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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

War Is A Certainty

March 17, 2014 by · 2 Comments 

Any country that is considering waging war against another country should first consider that the loser is almost always the country that runs out of money first.

Recently, an associate offered the following observation with regard to the likelihood of war in the immediate future:

“The big guys like to play chess with the world. It’s the biggest game. The bankers need ups and downs and wars to make money. The military needs wars to exist. The politicians need both to exist.

Whilst he was reiterating a concept we have discussed on many occasions, it occurred to me that I have never seen the subject defined so succinctly, nor so informatively.

Let’s break it down:

The bankers need ups and downs and wars to make money

Just as bankers increase their profit as a result of upward and downward economic fluctuations, so, too, do they benefit from war. It is not unusual for a given bank to finance those who would create armed conflict, and indeed, they sometimes bankroll both sides. Whilst banks have other means of making money, war is often more profitable than conventional banking.

The military needs war

The military-industrial complex is in the business of selling armaments to governments. Although armament sales may tick over nicely in peace time, they boom in war time. Therefore, any armament supplier will benefit from war. It matters little whether it is an all-out war or a series of smaller ventures. The object is sales.

The politicians need both banks and war

This is true in the sense that politicians need both bankers and an active military to thrive. Political campaigns depend upon funding. Banks and armament suppliers have long been a major source of campaign funds for candidates of the primary political parties. (If each party is well-paid before the election, favourable treatment towards banks and armament suppliers is assured, regardless of which party wins an election.)

But there is further necessity for armed conflict with regard to politicians. First, it is a truism that a country rarely changes leaders during times of war, and nothing is more imperative to the politician than gaining a further term of office.

Second, nothing distracts the voting public like war. If a politician is receiving increased criticism from the voters, a good war can be counted on to get the voters concentrating more on the war than on the politician’s poor stewardship.

Third, governments typically remove the freedoms of a populace over time. Whilst citizens may object to the loss of their freedoms in normal times, they are often more willing to relinquish them “temporarily” in times of war, “for the good of the country.” Not surprisingly, lost freedoms are seldom reinstated after a war.

Consider the words of James Madison, the fourth US President:

“Of all the enemies of public liberty, war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies and debts and taxes are the known instruments for bringing the many under the dominion of the few. In war, too, the discretionary power of the Executive is extended…. No nation could preserve its freedom in the midst of continual warfare.”

Generally speaking, the citizens of most countries would prefer to avoid war. After all, they rarely benefit from it. But then, the impetus for war is almost never generated by the people of a country. Unless a nation is actually attacked, in nearly every case, the people need to be talked into going to war.

Convincing the People

A good example of this is the US, who, since World War I, have needed convincing on almost every occasion when political leaders proposed war. In World War I, the Lusitania incident was created jointly by the UK and the US to motivate them. In World War II, the goading of Japan was needed. In Vietnam, the trumped-up Gulf of Tonkin incident was needed, and so on.

Suffice to say that, when bankers, the military industrial complex, the politicians, or all three decide to instigate war, war will come to pass. Whether it is a conservative government or a liberal government, if a clear threat does not exist, one will be invented.

As Hermann Goering stated in the Nuremburg trials,

“Naturally, the common people don’t want war. But after all, it is the leaders of a country who determine the policy, and it is always a simple matter to drag people along, whether it is a democracy or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. This is easy. All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in every country.”

At the present time in history, the countries of the First World have created the greatest pillaging of the state coffers that has ever occurred. As complacent as the peoples of both the EU and the US have been in recent decades, there does seem to be a growing understanding amongst the peoples that they have been scammed.

Aside from continuing quantitative easing until that scam also fails, the respective governments are running out of rabbits to pull out of the hat to distract the masses. It would therefore seem that there has been no time in history in which war was so neededby national leaders—both as a distraction to the populace and as a last squeeze at the monetary lemon, prior to the inevitable crash.

And so, what does that mean to the reader? Assuming he is not invited to take part, shouldn’t the drums of war be of little interest to him? Well, in terms of his own physical safety, that may well be true, but here is an historical fact to consider:

Any country that is considering waging war against another country should first consider that the loser is almost always the country that runs out of money first.

No venture is more costly than warfare. The EU and the US are bankrupt now. Those presently living in those locales may escape actual duty in the military, but they will unquestionably be expected to pick up the tab through taxation.

Those who presently feel that their obligations to their governments are already barely manageable might wish to consider what they will be, both during and after a major war.

Source:  Jeff Thomas  |  International Man

The State Department’s New World Order Agenda

March 11, 2014 by · Leave a Comment 

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Flag waving Americans want to believe that their government is on the right side of history. Especially in the realm of foreign policy, the myth that the United States saved the world from despotic tyrants, popularly reflected in the victor’s account of post World War II, is the accepted viewpoint. Hidden from public education is that the New World Order was the actual winner. The specific inception of the globalist forces that originated the sub rosa directions behind formable institutions and governments dates well back over centuries. However, the modern technocratic era allows for the dramatic acceleration of a one-world system imposition, which was never possible in previous times.

Loyal citizens of the old republic want to trust that the State Department, commissioned to serve as the guardian and protector of the country, is conducting foreign policy in the best interests of the nation. There is a reason why the Secretary of State is third in line to succeed the President. That purpose, intended to defend diplomatically and promote the public safety and benefit, has served a very different master for a very long time.

Senator Arthur H. Vandenberg’s notorious adage, “politics stops at the water’s edge”, by no means ever really practiced by the political class a true national defense of the country because it was never the primary goal of the establishment.

The international corporate conglomerate of economic dominance sets the agenda for the imperium empire that deploys the worldwide military hegemony, which feeds upon endless manufactured conflicts and false flag operations. The State Department is the keeper of the keys that formulate policies, which serves only the globalist patrons that control the puppets who make up the federal bureaucracies.

The successors of the sinister cabal that planned World War I and II and created Hitler, Stalin and Mao Zedong are the same prodigy that dictates the constant regional conflicts, which engulfs the United States into destructive involvements that bleed unnecessary blood and squander national treasure.

It is this New World Order that is in charge. State Department lackeys; duped into thinking they serve the cause of freedom, implement tactics and objectives that cause profound hatred towards America by much of the world. Those who know the real score and direct the actual formulation of policy, seek to join the ranks of world dominators, who have no allegiance to country, principles or moral values.

Examine the pattern of State Department betrayal. What a great result from the liberation of Iraq to rid all those weapons of mass destruction. Expanding the opium trade in Afghanistan surely deserves praise. Then there is the killing Gaddafi that resulted in that Benghazi success. Next was the Egyptian coup d’état of Mubarak and the subsequent removal of the democratically elected Muslim Brotherhood government. Finally, leading up to the current campaign against Syria, that is proving more difficult than usual, demonstrates that keeping the orthodox mission in the protection of Israel does not always go smoothly.Yes, that New World Order playbook needs to produce a continuous crop of villains. How else can a permanent and undeviating condition of controlled chaos exist? Managing fashioned circumstances for the benefit of the crown elites is the prescribed procedure of the State Department.

Enter the bona fide “Big Dog”, Vladimir Putin Nemesis of the New World Order. Establishment reports by the Zionist owned mass media is a massive cover-up. The State Department conceived operation to expand the NWO and engulfing Ukraine into the European Union sphere of control goes unreported. The enforcement military machine of the New World Order is NATO. This pathetic attempt to reconstitute the cold war to save a dying economic banksters system is just the latest political propaganda to deceive the public.

The “so called” liberation thugs that engaged in street warfare are part of a western inspired scheme that used George Soros operative fronts as cover. When the US spent $5 billion to destabilize Ukraine, such illegal intervention undermines self-determination at its core. The correct conclusion to draw from such efforts follows:

“The protests in the western Ukraine are organized by the CIA, the US State Department, and by Washington-and EU-financed Non-Governmental Organizations (NGOs) that work in conjunction with the CIA and State Department. The purpose of the protests is to overturn the decision by the independent government of Ukraine not to join the EU.”

“Nuland “was expressing in shortened form the frustration with the inability of the EU to come up with any kind of sugar to make the medicine go down,” said Gati. “What she is saying is we’ve got a crisis here, we’ve got to move, we can’t go by EU business as usual.”

The New World Order is build upon factions of elites that pivot around crux interests, while guiding their own governments into accepting the long-term outlook. One such foundational precept requires that the central banksters manage countries that are already in arrears in their debt payments. With the selection of Arseniy Yatseniuk, the central banker politico as PM for the post-coup Ukraine, the real purpose behind the upheaval becomes clear.

“Yats is also ready to impose IMF austerity on Ukraine, already one of the poorest nations in Europe. “Yatsenyuk is the kind of technocrat you want if you want austerity, with the veneer of professionalism,” Vladimir Signorelli, president of boutique investment research firm Bretton Woods Research LLC in New Jersey, told Forbes last month.

“He’s the type of guy who can hobnob with the European elite. A Mario Monti type: unelected and willing to do the IMFs bidding.”

The announced EU $15B aid package to provide much needed cash to Ukraine accelerates the intrusion of NWO dominance into the heartland of the former Soviet empire. As the State Department Is Preparing Sanctions Against Russia, the NeoCons and International Libs in Congress eagerly want to ratchet up the appearance of a new cold war to divert away from domestic woes and a collapsing war on the terror hoax.Yet the internal motivations out of the United States government carry little weight, when viewed within the context of the long-term master plans, for extending the current New World Order into a non-compete global dominion. Pushing Russia into the arms of an already hostile China certainly does not serve the security of America. However, that is exactly the probable outcome from getting involved, (like this designed covert regime change) in the internal affairs of Eastern Europe.

Lest one forgets, that Communism was the invention of the international banksters, recognize that authoritarianism is the normal condition of human governments. The totalitarian collectivism that the phony western democracies practice produces corporate fascism. This is the preferred version of global rule that the New World Order seeks.

Therefore, when the non-elected pawns of the transitional Ukrainian NWO protectorate states, Crimea ‘was, is and will be an integral part of Ukraine’, you get the Yats effect of a CNN reported illusion. For the reality, the RT coverage that Sevastopol and Crimean parliament vote to join Russia, referendum to be held, describes the actual circumstances.

The pathetic hypocrisy when Obama says Crimea referendum would ‘violate international law’, fails to account for the capricious attitude and deadly methods employed to oust the Viktor Yanukovych government. What legitimate international law standard did the snipers use to kill both police and protestors in Kiev?Playing king maker is a very dangerous game that the State Department undertakes at its own risk. Applying these same tactics, what will be the response when the liberation dissenters surround the capital and start a national demonstration to oust the DC criminal class from power? Surely, calling out the tanks to restore the homeland order will be the official response.

With every assault orchestrated to establish a government regime change favorable to the New World Order, the prospects of meaningful resistance diminishes. When the State Department leads the parade to dump defiant state leaders, the actual legitimacy of our own government’s authority evaporates.

Calling on the world community for moral permission to eliminate opposition states is like applying for a loan from the World Bank. Strings are attached that only benefit the shylock.

One needs to distinguish the genuineness of Western Civilization from the immorality of US/EU/NATO interventionism. Permanent war is the lifeblood of the New World Order. The last thing this planet needs is a global empire, which removes any country that rejects and resists the NWO feudalist model. The essence of true liberty demands that ethnic populations organize around and among their own kind.


