brzezinski and Wolfowitz doctrines that are the basis of US foreign policy.

The Israeli government is in the grip of the Zionist ideology that declares a “greater Israel” from the Nile to the Euphrates. Many Israelis themselves do not accept this ideology, but it is the ideology of the “settlers” and those who control the Israeli government.

Ideologies are important causes of war. Just as the Hitlerian ideology of German superiority is mirrored in the Neoconservative ideology of US superiority, the Communist ideology that the working class is superior to the capitalist class is mirrored in the Zionist ideology that Israelis are superior to Palestinians. Zionists have never heard of squatters’ rights and claim that recent Jewish immigrants into Palestine–invaders really–have the right to land occupied by others for millenniums.

Washington’s and Israel’s doctrines of superiority over others do not sit very well with the ”others.” When Obama declared in a speech that Americans are the exceptional people, Russia’s President Putin responded, “God created us all equal.”

To the detriment of its population, the Israeli government has made endless enemies. Israel has effectively isolated itself in the world. Israel’s continued existence depends entirely on the willingness and ability of Washington to protect Israel. This means that Israel’s power is derivative of Washington’s power.

Washington’s power is a different story. As the only economy standing after WWII, the US dollar became the world money. This role for the dollar has given Washington financial hegemony over the world, the main source of Washington’s power. As other countries rise, Washington’s hegemony is imperiled.

To prevent other countries from rising, Washington invokes the Brzezinski and Wolfowitz doctrines. To be brief, the Brzezinski doctrine says that in order to remain the only superpower, Washington must control the Eurasian land mass. Brzezinski is willing for this to occur peacefully by suborning the Russian government into Washington’s empire. ”A loosely confederated Russia . . . a decentralized Russia would be less susceptible to imperial mobilization.” In other words, break up Russia into associations of semi-autonomous states whose politicians can be suborned by Washington’s money.

Brzezinski propounded “a geo-strategy for Eurasia.” In Brzezinski’s strategy, China and “a confederated Russia” are part of a “transcontinental security framework,” managed by Washington in order to perpetuate the role of the US as the world’s only superpower.

I once asked my colleague, Brzezinski, that if everyone was allied with us, who were we organized against? My question surprised him, because I think that Brzezinski remains caught up in Cold War strategy even after the demise of the Soviet Union. In Cold War thinking it was important to have the upper hand or else be at risk of being eliminated as a player. The importance of prevailing became all consuming, and this consuming drive survived the Soviet collapse. Prevailing over others is the only foreign policy that Washington knows.

The mindset that America must prevail set the stage for the Neoconservatives and their 21st century wars, which, with Washington’s overthrow of the democratically elected government of Ukraine, has resulted in a crisis that has brought Washington into direct conflict with Russia.

I know the strategic institutes that serve Washington. I was the occupant of the William E.Simon Chair in Political Economy, Center for Strategic and International Studies, for a dozen years. The idea is prevalent that Washington must prevail over Russia in Ukraine or Washington will lose prestige and its superpower status.

The idea of prevailing always leads to war once one power thinks it has prevailed.

The path to war is reinforced by the Wolfowitz Doctrine. Paul Wolfowitz, the neoconservative intellectual who formulated US military and foreign policy doctrine, wrote among many similar passages:

“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere [China], that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

In the Wolfowitz Doctrine, any other strong country is defined as a threat and a power hostile to the US regardless of how willing that country is to get along with the US for mutual benefit.

The difference between Brzezinski and the Neoconservatives is that Brzezinski wants to suborn Russia and China by including them in the empire as important elements whose voices would be heard, If only for diplomatic reasons, whereas the Neoconservatives are prepared to rely on military force combined with internal subversion orchestrated with US financed NGOs and even terrorist organizations.

Neither the US nor Israel is embarrassed by their worldwide reputations as the two countries that pose the greatest threat. In fact, both countries are proud to be recognized as the greatest threats. The foreign policy of both countries is devoid of any diplomacy. US and Israeli foreign policy rests on violence alone. Washington tells countries to do as Washington says or be “bombed into the stone age.” Israel declares all Palestinians, even women and children, to be “terrorists,” and proceeds to shoot them down in the streets, claiming that Israel is merely protecting itself against terrorists. Israel, which does not recognize the existence of Palestine as a country, covers up its crimes with the claim that Palestinians do not accept the existence of Israel.

“We don’t need no stinking diplomacy. We got power.”

This is the attitude that guarantees war, and that is where the US is taking the world. The prime minister of Britain, the chancellor of Germany, and the president of France are Washington’s enablers. They provide the cover for Washington. Instead of war crimes, Washington has “coalitions of the willing” and military invasions that bring “democracy and women’s rights” to non-compliant countries.

China gets much the same treatment. A country with four times the US population but a smaller prison population, China is constantly criticized by Washington as an “authoritarian state.” China is accused of human rights abuses while US police brutalize the US population.

The problem for humanity is that Russia and China are not Libya and Iraq. These two countries possess strategic nuclear weapons. Their land mass greatly exceeds that of the US. The US, which was unable to successfully occupy Baghdad or Afghanistan, has no prospect of prevailing against Russia and China in conventional warfare. Washington will push the nuclear button. What else can we expect from a government devoid of morality?

The world has never experienced rogue states comparable to Washington and Israel. Both governments are prepared to murder anyone and everyone. Look at the crisis that Washington has created in Ukraine and the dangers thereof. On May 23, 2014, Russia’s President Putin spoke to the St. Petersburg International Economic Forum, a three-day gathering of delegations from 62 countries and CEOs from 146 of the largest Western corporations.

Putin did not speak of the billions of dollars in trade deals that were being formalized. Instead Putin spoke of the crisis that Washington had brought to Russia, and he criticized Europe for being Washington’s vassals for supporting Washington’s propaganda against Russia and Washington’s interference in vital Russian interests.

Putin was diplomatic in his language, but the message that powerful economic interests from the US and Europe received is that it will lead to trouble if Washington and European governments continue to ignore Russia’s concerns and continue to act as if they can interfere in Russia’s vital interests as if Russia did not exist.

The heads of these large corporations will carry this message back to Washington and European capitals. Putin made it clear that the lack of dialogue with Russia could lead to the West making the mistake of putting Ukraine in NATO and establishing missile bases on Russia’s border with Ukraine. Putin has learned that Russia cannot rely on good will from the West, and Putin made it clear, short of issuing a threat, that Western military bases in Ukraine are unacceptable.

Washington will continue to ignore Russia. However, European capitals will have to decide whether Washington is pushing them into conflict with Russia that is against European interests. Thus, Putin is testing European politicians to determine if there is sufficient intelligence and independence in Europe for a rapprochement.

If Washington in its overbearing arrogance and hubris forces Putin to write off the West, the Russian/Chinese strategic alliance, which is forming to counteract Washington’s hostile policy of surrounding both countries with military bases, will harden into preparation for the inevitable war.

The survivors, if any, can thank the Neoconservatives, the Wolfowitz doctrine, and the Brzezinski strategy for the destruction of life on earth.

The American public contains a large number of misinformed people who think they know everything. These people have been programmed by US and Israeli propaganda to equate Islam with political ideology. They believe that Islam, a religion, is instead a militarist doctrine that calls for the overthrow of Western civilization, as if anything remains of Western civilization.

