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Chinese And Japanese Deflationary Economies

November 29, 2014 by · Leave a Comment 

The global economy has just hit the wall. Do not underestimate the significance of the Asian downturn. Japan saw a dramatic rebirth after WWII and China was transformed into an industrial powerhouse from the “Free Trade” debacle. Now that the Central Bankers of the world are turning to Japan and China to keep the financial bubble from blowing, the focus pivots to the East. Pushing on a string is no easy task. Nervously, all eyes have to wonder if more debt will prevent the expected crash.

When the British financial press warns about Spreading deflation across East Asia threatens fresh debt crisis, people should listen.

“Deflation is becoming lodged in all the economic strongholds of East Asia. It is happening faster and going deeper than almost anybody expected just months ago, and is likely to find its way to Europe through currency warfare in short order.

China is in effect strapped to the rocketing dollar through its quasi-peg, increasingly a torture machine. George Magnus from UBS says this cannot continue. “What is happening in the property market is the tip of the iceberg for the whole economy. China will have to resort to monetary reflation over the winter, and I think this will include a lower yuan. We are heading into a currency war,” he said.”

The Economist provides the establishment viewpoint of the latest strategy in Deflation, deflated.

“WHEN people think of a large Asian country on the brink of deflation, they probably have Japan in mind. But China, the biggest of them all, is now skirting close to outright falls in prices across a wide swathe of the economy. Producer prices have been declining for nearly three years and consumer price inflation is mired at its lowest level since 2010.

Deflation is rightly feared by central bankers around the world as a most destructive economic force, making debts more expensive in real terms and leading to a vicious cycle of contraction as consumers delay purchases and companies put off investments. Yet the Chinese central bank has been remarkably laid-back about the downward lilt in prices. The most obvious tool in its kit to arrest the slide would be to cut interest rates, but it has not done so since July 2012; the benchmark one-year lending rate remains lofty at 6%. What explains the central bank’s calm in the face of falling prices, and is it making a big mistake?”

This last assessment demonstrates that when the shift in direction was announced, the financial community jumped on the bandwagon to In Change of Strategy, China Cuts Interest Rate.

“China finally admitted it has a growth problem — and that is a big step to getting the global economy back on track.

In cutting rates, China joins the parade of global policy makers who are stepping up their stimulus efforts to support growth. They are filling a void left by the United States Federal Reserve, which just ended a six-year bond-buying campaign that has kept borrowing costs low and has encouraged spending worldwide.”

The admission that a massive infusion to recapitalize the international system requires a new source to finance the retracting economies is significant. It seems that a tag team effort between China and Japan will hit the banking houses from different directions.

Japan Fires Another Shot in Global Currency War is the analysis from the Wall Street Journal.

“The Bank of Japan 8301.TO -1.63%’s surprise move to increase its asset purchases has sent the yen plummeting, with the dollar passing through ¥110 Friday to trade at highs not seen in six years. This is the mechanism through which Japan will try to restore inflation to its perennially stagnating economy. The BOJ describes its actions in terms of boosting domestic growth and pricing power, but the real way it works is to export deflation to the rest of the world – it has been doing this ever since the yen began an 30% decline versus the dollar once “Abenomics” stimulus measures were first floated in the fall of 2012.”

Japan will play the role of the QE Federal Reserve policy and the Chinese will finally slash their interest rates. Such moves are not taken because the global economies are prospering. Looking for actual growth is like Waiting for Godot.

The mystery that faces all economies is when does deflation become impervious to further stimulus? How many more times can the deficits, imbalances and shortfalls be papered or rolled over before a depression ensues.

Japan is already the poster child for negative growth and with the irrational expenditures that China has spent on ghost cities, their reported growth rates are about as valid as a stock buy recommendation from a Wall Street firm that is shorting their own portfolio.

Looking to the orient to pull the world out of a lethargic corporatist spiral is problematic at best. China slowed growth now reported at 7.3 percent is seen as setting the stage that fuels debt and property bubbles. Yet the balance of trade surpluses that China continues to build up against American consumption from their exports has never benefited economic conditions in the United States.

The Dollar Collapse site asks: Most of the World Panics — Is the US Next?

  • Will stepped-up debt monetization and interest rate reductions succeed where the past batch failed?
  • Can the US remain aloof from the carnage taking place all around it?

As the Asian economies suffer their own version of contraction on the road to a meltdown, who believes that the transnational corporations that have plotted to off shore their production for decades, will ever reverse their strategy and start returning manufacturing back in the US?

Who will buy the ever increasing US Treasury debt if China unwinds? Of course the Federal Reserve will ratchet up and even bigger QE infusion that will result with more zeros to the national debt.

The most effective solution for America is establishing a tax reform that encourages a domestic renaissance and setting tariffs at levels that will reverse the systemic balance of payments deficits. The worldwide deflation has commenced, so start thinking local and not global.


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

Sartre is a regular columnist for Veracity Voice

The New Slavery

November 27, 2014 by · 1 Comment 

You Are The Slave…

Recently I received a book about the history of Islam.  It is written in inviting prose and covers in detail the saga that unfolded through history from the time of the birth of Ishmael and Isaac.  On the cover is the bust of a soldier armed with a rifle on a background tinted in blood red.  The Tile of the book is “The Blood of the Moon” written by Dr. George Grant and published in 1991.  It is a great read.  I recommend it.

Grant contends that Islam is a religion that cannot be stamped out by the sole use of military force.  Nevertheless he seems to support both Israel and the United States military.  The book provides a clarion call for resistance to an Islamic plan to use brutalities to bring the world under their control.

I have just finished reading through several of R. J. Rushdoony’s books for the second time. .  His writing platform has King Jesus enthroned and active in the affairs of the world. Rushdoony provides superb explanations of the implications of a thorough, literal interpretation of Scripture.  He maintains that righteous government requires righteous citizens.

Good books written by capable thinkers invariably avoid the obvious existence of conspiracies.  We have progressed from the empires of Rome and France where large portions of the world fell under tyranny to quests for new world orders that hope to extend hegemony over the entire earth.  Like the airplanes that spray chemicals in our skies the public and most good commentators ignore reality, preferring instead to live in the comfortable but dangerous world of fantasy.

Chalcedon Foundation has published another collection of Dr. Rushdoony’s musings entitled “Our Threatened Freedom”.  It is a collection of radio spots recorded in the early 1980s.  As with all of Reverend Rushdoony’s commentaries they are incisive and pertinent. They cement the necessity of freedom in creating a prosperous society and pinpoint the insanity of allowing humanism to gain control.  Over and over again Rushdoony documents the irrational chaos created by overzealous humanistic government. The book produces extensive evidence that the checks and balances incorporated into our Constitution are not working.

Unfortunately, Rushdoony does not entertain the premise that irrational chaos is being purposely created throughout the world because chaotic societies are easier to dominate. There is no mention of the yearly Bilderberg meetings (See Here) where the wealthy and powerful meet to discuss and implement their collective agenda.  There is no mention of Zionism, which is a conspiracy, or the International bankers who control currencies, a power which is tantamount to control of the food supply.  David Rockefeller’s long time promotion of world government now confirmed in his book “Memoirs” is not cited.

There is an element of irony in the fact that theologically sound Christian teaching maintains that the Triune God created the world and even in these rebellious and barbaric times is in firm control of current events.  This fact allays the fears and striving of those that oppose the power seekers.  God controls the world and will always do so in spite of the evil efforts of those He created.

Coincidentally, Presidential candidates are often invited to the Bilderberg meetings prior to running for office.

Princeton’s Martin Gilens and Northwestern’s Benjamin I. Page have published a study that concludes “–ordinary citizens have virtually no influence over what their government does in the United States. And economic elites and interest groups, especially those representing business, have a substantial degree of influence. Government policy-making over the last few decades reflects the preferences of those groups — of economic elites and of organized interests.”  Read here and here.

Conspiracies are ignored because “conspiracy theorists” are widely considered a bit whacky. The word “conspiracy” has been demonized to prevent the expression of truth.

The plotters have made great progress in the past several decades World government wonks have become leaders in most Western nations and as the United States military does the bidding of the Zionists, hegemonic progress is occurring in the Muslim world.

Influential neocon Max Boot lobbies for perpetual war seeking the destruction of all enemies of Israel using the United States military.  It has been going on for a long time.  Boot is supported by scores of wealthy, influential neocons in powerful positions throughout the nation; he also has the media and a horde of wild eyed Evangelical Christians that make his current position almost impregnable. We are a giant puppet being controlled by a midget puppeteer creating an anomaly that is regularly ignored by prominent American authors.  Read here and here

Jacob Hornberger (Future of Freedom Foundation) describes the current condition of our nation:  “Is the situation here at home bad? We both know it is. Invasions, occupations, torture, indefinite detention, embargoes, sanctions, foreign aid, empire, militarized police, drug raids, asset forfeiture, infringements on civil liberties, IRS, income taxation, Federal Reserve, fiat money, welfare, minimum-wage laws, and economic regulations. The welfare-warfare state is destroying our freedom, morality, prosperity, and independence. We need to smash this immoral and destructive apparatus out of existence!”

Hornberger is on target with his description and the need to “smash this immoral and destructive apparatus out of existence”.  However, he fails to identify exactly how it is to be smashed!

There are some cracks beginning to appear in one conspiracy that could bode for future confrontation.  Publisher, Editor and writer, Tal Brooke, has used his SPC (Spiritual Counterfeits Project) Journal to bring some light to our current dilemma.  In the latest issue 38.1 and 38.2 he has authored an incisive piece entitled “The Messiah of a Divided People”.  In a paragraph describing the ancient Elders of the Sanhedrin he describes their dissatisfaction with a Messiah “who went like a lamb to the slaughter” preferring one that would defeat the Romans, install Zion as the world ruler and appoint them as rulers of the world

He writes, “This was, and remains, their aim and expectation. They would be the world’s five star generals and judges, Jerusalem would be the center of the World Court.  And they could tell Caesar to roll over like a dog.  They could walk into the city of Rome and take anything they wanted.  They could occupy the palace, they could execute judgment on the multitudes of the treacherous.  The world would finally be theirs as they believed Isaiah had promised them. And these Elders would rule the entire earth from Zion.  This remains the goal.”   (Emphasis mine.)  .  (For copies of the SPC Journal call 510-540-0300)

The same issue of the SPC Journal contains articles by Jewish Christian writers Steven Wohlberg and Steven Sizer.  Confrontation is not about hatred but about justice, peace, truth and righteousness for all people.

Talmudic Zionists realize at least two goal by supporting perpetual war:  They destroy the United States of America, a supposedly Christian nation (a religion they overtly hate), and at the same time contribute to the safety and power of neo-Israel.  Christianity seeks to bring the Creation under the dominion of the Triune God by peaceful means; Talmudic Zionists by stealth; and Islam by siege.

What will happen when these various power structures conflict?  Will the bankers dominate; the Zionists, the international Bilderbergers, Islam, or the business tycoons?  Will the Christian Triune God allow His world to be controlled by evil forces as punishment to rebellious Christians?  Or will Christians repent and allow the sword of the Spirit to Challenge the enemies of Christ?  Time will tell.

Wake up America.  It is not our elected officials who are setting policy for our nation.  Instead, it is the money barons, the Zionists, the Bilderbergers, and the international business tycoons.  That is at least a partial reason why elected officials do not keep their pre-electoral promises.  Obedience to the enabling masters is mandatory and retribution for disobedience is severe – note the fate of Presidents Reagan and Kennedy.

President Nixon set the stage for China to decimate the U. S. economy; President Carter gave away the Panama Canal; the Patriot Act was written long before 9/11, and Obamacare was constructed before his election.  The agenda is set in place before the presidents are elected and the people are expected to blame the puppet president rather than the invisible power centers that are actually setting policy.  The system is working.

It is time for American voters to understand that the candidates for President of the United States are pre-selected and only those obedient candidates are allowed to gain the office.  Voting is a sham to placate the populace.

Overt slavery has been eradicated in most of the Western World but the often denied sinfulness of men has put the entire world under a threat of becoming a massive slave plantation.


