Now that the financial hype is celebrating a new all time high in the stocks, the time to exit the market may well be at hand. So what will that Oracle of Omaha do with all the insider information available from his compadre network? The business press swoons all over Warren Buffett with every report, while only a few intrepid journalists would dare write about the dark side of Wall Street’s favorite equity cheerleader. The guru of sweet heart deals floats in the rarified air of a political cronyism ongoing honeymoon. So what is likely for his Berkshire Hathaway flagship company now that the ticker is breathing on pure oxygen?
At the Berkshire Hathaway Shareholders Meeting, the forecast projects that the market will continue to rise. Berkshire Cash Hits Record $49.1 Billion as Profit Climbs, cites Bill Smead, portfolio manager of the Smead Value Fund, “Warren has organized the company around the rebirth of the United States economy over the next 10 years and this is the beginning of that rebirth.”
Not everyone looks at the next decade as a boom for the economy. The easy money out of the Federal Reserve ultimately fuels the hysteria that is pushing the current rally. For the average consumer the markets smell of an elitist stench. The venerability of a top and a collapse has many remnants of the former middle class scared. Should the expectation be that a House of Cards is on the horizon or should the deal from the bottom of the deck continue as the insiders pump and dump their latest speculative fizz?
Examine just how Buffett operates. His reputation as a stock picker largely ignores any of the dirty laundry that follows in his wake. In the event you forget, the audacious reporting of Charles Gasparino, reminds of the methods employed in the investment culture of his associates. Cited in Saint Warren’s dark side, the working of the protecting racket that rewards the Buffett organization, smacks of the very definition of “too big to fail”.
“The SEC interviewed Buffett last year over one of the most sordid corporate affairs I’ve seen in a long time: His longtime aide and one-time heir-apparent bought shares in a company called Lubrizol just before Buffett purchased the outfit.
The executive, David Sokol, made a hefty profit from the purchase, and even advised Buffett to buy the company in the first place.
Insider trading? I can’t say if it was outside the law. But the SEC is looking into the matter. (SEC and Sokol spokesmen declined to comment on the probe’s status; Buffett didn’t return repeated calls seeking comment.)
Yet I don’t recall any major media outfit bringing up the sordid affair while Buffett was lecturing the nation on tax fairness. Nor did any jump on Buffett’s bizarre initial reaction as Sokol was resigning from Berkshire last year: He defended Sokol’s actions — which, even if they weren’t illegal, still smack of the kind of corporate favoritism that Obama and the rest of the left continually denounce.”
Barrons report another sordid episode swept under the rug in the article, A Buffett Bubble in BYD?
“In September of 2008, just after Lehman Brothers’ collapse had taken the financial crisis to a new level, Warren Buffett’s Berkshire Hathaway scooped up 9.9% of Chinese battery and electric-car maker BYD for HK$8 (US$1.03) a share. Even a renowned long-term value investor had to be impressed by the near-term sizzle: Within 18 months, BYD shares had rocketed to HK$88. Then the engine started to sputter.
BYD also may have been spoiled by the Buffett bubble built into the shares, which some analysts estimate could be as big as a 30%. “People regard Buffett well as an investor and are happy to stick with the stock as long as he is still holding it,” says Lewis. His departure could have have a huge adverse effect, they say. “A big Berkshire [BRK.A] premium is the only way you could justify where the stock is trading right now,” says Lewis. “You’ve got to ask yourself: Would Warren make the same decision today on BYD? I suspect not.” At the least, he will see Berkshire’s stake diluted by the offering and local reports say Berkshire won’t subscribe further. BYD trades at more than 50 times earnings.”
Finally, Forbes reflects on the big daddy of deals with that great vampire squid in the analysis, Goldman Sachs Reworks $5B In Warrants Held By Buffett’s Berkshire.
“Essentially, Buffett had the right to purchase 43.5 million shares of Goldman at $115 apiece until October 1, 2013. Under the new terms, Buffett will receive “the number of shares of common stock equal in value to the difference between the average closing price over the 10 trading days preceding October 1, 2013 and the exercise price of $115 multiplied by the number of shares of common stock covered by the warrant (43,478,260).”
The short form: instead of paying Goldman $5 billion in cash for stock worth considerably more, Buffett will simply take the amount of stock equivalent to the difference without paying the company.”
Now are their examples of special circumstances just the sign of astute investing or is this a pattern of synergetic regulatory favoritism and fusion with ruling governmental outlaws? Poor old uncle Warren, licking his ice cream cone while playing the ukulele. When will the anti-trust laws apply to the game rigging plutocrats? Evidently, the Buffett’s of the fixed exchanges have bought and paid for the best political protection available. Avoiding a speculative melt down is impossible for the man on the street, but the privileged globalists are well entrenched in their protected palaces built upon ill-gotten gain.
Run Buffett out of town on one of his rails, for railroading free enterprise into a dark tunnel. The derailment of our economy benefits the market manipulators, as the rest struggles to dig out of the collapsed slide of rubble that buries us alive. Elevating Buffett as an investment sage defies common sense.
The descent was gradual—a slide into the tawdry, the trivial and the inane, into the charade on cable news channels such as Fox and MSNBC in which hosts hold up corporate political puppets to laud or ridicule, and treat celebrity foibles as legitimate news. But if I had to pick a date when commercial television decided amassing corporate money and providing entertainment were its central mission, when it consciously chose to become a carnival act, it would probably be Feb. 25, 2003, when MSNBC took Phil Donahue off the air because of his opposition to the calls for war in Iraq
Donahue and Bill Moyers, the last honest men on national television, were the only two major TV news personalities who presented the viewpoints of those of us who challenged the rush to war in Iraq. General Electric and Microsoft—MSNBC’s founders and defense contractors that went on to make tremendous profits from the war—were not about to tolerate a dissenting voice. Donahue was fired, and at PBS Moyers was subjected to tremendous pressure. An internal MSNBC memo leaked to the press stated that Donahue was hurting the image of the network. He would be a “difficult public face for NBC in a time of war,” the memo read. Donahue never returned to the airwaves.
The celebrity trolls who currently reign on commercial television, who bill themselves as liberal or conservative, read from the same corporate script. They spin the same court gossip. They ignore what the corporate state wants ignored. They champion what the corporate state wants championed. They do not challenge or acknowledge the structures of corporate power. Their role is to funnel viewer energy back into our dead political system—to make us believe that Democrats or Republicans are not corporate pawns. The cable shows, whose hyperbolic hosts work to make us afraid self-identified liberals or self-identified conservatives, are part of a rigged political system, one in which it is impossible to vote against the interests of Goldman Sachs, Bank of America, General Electric or ExxonMobil. These corporations, in return for the fear-based propaganda, pay the lavish salaries of celebrity news people, usually in the millions of dollars. They make their shows profitable. And when there is war these news personalities assume their “patriotic” roles as cheerleaders, as Chris Matthews—who makes an estimated $5 million a year—did, along with the other MSNBC and Fox hosts.
It does not matter that these celebrities and their guests, usually retired generals or government officials, got the war terribly wrong. Just as it does not matter that Francis Fukuyama and Thomas Friedman were wrong on the wonders of unfettered corporate capitalism and globalization. What mattered then and what matters now is likability—known in television and advertising as the Q score—not honesty and truth. Television news celebrities are in the business of sales, not journalism. They peddle the ideology of the corporate state. And too many of us are buying.
The lie of omission is still a lie. It is what these news celebrities do not mention that exposes their complicity with corporate power. They do not speak about Section 1021 of the National Defense Authorization Act, a provision that allows the government to use the military to hold U.S. citizens and strip them of due process. They do not decry the trashing of our most basic civil liberties, allowing acts such as warrantless wiretapping and executive orders for the assassination of U.S. citizens. They do not devote significant time to climate scientists to explain the crisis that is enveloping our planet. They do not confront the reckless assault of the fossil fuel industry on the ecosystem. They very rarely produce long-form documentaries or news reports on our urban and rural poor, who have been rendered invisible, or on the wars in Iraq and Afghanistan or on corporate corruption on Wall Street. That is not why they are paid. They are paid to stymie meaningful debate. They are paid to discredit or ignore the nation’s most astute critics of corporatism, among them Cornel West, Medea Benjamin, Ralph Nader and Noam Chomsky. They are paid to chatter mindlessly, hour after hour, filling our heads with the theater of the absurd. They play clips of their television rivals ridiculing them and ridicule their rivals in return. Television news looks as if it was lifted from Rudyard Kipling’s portrait of the Bandar-log monkeys in “The Jungle Book.” The Bandar-log, considered insane by the other animals in the jungle because of their complete self-absorption, lack of discipline and outsized vanity, chant in unison: “We are great. We are free. We are wonderful. We are the most wonderful people in all the jungle! We all say so, and so it must be true.”
When I reached him by phone recently in New York, Donahue said of the pressure the network put on him near the end, “It evolved into an absurdity.” He continued: “We were told we had to have two conservatives for every liberal on the show. I was considered a liberal. I could have Richard Perle on alone but not Dennis Kucinich. You felt the tremendous fear corporate media had for being on an unpopular side during the ramp-up for a war. And let’s not forget that General Electric’s biggest customer at the time was Donald Rumsfeld [then the secretary of defense]. Elite media features elite power. No other voices are heard.”
Donahue spent four years after leaving MSNBC making the movie documentary “Body of War” with fellow director/producer Ellen Spiro, about the paralyzed Iraq War veteran Tomas Young. The film, which Donahue funded himself, began when he accompanied Nader to visit Young in the Walter Reed National Military Medical Center in Washington, D.C.
“Here is this kid lying there whacked on morphine,” Donahue said. “His mother, as we are standing by the bed looking down, explained his injuries. ‘He is a T-4. The bullet came through the collarbone and exited between the shoulder blades. He is paralyzed from the nipples down.’ He was emaciated. His cheekbones were sticking out. He was as white as the sheets he was lying on. He was 24 years old. … I thought, ‘People should see this. This is awful.’ ”
Donahue noted that only a very small percentage of Americans have a close relative who fought in Iraq or Afghanistan and an even smaller number make the personal sacrifice of a Tomas Young. “Nobody sees the pain,” he said. “The war is sanitized.”
“I said, ‘Tomas, I want to make a movie that shows the pain, I want to make a movie that shows up close what war really means, but I can’t do it without your permission,’ ” Donahue remembered. “Tomas said, ‘I do too.’ ”
But once again Donahue ran into the corporate monolith: Commercial distributors proved reluctant to pick up the film. Donahue was told that the film, although it had received great critical acclaim, was too depressing and not uplifting. Distributors asked him who would go to see a film about someone in a wheelchair. Donahue managed to get openings in Chicago, Seattle, Palm Springs, New York, Washington and Boston, but the runs were painfully brief.
“I didn’t have the money to run full-page ads,” he said. “Hollywood often spends more on promotion than it does on the movie. And so we died. What happens now is that peace groups are showing it. We opened the Veterans for Peace convention in Miami. Failure is not unfamiliar to me. And yet, I am stunned at how many Americans stand mute.”
Chris Hedges, whose column is published Mondays on Truthdig, spent nearly two decades as a foreign correspondent in Central America, the Middle East, Africa and the Balkans. He has reported from more than 50 countries and has worked for The Christian Science Monitor, National Public Radio, The Dallas Morning News and The New York Times, for which he was a foreign correspondent for 15 years.
In our modern world there exist certain institutions of power. Not government committees, alphabet agencies, corporate lobbies, or even standard military organizations; no, these are the mere “middle-men” of power. The errand boys. The well paid hitmen of the global mafia. They are not the strategists or the decision makers.
Instead, I speak of institutions which introduce the newest paradigms. Who write the propaganda. Who issue the orders from on high. I speak of the hubs of elitism which have initiated nearly every policy mechanism of our government for the past several decades. I am talking about the Council On Foreign Relations, the Tavistock Institute, the Heritage Foundation (a socialist organization posing as conservative), the Bilderberg Group, as well as the corporate foils that they use to enact globalization, such as Monsanto, Goldman Sachs, JP Morgan, the Carlyle Group, etc.
Many of these organizations and corporations operate a revolving door within the U.S. government. Monsanto has champions, like Donald Rumsfeld who was on the board of directors of its Searle Pharmaceuticals branch, who later went on to help the company force numerous dangerous products including Aspartame through the FDA. Goldman Sachs and JP Morgan have a veritable merry-go-round of corrupt banking agents which are appointed to important White House and Treasury positions on a regular basis REGARDLESS of which party happens to be in office. Most prominent politicians are all members of the Council on Foreign Relations, an organization which has openly admitted on multiple occasions that their goal is the destruction of U.S. sovereignty and the formation of a “one world government” or “supranational union” (their words, not mine).
However, one organization seems to rear its ugly head at the forefront of the most sweeping mass propaganda operations of our time, and has been linked to the creation of the most atrocious military methodologies, including the use of false flag events. I am of course referring to the Rand Corporation, a California based “think tank” whose influence reaches into nearly every sphere of our society, from politics, to war, to entertainment.
The Rand Corporation deals in what I would call “absolute gray”. The goal of the group from its very inception was to promote a social atmosphere of moral ambiguity in the name of personal and national priority. They did this first through the creation of “Rational Choice Theory”; a theory which prescribes that when making any choice, an individual (or government) must act as if balancing costs against benefits to arrive at an action that maximizes personal advantage. Basically, the ends justify the means, and moral conscience is not a factor to be taken seriously if one wishes to be successful.
Hilariously, rational choice theory has been attacked in the past by pro-socialist (collectivist) critics as “extreme individualism”; a philosophy which gives us license to be as “self serving” as possible while feeling patriotic at the same time. In reality, the socialists should have been applauding Rand Corporation all along.
What Rand had done through its propaganda war against the American people was to infuse the exact culture of selfishness needed to push the U.S. towards the socialist ideal. At the onset of any communist or national socialist society (sorry socialists, but they do indeed come from the same collectivist mindset), the masses are first convinced to hand over ultimate power to the establishment in order to safeguard THEMSELVES, not others. That is to say, the common collectivist man chooses to hand over his freedoms and participate in totalitarianism not because he wants what is best for the world, but because he wants what is best for himself, and he believes servitude to the system will get him what he wants with as little private sacrifice as possible (you know, except for his soul…).
The psychologist Carl Jung notes in his observations of collectivism in Nazi Germany and Stalinist Russia that most citizens of those nations did not necessarily want the formation of a tyrannical oligarchy, but, they went along with it anyway because they feared for their own comfort and livelihoods. Many a German supported the Third Reich simply because they did not want to lose a cushy job, or a steady paycheck, or they liked that the “trains ran on time”. Socialism is by far the most selfish movement in history, despite the fact that they claim to do what they do “for the greater good of the greater number”.
Rand also used Rational Choice Theory as a means to remove questions of principle from the debate over social progress. Rational Choice propaganda commonly presents the target audience with a false conundrum. A perfect example would be the hardcore propaganda based television show ‘24’ starring Kiefer Sutherland, in which a government “anti-terrorism” agent is faced with a controlled choice scenario in nearly every episode. This choice almost always ends with the agent being forced to set aside his morals and conscience to torture, kill, and destroy without mercy, or, allow millions of innocents to die if he does not.
Of course, the real world does not work this way. Life is not a chess game. Avenues to resolution of any crisis are limited only by our imagination and intelligence, not to mention the immense number of choices that could be made to defuse a crisis before it develops. Yet, Rand would like you to believe that we (and those in government) are required to become monstrous in order to survive. That we should be willing to forgo conscience and justice now for the promise of peace and tranquility later.