Many believe this propaganda even in the face of complete proof that the Sunnis and Shi’ites hate one another far more than they hate their Western oppressors and occupiers. The US has departed Iraq, but the carnage today is as high or higher than during the US invasion and occupation. The daily death tolls from the Sunni/Shi’ite conflict are extraordinary. A religion this disunited poses no threat to anyone except Islamists themselves. Washington successfully used Islamist disunity to overthrow Gaddafi, and is currently using Islamist disunity in an effort to overthrow the government of Syria. Islamists cannot even unite to defend themselves against Western aggression. There is no prospect of Islamists uniting in order to overthrow the West.

Even if Islam could do so, it would be pointless for Islam to overthrow the West. The West has overthrown itself. In the US the Constitution has been murdered by the Bush and Obama regimes. Nothing remains. As the US is the Constitution, what was once the United States no longer exists. A different entity has taken its place.

Europe died with the European Union, which requires the termination of sovereignty of all member countries. A few unaccountable bureaucrats in Brussels have become superior to the wills of the French, German, British, Italian, Dutch, Spanish, Greek, and Portuguese peoples.

Western civilization is a skeleton. It still stands, barely, but there is no life in it. The blood of liberty has departed. Western peoples look at their governments and see nothing but enemies. Why else has Washington militarized local police forces, equipping them as if they were occupying armies? Why else has Homeland Security, the Department of Agriculture, and even the Postal Service and Social Security Administration ordered billions of rounds of ammunition and even submachine guns? What is this taxpayer-paid-for arsenal for if not to suppress US citizens?

As the prominent trends forecaster Gerald Celente spells out in the current Trends Journal, “uprisings span four corners of the globe.” Throughout Europe angry, desperate and outraged peoples march against EU financial policies that are driving the peoples into the ground. Despite all of Washington’s efforts with its well funded fifth columns known as NGOs to destabilize Russia and China, both the Russian and Chinese governments have far more support from their people than do the US and Europe.

In the 20th century Russia and China learned what tyranny is, and they have rejected it.

In the US tyranny has entered under the guise of the “war on terror,” a hoax used to scare the sheeple into abandoning their civil liberties, thus freeing Washington from accountability to law and permitting Washington to erect a militarist police state. Ever since WWII Washington has used its financial hegemony and the “Soviet threat,” now converted into the “Russian threat,” to absorb Europe into Washington’s empire.

Putin is hoping that the interests of European countries will prevail over subservience to Washington. This is Putin’s current bet. This is the reason Putin remains unprovoked by Washington’s provocations in Ukraine.

If Europe fails Russia, Putin and China will prepare for the war that Washington’s drive for hegemony makes inevitable.

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest books are, The Failure of Laissez Faire Capitalism and How America Was Lost. http://www.paulcraigroberts.org/

Why John Boehner Hates The Tea Party

May 24, 2014 by · Leave a Comment 

What is now called the Tea Party began in 2007 as a loosely-organized yet highly-motivated grassroots support effort for Congressman Ron Paul’s bid for the White House. Since those early days, a lot has happened to the Tea Party.

For one thing, the Tea Party is now much larger and broader than any one person’s political candidacy. And though a Tea Party candidate has not yet obtained the White House (Ron Paul was the lone Tea Party Republican candidate in both the 2008 and 2012 presidential elections), a host of Tea Party candidates have won several elections in the US House and Senate–as well as many State and local races. And to win these elections, Tea Party candidates have had to repel the attacks against them from the Republican establishment. In fact, the GOP establishment is far and away the Tea Party’s biggest enemy.

Republican leaders such as John Boehner, John McCain, Lindsey Graham, Peter King, etc., have made one of their missions in life to defeat Republican Tea Party candidates–even if those candidates are incumbents. This is for good reason: the establishment Republican Party is diametrically opposed to the goals and principles of the Tea Party.

Based on the positions of most Tea Party candidates (which is all we have to go on as the Tea Party is not a real political party but only a grassroots activist effort being conducted mainly within the Republican Party), the goals and objectives of the Tea Party can be summarized generally as follows:

  • They support a non-interventionist foreign policy.
  • They support the Constitution and recognize the current attacks against the Constitution, especially against the Second, Fourth, and Tenth Amendments.
  • They oppose the NSA spying on the American citizenry (including the use of drones for such purposes).
  • They oppose the Patriot Act and the militarization of the Department of Homeland Security as well as local and State law enforcement agencies.
  • They oppose the Import-Export Bank.
  • They oppose the Federal Reserve Bank.
  • They oppose CISPA.
  • They oppose the indefinite detention provision of the NDAA.
  • They support ending the 2001 Authorization for the Use of Military Force (AUMF).
  • They support limited government spending–especially at the federal level.

One can easily see that many, if not most, of these goals and objectives are diametrically opposite the goals and objectives of the establishment Republican machine. And more than anything else, the Republican leadership in Washington, D.C., wants GOP congressmen and senators to be “team players.” Of course, by “team players” they mean good little Republican robots that will not buck party leadership.

Since Representative Ron Paul retired, the Tea Party leader in the U.S. House is Justin Amash of Michigan. And working side-by-side Rep. Amash is Congressman Thomas Massie of Kentucky. In the U.S. Senate, the Tea Party is being led by men such as Rand Paul of Kentucky, Mike Lee of Utah, and Ted Cruz of Texas. There are several other Tea Party supporters in both the U.S. House and Senate, of course. It is no accident or coincidence that each of these congressmen and senators has incurred (and continue to incur) the wrath of establishment Republican leaders.

Congressman Peter King (R-NY) reserves his harshest rhetoric, not for any Democrat, but for Senator Rand Paul. King said that Rand Paul “disgraced his office,” he “doesn’t deserve to be in the U.S. Senate,” and he “tells absolute lies.” Karl Rove has repeatedly lambasted Justin Amash. House Speaker Boehner has spearheaded well-financed opposition to Amash’s reelection campaign this year. Senator John McCain (the GOP standard bearer in 2008) recently called Amash, Paul, and Cruz “wacko birds.” So much for Ronald Reagan’s 11th Commandment to not speak evil of fellow Republicans. It would appear that commandment only applies to not criticizing the GOP establishment, while Republicans espousing Tea Party convictions are open-season for Republican leaders to lampoon and lambast without mercy.

Earlier this month, the GOP establishment spent over $1 million in a single House district race in an attempt to defeat 20-year Republican incumbent Walter Jones. The reason? Jones has a history of voting against the wishes of the party establishment–especially concerning the freedom issues listed above. Thankfully, they failed.

But all over the country, in national, State, and local elections, the GOP establishment is working feverishly to keep Tea Party candidates out of office or to defeat incumbent Republicans who support the Tea Party agenda. In fact, one way I can tell whether a candidate deserves my support or not is by the support or opposition he or she receives from the GOP establishment. If the Republican establishment supports him or her, I can pretty much know that I should vote for someone else.

The reason that Boehner, Karl Rove, and other big-government Republican leaders are trying so hard to defeat Justin Amash in particular is due to the fact that Amash has quietly but effectively spearheaded the momentum of small-government conservatives on Capitol Hill. Since the retirement of Ron Paul, Amash has successfully formed a potent coalition of constitutionally-minded Republicans within the Tea Party movement. He calls his coalition the “House Liberty Caucus.” Of course, most of the framework for this caucus was put together by former Congressman Ron Paul.