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

The Ukrainian Pendulum

March 9, 2014 by · Leave a Comment 

The stakes are high in the Ukraine: after the coup, as Crimea and Donbas asserted their right to self determination, American and Russian troops entered Ukrainian territory, both under cover.

The American soldiers are “military advisors”, ostensibly members of Blackwater private army (renamed Academi); a few hundred of them patrol Kiev while others try to suppress the revolt in Donetsk. Officially, they were invited by the new West-installed regime. They are the spearhead of the US invasion attempting to prop up the regime and break down all resistance. They have already bloodied their hands in Donetsk.

Besides, the Pentagon has doubled the number of US fighter jets on a NATO air patrol mission in the Baltics; the US air carrier entered the Black Sea, some US Marines reportedly landed in Lvov “as a part of pre-planned manoeuvres”.

The Russian soldiers ostensibly belong to the Russian Fleet, legally stationed in Crimea. They were in Crimea before the coup, in accordance with the Russian-Ukrainian treaty (like the US 5th fleet in Kuwait), but their presence was probably beefed up. Additional Russian troops were invited in by deposed but legitimately elected President Yanukovych (compare this with the US landing on Haiti in support of the deposed President Aristide ). They help the local pro-Russian militia maintain order, and no one gets killed in the process. In addition, Russia brought its troops on alert and returned a few warships to the Black Sea.

It is only the Russian presence which is described as an “invasion” by the Western media, while the American one is hardly mentioned. ”We have a moral duty to stick our nose in your business in your backyard a world away from our homeland. It’s for your own good”, wrote an ironic American blogger.

Moscow woke up to trouble in Ukraine after its preoccupation, nay obsession, with the Winter Olympic games had somewhat abated, — when people began to say that “Putin won the games and lost the Ukraine”. Indeed, while Putin watched sports in Sochi, the Brown Revolution succeeded in Ukraine. A great European country the size of France, the biggest republic of the former USSR (save Russia), was taken over by a coalition of Ukrainian ultra-nationalists and (mainly Jewish) oligarchs. The legitimate president was forced to flee for his very life. Members of Parliament were manhandled, and in some cases their children were taken hostage to ensure their vote, as their houses were visited by gunmen. The putsch was completed. The West recognised the new government; Russia refused to recognise it, but continued to deal with it on a day -to-day basis. However the real story is now developing in Crimea and Eastern Ukraine, a story of resistance to the pro-Western takeover.

The Putsch

The economic situation of Ukraine is dreadful. They are where Russia was in the 1990s, before Putin – in Ukraine the Nineties never ended. For years the country was ripped off by the oligarchs who siphoned off profits to Western banks, bringing it to the very edge of the abyss. To avoid default and collapse, the Ukraine was to receive a Russian loan of 15 billion euros without preconditions, but then came the coup. Now the junta’s prime minister will be happy to receive a mere one billion dollars from the US via IMF. (Europeans have promised more, but in a few years’ time…) He already accepted the conditions of the IMF, which will mean austerity, unemployment and debt bondage. Probably this was the raison d’être for the coup. IMF and US loans are a major source of profit for the financial community, and they are used to enslave debtor countries, asPerkins explained at length.

The oligarchs who financed the Maidan operation divided the spoils: the most generous supporter, multi-billionaire Igor “Benya” Kolomoysky, received the great Russian-speaking city of Dnepropetrovsk in fief. He was not required to give up his Israeli passport. His brethren oligarchs took other Russian-speaking industrial cities, including Kharkov and Donetsk, the Ukrainian Chicago or Liverpool. Kolomoysky is not just an ‘oligarch of Jewish origin’: he is an active member of the Jewish community, a supporter of Israel and a donor of many synagogues, one of them the biggest in Europe. He had no problem supporting the neo-Nazis, even those whose entry to the US had been banned because of their declared antisemitism. That is why the appeals to Jewish consciousness against the Brown putsch demonstrably failed.

Now came the nationalists’ crusade against Russian-speakers (ethnic Russians and Russian-speaking Ukrainians – the distinction is moot), chiefly industrial workers of East and South of the country. The Kiev regime banned the Communist Party and the Regions’ Party (the biggest party of the country, mainly supported by the Russian-speaking workers). The regime’s first decree banned the Russian language from schools, radio and TV, and forbade all official use of Russian. The Minister of Culture called Russian-speakers “imbeciles” and proposed to jail them for using the banned tongue in public places. Another decree threatened every holder of dual Russian/Ukrainian nationality with a ten-years jail sentence, unless he gives up the Russian one right away.

Not empty words, these threats: The storm-troopers of the Right Sector, the leading fighting force of the New Order, went around the country terrorising officials, taking over government buildings, beating up citizens, destroying Lenin’s statues, smashing memorials of the Second World War and otherwise enforcing their rule A video showed a Right Sector fighter mistreating the city attorney while police looked other way. They began to hunt down riot policemen who supported the ex-president, and they burned down a synagogue or two. They tortured a governor, and lynched some technicians they found in the former ruling party’s headquarters. They started to take over the Orthodox churches of the Russian rite, intending to transfer them to their own Greek-Catholic Church.

The instructions of US State Dept.’s Victoria Nuland were followed through: the Ukraine had had the government she prescribed in the famous telephone conversation with the US Ambassador. Amazingly, while she notoriously gave “fuck” to the EU, she did not give a fuck about the Russian view of Ukraine’s immediate future.

Russia was not involved in Ukrainian developments: Putin did not want to be accused of meddling in Ukrainian internal affairs, even when the US and EU envoys assisted and directed the rebels. The people of Russia would applaud him if he were to send his tanks to Kiev to regain the whole of Ukraine, as they consider it an integral part of Russia. But Putin is not a Russian nationalist, not a man of Imperial designs. Though he would like the Ukraine to be friendly to Russia, annexing it, in whole or in part, has never been his ambition. It would be too expensive even for wealthy Russia: the average income in the Ukraine is just half of the Russian one, and tits infrastructure is in a shambles. (Compare to the very costly West German takeover of the GDR.) It would not be easy, either, for every Ukrainian government in the past twenty years has drenched the people with anti-Russian sentiment. But involvement was forced upon Putin:

Hundreds of thousands of Ukrainians voted with their feet and fled to Russia, asking for asylum. Two hundred thousand refugees checked in during the weekend. The only free piece of land in the whole republic was the city of Sevastopol, the object of a French and British siege in 1852 and of a German siege in 1941, and the home base of the Russian Black Sea fleet. This heroic city did not surrender to the Kiev emissaries, though even here some local deputies were ready to submit. And at that last moment, the people began their resistance. The awful success of the putsch was the beginning of its undoing. The pendulum of Ukraine, forever swinging between East and West, began its return movement.

The Rising

The people of Crimea rose, dismissed their compromise-seeking officials and elected a new leader, Mr Sergey Aksyonov. The new leadership assumed power, took over Crimea and asked for Russian troops to save them from the impending attack by the Kiev storm troopers. It does not seem to have been necessary at this stage: there were plenty of Crimeans ready to defend their land from the Brown invaders, there were Cossack volunteers and there is the Russian Navy stationed in Crimea by treaty. Its Marines would probably be able to help the Crimeans in case of trouble. The Crimeans, with some Russian help, manned the road blocks on the narrow isthmus that connects Crimea to the mainland.

The parliament of Crimea voted to join Russia, but this vote should be confirmed by a poll on March 16 to determine Crimea’s future — whether it will revert to Russia or remain an autonomous republic within the Ukraine. From my conversation with locals, it seems that they would prefer to join the Russian Federation they left on Khrushchev’s orders only a half century ago. Given the Russian-language issue and the consanguinity, this makes sense: Ukraine is broke, Russia is solvent and ready to assume its protection. Ukraine can’t pay salaries and pensions, Russia had promised to do so. Kiev was taking away the lion’s share of income generated in Crimea by Russian tourists; now the profits will remain in the peninsula and presumably help repair the rundown infrastructure. Real estate would likely rise drastically in price, optimistic natives surmise, and this view is shared by Russian businessmen. They already say that Crimea will beat out Sochi in a few years’ time, as drab old stuff will be replaced by Russian Imperial chic.

Perhaps Putin would prefer the Crimea gain independence, like Kosovo, or even remain under a token Ukrainian sovereignty, as Taiwan is still nominally part of China. It could become a showcase pro-Russian Ukraine to allow other Ukrainians to see what they’re missing, as West Berlin was for the East Germans during the Cold War. Regaining Crimea would be nice, but not at the price of having a consolidated and hostile Ukraine for a neighbour. Still Putin will probably have no choice but to accept the people’s decision.

There was an attempt to play the Crimean Tatars against the Russians; apparently it failed. Though the majlis, their self-appointed organisation, supports Kiev, the elders spoke up for neutrality. There are persistent rumours that the colourful Chechen leader Mr Kadyrov, a staunch supporter of Mr Putin, had sent his squads to the Tatars to strong-arm them into dropping their objections to Crimea’s switch to Russia. At the beginning, the Tatars supported Kiev, and even tried to prevent the pro-Russian takeover. But these wise people are born survivors, they know when to adjust their attitudes, and there is no doubt they will manage just fine.

Russian Nazis, as anti-Putin as Ukrainian Nazis, are divided: some support a “Russian Crimea” whilst others prefer pro-European Kiev. They are bad as enemies, but even worse as friends: the supportive Nazis try to wedge between Russians and Ukrainians and Tatars, and they hate to see that Kadyrov’s Chechnya actually helps Russian plans, for they are anti-Chechen and try to convince people that Russia is better off without Chechens, a warlike Muslim tribe.

As Crimea defied orders from Kiev, it became a beacon for other regions of the Ukraine. Donbas, the coal and steel region, raised Russian banners and declared its desire for self-determination, “like Crimea”. They do want to join a Russian-led Customs Union; it is not clear whether they would prefer independence, autonomy or something else, but they, too, scheduled a poll – for March 30. There were big demonstrations against the Kiev regime in Odessa, Dnepropetrovsk, Kharkov and other Russian-speaking cities. Practically everywhere, the deputies seek accommodation with Kiev and look for a way to make some profit, but the people do not agree. They are furious and do not accept the junta.

The Kiev regime does not accept their quest for freedom. A popularly-elected Mayor of Donetsk was kidnapped by the Ukrainian security forces and taken to Kiev. There are now violent demonstrations in the city.

The Ukrainian navy in the Black Sea switched its allegiance from Kiev to Crimea, and they were followed by some units of the air force with dozens of fighter jets and ground troops. Troops loyal to Kiev were blocked off by the Crimeans, but there was no violence in this peaceful transfer of power.

The junta appointed an oligarch to rule Donbas, Mr Sergey Taruta, but he had difficulty assuming power as the local people did not want him, and with good reason: Taruta had bought the major Polish port of Gdansk and brought it to bankruptcy. It seems he is better at siphoning capital away than in running serious business. Ominously, Mr Taruta brought with him some unidentified, heavily armed security personnel, reportedly guns-for-hire from Blackwater (a.k.a. Academi) fresh from Iraq and Afghanistan. He will need a lot more of them if he wants to take Donbas by force.