This is the age old strategy of Centralization; to remove all choices within a system, by force or manipulation, until the masses think they have nothing left but the choices the elites give them. It is the bread and butter of elitist institutions like Rand Corporation, and is at the core of the push for globalization.
In my studies on the developing economic disaster (or economic recovery depending on who you talk to) I have come across a particular methodology many times which set off my analyst alarm (or spidey-sense, if you will). This latest methodology, called “Linchpin Theory”, revolves around the work of John Casti, a Ph.D. from USC, “complexity scientist” and “systems theorist”, a Futurist, and most notably, a former employee of Rand Corporation:
Casti introduces his idea of “Linchpin Theory” in his book “X-Events: The Collapse Of Everything”, and what I found most immediately striking about the idea of “Linchpin Events” was how they offered perfect scapegoat scenarios for catastrophes that are engineered by the establishment.
Linchpin Theory argues that overt social, political, and technological “complexity” is to blame for the most destructive events in modern human history, and it is indeed an enticing suggestion for those who are uneducated and unaware of the behind the scenes mechanics of world events. Casti would like you to believe that political and social tides are unguided and chaotic; that all is random, and disaster is a product of “chance” trigger events that occur at the height of a malfunctioning and over-complicated system.
What he fails to mention, and what he should well know being a member of Rand, is that global events do not evolve in a vacuum. There have always been those groups who see themselves as the “select”, and who aspire to mold the future to their personal vision of Utopia. It has been openly admitted in myriad official observations on historical events that such groups have had a direct hand in the advent of particular conflicts.
For instance, Casti would call the assassination of Archduke Franz Ferdinand of Austria an “X-event”, or linchpin, leading to the outbreak of WWI, when historical fact recalls that particular crisis was carefully constructed with the specific mind to involve the U.S.
Norman Dodd, former director of the Committee to Investigate Tax Exempt Foundations of the U.S. House of Representatives, testified that the Committee was invited to study the minutes of the Carnegie Endowment for International Peace as part of the Committee’s investigation. The Committee stated:
“The trustees of the Foundation brought up a single question. If it is desirable to alter the life of an entire people, is there any means more efficient than war…. They discussed this question… for a year and came up with an answer: There are no known means more efficient than war, assuming the objective is altering the life of an entire people. That leads them to a question: How do we involve the United States in a war. This was in 1909.”
So, long before the advent of Ferdinand’s assassination, plans were being set in motion by globalist interests to draw the U.S. into a large scale conflict in order to “alter the life, or thinking, of the entire culture”. When a group of people set out to direct thinking and opportunity towards a particular outcome, and the end result is a culmination of that outcome, it is obviously not coincidence, and it is definitely not providence. It can only be called subversive design.
In the economic arena, one might say that the collapse of Lehman Bros. was the “linchpin” that triggered the landslide in the derivatives market which is still going on to this day. However, the derivatives market bubble was a carefully constructed house of cards, deliberately created with the help of multiple agencies and institutions. The private Federal Reserve had to artificially lower interest rates and inject trillions upon trillions into the housing market, the international banks had to invest those trillions into mortgages that they KNEW were toxic and likely never to be repaid. The Federal Government had to allow those mortgages to then be chopped up into derivatives and resold on the open market. The ratings agencies had to examine those derivatives and obviously defunct mortgages and then stamp them AAA. The SEC had to ignore the massive fraud being done in broad daylight while sweeping thousands of formal complaints and whistle blowers under the rug.
This was not some “random” event caused by uncontrolled “complexity”. This was engineered complexity with a devious purpose. The creation of the derivatives collapse was done with foreknowledge, at least by some. Goldman Sachs was caught red handed betting against their OWN derivatives instruments! Meaning they knew exactly what was about to happen in the market they helped build! This is called Conspiracy…
One might attribute Casti’s idea to a sincere belief in chaos, and a lack of insight into the nature of globalism as a brand of religion. However, in his first and as far as I can tell only interview with Coast To Coast Radio, Casti promotes catastrophic “X-Events” as a “good thing” for humanity, right in line with the Rand Corporation ideology. Casti, being a futurist and elitist, sees the ideas of the past as obsolete when confronted with the technological advancements of the modern world, and so, describes X-event moments as a kind of evolutionary “kickstart”, knocking us out of our old and barbaric philosophies of living and forcing us, through trial by fire, to adapt to a more streamlined culture. The linchpin event is, to summarize Casti’s position, a culture’s way of “punishing itself” for settling too comfortably into its own heritage and traditions. In other words, WE will supposedly be to blame for the next great apocalypse, not the elites…
I might suggest that Casti’s attitude seems to be one of general indifference to human suffering in the wake of his “X-Events”, and that he would not necessarily be opposed to the deaths of millions if it caused the “advancement” of humanity towards a particular ideology. His concept of “advancement” and ours are likely very different, though. I suspect that he is well aware that X-Events are actually tools at the disposal of elitists to generate the “evolution” he so desires, and that evolution includes a collectivist result.
With almost every major economy on the globe on the verge of collapse and most now desperately inflating, taxing, or outright stealing in order to hide their situation, with multiple tinderbox environments being facilitated in the Pacific with China, North Korea, and Japan, and in the Middle East and Africa with Egypt, Syria, Iran, Pakistan, Yemen, Mali, etc., there is no doubt that we are living in a linchpin-rich era. It is inevitable that one or more of these explosive tension points will erupt and cause a chain reaction around the planet. The linchpin and the chain reaction will become the focus of our epoch, rather than the men who made them possible in the first place.
Strangely, Casti’s theory was even recently featured in an episode of the ABC mystery/drama show “Castle”, called “Linchpin” (what else?), in which a writer turned detective uncovers a plot by a “shadow group” to use the research of the innocent Dr. Nelson Blakely (apparently based on Casti) to initiate a collapse of the U.S. economy by assassinating the ten-year-old daughter of a prominent Chinese businessman, triggering a dump of U.S. Treasuries by China and fomenting WWIII:
Now, I think anyone with any sense can see where this is going. Casti and Rand Corporation are giving us a glimpse into the future of propaganda. This is what will be written in our children’s history books if the globalists have their way. The fact that Linchpin Theory is featured in a primetime television show at all is a testament to Rand Corporation’s influence in the media. But, as for the wider picture, are the trigger points around us really just a product of complex coincidence?
Not a chance.
Each major global hot-spot today can easily be linked back to the designs of international corporate and banking interests and the puppet governments they use as messengers. Casti claims that “X-events” and “linchpins” cannot be accurately predicted, but it would seem that they can certainly be purposely instigated.
The globalists have stretched the whole of the world thin. They have removed almost every pillar of support from the edifice around us, and like a giant game of Jenga, are waiting for the final piece to be removed, causing the teetering structure to crumble. Once this calamity occurs, they will call it a random act of fate, or a mathematical inevitability of an overly complex system. They will say that they are not to blame. That we were in the midst of “recovery”. That they could not have seen it coming.
Their solution will be predictable. They will state that in order to avoid such future destruction, the global framework must be “simplified”, and what better way to simplify the world than to end national sovereignty, dissolve all borders, and centralize nation states under a single economic and political ideal?
Is it the Hegelian Dialectic all over again? Yes. Is it old hat feudalism and distraction? Yes. But, I have to hand it to Casti and Rand Corporation; they certainly have refined the argument for collectivism, centralization, technocracy, slavery, moral relativism, and false-flag dupery down to a near science.
Source: Brandon Smith | Alt-Market
During the second half of the 20th century the United States was an opportunity society. The ladders of upward mobility were plentiful, and the middle class expanded. Incomes rose, and ordinary people were able to achieve old-age security.
In the 21st century the opportunity society has disappeared. Middle class jobs are scarce. Indeed, jobs of any kind are scarce. To stay even with population growth from 2002 through 2011, the economy needed about 14 million new jobs. However, at the end of 2011 there were only 1 million more jobs than in 2002. http://www.bls.gov/webapps/legacy/cesbtab1.htm
Only 426,000 of these jobs are in the private sector. The bulk of the net new jobs consist of waitresses and bartenders and health care and social assistance. According to the Bureau of Labor Statistics, over the 9 years, employment for waitresses and bartenders increased by 1,188,000. Employment in health care and social assistance increased 3,087,000. These two categories accounted for 1,000% of the net private sector job growth.
As for manufacturing jobs, they not only did not grow with the population but declined absolutely. During these nine years, 3.5 million middle class manufacturing jobs were lost.
Over the entire nine years, only 48,000 new jobs were created for architects and engineers.
In the 21st century the US economy has been able to create only a few new jobs and these are in lowly paid domestic services that cannot be offshored, such as waitresses and bartenders.
The lack of jobs, especially high value-added, high productivity jobs, is the reason real median household income has declined and the distribution of income has worsened. Without rising real household income, there cannot be a consumer economy.
In the early years of the 21st century, the Federal Reserve substituted a rise in consumer debt to drive the economy in place of the missing rise in consumer incomes. Low interest rates drove up housing prices, and people refinanced their mortgages and spent the equity. The Federal Reserve kept the economy alive by loading up consumers with debt that housing prices and consumer incomes would soon be unable to support.
When debt and real estate prices reached unsustainable levels, the bubble popped, and the ongoing financial crisis was upon us.
The cause of all of the problems is the offshoring of Americans’ jobs. When jobs are moved offshore, consumers’ careers and incomes, and the GDP and payroll and income tax base associated with those jobs, go with them. When the goods and services produced for American markets by offshored labor are brought into the US to be sold, the trade deficit rises, and downward pressure is put on the dollar, pushing up domestic inflation. (On October 12, statistician John Williams (shadowstats.com) reported that “third-quarter wholesale inflation jumped to an annualized 6.2%.”)
Jobs offshoring is driven by Wall Street, “shareholder advocates,” the threat of takeovers, and by large retailers, such as Walmart. By cutting labor costs, profits go up.It is that simple. However, as a result of sending American jobs to cheap labor countries, US consumer incomes go down. The end result is to destroy the domestic consumer market. What would have been US consumer income growth becomes instead profit growth for US corporations.
Keynesian economists use in their textbooks the example of how the aggregate effect of individual saving could be the opposite of the effect intended by the individuals. Whereas each saver seeks to improve his position by building wealth, in the aggregate saving could exceed investment, resulting in a decline in aggregate demand and a fall in income for all. Offshoring has the same logic. Each corporation can expect to gain more profits from moving US jobs offshore, but the aggregate effect is a fall in American consumer incomes and a reduction in the American consumer market.
I have told this story many times. But policymakers, the media, and economists seem unable to connect the dots.
Jobs offshoring has substantial implications for Social Security and Medicare. The US has the least adequate social safety net of any developed country. The two major components of the US social safety net are Social Security and Medicare for the elderly. Social Security and Medicare are financed by a payroll tax. The combined tax is 15.3% of payrolls. For the past quarter of a century the Social Security portion of the payroll tax has built up a surplus of over $2 trillion. Recently, the Medicare portion began running in the red.
Right-wing Republicans, free market ideologues, and the left-wing have all indoctrinated themselves with incorrect beliefs about Social Security and Medicare. The right-wing claims that a safety net financed with 15.3% of payrolls is a “Ponzi scheme” and an “unfunded liability.” If that is the case, then so are veterans benefits, military pensions, and federal pensions, all of which are financed by the income tax, the basis for the payroll tax.
The left-wing claims that the rich do not pay high enough payroll taxes, because the income subject to Social Security payroll tax is capped at about $110,000. But the benefits are also capped. Social Security is not supposed to be an income redistribution scheme from rich to poor, and it is not supposed to be a pension system for the rich. The pension paid is supposed to correlate with the pre-retirement income level of the retiree. Those who had higher wages or salaries and consequently paid more in payroll taxes receive a larger Social Security check than those who had lower wages and salaries and paid less payroll taxes, although there is favoritism toward the lower income earners who receive proportionally more in respect to their payroll taxes than higher income earners.
There is no cap on income subject to the Medicare portion of the payroll tax. Moreover, Medicare charges a Medicare Part B premium that is deducted from the Social Security monthly check. In addition, there is a further Part B premium based on retirement age income. For example, someone working beyond retirement age and making $250,000 per year pays about $3,800 in Medicare Part B premium in addition to the Medicare portion of the payroll tax of about $7,500. The annual premium he pays for his “free” Medicare for which he has paid all his working life with a payroll tax is about $11,300.
Moreover, Medicare by itself is insufficient coverage. To actually have medical coverage, those covered by Medicare have to purchase a supplementary private policy to cover the large gaps in Medicare. Depending on the range of coverage, a supplementary policy costs approximately $100 to $300 per month.
As the person making $250,000 per year is likely to go for the most coverage, he will be paying about $14,900 (excluding deductions and co-payments) per year for his “free” Medicare. This is despite having paid the Medicare payroll tax each year of his working life. A person who made $250,000 in taxable income per year for 30 years would have paid $217,500 into Medicare at the current Medicare payroll tax rate.
The right-wing’s notion that Social Security and Medicare are handouts, part of the welfare state’s bread and circuses, and the left-wing’s idea that the rich get a free ride are equally untrue.
(Note: $250,000 is the politicians’ dividing line between the rich and the rest of us. For a person making $50,000 a year, an income five times larger can seem rich. However, a $250,000 annual income leaves a family or person far distant from the lifestyle of the rich. Upper middle class incomes are generally associated with high-tax, high-cost urban areas in states with high income taxes. After federal income and payroll taxes, state income and sales taxes, and property taxes, what appears to many as a large income disappears. In New York City, the federal income tax will take about 25% of the $250,000, New York state will take about 9%, and New York City will take about 3.65%. The combined city and state sales tax is 8.875%. The property tax is high. The conclusion is that in New York City a $250,000 income is reduced to $125,000 or thereabouts. Those who claim “the rich don’t pay taxes” are not talking about $250,000 incomes.)
Social Security and Medicare have served the country well. They protect the individual from his own mistakes, from crooked and incompetent money managers, and from financial crises, and they protect society from the moral dilemma of confronting large numbers of fellow citizens who through fault or no fault of their own cannot provide for their livelihood and medical care. After the financial scandals and crisis of the past five years, it is a stretch to believe that any but the astute can manage their personal wealth, whether small or large, in today’s situation of unregulated financial markets, zero interest rates, currency uncertainty, and highly complex investment instruments with computers programmed with mathematical models dominating equity trades.
The argument that conceptually a person could do better by investing his payroll taxes in the stock market is a poor basis for old age security policy. The person can do better as long as he or she doesn’t fall into the hands of a Bernie Madoff or a Goldman Sachs, doesn’t receive zero interest on his bonds because the Federal Reserve has to bail out the “too big to fail banks,” doesn’t experience a decline in currency value due to monetization of enormous federal deficits, and doesn’t experience a bear market as he approaches retirement.
The right-wing ideologues who try to scare old age security out of existence go on and on about rising medical costs, about an aging population living longer, declining birthrates and a worsening ratio of workers to retirees, about people learning to rely on handouts rather than their own means, and about Washington’s rising unfunded liabilities.
Scare projections are designed to scare, and most are untenable. For example, longevity was a product of rising incomes, good diet, and antibiotics. Today only the upper crust have rising incomes. Antibiotics are wearing out from abuse and rising immunity of bacteria. Diet is compromised in ways still poorly understood as a result of GMOs, pesticides, herbicides, pumping chicken, pork, and beef full of antibiotics and hormones and feeding the animals GMO grains and also possibly infected animal byproducts, and pumping our water full of fluoride. A variety of destructive activities and behaviors are causing ecological damage. Longevity might have been a short-term benefit of irreproducible conditions considering the mounting ecological damage and the rise of superbugs, stress, and tainted food and water production.