Since Justin Amash was elected to the House and Rand Paul was elected to the Senate in 2010, eight of the eleven Ron Paul-endorsed congressional candidates won elections in 2012, including Senator Ted Cruz. All of these folks had significant Tea Party support. Boehner and Rove have reason to be worried. No wonder Amash’s establishment-endorsed opponent has over $1 million to spend trying to oust him. No wonder the U.S. Chamber of Commerce (a long-time establishment organization) has unveiled a $50 million war chest designed to defeat Tea Party congressmen nationwide.

And please know this, too: the establishment has done its best to infiltrate the Tea Party so as to dilute its message and weaken its effectiveness. In fact, some Tea Parties around the country are now mostly dominated by establishment neocons. Thank God, many, if not most, of the Tea Parties around the country are still mostly comprised of strong, constitutionally-minded, non-establishment folks who refuse to bow to the GOP hierarchy. But we must be aware of the neocon infiltration that has taken place among many Tea Parties.

In virtually every political race this year–including national, State, county, and city–the establishment will be working tirelessly to elect their hand-picked neocons. When you hear Tea Party-type candidates being lampooned as “wacko” or “far right,” etc., when you hear their critics and detractors say, “He can’t win,” please understand that you are listening to an establishment elitist whose job is to undermine the candidacies of those folks who refuse to go along with the establishment. Many of these critics will call themselves “conservatives.” They will say they are simply being “pragmatic” and “reasonable.” Hogwash! What they are doing is trying to ensure that non-establishment candidates never get elected.

The future of the Republican Party–or even if there is a Republican Party in the future–depends on the next few elections and whether or not the establishment will be able to bully and buy-off the votes of the American people. When John Boehner, John McCain, Lindsey Graham, Jeb Bush, Karl Rove, etc., demand that Congress provide amnesty for illegal aliens, when they try to ram their elitist, big-government agenda down the throats of congressmen and senators, when they spend hundreds of millions of dollars trying to defeat Tea Party Republicans, you can rest assured that they are not seeking the welfare of the country or even of the Republican Party.

The big-government establishment doesn’t give a flip about freedom, the Constitution, or even the constituent back home. What they care about is THEM. They have become part of a wealthy and powerful cabal of miscreants who are going to be well-taken-care-of NO MATTER WHAT. They are themselves the pawns of evil power-brokers; and in order to survive, they must make sure that there are other pawns coming to Washington, D.C., to keep the power base intact.

This is a war. It is not only a political war; it is a spiritual war. It is a war for both the soul of the Republican Party (which at present, there isn’t much of one left) and the soul of the country. It would really help if our pastors and churches could awaken to this war and help us fight it. The establishment knows it’s a war; and they are fighting it with every ounce of energy in their collective being. And they have declared the Tea Party as public enemy number one.

What started as one congressman’s presidential bid back in 2007 has now become a full-blown assault on the big-government establishment in Washington, D.C.–and around the country. The result is there is now a small army of Ron Pauls on Capitol Hill.

I urge you to ignore the shills of the establishment and go to the polls in the primaries this year and elect as many non-establishment candidates as you possibly can. Let’s give Karl Rove and John Boehner something to really worry about.


Chuck Baldwin is a regular columnist for Veracity Voice

You can reach him at: chuck@chuckbaldwinlive.com
Please visit Chuck’s web site at: http://www.chuckbaldwinlive.com

Why NOT Believing In Conspiracies Is A Sure Sign of Mental Retardation

May 19, 2014 by · 1 Comment 

The phrase “conspiracy theorist” is a derogatory smear phrase thrown at someone in an attempt to paint them as a lunatic. It’s a tactic frequently used by modern-day thought police in a desperate attempt to demand “Don’t go there!”

But let’s step back for a rational moment and ask the commonsense question: Are there really NO conspiracies in our world?

The Attorney General of South Carolina would surely disagree with such a blanket statement. After all, he sued five pharmaceutical companies for conducting a price-fixing conspiracy to defraud the state of Medicaid money.

Similarly, in 2008, a federal judge ruled that three pharmaceutical companies artificially marked up their prices in order to defraud Medicare.

In fact, dozens of U.S. states have filed suit against pharmaceutical companies for actions that are conspiracies: conspiracy to engage in price fixing, conspiracy to bribe doctors, conspiracy to defraud the state and so on.

The massive drug company GlaxoSmithKline, even more, plead guilty to a massive criminal fraud case involving a global conspiracy to bribe doctors into prescribing more GSK drugs.

And this is just the tip of the iceberg. A deeper look into the criminality of just the drug industry alone reveals a widespread pattern of conspiratorial behavior to defraud the public and commit felony crimes in the name of “medicine.”

What is a conspiracy, exactly?

As any state or federal prosecutor will gladly tell you, a “conspiracy” is simply when two or more people plot to commit an act of deceit (or a crime).

Thus, when three hoodlums plan to rob the local Quickie Mart, they are engaged in a “conspiracy” and will likely be charged with a “conspiracy to commit armed robbery” in addition to the different crime of “armed robbery.” The fact that they planned it with several friends makes it a “conspiracy” worthy of additional felony charges, you see. When these charges are brought up in court, the judge doesn’t look at the prosecutor and say, “You are a conspiracy theorist!” That would be absurd.

The idea, then, that there is no such thing as a conspiracy is flatly ludicrous. And people who condemn others as being “conspiracy theorists” only make themselves look mentally impaired.

To live in our modern world which is full of collusion and conspiracy — and yet somehow DENY the existence of any conspiracies at all — is an admission of a damaged brain. Of course there are conspiracies, and when people analyze those conspiracies, they are “theorizing” about what happened. This is, in fact, precisely the job that police detectives and FBI agents carry out almost daily.

Most police detectives are, in reality, “conspiracy investigators” and analysts.

There are endless examples of real conspiracies

Auto manufacturers routinely conspire to cover up mechanical defects that put customer lives at risk. Even National Public Radio lays out the full timeline of the General Motors conspiracy to hide the problem with its faulty ignition switches.

Last year, food corporations conspired with the Grocery Manufacturers of America (the GMA) tocommit money laundering crimes in Washington state in order to funnel money into a campaign to defeat GMO labeling there.

The FDA conspired with a drug manufacturer to keep a deadly diabetes drug called Rezulin on the market in the USA even after safety regulators pulled the product in Europe.

Similarly, the corrupt, criminal-minded operators of mainstream science journals conspired in a particularly evil way to railroad Dr. Andrew Wakefield with provably false accusations about the nature of his research into the side effects of vaccines. The GMO Seralini study has been similarly railroaded by a genuine conspiracy of evil, corrupt science journal editors who routinely conspire to suppress all the science they don’t want to be seen by the public. Fortunately, 150 other scientists have come to support Seralini with a global condemnation of the obviously contrived scientific censorship.

We live in a world of such deception and collusion that, frankly stated, it’s hard to find a large institution (such as medicine, agriculture or the war industry) which isn’t involved in some sort of conspiracy at some level.

What is a “conspiracy theorist?

The pejorative “conspiracy theorist” is meant to demean and ridicule skeptics of official stories.