In Kharkov, the biggest Eastern city, erstwhile capital of Soviet Ukraine, local people ejected the raiding force of the Right Sector from government offices, but police joined with the oligarchs. While the fake revolution took place in Kiev under the tutelage of US and EC envoys, the real revolution is taking place now, and its future is far from certain.

The Ukraine hasn’t got much of an army, as the oligarchs stole everything ever assigned to the military. The Kiev regime does not rely on its army anyway. Their attempt to draft able-bodied men failed immediately as hardly anybody answered the call. They still intend to squash the revolution. Another three hundred Blackwater mercenaries landed Wednesday in Kiev airport. The Kiev regime applied for NATO help and expressed its readiness to allow US missiles to be stationed in the Ukraine. Missiles in the Ukraine (as now stationed in Poland, also too close for Russian comfort) would probably cross Russia’s red line, just as Russian missiles in Cuba crossed America’s red line in 1962. Retired Israeli intelligence chief Yaakov Kedmi, an expert on Russia, said that in his view the Russians just can’t allow that, at any price, even if this means all-out war.

Putin asked the upper house of the Russian parliament for permission to deploy Russian troops if needed, and the parliament unanimously approved his request. They will probably be deployed in order to defend the workers in case of attack by a Right Sector beefed up by Blackwater mercenaries. Humanitarian catastrophe, large-scale disturbances, the flow of refugees or the arrival of NATO troops could also force Putin’s hand, even against his will.

The President in exile

President Yanukovych will be historically viewed as a weak, tragic figure, and he deserves a better pen with a more leisured pace than mine. He tried his best to avoid casualties, though he faced a full-scale revolt led by very violent Brown storm-troopers. And still he was blamed for killing some eighty people, protesters and policemen.

Some of the victims were killed by the Right Sector as they stormed the ruling party offices. The politicians left the building well in advance, but the secretarial staff remained behind — many women, janitors and suchlike. An engineer named Vladimir Zakharov went to the besieging rebels and asked them to let the women out. They killed him on the spot with their bats. Another man was burned alive.

But the majority of casualties were victims of sniper fire, also blamed on Yanukovych. The Kiev regime even asked the Hague tribunal to indict the President as they had President Milosevic. But now, a telephone conversation between EC representative Catherine Ashton and Estonian Foreign Minister Urmas Paet reveals that the EC emissaries were aware that dozens of victims of sniper fire at the Maidan were killed by Maidan rebel supporters, and not by police or by President Yanukovych, as they claimed. Urmas Paet acknowledged the veracity of this conversation at a press conference, and called for an independent enquiry. It turned out that the rebel snipers shot and killed policemen and Maidan protesters alike, in order to shed blood and blame it on the President.

This appears to be a staple feature of the US-arranged revolutions. Snipers killing both protesters and police were reported in Moscow’s 1991 and 1993 revolutions, as well as in many other cases. Some sources claim that famed Israeli snipers were employed on such occasions, which is plausible in view of Mr Kolomoysky’s Israeli connection. A personal friend of Mr Kolomoysky, prominent member of the then-opposition, Parliamentarian and present head of administration Sergey Pashinsky was stopped by police as he removed a sniper’s rifle with a silencer from the scene of murder. This discovery was briefly reported in the New York Times, but later removed. This revelation eliminates (or at least seriously undermines) the case against the President. Probably it will be disappear down the memory hole and be totally forgotten, as were the Seymour Hersh revelations about Syria’s sarin attack.

Another revelation was made by President Putin at his press-conference of March 4, 2014. He said that he convinced (read: forced) President Yanukovych to sign his agreement of February 21, 2014 with the opposition, as Western ministers had demanded. By this agreement, or actually capitulation act, the Ukrainian President agreed to all the demands of the Brown rebels, including speedy elections for the Parliament and President. However, the agreement did not help: the rebels tried to kill Yanukovych that same night as he travelled to Kharkov.

Putin expressed amazement that they were not satisfied with the agreement and proceeded with the coup anyway. The reason was provided by Right Sector goons: they said that their gunmen will be stationed by every election booth and that they would count the vote. Naturally, the agreement did not allow for that, and the junta had every reason to doubt their ability to win honest elections.

It appears Yanukovych hoped to establish a new power base in Kharkov, where a large assembly of deputies from East and South of Ukraine was called in advance. The assembly, says Mr Kolomoysky, was asked to assume powers and support the President, but the deputies refused. That is why President Yanukovych, with great difficulty, escaped to Russia. His landing in Rostov made quite an impression on people as his plane was accompanied by fighter jets.

Yanukovych tried to contact President Putin, but the Russian president did not want to leave the impression that he wants to force Yanukovych on the people of Ukraine, and refused to meet or to speak with him directly. Perhaps Putin had no time to waste on such a weak figure, but he publicly recognised him anyway as the legitimate President of the Ukraine. This made sense, as President Yanukovych requested Russian troops to bring peace to his country. He still may make a comeback – as the president of a Free Ukraine, if such should ever be formed in some part of the country, – or as the protagonist of an opera.

English language editing by Ken Freeland.


A native of Novosibirsk, Siberia, a grandson of a professor of mathematics and a descendant of a Rabbi from Tiberias, Palestine, he studied at the prestigious School of the Academy of Sciences, and read Math and Law at Novosibirsk University. In 1969, he moved to Israel, served as paratrooper in the army and fought in the 1973 war.

After his military service he resumed his study of Law at the Hebrew University of Jerusalem, but abandoned the legal profession in pursuit of a career as a journalist and writer. He got his first taste of journalism with Israel Radio, and later went freelance. His varied assignments included covering Vietnam, Laos and Cambodia in the last stages of the war in South East Asia.

In 1975, Shamir joined the BBC and moved to London. In 1977-79 he wrote for the Israeli daily Maariv and other papers from Japan. While in Tokyo, he wrote Travels with My Son, his first book, and translated a number of Japanese classics.

Email at: info@israelshamir.net

Israel Shamir is a regular columnist for Veracity Voice

Ukraine As The US Dollar Waterloo

March 7, 2014 by · Leave a Comment 

The desperation of the Anglo-American leadership, guided by the steady corrupt banker hands, has never been more acutely high, nor obvious in full view. The entire Ukraine situation is a travesty. It includes Langley agents killing police and street demonstrators from rooftops, the confirmation coming from the Estonian Embassy (translation of scripts). It includes thefts of official Ukrainian Govt funds, again sent to the Swiss hill sanctuary. It includes sanctions delivered by a US Paper Tiger, sure to cause horrific backlash. It involves the last gasp attempt to obstruct the Gazprom energy pipelines, which will inevitably corner the European market in monopoly. It involves subterfuge with the NATO card (aka Narcotics And Treachery Outlaws) with missiles placed on the Russian borders. Look for NATO members to find a back door to exit the spurious treaty. It involves playing with nitro-glycerine in the Petro-Dollar room. It involves putting tremendous risk for much more clear isolation of the United States. The more the USGovt pushes, the more the US will be isolated. Remember that Nazis steal from their enemy states, de-fraud from their allied states, and force themselves into an isolated state. In Ukraine, the United States has over-played its weak hand. Already, a secret document was leaked in London that the UKGovt would not support the US-led sanctions against Russia.

History repeats itself from the Kremlin phone calls made during the Syrian conflict just a few months ago, when the UKGovt withdrew its support and left the US isolated, looking very weak. Already, Putin has threatened to dump USTreasury Bonds. Putin aptly calls the Anglo-Americans as Mutants. Imagine the lunacy of trying to cut off the only Russian warm water military naval port in the Crimea. Just as stupid as the Trans Pacific Partnership faux pas, trying to cut off China from its Asian neighbors and partners in trade. The intelligence level of the USGovt has never been more stupid, destructive, and in full view. The lost ground for the United States is obvious and glaring in the Persian Gulf, the Mediterranean Sea, and the Caucasus region.

IMMEDIATE PETRO-DOLLAR RISK

If the Kremlin demands Gold bullion (or even Russian Rubles) for oil payments, then the interventions to subvert the Ruble currency by the London and Wall Street houses will backfire and blow up in the bankster faces. Expect any surplus Rubles would be converted quickly to Gold bullion. If the Chinese demand that they are permitted to pay for oil shipments in Yuan currency, then the entire Petro-Dollar platform will be subjected to sledge hammers and wrecking balls. The new Petro-Yuan defacto standard will have been launched from the Shanghai outpost. If the Saudis curry favor to the Russians and Chinese by accepting non-USDollar payments for oil shipments, then the Petro-Dollar is dead and buried. The rise of the Nat Gas Coop run by Gazprom is in progress, its gas pipelines to strangle the OPEC and its bastard Petro-Dollar child. The entire USDollar foundation with the USTreasury Bond bank reserve structure is at risk is collapsing, as consequence to the desperate adventure and criminal activity conducted in Ukraine.Just like with Syria, a hidden giant energy deposit is concealed under the table. Off the Lebanese and Syrian coast, a massive off-shore energy deposit was recently discovered. The US & UK & Israeli oligarchs wish to take it all. Confusion is their game. In the western plains of Ukraine, a massive gas deposit was recently discovered. The US & European oligarchs wish to take it all. Confusion is their game.

The danger level has never been higher. No resolution to the Global Monetary War can come, which we have been seeking, without a climax. It is hardly just a financial crisis amidst a stubborn economic recovery. The nature of the currencies and their underlying sovereign bond foundation is highly toxic, which requires a strong replacement as solution, using an alternative to the USDollar alongside its reserve ledger item the USTreasury Bond. A return to the Gold Standard is coming, but the birth will have loud pangs and possibly broad damage suffered. The Global Currency Reset is better named the Return to the Gold Standard. The United States and London will not give up their control of the Weimar Printing Press easily, used for elite self-dole of extreme wealth. It has served well as the Elite credit card. They will not go quietly, and assume their place in the backwater without taking the world to the brink. No climax can occur without enormous risk and loss. The Global Paradigm Shift is in full gear, with attendant risk huge here and now. My Jackass firm belief is that the US/UK fascist team face a Waterloo event in Ukraine, the victim to be the Imperial Dollar. This bulletin will not be a comprehensive note, as the situation is too vast. The information in the Hat Trick Letter is used to interweave a story of the impending removal of the USDollar from its corrupt throne.

UNITED STATES TRAPPED AND CORNERED

The Anglo Americans have fallen into a carefully designed trap by the Russians and Chinese in a clever designed sequence. More Sun Tzu tactics have been put into practice, which utilize the momentum from the enemy to be thrust back on them. Planning for final steps must have taken place during high level Putin meetings with Xi from the elite Sochi viewing box. The unfolding of events has been more carefully engineered and orchestrated than what appears. The US/UK team has been caught in a vise for months, as the rejection of the USDollar as global reserve currency is in high gear, the refusal of the USTBond a recognized trend in diversifications. The death process is slow and grueling. Much of the American Hemisphere is surrounded and controlled by Russia & China, whether the canal, the port facilities, the oil supply, the mineral deposits, even Yuan Swap facilities. Africa has largely gone under Chinese control, with Russia playing a hidden role as well.