Al Cronkrite is a writer living in Florida, reach him at: trueword13@yahoo.com

Al Cronkrite is a regular columnist for Veracity Voice

Russia Invades Ukraine. Again. And Again. And Yet Again… Using Saddam’s WMD

November 22, 2014 by · Leave a Comment 

“Russia reinforced what Western and Ukrainian officials described as a stealth invasion on Wednesday [August 27], sending armored troops across the border as it expanded the conflict to a new section of Ukrainian territory. The latest incursion, which Ukraine’s military said included five armored personnel carriers, was at least the third movement of troops and weapons from Russia across the southeast part of the border this week.”

None of the photos accompanying this New York Times story online showed any of these Russian troops or armored vehicles.

“The Obama administration,” the story continued, “has asserted over the past week that the Russians had moved artillery, air-defense systems and armor to help the separatists in Donetsk and Luhansk. ‘These incursions indicate a Russian-directed counteroffensive is likely underway’, Jen Psaki, the State Department spokeswoman, said. At the department’s daily briefing in Washington, Ms. Psaki also criticized what she called the Russian government’s ‘unwillingness to tell the truth’ that its military had sent soldiers as deep as 30 miles inside Ukraine territory.”

Thirty miles inside Ukraine territory and not a single satellite photo, not a camera anywhere around, not even a one-minute video to show for it. “Ms. Psaki apparently [sic] was referring to videos of captured Russian soldiers, distributed by the Ukrainian government.” The Times apparently forgot to inform its readers where they could see these videos.

“The Russian aim, one Western official said, may possibly be to seize an outlet to the sea in the event that Russia tries to establish a separatist enclave in eastern Ukraine.”

This of course hasn’t taken place. So what happened to all these Russian soldiers 30 miles inside Ukraine? What happened to all the armored vehicles, weapons, and equipment?

“The United States has photographs that show the Russian artillery moved into Ukraine, American officials say. One photo dated last Thursday, shown to a New York Times reporter, shows Russian military units moving self-propelled artillery into Ukraine. Another photo, dated Saturday, shows the artillery in firing positions in Ukraine.”

Where are these photographs? And how will we know that these are Russian soldiers? And how will we know that the photos were taken in Ukraine? But most importantly, where are the fucking photographs?

Why am I so cynical? Because the Ukrainian and US governments have been feeding us these scare stories for eight months now, without clear visual or other evidence, often without even common sense. Here are a few of the many other examples, before and after the one above:

  • The Wall Street Journal (March 28) reported: “Russian troops massing near Ukraine are actively concealing their positions and establishing supply lines that could be used in a prolonged deployment, ratcheting up concerns that Moscow is preparing for another [sic] major incursion and not conducting exercises as it claims, US officials said.”
  • “The Ukrainian government charged that the Russian military was not only approaching but had actually crossed the border into rebel-held regions.” (Washington Post, November 7)
  • “U.S. Air Force Gen. Philip M. Breedlove told reporters in Bulgaria that NATO had observed Russian tanks, Russian artillery, Russian air defense systems and Russian combat troops enter Ukraine across a completely wide-open border with Russia in the previous two days.” (Washington Post, November 13)
  • “Ukraine accuses Russia of sending more soldiers and weapons to help rebels prepare for a new offensive. The Kremlin has repeatedly denied aiding the separatists.” (Reuters, November 16)

Since the February US-backed coup in Ukraine, the State Department has made one accusation after another about Russian military actions in Eastern Ukraine without presenting any kind of satellite imagery or other visual or documentary evidence; or they present something that’s very unclear and wholly inconclusive, such as unmarked vehicles, or unsourced reports, or citing “social media”; what we’re left with is often no more than just an accusation. The Ukrainian government has matched them.

On top of all this we should keep in mind that if Moscow decided to invade Ukraine they’d certainly provide air cover for their ground forces. There has been no mention of air cover.

This is all reminiscent of the numerous stories in the past three years of “Syrian planes bombing defenseless citizens”. Have you ever seen a photo or video of a Syrian government plane dropping bombs? Or of the bombs exploding? When the source of the story is mentioned, it’s almost invariably the rebels who are fighting against the Syrian government. Then there’s the “chemical weapon” attacks by the same evil Assad government. When a photo or video has accompanied the story I’ve never once seen grieving loved ones or media present; not one person can be seen wearing a gas mask. Is it only children killed or suffering? No rebels?

And then there’s the July 17 shootdown of Malaysia Flight MH17, over eastern Ukraine, taking 298 lives, which Washington would love to pin on Russia or the pro-Russian rebels. The US government – and therefore the US media, the EU, and NATO – want us all to believe it was the rebels and/or Russia behind it. The world is still waiting for any evidence. Or even a motivation. Anything at all. President Obama is not waiting. In a talk on November 15 in Australia, he spoke of “opposing Russia’s aggression against Ukraine – which is a threat to the world, as we saw in the appalling shoot-down of MH17”. Based on my reading, I’d guess that it was the Ukranian government behind the shootdown, mistaking it for Putin’s plane that reportedly was in the area.

Can it be said with certainty that all the above accusations were lies? No, but the burden of proof is on the accusers, and the world is still waiting. The accusers would like to create the impression that there are two sides to each question without actually having to supply one of them.

The United States punishing Cuba

For years American political leaders and media were fond of labeling Cuba an “international pariah”. We haven’t heard that for a very long time. Perhaps one reason is the annual vote in the United Nations General Assembly on the resolution which reads: “Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba”. This is how the vote has gone (not including abstentions):

Year Votes (Yes-No) No Votes
1992 59-2 US, Israel
1993 88-4 US, Israel, Albania, Paraguay
1994 101-2 US, Israel
1995 117-3 US, Israel, Uzbekistan
1996 138-3 US, Israel, Uzbekistan
1997 143-3 US, Israel, Uzbekistan
1998 157-2 US, Israel
1999 155-2 US, Israel
2000 167-3 US, Israel, Marshall Islands
2001 167-3 US, Israel, Marshall Islands
2002 173-3 US, Israel, Marshall Islands
2003 179-3 US, Israel, Marshall Islands
2004 179-4 US, Israel, Marshall Islands, Palau
2005 182-4 US, Israel, Marshall Islands, Palau
2006 183-4 US, Israel, Marshall Islands, Palau
2007 184-4 US, Israel, Marshall Islands, Palau
2008 185-3 US, Israel, Palau
2009 187-3 US, Israel, Palau
2010 187-2 US, Israel
2011 186-2 US, Israel
2012 188-3 US, Israel, Palau
2013 188-2 US, Israel
2014 188-2 US, Israel

 
This year Washington’s policy may be subject to even more criticism than usual due to the widespread recognition of Cuba’s response to the Ebola outbreak in Africa.

Each fall the UN vote is a welcome reminder that the world has not completely lost its senses and that the American empire does not completely control the opinion of other governments.

Speaking before the General Assembly before last year’s vote, Cuban Foreign Minister Bruno Rodriguez declared: “The economic damages accumulated after half a century as a result of the implementation of the blockade amount to $1.126 trillion.” He added that the blockade “has been further tightened under President Obama’s administration”, some 30 US and foreign entities being hit with $2.446 billion in fines due to their interaction with Cuba.

However, the American envoy, Ronald Godard, in an appeal to other countries to oppose the resolution, said:

The international community … cannot in good conscience ignore the ease and frequency with which the Cuban regime silences critics, disrupts peaceful assembly, impedes independent journalism and, despite positive reforms, continues to prevent some Cubans from leaving or returning to the island. The Cuban government continues its tactics of politically motivated detentions, harassment and police violence against Cuban citizens.

So there you have it. That is why Cuba must be punished. One can only guess what Mr. Godard would respond if told that more than 7,000 people were arrested in the United States during the Occupy Movement’s first 8 months of protest in 2011-12 ; that many of them were physically abused by the police; and that their encampments were violently destroyed.

Does Mr. Godard have access to any news media? Hardly a day passes in America without a police officer shooting to death an unarmed person.

As to “independent journalism” – What would happen if Cuba announced that from now on anyone in the country could own any kind of media? How long would it be before CIA money – secret and unlimited CIA money financing all kinds of fronts in Cuba – would own or control most of the media worth owning or controlling?

The real reason for Washington’s eternal hostility toward Cuba has not changed since the revolution in 1959 – The fear of a good example of an alternative to the capitalist model; a fear that has been validated repeatedly over the years as many Third World countries have expressed their adulation of Cuba.

How the embargo began: On April 6, 1960, Lester D. Mallory, US Deputy Assistant Secretary of State for Inter-American Affairs, wrote in an internal memorandum: “The majority of Cubans support Castro … The only foreseeable means of alienating internal support is through disenchantment and disaffection based on economic dissatisfaction and hardship. … every possible means should be undertaken promptly to weaken the economic life of Cuba.” Mallory proposed “a line of action which … makes the greatest inroads in denying money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government.”

Later that year, the Eisenhower administration instituted its suffocating embargo against its everlasting enemy.

The United States judging and punishing the rest of the world

In addition to Cuba, Washington currently is imposing economic and other sanctions against Burma, Democratic Republic of the Congo, Iran, China, North Korea, South Korea, United Arab Emirates, Pakistan, Sri Lanka, Switzerland, Turkey, Germany, Malaysia, South Africa, Mexico, South Sudan, Sudan, Russia, Syria, Venezuela, India, and Zimbabwe. These are sanctions mainly against governments, but also against some private enterprises; there are also many other sanctions against individuals not included here.

Imbued with a sense of America’s moral superiority and “exceptionalism”, each year the State Department judges the world, issuing reports evaluating the behavior of all other nations, often accompanied by sanctions of one kind or another. There are different reports rating how each lesser nation has performed in the previous year in areas such as religious freedom, human rights, the war on drugs, trafficking in persons, and sponsors of terrorism. The criteria used in these reports are often political. Cuba, for example, is always listed as a sponsor of terrorism whereas anti-Castro exile groups in Florida, which have committed literally hundreds of terrorist acts over the years, are not listed as terrorist groups or supporters of such.

Cuba, which has been on the sponsor-of-terrorism list longer (since 1982) than any other country, is one of the most glaring anomalies. The most recent State Department report on this matter, in 2012, states that there is “no indication that the Cuban government provided weapons or paramilitary training to terrorist groups.” There are, however, some retirees of Spain’s Basque terrorist group ETA (which appears on the verge of disbanding) in Cuba, but the report notes that the Cuban government evidently is trying to distance itself from them by denying them services such as travel documents. Some members of the Revolutionary Armed Forces of Colombia (FARC) have been allowed into Cuba, but that was because Cuba was hosting peace talks between the FARC and the Colombian government, which the report notes.

The US sanctions mechanism is so effective and formidable that it strikes fear (of huge fines) into the hearts of banks and other private-sector organizations that might otherwise consider dealing with a listed state.