Most so-called “conspiracy theorists” are really skeptics, by definition. They’re skeptical of what the government tells them. They’re skeptical of the claim that drug companies are really only interested in helping humankind and have no desire to make money. They’re skeptical that food corporations are telling them the truth about what’s in their food. And they’re also skeptical of anything coming out of Washington D.C., regardless of which party happens to be in power at the time.

People who are not skeptics of “official stories” tend to be dull-minded. To believe everything these institutions tell you is a sign of mental retardation. To ask questions, on the other hand, is a sign of higher intelligence and wisdom.

Skeptics of official stories, it turns out, also have the support of history on their side. How many times has it later been revealed that the American people were lied to by the very institutions we were supposed to trust?

For example, it is an historical fact that 98 million Americans were injected with hidden cancer viruses which were later found in polio vaccines strongly recommended by the CDC. In an effort to cover that up and rewrite history, the CDC later scrubbed all accounts of that history from its website, pretending it never happened.

That’s more than a cover-up; it’s an Orwellian-style conspiracy to selectively rewrite history and deny Americans any memory of a monumental, deadly error made by the CDC in collusion with the vaccine industry.

According to two former Merck virologists, that company conspired to fake the results of its vaccine tests by spiking test samples with animal antibodies, thereby falsely distorting the results to make the vaccine appear effective. The two virologists filed a False Claims Act with the federal government detailing the conspiracy, saying:

Merck also added animal antibodies to blood samples to achieve more favorable test results, though it knew that the human immune system would never produce such antibodies, and that the antibodies created a laboratory testing scenario that “did not in any way correspond to, correlate with, or represent real life … virus neutralization in vaccinated people…”

Conspiracies of money and big banks

Every month, the Federal Reserve conspires to steal a portion of your wealth through “quantitative easing” — an irresponsible money creation scheme that devalues all the currency already in circulation (i.e. the money in your bank account).

The money the Fed creates is, not surprisingly, handed over to the big Wall Street banks — the same banks that received a jaw-dropping $29 trillion in “bailout money” since the near-collapse of U.S. banking in late 2008.

Why did this bailout money go to the banks instead of the American people? Because powerful people sat in dark rooms and colluded to send the money to the most influential banks. A conspiracy, in other words, by definition.

Had that same amount of money been equally distributed across the U.S. population, the Fed would have distributed nearly $100,000 to each and every citizen in America; man, woman and child. But instead of enriching the population, the banking bailout burdened the population with the debt now owed to the Fed by future taxpayers.

Every $1 trillion created by the Fed, after all, is $1 trillion “loaned” to the U.S. Treasury which must somehow be repaid. In truth, the minute you start to investigate how money is created, why the Federal Reserve is a private banking cartel and why the big banks get all the bailout money, you run head-first into genuine conspiracies almost from the outset. When you look up the word “conspiracy” in a dictionary, it should probably say, “See Banking and Finance.”

Our world is full of conspiracies because it’s full of people who deceive

The reason conspiracies are real is because humanity is a race capable of extreme deception. As long as there are people whose actions are based in greed, jealousy and a desire to dominate others, there will be real conspiracies plotted and operating across every sector of society.

The correct term for “conspiracy theorist” should really be “conspiracy analyst.” Most of the people who are skeptical of official stories are, in fact, analyzing conspiracies in an attempt to understand what really happened and what took place behind closed doors.

A highly-recommended book the delves into this matter in more detail is the five-star-rated masterpiece Official Stories: Counter-Arguments for a Culture in Need by Liam Scheff.

This book will open the minds of those who still have the cognitive capability remaining to grasp it. (Sadly, the injection of mercury into babies in the form of vaccines has damaged so many brains across America that many people are now cognitively incapable of rational thought.)

And remember: the next time someone flings the phrase “conspiracy theorist” in your direction, simply know that they are effectively wearing a DUNCE hat on their heads by admitting they have failed to acknowledge that true conspiracies are rather commonplace.

That’s not merely a theory, either: it’s a statement of fact.

Source: Mike Adams |Natural News

The Japanese Debt Economy

May 18, 2014 by · Leave a Comment 

What does the United States have in common with Japan’s economy? Demographics of an aging population have consequences for both countries. As Japan News reports, National debt hits record high.

“Japan’s national debt totaled a record-high ¥1.02 quadrillion as of the end of March, up ¥33.36 trillion from a year earlier, the Finance Ministry said.

The central government debt, which increased ¥7.01 trillion from the end of December last year, kept rising mainly due to ballooning social security costs in line with the aging of the population.”

Last year Forbes viewed their debt crisis as staggering. “Currently at 240% of GDP, the International Monetary Fund estimates that it will get to 250% by year-end. Why is this an issue? Well, when you have government debt at 24x government revenue and interest expenses taking up 25% of government revenue, it becomes a very big issue.”

Around the same time, Matt Phillips wrote that with a quadrillion in debt, there’s only one way out for Japan, jumpstart growth.

“So, yes, while Japan does have a ton of debt, the outright level is not the best way to keep track of it. The more important gauge is debt as a percentage of the country’s annual economic output, or GDP. And at more than 200%, Japan’s debt load is the highest among all developed nations.

But still, how will Japan ever manage to pay it off it’s debt? Well, actually, it won’t.

The goal for countries isn’t paying off debt, it’s getting its debt-to-GDP ratio in better shape.”

There is a huge problem with growing a GDP when the international economy is still suffering from the global financial meltdown, when your own nation has fewer spending consumers as the population ages. OECD warns Japan’s economy may suffer inflation without wage growth. “The Paris-based club of 34 advanced nations said in its biannual report that the world’s third-biggest economy would expand 1.2 percent this year, downgraded from its November forecast of 1.5 percent in terms of inflation-adjusted gross domestic product growth.”

Added to this sluggish and lackluster forecast, the WSJ article that Japan Current Account Surplus Smallest on Record, indicates a serious downward trend in foreign trade earnings.

“The ¥789.9 billion ($7.76 billion) surplus in the broadest measure of a nation’s trade with the rest of the world was sharply lower than the ¥4.2 trillion surplus registered a year earlier, data from the Ministry of Finance showed Monday. Until recently, the country routinely produced a surplus in excess of ¥10 trillion a year.”

Is the day on the horizon when Japan will mirror the trade deficits that have so long plagued the American economy? Just look to the practice that many Japanese manufacturers are shifting their production offshore. Besides, the aftermath of the Fukushima nuclear disaster has the country consuming more imported fossil fuels to meet energy needs.

If you are looking for answers, you better read the essay by Alan Gula in Wall Street Daily, Japan’s Most Valuable Resource is Vanishing. “Through quantitative easing and large budget deficits, Abenomics has produced currency weakness and higher stock prices… but it’s failed to generate real wage growth.Currency weakness has contributed to soaring energy prices, and the recent sales tax increase will effectively exacerbate inflation and crimp consumer spending. So despite an escape from the jaws of deflation, problems persist in Japan.

In fact, it’s likely that Japan has stagnated because of 15 years of zero interest rate policy (ZIRP), not in spite of ZIRP.”

Finally, Mr. Gula’s points to the fact that, “children under 15 make up just 12.8% of the Japanese population, the lowest ratio among nations with populations of at least 40 million people.” When you factor in that Japan ranks number eight among developed economies in household debt, the persistent legend that Japanese are the world’s savers, is rapidly vanishing.