The Persian Gulf is in transition, with the critical protectorate role shifting to China. The Qatar royals have just ordered a dismissal of USGovt ambassadors from their nation. Note that Qatar is the site of a giant USNaval base. To be sure, the Sochi Olympic Games are over, a successful event. The gloves have thus come off. The risks have reached acute levels. The US leadership seems cavalier to the risks that over half the USGovt debt is in foreign hands, over 30% of it in Russian & Chinese hands. A severe backlash cometh. The most vulnerable player in the room is the most aggressive, arrogant, vile, and obnoxious. The instability of the situation is far beyond acute. The victim will be the USDollar and its sidekick the USTreasury Bond. The USTBonds will be kicked out of the global banking system. The Third World awaits the United States, for its domestic betrayals, its financial failures, its criminal deeds, and its war aggression.

THE RUSSIAN BACKLASH TO BE SUDDEN

Russian President Vladimir Putin will slam the West, and very soon. The initial salvo might be a natural gas cutoff by Gazprom, the Russian giant which has fast moved into the global monopoly position. Eventually, Putin might demand gold payment for the natgas in the captured pipelines, that being the plan according to The Voice. Russia supplies one quarter of Western European gas needs. It will be the opening salvo for Gold Trade Settlement, for which the Iran workarounds to the sanctions provided the critical prototype. Combined with a formal announcement of USTreasury Bond sales in volume by Russia & China, the impact would be tremendous, even devastating. The reverberation will be soon seen as the pending demise of the defacto Petro-Dollar Standard, dictated by crude oil sales in USD terms. It will also be soon seen as the end of the USTBond as the global reserve standard in banking systems. Notice for over two years, the primary buyer of USGovt debt (and its refunded rollover) has been the US Federal Reserve via bond monetization, an absolute heresy to central banking. Hyper monetary inflation cannot stand as fixed policy. The world has responded by constructing an alternative to trade settlement. The forum has been the BRICS conferences and the G-20 Meetings of finance ministers. The US & UK will gradually be excluded from both forums, a process well along. Even traditional allies like Japan are buying gold in high volume, with suppressed lowball data so far. This is game over for the USDollar, the direct victim of Ukraine backlash. The war against Russia has been veiled, but the Jackass has exposed it.

VEILED ATTACKS AGAINST RUSSIAN GAZPROM

First was the attack against Russian Gazprom in Cyprus. It was a hidden attack made to look like a bank confiscation event. Notice no bank account confiscations outside the small but important island nation. The entire Russian banking clearance system had been done through Cyprus. Also, Russia was making significant transactions to purchase Gold bullion using Cyprus as clearing house for the purchases. Second was the attack against Russian Gazprom in Syria, another complicated event. The US had used the Libyan Embassy as a weapons running facility (major diplomatic violation), after which the US lost Egypt as a transfer station on the weapons running. The false flag attack in Syria was made to look like a chemical weapons event. However, the Saudis were the guilty party. The motive by the US was to block the advance of Russian Gazprom pipelines, which are to connect to the vast Iran supply centers. Iran has far more oil & gas than Iraq. In fact, Iran is the linchpin nation, which will throw its support toward Russia. Iran will push the Nat Gas Coop certain to eclipse Saudi Arabia and the loud gaggle of OPEC members. With the Russian Gazprom, together Iran and the Nat Gas Coop will usher in the Petro-Yuan Standard and bury the Petro-Dollar, the price set by Russia, the contracts set in Shanghai. Thus the Saudis will be expendable, and their Gold in London to be totally stolen.

Move to the present. Third was the attack against Russia Gazprom in Ukraine, done by the CIA and its partner security agents from the small ally nation on the SouthEast Med corner. The old game of destabilization, popular uprising, bank thefts, and now data files stolen has been put into action. The theft of significant funds in Ukraine has only started, funds gone to Swiss banks. The full betrayal will be seen soon. The US & UK have a lunatic plan to corral the Ukraine pipelines and possibly the vast farmlands of Ukraine. The wrong-footed plan will backfire, when Putin cuts off the natgas supply to Europe, when Putin demands a new type of energy supply payment structure, and when Putin engineers certain other steps. They might execute a Nat Gas Coop double in price, much like the OPEC event in 1973. Witness the upcoming Birth of the Eurasian Trade Zone, the birth pangs heard in Ukraine. The United States and Great Britain will not be included. The Eurasian Trade Zone will span 14 time zones and will settle in gold.

IRAN WORKAROUND AS KEY PROTOTYPE SOLUTION

The Anglo Americans have disrupted a key nation with longstanding historical and religious ties to Russia. The land of Ukraine also contains Russia’s only warm water naval port in the Crimea, the site of a recent suspicious earthquake. The response will be swift and firm. The Eastern nations (led by China & Russia) have been making detailed preparations in the last couple years to launch the alternative trade system founded in Gold Settlement. Its launch lacks a potential open door trigger, possibly offered by the Ukraine situation. The Gold Standard could return in a baptism by fire. The open door trigger appears to be the Western interventions into Ukraine, since the Western banking structures will not be permitted to collapse, the ugly reality. The abuse of the central bank monetary expansion and fraudulent bond redemption has gone totally out of control, forcing an endless cycle of alternative preparations and motivated reactions, including the Iran workaround with Turkey as intermediary in gold provision. Other attacks have taken place in the last few months against the Russian Ruble by Wall Street firms. The reaction will possibly be the launch of what could eventually be understood to be a gold-backed Ruble currency, combined with natgas cutoffs to Europe and USTBond dumps. At first it could be perceived as the oil-backed Ruble, but its quick hidden conversion to Gold bullion could be revealed later on. The USDollar will be discarded as obsolete, even toxic. The USDollar debt basis might be widely accepted to be the cause of the global financial crisis, and the USFed Quantitative Easing be widely understood to be the cause of the global financial collapse.

EUROPE AS KEY REGION TO TIP EASTWARD

Events inside Western Europe could unfold rapidly. Behind the scenes, much is happening. The important German-French Axis is breaking down, weakened by each passing month and bailout exercise. The motive for much of the German support of bailouts and rescue plans, as faulty as they have been, is the oversized German ownership of both French Govt debt and big French banks. They will fail, both the French sovereign debt and the big French banks. Germany must undergo a split, with a restructure from the devastating damage due to Southern European sovereign debt and related big bank losses. At the same time, Germany is on the verge of turning East to Russia. Already Russia is a large energy and mineral supplier to Germany, the heavy railway facilities in place. The core of Nordic Europe is firm. Austria and Finland are aligned with the pragmatic forces in Germany and the Netherlands. Italy is being transformed, but Spain might be lost to chaos. Turkey is also undergoing change during chaotic reform. The entire NATO Alliance has never been weaker. The military action in Ukraine is framed as a supposed NATO exercise to honor a treaty. Watch the loose end like Turkey fall off the NATO wagon, while Finland falls off the Euro currency wagon. The Jackass is eager to see the Snowden NSA files reveal key data on the illicit usage of NATO bases for narcotics distribution, the origin being Afghanistan. What a bombshell it would be if Turkey announced that their government would no longer permit heroin shipments from USMilitary aircraft on their Incirlik Airbase.

A key player in the mix is Israel. They have a Tamar floating platform, whose natgas has been pledged under contract to Russian Gazprom. The tiny nation is possibly changing its alliances out of pragmatism, seeing its drained weakened host that has duly served its purpose. The next big step is for Western Ukraine to suffer the drain of remaining resources (financial and agricultural) to the West, using all the diplomatic tools the Euro Elite can muster. The people in the East will realize that they have been betrayed once more by the Western powers. This is the critical final step. Several swing nations will consequently align with Germany, if only to make being integrated by Russia less painful. During all the transitions, China will take care of Asia in this game. The remaining overriding question is whether the US & Britain will go quietly in the night of faded empires, or else to wreck the world with nukes and viruses. The main exports out of the United States and its royal handlers have been fraudulent bonds, military hardware, genetically modified food, fast food with diabetes, pharmaceuticals, surveillance software, computer viruses, and jamming software technology. Such is the nature of the fascist transformation.

RUSSIA CANNOT BE ISOLATED

The West is in for a gigantic surprise in the sequence of events to unfold. They have placed criminal oligarchs into top government positions in Ukraine. Doing so might suit the West but not the Ukrainian people. The political brain trust in Berlin shows extremely errant strategy, still kowtowing to the USGovt and London Elite in an incomprehensible manner. The West cannot isolate Russia, which is the latest absurd bone-headed strategy. They need Russia in vital ways that will become apparent when the West faces energy supply cutoff or forced Gold payments during an open global USDollar rejection. The US will quickly feel the lost Petro-Dollar gear mechanisms. China has already aligned itself beside Russia, which makes isolation impossible. Consider the Russian commodity supply and Chinese industrial power, the new axis to the Eurasian Trade Zone.

The West cannot continue to bully Russia & China. Poking a stick in the bear’s face will not work for long. Disrespecting the Chinese creditor is deep folly. The risk that coincides is for the two Asian superpowers to threaten or actually execute a dumping initiative of USTreasury Bonds, and force the United States to use its last card in a grotesque display of hugely amplified monetary expansion. The US would collapse by falling on its own sword, the event occurring in the Weimar chamber. A super high volume bond monetization machine to cover globally dumped USTBonds is a strong likelihood as climax event, with a broken derivative mechanism that is revealed during its fracture. The London banker murders (another Jackass correct forecast, made in mid-2011) indicate a motive to keep covered up the extreme $100 billion JPMorgan derivative losses at the hands of the London Whale Bruno Iksil, first sighted in May 2012. The accelerated hyper monetary inflation in response to Russian & Chinese joint retaliation would finally kill the USDollar. The echo event, born from failure, would be for the USGovt to launch the new split Scheiss Dollar. Then the USGovt could have its domestic currency finally, and then wreck it with an assured painful sequence of devaluations. The fundamentals for the US domestic only currency are truly horrible, typical of a Third World nation. Ukraine is about the last gasp of the USDollar. It has no viable defense.

UKRAINE AS WATERLOO FOR THE US DOLLAR

Ukraine is the Waterloo event for Team Obama and the Wall Street handlers, the true controllers of the White House puppet. Ukraine will lead to wreckage to the USDollar and its USTBond partner in crime. Witness the death of the USDollar and the Birth of both the Gold Trade Standard, on the new Eurasian Trade Zone landscape. Neither Russia nor China will cooperate on the IMF super sovereign reformed currency basket at this point, not during extreme hostility and conflict. Hope and pray for cooler heads to prevail, since already many serious military attacks have occurred with advanced weapons off the Syrian coast. The Western Press prefers to frame the Ukraine situation as one more curious Orange Revolution event staged in Eastern Europe, akin to the other deceptive Arab Spring events. The old Soviet Union was trapped years ago, forced to use hyper monetary inflation in defense, as the nation imploded financially. The United States is now trapped in an ironic parallel manner, and will be exposed for its heretic inflationary response that ramps up to obscene volumes, followed by financial implosion. In fact, the events from here onward are the final hurrah for the USDollar regime and the criminal cabal.