Some selected thoughts on American elections and democracy

In politics, as on the sickbed, people toss from one side to the other, thinking they will be more comfortable.
– Johann Wolfgang von Goethe (1749-1832)

  • 2012 presidential election:
    223,389,800 eligible to vote
    128,449,140 actually voted
    Obama got 65,443,674 votes
    Obama was thus supported by 29.3% of eligible voters
  • There are 100 million adults in the United States who do not vote. This is a very large base from which an independent party can draw millions of new votes.
  • If God had wanted more of us to vote in elections, he would give us better candidates.
  • “The people can have anything they want. The trouble is, they do not want anything. At least they vote that way on election day.” – Eugene Debs, American socialist leader (1855-1926)
  • “If persons over 60 are the only American age group voting at rates that begin to approximate European voting, it’s because they’re the only Americans who live in a welfare state – Medicare, Social Security, and earlier, GI loans, FHA loans.” – John Powers
  • “The American political system is essentially a contract between the Republican and Democratic parties, enforced by federal and state two-party laws, all designed to guarantee the survival of both no matter how many people despise or ignore them.” – Richard Reeves (1936- )
  • The American electoral system, once the object of much national and international pride, has slid inexorably from “one person, one vote”, to “one dollar, one vote”.
  • Noam Chomsky: “It is important to bear in mind that political campaigns are designed by the same people who sell toothpaste and cars. Their professional concern in their regular vocation is not to provide information. Their goal, rather, is deceit.”
  • If the Electoral College is such a good system, why don’t we have it for local and state elections?
  • “All the props of a democracy remain intact – elections, legislatures, media – but they predominantly function at the service of the oligarchy.” – Richard Wolff
  • The RepDem Party holds elections as if they were auctions; indeed, an outright auction for the presidency would be more efficient. To make the auction more interesting we need a second party, which must at a minimum be granted two privileges: getting on the ballot in all 50 states and taking part in television debates.
  • The US does in fact have two parties: the Ins and the Outs … the evil of two lessers.
  • Alexander Cockburn: “There was a time once when ‘lesser of two evils’ actually meant something momentous, like the choice between starving to death on a lifeboat, or eating the first mate.”
  • Cornel West has suggested that it’s become difficult to even imagine what a free and democratic society, without great concentrations of corporate power, would look like, or how it would operate.
  • The United States now resembles a police state punctuated by elections.
  • How many voters does it take to change a light bulb? None. Because voters can’t change anything.
  • H.L. Mencken (1880-1956): “As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.”
  • “All elections are distractions. Nothing conceals tyranny better than elections.” – Joel Hirschhorn
  • In 1941, one of the country’s more acerbic editors, a priest named Edward Dowling, commented: “The two greatest obstacles to democracy in the United States are, first, the widespread delusion among the poor that we have a democracy, and second, the chronic terror among the rich, lest we get it.”
  • “Elections are a necessary, but certainly not a sufficient, condition for democracy. Political participation is not just a casting of votes. It is a way of life.” – UN Human Development Report, 1993
  • “If you don’t vote, you can’t complain!” I reply, “You have it backwards. If you DO vote, you can’t complain. You asked for it, and they’re going to give it to you, good and hard.”
  • “How to get people to vote against their interests and to really think against their interests is very clever. It’s the cleverest ruling class that I have ever come across in history. It’s been 200 years at it. It’s superb.” – Gore Vidal
  • We can’t use our democracy/our vote to change the way the economy functions. This is very anti-democratic.
  • What does a majority vote mean other than that the sales campaign was successful?
  • Roman Emperor Marcus Aurelius: “The opinion of 10,000 men is of no value if none of them know anything about the subject.”
  • We do have representative government. The question is: Who does our government represent?
  • “On the day after the 2002 election I watched a crawl on the bottom of the CNN news screen. It said, ‘Proprietary software may make inspection of electronic voting systems impossible.’ It was the final and absolute coronation of corporate rights over democracy; of money over truth.” – Mike Ruppert, RIP
  • “It’s not that voting is useless or stupid; rather, it’s the exaggeration of the power of voting that has drained the meaning from American politics.” – Michael Ventura
  • After going through the recent national, state and local elections, I am now convinced that taxation without representation would have been a much better system.
  • “Ever since the Constitution was illegally foisted on the American people we have lived in a blatant plutocracy. The Constitution was drafted in secret by a self-appointed elite committee, and it was designed to bring three kinds of power under control: Royalty, the Church, and the People. All were to be subjugated to the interests of a wealthy elite. That’s what republics were all about. And that’s how they have functioned ever since.” – Richard K. Moore
  • “As demonstrated in Russia and numerous other countries, when faced with a choice between democracy without capitalism or capitalism without democracy, Western elites unhesitatingly embrace the latter.” – Michael Parenti
  • “The fact that a supposedly sophisticated electorate had been stampeded by the cynical propaganda of the day threw serious doubt on the validity of the assumptions underlying parliamentary democracy as a whole.” – British Superspy for the Soviets Kim Philby (1912-1988), explaining his reasons for becoming a Communist instead of turning to the Labour Party
  • US Supreme Court Justice Louis Brandeis (1856-1941): “We may have democracy in this country, or we may have wealth concentrated in the hands of a few, but we cannot have both.”
  • “We don’t need to run America like a business or like the military. We need to run America like a democracy.” – Jill Stein, Green Party presidential candidate 2012

Notes

  1. Democracy Now!, October 30, 2013
  2. Huffingfton Post, May 3, 2012
  3. Department of State, Foreign Relations of the United States, 1958-1960, Volume VI, Cuba(1991), p.885 (online here)
  4. For the complete detailed list, see U.S. Department of State, Nonproliferation Sanctions
  5. U.S. Department of State, “Country Reports on Terrorism 2012, Chapter 3: State Sponsors of Terrorism,” May 20, 2013


William Blum is the author of:

  • Killing Hope: US Military and CIA Interventions Since World War 2
  • Rogue State: A Guide to the World’s Only Superpower
  • West-Bloc Dissident: A Cold War Memoir
  • Freeing the World to Death: Essays on the American Empire


Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Email to bblum6@aol.com

Website: WilliamBlum.org

William Blum is a regular columnist for Veracity Voice

Globalism Free Trade Immigration Connection

November 21, 2014 by · Leave a Comment 

How is your life going under the Global Empire? If you answer honestly, for non billionaires, the response must reflect disappointment if not immense distress. Middle America stands on the precipice of oblivion. While the recent past decades have shown steep declines in financial security and net wealth, the future looks much more ominous. The link between the shift to an internationalist de-industrialization economy and open border immigration has hit the United States hard. This harsh reality is routinely denied in the financial press, but the social chaos that engulfs society is largely caused by this betrayal mindset. Corporatists are waging war against the American public.

Summing up the battle lines is the quintessential voice of an America First philosophy. Pat Buchanan on Free Trade is a collection of quotations and references that should be a must read for every displaced citizen. And that group includes virtually everyone.

“Good for global business” isn’t necessarily good for US

“Global capitalists have become acolytes of global governance. They wish to see national sovereignty diminished and sanctions abolished. Where yesterday American businesses suffered damage to their good name for selling scrap iron to Japan before Pearl Harbor, today [war materiel is routinely exported] to potentially hostile nations. Once it was true that what was good the Fortune 500 was good for America. That is no longer true, and what is good for America must take precedence.”

Source: “A Republic, Not an Empire,” p.349 , Oct 9, 1999

The most puzzling malady that penetrates the “PC” culture is a fear of confronting the direct consequences of encouraging an invasion of illegal’s into the country. The disconnect that sweeps across national borders is not isolated just to the United States. Western Europe is not only in decay but is on the verge of social and economic collapse.

Demetrios Papademetriou, PhD, Director of the Migration Policy Institute, wrote in his Sep. 2005 Migration Policy Institute essay “The Global Struggle with Illegal Migration: No End in Sight”: How Are Illegal Immigration and Globalization Related?

“For nearly two decades now, capital and the market for goods, services, and workers of many types have weaved an ever more intricate web of global economic and social interdependence… No aspect of this interdependence seems to be more visible to the public of advanced industrial societies than the movement of people. And no part of that movement is proving pricklier to manage effectively, or more difficult for publics to come to terms with, than irregular (also known as unauthorized, undocumented, or illegal) migration…”

Dr. Papademetriou’s assumption that interdependency is the new normal may be supported with the procession of the Trilateral Commission’s “New International Economic Order”. Nonetheless, the destruction of national sovereignty is a price that no country can afford to adopt, much less pay and remain a nation. Interdependency is the death knell of traditional values, autonomous commerce and individual civil liberties. With the ringing of the bell at the NY Stock exchange, the sound of prosperity goes deaf for the populist, while globalist elites extract the last pound of flesh from an intentionally designed consolidation of a Corporatocracy economy.

The fate of the world is at stake if the forces of globalization are left to complete their total domination of monetary and financial control. It is just as important to prevent the next bipartisan arrangement to grant effective amnesty to millions of illegal foreigners, who have shown little interest to assimilate or adopt the heritage and values of our founding principles.

Warren Mass wrote over a year ago in Permanent Amnesty, Temporary Border.

“An important part of regulating legal immigration, in addition to evaluating each prospective immigrant’s ability to become a productive, law-abiding citizen, is to determine how many immigrants the United States is capable of absorbing each year, taking into consideration the impact on our nation’s economy and culture.”

If this standard needs to apply to those who apply for citizenship, by what absurd twist of logic or sanity pertains to President Obama’s intentions of issuing executive orders that are clearly unconstitutional? How insulting it is to hard press citizens, relegated to enduring impoverishment from off shoring livable wage jobs, while awarding effective amnesty to illegals.

Columnist Glenn R. Jackson review of author Kenneth Buchdahl’s book, Dismantling The American Dream: Globalization, Free Trade, immigration, Unemployment, Poverty, Debt, Foreign Dependency hits the mark.

“First and foremost it is good to see the recognition by Buchdahl of American culture as   critical to the building of the American Dream.  As Buchdahl writes the development of a culture is grounded in a unique American personality and intricate system of values and beliefs that is responsible for America’s enviable situation.  And it is that enviable situation that has contributed to creating the forces that are working rapidly, knowingly or not, to dismantle the American Dream.

Dismantling the American Dream chronicles the unintended impact of America’s pop culture belief in globalization as a force for good in our economy and the failure of leadership to recognize that belief gone awry.  America’s political leaders continued belief in free trade and give-away trade deals, in the face of the near deathblow of NAFTA to American manufacturing is but one of the delusions of globalization that Buchdahl lays bare.”

The interjection of cultural aspects may well be the missing link that escapes most chronicles on current events. Documenting the actual results from Free Trade Treaties, should in and of itself win the intellectual argument that economic destruction of Middle America has already happened. Add in the deliberate call for mass migration and social incentives to cross the border has created the latest flood in undocumented aliens.

When Democracy Now asks, Obama & McConnell Pledge Cooperation; Will Fast-Tracking Secretive TPP Trade Deal Top Their Agenda?, and presents Ralph Nader on TPP and the “Unstoppable” Left-Right Anti-Corporate Movement, one has hope that the Buchanan Brigades message is being heard.

With the celebrity coronation that the Democrats are showering on their new favorite daughter, the “Pocahontas Princess”, Elizabeth Warren’s Crusade Against Disastrous “Free Trade” Agreements, is welcomed.

An inquiry was made to NY Senator Charles E. Schumer on the TPA, Trade Priorities Act of 2014 (S.1900). His reply can be read on this link.

An alliance among anti-free trade factions from all ideological camps is necessary to stop the globalist juggernaut. Even if such a coalition could be grown, the likelihood that linkage to the need to stop illegal immigration and opposition to amnesty, would be frosty.

This brings up the opportunity to interject the appeal, WE MUST NOT SURRENDER TO IMMIGRATION AMNESTY, by Frosty Wooldridge. ““Why would any member of Congress who opposes executive amnesty provide President Obama the funds to carry it out? A Republican majority must force congressional Democrats to answer this question through their votes”.

Likewise, why would as covered in the New American essay, Republicans to Obama: We Will Give You Trade Promotion Authority, patriots want to grant “fast track” authority to a President, who is defiant to congressional constitutional separation of powers?

“Fast track authority eventually expired on April 16, 1994, and was not reauthorized by Congress until the passage of the Bipartisan Trade Promotion Authority Act (BPTAA) of 2002. BPTAA reinstated fast track authority renamed as “trade promotion authority” (TPA), which expired in 2007. In 2012, President Obama requested renewal of TPA/fast track authority to complete negotiations for the TPP and TTIP.”

The answer should be apparent that any support of “fast track” or for TPP is a vote bought with globalist control. If it is so obvious that such influence is at play in trade deals, why are so many confused activists not able to see through the “Open Border” fraud and act upon the best interests for American workers and families?

That taboo culture factor, covered in the Buchdahl book explains the blind spot from the Loony Left. A review of a pro immigration site, Open Borders will demonstrate a systemic disconnect from reality. Often Libertarian purists, also fall under the spell of a transcendental fantasy. To their credit, Open Borders presents the concept of CITIZENISM and provides the following its key features.

Citizenism places substantially greater weight on the rights and interests of citizens than non-citizens, though it operates within moral side-constraints.

Citizenism is about current citizens, not about the people who may become citizens as a result of immigration or deportation policy.

Citizenism, as conceived by its original proponent Sailer, is both about the individual ethics of voters and about the responsibilities of elected representatives.

Citizenism is about loyalty, not admiration, toward one’s fellow citizens.