The projection of an aging population might also be wrong. Clearly, the post-World War II baby boomers are aging, but do the projections take into account the legislated 1965 immigration increases plus the illegal influx from Mexico and points south of young people with high birth rates? How can it be that a country with allegedly 30 million illegal immigrants, whose children born in the US are citizens, has a declining birth rate? How do we know that the illegal population will not continue to increase?
There are so many Spanish speaking people in the US today that if a person calls any of his utility companies, whether telephone, Internet, water, electricity, TV, or any of his credit card companies, or his bank, he has to select English or Spanish. Obviously, as
anti-immigration sites make clear, the US population is changing in its national origin, and there appears to be no sign of an aging Hispanic population. How many old Spanish speaking people do you see in the US compared to the young?
When confronted with this apparent fact, the response is: “why will the Hispanics pay for the aging white population?” The answer is: because they are in the same payroll tax system and the taxes will be withheld from their wages and salaries just as they are from everyone else’s.
It is possible that if Hispanics in the US have suffered years of hostility, accusations, and hatred from “the ice people,” once Hispanics are sufficiently numerous to control the legislature, assuming one still exists, or to take over the executive branch, the only seat of power, they may in retribution cut off the aging whites. But if so, the whites will have brought it on themselves.
Whatever the scare projections that are mustered to undermine the public provision of old age security, the real financial danger is never mentioned. The only significant financial danger to Social Security and Medicare is the offshoring of American jobs and GDP. A country without a job base is without a payroll tax base. If the only jobs that the 21st century “world’s only superpower” economy can create are for waitresses, bartenders, and health care and social assistance (hospital orderlies and practical nurses), payroll tax revenues will be less than if the US still had 20 million workers and rising in well-paid manufacturing jobs instead of 11 million.
Regardless of Medicare’s financing, the death knell for the elderly was the legality of abortion. If the yet to be born are an insufferable burden, imagine the cost of the elderly. As far as the state is concerned, once you stop producing income and payroll tax revenues for the state, it is time for you to die. Washington would rather enact euthanasia than to pay back the $2+ trillion in the Social Security trust fund that Washington spent, leaving only non-marketable IOUs in the account.
Readers might think that Americans would never stand for death by injection for the elderly once the qualified age is reached. But why would they not? They have accepted millions of aborted babies, and Americans, including the elderly, have stood for Washington’s murder, maiming and displacement of millions of Muslim men, women, and children in 7 countries over the past 11 years and are yet to show any signs of remorse for their complicity in mass murder. Next month tens of millions of Americans will vote for Mitt Romney who believes Obama isn’t killing Muslims fast enough.
The new “Obamneycare” health legislation does have “death panels.” They are not called that, and they do not make formal decisions to terminate lives. But it comes to almost the same thing. Various panels, committees, or bureaucratic departments are empowered to make decisions about “effective care.” It has long been known that most health care costs are associated with the last year of life. Cost and age will be elements in determining standards of care. The greater the weight assigned to cost, the more care will be withheld. In effect, the “effective care” panel is a “death panel.”
Prior to the advent of the new “health care” system, Medicare and or hospitals are already shifting costs to Medicare patients. To avoid penalties and fraud allegations for “medically unnecessary hospitalizations,” rather than formally admit Medicare patients as inpatients, hospital administrators classify them as outpatients “under observation.”
According to a Brown University analysis of Medicare records in 2007, 2008, and 2009, the ratio of Medicare observation patients to those admitted as inpatients rose by 34 percent.
Being classified an outpatient under observation eliminates medicare coverages, especially for post-operative or post-accident rehabilitation care, leaving Medicare patients with bills in the tens of thousands of dollars (AARP Bulletin, October 2012).
Other costs are being shifted to doctors and to hospitals. Medicare pays fixed prices for each covered procedure or test, and these prices can be as low as half of the billed prices. During a period when costs incurred by providers of health care have been rising, Medicare has been cutting the amounts it pays providers.
As the payroll tax is commingled with general tax revenues, Social Security and Medicare payroll tax collections can be diverted to other purposes and, thus, are always subject to competing budgetary demands, such as the previous 11 years of gratuitous wars and the bailouts of “banks too big to fail,” or to deficit reduction demands as the government consistently overspends all revenue sources.
A national health service is the only way to control health costs and provide the population with health care coverage. A national health system takes the many levels of profits out of the system and also reams of compliance and liability costs. A national health system can coexist with a private system for those who can afford it or whose employers are sufficiently profitable to provide it.
As Jarad Diamond reveals in his book, Collapse: How Societies Choose to Fail or Succeed, societies fail, if not because of their moral bankruptcy, then because their rulers are only capable of short-term thinking. The future is beyond their interest. The US offshored its economy, because it worked short-term for corporate executives (rewarded with multi-million dollar performance bonuses), Wall Street (rewarded with profits), shareholders (rewarded with capital gains), and politicians (rewarded with corporate and Wall Street campaign contributions).
Incompetent free market economists confused jobs offshoring with free trade. They said the country would and was benefiting by giving its manufacturing, industrial, and tradable professional service jobs to China and India, that the US was ridding itself of “dirty fingernail jobs” and would soon be flush with highly paid high-tech jobs and highly paid financial service jobs.
None of these promises or predictions were true. Nowhere in the government’s jobs statistics are there any of these promised replacement jobs. The economists who provided cover for the destruction of the US economy were rewarded by the corporations with speaking fees, grants for their university departments, and newspaper columns paid for by corporate advertisers. Those few who told the truth were expelled from the corporate media that Bill and Hilary Clinton allowed to be monopolized (for campaign contributions, of course).
The future of old age security in the United States has been lost, because the job base has been given away to foreigners in order to maximize incomes in the short-run for the few decision-makers.
The misrepresentation of jobs offshoring as free trade has destroyed the prospects of cities, counties, and states along with those of unions and millions of Americans who once had a secure future. It has destroyed the prospects of class after class of university graduates burdened with student loans who expected to step into the jobs that have been offshored or filled by H-1B visa holders from abroad.
The American work force has been forsaken by the corporations and by Washington, and this means that Social Security and Medicare have also been forsaken.
As I predicted in the early years of this new century, “the United States will be a third world country in 20 years.” We might get there even sooner as Washington exhausts what little is left of American wealth in gratuitous wars in service to Israel and the US Military/Security Complex, in unaffordable military buildups in futile hopes of establishing hegemony over China and Russia, and in negative interest rates from the Federal Reserve’s effort to drive up the book value of debt instruments on the balance sheets of financial institutions.
In 1817 Percy Bysshe Shelly forecast America’s future:
“I met a traveler from an antique land
Who said: “Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip and sneer of cold command,
Tell that its sculptor well those passions read,
Which yet survive, stampt on these lifeless things,
The hand that mockt them and the heart that fed:
On the pedestal these words appear:
‘My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!’
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.”
Writing in the October 15 online CounterPunch, John V. Walsh, relying on charts prepared by economics professor Mark J. Perry at the University of Michigan and blogger John Hunter, concludes that it is a myth that US manufacturing is in decline.
Walsh says that the loss of US manufacturing jobs is due to automation, not to offshoring. Think about this for a moment. Perry’s graph on which Walsh relies shows the sharp drop in US manufacturing employment to be a 21st century experience. However, automation has been around for a long time. The notion that its effect on employment only showed up recently needs an explanation that is not provided. The steep drop in US manufacturing employment that began in 2000 does correspond with the date at which jobs offshoring began to bite hard.
Why does automation not also affect Chinese manufacturing, especially as most of the Chinese manufacturing technology came from the US as US corporations offshored their production for the US market? If Chinese manufacturing is not up to date with automation, like the US is assumed to be, how do the Chinese, even with cheap labor, undersell US automated factories? How did Chinese manufacturing employment increase in a mere four years by an amount equal to the total manufacturing employment in the US?
The US Bureau of Economic Analysis shows only 11.2 million full time US manufacturing jobs in 2010. The US Bureau of Labor Statistics shows 11.7 million US manufacturing jobs in 2011, down from 15.3 million in 2002.
In contrast, China, an industrial and manufacturing backwater for most of my life, had 112 million manufacturing jobs in 2006. In a mere four years (2002-2006), the increase in China’s manufacturing employment was as large as today’s total employment in US manufacturing. As long ago as 2006, China’s manufacturing employment was about 10 times the current US manufacturing employment. The Chinese population is about 4 times larger than the US population, but China’s manufacturing population is proportionately greater–10 times larger. Indeed, Chinese manufacturing employees almost equal the total number of employees in all occupations in the US (Manufacturing and Technology News, December 15, 2009).
Obviously, something is wrong with Walsh’s article or the graphs on which he relied.
America’s manufacturing prowess cannot be found in the statistical data. The US is primarily an exporter of Agricultural commodities. The US imports almost twice the amount of manufactured goods as it exports. Indeed, according to the US Census Bureau Statistical Abstract of the US http://www.census.gov/compendia/statab/2012/tables/12s1308.pdf US imports of manufactured goods are 5.5 times larger than US imports of crude oil and 4 times larger than all imports of mineral fuel. Yet, we hear about energy dependency, not manufacturing dependency.
As of 2010 the “superpower” US economy still had a trade surplus in airplanes and airplane parts and a small $6 billion surplus in scientific instruments, but that is about all.
In ADP equipment and office machinery, the US exported $22.2 billion in 2010 (latest information at time of writing), down from $44.6 billion in 2000. US imports in 2010 of ADP equipment and office machinery were $113.5 billion, or 5.1 times exports.
The US cannot even make its own clothes and shoes. In 2010 footwear imports are 28.7 times exports. Clothing imports are 24.6 times exports.
Electrical machinery exports were $77 billion; imports were $120 billion.
Exports of power generating machinery were $33 billion; imports were $42 billion.
Exports of television, VCRs were $21.5 billion; imports were $137 billion.
US exports of vehicles was $88 billion; imports were $179 billion.
US news reports of thousands upon thousands of discharged US workers never cite their replacement by automation. The news story is always that the plant is being closed and the jobs moved abroad. Any review of America’s former manufacturing centers verifies this. Boarded up plants and cities and towns in decline are the remains of America’s formerly world dominant manufacturing economy.
The loss of the US post-war trade surplus in manufacturing has left the US with a huge trade deficit. The charts on which Walsh relied left him unaware of the fact that China has a large trade surplus with the US, and the US has a large trade deficit not only with China but with the world.
The fact that the US has to import not only manufactured goods, but also high-technology products from China, an inconceivable outcome during the second half of the 20th century, is powerful testimony to the decline of the US as a manufacturing powerhouse.
It took some doing to obscure the facts and to present the US as a rival to China in manufacturing prowess. How did it happen?
The fault might lie in the way statistical information is collected and presented. Apple, for example, is a US corporation. It reports its worldwide earnings to the IRS. Its manufacturing is counted as US manufacturing as it is a US corporation. However, Apple doesn’t produce a single computer in the US. They are produced in China. The employment that Apple reports is in China. The Chinese are employed by an American company, but they are not Americans. The Chinese incomes that Apple provides do not support the American consumer market or provide the tax base for cities and states. The Chinese incomes do not provide ladders of upward mobility or careers for Americans.
The wages Apple pays are in China. The consumer incomes and GDP that it generates are in China. When Apple’s computers come back to America to be sold they come in as imports. But Apple’s manufacturing and employment are reported as the output and employment of an American company.
When statistics and the methods by which they are compiled were put into effect, countries did not offshore their production for their domestic markets. Foreign investments were made for selling abroad, not for selling in the home market. With the advent of offshoring, counting the employment and output of US firms that are producing abroad for their domestic market as an indication of the strength of US manufacturing is very misleading. Apple, for example, has done more to boost China’s GDP than to boost America’s GDP. This is true of every US corporation that offshores its production for US consumers.
In recent years the percentage of the work forces of large US corporations that is foreign sourced has risen rapidly. Some of the overseas hiring reflects traditional foreign investment in which a company builds abroad in order to sell abroad, but much of the hiring reflects offshored production for US markets.
The US has been able to survive the large trade deficits produced by jobs offshoring, because the US dollar is the world reserve currency. Being the world reserve currency, the US does not have to earn foreign currencies with exports in order to pay for its imports. However, as these trade deficits persist and the buildup of foreign holdings of dollar paper assets rises, there is a diminishing willingness of foreigners to trade real goods and services for financial assets denominated in a fiat currency whose value is diminishing with the ever-growing supply.
Thus, the basic notion of globalism–that a country’s corporations can produce goods and services in any country for home markets–is false.
Walsh is correct that China is not to blame for the decline in US manufacturing. Offshoring is to blame, and, thus, the blame lies with US corporations, policymakers, and the economists and financial media who shill for “globalism.” The decision was made to sacrifice the US economy to the short-term profits of the few. A country so poorly led can do nothing but decline.
Source: Paul Craig Roberts
Warnings That A Massive Stock Market Crash Is ImminentIn the financial world, the month of October is synonymous with stock market crashes. So will a massive stock market crash happen this year? You never know. The truth is that our financial system is even more vulnerable than it was back in 2008, and financial experts such as Doug Short, Peter Schiff, Robert Wiedemer and Harry Dent are all warning that the next crash is rapidly approaching. We are living in the greatest debt bubble in the history of the world and Wall Street has been transformed into a giant casino that is based on a massive web of debt, risk and leverage. When that web breaks we are going to see a stock market crash that is going to make 2008 look like a Sunday picnic. Yes, the Federal Reserve has tried to prevent any problems from erupting in the financial markets by initiatinganother round of quantitative easing, but 40 billion dollars a month will not be nearly enough to stop the massive collapse that is coming. This will be explained in detail toward the end of the article. Hopefully we will get through October (and the rest of this year) without seeing a stock market collapse, but without a doubt one is coming at some point. Those on the wrong end of the coming crash are going to be absolutely wiped out.
A lot of people focus on the month of October because of the history of stock market crashes in this month. This history was detailed in a recent USA Today article….
When it comes to wealth suddenly disappearing, October can be diabolically frightful. The stock market crash of 1929 that led to the Great Depression occurred in October. So did the 22.6% plunge suffered by the Dow Jones industrial average in 1987 on “Black Monday.”
The scariest 19-day span during the 2008 financial crisis also went down in October, when the Dow plunged 2,675 points after investors fearing a financial collapse went on a panic-driven stock-selling spree that resulted in five of the 10 biggest daily point drops in the iconic Dow’s 123-year history.
So what will we see this year?
Only time will tell.
If a stock market crash does not happen this month or by the end of this year, that does not mean that the experts that are predicting a stock market crash are wrong.
It just means that they were early.
As I have said so many times, there are thousands upon thousands of moving parts in the global financial system. So that makes it nearly impossible to predict the timing of events with perfect precision. Financial conditions are constantly shifting and changing.
But without a doubt another major financial collapse similar to what happened back in 2008 (or even worse) is on the way. Let’s take a look at some of the financial experts that are predicting really bad things for our financial markets in the months ahead….
According to Doug Short, the vice president of research at Advisor Perspectives, the stock market is somewhere between 33% and 51% overvalued at this point. In a recent article he offered the following evidence to support his position….
● The Crestmont Research P/E Ratio (more)
● The cyclical P/E ratio using the trailing 10-year earnings as the divisor (more)
● The Q Ratio, which is the total price of the market divided by its replacement cost (more)
● The relationship of the S&P Composite price to a regression trendline (more)
Peter Schiff, the CEO of Euro Pacific Capital, has been one of the leading voices in the financial community warning people about the crisis that is coming.
During a recent interview with Fox Business, Schiff stated that the massive financial collapse that we witnessed back in 2008 “wasn’t the real crash” and he boldly declared that the “real crash is coming”.
So is Schiff right?
We shall see.