Now has never been a better time to own a big stack of gold & silver coins & bars, stored in a secure place outside the United States, outside England, outside Switzerland, even outside Canada. The people must defend against a climax of systemic failure, led by arrogance, stupidity, desperation, and delusion, even armed aggression. It remains to be seen whether the Kremlin has some secret allies who might emerge in time, from other worlds. But that is an entire other story to be told someday maybe. We earthlings will all find out soon enough. Times are changing fast, and better to be alert than to get hurt. The Global Currency Reset lies directly ahead, complete with its doubled Gold price and doubled Silver price. The Russians & Chinese are motivated to respond to a military prod, poke, and nudge by delivering a financial response. The rejection of the USDollar is near. The rapid diversification away from the USTreasury Bond is near. The arrival of the new Global Gold Standard is imminent.

Source: GoldSeek.com | Jim Willie CB, GoldenJackass.com

Ukraine Crisis: Just Another Globalist-Engineered Powder Keg

March 5, 2014 by · Leave a Comment 

When one studies history, all events seem to revolve around the applications and degenerations of war. Great feats of human understanding, realization and enlightenment barely register in the mental footnotes of the average person. War is what we remember, idealize and aggrandize, which is why war is the tool most often exploited by oligarchy to distract the masses while it centralizes power.

With the exception of a few revolutions, most wars are instigated and controlled by financial elites, manipulating governments on both sides of the game to produce a preconceived result. The rise of National Socialism in Germany, for instance, was largely funded by corporate entities based in the U.S., including Rockefeller giant Standard Oil, JPMorgan and even IBM, which built the collating machines specifically used to organize Nazi extermination camps, the same machines IBM representatives serviced on site at places like Auschwitz. As a public figure, Adolf Hitler was considered a joke by most people in German society, until, of course, the Nazi Party received incredible levels of corporate investment. This aid was most evident in what came to be known as the Keppler Fund created through the Keppler Circle, a group of interests with contacts largely based in the U.S.

George W. Bush’s grandfather, Prescott Bush, used his position as director of the New York-based Union Banking Corporation to launder money for the Third Reich throughout the war. After being exposed and charged for trading with the enemy, the case against Bush magically disappeared in a puff of smoke, and the Bush family went on to become one of the most powerful political forces in America.

Without the aid of international conglomerates and banks, the Third Reich would have never risen to power.

The rise of communism in Russia through the Bolshevik Revolution was no different. As outlined in Professor Antony Sutton’s book Wall Street And The Bolshevik Revolution with vast detail and irrefutable supporting evidence, it was globalist financiers that created the social petri dish in which the communist takeover flourished.  The same financiers that aided the Nazis…

The two sides, National Socialism and communism, were essentially identical despotic governmental structures conjured by the same group of elites. These two sides, these two fraudulent ideologies, were then pitted against each other in an engineered conflict that we now call World War II, resulting in an estimated 48 million casualties globally and the ultimate formation of the United Nations, a precursor to world government.

Every major international crisis for the past century or more has ended with an even greater consolidation of world power into the hands of the few, and this is no accident.

When I discuss the concept of the false left/right paradigm with people, especially those in the liberty movement, I often see a light turn on, a moment of awareness in their faces. Many of us understand the con game because we live it day to day. We see past the superficial rhetoric of Republican and Democratic party leadership and take note of their numerous similarities, including foreign policy, domestic defense policy and economic policy. The voting records of the major players in both parties are almost identical. One is hard-pressed to find much difference in ideology between Bush and Barack Obama, for example; or Obama and John McCain; or Obama and Mitt Romney, for that matter.

When I suggest, however, that similar false paradigms are used between two apparently opposed nations, the light fades, and people are left dumbstruck. Despite the fact that globalist financiers shoveled capital into the U.S., British, German and Soviet military complexes all at the same time during World War II, many Americans do not want to believe that such a thing could be happening today.

In response, I present the crisis in Ukraine versus the crisis in Syria…

Ukraine Versus Syria

It seems as though much of the public has already forgotten that at the end of 2013, the U.S. came within a razor’s edge of economic disaster — not to mention the possibility of World War III. The war drums in Washington were thundering for “intervention” in Syria and the overthrow of Bashar Assad. The only thing that saved us, I believe, were the tireless efforts of the independent media in exposing the darker motives behind the Syrian insurgency and the bloodlust of the Obama Administration. The problem is that when the elites lose one avenue toward war and distraction, they have a tendency to simply create another. Eventually, the public is so overwhelmed by multiple trigger points and political powder kegs that they lose track of reality. I often call this the “scattergun effect.”

The crisis in the Ukraine is almost a carbon copy of the civil war in Syria, culminating in what I believe to be the exact same intent.

The Money

Money from globalist centers has been flowing into the Ukrainian opposition since at least 2004, when the Carnegie Foundation was caught filtering funds to anti-Russian political candidate Viktor Yushchenko, as well as to the groups who supported him.

The Ukrainian Supreme Court called for a runoff due to massive voter fraud and the rise of the pro-Western Orange Revolution, determining the winner to be Yushchenko over none other than Viktor Yanukovych. Yanukovych went on to win the 2010 elections, and the revolution returned to oust him this year.

It has been discovered that the current revolution has also been receiving funds from NATO and U.S. interests, not just from the State Department, but also from billionaires like Pierre Omidyar, the chairman of eBay and the new boss of journalist Glen Greenwald, the same journalist who is now famous for being the first to expose National Security Agency documents obtained by Edward Snowden.

Much of the monetary support from such financiers was being funneled to men like Oleh Rybachuk, the right-hand man to Yanukovych during the Orange Revolution and a favorite of neoconservatives and the State Department in the U.S.

The International Monetary Fund has also jumped at the chance to throw money at the new Ukrainian regime, which would prevent default of the country and allow the opposition movement to focus their attentions on Russia.

The revolution in Syria was also primarily driven by Western funds and arms transferred through training grounds like Benghazi, Libya. There is much evidence to suggest that theattack on the U.S. consulate in Benghazi was designed to possibly cover up the arming of Syrian rebels by the CIA, who had agents on the ground who still have not been allowed to testify in front of Congress.

After this conspiracy was exposed in the mainstream, globalist-controlled governments decided to openly supply money and weapons to the Syrian insurgency, instead of ending the subterfuge.

The ‘Rebels’

Some revolutions are quite real in their intent and motivations. But many either become co-opted by elites through financing, or they are created from thin air from the very beginning. Usually, the rebellions that are completely fabricated tend to lean toward extreme zealotry.

The Syrian insurgency is rife with, if not entirely dominated by, men associated with al-Qaida. Governments in the U.S. and Israel continue to support the insurgency despite their open affiliation with a group that is supposedly our greatest enemy. Syrian insurgents have been recorded committing numerous atrocities, including mass execution, the torture of civilians and even the cannibalism of human organs.

The revolution in Ukraine is run primarily by the Svoboda Party, a National Socialist (fascist) organization headed by Oleh Tyahnybok.  Here is a photo of Tyahnybok giving a familiar salute:

So far, the opposition in Ukraine has been mostly careful in avoiding the same insane displays of random violence that plagued the Syrians’ public image. It is important to remember though that mainstream outlets like Reuters went far out of their way in attempts to humanize Syrian al-Qaida. Their methods were exposed only through the vigilance of the independent media. With the fascist Svoboda in power in the Ukraine, I believe it is only a matter of time before we see video reports of similar atrocities, giving Russia a perfect rationalization to use military force.

John McCain?

I am now thoroughly convinced that John McCain is a pasty ghoul of the highest order. He claims to be conservative yet supports almost every action of the Obama Administration. He is constantly defending anti-Constitutional actions by the Federal government, including the Enemy Belligerents Act, which was eventually melded into the National Defense Authorization Act; NSA surveillance of U.S. citizens; and even gun control.

And for some reason, the guy makes appearances like clockwork right before or during major overthrows of existing governments. McCain was in Libya during the coup against Moammar Gadhafi.

McCain showed up to essentially buy off the rebels in Tunisia.

McCain hung out with al-Qaida in Syria.

And, what a surprise, McCain met with the Ukrainian opposition movement just before the overthrow of Viktor Yanukovych.  Here is a photo of McCain giving a speech to the opposition with none other than Neo-Nazi Oleh Tyahnybok standing over his left shoulder.

Why McCain? I have no idea. All I know is, if this guy shows up in your country, take cover.

Russia In The Middle

The great danger in Syria was not necessarily the chance of war with Assad. Rather, it was the chance that a war with Assad would expand into a larger conflagration with Iran and Russia. Russia’s only naval facility in the Mideast is on the coast of Tartus in Syria, and Russia has long-standing economic and political ties to Syria and Iran. Any physical action by the West in the region would have elicited a response from Vladimir Putin. The mainstream argument claims that the threat of Russian intervention scared off Obama, but I believe the only reason war actions were not executed by the White House and the globalists was because they didn’t have even minimal support from the general public. For any war, you need at least a moderate percentage of the population to back your play.

In Ukraine, we find the globalists creating tensions between the West and the East yet again. Russia’s most vital naval base sits in Crimea, an autonomous state tethered to the Ukrainian mainland. Currently, Russia has flooded Crimea with troops in response to the regime change in Ukraine. The new Ukrainian government (backed by NATO) has called this an “invasion” and an act of war, while Western warmongers like McCain and Lindsay Graham spread the propaganda meme that Russia made such a move only because Putin believes the Obama Administration to be “weak.”

Clearly, the idea here is to engineer either high tensions or eventual war between Russia and the United States. Syria failed to produce the desired outcome, so the Ukraine was tapped instead.

Energy Markets And The Dollar At Risk

In Syria, any U.S. led military action would have resulted in the immediate closing of the Straight of Hormuz by Iran, threatening to obstruct up to 30% of global petroleum shipments.  Foreign resentment could have easily led to the abandonment of the U.S. dollar as the petro-currency.  Both China and Russia implied the possibility of an economic response to American intervention, though they did not officially go into specifics.  In all likelihood, the dollar’s world reserve status would have been damaged irrevocably.

In the Ukraine, the chance of intervention has been countered with VERY specific threats from Russia, including a freeze on natural gas imports to the European Union through Gazprom, which supplies approximately 30% of the EU’s fuel.  In 2009, a temporary Ukranian pipeline closure led to widespread shortages across Europe.  While some in the mainstream claim that Russia’s influence over EU energy has “diminished” the fact is a loss of 30% of natural gas reserves for an extended period would inflate energy prices wildly and cripple the EU’s economy.

Another specific reaction given by Russia is the dumping of U.S. treasury bonds.  Russia’s bond holdings may not seem like much leverage, except for the fact that China has now publicly backed Russian efforts in the Ukraine, just as they backed Russian opposition to U.S. activities in Syria.  A dump of bonds by Russia would invariably be followed by a Chinese dump as well.  In fact, China and Russia have been setting the stage for a global dollar decoupling since at least 2008.   I have been warning for years that globalists and central bankers needed a “cover event”, a distraction or scapegoat imposing enough to provide a veil of chaos in which they could then destroy the greenback as the world reserve and usher in a global currency system.  The Ukraine crisis offers yet another opportunity for this plan to unfold.