If you understand the destructive nature of corporatist trade agreements that only benefit transnational conglomerates, while poisoning economic commerce for Middle Americans, why would you not oppose the lunacy of unrestrictive mass migration? The imperative moral directive is to protect and defend your own nation, its traditional culture and responsible citizens.

Saving the world is a concept that resides in the sick minds of the Save the Planet Kill Yourself mindset. If they are so devoted to a globalist utopia, the influx of trespassers must be leaving their own homeland in better shape. Just how well is life south of the border doing?


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

Sartre is a regular columnist for Veracity Voice

Lies and Liars

November 11, 2014 by · 1 Comment 

Both Good Guys and Bad Guys…

During my four score and five years I have witnessed a series of boggy men created by our elite masters that have horrified the population, allowed the deterioration of our freedom, and destroyed our Constitution. The terrifying phantoms they trotted out were often contrived and bogus.

Communism filled the bill for several decades; then the Russian atomic threat became so real that many citizens constructed shelters. Recently the Muslims have been used to create mainstream fear and hate. As I write this Russian has returned to the demon category and is being castigated by our devious press and media.

A feared enemy is a necessary element for the progression of tyranny and the American people are easily fooled.

Fooling the public is not confined to the government. Dissident truth tellers are guilty a well.

When I began writing regularly a number of years ago I wrote about the power grabs that were becoming regular fare in government circles. These essays were popular and were widely reproduced. As it became apparent that educating the populace was useless; that the problem was not entirely centered in our government; that ample responsibility rested with our citizens; indicting our foolish populace was not popular and my readership and popularity plummeted.

The bogus prophecies that beguile Charismatic Christian circles are eerily similar to many of the fear mongering prognostication written by talented and ambitious truth tellers in patriotic groups; both tend toward dramatic predictions that do not materialize and in the process destroy integrity.

Sensationalism is scintillating and sensational revelations and predictions are broadly popular. Truth is profound to a small number of readers and onerous to the majority. R. J. Rushdoony declares that “—the ability to investigate, denounce, and condemn evil is no guarantee of righteousness”. He compares the deterioration of the Roman Empire to a similar decline in the United States:

“The Romans of old, like Americans today, loved to see evil exposed. They loved to talk about national scandals. Evil is interesting to most people, whereas righteousness is not. At a dinner party, a suddenly disgusted host said, ‘Let’s stop all this talk about scandals and let’s talk about something good for a change!’ The result was a painful silence. No one was interested in talking about righteousness. But freedom rests on righteousness (or justice). Without righteousness freedom perishes.”

I recall the Y2K threat that was almost universally considered serious. Various commentators predicted all kinds of breakdowns but on January 2, 2000 things were mostly normal. For several decades we have been regaled with notices of a stock market crash; hyperinflation; death of the dollar; bank failures, or a depression; nothing really serious has occurred. We have been told that Martial Law was Imminent, that body bags had been purchased, burial vaults stock piled, and that Mexican soldiers or Russians soldiers were active in the United States.

Following are some of the titles of articles published by a popular Libertarian writer and radio host with the year they were published.

The Draft is Coming 2006
By 2010, you and I will no longer be Americans 2008
The Beginning of the End 2008
Pentagon Planning Deployment of Troops in Support of Nationwide Vaccination 2009
Depopulation by Inoculation 2009
The Economic Collapse of 2009
Freedom Loving Americans Headed for FEMA Camps 2012
More False Flags Coming! 2012
Mega Banks Stealing Customer Savings and Homes Prior to Collapse 2012
FEMA Trains with Human Shackles are Real! 2012
The DHS Plan to Convert Malls and Stadiums to FEMA Camps — 2012
Manufactured Presidential Assassination Attempt Expected to Justify Martial Law 2012
The Russians are Coming, The Russians are Coming 2012
WWW III is Right Around the Corner 2012
Nowhere to Run or to Hide From the New Killer Robots 2012
Will Your Family Survive the Coming Tyranny? 2013
The Eight Unfolding Stages of the Great American Genocide 2013
The Government Theft of Retirement Accounts Has Begun 2013
Five Months From the Biggest Depopulation Event in US History 2013
Where Will FEMA Take Your Children? 2013
A Military Coup Will Remove Obama 2013
The Mother of All Conspiracies Aimed At Our Children 2013
The Murdering of Our Daughters 2013
Game Over; Total Collapse is Imminent 2013
They Are Coming for Our Water 2013
The Chinese Military Will Be Knocking On Your Door 2013
The Sides are Forming for the Coming Civil War 2013

These are startling titles that are popular and get the attention of readers. There is often an element of truth but many of the events predicted never materialized and some of them were contrived lies. These titles provide an easy target but there are scores of other writers that use questionable statements to gain readership and popularity. He is not alone.

Charismatic Christian Churches entertain similar startling predictions made by modern day prophets who give the impression that their message comes from God. I have received numerous emails containing warnings given by these Christian oracles that are sent by people who take their words as gospel.

It is a deplorable mendacity to purposely lie to the public as a means of gaining popularity.

Both Christian and secular society should understand that our love for sensation and prurience is a result of our own sinful natures and that the perpetrator needs our cooperation to continue supplying us with evil fantasy. If we are serious about changing our government we must first change ourselves.

The Roman Empire lasted for over 500 years but it slowly deteriorated. Like the United States of America, the Empire began with a love of virtue but ended with a love of evil. Roman citizens, like present day Americans, thought that it was righteous to expose sin and malfeasance in high places. And, like present day Americans, they never understood that righteousness must start with the individual citizen’s obedience to the Law of the Creator; that exposing the sins in government and church would never produce righteous citizens.

Now, gentle reader, the above does not mean that exposing sin in high places is evil. It is not. Freedom is under siege and if we are to win the battle we must know and understand the enemy while realizing that exposing sin in high places will not by itself change our society. Societal change must come with each individual citizen and as individuals seek justice from the Only Source of Justice society will change and so will our government.


Al Cronkrite is a writer living in Florida, reach him at: trueword13@yahoo.com

Al Cronkrite is a regular columnist for Veracity Voice

Subprime Loans And Auto Sales: Debt On Wheels

November 8, 2014 by · Leave a Comment 

“It’s not the underlying economics that’s driving things, it’s central bank liquidity.”

— Matt King, Citigroup

Soaring auto sales are not so much a sign of a strong economy as they are an indication of financial hanky-panky. We saw this same type of fakery play out in housing between 2004 – 2006, when prices went through the roof due to a mortgage-lending scam (“subprime”) that crashed the stock market and sent the economy reeling. Now the bigtime money guys are at it again, writing up auto loans for anyone who can sit upright in a chair and scribble an “X” on the dotted line. As a result, car sales have surged to over 16 million for the last 6 months. (A full 7 million more than the low point in January, 2009.)   And it’s not hard to see why either. The finance gurus are packaging these sketchy subprimes into bonds, offloading them on eager investors, and recycling the profits into more crappy loans. It’s a perfect circle and it won’t end until the loans start blowing up, jittery investors head for the exits,  and Uncle Sugar rides to the rescue with more bailouts.

But we’re getting ahead of ourselves.  First take a look at these charts by House of Debt which shows the disparity between auto spending and other types of spending since the end of the slump in 2009.

House of Debt:  “New auto purchases have driven the consumer spending recovery to a large degree. The chart below shows the spending recovery for new auto sales and for all other retail spending…

From 2009 to 2013, spending on new autos increased by 40% in nominal terms. All other spending increased by only 20%. Further, excluding autos, 2013 saw lower growth in nominal retail spending than 2012…

The concern is that a lot of auto purchases are being fueled with debt, given a strong recovery in the auto loan market. Below is the net flow of auto loans from 2002 to 2013. It is a net flow because it includes pay downs in addition to new originations. As it shows, auto lending in 2012 and 2013 tops any other year during the previous expansion from 2002 to 2007 (although it is still below the amount of new auto loans in 2000 and 2001).


(“Another Debt-Fueled Spending Spree?” House of Debt) 

How about that? So there’s a bigger debt bubble in auto loans today than there was before the bust. But why? Is it because demand is strong,  jobs are plentiful, wages are rising, the economy is growing, and people are optimistic about the future?

Heck, no. It’s because rates are low, credit is easy, and dealers are ready to put anyone with a license and a heartbeat into a brand-spanking new car no questions asked.  Here are the details from an article in the New York Times titled “In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates” by Jessica Silver-Greenberg and Michael Corkery:

”Auto loans to people with tarnished credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered subprime — people with credit scores at or below 640.

The explosive growth is being driven by some of the same dynamics that were at work in subprime mortgages. A wave of money is pouring into subprime autos, as the high rates and steady profits of the loans attract investors. Just as Wall Street stoked the boom in mortgages, some of the nation’s biggest banks and private equity firms are feeding the growth in subprime auto loans by investing in lenders and making money available for loans.

And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.

The New York Times examined more than 100 bankruptcy court cases, dozens of civil lawsuits against lenders and hundreds of loan documents and found that subprime auto loans can come with interest rates that can exceed 23 percent. The loans were typically at least twice the size of the value of the used cars purchased, including dozens of battered vehicles with mechanical defects hidden from borrowers. Such loans can thrust already vulnerable borrowers further into debt, even propelling some into bankruptcy, according to the court records, as well as interviews with borrowers and lawyers in 19 states.

In another echo of the mortgage boom, The Times investigation also found dozens of loans that included incorrect information about borrowers’ income and employment, leading people who had lost their jobs, were in bankruptcy or were living on Social Security to qualify for loans that they could never afford.” (“In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates”, New York Times)

Can you believe that this kind of chicanery is going on in broad daylight without the regulators stepping in? Think about it for a minute: If the NYT’s journalists can find “dozens of loans that included incorrect information about borrowers’ income and employment”, then why can’t the government regulators? It’s ridiculous. What we’re talking about here is a new version of “liar’s loans” where dealers are helping people who don’t have the means to repay the debt, to fudge the details on their loan application so they can drive off in a shiny new Impala.

Haven’t we seen this movie before?

Here’s more from USA Today: “In the first quarter of 2014, 24.9% of all new-car loans were 73 to 84 months long. Four years ago, less than 10% of loans were that long. In fact, such lengthy terms have pulled the average new-car loan to 66 months. That’s an all-time record.”

7 years to pay off a car?  You got to be kidding me? It’s like a second mortgage. And there’s more, too. The average monthly payment and average amount financed hit record highs in the first quarter too. This is from Auto News:

“The average monthly new-vehicle payment was $474 in the first quarter, up 3.3 percent from a year ago. The average monthly used-vehicle payment was $352, up 1.1 percent, Experian Automotive said.

Also in the first quarter, the average amount financed on a new-vehicle loan was $27,612, an increase of $964, or 3.6 percent. For used vehicles, the average amount financed was $17,927, up $395 or 2.3 percent.”

(“Auto loan terms, monthly payments hit high in Q1, Experian says“, Auto News)

So Americans are not just loading on more debt, they’re also assuming that they’re financial situation is going to be stable enough to make these large payments well into the future.  Good luck with that.

It’s also worth noting that, in many transactions, dealers are actually lending more than the value of the vehicle. According to Reuters David Henry,

“The average loan-to-value on new cars rose to 110.6 percent… On used cars it rose to 133.2 percent…

Auto lenders often provide loans that exceed the value of cars they are financing because borrowers want cash to pay sales taxes and fees.”

(“U.S. car buyers borrow more as rates fall and standards loosen“, David Henry, Reuters)

Let me see if I got this straight: You walk onto a car lot without a dime in your pocket, and drive off in a brand new car with everything paid for upfront? Such a deal! Can you see why we think that the sales numbers are a big fake?  This isn’t the sign of a strong economy. It’s the sign of another gigantic credit bubble rip-off. But what do the dealers get out of this thing? Is it really worth their while to botch the underwriting when they know that eventually they’ll have to repossess the vehicle? Sure, it is, because there’s big money in stuffing people into loans they can’t afford.

Here’s how the Times explains it: ”Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years. The jump has been driven in large part by the demand among investors for securities backed by the loans, which offer high returns at a time of low interest rates. Roughly 25 percent of all new auto loans made last year were subprime, and the volume of subprime auto loans reached more than $145 billion in the first three months of this year.”