Economist Robert Wiedemer warned people what was coming before the crash of 2008, and now he is warning that what is coming next is going to be even worse….
“The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2012.”
Financial author Harry Dent believes that the stock market could fall by as much as 60 percent in the coming months. He is convinced that stocks are hugely overvalued right now….
“We have the greatest debt bubble in history. We will see a worldwide downturn. And when you are in this type of recessionary environment stocks should be trading at five to seven times earnings.”
So are these guys right?
We shall see.
But I do find it interesting that some of the biggest names in the financial world are currently making moves as if they also believe that a massive financial crisis is coming.
For example, as I have written about previously, George Soros has dumped all of his holdings in banking giants JP Morgan, Citigroup and Goldman Sachs.
Infamous billionaire hedge fund manager John Paulson, the man who made somewhere around 20 billion dollarsbetting against the U.S. housing market during the last financial crisis, is making massive bets against the euro right now.
So where are these financial titans putting their money?
According to the Telegraph, both of these men are pouring enormous amounts of money into gold….
There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).
Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake to 21.3m.
At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more than $700m from Mr Paulson’s funds. These are significant positions.
So why would they do this?
Why would they pour millions upon millions of dollars into gold?
Well, it would make perfect sense to put so much money into gold if a massive financial crisis was coming.
So is the next financial crisis imminent?
We will see.
Most “financial analysts” that appear in the mainstream media would laugh at the notion that a stock market crash is imminent.
Most of them would insist that everything is going to be perfectly fine for the foreseeable future.
In fact, most of them are convinced that quantitative easing is going to cause stocks to go even higher.
After all, isn’t quantitative easing supposed to be good for stocks?
Didn’t I write an article just last month that detailed how quantitative easing drives up stock prices?
Yes I did.
So how can I be writing now about the possibility of a stock market crash?
Aren’t I contradicting myself?
Not at all.
Let me explain.
The first two rounds of quantitative easing did indeed drive up stock prices. The same thing will happen under QE3, unless the effects of QE3 are overwhelmed by a major crisis.
For example, if we were to see a total collapse of the derivatives market it would render QE3 totally meaningless.
Estimates of the notional value of the worldwide derivatives market range from 600 trillion dollars all the way up to 1.5 quadrillion dollars. Nobody knows for sure how large the market for derivatives is, but everyone agrees that it is absolutely massive.
When we are talking about amounts that large, the $40 billion being pumped into the financial system each month by the Federal Reserve during QE3 would essentially be the equivalent of spitting into Niagara Falls. It would make no difference at all.
Most Americans do not understand what “derivatives” are, so they kind of tune out when people start talking about them.
But they are very important to understand.
Essentially, derivatives are “side bets”. When you buy a derivative, you are not investing in anything. You are just gambling that something will or will not happen.
I explained this more completely in a previous article entitled “The Coming Derivatives Crisis That Could Destroy The Entire Global Financial System“….
A derivative has no underlying value of its own. A derivative is essentially a side bet. Usually these side bets are highly leveraged.
At this point, making side bets has totally gotten out of control in the financial world. Side bets are being made on just about anything you can possibly imagine, and the major Wall Street banks are making a ton of money from it. This system is almost entirely unregulated and it is totally dominated by the big international banks.
Over the past couple of decades, the derivatives market has multiplied in size. Everything is going to be fine as long as the system stays in balance. But once it gets out of balance we could witness a string of financial crashes that no government on earth will be able to fix.
Five very large U.S. banks (including Goldman Sachs, JP Morgan and Bank of America) have combined exposure to derivatives in excess of 250 trillion dollars.
Keep in mind that U.S. GDP for 2011 was only about 15 trillion dollars.
So we are talking about an amount of money that is almost inconceivable.
That is why I cannot talk about derivatives enough. In fact, I apologize to my readers for not writing about them more.
If you want to understand the coming financial collapse, one of the keys is to understand derivatives. Our entire financial system has been transformed into a giant casino, and at some point all of this gambling is going to cause a horrible crash.
Do you remember the billions of dollars that JP Morgan announced that they lost a while back? Well, that was caused by derivatives trades gone bad. In fact, they are still not totally out of those trades and they are going to end up losinga whole lot more money than they originally anticipated.
Sadly, that was just the tip of the iceberg. Much, much worse is coming. When you hear of a major “derivatives crisis” in the news, you better run for cover because it is likely that the entire house of cards is about to start falling.
And don’t get too caught up in the exact timing of predictions.
If a stock market crash does not happen this month, don’t think that the storm has passed.
A major financial crisis is coming. It might not happen this week, this month or even this year, but without a doubt it is approaching.
And when it arrives it is going to be immensely painful and it is going to change all of our lives.
I hope you are ready for that.
Source: The Economic Collapse
It is impossible to make up a fantasy tale that rivals the manifestations of the outlandish MF Global scandal. The evaporation of customer’s monies into an intentional off shore stash is tragic enough, but the indignity of allowing “no consequences” for a horrific crime against all investors is inexcusable. Jon S. Corzine is a fraudster that screams out for the gallows of justice. The manner of fleecing the public by Wall Street crooks has a clear distinction. Corzine walks while Madoff serves time. The original “Magical Mystery Tour” was a precursor of today’s reality TV shows. Corzine’s version is more a “House of Horrors”.
The lack of definitive disclosure in the MF Global investigation is hampered at every turn. The stonewalling and cover-up is business as usual in the world of special selective prosecution. The frustration shows as Judicial Watch sues SEC, CFTC for Corzine, MF Global docs.
“Judicial Watch said the CFTC acknowledged receiving the group’s FOIA on April 25, 2012, but failed to provide a final reply by the statutory deadline of May 23, 2012. Similarly, the SEC told Judicial Watch it received the FOIA on April 25, 2012, but did not provide a final response by the mandatory deadline date.
The American people deserve to know the truth about what FSOC officials knew about the epic failure of MF Global and when they knew it. But once again, the Obama administration refuses to provide basic information related to its ‘oversight’ of the private sector,” stated Judicial Watch President Tom Fitton.”
Judging from public polls the attitude towards this dramatic crime hits hard at the diminutive confidence level, which goes a long way to cloud the entire financial community. If MF Global is an aberration, what is the problem of conducting an open and thorough probe that holds the thieves that stole customer’s money accountable?
The public deserves answers. The Daily Finance illustrates this sentiment in the article, MF Global: The Hero, the Villain, and the Anticlimax.
“During an online chat The Motley Fool held shortly after publishing our series on The Astonishing Collapse of MF Global, we polled participants on whether they thought criminal charges would be pressed, and if so, against whom: 71% thought someone would be held accountable and sent to prison. Most thought it would be Corzine. Others eyed JPMorgan CEO Jamie Dimon. Some thought a fall guy (or gal) would be found. But the idea that everyone would walk away seemed impossible.
Ten months later, customers are still fighting for their money to be returned, and getting it in pennies rather than pounds. (A recent ruling will return $130 million more from the CME Group (NYS: CME) JPMorgan Chase is onto its next scandal involving customer accounts and the collapse of a brokerage firm. And Corzine, whose hands-on role at MF Global included roaming the trading floors, is considering starting a hedge fund.”
Crime committed among the protectedGoldman Sachs fraternity is a foregone conclusion. Investor Daily offers up an even more disgusting prospect inCorzine’s Next Act After MF Global: A Hedge Fund. It looks like the vanishing of $1.5 billion is not a prohibition to running a new money scheme.
“Amazingly, Corzine’s reputation may be irrevocably tarnished, but the latest reports suggest the ensuing criminal investigation is unlikely to lead to any charges against him. Of course, Corzine himself has yet to be interviewed by federal investigators in the 10 months since they began examining the details of the firm’s downfall, though it’s anticipated he’ll agree to such an interview next month.”
The infectious relationship between the Corzine Cosa Nostra and the Obama administration is sickening. The Goldman Sachs immunity of their crony connections just keeps on coming over at Eric Holder’s Department of Justice. Breitbart cites: “The New York Times reported that Holder’s Justice Department will not be criminally charging Jon Corzine or any MF Global executives in that case either.”The New American expands in an article by Bob Adelmann, Former MF Global CEO Jon Corzine Will Likely Get Off Scot-Free.
“With the investigators passing on pressing for criminal charges to be filed against Corzine, there are several glaring ironies remaining. First, the huge bets that Corzine made with company money, and then with customers’ monies when the company’s funds were depleted, turned out to be profitable after all.
Second, investigators are currently negotiating with O’Brien, the assistant treasurer from Chicago, to waive her Fifth Amendment rights in exchange for immunity for her testimony about what actually happened in those last days.
Finally, rumors are surfacing that Corzine is about to start another investment company, this time a hedge fund where he will manage investors’ funds for them. There will be just one stipulation: they must have bad memories in order to play.”A financial wizard like Corzine puts P. T. Barnum to shame. Who needs to gear up a forgery currency printing press, when people simply turn over their treasure to a confidence artist with Goldman Sachs credentials? Such surreal conduct in the world of Wall Street larceny is rarely so blatant.
A mass exodus from entrusting your funds in third party risk financial instruments should be the logical response. However, in the bizarre environment of derivative deception and compulsory arbitration, the average saver has little security in the return of their capital. Once, farmers’ biggest hazard was the weather. Today hedging your crop with future contracts in a Corzine account incurs far greater risk. When the government ignores the crimes of major political donors and refuses to prosecute or recover stolen money, it promotes an outlaw system for and by connected elites. Such an absence of fair dealing in the Obama tour of duty deserves their own jail sentence.
No doubt, the chief crook on Wall Street is virtually immune from any law that brings lesser mortals to their knees. The latest outrage summed up nicely in “Relieve Goldman Sachs of Their Legal Exposure“, passes with little notice in the establishment media.
“Goldman Sachs got a rare “reverse Wells notice” from the SEC, when they were told that a mortgage-backed securities deal which they earlier heard they would face prosecution for would not net them any civil enforcement. But that was just the beginning. Later in the day, they learned they would not face any prosecution from the Justice Department for the misdealings brought to light in a Senate Permanent Subcommittee on Investigations report a year ago.”
In case you have not heard the details, the Eric Holder, DOJ of criminal protection and selective prosecution, hit a new low.
“In a written statement, the department said it conducted an exhaustive investigation of allegations brought to light by a Senate panel investigating the 2008-2009 financial crisis.
“The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the department said.”
TARP was designed to bail out the insolvent banks. Goldman Sachs transformed itself into a BANK so that the firm could borrow from the Fed window. The revolving door cycle of government regulators, opting for a promotion as an investment bankster and compensatory profit well earned from previous service, hardly gets the attention of the financial community or government oversight. The entire obscene relationship of crony favoritism inevitably leads to a society where the rule of law only applies to the competition.
The definitive “vampire squid” watchdog site, Goldman Sachs 666, is so effective that the Goldman Sachs hires law firm to shut blogger’s site. “The bank has instructed Wall Street law firm Chadbourne & Parke to pursue blogger Mike Morgan, warning him in a recent cease-and-desist letter that he may face legal action if he does not close down his website.” Such excessive efforts to inhibit investigative reporting may seem that the global financial titan is afraid of public scrutiny. However, encouraging it is that the flow of information persists; the deplorable reality is that there is no political will to enforce common law violations.
The slanted regulations are written by Goldman Sachs attorneys and shepherd into law with their lobbyists. Their bought and paid for legislators dutifully do their bidding and eagerly take their campaign contributions. That is why the rejection of holding Goldman Sachs accountable by the Department of Justice is significant.
The incomparable ZeroHedge explains in, Confused Why Goldman Will Face No Criminal Charges? Here’s Why.
“We learned courtesy of Goldman’s 10-Q, that the US justice department will not press criminal charges against Goldman Sachs. This, despite Senator Carl “Shitty Deal” Levin, in one of the most bombastic kangaroo court spectacles on live TV ever, asking for a criminal investigation after the subcommittee he led spent years looking into Goldman, and in which he said Goldman misled Congress and investors.”
The Department of Justice functions to discipline the other guy. Goldman Sachs is the hub of the financial pyramid. When partners are installed on the Federal Reserve or are appointed to Treasury, the money elite contain their grip on their control of the fiat money system. This model dominated by bureaucratic technocrats, runs roughshod over the regulators. The mere notion that any Attorney General will enforce statues is naive, when every administration is bought and paid for by the same moneychangers.
Using the distinctive absurdity of legal rationalization, RT reports:
“The Justice Department said that it had conducted an “exhaustive investigation” into allegations of fraud during the crisis from 2008 to 2009. The probe reportedly uncovered email conversations between employees of Goldman Sachs branding mortgage securities sold to investors as “junk” and “crap”.
Moreover, the probe writes that the bank “used net short positions to benefit from the downturn in the mortgage market, and designed, marketed, and sold CDOs [collateralized debt obligations] in ways that created conflicts of interest with the firm’s clients and at times led to the bank’s profiting from the same products that caused substantial losses for its clients.”
Alas, such illegal conduct is acceptable in the world of politicized injustice. No one gets the judicial breaks and skates the fine line of illegality better then Goldman Sachs. The DoJ operates as a mob lawyer for the accused. Prosecuting the proprietors of the criminal system is taboo.
Accepting this obscenity as normal is frustrating. Until now, no practical legislative, regulatory, administrative, legal or punitive response has seen the light of day to hang the Goldman Sachs pirates from the yardarms. Legal recourse will never provide comprehensive relief or rectify the abuses of this wicked protection racket that keeps Goldman Sachs above justice.
Only a total ban and breakup of the House of Rothschild and all their surrogate entities, can resolve by liquidation the monetary monopoly of debt created finance. Reinstituting Glass-Steagall would be a necessary first measure, but that reenactment alone is mere window dressing on a fraudulent Ponzi scheme.
Goldman Sachs stays one-step ahead of a critical mass meltdown, much of its own creation. The risks taken by this firm do not end with their former partners or current shareowners. This house of cards is entrenched in the IOU pecuniary system. What visibly sets Goldman Sachs apart from the rest of Wall Street is their network of entangling influences in every corner and crack of government, media, business and the courts.
No other financial organization enjoys picking financial policy makers on every level in the process. If Congress cannot get the Department of Justice to follow the law, who can honestly believe that a viable Presidential candidate can buck the Wall Street culture that controls and funds the two party facade?
Tragically, the corruption of corporatist is not confined to crony investment banksters. The legal and court organism that watches over the crooked money machine deserves widespread disrespect for their complicity. Goldman Sachs’ day of reckoning await the wrath of the populace.
And other tales of an empire gone mad…
Afghanistan in the 1980s and 90s … Bosnia and Kosovo in the 1990s … Libya 2011 … Syria 2012 … In military conflicts in each of these countries the United States and al Qaeda (or one of its associates) have been on the same side. 1
What does this tell us about the United States’ “War On Terrorism”?
Regime change has been the American goal on each occasion: overthrowing communists (or “communists”), Serbians, Slobodan Milosevic, Moammar Gaddafi, Bashar al-Assad … all heretics or infidels, all non-believers in the empire, all inconvenient to the empire.
Why, if the enemy is Islamic terrorism, has the United States invested so much blood and treasure against the PLO, Iraq, and Libya, and now Syria, all mideast secular governments?
Why are Washington’s closest Arab allies in the Middle East the Islamic governments of Saudi Arabia, Qatar, Kuwait, Jordan, and Bahrain? Bahrain being the home of an American naval base; Saudi Arabia and Qatar being conduits to transfer arms to the Syrian rebels.
Why, if democracy means anything to the United States are these same close allies in the Middle East all monarchies?