Over ten years ago Research at Shorenstein APARC, Stanford addressed theCauses of Japan’s Economic Stagnation. However, the global economy has changed dramatically after 2008. In many ways, Japan has experienced several major setbacks.

“If Japan’s current account surplus turns into a current account deficit, the country will have to attract money into its financial markets in order to pay its bills. That may be difficult given that Japan has some of the lowest interest rates and highest debt in the world. Interest rates would probably have to rise substantially, which would worsen the government’s finances and could cause a crisis – causing the yen to weaken even further.

To make matters worse, if the government is successful in its drive to raise the inflation rate, that will only further reduce the real interest rate on Japanese bonds, which is already the lowest of the major bond markets. That’s going to be a hard sell and that’s why I expect the yen to trend lower over the next several years.”

The global financial system, based upon debt fiat money, affects industrial countries the most. Japan was once an island nation, immune from international intervention. The Princeton Press published a paper, Why Study Japanese Political Economy?Most analysis of economic developments in foreign countries only glosses over the political factor that influence and often shape economic policy.

Looking at Japan may well be a valuable mirror on the future of American society. The Japanese tragedy, very easily can turn into the lost decades for our own marketplace. The notion that domestic business or for that matter, the global economy can continue to operate on ever rising debt obligations is paternally absurd. Better, learn this lesson now, before it is too late.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

Repeal of Glass-Steagall And The Too Big To Fail Culture

May 11, 2014 by · Leave a Comment 

During the 1990’s the conventional economic wisdom supported the repeal of Glass-Steagall. However, “10 years later, the end of Glass-Steagall has been blamed by some for many of the problems that led to last fall’s (2008) financial crisis. While the majority of problems that occurred centered mostly on the pure-play investment banks like Lehman Brothers, the huge banks born out of the revocation of Glass-Steagall, especially Citigroup, and the insurance companies that were allowed to deal in securities, like the American International Group, would not have run into trouble had the law still been in place.”

This assessment by Cyrus Sanati, also seems to be the typical perception, now that the anemic rescue of the economy struggles to claw back to pre 2008 levels. The separation of commercial banks and investment banking was a cornerstone in finance, since the Banking Act of 1933 established a protective firewall. The Corporatocracy culture that operates as todays dominate economic model, adopts the “Too Big To Fail” paradigm. Tapping an unending stream of capital for acquisitions, mergers and poison pill financing to fend off unwanted suitors, is a continued requirement to survive in a global investment environment, where soveriegn wealth funds operate as preparatory pirates.

Commercial banks once had a clear mission statement and purpose, underwriting business and mortgage loans. Since Investment Banks, now allowed to access the Federal Reserve discount window programs, because they are now considered depository institutions, the impact of the repeal of Glass-Steagall becomes evident.

The financial mortgage meltdown, as a primary cause of the collapse of the economy, has never been resolved. Bloomberg reports in Basel Spurs Big-Bank Borrowing From U.S. Home Loan Banks.

“Lending at the 12 regional Home Loan Banks rose 30 percent to $492 billion between March of 2013 and December 2013, largely the result of advances made to JPMorgan, Bank of America Corp., Wells Fargo & Co. (WFC) and Citigroup Inc., according to a report released today by the Federal Housing Finance Agency Office of the Inspector General.

The concentration of Home Loan Bank lending in four large institutions could present safety and soundness risks, the report said. In addition, auditors questioned whether lenders created to support housing finance should be providing funds so banks can meet standards set under the international Basel III accord.”

Now does anyone seriously expect that the money center banks dedicated their capital to fund mortgages for the masses? The notion that such mega institutions prefer to function as commercial lenders is a stretch at best. Nevertheless, the investment banking culture is changing out of necessity. The Volcker rule has taken its toll on the whales of finance.

Over two years ago, the announcement that Citigroup to Close Prop Trading Desk, was news. Even before that shift, the banksters began plotting to circumvent the regulator restrictions. “In October 2010, the proprietary trading group at Goldman Sachs left the bank to start a similar operation at Kohlberg Kravis Roberts, the private equity giant. JPMorgan Chase moved its proprietary desk out of its investment bank and into its asset management unit last year, and Morgan Stanley has said it will spin its proprietary operation into a separate entity later this year.”

A prominent proponent of restoring Glass-Steagall has been the Larouche Pac.

“Glass-Steagall is the indispensable first step to global economic recovery. It will immediately halt the onset of hyperinflation, remove government commitment from bailing out toxic debts, end too-big-to-fail banks, and force a separation of commercial banking functions from investment banking functions, thus cleaning up the nation’s banking system to make way for real, long-term investments.

There are now two bills in each house calling for the restoration of President Roosevelt’s 1933 Glass-Steagall law. H. R. 129 & its Senate companion bill S. 985, introduced by Rep. Marcy Kaptur and Senator Tom Harkin respectively, and most recently, S. 1282, known as the “21st Century Glass-Steagall Act,” championed by Senator Elizabeth Warren, whose companion House bill, H.R. 3711 was recently introduced on December 11, 2013.”

It is disappointing that progressive collectivists are leading the effort for a return to a law that served well for decades. The absence of bipartisan support is disturbing. Lefty loons embrace Elizabeth Warren for many foolish reasons. In spite of this, her claim that, “Reintroducing Glass-Steagall will make it so depositor’s money cannot be used for the derivatives market” is a desired objective.

When Yaron Brook and Don Watkins argue in Forbes, Why The Glass-Steagall Myth Persists, they seem indifferent about accelerating the “Too Big To Fail” mentality that became the operative political concern, as the megabanks took on more leverage and risk.

“In 1999, President Clinton signed GLB into law. Although it left the bulk of Glass-Steagall in place, it ended the affiliation restrictions, freeing up holding companies to own both commercial and investment banks.

There is zero evidence this change unleashed the financial crisis. If you tally the institutions that ran into severe problems in 2008-09, the list includes Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, and Fannie Mae and Freddie Mac, none of which would have come under Glass-Steagall’s restrictions. Even President Obama has recently acknowledged that “there is no evidence that having Glass-Steagall in place would somehow change the dynamic.”

Of course, the establishment political class would never admit that their financial donors and patrons must hinder their unbridled trading strategies. The point of the proposed bill, 21st Century Glass-Steagall Act of 2013 or any other legislation that attempts to reign in the excesses of the banking system is that the political will is entirely absent to go against the banksters. Enactment of an updated Glass-Steagall is certainly not the definitive answer to an unsustainable debt ridden financial fiat banking system. Yet, where does one start to build public critical mass to replace the private Federal Reserve monopoly on money, with economic commerce, that is not the prisoner of banking exploitation? The disastrous institution that fails us all is the current banking cartel.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

American Democracy Now An Oligarchy

April 26, 2014 by · Leave a Comment 

History has been made.  But few Americans are aware of it or angry about it.  I say: Wake up Americans.  A war has been waged against US democracy, from the inside.  Time to pick a side and fight back.

If you are not totally brain dead, distracted by pain or pleasure, or consumed by narcissistic obsessions, face the ugly, painful truth.