Bingo. So not only do they make dough on the high interest rates they charge their subprime borrowers, (Sometimes 23 percent or more.) they also make it by selling the loan to investors who are eager to buy any manner of crappy bond provided it offers a better return than US Treasuries. This is the mess Bernanke created by fixing interest rates at zero for nearly 6 years.  Zirp (zero interest rate policy) unavoidably leads to excessive risk taking by yield-crazed speculators.    The voracious appetite for subprime securities (ABS–Asset-Backed Securities) has even surprised the bond issuers who are constantly beating the bushes looking for sketchier products.  This is from the same article by the NY Times:

“Investors, seeking a higher return when interest rates are low, recently flocked to buy a bond issue from Prestige Financial Services of Utah. Orders to invest in the $390 million debt deal were four times greater than the amount of available securities.

What is backing many of these securities? Auto loans made to people who have been in bankruptcy.

An affiliate of the Larry H. Miller Group of Companies, Prestige specializes in making the loans to people in bankruptcy, packaging them into securities and then selling them to investors.

“It’s been a hot space,” Richard L. Hyde, the firm’s chief operating officer, said during an interview in March. Investors are betting on risky borrowers. The average interest rate on loans bundled into Prestige’s latest offering, for example, is 18.6 percent, up slightly from a similar offering rolled out a year earlier…. To meet that rising demand, Wall Street snatches up more and more loans to package into the complex investments.” (NYT)

HA! Now there’s a good way to feather the old retirement fund; load up on bonds made up of loans to people who’ve gone bust.

This is the impact that zero rates have on investor behavior. The abundance of cheap and plentiful liquidity invariably leads to trouble. And there are victims in this Central Bank-authored gold rush too, namely the unsophisticated borrowers who pay prohibitively high rates on beater vehicles that are typically worth less-than-half the value of the loan. (Check the NYT article for examples.)

The Times also notes that the ratings agencies have been playing along with the finance companies just as they did during the subprime mortgage fiasco. Here’s more from the Times:

“Rating agencies, which assess the quality of the bonds, are helping fuel the boom. They are giving many of these securities top ratings, which clears the way for major investors, from pension funds to employee retirement accounts, to buy the bonds. In March, for example, Standard & Poor’s blessed most of Prestige’s bond with a triple-A rating. Slices of a similar bond that Prestige sold last year also fetched the highest rating from S.&P. A large slice of that bond is held in mutual funds managed by BlackRock, one of the world’s largest money managers.” (NYT)

Ask yourself this, dear reader: How are the ratings agencies able to give “many of these securities top ratings”, when the investigators from the Times found “dozens of loans that included incorrect information about borrowers’ income and employment, leading people who had lost their jobs, were in bankruptcy or were living on Social Security to qualify for loans that they could never afford”?

Let’s face it: The regulatory changes in Dodd-Frank haven’t done a damn thing to protect the victims of these dodgy subprime schemes. Borrowers and investors are both getting gouged by a system that only protects the interests of the perpetrators. The sad fact is that nothing has changed. The system is just as corrupt as it was when Lehman went down.

So, how long can this go on before the market implodes?

According to the Times:

“financial firms are beginning to see signs of strain. In the first three months of this year, banks had to write off as entirely uncollectable an average of $8,541 of each delinquent auto loan, up about 15 percent from a year earlier, according to Experian…

In another sign of trouble ahead, repossessions, while still relatively low, increased nearly 78 percent to an estimated 388,000 cars in the first three months of the year from the same period a year earlier, according to the latest data provided by Experian. The number of borrowers who are more than 60 days late on their car payments also jumped in 22 states during that period….” (NYT)

(According to Amber Nelson at loan.com: “In the second quarter, the value of all auto loans late by 60 days or more was more than $4 billion, up 27 percent from the prior year, according to Experian.”)

So, yeah, the trouble is mounting, but that doesn’t mean that this madness won’t continue for some time to come. It probably will. It’ll probably drag-on until the economy turns south and more borrowers start falling behind on their payments. That will lead to more defaults, heavier losses on auto bonds, and a hasty race to the exits by investors. Isn’t that how the subprime mortgage scam played out?

Indeed. But at least there are signs of hope on the regulatory front. Check out this clip from an article at CNBC:

“In August, both Santander Consumer and General Motors Financial Co. acknowledged receiving Justice Department subpoenas in connection with a probe over possible violations of civil-fraud laws. And the Consumer Financial Protection Bureau and the Securities and Exchange Commission have both stepped up their scrutiny of the auto-loan market.” (“New debt crisis fear: Subprime auto loans“, CNBC)

So the SEC, the DOJ, and the CFPB are actually investigating the underwriting practices of these behemoth finance companies to see if they violated “civil fraud laws”?

Will wonders never cease?

Just don’t hold your breath waiting for convictions.


Mike Whitney is a regular columnist for Veracity Voice

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

Court Protects IRS Tyranny

November 2, 2014 by · Leave a Comment 

The names Catherine Engelbrecht and Reggie B. Walton may not exactly be household names, but both are part of a disturbing court ruling that can only be described as a reprehensible government protection racket in plain sight for all to see. Ms. Engelbrecht was the plaintiff and Reggie B. Walton the judge. A succinct summary is provided by Breitbart in the report, True the Vote’s Lawsuit against IRS Gets Tossed by Federal Judge.

“A federal judge in the United States District Court for the District of Columbia entered an order dismissing a lawsuit filed by True the Vote, a Houston, Texas-based non-profit organization focused on “voters’ rights and election integrity” against the Internal Revenue Service (IRS). The order alleged that the IRS had improperly delayed granting their application for 501(c)(3) status and targeted them as a conservative organization. The opinion, by Judge Reggie B. Walton, found that the IRS had taken sufficient “remedial steps to address the alleged behavior.”

From the ruling by Judge Walton, analysis:

“The defendants contend that the Court does not have subject-matter jurisdiction over counts one, two, and five of the plaintiff’s complaint because the IRS ultimately approved the plaintiff’s application for tax-exempt status, and thus counts one, two, and five—all of which seek “to correct [the] alleged targeting [of the IRS] and delay during its application process” for tax-exempt status—are now moot as there is no longer any case or controversy for the Court to resolve.”

How nice that the IRS can slip out of a sticky wicket by simply retroactively approving a 501(c)(3) application that they officiated with a touch of harassment and a sprinkle of intimidation. The reasoning used by Judge Walton to protect the IRS from a “voluntary cessation” exception follows:

“The rationale supporting the defendant’s voluntary cessation as an exception to mootness is that, while the defendant’s unilateral cessation of the challenged conduct may grant the plaintiff relief, the defendant is free to return to its old ways—thereby subjecting the plaintiff to the same harm but, at the same time, avoiding judicial review. Accordingly, a case can be mooted by virtue of the defendant’s cessation of its allegedly illegal conduct only if (1) there is no reasonable expectation that the conduct will recur and (2) interim relief or events have completely and irrevocably eradicated the effects of the alleged violation.”

Oh praise the sacred high priests of the Internal Revenue Service for “seeing the light” and repenting their ways. Such a reasonable trust in the good intentions of the IRS to not only follow the law but to administer their trade under the “good faith” doctrine that only a judge working for the same corrupt government as do the Lois Lerner brigade of bureaucrats, would profess.

An important USA Today article, from hardly an anti government publication, IRS list reveals concerns over Tea Party ‘propaganda’, furnishes the evidence.

“Newly uncovered IRS documents show the agency flagged political groups based on the content of their literature, raising concerns specifically about “anti-Obama rhetoric,” inflammatory language and “emotional” statements made by non-profits seeking tax-exempt status.

The internal 2011 documents, obtained by USA TODAY, list 162 groups by name, with comments by Internal Revenue Service lawyers in Washington raising issues about their political, lobbying and advocacy activities. In 21 cases, those activities were characterized as “propaganda.”

The list provides the most specific public accounting to date of which groups were targeted for extra scrutiny and why. The IRS has not publicly identified the groups, repeatedly citing a provision of the tax code prohibiting it from releasing tax return information.”

The supporting items Document: IRS ‘political advocacy cases’ list, while the pattern of selective favoritism is authenticated in the report, IRS approved liberal groups while Tea Party in limbo.

For a more cutting edge analysis from  Twitchy US politics on the insanity from the Loony Left, just absorb the rhetoric and ask, who the real totalitarians are in society and even worse in government. Outrage: Court acknowledges that IRS targeted True the Vote, dismisses lawsuit anyway explains.

“Voters’ rights group True the Vote , a nonprofit “founded to inspire and equip voters for involvement at every stage of our electoral process,” has had a hard time of it. As the 2012 election approached, Cher of all people referred to True the Vote as “a bunch of Tea Party Nazis” and “animals.” Maryland Rep. Elijah Cummings, who sits on the House Oversight and Government Reform Committee, informed True the Vote founder and president Catherine Engelbrecht that he would be launching an investigation into her organization.

Of course, all of this was happening while the IRS was targeting conservative groups and holding up applications for nonprofit status, often through several election cycles. And even though the U.S. Federal District Court didn’t deny this, True the Vote’s case against the IRS was dismissed today.”

Engelbrecht issued the following brief statement:

“The Court today correctly acknowledged that the IRS targeted True the Vote because of its perceived political beliefs. Such conduct is reprehensible and should never be acceptable in a free society. Despite this critical finding, we are stunned and disappointed in the court’s ruling which nevertheless dismisses our case. We will be evaluating our legal options and will announce our intent in that regard soon.”

Jenny Beth Martin, co-founder of Tea Party Patriots reaction to the DC Court Decision on IRS “Unconscionable”. “The Court’s decision not to sanction either the IRS or the individual agents because it and they had taken “remedial measures” is unconscionable.”

Supporting this conclusion are Top 9 Quotes on the IRS Targeting of Tea Party Groups.

  1. “Not even a smidgen of corruption.” – President Barack Obama to Fox News’ Bill O’Reilly February, 2014
  2. “Decline to answer that question.” – Lois Lerner, pleading the Fifth Amendment before the House Oversight and Government Reform Committee, March 5, 2014
  3. “The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention.” – Treasury Inspector General for Tax Administration Audit
  4. “Instead of referring to the cases as advocacy cases, they actually used case names on this list. They [Determinations Unit in Cincinnati, Ohio] used names like ‘Tea Party’ or ‘Patriots’ and they selected cases simply because the applications had those names in the title. That was wrong, that was absolutely incorrect, insensitive, and inappropriate.” – Lois Lerner
  5. “Even after admitting that it had targeted groups, and a TIGTA [Treasury Inspector General for Tax Administration] report detailed the abuses, the IRS did not let up. In August 2013, the IRS requested yet more documents and information. It asked us to provide, for example, all fundraising communications for the 60 days before the November 6, 2012 election, and all materials that we used in various “Get Out the Vote” activities. That request made no sense under the current standards for evaluating non-profit applications. The regulations proposed three months later, however, explain the requests, as they include specific provisions classifying any mention of a candidate’s name within 60 days of an election and get-out-the-vote efforts as taxable political activity.” – Jenny Beth Martin in testimony to the House Committee on Oversight and Government Reform, February 27, 2014
  6. “The Internal Revenue Service says acting IRS Commissioner Steven T. Miller was first informed in May 2012 that tea party groups were inappropriately targeted for scrutiny.” – Hot Air, May 13, 2013
  7. “The IRS inspector general said this week that while some liberal groups were given extra scrutiny by the tax agency, they were not subjected to the same invasive queries as tea party groups – a finding that seems to confirm political bias was at play.” – The Washington Times, June 27, 2013
  8. When the IRS revelations broke, Obama promised a full investigation. Yet Cleta Mitchell, an attorney for a number of tea party and conservative groups targeted by the IRS, testified, “None of my clients have received a single contact from the FBI, the DOJ [Department of Justice] or any other investigator regarding the IRS scandal.” – The Chicago Sun-Times, February 10, 2014
  9. More than 400,000 documents have been turned over to Congress, only a fraction of which have been publicly released under the Freedom of Information Act. Republicans say they’re still missing key documents including the e-mails of former IRS Exempt Organizations Director Lois Lerner. – USA Today, February 26, 2014

But remember, President Obama assures us there’s “not a smidgen of corruption!”