Why, if the enemy is Islamic terrorism, did the United States shepherd Kosovo — 90% Islamist and perhaps the most gangsterish government in the world — to unilaterally declare independence from Serbia in 2008, an independence so illegitimate and artificial that the majority of the world’s nations still have not recognized it?
Why — since Kosovo’s ruling Kosovo Liberation Army (KLA) have been known for their trafficking in women, heroin, and human body parts (sic) — has the United States been pushing for Kosovo’s membership in NATO and the European Union? (Just what the EU needs: another economic basket case.) Between 1998 and 2002, the KLA appeared on the State Department terrorist list, remaining there until the United States decided to make them an ally, due in no small part to the existence of a major American military base in Kosovo, Camp Bondsteel, well situated in relation to planned international oil and gas pipelines coming from the vast landlocked Caspian Sea area to Europe. In November 2005, following a visit to Bondsteel, Alvaro Gil-Robles, the human rights envoy of the Council of Europe, described the camp as a “smaller version of Guantánamo”. 2
Why, if the enemy is Islamic terrorism, did the United States pave the way to power for the Libyan Islamic rebels, who at this very moment are killing other Libyans in order to institute a more fundamentalist Islamic state?
Why do American officials speak endlessly about human rights, yet fully support the Libyan Islamic rebels despite the fact that Doctors Without Borders suspended its work in prisons in the Islamic-rebel city of Misurata because torture was so rampant that some detainees were brought for care only to make them fit for further interrogation? 3
Why is the United States supporting Islamic Terrorists in Libya and Syria who are persecuting Christians?
And why, if the enemy is Islamic terrorism, did US Ambassador to the UN, Susan Rice — who daily attacks the Syrian government on moral grounds — not condemn the assassination of four Syrian high officials on July 18, in all likelihood carried out by al Qaeda types? RT, the Russian television channel broadcast in various parts of the United States, noted her silence in this matter. Does anyone know of any American media that did the same?
So, if you want to understand this thing called United States foreign policy … forget about the War on Terrorism, forget about September 11, forget about democracy, forget about freedom, forget about human rights, forget about religion, forget about the people of Libya and Syria … keep your eyes on the prize … Whatever advances American global domination. Whatever suits their goals at the moment. There is no moral factor built into the DNA of US foreign policy.
Bring back the guillotine
In July, the Canadian corporation Enbridge, Inc. announced that one of its pipelines had leaked and spilled an estimated 1,200 barrels of crude oil in a field in Wisconsin. Two years ago, an Enbridge pipeline spilled more than 19,000 barrels in Michigan. The Michigan spill affected more than 50 kilometers of waterways and wetlands and about 320 people reported medical symptoms from crude oil exposure. The US National Transportation Safety Board said that at $800 million it was the costliest onshore spill cleanup in the nation’s history. The NTSB found that Enbridge knew of a defect in the pipeline five years before it burst. According to Enbridge’s own reports, the company had 800 spills between 1999 and 2010, releasing close to 7 million gallons of crude oil. 4
No executive or other employee of Enbridge has been charged with any kind of crime. How many environmental murderers of modern times have been punished?
During a period of a few years beginning around 2007, several thousand employees of stock brokers, banks, mortgage companies, insurance companies, credit-rating agencies, and other financial institutions, mainly in New York, had great fun getting obscenely rich while creating and playing with pieces of paper known by names like derivatives, collateralized debt obligations, index funds, credit default swaps, structured investment vehicles, subprime mortgages, and other exotic terms, for which, it must be kept in mind, there had been no public need or demand. The result has been a severe depression, seriously hurting hundreds of millions of lives in the United States and abroad.
No employee of any of these companies has seen the inside of a prison cell for playing such games with our happiness.
For more than half a century members of the United States foreign policy and military establishments have compiled a record of war crimes and crimes against humanity that the infamous beasts and butchers of history could only envy.
Not a single one of these American officials has come any closer to a proper judgment than going to see the movie “Judgment at Nuremberg”.
Yet, we live in the United States of Punishment for countless other criminal types; more than two million presently rotting their lives away. No other society comes even close to this, no matter how the statistics are calculated. And many of those in American prisons are there for victimless crimes.
On the other hand, we see the Chinese sentencing their citizens to lengthy prison terms, even execution, for environmental crimes.
We have an Iranian court recently trying 39 people for a $2.6 billion bank loan embezzlement carried out by individuals close to the political elite or with their assent. Of the 39 people tried, four were sentenced to hang, two to life in prison, and others received terms of up to 25 years; in addition to prison time, some were sentenced to flogging, ordered to pay fines, and banned from government jobs. 5
And in Argentina in early July, in the latest of a long series of trials of former Argentine officials, former dictator Jorge Rafael Videla was convicted and sentenced to 50 years for a systematic plan to steal babies from women prisoners who were kidnapped, tortured and killed during the military junta’s war on leftist dissenters — the “dirty war” of 1976-83 that claimed 13,000 victims. Many of the women had “disappeared” shortly after giving birth. Argentina’s last dictator, Reynaldo Bignone, was also convicted and got 15 years. Outside the courthouse a jubilant crowd watched on a big screen and cheered each sentence. 6
As an American, how I envy the Argentines. Get the big screen ready for The Mall in Washington. We’ll have showings of the trials of the Bushes and Cheney and Rumsfeld and Obama. And Henry Kissinger, a strong supporter of the Argentine junta among his many contributions to making the world a better place. And let’s not forget the executives of Goldman Sachs, JP Morgan, Bank of America, and Enbridge, Inc. Fining them just money is pointless. We have to fine them years, lots of them.
Without imprisoning these people, nothing will change. That’s become a cliché, but we very well see what continues to happen without imprisonment. And it’s steadily getting worse, financially and imperially.
Items of interest from a journal I’ve kept for 40 years, part VII
- Bantustanning the aboriginals all over the world: The Indians in America, the aboriginals in Australia, the blacks in South Africa, and the Palestinians in Palestine.
- From 1966 tape of President Lyndon Johnson: “I know we oughtn’t to be there [in Vietnam], but I can’t get out.” And he never did. And thousands more troops would die before Johnson left office. (Washington Post, March 12, 2006)
- The Germans had Lebensraum. Americans had Manifest Destiny.
- chinks, gooks, wogs, towelheads, ragheads — some of the charming terms used by American soldiers to describe their foes in Asia and the Middle East
- In June, 2005, Cong. Duncan Hunter (Rep.-CA) held a news conference concerning Guantánamo. Displaying some tasty traditional meals, he said the government spends $12 a day for food for each prisoner. “So the point is that the inmates in Guantánamo have never eaten better, they’ve never been treated better, and they’ve never been more comfortable in their lives than in this situation.” (Scripps Howard News Service, June 28, 2005, Reg Henry column)
- Vice President Dick Cheney: Guantánamo prisoners are well treated. “They’re living in the tropics. They’re well fed. They’ve got everything they could possibly want.” (CNN.com, June 23, 2005)
- “[Defense Secretary Donald] Rumsfeld said Guantánamo’s operations have been more open to scrutiny than any military detention facility in history.” (Associated Press, June 14, 2005)
- “Their ‘coalition of the willing’ [in Iraq] meant the US, Britain, and the equivalent of a child’s imaginary friends.” Paul Loeb, Truthout, June 16, 2005
- Nobody has ever suggested that Serbia attacked or was preparing to attack a member of NATO, and that is the only event which justifies a military reaction under the NATO treaty, such as the 1999 78-day bombing of Serbia.
- Rumsfeld re Chinese military buildup: “Since no nation threatens China, one wonders: Why this growing investment?” (New York Times, June 6, 2005
- Rumsfeld re Venezuelan major weapons buildup: “I don’t know of anyone threatening Venezuela, anyone in this hemisphere.” (Washington Post, October 3, 2006) [Is it possible that the response to both points raised is the same? A country in North America bordering on Mexico?]
- The failure of the United Nations — as an institution and its individual members — to unequivocally oppose and prevent the United States invasion of Iraq in 2003 can well be called “appeasement”.
- The Iraqi Kurds generally sided with Iran during the 1981-88 Iraq-Iran war; helped the United States before and during its bombing of Iraq in 2003 and during its occupation; and most Kurds don’t identify with being Iraqi according to polls.
- One of the military judges at Guantánamo said: “I don’t care about international law. I don’t want to hear the words ‘international law’ again. We are not concerned with international law.” (Democracy Now, April 12, 2005)
- George W. Bush, re al Qaeda types: “Iraqis are sick of foreign people coming in their country and trying to destabilize their country. And we will help them rid Iraq of these killers.” (Baltimore Sun, May 6, 2004)
- “I think all foreigners should stop interfering in the internal affairs of Iraq. Those who want to come and help are welcome. Those who come to interfere and destroy are not.” Paul Wolfowitz, Deputy Secretary of Defense and unindicted war criminal (Chicago Tribune, July 22, 2003)
- Timothy McVeigh, Gulf War veteran who bombed a government building in Oklahoma City in 1995, killing 168 people: “What occurred in Oklahoma City was no different than what Americans rain on the heads of others all the time … The bombing of the Murrah building was not personal, no more than when Air Force, Army, Navy or Marine personnel bomb or launch cruise missiles against government installations and their personnel. … Many foreign nations and peoples hate Americans for the very reasons most Americans loathe me. Think about that.” (McVeigh’s letter to and interview with Rita Cosby, Fox News Correspondent, April 27 2001)
- Douglas Feith, Under Secretary of Defense for Policy and unindicted war criminal: “Defense Department officials don’t lie to the public. … The Defense Department doesn’t do covert action, period.” (Washington Post, February 21, 2002)
- The United States will “deal promptly and properly with the terrible abuses” of Iraqi prisoners by U.S. soldiers. “No country in the world upholds the Geneva Conventions on the laws of armed conflict more steadfastly than does the United States.” Douglas Feith, Boston Globe, May 5, 2004
- “The State Department plans to delay the release of a human rights report that was due out today, partly because of sensitivities over the prison abuse scandal in Iraq, U.S. officials said. One official who asked not to be identified said the release of the report, which describes actions taken by the U.S. government to encourage respect for human rights by other nations, could ‘make us look hypocritical’.” (Los Angeles Times, May 5, 2004)
- In the decades after 1945, as colonial possessions became independent states, it was widely believed that imperialism as a historical phenomenon was coming to an end. However, a new form of imperialism was in fact taking shape, an imperialism not defined by colonial rule but by the global capitalist market. From the outset, the dominant power in this imperialism without colonies was the United States.
- Francis Boyle re the capture and public display of Saddam Hussein: “This is the 21st century equivalent of the Roman Emperor parading the defeated barbarian king before the assembled masses so that they might all shout in unison: Hail Caesar!”
- The US-provided textbooks in Nicaragua after the US-instigated defeat of the Sandinistas in 1990 carefully excluded all mention of Augustino Sandino as a national hero. (Z magazine, November, 1991)
- “Col. David Hogg, commander of the 2nd Brigade of the 4th Infantry Division, said tougher methods are being used to gather the intelligence. On Wednesday night, he said, his troops picked up the wife and daughter of an Iraqi lieutenant general. They left a note: ‘If you want your family released, turn yourself in.’ Such tactics are justified, he said, because, ‘It’s an intelligence operation with detainees, and these people have info.’ They would have been released in due course, he added later. The tactic worked. On Friday, Hogg said, the lieutenant general appeared at the front gate of the U.S. base and surrendered.” (Washington Post, July 28, 2003) [This is illegal under international law; in ordinary parlance we'd call it a kidnapping with ransom; in war, it's the collective punishment of civilians and is forbidden under the Geneva Convention]
- “Never forget that everything Hitler did in Germany was legal.” — Martin Luther King, Jr.
- “Americans, who up until now had been so valued for their pragmatism, have become ideologues, ‘Bolsheviks’ of the Right, as Daniel Cohn-Bendit once described them.” (Jean-Marcel Bouguereau, concerning Iraq, Le Nouvel Observateur, September 8, 2003)
- Six months after its invasion of Iraq, the Bush administration defended its policy on the basis of schools and hospitals opening and strides made in providing water and electricity. (Washington Post, September 25, 2003) — These are all things 12 years of US bombing and sanctions had destroyed.
- For a summary of much of this, see: Peter Dale Scott, “Bosnia, Kosovo, and Now Libya: The Human Costs of Washington’s Ongoing Collusion With Terrorists“, The Asia-Pacific Journal: Japan Focus, August 7, 2011 ↩
- Camp Bondsteel entry on Wikipedia ↩
- Washington Post, January 27, 2012 ↩
- Enbridge entry on Wikipedia; Washington Post, July 29, 2012↩
- Reuters, July 31, 2012 ↩
- Associated Press, July 6, 2012 ↩
As the world economy plunges and the financial markets debate the future of EU, the London Olympics provide a pretext to take a holiday and party all night. The latest example of excess and self-absorbed haughtiness, promotes an agenda of internationalism. The spirit of the games is less about sportsmanship than promotion of indoctrination. The cost to produce such an extravaganza approaches sums that necessitate a bailout from the IMF. The article, Winner’s curse? The economics of hosting the Olympic Games, illustrates a disturbing cost for hosting the Games.
“The complete official budget, initially pegged at $3.8 billion for the Games, has nearly quadrupled, and some estimates from British media have set the total cost at as high as $38 billion.
The 1996 Summer Olympics in Atlanta cost $2 billion US. Hosting costs grew to $4.8 billion in Sydney four years later. Athens is estimated to have spend between $15 billion and $32 billion on hosting the 2004 Olympics.
And, at $42 billion, the 2008 Beijing Games are widely thought to be the most expensive ever. Chinese authorities have declined to release the official figures needed to confirm that figure.”
The notion that global comradeship is built through athletic competition is the message behind the quadrennial event. Seldom if ever does the TV viewing audience question the enormous sums required to conduct the amusing circus. So, what does the financial community say about the effect of these sports events, especially in these trying times? The analysis in the Guardian, Will the Olympics get the economy growing again? Don’t bank on it, provides some answers.
“Citi’s Michael Saunders is frank in his assessment: “In our view, the Olympics are likely to be very entertaining. But the Games are not an economic policy.”
Saunders has examined the data from 10 Olympics held between 1964 and 2008 and found that although growth tends to rise in the runup to the tournament, the effect starts to fall away even before the Games begin – and afterwards, growth tends to be weaker.
The trend is explained by the fact that many of the positives that come from the Olympics (such as jobs created during the construction phase) are out of the way long before the opening ceremony, while negatives (such as lost productivity as Britons stay glued to their TVs) come during and after the Games. The anticipation of extra revenue from foreign visitors, economists say, also fails to take into account visitors who might have come to the UK anyway and just change the timing of their visit.”
Yet in an even more in-depth report, Olympic Economics, The Pre-Games Show, the notorious ‘Vampire Squid’ of international banksters produces a lengthy analysis.
“Goldman Sachs has put out a 39-page report (PDF) on the subject (plus, somewhat incongruously, athlete interviews). The bank’s analysts conclude that games in Munich (1972) and Montreal (1976) lost big bucks, while Los Angeles (1984), Barcelona (1992) and Atlanta (1996) “each made a profit.”
Breaking even or making a profit certainly goes a long way to justify the immense expense. However, when governments absorb the losses and cost overruns to produce the symbolic script of worldwide “good will”, the propaganda budgets get a bump from their countries treasuries.
So who benefits from the Olympic “Passion Play” process and how does it work in the bidding competition? Andrew Zimbalist, write in Atlantic magazine.
“The city (principal) is not properly represented by the local organizing committee (agent). The committee that nominally represents the city really represents itself and bids according to its sense of the private benefit (of its members) versus the private cost, rather than the city’s public benefit versus public cost. Since the private cost is diminutive and the private gain extraordinary, the local organizing committees, on behalf of the cities, are bound to overbid, wiping out any modest, potential economic gains.”