Republicans with political power in Congress and the states and, even more appallingly, on the Supreme Court have succeeded in turning their beloved republic into a-money-buys-power oligarchy.  One person, one vote was the enemy and it is being defeated.  One dollar, one vote is the new Republican political value.  American democracy is more delusional than ever.  To think otherwise is even more delusional.

I present three arguments supporting the conclusion that there has been a conversion of US democracy into something worse than a plutocracy.  Political power is more dependent on money than ever before.

First, Republicans controlling the House of Representatives and many controlling state governments, together with their rich supporters, have steadily and successfully eroded voting and election laws.  Their goal has been simple: Fight the demographic advantages of Democrats that give them more voters by making it more difficult for those citizens to actually vote.  This has been documented in a New York Times top story and many other places.  Republicans see the obvious.  Namely that their older,-largely rural, white male shrinking proportion of the population is insufficient to win many elections and, even more significant, that many of their policy positions will never prevail with many demographic groups.

As Damon Linker observed about this statistical reality, this is a “tacit acknowledgement by the Republican Party that it’s in dire demographic straits — and that one of the key pillars of its ideology over the last half-century is crumbling right before our eyes.”  Their solution, besides vicious gerrymandering of House districts, is to make it ever more difficult for groups likely to favor Democrats to vote in all elections.  This direct assault on electoral democracy depends considerably on money coming from the wealthiest people to finance the actions to change election laws.

Second, the Supreme Court is now controlled by a Republican majority that has been successfully producing decisions to remove limits to money dumped into the political system by the richest Americans.  For example, recently the McCutcheon decision  continued the Roberts Court program of gutting campaign-finance laws.  Hard to believe, but this decision came to the aid of just 1,219 people in the US—that’s four in every 1,000,000 of our population, who ran up against a contribution limit.  But this is consistent with the insanity that money is the same as free speech, which the Supreme Court has made the law of the land.

As Robert Reich correctly noted: “The court said such spending doesn’t corrupt democracy.  That’s utter baloney, as anyone who has the faintest familiarity with contemporary American politics well knows.”  Political money is used to greatly impact lawmaking and elections.  Political power obtained through political spending is, of course, essential for the richest Americans to maintain and perhaps intensify the economic inequality that now distinguishes American society.  It is how an oligarchy is obtained and sustained.

I hope that Brent Budowsky is correct.  Namely that “Roberts and his four conservative Republican brethren will ultimately be impeached by historians who will condemn, and future courts that will reverse, politically illegitimate and constitutionally deformed rulings that would turn America into a constitutional oligarchy.”  But change “would turn” into “have turned.”

Third, as still more proof of the profound historic change in the US, a recent study from Princeton University that analyzed considerable data concluded that the US has become an oligarchy. Here is what this important study said: “In the United States, our findings indicate, the majority does not rule — at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.”

Furthermore, “Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association, and a widespread (if still contested) franchise. But we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.”  In other words, it is time for Americans to stop believing delusional truths and recognize that US democracy has become a myth, especially if there are ever to be serious actions by the majority to fix and restore democracy.

Americans, especially younger ones, need to understand the historical path from democracy to plutocracy to oligarchy.  Most Americans are suffering because of economic inequality and they need to understand that the economic system is under the control of the perverted political system.  Anyone who is not in the Upper Class or proverbial top one percent who votes for Republicans is living in some fantasy world.  Such voters have been brainwashed and manipulated by, for example, FOX News and blowhards like Limbaugh.

Republicans want even more power.  And if they get it, what would you expect from those working so hard to make US democracy a joke and replace millions of voters with one percent oligarchs?  What Republicans have been doing is nothing less than domestic political terrorism.  If Republicans and Tea Party loyalists were true patriots, they would rebel against the oligarchy created by Republicans.

Finally, make no mistake and think this condemnation of Republicans equates to advocacy for Democrats.  The ultimate solution if a better, more democratic US system is to be obtained is not to rely on putting Democrats in control who also have some billionaires on their side.  No, what is required is a number of constitutional amendments obtained through an Article V conventionthat are necessary to structurally reform the political system, especially getting rid of the power of political money.  In recent months there has been a historic increase in support from important people for constitutional amendments and greater public support is desperately needed to finally use the constitutional option given by the Founders to the nation.


Joel S. Hirschhorn is a regular columnist for Veracity Voice

He can be reached through www.delusionaldemocracy.com

The Economic Scam of the Century

March 27, 2014 by · Leave a Comment 

The leaders of the U.S. Senate Banking Committee,  Sen. Tim Johnson (D., S.D.) and Sen. Mike Crapo (R., Idaho),  released a draft bill on Sunday that would provide explicit government guarantees on mortgage-backed securities (MBS) generated by privately-owned banks and financial institutions. The gigantic giveaway to Wall Street would put US taxpayers on the hook for 90 percent of the losses on toxic MBS the likes of which crashed the financial system in 2008 plunging the economy into the deepest slump since the Great Depression. Proponents of the bill say that new rules by the Consumer Financial Protection Bureau (CFPB) –which set standards for a “qualified mortgage” (QM)– assure that borrowers will be able to repay their loans thus reducing the chances of a similar meltdown in the future. However, those QE rules were largely shaped by lobbyists and attorneys from the banking industry who eviscerated strict underwriting requirements– like high FICO scores and 20 percent down payments– in order to lend freely to borrowers who may be less able to repay their loans.  Additionally, a particularly lethal clause has been inserted into the bill that would provide blanket coverage for all MBS  (whether they met the CFPB’s QE standard or not) in the event of another financial crisis. Here’s the paragraph:

“Sec.305. Authority to protect taxpayers in unusual and exigent market conditions….

If the Corporation, the Chairman of the Federal Reserve Board of Governors and the Secretary of the Treasury, in consultation with the Secretary of Housing and Urban Development, determine that unusual and exigent circumstances threaten mortgage credit availability within the U.S. housing market, FMIC may provide insurance on covered securities that do not meet the requirements under section 302 including those for first loss position of private market holders.” (“Freddie And Fannie Reform – The Monster Has Arrived”, Zero Hedge)

In other words, if the bill passes,  US taxpayers will be responsible for any and all bailouts deemed necessary by the regulators mentioned above.  And, since all of those regulators are in Wall Street’s hip-pocket, there’s no question what they’ll do when the time comes. They’ll bailout they’re fatcat buddies and dump the losses on John Q. Public.

If you can’t believe what you are reading or if you think that the system is so thoroughly corrupt it can’t be fixed; you’re not alone. This latest outrage just confirms that the Congress, the executive and all the chief regulators are mere marionettes performing whatever task is asked of them by their Wall Street paymasters.

The stated goal of the Johnson-Crapo bill is to “overhaul” mortgage giants Fannie Mae and Freddie Mac so that “private capital can play the central role in home finance.” (That’s how Barack Obama summed it up.) Of course, that’s not really the purpose at all. The real objective is to hand over the profit-generating mechanism to the private banks (Fannie and Freddie have been raking in the dough for the last three years) while the red ink is passed on to the public. That’s what’s really going on.

According to the Wall Street Journal,  the bill will

“construct an elaborate new platform by which a number of private-sector entities, together with a privately held but federally regulated utility, would replace key roles long played by Fannie and Freddie….”