No matter your political leanings, every American should be concerned when the courts condone abusive and arbitrary administration in any agency. Allowing the IRS to retroactively cover their rear, while turning a blind eye to systemic illicit practices, is just part of the game plan that permits the court to make up law, which favors government tyranny.

The True the Vote decision is insulting and only goes to prove that reforms through the election process are truly the moot option.


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

Sartre is a regular columnist for Veracity Voice

Risky Business “Easy Money”

November 1, 2014 by · Leave a Comment 

Here we go again.

Last week, the country’s biggest mortgage lenders scored a couple of key victories that will allow them to ease lending standards, crank out more toxic assets, and inflate another housing bubble.  Here’s what’s going on.

On Monday,  the head of the Federal Housing Finance Agency (FHFA), Mel Watt, announced that Fannie and Freddie would slash the minimum down-payment requirement on mortgages from 5 percent to 3 percent while making loans more available to people with spotty credit. If this all sounds hauntingly familiar, it should. It was less than 7 years ago that shoddy lending practices blew up the financial system precipitating the deepest slump since the Great Depression. Now Watt wants to repeat that catastrophe by pumping up another credit bubble. Here’s the story from the Washington Post:

“When it comes to taking out a mortgage, two factors can stand in the way: the price of the mortgage,…and the borrower’s credit profile.”

On Monday, the head of the agency that oversees the mortgage giants Fannie Mae and Freddie Mac outlined … how he plans to make it easier for borrowers on both fronts. Mel Watt, director of the Federal Housing Finance Agency, did not give exact timing on the initiatives. But most of them are designed to encourage the industry to extend mortgages to a broader swath of borrowers.

Here’s what Watt said about his plans in a speech at the Mortgage Bankers Association annual convention in Las Vegas:

Saving enough money for a downpayment is often cited as the toughest hurdle for first-time buyers in particular. Watt said that Fannie and Freddie are working to develop “sensible and responsible” guidelines that will allow them to buy mortgages with down payments as low as 3 percent, instead of the 5 percent minimum that both institutions currently require.”

Does Watt really want to “encourage the industry to extend mortgages to a broader swath of borrowers” or is this just another scam to enrich bankers at the expense of the public?  It might be worth noting at this point that Watt’s political history casts doubt on his real objectives.   According to Open Secrets, among the Top 20 contributors to Watt’s 2009-2010 campaign were Goldman Sachs, Bank of America, Citigroup Inc., Bank of New York Mellon, American bankers Association, US Bancorp, and The National Association of Realtors. (“Top 20 Contributors, 2009-2010“, Open Secrets)

Man oh man,  this guy’s got all of Wall Street rooting for him. Why is that, I wonder? Is it because he’s faithfully executing his office and defending the public’s interests or is it because he’s a reliable stooge who brings home the bacon for fatcat bankers and their brood?

This is such a farce, isn’t it? I mean, c’mon, do you really think that the big banks make political contributions out of the kindness of their heart or because they want something in return?  And do you really think that a guy who is supported by Goldman Sachs has your “best interests” in mind?  Don’t make me laugh.

The reason that Obama picked Watt was because he knew he could be trusted to do whatever Wall Street wanted, and that’s precisely what he’s doing. Smaller down payments and looser underwriting are just the beginning; teaser rates, balloon payments, and liars loans are bound to follow. In fact, there’s a funny story about credit scores in the Washington Post that explains what’s really going on behind the scenes. See if you can figure it out:

“Most housing advocates agree that a bigger bang for the buck would come from having lenders lower the unusually high credit scores that they’re now demanding from borrowers.

After the housing market tanked, Fannie and Freddie forced the industry to buy back billions of dollars in loans. In a bid to protect themselves from further financial penalties, lenders reacted by imposing credit scores that exceed what Fannie and Freddie require. Housing experts say the push to hold lenders accountable for loose lending practices of the past steered the industry toward the highest-quality borrowers, undermining the mission of Fannie and Freddie to serve the broader population, including low- to moderate- income borrowers.

Today, the average credit score on a loan backed by Fannie and Freddie is close to 745, versus about 710 in the early 2000s, according to Moody’s Analytics. And lenders say they won’t ease up until the government clarifies rules that dictate when Fannie and Freddie can take action against them.” (Washington Post)

Can you see what’s going on? The banks have been requiring higher credit scores than Fannie or Freddie.

But why? After all, the banks are in the lending business, so the more loans they issue the more money they make, right?

Right. But the banks don’t care about the short-term dough. They’d rather withhold credit and slow the economy in order to blackmail the government into doing what they want.

And what do they want?

They want looser regulations and they want to know that Fannie and Freddie aren’t going to demand their money back (“put backs”) when they sell them crappy mortgages that won’t get repaid. You see, the banks figure that once they’ve off-loaded a loan to Fannie and Freddie, their job is done.  So, if the mortgage blows up two months later, they don’t think they should have to pay for it. They want the taxpayer to pay for it. That’s what they’ve been whining about for the last 5 years. And that’s what Watt is trying to fix for them. Here’s the story from Dave Dayen:

“Watt signaled to mortgage bankers that they can loosen their underwriting standards, and that Fannie and Freddie will purchase the loans anyway, without much recourse if they turn sour. The lending industry welcomed the announcement as a way to ease uncertainty and boost home purchases, a key indicator for the economy. But it’s actually a surrender to the incorrect idea that expanding risky lending can create economic growth.

Watt’s remarks come amid a concerted effort by the mortgage industry to roll back regulations meant to prevent the type of housing market that nearly obliterated the economy in 2008. Bankers have complained to the media that the oppressive hand of government prevents them from lending to anyone with less-than-perfect credit. Average borrower credit scores are historically high, and lenders make even eligible borrowers jump through enough hoops to garner publicity. Why, even Ben Bernanke can’t get a refinance done! (Actually, he could, and fairly easily, but the anecdote serves the industry’s argument.)

(“The Mortgage Industry Is Strangling the Housing Market and Blaming the Government“, Dave Dayen, The New Republic)

Can you see what a fraud this is?  6 years have passed since Lehman crashed and the scum-sucking bankers are still  fighting tooth-and-nail to unwind the meager provisions that have been put in place to avoid another system-shattering disaster. It’s crazy. These guys should all be in Gitmo pounding rocks and instead they’re setting the regulatory agenda. Explain that to me? And this whole thing about blackmailing the government because they don’t want to be held responsible for the bad mortgages they sold to the GSE’s is particularly irritating. Here’s more from Dave Dayen:

“After the housing market tanked, Fannie and Freddie forced the industry to buy back billions of dollars in loans. In a bid to protect themselves from further financial penalties, lenders reacted by imposing credit scores that exceed what Fannie and Freddie require. ….And lenders say they won’t ease up until the government clarifies rules that dictate when Fannie and Freddie can take action against them.”

So the industry has engaged in an insidious tactic: tightening lending well beyond required standards, and then claiming the GSEs make it impossible for them to do business. For example, Fannie and Freddie require a minimum 680 credit score to purchase most loans, but lenders are setting their targets at 740. They are rejecting eligible borrowers….so they can profit much more from a regulation-free zone down the line.

So, I ask you, dear reader; is that blackmail or is it blackmail?

And what does Watt mean when he talks about “developing sensible and responsible guidelines’ that will allow them (borrowers) to buy mortgages with down payments as low as 3 percent”?

What a joke.  Using traditional underwriting standards, (the likes of which had been used for  the entire post-war period until we handed the system over to the banks) a lender would require a 10 or 20 percent down, decent credit scores, and a job. The only reason Watt wants to wave those requirements is so the banks can fire-up the old credit engine and dump more crap-ass mortgages on Uncle Sam.  That’s the whole thing in a nutshell. It’s infuriating!

Let me fill you in on a little secret: Down payments matter! In fact, people who put more down on a home (who have “more skin in the game”) are much less likely to default.  According to David Battany, executive vice president of PennyMac, “there is a strong correlation between down payments to mortgage default. The risk of default almost doubles with every 1%.”

Economist Dean Baker says the same thing in a recent blog post:

“The delinquency rate, which closely follows the default rate, is several times higher for people who put 5 percent or less down on a house than for people who put 20 percent or more down.

Contrary to what some folks seem to believe, getting moderate income people into a home that they subsequently lose to foreclosure or a distressed sale is not an effective way for them to build wealth, even if it does help build the wealth of the banks.”

(“Low Down Payment Mortgages Have Much Higher Default Rates“, Dean Baker, CEPR)

Now take a look at this chart from Dr. Housing Bubble which helps to illustrate the dangers of low down payments in terms of increased delinquencies:

Data on mortgage delinquencies by downpayment. Source:  Felix Salmon 

“When the mortgage industry starts complaining about the 14 million people who would be denied the chance to buy a qualified mortgage if they don’t have a 5% downpayment, it’s worth remembering that qualified mortgages for people who don’t have a 5% downpayment have a delinquency rate of 16% over the course of the whole housing cycle.” (“Why a sizable down payment is important“, Dr. Housing Bubble)

So despite what Watt thinks,  higher down payments mean fewer defaults, fewer foreclosures, fewer shocks to the market, and greater financial stability.

And here’s something else that Watt should mull over:  The housing market isn’t broken and doesn’t need to be fixed.  It’s doing just fine, thank you very much. First of all, sales and prices are already above their historic trend. Check it out from economist Dean Baker:

“If we compare total sales (new and existing homes) with sales in the pre-bubble years 1993-1995, they would actually be somewhat higher today, even after adjusting for population growth. While there may be an issue of many people being unable to qualify for mortgages because of their credit history, this does not appear to be having a negative effect on the state of market. Prices are already about 20 percent above their trend levels.” (“Total Home Sales Are At or Above Trend“, Dean Baker, CEPR)

Got it? Sales and prices are ALREADY where they should be, so there’s no need to lower down payments and ease credit to start another orgy of speculation. We don’t need that.

Second, the quality of today’s mortgages ARE BETTER THAN EVER, so why mess with success? Take a look at this from Black Knight Financial Services and you’ll see what I mean:

“Today, the Data and Analytics division of Black Knight Financial Services … released its November Mortgage Monitor Report, which found that loans originated in 2013 are proving to be the best-performing mortgages on record…..

“Looking at the most current mortgage origination data, several points become clear,” said Herb Blecher, senior vice president of Black Knight Financial Services’ Data & Analytics division. “First is that heightened credit standards have resulted in this year being the best-performing vintage on record. Even adjusting for some of these changes, such as credit scores and loan-to-values, we are seeing total delinquencies for 2013 loans at extremely low levels across every product category.”

(“Black Knight Financial Services’ Mortgage Performance Data Shows 2013 Loans Best Performing on Record“, LPS)

Okay, so sales and prices are fine and mortgage quality is excellent. So why not leave the bloody system alone? As the saying goes: If it ain’t broke, don’t fix it.

But you know why they’re going to keep tinkering with the housing market. Everyone knows why. It’s because the banks can’t inflate another big-honking credit bubble unless they churn out zillions of shi**y mortgages that they offload onto Fannie and Freddie. That’s just the name of the game: Grind out the product (mortgages), pack it into sausages (securities and bonds), leverage up to your eyeballs (borrow as much as humanly possible), and dump the junk-paper on yield-chasing baboons who think they’re buying triple A “risk free” bonds.

Garbage in, garbage out.  Isn’t this how the banks make their money?

You bet it is, and in that regard things have gotten a helluva a lot scarier since last Wednesday’s announcement that the banks are NOT going to be required to hold any capital against the securities they create from bundles of mortgages.

Huh?

You read that right. According to the New York Times:  “there will be no risk retention to speak of, at least on residential mortgage loans that are securitized.”

But how can that be, after all, it wasn’t subprime mortgages that blew up the financial system (subprime mortgages only totaled $1.5 at their peak), but the nearly $10 trillion in subprime infected mortgage-backed securities (MBS) that stopped trading in the secondary market after a French Bank stopped taking redemptions in July 2007. (a full year before the crisis brought down Lehman Brothers) . That’s what brought the whole rattling financial system to a grinding halt. Clearly, if the banks had had a stake in those shabby MBS— that is, if they were required to set aside 5 or 10 percent capital as insurance in the event that some of these toxic assets went south– then the whole financial collapse could have been avoided, right?