Therefore, basic business restraint and prudent judgment is often absent from the marathon race to gain the rewarding decision to go crazy by hosting the Games.
The public has a much different attitude towards the Olympics than the financial movers and shakers. The corporatist jet set loves to merge their interest with that of statist bureaucracies. The Guardian continues and makes an insightful assessment.
“David Cameron started the ball rolling on Thursday with what was billed as the biggest investment conference ever hosted in the UK. The event was a who’s who of the global financial system: International Monetary Fund chief Christine Lagarde rubbed shoulders with Mario Draghi, governor of the European Central Bank and Angel Gurría, secretary general of the OECD. There was also an impressive roll-call of business leaders, with Google chairman Eric Schmidt sharing a platform with Cisco’s John Chambers.”
The centralization of the global economy is supercharged through the figurative meaning of the interlocking rings. The five continents Africa, America, Asia, Australia, and Europe wave their flags under the Olympic banner. These rallies, designed to merge communal synergism under an international symbol, feed the transnational economy. Breaking down national pride may not be easy to see through the repetitive media coverage, but the true intent of holding the Games is to forge a unified system of coordinated financial inclusion.
Just as the budget overruns become the rule for most Olympic venues, the world economic model runs on unsustainable debt. The cavalier attitude toward the economic risks and financial obligations incurred, to light the torch, seems more to do with national ego than practical benefits.
Much like other pet projects of the international community, the Olympics are useful as a training exercise for programming the thinking of rabid and crazed sports buffs. The World (soccer to American observers) Cup, routinely herd psycho fans into confined stadiums. The frequent result engenders a martial law response to chaotic conduct.
The Olympics seeks to instill compliant behavior through more docile means. The accurate assessment of the economic consequences of holding the Olympics more closely resembles a contest of the Hunger Games than Chariots of Fire.
The greatest crimes of human history are made possible by the most colorless human beings. They are the careerists. The bureaucrats. The cynics. They do the little chores that make vast, complicated systems of exploitation and death a reality. They collect and read the personal data gathered on tens of millions of us by the security and surveillance state. They keep the accounts of ExxonMobil, BP and Goldman Sachs. They build or pilot aerial drones. They work in corporate advertising and public relations. They issue the forms. They process the papers. They deny food stamps to some and unemployment benefits or medical coverage to others. They enforce the laws and the regulations. And they do not ask questions.
Good. Evil. These words do not mean anything to them. They are beyond morality. They are there to make corporate systems function. If insurance companies abandon tens of millions of sick to suffer and die, so be it. If banks and sheriff departments toss families out of their homes, so be it. If financial firms rob citizens of their savings, so be it. If the government shuts down schools and libraries, so be it. If the military murders children in Pakistan or Afghanistan, so be it. If commodity speculators drive up the cost of rice and corn and wheat so that they are unaffordable for hundreds of millions of poor across the planet, so be it. If Congress and the courts strip citizens of basic civil liberties, so be it. If the fossil fuel industry turns the earth into a broiler of greenhouse gases that doom us, so be it. They serve the system. The god of profit and exploitation. The most dangerous force in the industrialized world does not come from those who wield radical creeds, whether Islamic radicalism or Christian fundamentalism, but from legions of faceless bureaucrats who claw their way up layered corporate and governmental machines. They serve any system that meets their pathetic quota of needs.
These systems managers believe nothing. They have no loyalty. They are rootless. They do not think beyond their tiny, insignificant roles. They are blind and deaf. They are, at least regarding the great ideas and patterns of human civilization and history, utterly illiterate. And we churn them out of universities. Lawyers. Technocrats. Business majors. Financial managers. IT specialists. Consultants. Petroleum engineers. “Positive psychologists.” Communications majors. Cadets. Sales representatives. Computer programmers. Men and women who know no history, know no ideas. They live and think in an intellectual vacuum, a world of stultifying minutia. They are T.S. Eliot’s “the hollow men,” “the stuffed men.” “Shape without form, shade without colour,” the poet wrote. “Paralysed force, gesture without motion.”
It was the careerists who made possible the genocides, from the extermination of Native Americans to the Turkish slaughter of the Armenians to the Nazi Holocaust to Stalin’s liquidations. They were the ones who kept the trains running. They filled out the forms and presided over the property confiscations. They rationed the food while children starved. They manufactured the guns. They ran the prisons. They enforced travel bans, confiscated passports, seized bank accounts and carried out segregation. They enforced the law. They did their jobs.
Political and military careerists, backed by war profiteers, have led us into useless wars, including World War I, Vietnam, Iraq and Afghanistan. And millions followed them. Duty. Honor. Country. Carnivals of death. They sacrifice us all. In the futile battles of Verdun and the Somme in World War I, 1.8 million on both sides were killed, wounded or never found. In July of 1917 British Field Marshal Douglas Haig, despite the seas of dead, doomed even more in the mud of Passchendaele. By November, when it was clear his promised breakthrough at Passchendaele had failed, he jettisoned the initial goal—as we did in Iraq when it turned out there were no weapons of mass destruction and in Afghanistan when al-Qaida left the country—and opted for a simple war of attrition. Haig “won” if more Germans than allied troops died. Death as score card. Passchendaele took 600,000 more lives on both sides of the line before it ended. It is not a new story. Generals are almost always buffoons. Soldiers followed John the Blind, who had lost his eyesight a decade earlier, to resounding defeat at the Battle of Crécy in 1337 during the Hundred Years War. We discover that leaders are mediocrities only when it is too late.
David Lloyd George, who was the British prime minister during the Passchendaele campaign, wrote in his memoirs: “[Before the battle of Passchendaele] the Tanks Corps Staff prepared maps to show how a bombardment which obliterated the drainage would inevitably lead to a series of pools, and they located the exact spots where the waters would gather. The only reply was a peremptory order that they were to ‘Send no more of these ridiculous maps.’ Maps must conform to plans and not plans to maps. Facts that interfered with plans were impertinencies.”
Here you have the explanation of why our ruling elites do nothing about climate change, refuse to respond rationally to economic meltdown and are incapable of coping with the collapse of globalization and empire. These are circumstances that interfere with the very viability and sustainability of the system. And bureaucrats know only how to serve the system. They know only the managerial skills they ingested at West Point or Harvard Business School. They cannot think on their own. They cannot challenge assumptions or structures. They cannot intellectually or emotionally recognize that the system might implode. And so they do what Napoleon warned was the worst mistake a general could make—paint an imaginary picture of a situation and accept it as real. But we blithely ignore reality along with them. The mania for a happy ending blinds us. We do not want to believe what we see. It is too depressing. So we all retreat into collective self-delusion.
In Claude Lanzmann’s monumental documentary film “Shoah,” on the Holocaust, he interviews Filip Müller, a Czech Jew who survived the liquidations in Auschwitz as a member of the “special detail.” Müller relates this story:
“One day in 1943 when I was already in Crematorium 5, a train from Bialystok arrived. A prisoner on the ‘special detail’ saw a woman in the ‘undressing room’ who was the wife of a friend of his. He came right out and told her: ‘You are going to be exterminated. In three hours you’ll be ashes.’ The woman believed him because she knew him. She ran all over and warned to the other women. ‘We’re going to be killed. We’re going to be gassed.’ Mothers carrying their children on their shoulders didn’t want to hear that. They decided the woman was crazy. They chased her away. So she went to the men. To no avail. Not that they didn’t believe her. They’d heard rumors in the Bialystok ghetto, or in Grodno, and elsewhere. But who wanted to hear that? When she saw that no one would listen, she scratched her whole face. Out of despair. In shock. And she started to scream.”
Blaise Pascal wrote in “Pensées,” “We run heedlessly into the abyss after putting something in front of us to stop us from seeing it.”
Hannah Arendt, in writing “Eichmann in Jerusalem,” noted that Adolf Eichmann was primarily motivated by “an extraordinary diligence in looking out for his personal advancement.” He joined the Nazi Party because it was a good career move. “The trouble with Eichmann,” she wrote, “was precisely that so many were like him, and that the many were neither perverted nor sadistic, that they were, and still are, terribly and terrifyingly normal.”
“The longer one listened to him, the more obvious it became that his inability to speak was closely connected with an inability to think, namely, to think from the standpoint of somebody else,” Arendt wrote. “No communication was possible with him, not because he lied but because he was surrounded by the most reliable of all safeguards against words and the presence of others, and hence against reality as such.”
Gitta Sereny makes the same point in her book “Into That Darkness,” about Franz Stangl, the commandant of Treblinka. The assignment to the SS was a promotion for the Austrian policeman. Stangl was not a sadist. He was soft-spoken and polite. He loved his wife and children very much. Unlike most Nazi camp officers, he did not take Jewish women as concubines. He was efficient and highly organized. He took pride in having received an official commendation as the “best camp commander in Poland.” Prisoners were simply objects. Goods. “That was my profession,” he said. “I enjoyed it. It fulfilled me. And yes, I was ambitious about that, I won’t deny it.” When Sereny asked Stangl how as a father he could kill children, he answered that he “rarely saw them as individuals. It was always a huge mass. … [T]hey were naked, packed together, running, being driven with whips. …” He later told Sereny that when he read about lemmings it reminded him of Treblinka.
Christopher Browning’s collection of essays, “The Path to Genocide,” notes that it was the “moderate,” “normal” bureaucrats, not the zealots, who made the Holocaust possible. Germaine Tillion pointed out “the tragic easiness [during the Holocaust] with which ‘decent’ people could become the most callous executioners without seeming to notice what was happening to them.” The Russian novelist Vasily Grossman in his book “Forever Flowing” observed that “the new state did not require holy apostles, fanatic, inspired builders, faithful, devout disciples. The new state did not even require servants—just clerks.”
“The most nauseating type of S.S. were to me personally the cynics who no longer genuinely believed in their cause, but went on collecting blood guilt for its own sake,” wrote Dr. Ella Lingens-Reiner in “Prisoners of Fear,” her searing memoir of Auschwitz. “Those cynics were not always brutal to the prisoners, their behavior changed with their mood. They took nothing seriously—neither themselves nor their cause, neither us nor our situation. One of the worst among them was Dr. Mengele, the Camp Doctor I have mentioned before. When a batch of newly arrived Jews was being classified into those fit for work and those fit for death, he would whistle a melody and rhythmically jerk his thumb over his right or his left shoulder—which meant ‘gas’ or ‘work.’ He thought conditions in the camp rotten, and even did a few things to improve them, but at the same time he committed murder callously, without any qualms.”
These armies of bureaucrats serve a corporate system that will quite literally kill us. They are as cold and disconnected as Mengele. They carry out minute tasks. They are docile. Compliant. They obey. They find their self-worth in the prestige and power of the corporation, in the status of their positions and in their career promotions. They assure themselves of their own goodness through their private acts as husbands, wives, mothers and fathers. They sit on school boards. They go to Rotary. They attend church. It is moral schizophrenia. They erect walls to create an isolated consciousness. They make the lethal goals of ExxonMobil or Goldman Sachs or Raytheon or insurance companies possible. They destroy the ecosystem, the economy and the body politic and turn workingmen and -women into impoverished serfs. They feel nothing. Metaphysical naiveté always ends in murder. It fragments the world. Little acts of kindness and charity mask the monstrous evil they abet. And the system rolls forward. The polar ice caps melt. The droughts rage over cropland. The drones deliver death from the sky. The state moves inexorably forward to place us in chains. The sick die. The poor starve. The prisons fill. And the careerist, plodding forward, does his or her job.
Source: Chris Hedges | Truthdig
Anyone claiming that international bankers, multinational company executives, members of the Bilderberg Group, elite academics, senior judges, United Nations officials and European Union strategists are working together to undermine the remnants of sovereignty and identity of old Christian nations through mass Third World immigration would be dismissed by our bien pensants as a conspiracy theorist. A wacko unfit for polite society.
Enter Peter Sutherland (66), a remarkable man. Addressing the House of Lords sub-committee on immigration on June 21, Mr. Sutherland said that the EU should “do its best to undermine” the “homogeneity” of its member states in order to make them truly multicultural. He was addressing the peers in his capacity of head of the Global Forum on Migration and Development, but that is only one of Peter Sutherland’s many affiliations. He is also:
- the UN’s special representative for migration;
- non-executive chairman of Goldman Sachs International who made $200 million from the bank’s flotation in 1999;
- former chairman of Allied Irish Bank, the biggest in the country;
- former member of the European Commission;
- “Consultor of the Extraordinary Section of the Administration of the Patrimony of the Apostolic See,” offering advice on the Vatican’s finances;
- former Director General of The World Trade Organization (WTO);
- former chairman of oil giant BP, with a salary of $1,000,000 a year;
- former Attorney General of Ireland;
- Chairman of the Council of the London School of Economics;
and last but by no means least,
- a regular participant in meetings of The Bilderberg Group, which the BBC report on his remarks to the Lords tactfully described as “a top level international networking organization often criticized for its alleged secrecy.”
The future prosperity of many EU states depended on them becoming “multicultural,” Sutherland told the peers, “however difficult it may be to explain this to the citizens of those states.” An ageing or declining native population in countries like Germany or southern EU states was the “key argument … for the development of multicultural states,” he said. “It’s impossible to consider that the degree of homogeneity which is implied by the other argument can survive because states have to become more open states, in terms of the people who inhabit them,” according to Sutherland. “At the most basic level individuals should have a freedom of choice” because anyone should have the right to work or study in the country of his or her preference.
Criticizing the UK government’s current attempt to cut net immigration to “tens of thousands” a year through visa restrictions, Mr. Sutherland urged EU member states to adopt “a global approach to the issue” and “accommodate more readily those from other backgrounds.” He bewailed the fact that many Europeans “still nurse a sense of [their] homogeneity and difference from others… And that’s precisely what the European Union, in my view, should be doing its best to undermine.”
This is the most explicit statement of intent to date by an authoritative member of what is de facto world government. Nations should disappear by being cured of the sense of difference from others, dissenters should be coerced into submission, and everyone in the world is entitled to live anywhere in the world.
It is noteworthy that, in Sutherland’s view, the EU has not done enough to advance his agenda. As it happens, Brussels has decreed many years ago that countries of the European Union no longer have the power to decide on who comes or stays within their borders. In 1999, the Treaty of Amsterdam transferred responsibility for immigration policies from individual member-countries to the EU Council of Ministers, acting on proposals from the unelected European Commission. The all-out EU effort to undermine “homogeneity” is over a decade old. Its founding document is the European Council agreement signed in Tampere (Finland) in October 1999, which mandated granting immigrants all those rights enjoyed by host-country citizens. It also demanded relaxation of asylum policy, since European freedoms should not be regarded “as the exclusive preserve of the Union’s own citizens” and will not be denied to those “whose circumstances lead them justifiably to seek access to our territory.” The European Union Presidency statement on racism of March 21, 2002, declared that the EU “bases its very existence in the idea that “all peoples and individuals constitute one human family.”
With his plea that “individuals should have a freedom of choice,” Sutherland is knocking on an open EU door, and he knows it. For a cultural radical like him no given status quo is ever satisfactory, however. Brussels can and should do more, for as long as there are Britons, Germans or Italians who are still proud of who they are and who still believe that their countries should somehow belong to them and their offspring.
It is to be feared that Europeans may get physically eradicated well before their “sense of difference” is destroyed though state education and judicial fiat. Even on current form Europe is well on the way to population replacement. In France—to take the most drastic example—of close to 800,000 live births in a nation of just under 60 million, Muslim immigrants (predominantly from North Africa) and their French-born descendants currently account for close to one-third. Short of a sudden reversal of policies and demographic curves, even without Sutherland’s radical measures there will be no “Europeans” a century from now. They will literally disappear as members of ethnic groups that share the same language, culture, and ancestors, and inhabit lands associated with their names.