The False Paradigm And The Globalist Chessboard

So far, I have outlined what appears to be a correspondence of conspiracy between Syria and the Ukraine and how each event has the continued potential to trigger regional conflict, dollar collapse, or world war. But is this conspiracy one-sided? Are only the West and NATO being manipulated by globalists to box in Russia and provoke a conflict? And what do globalists have to gain by sparking such disaster?

As with every other catastrophic fabricated war, the goal is the erasure of sovereign identity while consolidating of economic, political and social power. It is not enough that global financiers dominate the banking industry and own most politicians; they want to transform the public psyche. They want US to ask THEM for global governance. This manufacture of consent is often achieved by pitting two controlled governments against each other and then, in the wake of the tragedy, calling for global unification. The argument is always presented that if we simply abandoned the concept of nation states and reform under a single world body, all war would “disappear.”

The question is whether Russia’s Putin is aware of the plan. Is he a part of it?  Are we seeing repeat theater of a puppet Russia versus a puppet NATO like that witnessed during the Cold War?

What I do know is that Putin has, a number of times in the past, called for global control of the economy through the IMF and the institution of a new global currency using the IMF’s Special Drawing Rights (SDR).

Loans from the IMF are what saved Russia from debt default in the late 1990s. And Putin has recently called for consultations with the IMF concerning Crimea. Remember, this is the same IMF that is working to fund his opponents in Western Ukraine.

Bottom line, if you believe in national sovereignty and decentralization of power, Putin is NOT your buddy. Once again, we have the globalists injecting money into both sides of a conflict which could morph into something nightmarish.  Putin wants global economic governance and consolidation under the IMF just as much as the supposedly “American-run” IMF wants consolidation.  Global governance of finance and money creation ultimately means global governance of everything else.

Is a war being created through the false paradigm of East versus West in order to pave the road for global government?  Are East/West tensions being exploited as a smokescreen for the final destruction of the dollar’s world reserve status?  It is hard to say if the Ukraine will be the final trigger; however, the evidence suggests that if a conflict occurs, regardless of who “wins” such a scenario, the IMF comes out on top.

Imagine you are playing a game of chess by yourself. Which side wins at the end of that game: black or white? The answer is it doesn’t matter. You always win when you control both sides.

Source: Brandon Smith | Alt-Market

Fasten Your Seatbelts: The Coming Global Monetary Reset

February 27, 2014 by · Leave a Comment 

The big currency reset. It’s not a case of ‘if’ – it’s a case ofwhen.

Don’t expect your provincial Secretary of Treasury or Chancellor Exchequer to warn you about what is coming around the corner, because they are either too stupid to know, or too busy covering their own backsides.

To understand where we are, it’s very important to understand how we got here (another point which bureaucrats and backers do not want the general populace to know).

A quick history lesson then…

The Opposite of Emerging is Submerging

Lulled and distracted by the antics of developed country central banks and emerging economy central banks – to constantly “pump-up the jam” and flood the economy with paper casino chips from either Fort Knox or Mount Gox, the real tectonic shift of the global economy since 2008 has been more or less ignored by financial gurus and sages. It is taken as “normal” that deflation, ordisinflation is operating in the developed economies, but now we can see that rip-roaring inflation operating in the emerging economies.

Supposedly, this is ‘Muddle Through’, but since 2008 the North-South paradigm has all but dissolved – the developed OECD economies are locked in a death embrace with the Emerging economies. The developed economies are now locked into chronic globalization – exporting monetary inflation while importing cheap industrial goods, services and resources.

Since 2008 the always-promised ‘world shift’ of the economy from west to east, and from north to south has happened, but the net result is a shock. Pretending “we didn’t know” is comforting, but ultimately stupid.

This is an unstable equilibrium, or an interregnum – even a sideshow, because the current global economic context and process is the exact opposite of sustainable. Harm to both North and South is now the main impact of the post-2008 process of overreach and intense fiat paper shuffling. Listing the consequences and causes of this overreach is not easy and always open to argument, but possibly the best summary is to suggest that since 2008, ‘Ricardo’s comparative advantage‘ paradigm has been inverted. Economic and above all monetary globalization is now the path to ruin and poverty. From win-win to lose-lose. The worse it gets, expect the architects of ruin – establishment politicians, central bankers and financial pundits, to retreat into even deeper denial.

The Production Bubble That Triggers the Collapse

Another simple way to argue the global economy has overreached is that industrial and economic production capacity in the Emerging economies (EMs), starting with the BRICs, is now massively over-sized. This means the EMs can and will saturate the post-industrial, deflating North with industrial supply at every stage and opportunity as technology, design and product development throw up a new market openings everywhere. Examples like the car and cellphone, fashion wear and off-shore call center industries are relatively “classic”. All of these are already saturated with capacity – but the EMs are still adding more. Previous historical “classic examples” of this process for example included the ship building industry, but the scale paradigm has been woefully ignored.


BRAZILIAN SKILLZ: Production of top-line automobiles in Brazil has surpassed many of its ‘developed’ counterparts.

Since 2008, the process has intensified, creating an increasingly certain outlook for a forced and fiat end to the willingness of the EMs to accept the fiat currency endlessly printed to finance the deflating, de-industrializing DMs (developed economies).

This will not necessarily be a politicized process, of the type hinted at by India’s central bank governor (see http://finance.fortune.cnn.com/tag/raghuram-rajan/), due to the rapidity and scale of the crisis, but instead trigger the collapse of the current global fiat monetary orderdictated by national economic self-defence and survival in the EMs.

The economic jump start of the Ricardo model, which has run riot for the last quarter-century, and went into over-drived from 2008 – will be abandoned.

Deflation/Inflation: Two Sides of the Same Bitcoin

Ricardo’s original model held sunny Portugual as a producer of cork and sherry, while rainy England could produce wine casks from its oak forests and wool from its sheep flocks. The money used in a basically resource-based exchange using then-rapidly growing maritime transport capabilities was held to be stable and gold-linked (or based). Later on, low-cost labor resources were built into Ricardo’s paradigm called “comparative advantage”. The EMs since the 1980s have played the role of resource providers while the DMs were the solvent market suppliers.

While there was a clear limit on cork, wine, oak casks and woolens supply and demand, this does not really apply to modern global fiat money and modern industrial technology. These are high gain positive feedback processes which only stop when they hit a brick wall.

The Ricardo comparative advantage model does not apply to post-1980′s globalization and super economies – like those of China and India, where industrial technology has raced ahead of infrastructure development. This is simply a bomb waiting to explode, alongside the industrial capacity growth, the EMs engaged massive growth of credit, mushroom growth urbanization, neglect of the agriculture and food sector, and turning a blind eye to rampant or even “structural” corruption. Inflation was the sure and certain result.

The results do not stop there. While inflation took off inside the EMs, with their economies producing more than they can consume, and exporting to the DMs which consume more than they produce, the EMs are also exported deflation to the developed market economies. At the same time, the emerging market economies mined out their capital bases to maintain their breakneck growth of industrial capacity.

On an almost daily basis now, the EMs are all shifting to current account deficit with the inevitable consequences of national currency devaluation, further inflation, and of course – higher interest rates.

Win-Win to Lose-Lose: Global Fiat Currency Crisis

The post-1980′s economic globalization paradigm can be called an initial ‘Win-Win’ model which eventually morphed to Lose-Lose.

The industrial nations of the DMs, which formerly benefited from the resource nations of the EMs under the previous ‘Ricardo-type’ model, are now mired in debt and de-industrialization, making it impossible for them to “grow their way out of crisis”. The EMs on their present industrial expansion path can only grow themselves into rapidly-deepening crisis.

The “money-in-the-middle” especially concerns the US dollar and its subsidiary partner, theeuro, both of which are vastly overvalued fiat currencies – but against what? Almost inevitably, this will feature a big rebound for gold, playing the starring role of in this latest episode of “Canary in the Monetary Coal Mine”. From a personal standpoint, or national (for those who have any), physical gold and silver could end up providing solid protection against the exposure of a monetary reset.

Conversely, commodities are unlikely to profit on an enduring sustained basis, due to economic restructuring, re-centering and contraction being almost certain.

Commenting on the IMF’s latest report on global capital flows since 1980, Reuters on 30 January said that while the IMF estimates net capital inflows to emerging economies as $7 trillion or more only since 2005, this was a “legacy trend” hinged on the EMs running a much higher GDP growth differential above the DMs than present. The IMF report noted that for 2014, economic growth in the BRICs will go on declining, and for Russia and Brazil, they will be less even than the GDP growth of the US and Britain. While the IMF’s economists do not allow themselves to project break-of-series change to the global economy, the process of what Gordon T. Long calls “Global collateral impairment” can easily default as the net result of apparently ‘unrelated and complex’ runaway processes.

This collateral impairment will inevitably trigger multi-national currency protection measures, a situation already clear in countries like Turkey, India, Argentina and other EMs.

For DMs in the North, plans are likely already underway. Will the reset feature a brand new reserve currency, or the introduction a fledgling single global, or virtual currency? If so, what will it be backed by (or maybe it won’t). It’s hard to know right now, but a shift of that magnitude could provide for the introduction of something new in the mix.

It’s a case of problem, reaction, solution, and one can assume that this Hegelian equation has already been mapped out on the back of a napkin in an executive dining floor of the one of the world leading central banks, possibly written using Christine Lagarde’s lip stick.

As a result, sacrificing GDP growth to protect the national money in the EMs will be inevitable. In turn, this will send a severe shock wave North to the DMs ,which have surfed on the latter-day version of the Ricardo paradigm for the last 30 years, and are now left unable to adapt.

The basic conclusion is that a global monetary reset is now overdue.

There will be shock waves, and haircuts too.

Brace yourself for impact, because it’s coming.

Source: Andrew McKillop | 21st Century Wire

The Brown Revolution of the Ukraine

February 26, 2014 by · Leave a Comment 

I am a great fan of Kiev, an affable city of pleasing bourgeois character, with its plentiful small restaurants, clean tree-lined streets, and bonhomie of its beer gardens. A hundred years ago Kiev was predominantly a Russian resort, and some central areas have retained this flavour. Now Kiev is patrolled by armed thugs from the Western Ukraine, by fighters from the neo-Nazi -Right Sector, descendants of Stepan Bandera, the Ukrainian Quisling’s troopers, and by their local comrades-in-arms of nationalist persuasion.

After a month of confrontation, President Viktor Yanukovych gave in, signed the EC-prepared surrender and escaped their rough revolutionary justice by the skin of his teeth. The ruling party MPs were beaten and dispersed, the communists almost lynched, the opposition have the parliament all to themselves, and they’ve  appointed new ministers and taken over the Ukraine. The Brown Revolution has won in the Ukraine. This big East European country of fifty million inhabitants has gone the way of Libya. The US and the EU won this round, and pushed Russia back eastwards, just as they intended.

It remains to be seen whether the neo-Nazi thugs who won the battle will agree to surrender the sweet fruits of victory to politicians, who are, God knows, nasty enough. And more importantly, it remains to be seen whether the Russian-speaking East and South East of the country will accept the Brown rule of Kiev, or  split off and go their own way, as the people of Israel (so relates the Bible) after King Solomon’s death rebelled against his heir saying “To your tents, o Israel!” and proclaimed independence of their fief (I Kings 12:16). Meanwhile it seems that the Easterners’ desire to preserve Ukrainian state integrity is stronger than their dislike for the victorious Browns. Though they assembled their representatives for what could be a declaration of independence, they did not dare to claim power. These peaceful people have little stamina for strife.