Right. It could have been avoided. But the banks don’t want to hold any capital against their stockpile of rancid assets, in fact, they don’t want to use their own freaking money at all, which is why 90 percent of all mortgages are financed by Uncle Sugar. It’s because the banks are just as broke as they were in 2008 when the system went off the cliff. Here’s a summary from the New York Times:

“Once upon a time, those who made loans would profit only if the loan were paid back. If the borrower defaulted, the lender would suffer.

That idea must have seemed quaint in 2005, as the mortgage lending boom reached a peak on the back of mushrooming private securitizations of mortgages, which were intended to transfer the risk away from those who made the loans to investors with no real knowledge of what was going on.

Less well remembered is that there was a raft of real estate securitizations once before, in the 1920s. The securities were not as complicated, but they had the same goal — making it possible for lenders to profit without risking capital.

The Dodd-Frank Act of 2010 set out to clean that up. Now, there would be “risk retention.” Lenders would have to have “skin in the game.” Not 100 percent of the risk, as in the old days when banks made mortgage loans and retained them until they were paid back, but enough to make the banks care whether the loans were repaid.

At least that was the idea. The details were left to regulators, and it took more than four years for them to settle on the details, which they did this week.

The result is that there will be no risk retention to speak of, at least on residential mortgage loans that are securitized.

“…..Under Dodd-Frank, the general rule was to be that if a lender wanted to securitize mortgages, that lender had to keep at least 5 percent of the risk…….But when the final rule was adopted this week, that idea was dropped.”  (“Banks Again Avoid Having Any Skin in the Game”, New York Times)

No skin in the game, you say?

That means the taxpayer is accepting 100 percent of the risk. How fair is that?

Let’s review: The banks used to lend money to creditworthy borrowers and keep the loans on their books.

They don’t do that anymore, in fact, they’re not really banks at all, they’re just intermediaries who sell their loans to the USG or investors.

This arrangement has changed the incentives structure. Now the goal is quantity not quality.  “How many loans can I churn-out and dump on Uncle Sam or mutual funds etc.” That’s how bankers think now.  That’s the objective.

Regulations are bad because regulations stipulate that loans must be of a certain quality, which reduces the volume of loans and shrinks profits. (Can’t have that!) Therefore, the banks must use their money to hand-pick their own regulators  (“You’re doin’ a heckuva job, Mel”) and ferociously lobby against any rules that limit their ability to issue credit to anyone who can fog a mirror. Now you understand how modern-day banking works.

It would be hard to imagine a more corrupt system.


Mike Whitney is a regular columnist for Veracity Voice

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

The Fix Is In: Fed Stops Stock Slide With Talk of QE Extension

October 25, 2014 by · Leave a Comment 

Unbelievable.

On Wednesday, stocks were hammered after economic data showed that the US and global economies were headed for a major slowdown. By mid-day, the Dow was down 460 points before clawing its way back to minus 173 points. It looked like the market was set for another triple-digit flogging on Thursday when the Fed stepped in and started talking-up an extension to QE3. That’s all it took to ease investors jitters, stop the meltdown and send equities rocketing back into space. By the end of Friday’s session, all the markets were back in the green with the Dow logging an impressive 263 points on the day. Here’s more background from Wolf Street:

“But just when some profusely sweating souls on Wall Street thought that the bottom was falling out, a savior appears. St. Louis Fed President James Bullard got on Bloomberg TV and pressed the red panic button (and) handed them what they wanted….That was enough.

Using declining inflation expectations as a pretext, he proposed to delay the end of QE. The Fed should continue buying $15 billion in securities a month…. it instantly turned around the markets. The spoiled brats on Wall Street were ecstatic to imagine that the Fed might continue to deliver the goodies they’ve become addicted to, and without which life seems unbearable.” (This Market is Driven by Psychology and Momentum,’ which ‘Works Really Painfully on the Way Down, Wolf Street)

For those readers who still think that the Fed doesn’t meddle in the markets: Think again. Friday’s stock surge had nothing to do with productivity, price, earnings, growth or any of the other so called fundamentals. It was all about manipulation; telling people what they want to hear, so they do exactly what you want them to do. The pundits calls this jawboning, and the Fed has turned it into an art-form. All Bullard did was assure investors that the Fed “has their back”, and , sure enough, another wild spending spree ensued. One can only imagine the backslapping and high-fives that broke out at the Central Bank following this latest flimflam.

As most people now realize, stocks haven’t tripled in the last 5 years because the economy is expanding. Heck, no. The economy is still on all-fours and everyone knows it. The reason stocks have been flying-high is because the Fed added a hefty $4 trillion in red ink to its balance sheet. Naturally, when someone buys $4 trillion in financial assets, the price of financial assets go up.

Who would’ve known?

And here’s something else to chew on: On Thursday I wrote an article titled “Stocks Plunge 460 Points on QE Exit”. Among the 2 or 3 thousand other articles on the topic in the mainstream, not one mentioned the fact that QE was set to end at the end of October. Instead, they pointed to sluggishness in Europe and China, and weaker-than-expected economic data in the US as the proximate causes of the downturn.

So let me ask you this, dear reader, if the end of QE was not the real trigger for the Dow’s 460 point bungee jump, then why did the markets do a quick 180 right after Bullard made his statement on Thursday? In fact, the media even admits that point now. Check out this article on Marketwatch on Friday titled “Bullard’s surprise suggestion of continuing QE lifts markets”:

“A comment from a hawkish Federal Reserve official on Thursday that central-bank bond buying should continue beyond its scheduled end lifted stock markets and surprised many observers.

The Federal Reserve should consider extending its bond-buying program beyond October due to the market selloff to see how the U.S. economic outlook evolves, said James Bullard, the president of the St. Louis Fed, on Thursday. …

If the economy is still as robust as I am describing it, then I think we could just end the program in December. But if the market is right, and this is portending something more serious for the U.S. economy, than the committee would have an option of ramping up QE at that point,” he said.

The S&P 500 SPX, +1.65% jumped from its session low of a 0.9% drop after Bullard’s remarks came out.” (Bullard’s surprise suggestion of continuing QE lifts markets, Marketwatch)

How do you like that? Just one word from the Fed and the markets do an immediate about-face. Now that’s power.

It’s too bad the Fed can’t put in a good word for the real economy while they’re at it. But, oh, I forgot that the real economy is stuffed with working stiffs who don’t warrant the same kind of treatment as the esteemed supermen who trade stocks for a living. Besides, the Fed doesn’t give a rip about the real economy. If it did, it would have loaded up on infrastructure bonds instead of funky mortgage backed securities (MBS). The difference between the two is pretty stark: Infrastructure bonds put people to work, circulate money, boost economic activity, and strengthen growth. In contrast, MBS purchases help to fatten the bank accounts of the fraudsters who created the financial crisis while doing bupkis for the economy. Guess who the Fed chose to help out?

Do you really want to know why the Fed isn’t going to end QE? Here’s how Nomura’s chief economist Bob Janjuah summed it up:

“I want to remind readers of a message that may be buried in the past: When QE1 ended, the S&P 500 fell just under 20% in a roughly three-month period before the QE2 recovery.

When the QE2 ended, the S&P 500 fell about 20% in a three-month period before the next Fed-inspired bounce (aided by the ECB). QE3 is ending this month…”

Is that why the Fed started jawboning QE4, to avoid the inevitable 20 percent correction?

You bet it is. But what’s odd is that stocks hadn’t even dropped 10 percent before the Fed hit the panic button. Why is that?

Could it be that they have no confidence in the market? Could it be that they know that their loosy-goosey monetary policies have inflated the biggest bubble of all time which has created a fragile, crisis prone system that can’t even withstand a measly 10 percent drop before bank balance sheets start going up in flames and the whole wobbly financial house of cards comes crashing to earth in a thud?

Of course, it is. They’re scared sh**less, which is why they dispatched bigmouth Bullard to promise investors the moon as long as they keep loading up on equities. Yellen an Co. are going to do everything in their power to keep this runaway train from going off the cliff, even if they kill us all in the process.

Now check out this blurb from Allianz ‘s chief economic adviser, Mohamed A. El-Erian, one of the few analysts who got it right:

“Due to excessive confidence in central banks, investors eagerly decoupled high market valuations from what was warranted by the sluggish fundamentals.”… That disconnect has been undermined over the last few weeks by signs that the global economy’s fundamentals are weaker than they seemed and concern that the European Central Bank will not adequately fight that continent’s economic drift…” (New York Times)

What El Erian is saying, is that, stocks are vastly overpriced given “sluggish fundamentals”. The only reason investors have been buying is because the Fed has been shoving money into the market hand-over-fist. That’s what’s kept equities airborne. But on Wednesday, investors woke up and said to themselves, “Hey, the economy’s circling the plughole, the Fed is bailing out, and I’m left with a boatload of dodgy stocks that might be worth $.30 on the dollar. Maybe I’ll get out now while I still can.” That’s why the market tanked.

So, what’s the lesson here?

The lesson is that the Fed is driving the markets. The whole “free market” trope is baloney. No one is loading up on stocks because they’re a good deal or because they think the economy is going gangbusters. Investors are buying stocks because they still believe in the power of money. They still think the Fed can pump a few more wisps of helium into the equities balloon and keep the rally going for a bit longer. And that’s why stocks surged on Friday, because, at least for now, greed still trumps fear.

But what’s the overall effect of this loony policy on the economy, or is that a fair question to ask after 6 years of falling incomes, flatlining wages, widening inequality and widespread economic stagnation?

The truth is, we already know what the impact is: The rich have gotten richer while the poor have been shunted off to tent cities, food pantries and under freeway off-ramps. Isn’t that what’s happened? Get a load of this brief summary in Friday’s WSWS:

“The richest one percent of the world’s population now controls 48.2 percent of global wealth, up from 46 percent last year, according to the most recent global wealth report issued by Credit Suisse, the Swiss-based financial services company.

Hypothetically, if the growth of inequality were to proceed at last year’s rate, the richest one percent for all intents and purposes would control all the wealth on the planet within 23 years.

The report found that the growth of global inequality has accelerated sharply since the 2008 financial crisis, as the values of financial assets have soared while wages have stagnated and declined…

The study revealed that the richest 8.6 percent of the world’s population—those with a net worth of more than $100,000—control 85 percent of the world’s wealth. Meanwhile, the bottom 70 percent of the world’s population—those with less than $10,000 in net worth—hold a mere 2.9 percent of global wealth.

The growth in inequality is bound up with a worldwide surge in paper wealth, fueled by the trillions of dollars pumped into the financial system by central banks via zero interest rate and “quantitative easing” policies…

As the report noted, “The overall global economy may remain sluggish, but this has not prevented personal wealth from surging ahead during the past year. Driven by … robust equity prices, total wealth grew by 8.3% worldwide … the first time household wealth has passed the $250 trillion threshold.” (Richest one percent controls nearly half of global wealth, Andre Damon)

That says it all, doesn’t it? The widening chasm between rich and poor is traceable to the policies that were adopted in 2008. That’s why things are so fu**ed up, it’s because the “surge in paper wealth, fueled by the trillions of dollars pumped into the financial system by central banks via zero interest rate and “quantitative easing” policies.”

In other words, it’s all deliberate. Robbing the poor and giving to the rich is all part of the plan.

That strikes me as an important point, and one that’s worth mulling over for awhile; that crushing the middle class isn’t an accident. It’s what they want. It’s the policy.


Mike Whitney is a regular columnist for Veracity Voice

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

8 Facts About American Inequality

October 25, 2014 by · Leave a Comment 

“…that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

– James Truslow Adams, The Epic of America (1931)

The American Dream has been defined many ways by writers of both poetic and prosaic bent, but its essentials tend to involve life, liberty and the pursuit of happiness (or property, depending on your source).