Peter Sutherland embodies the Western elite class: he is deracinated, authoritarian, rich, arrogant, contemptuous of the common people, powerful and dangerous. In other words, a few details of the physique notwithstanding, he is Barack Obama’s older brother. It is therefore unsurprising that in his remarks to the House of Lords he praised the United States as the model of multicultural openness that Europe would be well advised to emulate.
The shadow-banking component that adds to the risk of non-regulatory oversight just deepens the mystery behind the most powerful banking institution that runs roughshod over global finance. In order to gain an insight into the complexity of deception, examine the function of the BIS. The granddaddy of all central banks, the Bank for International Settlement, latest BIS Annual Report 2011/2012, foretells future financial consolidation.
Watch the Banker to the World’s Bank: Time to Deleverage, video interview on CNBC.
From Chapter V. Restoring fiscal sustainability, in this report concludes:
“Sovereigns have been losing their risk-free status at an alarming rate. Fiscal positions were already unsustainable in many advanced economies before the financial crisis, which in turn led to significant further weakening. The deterioration of public finances has undermined financial stability, lowered the credibility of fiscal and monetary policy, impaired the functioning of financial markets, and increased private sector borrowing costs. Restoring sustainable fiscal positions will require implementing effective fiscal consolidation, promoting long-term growth, and breaking the adverse feedback loop between bank and sovereign risk.”
The section called, Box VI.A: Shadow banking, states:
“While definitions differ, the term “shadow banking” broadly refers to financial activities carried out by non-bank financial institutions that create leverage and/or engage in maturity and liquidity transformation. Thus, even though they are subject to different regulatory frameworks, shadow and traditional banks operate alongside each other.
Shadow banking exists because historical and institutional factors, the rapid pace of financial innovation and specialization have all increased the attractiveness of performing certain types of financial intermediation outside traditional banking. In normal times, shadow banking enhances the resilience of the broader financial system by offering unique financial products and a range of vehicles for managing credit, liquidity and maturity risks. But shadow banking also creates risks that can undermine financial stability in the absence of prudential safeguards.”
The bombshell news that raises alarm is the admission that “Too Big To Fail” is still the operative principle that drives the banking system into an unsustainable servicing of debt obligations. The cloak of the shadow banking practice, intended to circumvent usual regulatory standards, creeps along the soft underbelly of respectable central banking. When a collapse catches up with the racket of excessive leverage, the ensuing scandal is directed to some esoteric phantom operation that is expendable.
The analysis in Big Banks Take Risks Expecting Taxpayers To Cover Lossesidentifies who ultimately bears the risk of the world fiat, debt created, financial system.
“The report also emphasized the need to increase the safety of the banking system by pushing banks to be responsible for their losses, add to their financial buffers and avoid risky practices. It added that big banks still have an interest in using high-risk debt – so-called “leveraging” – to magnify any trading gains because they can expect taxpayers to step in and cover their losses if things go bad.
“Big banks continue to have an interest in driving up their leverage without enough regard for the consequences of failure: because of their systemic weight, they expect the public sector to cover the downside, “ said BIS. “Another worrying sign is that trading, after a brief crisis-induced squeeze, has again become a major source of income for large banks.”
Protecting the fractional reserve scheme, at all cost, is the true purpose of the BIS. Sovereign holdings, with their ensuing national debt owed to the banksters pays homage to the real owners of underlying collateral assets.
From a source in the essay, Revolution against Central Banks, explains a scheme of global magnitude for financial control.
“The BIS is taking national currency deposits from the 55 member/owner central banks and converting them to SDR’s on its own balance sheet. The SDR’s are “claims on the freely usable currencies of IMF members,” therefore, the deposits of the central banks become claims on those currencies–the deposits of the fiat central banks who can deposit as much as they feel at the BIS in whatever currency the chose–including the SDR’s allotted to their “nation,” as the central banks are the sole depositories for the national wealth/sellers of the national debt. The BIS is then paying out dividends to these same member CB’s in the form of SDR’s, which again can be used to claim currencies. By August 2009, they had just made up out of thin air almost twelve times the supposed global supply of SDR’s. They are truly acting like the “central bank of the world,” complete with printing!”
By any objective standard of decency and accountability, the BIS is the ultimate clearinghouse of worldwide debt for the New World Order. Need proof, just reflect on the diversion used by a captain from one of the most powerful “Godfather” family of investment banking.
Finally in, Time to Stop Expecting So Much From the Fed?, Goldman Sachs strategist Jim O’Neill told CNBC:
Even the central bank for central banks, the Bank for International Settlements, is playing down the power of the Fed and other central banks.
“It would be a mistake to think that central bankers can use their balance sheets to solve every economic and financial problem,” the BIS said in its annual report.
“In fact, near-zero policy rates, combined with abundant and nearly unconditional liquidity support, weaken incentives for the private sector to repair balance sheets and for fiscal authorities to limit their borrowing requirements,” the report said.
World consumers are being pick-pocketed in the graveyard of financial ruin. Strip away the skin of a decayed corpse and what remains is the stark skeleton of a dead paper monitory system. The life-support methods used to keep the interest payments accruing, only forestall the day of reckoning. The end game for the central bankers is foreclosure on pledged guarantees. Currency swaps will become a recall of national fiat species and a replacement with a float of a new world coinage.
National governments are mere public diversions from the real power behind the thrones.
For additional information on the BIS, visit the Facebook Group, BIS (Bank for International Settlements) awareness.
The Agenda Progresses…
“We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.” That was James Paul Warburg speaking before the United States Senate on February 17, 1950, a couple of generations ago. James Warburg was the son of Paul Montz Warburg nephew of Felix Warburg and Jacob Schiff, both of Kuhn, Loeb & Company. Max Warburg, James’s brother, was Chairman of the Council on Foreign Relations (CFR) and through his German Bank poured money into the Russian Revolution.
“The rich ruleth over the poor, and the borrower is servant to the lender.” Proverbs 22:7
The Talmudic elite that control our world become wealthier and more powerful by several techniques with debt as the fouindational mechanism. The great depression of the 1930s allowed the moneychangers to buy solid assets at pennies on the dollar; market crashes that follow the easy money bubbles result in massive transfers of wealth. In our time, the real estate bubble has put tangible assets on the market at fractions of their real value. Social programs force governments into debt and result in interest payments on money created from nothing. The International Monetary Fund loans money to nations and is often repaid with tangible assets. It is almost impossible for nations to wage war without borrowing money. War is expensive and the moneychangers play no favorites; they finance both sides of the conflict. Trillions of dollars are now being pilfered through bank debt that is backed by tax-paying citizens.
As our society has deteriorated the meaning of words has changed. Originally “usury” meant charging interest for the use of money. Historically, the Catholic Church did not charge interest and ultimately forbade its members as well. The shunning of usury left an opening for Jewish bankers to lend money at a profit. As this close knit, shunned group developed contacts and financial expertise wealthy Gentiles began to hire them to oversee their finances. In the early Seventeenth Century these wealthy Gentiles were called Nobles and their castles Noble Houses. The Jews who worked for them were known as Court Jews. The Court Jews collected taxes, negotiated loans, issued debentures, developed new taxes, financed the armed guards, and provided money for personal extravagances.
It was in this era that the word usury began to lose its original meaning and the Christian tenet of avoiding usury waned. Charging interest for the use of money is now commonly accepted and usury is now defined as the charging of “excess” interest.
Even though the Court Jews were highly valued and often obtained nobility status they were still preyed upon and regularly robbed of their wealth. In the Eighteenth Century the German Jewish Rothschild family saw banking as a multi-national opportunity and skillfully used their financial acumen to set up an impregnable empire of wealth. Mayer Amschel Rothschild (1744–1812) had five sons which were sent to separate cities: Amschel Mayer Rothschild (1773-1655) Frankfurt, Germany; Salomon Mayer Rothschild (1774-1855) Vienna, Austria; Nathan Mayer Rothschild (1777-1836) London, England; Calmann Mayer Rothschild (1788-1855) Naples, Italy; Jakob Mayer Rothschild (1792-1868) Paris, France.
Born in a Frankfurt, German ghetto Mayer Amschel Rothschild, like most of his fellows, harbored a hatred for the Gentile Christian population. Hidden under a deceptive mask this loathing is still common in powerful Jewry.
Respected historian Paul Johnson writes “The Rothschilds are elusive. There is no book about them that is both revealing and accurate. Libraries of nonsense have been written about them… unlike the court Jews of earlier centuries, who had financed and managed European noble houses, but often lost their wealth through violence or expropriation, the new kind of international bank created by the Rothschilds was impervious to local attacks.” Johnson claims that a major part of the Rothschild fortune was accumulated by Nathan Rothschild in London. Other historians claim the family wealth was more diverse.
Famous Rothschild quotes are widely believed but tough to corroborate. Mayer Rothschild is supposed to have claimed “Give me control of a nation’s money and I care not who makes her laws.“ The following statement is attributed to Nathan Rothschild ”I care not what puppet is placed on the throne of England to rule the Empire, the man that controls Britain’s money supply controls the British Empire. And I control the money supply.” While it is true that control of the money supply equates to control of the nation it is doubtful that the secretive Rothschilds would have made such a statement.
In one way, Vladimir Putin might be compared to American President Andrew Jackson. For a time, President Jackson kept the moneychangers out of the United States and Putin has partially blocked the same element from sacking Russia.
In recent times the Rothschild name has been in the news on at least a couple of occasions. When Putin arrested Mikhail Khodorkovsky, one of Russia’s original Jewish oligarchs, his substantial share of Russian oil giant Yukos was ceded to Lord Jacob Rothschild in London
Under the aegis of Privatization Khodokovsky acquired Yukos for $309 million. The company was valued at $40 billion when Khodokovsky was arrested and 40 percent of its shares (controlling interest) were transferred to Lord Jacob Rockefeller. The relationship between Khodokovsky and Lord Jacob Rothschild was not described. It was unusual that the Rothschild name was mentioned at all.
There were six other Oligarchs in Russia. Putin went after all of them but they have either escaped or evaded prosecution. The Rothschild name was not mentioned but one wonders if involvement in the case of one oligarch means the others were involved as well. The potential profits from privatization are enormous.
Now, there is another side to the Russian Oligarch story. The June 14th issue of the “New American Magazine” contains an article on the new crop of Russian oligarchs who “have not earned their sudden wealth through entrepreneurial skill and free enterprise” but instead through Communist Party Connections. “ Russia’s super-wealthy oligarchs profiled by Forbes — Alisher Usmanov (steel, telecom, investments), Vladimir Lisin (steel and transport), Alexei Mordashov (steel), Vladimir Potanin (metals, media), Vagit Alekperov (oil), Mikhail Fridman (banking, oil, telecom), Mikhail Prokhorov (metals, energy, investments), Roman Abramovich (steel, investments), et al. — are all tied in to Vladimir Putin’s KGB-run Kremlin power structure.” Putin chased out the previous vultures but more weeds have sprung up.
In another rather strange event, Evelyn De Rothschild, part of the English family, has reportedly sold his banking business and is providing interviews. In a curious public display Evelyn De Rothschild is publically expressing his opinions. See interviews here and here.
Rothschild assets have been impenetrable since the dynasty began over two hundred years ago. Their wealth is never mentioned. When Forbes Magazine lists the world’s wealthiest people the Rothschild family is never included. Neither does one see the Rothschild name associated with power conclaves like Bilderberger, the Committee of 300, or the Club of Rome. Estimates of 500 trillion dollars or more are guesses since the figure cannot be established. The practice of using scores of men like J. P. Morgan, George Soros, Henry Kissinger, and Mikhail Khodorkovsky, and institutions like J. P. Morgan Chase & Company, and Goldman Sachs, as surrogates provides control and obscures ownership.
The Rothschild Empire functions above the governments of the world. The power structure we see and the names we know are subordinate to a name that is never seen nor mentioned. Using surrogates whose careers they have created and whose lives they own and institutions over which they exert hidden control the Rothschild name never appears on public documents. The relationship is symbiotic. One source claims that at his death the J. P. Morgan estate had only $19 million in securities, the bulk of the estate was actually owned by the Rothschilds. Their invisible tentacles can grasp the public and private domain whenever and wherever they like and the source of the venture can only be guessed at. Wealth and power accompany association with the Rothschild Empire. Their surrogates are carefully selected; they are smart, ambitious, ruthless, and devoted.
The profit margin on the Yukos venture, $309 million to $40 billion, is somewhat comparable to the profit margin on gasoline, $5.00 bbl. to produce, $90.00 a bbl. to purchase. Monopoly control of essential commodities is very profitable and laden with power over the public domain. The Rothschilds are actively urging privatization.
It isn’t the military/industrial complex that requires confrontation, it is the surreptitious power that controls the military/industrial complex.
History is replete with tyrants and despots who enslaved nations and built empires. Today we are faced with tyrants that seek to control the entire world. The British Empire broke up but the power to control still emanates from that small island. Wealthy control freaks have sought world hegemony for centuries. Today it is feasible and quickly progressing.
There has been much talk recently about the impact of money on politics, especially in the wake of the Citizens United ruling that has ratcheted up the role of corporate money in political campaigns. Organized labor was quick to blame this ruling for its defeat in Wisconsin. And many have assumed that the relation of money to politics is like a law of nature: the more money one has, the more political power one can wield.
There is some truth to this claim. In a recent editorial (“Money Rules,” April 19, 2012) The New York Times noted that “big donors to Mr. Obama and the Democratic Party are far more likely to be welcomed at the White House than those who gave smaller gifts.”
The editorial continued: “And, despite decades of money abuses and scandal, neither presidential candidate [Obama nor Romney] has shown any interest in reforming the system.”
Of course, politicians always deny that there is any connection between campaign donations and their policy decisions, swearing that the strong statistical correlation between the two is entirely coincidental. However, given their fixation on “the bottom line,” it is inconceivable that corporations would continue to donate billions of dollars a year to politicians if they did not expect to get a “return” on their investment.
It should not be surprising that money and power tend to converge. Capitalism is not just an economic system that places profit above all other concerns; it breeds a culture in which money is the “bottom line” in every transaction. Money opens the doors to the best education available, to quality health care and spacious homes in crime-free neighborhoods, not to mention “attractive mates.” Money buys leisure time and can allow people to avoid work altogether. Money commands respect. When Jamie Dimon of JPMorgan appeared before a Congressional committee after having lost billions of dollars in risky investments, he was bombarded by obsequious questions by members of Congress, who probably would have preferred asking him for investing advice. And although not a sufficient condition, money is a necessary condition for winning political elections and is usually the determining factor. Finally, with individuals placed in perennial competition with one another under capitalism, social and community ties are weakened, leaving only money to fill the void.
Within the system of capitalism, the more money and power one has, the easier it is to acquire still more money and power. When the billionaire Warren Buffett recently invested $5 billion dollars with Goldman Sachs, he was guaranteed a 10 percent rate of return, meaning he will make $500 million a year without lifting a finger. Even worse, much of this money is acquired simply by the rich taking from everyone else. In their recent book, “Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class,” political scientists Jacob Hacker and Paul Pierson argue that much of the new wealth enjoyed by the rich has resulted from their success at lobbying politicians to change the tax laws and business regulations to their advantage. Hence, when left to its own devices, capitalism tends to concentrate money and power in the hands of a few while allowing inequalities in wealth to grow ever greater.