Their great neighbour, Russia, does not appear overtly concerned with this ominous development. Both Russian news agencies, TASS and RIA, didn’t even place the dire Ukrainian news at the top, as Reuters and BBC did: for them, the Olympics and the biathlon were of greater importance.

This “ostrich” attitude is quite typical of the Russian media: whenever they find themselves in an embarrassing position, they escape into showing the Swan Lake ballet on TV. That’s what they did when the Soviet Union collapsed in 1991. This time it was the Olympics instead of the ballet.

Anti-Putin opposition in Russia heartily approved of the Ukrainian coup.Yesterday Kiev, tomorrow Moscow, they chanted. Maidan (the main square of Kiev, the site of anti-government demos) equals Bolotnaya (a square in Moscow, the site of anti-government protests in December 2012) is another popular slogan.

The majority of Russians were upset but not surprised. Russia decided to minimise its involvement in the Ukraine some weeks ago as if they wished to demonstrate to the world their non-interference. Their behaviour bordered on recklessness. While foreign ministers of EC countries and their allies crowded Kiev, Putin sent Vladimir Lukin, a human rights emissary, an elder low-level politician of very little clout, to deal with the Ukrainian crisis. The Russian Ambassador Mr Zurabov, another non-entity, completely disappeared from public view. (Now he was recalled to Moscow). Putin  made not a single public statement on the Ukraine, treating it as though it were Libya or Mali, not a neighbouring country quite close to the Russian hinterland.

This hands-off approach could have been expected: Russia did not interfere in the disastrous Ukrainian elections 2004, or in the Georgian elections that produced extremely anti-Russian governments. Russia gets involved only if there is a real battle on the ground, and a legitimate government asks for help, as in Ossetia in 2008 or in Syria in 2011. Russia supports those who fight for their cause, otherwise Russia, somewhat disappointingly, stands aside.

The West has no such inhibitions and its representatives were extremely active: the US State Department representative Victoria “Fuck EC’’ Nuland had spent days and weeks in Kiev, feeding the insurgents with cookies, delivering millions of smuggled greenbacks to them, meeting with their leaders, planning and plotting the coup. Kiev is awash with the newest US dollars fresh from its mint (of a kind yet unseen in Moscow, I’ve been told by Russian friends). The US embassy spread money around like a tipsy Texan in a night club. Every able-bodied young man willing to fight received five hundred dollar a week, a qualified fighter – up to a thousand, a platoon commander had two thousand dollars – good money by Ukrainian standards.

Money is not all. People are also needed for a successful coup. There was an opposition to Yanukovych who won democratic elections, and accordingly, three parties lost elections. Supporters of the three parties could field a lot of people for a peaceful demonstration, or for a sit-in. But would they fight when push comes to shove? Probably not. Ditto the recipients of generous US and EC grants (Nuland estimated the total sum of American investment in “democracy building” at five billion dollars). They could be called to come to the main square for a demo. However, the NGO beneficiaries are timid folk, not likely to risk their well-being. And the US needed a better fighting stock to remove the democratically elected president from power.

Serpent Eggs

In the Western Ukraine, the serpent eggs hatched: children of Nazi collaborators who had imbibed hatred towards the Russians with their mothers’ milk. Their fathers had formed a network under Reinhard Gehlen, the German spymaster. In 1945, as Germany was defeated, Gehlen swore allegiance to the US and delivered his networks to the CIA. They continued their guerrilla war against the Soviets until 1956. Their cruelty was legendary, for they aimed to terrify the population into full compliance to their command. Notoriously, they strangulated the Ukrainians suspected of being friendly to Russians with their bare hands.

A horrifying confession of a participant tells of their activities in Volyn: “One night, we strangulated 84 men. We strangulated adults, as for little kids, we held their legs, swung and broke their heads at a doorpost. …Two nice kids, Stepa and Olya, 12 and 14 years old… we tore the younger one into two parts, and there was no need to strangulate her mother Julia, she died of a heart attack” and so on and so on. They slaughtered hundreds of thousands of Poles and Jews; even the dreadful Baby Yar massacre was done by them, with German connivance, somewhat similar to Israeli connivance in the Sabra and Chatila massacres of Palestinians by the Lebanese fascists of the Phalange.

The children of these Bandera murderers were brought up to hate Communism,  Soviets and Russians, and in adoration of their fathers’ deeds. They formed the spearhead of the pro-US anti-government rebels in the Ukraine, the Right Sector led by out-and-out fascist Dmytro Yarosh. They were ready to fight, to die and kill. Such units attract potential rebels of differing backgrounds: their spokesman is young Russian -turned -Ukrainian -nationalist Artem Skoropadsky, a journalist with the mainstream oligarch-owned Kommersant-UA daily. There are similar young Russians who join Salafi networks and become suicide-bombers in the Caucasus mountains – young people whose desire for action and sacrifice could not be satisfied in the consumer society. This is a Slav al-Qaeda — real neo-Nazi storm troopers, a natural ally of the US.

And they did not fight only for association with EC and against joining a Russia-led TC. Their enemies were also the Russians in the Ukraine, and Russian-speaking ethnic Ukrainians. The difference between the twain is moot. Before independence in 1991, some three quarters of the population preferred to speak Russian. Since then, successive governments have tried to force people to use Ukrainian. For the Ukrainian neo-Nazis, anyone who speaks Russian is an enemy. You can compare this with Scotland, where people speak English, and nationalists would like to force them to speak the language of Burns.

Behind the spearhead of the Right Sector, with its fervent anti-communist and anti-Russian fighters, a larger organisation could be counted on: the neo-Nazi Freedom (Svoboda), of Tyagnibok. Some years ago Tyagnibokcalled for a fight against Russians and Jews, now he has become more cautious regarding the Jews. He is still as anti-Russian as John Foster Dulles. Tyagnibok was tolerated or even encouraged by Yanukovych, who wanted to take a leaf from the French president Jacques Chirac’s book. Chirac won the second round of elections against nationalist Le Pen, while probably he would have lost against any other opponent. In the same wise, Yanukovych wished Tyagnibok to become his defeatable opponent at the second round of presidential elections.

The parliamentary parties (the biggest one is the party of Julia Timoshenko with 25% of seats, the smaller one was the party of Klitschko the boxer with 15%) would support the turmoil as a way to gain power they lost at the elections.

Union of nationalists and liberals

Thus, a union of nationalists and liberals was formed. This union is the trademark of a new US policy in the Eastern Europe. It was tried in Russia two years ago, where enemies of Putin comprise of these two forces, of pro-Western liberals and of their new allies, Russian ethnic nationalists, soft and hard neo-Nazis. The liberals won’t fight, they are unpopular with the masses; they include an above-average percentage of Jews, gays, millionaires and liberal columnists; the nationalists can incite the great unwashed masses almost as well as the Bolsheviks, and will fight. This is the anti-Putin cocktail preferred by the US. This alliance actually took over 20% of vote in Moscow city elections, after their attempt to seize power by coup was beaten off by Putin. The Ukraine is their second, successful joint action.

Bear in mind: liberals do not have to support democracy. They do so only if they are certain democracy will deliver what they want. Otherwise, they can join forces with al Qaeda as now in Syria, with Islamic extremists as in Libya, with the Army as in Egypt, or with neo-Nazis, as now in Russia and the Ukraine. Historically, the liberal–Nazi alliance did not work because the old Nazis were enemies of bankers and financial capital, and therefore anti-Jewish. This hitch could be avoided: Mussolini was friendly to Jews and had a few Jewish ministers in his government; he objected to Hitler’s anti-Jewish attitude saying that “Jews are useful and friendly”. Hitler replied that if he were to allow that, thousands of Jews would join his party. Nowadays, this problem has vanished: modern neo-Nazis are friendly towards Jews, bankers and gays. The Norwegian killer Breivik is an exemplary sample of a Jew-friendly neo-Nazi. So are the Ukrainian and Russian neo-Nazis.

While the original Bandera thugs killed every Jew (and Pole) that came their way, their modern heirs receive some valuable Jewish support. The oligarchs of Jewish origin (Kolomoysky, Pinchuk and Poroshenko) financed them, while a prominent Jewish leader, Chairman of the Association of Jewish Organizations and Communities of the Ukraine, Josef Zissels, supported them and justified them. There are many supporters of Bandera in Israel; they usually claim that Bandera was not an anti-Semite, as he had a Jewish doctor. (So did Hitler.) Jews do not mind Nazis who do not target them. The Russian neo-Nazis target Tajik gastarbeiters, and the Ukrainian neo-Nazis target Russian-speakers.

Revolution: the Outline

The revolution deserves to be described in a few lines: Yanukovych was not too bad a president, prudent though weak. Still the Ukraine came to the edge of financial abyss. (You can read more about it in my previous piece) He tried to save the situation by allying with the EC, but the EC had no money to spare. Then he tried to make a deal with Russia, and Putin offered him a way out, without even demanding from him that the Ukraine join the Russian-led TC. This triggered the violent response of the EC and the US, as they were worried it would strengthen Russia.

Yanuk, as people call him for short, had few friends. Powerful Ukrainian oligarchs weren’t enamoured with him. Besides the usual reasons, they did not like the raider habits of Yanuk’s son, who would steal other men’s businesses. Here they may have had a point, for the leader of Belarus, the doughty Lukashenko, said that Yanuk’s son’s unorthodox ways of acquiring businesses brought disaster.

Yanuk’s electorate, the Russian-speaking people of the Ukraine (and they are a majority in the land, like English-speaking Scots are majority in Scotland) were disappointed with him because he did not give them the right to speak Russian and teach their children in Russian. The followers of Julia Timoshenko disliked him for jailing their leader. (She richly deserved it: she hired assassins, stole billions of Ukrainian state money in cahoots with a former prime minister, made a crooked deal with Gazprom at the expense of Ukrainian consumers, and what not.) Extreme nationalists hated him for not eradicating the Russian language.

The US-orchestrated attack on the elected President followed Gene Sharp’s instructions to a tee, namely: (1) seize a central square and organise a mass peaceful sit-in, (2) speak endlessly of danger of violent dispersal, (3) if the authorities do nothing, provoke bloodshed, (4) yell bloody murder, (5) the authority is horrified and stupefied and (6) removed and (7) new powers take over.

The most important element of the scheme has never been voiced by the cunning Sharp, and that is why the Occupy Wall Street movement (who thumbed through the book) failed to achieve the desired result. You have to have the Masters of Discourse™ i.e., Western mainstream media, on your side. Otherwise, the government will squash you as they did with the Occupy and many other similar movements. But here, the Western media was fully on the rebels’ side, for the events were organised by the US embassy.