“The legislation replaces the mortgage-finance giants with a new system in which the government would continue to play a potentially significant role insuring U.S. home loans.” (“Plan for Mortgage Giants Takes Shape”, Wall Street Journal) 

“Significant role”? What significant role? (Here’s where it gets interesting.)

The WSJ:

“The Senate bill would repurpose the firms’ existing regulator as a new “Federal Mortgage Insurance Corp.” and charge the agency with approving new firms to pool loans into securities. Those firms could then purchase federal insurance to guarantee payments to investors in those bonds. The FMIC would insure mortgage bonds much the way the Federal Deposit Insurance Corp. provides bank-deposit insurance.”

Unbelievable. So they want to turn F and F into an insurance company that backs up the garbage mortgages created by the same banks that just ripped us all off for trillions of dollars on the same freaking swindle?

You can’t be serious?

More from the WSJ:  “Mortgage guarantors would be required to maintain a 10% capital buffer against losses and to have that capital extinguished before the federal insurance would be triggered.”

10 percent? What the hell difference does 10 percent make; that’s a drop in the bucket.  If the banks are going to issue mortgages to people who can’t repay the debt, then they need to cover the damn losses themselves, otherwise they shouldn’t be in the banking biz to begin with, right?

This is such an outrageous, in-your-face ripoff, it shouldn’t even require a response. These jokers should be laughed out of the senate. All the same,  the bill is moving forward, and President Twoface has thrown his weigh behind it. Is there sort of illicit, under-the-table, villainous activity this man won’t support?

Not when it comes to his big bank buddies, there isn’t. Now check out this clip from an article by economist Dean Baker. Baker refers to the Corker-Warner bill, but the Crapo-Johnson fiasco is roughly the same deal. Here’s Baker:

“The Corker-Warner bill does much more than just eliminate Fannie and Freddie. In their place, it would establish a system whereby private financial institutions could issue mortgage-backed securities (MBS) that carry a government guarantee. In the event that a large number of mortgages in the MBS went bad, the investors would be on the hook for losses up to 10 percent of its value, after that point the government gets the tab.

If you think that sounds like a reasonable system, then you must not have been around during the housing crash and ensuing financial crisis. At the peak of the crisis in 2008-2009 the worst subprime MBS were selling at 30-40 cents on the dollar. This means the government would have been picking up a large tab under the Corker-Warner system, even if investors had been forced to eat a loss equal to 10 percent of the MBS price.

The pre-crisis financial structure gave banks an enormous incentive to package low quality and even fraudulent mortgages into MBS. The system laid out in the Corker-Warner bill would make these incentives even larger. The biggest difference is that now the banks can tell investors that their MBS come with a government guarantee, so that they most they stand to lose is 10 percent of the purchase price.” (“The disastrous idea for privatizing Fannie and Freddie”, Dean Baker, Al Jazeera)

Just ponder that last part for a minute: “The bill would make these incentives even larger.”

Do you really think we should create bigger incentives for these dirtbags to rip us off? Does that make sense to you? Here’s more from Baker:

“The changes in financial regulation are also unlikely to provide much protection. In the immediate wake of the crisis there were demands securitizers keep a substantial stake in the mortgages they put into their pools, to ensure that they had an incentive to only securitize good mortgages. Some reformers were demanding as much as a 20 percent stake in every mortgage.

Over the course of the debate on the Dodd-Frank bill and subsequent rules writing this stake got ever smaller. Instead of being 20 percent, it was decided that securitizers only had to keep a 5 percent stake. And for mortgages meeting certain standards they wouldn’t have to keep any stake at all.

Originally only mortgages in which the homeowner had a down payment of 20 percent or more passed this good mortgage standard. That cutoff got lowered to 10 percent and then was lowered further to 5 percent. Even though mortgages with just 5 percent down are four times as likely to default as mortgages with 20 percent or more down, securitizers will not be required to keep any stake in them when they put them into a MBS.”

Hold on there, Dean. You mean Dodd Frank didn’t ”put things right”?  What the heck? I thought that “tough new regulations” assured us that the banks wouldn’t blow up the system again in five years or so. Was that all baloney?

Yep, sure was. 100% baloney. Once the banks unleashed their army of attorneys and lobbyists on Capital Hill,  new regulations didn’t stand a chance. They turned Dodd Frank into mincemeat and now we’re back to square one.

And don’t expect the ratings agencies to help out either because they’re in the same shape they were before the crash. No changes at all.  They still get paid by the guys who issue the mortgage-backed securities (MBS) which is about the same as if you paid the salary of the guy who grades your midterm exam. Do you think that might cloud his judgment a bit? You’re damn right, it would; just like paying the ratings agencies guarantees you’ll get the rating you want. The whole system sucks.

And as far as the new Consumer Financial Protection Bureau, well, you guessed it. The banks played a role in drafting the new “Qualified Mortgage” standard too, which is really no standard at all, since no self-respecting lender would ever use the same criteria for issuing a loan or mortgage. For example, no banker is going to say, “Heck, Josh, we don’t need your credit scores. We don’t need a down-payment. We’re all friends here, right? So, how much do you need for that mortgage old buddy, $300,000, $400,000, $500,000.  You name it. The sky’s the limit.”

No down payment? No credit scores? And they have the audacity to call this a qualified mortgage?

Qualified for what? Qualified for sticking it to the taxpayers?  The real purpose of the qualified mortgage is to protect the banks from their own shifty deals. That’s what it’s all about. It provides them with “safe harbor” in the event that the borrower defaults. What does that mean?

It means that the government can’t get its money back if the loan blows up.   The qualified mortgage actually protects the banks, not the consumer. That’s why it’s such a farce,  just like Dodd Frank is a farce. Nothing has changed. Nothing. In fact, it’s gotten worse. Now we’re on the hook for whatever losses the banks run up peddling mortgage credit to anyone who can fog a mirror.

We’ll leave the last word for Dean Baker, since he seems like the only guy in America who has figured out what the hell is going on:

“In short, the Corker-Warner plan to privatize Fannie and Freddie is essentially a proposal to reinstitute the structure of incentives that gave us the housing bubble and the financial crisis, but this time with the added fuel of an explicit government guarantee on the subprime MBS. If that doesn’t sound like a great idea to you then you haven’t spent enough time around powerful people in Washington.”

The Johnson-Crapo bill doesn’t have anything to do with “winding down” Fannie and Freddie or “overhauling” the mortgage finance industry. It’s a bald-face ripoff engineered by two chiseling senators who are putting the country at risk to beef up Wall Street’s bottom line.

It’s the scam of the century.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Economic Suicide

March 25, 2014 by · Leave a Comment 

Abenomics has been great for stock speculators and corporate bigwigs, but for everyone else, not so much. The fact is–despite all the media hype and monetary fireworks–Prime Minister Shinzo Abe’s three-pronged strategy to end 20 years of deflation has been a total bust. But don’t take my word for it, check out this clip from Reuters and see for yourself:

“In the fourth quarter of last year, Japan’s economy grew at an annual rate of just 0.7 percent, revised figures show, slower than the initial estimate of 1.0 percent on weaker business investment and consumption….” (Japan fourth-quarter growth, external balance suffer blow in test for Abenomics, Reuters)

See? Japan’s economy is dead as a doornail. No sign of life at all. What more proof do you need than that?