Unions were created to combat these tendencies and to protect workers from their employers’ avid pursuit of money. While employers want to maximize profits, workers want enough to pay their bills and lead a comfortable life. Hence, there is a power struggle between workers and employers over how much of the company’s profits will go to wages and benefits and how much to the owners. Given that the owners have far more money at their disposal than the workers, one might assume that they hold the reins of power in their hands and can dictate the outcome.
But there is a limit to the role that money can play. Unions operate on their own unique principles that provide the potential for a far greater exercise of power than what their employers can command, even with far more money at their disposal. Rejecting competition, workers organized unions on the principle of solidarity. It was a logical course for workers to pursue: while an individual worker is powerless in the face of a domineering employer and while workers who are competing against one another are collectively powerless in relation to the employer, workers quickly learned that power shifts in their direction when they join together and engage in coordinated action. If one person tries to conduct a strike, that person is simply fired. When the entire workforce conducts a strike, they bring the business to a grinding halt and become a force to contend with.
Because of this need to stand together and work for a common goal, unions generate their own culture. When they have successfully struggled together, camaraderie develops among the union members. They take care of one another, cover for each other, and form lifetime friendships in much the same way as soldiers who have endured battles together.
For this reason, union struggles can change the entire political and cultural landscape. When workers decide to take a stand in order to break the cycle of growing inequalities in wealth, when they fight for a decent standard of living that includes a living wage, job security, health care, access to quality education, homeownership, and retirement with dignity, not just for themselves but for everyone, they inspire all working people and create the possibility of a massive social movement that has the potential to forge historic changes, as was done in the 1930s. People are inspired by movements that aim at creating a better world for everyone, where those who need help are given what they need, where people contribute according to their ability, and where no one advances at the expense of others. This more ennobled sense of humanity engenders inspiration in a way that money never can. And people are inspired when workers wage a real fight, as opposed to the current ever so prevalent practice of organizing fake fights that involve porous picket lines that no one takes seriously or demonstrations of several hundred workers when the workforce includes thousands.
When these social movements achieve momentum, money no longer plays the deciding role. People shed their disconnected isolation, become engaged and talk with one another, become knowledgeable of the issues, and derive strength in their numbers. And massive numbers of people demonstrating for a common goal has proved time and again to be the prevailing factor.
At this time in history, organized labor, however, seems content to rely on money for power. Unions spend hundreds of millions of dollars trying to elect Democrats to office, leaving the vast reservoir of power of their membership untapped. Of course, corporations have even more money at their disposal and give generously to both political parties to hedge their bets, easily outspending labor in the process. When it comes to money, simple arithmetic is all that counts: because corporations give far more than labor, they get far more than labor, and the inequalities in wealth continue to grow.
As a result of the unions’ current orientation toward the Democratic Party, one must look long and hard for compelling examples, aside from the 1930s, when unions put up a valiant struggle. But in 1958 the unions relied on themselves instead of the Democrats, mobilized their members to defeat a right to work law, and won a stunning victory. The local newspaper reported: “Ohio voters rejected the ‘right-to-work’ proposal by the biggest margin ever recorded on an issue on the ballot in the state’s history.”
More recently, United Electrical workers conducted a sit-down strike in a Chicago windows and doors factory, demanding their severance pay from the Bank of America. Because of the outpouring of public support from across the country, Bank of America, one of the most powerful corporations in the world, backed down, and the workers won their demands.
When it is a question of the efficacy of money in politics and workers fail to put up a fight, money prevails. The moral is: money counts – but only if we let it.
The Soul Crushing Despair of Lowered Expectations…
All over America tonight there are people that believe that their lives are over. When you do everything that you know how to do to get a job and you still can’t get one it can be absolutely soul crushing. If you have ever been unemployed for an extended period of time you know exactly what I am talking about. When you have been unemployed for month after month it can be very tempting to totally cut yourself off from society. Those that are kind will look at you with pity and those that are cruel will treat you as though you are a total loser. It doesn’t matter that America is in decline and that our economy is not producing nearly enough jobs for everyone anymore. In our society, one of the primary things that defines our lives is what we do for a living. Just think about it. When you are out in a social situation, what is one of the very first things that people ask? They want to know what you “do”. Well, if you don’t “do” anything, then you are not part of the club. But the worst part of being unemployed for many Americans is the relentless pressure from family and friends. Often they have no idea how hard it is to find a job in this economy – especially if they still have jobs. Sometimes the pressure becomes too great. Sadly, we are seeing unemployment break up a lot of marriages in America today. Things are really hard out there right now. A very large number of highly educated Americans have taken very low paying service jobs in recent years just so that they can have some money coming in even as they “look for something else”. Unfortunately, in many cases that “something else” never materializes. In the past, America was “the land of opportunity” where anything was possible. But today America has become “the land of lowered expectations” and the worst is yet to come.
We live during a time when “the American Dream” is literally being redefined. In the old days, just about anyone could get a good job that would pay enough to make it possible to buy a house, buy a nice car and raise a family.
Unfortunately, those days are long gone. The following is from a recent NPR article….
The town of Lorain, Ohio, used to embody this dream. It was a place where you could get a good job, raise a family and comfortably retire.
“Now you can see what it is. Nothing,” says John Beribak. “The shipyards are gone, the Ford plant is gone, the steel plant is gone.” His voice cracks as he describes the town he’s lived in his whole life.
“I mean, I grew up across the street from the steel plant when there was 15,000 people working there,” he says. “My dad worked there. I worked there when I got out of the Air Force. It’s just sad.”
We live in an economy that is in serious decline. In this environment no job is safe. In fact, even Goldman Sachs is laying off workers these days.
Millions of Americans are suffering from deep depression because they can’t find jobs. Many of them are sitting at home right now blankly starting at their television screens as they wonder why nobody wants to hire them. Some have been unemployed for years and have sent out thousands upon thousands of resumes. The following is from a recent article by J.D. Hicks….
I have a brilliant cousin with a $180K Syracuse education working part-time at a department store. She has literally sent out 38,000 resumes in the span of a year to no avail. I have another very bright friend with the kindest heart who is so desperate he has applied for dishwashing jobs and didn’t get them, sending him deeper into depression. I’m sure we all know people like this, or perhaps have even been there ourselves.
Society has trained us to believe that we are worthless without a job. Indeed, we feel worthless when we are unemployed with few prospects of making money. Family, friends, and peers constantly remind us in subtle and not-so-subtle ways that we “need” a job.
Have you ever been unemployed?
How did it make you feel?
How were you treated by your family and friends?
In the old days, a college education was almost a guaranteed ticket to the middle class.
But these days, a college education guarantees you absolutely nothing.
As a recent article by Jed Graham detailed, most young unemployed workers in America today have at least some college education….
For the first time in history, the number of jobless workers age 25 and up who have attended some college now exceeds the ranks of those who settled for a high school diploma or less.
Out of 9 million unemployed in April, 4.7 million had gone to college or graduated and 4.3 million had not, seasonally adjusted Labor Department data show.
Overall, 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed last year.
It is tough to tell young college graduates with their whole lives ahead of them that they need to lower their expectations because America is in decline.
So where did all the jobs go?
Well, one place they went is overseas. Over the past couple of decades, millions upon millions of good jobs have left the United States and have gone over to the other side of the world.
That is why you see gleaming new factories going up all over China even while our once great manufacturing cities are turning into crime-infested warzones.
But as a recent WND article reported, the WTO has a solution. They plan to replace “Made in China” labels with “Made in the World” labels so that we don’t feel so bad about losing our jobs and our economic infrastructure…
The World Trade Organization is moving closer to eliminating country-of-origin labels and replacing them with “Made in the World” initiative labels because they say we need to “reduce public opposition to free trade” and “re-engineer global governance.”
As the number of middle class jobs has steadily declined in recent years, the number of low paying service jobs has increased.
Could your family survive on 10 dollars an hour?
Today, you can find hordes of very smart, very talented Americans flipping burgers, waiting tables and welcoming people to Wal-Mart.
Sadly, the United States now has a higher percentage of workers doing low wage work than any other major industrialized nation does.
Perhaps we should applaud our leaders for doing such a great job of destroying the American Dream.
Because so many Americans are working crappy jobs, a very large percentage of them have absolutely no savings to speak of.
According to one survey, 42 percent of all American workers live paycheck to paycheck.
I am constantly encouraging people to save up an “emergency fund” that will enable them to pay their bills for at least 6 months if they suddenly become unemployed.
Unfortunately, for many Americans that is simply not possible. Way too many families are just barely scraping by from month to month.
Another area of the economy where Americans are facing lowered expectations is in housing.
In the old days, most Americans dreamed of owning their own homes.
But today we are being told that things have changed. For example, a recent USA Today article was entitled “Home rentals — the new American Dream?“….
Steve and Jodi Jacobson bought their Phoenix-area “dream home” in 2005. They built flagstone steps to the front door. They tiled the kitchen and bathroom. They entertained often, enjoying their mountain views.
“We put our soul into that house,” says Steve Jacobson, 37.
Then, home prices tanked more than 50%. Steve, a software quality assurance engineer, suffered pay cuts. In 2010, foreclosure claimed the home and their $100,000 down payment.
The Jacobsons didn’t lose their desire to live in a single-family home, however. They now rent one, like many other former homeowners displaced by foreclosure.
Is that what we are supposed to tell future generations of Americans?
“Listen Johnny and Suzie, if you work really, really hard at your minimum wage jobs perhaps someday you will be able to rent a home that has been foreclosed by a big, greedy bank”.
It is so sad to watch what is happening to this country.
These days many Americans are scratching and clawing and doing everything that they can to make it, but they still find themselves short on money at the end of the month.
Many are turning to debt in an attempt to bridge the gap. According to CNN, 40 percent of “low- and middle-income households” are using credit cards to pay for basic living expenses.
Overall, U.S. consumers have more than 11 trillion dollars in debt right now.
That is an incredible number.
As the economy has declined, a lot of families have completely given up trying to make it on their own and have turned to the U.S. government for financial help. Today, an astounding 49.1 percent of all Americans live in a home where at least one person receives government benefits.
Just think about that number for a while. It is one of the clearest signs that America is in deep, deep decline.
Unfortunately, things are about to get even worse. The next wave of the financial crisis is unfolding in Europe and we will all be talking about another “major global recession” very soon.
That means that unemployment in the United States is going to get a lot worse.
For the millions upon millions of Americans that are already suffering through the horror of unemployment, that is really bad news.
Posted below is a trailer for a new HBO documentary entitled “Hard Times: Lost on Long Island”. Please take a few minutes to watch this video, because I think it does a good job of showing the soul crushing despair that many unemployed Americans are going through right now.
Source: The Economic Collapse
Unraveling The Welfare Safety Net…
Yields on 10-year Treasuries plunged to a record-low 1.56 percent on Thursday morning as panicky investors stormed out of European financial assets into German and U.S. government bonds. Deteriorating credit conditions, a flurry of ratings downgrades, and bank runs in Spain and Greece have triggered a flight-to-safety which has pushed the benchmark 10-year below its previous all-time low of 1.67 percent. Falling yields indicate that investors have lost confidence in the ability of EU policymakers to resolve the ongoing debt crisis, particularly as it relates to growing troubles in Greece and Spain.
The present crisis, which is largely the result of excessive credit expansion and poor risk management by EU banks, is being used by the European Commission and the ECB to establish a euro-wide ”banking union” and to impose savage cuts to social programs, health care, and pensions. The response by EU policymakers is a social counterrevolution designed to transform the 17-member monetary union into a permanent ”austerity zone” ruled by corporate elites and big finance. Here’s more from Reuters:
“The eurozone must boost growth and cut debt to regain investor confidence but it should also move towards a banking union, consider eurobonds and the direct recapitalisation of banks from its permanent bailout fund, the European Commission said on Wednesday as it laid out year-long recommendations.”
“A closer integration among the euro area countries in supervisory structures and practices, in cross-border crisis management and burden sharing, towards a “banking union”, would be an important complement to the current structure” of Europe’s economic and monetary union, the Commission said.
“In the same vein, to sever the link between banks and the sovereigns, direct recapitalisation by the European Stability Mechanism (ESM) might be envisaged,” the document said.” (“EU calls for eurozone banking union, direct bank recapitalisations”, IFR, Reuters)
The eurozone’s permanent bailout fund, the ESM, has not yet been ratified by all 17 members and already the European Commission wants to change its mandate to include direct bailouts to banks. The direct funding of underwater banks is a blatant power-grab, an attempt to establish the primacy of banks in the same way that the TARP was used to create Too Big To Fail in the US. TBTF means that the banks have merged with the state and that taxpayers provide blanket guarantees for their survival. Europe is moving fast towards this same model.
German chancellor Angela Merkel is opposed to allowing the ESM to recapitalise Spanish banks, but she’s likely to capitulate if the crisis worsens. If she does give in, then the mismanaged banks will not be required to restructure their debt, wipe out bondholders and shareholders, remove bad assets, and replace management. All of the costs for such a bailout would fall on taxpayers, which is exactly what leaders of the European Commission and the ECB want. At the same time, the deepening crisis will be used to impose more fiscal reforms, which have already pushed unemployment to 20 year highs while submerging most of the south in a severe recession. Here’s more from Reuters:
”….ministers in private are clear about their wish to see European-wide bank deposit guarantee measures put in place quickly to avoid the risk of what could be a catastrophic event. There are signs the European Central Bank favors deposit guarantees. Problems are mounting on other fronts. With the cost of borrowing heading rapidly towards 7 percent and most foreign investors already shunning Spanish debt, the government will find it increasingly difficult to refinance 98 billion euros of debt and find another 52 billion euros to fund its deficit this year. Local banks are barely lending, or offering loans at prohibitively high rates, squeezing companies and increasing the risk of a chain of bankruptcies which could send the economy into a nosedive. The banking system’s total loans to the business sector were 44.6 billion euros at the end of March half of what they were at the end of the boom in 2007, and the contraction continues almost every month, according to Bank of Spain data. Consumers are postponing big purchases and cutting back spending. Spain’s soaring borrowing costs have become a national obsession since the crisis….The government acknowledges that the situation is critical.” (“Spain cries for help: is Berlin listening ?”, Reuters)
The EU Commission and ECB are allowing the crisis to grow to achieve their goal, which is the creation of a fiscal union controlled by banks that has unlimited access to funding and the power to impose policy (“austerity”) through coercion. Here’s a clip from economist Mark Weisbrot who sees the political motive behind the debt crisis:
“I have argued for some time now that the recurring crisis in the eurozone is not driven by financial markets’ demands for austerity in a time of recession, as is commonly asserted. Rather, the primary cause of the crisis and its prolongation is the political agenda of the European authorities – led by the European Central Bank (ECB) and European commission. These authorities (which, if we included the IMF constitute, the “troika” that runs economic policy in the eurozone) want to force political changes, particularly in the weaker economies, that people in these countries would never vote for.” (“Europeans’ economic future has been hijacked by dangerous ideologues”, The Guardian)
It’s all politics. Right wing politics. 100 percent of the reputable economists that have commented on the debt crisis have criticized the way it has been handled, particularly in regards to austerity measures. Do you really think that Merkel or Draghi think that they’re smarter than Stiglitz, Krugman, Reich, Eichengreen, Thoma, Weisbrot, Galbraith, Baker, Roubini, etc. etc? No. Merkel has no background in economics at all, and Draghi was formally an investment banker for Goldman Sachs.
These people are not interested in fixing the EZ economy. They are engaged in a stealth campaign to radically restructure EU society, to unravel to welfare safety net, to roll back the progressive gains of the last century, and to reduce much of the continent to 3rd world poverty. A banking union will further solidify the power of big finance over the individual states, and that is the main objective.