At first, they gathered for a sit-in on the Independence Square (aka “Maidan Square”) some people they knew: recipients of USAID grants via the NGO network, wrote a Ukrainian expert Andrey Vajra, networks of fugitive oligarch Khoroshkovski, neo-Nazis of the Right Sector and radicals of the Common Cause. The peaceful assembly was lavishly entertained by artists; food and drink were served for free, free sex was encouraged – it was a carnival in the centre of the capital, and it began to attract the masses, as would happen in every city in the known universe. This carnival was paid for by the oligarchs and by the US embassy.

But the carnival could not last forever. As per (2), rumours of violent dispersal were spread. People became scared and drifted away. Only a small crowd of activists remained on the square. Provocation as per (3) was supplied by a Western agent within the administration, Mr Sergey Levochkin. He wrote his resignation letter, posted it and ordered police to violently disperse the sit-in. Police moved in and dispersed the activists. Nobody was killed, nobody was seriously wounded, – today, after a hundredfold dead, it is ridiculous even to mention this thrashing, – but the opposition yelled bloody murder at the time. The world media, this powerful tool in the hands of Masters of Discourse, decried “Yanukovych massacred children”. The EC and the US slapped on sanctions, foreign diplomats moved in, all claiming they want to protect peaceful demonstrators, while at the same time beefing up the Maidan crowd with armed gunmen and Right Sector fighters.

We referred to Gene Sharp, but the Maidan had an additional influence, that of Guy Debord and his concept of Society of Spectacle. It was not a real thing, but a well-done make-believe, as was its predecessor, the August 1991 Moscow “coup”. Yanukovych did everything to build up the Maidan resistance: he would send his riot police to disperse the crowd, and after they did only half of the job, he would call them back, and he did this every day. After such  treatment, even a very placid dog would bite.

The Spectacle-like unreal quality of Kiev events was emphasized by arrival of the imperial warmonger, the neocon philosopher Bernard-Henri Levy. He came to Maidan like he came to Libya and Bosnia, claiming human rights and threatening sanctions and bombing. Whenever he comes, war is following. I hope I shall be away from every country he plans to visit.

First victims of the Brown Revolution were the monuments – those of Lenin, for they do hate communism in every form, and those of the world war, because the revolutionaries solidarise with the lost side, with the German Nazis.

History will tell us to what extent Yanuk and his advisors understood what they were doing. Anyway, he encouraged the fire of Maidan by his inefficient raids by a weaponless police force. The neo-Nazis of Maidan used snipers against the police force, dozens of people were killed, but President Obama called upon Yanuk to desist, and he desisted. After renewed shooting, he would send the police in again. An EC diplomat would threaten him with the Hague tribunal dock, and he would call his police back. No government could function in such circumstances.

Eventually he collapsed, signed on the dotted line and departed for unknown destination. The rebels seized power, forbade the Russian language and began sacking Kiev and Lvov. Now the life of the placid people of Kiev has been turned into a living hell: daily robberies, beating, murder abound. The victors are preparing a military operation against the Russian-speaking areas in the South East of Ukraine. The spectacle of the revolution can yet turn really bloody.

Some Ukrainians hope that Julia Timoshenko, freshly released from jail, will be able to rein the rebels in. Others hope that President Putin will pay heed to the Ukrainian events, now that his Olympic games are, mercifully, finished. The spectacle is not over until the fat lady sings, but sing she will – her song still remains to be seen and heard.

English language editing by Ken Freeland.


A native of Novosibirsk, Siberia, a grandson of a professor of mathematics and a descendant of a Rabbi from Tiberias, Palestine, he studied at the prestigious School of the Academy of Sciences, and read Math and Law at Novosibirsk University. In 1969, he moved to Israel, served as paratrooper in the army and fought in the 1973 war.

After his military service he resumed his study of Law at the Hebrew University of Jerusalem, but abandoned the legal profession in pursuit of a career as a journalist and writer. He got his first taste of journalism with Israel Radio, and later went freelance. His varied assignments included covering Vietnam, Laos and Cambodia in the last stages of the war in South East Asia.

In 1975, Shamir joined the BBC and moved to London. In 1977-79 he wrote for the Israeli daily Maariv and other papers from Japan. While in Tokyo, he wrote Travels with My Son, his first book, and translated a number of Japanese classics.

Email at: info@israelshamir.net

Israel Shamir is a regular columnist for Veracity Voice

“Firesales” Could Trigger Another Financial Crisis

February 22, 2014 by · Leave a Comment 

“The repo market wasn’t just a part of the meltdown. It was the meltdown.” – David Weidner, Wall Street Journal, May 29, 2013.

Ask your average guy-on-the-street ‘what caused the financial crisis’, and you’ll either get a blank stare followed by a shrug of the shoulders or a brusque, three-word answer: “The housing bubble”. Even people who follow the news closely are usually sketchy on the details. They might add something about subprime mortgages or Lehman Brothers, but not much more than that. Very few people seem to know that the crisis began in a shadowy part of the financial system called repo, which is short for repurchase agreement. In 2008, repo was ground zero, the epicenter of the meltdown. That’s where the bank run took place that froze the credit markets and sent the financial system into freefall. Unfortunately, nothing has been done to fix the problems in repo, which means that we’re just as vulnerable today as we were five years ago when Lehman imploded and all hell broke loose.

Repo is a critical part of today’s financial architecture. It allows the banks to fund their long-term securities cheaply while giving lenders, like money markets, a place where they can park their money overnight and get a small return. The entire repo market is roughly $4.5 trillion, although the more volatile tri-party repo market is around $1.6 trillion. (Note: That’s $1.6 trillion that’s rolled over every day.)

Repo works a lot like a pawn shop. You bring your rusty bike and your imitation Van Gogh “Starry Night” to Rosie’s E-Z-Pawn, and the guy with the gold earring behind the counter gives you 15 bucks in return. That’s how repo works too, the only difference is that repo is a loan. The banks post collateral –mostly pools of mortgages (MBS) or US Treasuries– and get overnight loans from a cash-heavy lenders, like money markets, insurance companies or pension funds. Borrowers repay the loan with interest added to the original sum.

The problem that arose in 2008, and that will likely crop up in the future, was that the value of the underlying collateral (subprime MBS) was steadily downgraded forcing the banks to take steep haircuts. (which means they couldn’t borrow as much on their collateral) The bigger the haircuts, the less money the banks had to fund their securities which forced them to sell assets to make up the difference. When banks and other financial institutions deleverage quickly, asset prices plunge and capital is wiped out forcing the Fed to step in and backstop the system to prevent a full-blown meltdown. And that’s exactly what the Fed did in 2008. It slashed rates to zero, set up myriad lending facilities and provided unlimited backing for both regulated and unregulated financial institutions. It was the biggest financial rescue operation of all time and it cost somewhere in the neighborhood of 12 to 13 trillion dollars in loans and other guarantees. Under the provisions of the Dodd Frank financial reforms, the Fed is forbidden from carrying out a similar bailout in the future, although you can bet-your-bippy that Yellen and Co. will bend the rules if there’s another catastrophe.

Fixing repo is not a left-right issue. Among the people who follow these things, there is general agreement about what needs to be done to make the system safer. Even New York Fed President William C. Dudley –who’s no “liberal” by any stretch–admits that the system is broken. In October, 2013, at a bank conference Dudley opined, “Current reforms do not address the risk that a dealer’s loss of access to tri-party repo funding could precipitate destabilizing asset fire sales, whether by the dealer itself, or by the dealer’s creditors following a default.” In other words, the chances of another 5-alarm fire sometime in the future are pretty darn good.

Dudley’s description of what happened during the acute phase of the crisis is also worth reviewing. He said:

“Higher margins on repo and increased collateral calls due to credit ratings downgrades reduced the quantity of assets that could be financed in repo markets and elsewhere, prompting further asset sales. As wholesale investors started to exit, this set in motion a bad dynamic—a fire sale of assets that cut into earnings and capital. This just increased the incentives of investors to run and for banks to hoard liquidity against the risk that they could themselves face a run. This downward spiral of fire sales and funding runs was a key feature of the financial crisis …”

And, that, dear reader, is a first-rate account of what happened in 2008 when panic gripped the markets and the dominoes started to tumble. Former Fed chairman Ben Bernanke’s version of events is also worth a look if only because he describes the crash in terms of what it really was, a modern day bank run. Here’s what he said:

“What was different about this crisis was that the institutional structure was different. It wasn’t banks and depositors. It was broker-dealers and repo markets. It was money market funds and commercial paper.”

While most analysts agree about the origins of the crisis and the type of changes that are needed to avoid a repeat, the banks have blocked all attempts at reforming the system.

But, why?

It’s because the reforms would cost the banks more money, and they don’t want that. They’d rather put the entire system at risk, then cough up a little more dough to make repo safer. Here’s how the New York Fed summed it up in a paper titled “Shadow Bank Monitoring”:

“One clear motivation for intermediation outside of the traditional banking system is for private actors to evade regulation and taxes. … Regulation typically forces private actors to do something which they would otherwise not do: pay taxes to the official sector, disclose additional information to investors, or hold more capital against financial exposures. Financial activity which has been re-structured to avoid taxes, disclosure, and/or capital requirements, is referred to as arbitrage activity.” (“Shadow Bank Monitoring”, Federal Reserve Bank of New York Staff Reports, September, 2013)

That says it all, doesn’t it? They don’t want to pay taxes, they don’t want to hold capital against their collateral, and they want to continue to run their businesses in the shadows so nosy shareholders and regulators can’t see what the heck they’re up to. So, what else is new? The banks are running a crooked, black box operation, and they aim to keep it that way come hell or high water.

The banks can’t be reasoned with, that’s obvious from the position they’ve taken. They’ve put profits above everything, even the viability of the system. How can you reason with people like that? Just get a load of what the New York Fed said on the matter:

“Intermediaries create liquidity in the shadow banking system by levering up the collateral value of their assets. However, the liquidity creation comes at the cost of financial fragility as fluctuations in uncertainty cause a flight to quality from shadow liabilities to safe assets. The collapse of shadow banking liquidity has real effects via the pricing of credit and generates prolonged slumps after adverse shocks.”

This sounds more complicated than it is. What the Fed is saying is: “Hey, guys, you’re creating all this fake money (credit) by loading up on leverage (borrowing), and that’s pushing us closer to another crisis. Once the money markets figure out that all those nifty subprime CDOs you’ve been trading for overnight loans aren’t worth Jack-crap, then they’re going to cut you off at the knees and move into risk-free assets like US Treasuries. So why don’t you wise-the-hell-up, and start playing by the rules like everyone else so we don’t have to deal with another big, freaking meltdown. Okay?”

(Of course, I’m paraphrasing here.)

The only way to fix repo is by backstopping collateral with more capital, forcing all trading onto central clearing platforms (where regulators can see what’s going on), and regulating shadow banks like traditional, commercial banks. The editors at Bloomberg said it best nearly a year ago. They said: ” If an entity engages in banking activity… it must register as a bank, with all the backstops and capital requirements that entails.”

Right on.

If we’re not going to nationalize the banks and turn them into public utilities, which is what we should have done in 2009 when we had the chance, then we need to put safeguards in place to keep them from crashing the system every few years.

Regulate, Regulate, Regulate. That’s the ticket.

Stricter regulations could have prevented the last crisis, and stricter regulations can prevent the next one. It’s just a matter of finding the political will to get the job done.


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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