And Abenomics won’t end deflation either. That’s another fiction. The weaker yen is just going to force working people and retirees on fixed income to reduce their consumption which will intensify the slump. Heck, even the IMF has figured that one out. Take a look at this clip from one of their recent pieces:

“The average Japanese worker has been dipping into his savings to finance consumption growth. But there’s a limit to how far he can do this. The savings rate as a percent of disposable income has declined from around 5 percent a decade ago to close to zero today, leaving little further room for spending from savings….Looking forward, real wages are set to come under even greater pressure this year and next with higher underlying inflation and successive increases in the consumption-tax rate.” (Abenomics—Time for a Push from Higher Wages, IMF-direct)

It sounds to me like the IMF is telling old Shinzo that his plan sucks, doesn’t it?

Whoever thought that dumping trillions of dollars into the financial system would end deflation had a couple screws loose. That’s not how it works. The Fed loaded up on $4 trillion in financial assets and inflation is still hovering at a measly 1 percent. So if the theory doesn’t work in the US, why would it work in Japan?

It won’t. The way to generate inflation is by circulating money in the economy and increasing the velocity. That means full employment and higher wages. That means fiscal stimulus and redistributive taxation. That means fixing the damn economy. But Abe’s not going to do that because it doesn’t jibe with his class war strategy which is what drives the current policy. Now check this out from Roger Arnold at The Street:

“The essential policy tools of Abenomics are massive monetary and fiscal stimulus aimed at forcing the yen lower, which should cause exports to rise and domestic production to increase, leading to increased domestic job production and consumption: the virtuous cycle. In the process, Japan also increased sovereign debt, which must be serviced by the government. The servicing of that debt is supposed to come from an increase in tax receipts to be made available by the increased domestic production and consumption.

But it isn’t working.

The failure of Abenomics to stimulate economic activity and raise tax receipts enough to pay for the stimulus is now causing the government to double back on these programs with a counter-cyclical consumer tax increase of about 3%, which will be implemented in April. In other words, Abenomics is making the real economic and fiscal situations in Japan worse, not better. They are digging a bigger sovereign debt hole and accelerating the trajectory toward insolvency…Investors would be wise to avoid Japan altogether now, and probably permanently.” (Arnold: Abenomics’ Failure Is the Global Canary, The Street)

That’s probably good advice, although I think Japan’s implosion will take much longer than Arnold seems to believe. But that’s beside the point. What matters is the that policy doesn’t work. The economy isn’t growing, personal consumption is weak, the trade deficit, the current account deficit and the national debt are all ballooning at the same time, and the Japanese people are growing more pessimistic. And on top of it all, a 3 percent sales tax is set to kick in at the beginning of April which is going to send the economy stumbling back into recession. (Abe pushed through the tax hike to placate his right-wing constituents even though the risks to the economy were obvious.)

So, it’s all bad, unless you’re high-flying stock trader or a money-grubbing corporate CEO, that is. Then things have never been better. Get a load of this in the Wall Street Journal:

“While Japan Inc. may be whistling a happy tune on the back of robust profit growth and a weaker yen thanks to the pro-business agenda of Prime Minister Shinzo Abe, a key survey released Wednesday shows that consumers aren’t in a similar Abenomics-induced state of rapture.

The Cabinet Office’s monthly Consumer Confidence Index contracted for the third straight month in February to 38.2. That’s the worst reading since Mr. Abe entered office in January 2013 and the lowest since September 2011. Respondents were even more pessimistic than during Mr. Abe’s year-long term as prime minister between September 2006 and September 2007…

Even though recent data showed the basic earnings of workers in the world’s third-largest economy rose for the first time in almost two years in January, respondents in the February survey were less optimistic about their income growth, the value of their assets, and their overall livelihood than they were a month earlier.

The downbeat reading prompted the government to downgrade its assessment, saying it is “on a weak note.” (Japanese Consumer Pessimism Hits New High Under Abe, WSJ)

To say the Japanese are depressed, would be an understatement. Your average Joe is “even more pessimistic” than he was when Abe stepped down in 2007 and the economy was on the brink of rigor mortis. Does that sound like the “Happy Days are here again” blabber you’ve been reading in the media or hearing from liberal pundits like the madcap Dr. Krugman?

Also, according to a Cabinet Office survey that appeared in the Japan Times on Saturday, only 22 percent of respondents “think the economy is headed in the right direction”, while 76 percent are worried about the impact the consumption tax will have on the economy.

How’s that for a ringing endorsement of Abe’s Kamikazenomics? The only people who still believe in Abe’s song and dance are the ivory tower set at Princeton and Yale. Everyone else has thrown in the towel.

Abenomics is a public relations scam designed to shift more payola to voracious stock speculators and their thieving corporate counterparts. It’s a fraud wrapped in a lie. That’s all there is to it. But there are victims, that’s for dang-sure. Just check out this article in Bloomberg and you’ll see what I mean:

“Japanese Prime Minister Shinzo Abe looks set to drive an indicator of economic hardship to a 33-year high by increasing taxes and prices amid stagnant wages. The misery index, which adds the jobless rate to the level of inflation, will climb to 7 percentage points in the three months starting April 1 when Japan raises its sales levy to 8 percent from 5 percent, based on the median estimates of economists in Bloomberg News surveys of unemployment and consumer prices. That would be the highest level for the measure since June 1981 when Japan was emerging out of depression after the oil shocks in the 1970s.

Bank of Japan monetary stimulus designed to spur economic growth and achieve 2 percent inflation has weakened the yen by 6.8 percent in the past 12 months, eroding the value of wages to a record low. Abe, the son of an ex-foreign minister who grew up in a house with servants, is under fire from the opposition party after the cost of living surged to a five-year high.

“Inflation is really tough,” said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees more than $77 billion. “Those who speak favorably about inflation might have been born in wealthy families and never experienced the hardship that inflation brought.” (Misery Index Rising to 33-Year High on Abenomics: Japan Credit, Bloomberg)

The Misery Index is peaking and all you hear in the US is a bunch of baloney about glorious Abenomics and the miraculous effect of money printing. What a joke. People are hurting big-time in Japan, and shifty Shinzo is only adding to their pain with his monetary Hara-kiri. It’s madness. Wages dropped for 19 months in a row before they got a “one-off” bump-up last month of 0.1 percent, which is a big nothingburger. The overall trend is down, down, down. On top of that, roughly 35 percent of Japan’s workforce is part-time employment; no pension, no bennies, no job security, no nothing. Things slow down, and you get booted down the stairwell with not as much as a “Goodbye, Charlie!” They probably don’t even bother with the perfunctory pink slip. Just grab your lunchbox, and “out you go.”

So how does Abe figure he’s going to generate inflation when workers are flat on their backs and don’t have enough scratch to buy the widgets that Japan Inc produces?

The whole thing is a non starter, which is why I think this “fighting deflation” trope is a big freaking smokescreen to hide what’s really going on, which is a massive transfer of wealth to the investor class via asset inflation. That’s what’s really happening, right? Abenomics is just a way to produce fat returns during extended periods of slow growth and deepening stagnation. The big boys figured out how to overcome the very conditions that they created with their unbounded avarice. I guess they figure that, just because everyone else has to suffer through a goddamn Depression, doesn’t mean they have to too.

You got to hand it to these guys, they think of everything.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

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