The Declaration of Independence, upon which an entire nation was radically brought into existence, asserts that not only are all men created equal but that this is a “self-evident” truth. By this “unanimous Declaration of the thirteen united States of America,” a contract was agreed to, that their union would be founded on this principle. Thus, America was endowed with its dream at the moment of its conception: the freedom to succeed.

The United States has promoted a self-congratulating exceptionalism for decades, waving its Declaration and Constitution in the faces of other sovereign nations as if the latter had never considered such concepts. Our capital F “Freedom” sets us apart from the rest of the world, as the political rhetoric has repeated ad nauseam, no matter the freedoms enjoyed by democracies on almost every continent. And yet our basic freedom, the freedom to succeed, America’s contractual promise, has been shrinking for thirty years.

The freedom to succeed transcends economic systems but it is most potently expressed by capitalist gains. The ability to go “from rags to riches” is ingrained in this nation’s ethos and there is nothing intrinsically immoral about that goal. However, the current state of American inequality reveals a very real and expanding gap between the rich and poor that betrays the foundational endowment of this Union. When the freedom to succeed is denied every citizen, their equality is equally denied.

Recently, the Pew Research Center released a poll on what international citizens consider the greatest threat to the planet. Conducted between March 17 and June 5 of this year, the survey received answers from 48,643 respondents in 44 countries. In the U.S. and Europe, the growing gap between the rich and the poor was overwhelmingly considered the greatest danger to world prosperity. Over a quarter of Americans ranked “Inequality” as number one, above Religious & ethnic hatred, Pollution, Nuclear weapons and Infectious diseases.

This is hardly startling news considering that the median net worth of American households fell by 35 percent ($106,591 to $68,839) between 2005 and 2011, according to the U.S. Census Bureau. It is, however, disturbing that inequality remains so prevalent five years after the Great Recession.

Capitalism is not the problem. The problem is that we have let inequality advance in this country so gradually that its obviousness is masked by its familiarity. Below, I outline eight facts about inequality in America that every American should know.

1) 400 Americans have more wealth than half of all Americans combined. This ratio has been verified by Politifact and former Labor Secretary Robert Reich. To put it into context, last year the U.S. Census Bureau estimated that there were over 316 million people living in the United States. That means 400 Americans have more money than over 158 million of their fellow citizens. Their net worth is over$2 trillion, which is approximate to the Gross Domestic Product of Russia.

One explanation for the vast discrepancy in wealth is the definition of “worth,” which includes everything a person or household owns. This means savings and property but also mortgages, bills and debt. Poorer households can owe so much in debt that they possess a negative net worth.

2) America has the second-highest level of income inequality, after Chile. The Organization for Economic Cooperation and Development studies thirty-four developed countries and ranks them both before and after taxes and government transfers take effect (government transfers include Social Security, income tax credit and unemployment insurance). Before taxes and government transfers, America ranks tenth in income inequality. After taxes and transfers, it ranks second. Whereas its developed peers reduce inequality through government programs, the United States’ government exacerbates it.

3) The current state of inequality can be traced back to 1979. After the Stock Market Crash of 1929, the gap between the rich and the poor began to narrow. For fifty years, wages differed between the upper- and working-classes, but a robust middle-class took shape and there remained ample opportunity for working-class individuals to ascend.

In his book, “The Great Divergence,” journalist Timothy Noah traced today’s inequality to the beginning of the 1980s and the widening gap between the middle- and upper-classes. This gap was influenced by the following factors: the failure of American schools to prepare students for new technology; poor immigration policies that favor unskilled workers and drive down the price of already low-income labor; federally-mandated minimum wage that has failed to keep pace with inflation; and the decline of labor unions.

4) Non-union wages are also affected by the decline of unions. The Economic Policy Institute claims that 20 percent of the growth in the wage gap between high-school-educated and college-educated men can be attributed to deunionization.

Between 1978 and 2011, union representation for blue-collar and high-school educated workers declined by more than half. This has also diminished the “union wage effect,” whereby the existence of unions (more than 40 percent of blue-collar workers were union members in 1978) was enough to boost wages in non-union jobs – in high school graduates by as much as 8.2 percent. Not only did unions protect lower- and middle-class workers from unfair wages, they also established norms and practices that were then adopted by non-union employers. Two prime examples are employee pensions and healthcare.

Today, about 13 percent of workers belong to unions, which has reduced their bargaining power and influence.

5) There is less opportunity for intergenerational mobility. In December 2011, President Obama spoke at Osawatomie High School in Kansas. He was very clear about the prospects of the poor in today’s United States:

“[O]ver the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. You know, a few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance had fallen to around 40 percent. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a one-in-three chance of making it to the middle class – 33 percent.”

As refreshing as that honesty is, Obama promised no fix beyond $1 trillion in spending cuts and a need to work toward an “innovation economy.”

In a speech one month later, Obama’s Chairman of Economic Advisers, Alan Krueger, elaborated on the dire state of America’s shrinking middle-class. The contraction, he stated, could partially be attributed to “skill-biased technical change”: work activities that have become automated over time, reducing the need for unskilled labor and favoring those with analytical training. He also highlighted the 50 year decline in tax rates for the top 0.1 percent, increased competition from overseas workers, and a lack of educational equality for children. Poor children are denied the private tutors, college prep and business network of family and friends available to their wealthier peers, which locks them into the class they are born into.

6) Tax cuts to the wealthiest have not improved the economy or created more jobs. Krueger also revealed that the tax cuts of the 2000s for top earners did not improve the economy any better than they did in the 1990s (meanwhile, income growth was stronger for lower- and middle-class families in the 1990s than in the last forty years).

Tax rates for the top income earners in America peaked in 1945 at 66.4 percent. Following decades of gradual reductions, they have since been cut in half. During the same time, the payroll tax has increased since the 1950s and individual income tax has bounced between 40-50 percent through the present day. Conversely, corporate tax declined from above 30 percent in the 1950s to under 10 percent in 2011.

All of these tax cuts are made ostensibly to improve the economy and create jobs. However, the National Bureau of Economic Research has concluded that it is young companies, “regardless of their size,” that are the real job creators in America. Tax cuts to the wealthiest do not create jobs.

7) Incomes for the top 1% have increased (but the top 0.01% make even more). Between 1979 and 2007, the average incomes of the 1 percent increased 241 percent. Compare that to 19 percent growth for the middle fifth of America and 11 percent for the bottom fifth. Put another way, in 1980 the average American CEO earned forty-two times as much as his average worker. In 2001, he earned 531 times as much.

Average income across the 1 percent is actually stratified into widely disparate echelons. Compare the $29,840 average income for the bottom 90 percent to the $161,139 of the top 10 percent. Compare the $1 million average income of the top 1 percent to the $2.8 million of the top 0.1 percent. Yet both still pale beside the $23 million average income of the top 0.01 percent.

If those numbers seem a bit overwhelming, Politizane has created a video that illustrates this staggering inequality:

8) The majority of Congress does not feel your pain. Empowered by the Constitution to represent their constituents, United States Congress members are, for the first time in history, mostly millionaires. The 2012 financial disclosure information of the 534 current Congress men and women reveals that over half of them have a net worth of $1 million or more.

After the past seven facts it is difficult to read this last one and believe that these 268 legislators have the best interests of the remaining 99 percent at heart. But if that is too presumptuous a leap, it is not too bold to say that wealthier donors, lobbyists and special interest groups enjoy greater access to these lawmakers than the average American.

In January, Congress failed to extend emergency benefits for unemployment, leaving 1.3 million people without federal aid. Congress then went on a weeklong recess that kept them from debating the issue until the end of the month. The bill was too divisive for Republicans and Democrats to reach an agreement on, though unemployment was then above 7 percent nationally.

Thankfully, the unemployed have their Congress working for them. And at $174,000 annual pay, those representatives are sure to return from their vacations committed to fresh solutions.

Pierce Nahigyan is a guest columnist for Veracity Voice

Pierce Nahigyan is a freelance journalist living in Long Beach, California. His work has appeared in several publications, including NationofChange, the Los Angeles Post-Examiner and SHK Magazine. A graduate of Northwestern University, he holds a B.A. in Sociology and History.

Mary Poppins, Elizabeth Warren & The American Banking System

October 21, 2014 by · Leave a Comment 

When I saw the movie “Saving Mr. Banks” during one of my interminably-long plane rides back from Syria, I liked it so much that I actually went out and bought a copy of the 1964 “Mary Poppins” Disney classic it was based on — the one with Julie Andrews and Dick Van Dyke frolicking across the rooftops of London.

And much to my surprise, I discovered that Mary Poppins might have been one of the world’s first hippies.  Who woulda thought!  And what was even more amazing is that Mary Poppins was one of the first people to warn us about the dangers and perfidy of big bankers and big banks.

And fortunately for those of us living here in America one hundred years later, Elizabeth Warren has now become the new Mary Poppins — also warning us about the dangers and perfidy of big bankers and big banks.

If only Americans would start paying attention to Elizabeth Warren as much as they paid attention to Julie Andrews!

“Hey, Elizabeth!” I also want to shout on the rooftops like Dick VanDyke, “voters aren’t listening to you!”  Maybe if Disney studios made a movie about you too?  Then maybe voters would finally start to listen.

According to Warren, the American middle class has been absolutely decimated by the banking and credit-card lobbies.

And yet voters still keep falling for all those glossy ads and happy lies that still keep getting pro-big-bank candidates elected to the White House and Congress even though voters can clearly see that they themselves are losing their jobs, having their homes repossessed, becoming slaves to their student loans and getting ripped off bigtime by credit-card debt.  But then I guess that those syrupy ads actually do prove that “A spoonful of sugar helps the medicine go down” after all.

In the heroic country of Iceland, their well-informed voters have vigorously fought back against bankster greed and have even re-written their constitution in order to make lending-bubbles and bank fraud illegal.

But in America, the opposite happens.  Here in America our very own government, the very one that bank lobbyists have chosen for us to elect, is handing over billions of our very own hard-earned dollars to big banks just as fast as it can.  And Congress is always writing new bankruptcy laws that favor banksters over the middle class every time.  Mary Poppins would be livid, of course, but nobody else seems to even notice these days — except for Elizabeth Warren.

And even the Federal Reserve is dancing over the rooftops in glee as it too gives away our money to the banksters just as fast as it possibly can, singing “Step in Time” as gleefully hands over giant bags of taxpayers’ money to Chase, Bank of America, CitiBank and Goldman Sachs.

And the Federal Reserve’s chim chem cher-ee chummy coverups are going through the roof too.

Plus the Senate just vetoed a bill that would have given students a break from paying up to 12% interest on their college loans too.  According to Warren, “This isn’t complicated.  It’s a choice – a choice that raises a fundamental question about who the United States Senate works for.  Does it work for those who can hire armies of lawyers and lobbyists to protect tax loopholes for billionaires and profits for the big banks?  Or does it work for those who work hard, play by the rules, and are trying to build a future for themselves and their families?”

Not to mention the hidden (and not-so-hidden) fees that banks gleefully charge us customers for no reason at all.

To try to completely understand how banksters and their toadies in Congress and the Department of Justice are robbing the rest of us blind, you just gotta watch this video of Bill Moyers interviewing bank-fraud expert Thomas K. Black.  Seriously.   You really should watch this:  http://vimeo.com/107916659

In this video, Black describes how Obama was elected by the banking industry and how Obama has totally paid back his debt to the banksters by handing them all “get out of jail free” cards.  Is being elected president really worth selling us Americans out to the banksters?  Apparently so.

“There’s no threat to capitalism like capitalists,” continues Black.  “They are destroying its underpinnings.  And when dishonest people gain an advantage in the marketplace, bad ethics drive good ethics out.  This is why we need the rule of law.”  Doesn’t Thomas K. Black sound just like Dick VanDyke, er, I mean Burt the Chimney Sweep here — as Black proposes that it’s high time to sweep clean our banks.

And now let’s talk about America’s ratings on the so-called “Misery Index”.  Apparently America rates higher on the misery charts now than it ever has, even back in the Great Depression — and probably even as high as did Mary Poppins’s 1910 London.  Thanks a lot, banksters.

Isn’t it time that American voters finally join up with Elizabeth Warren and Mary Poppins — and tell big banks and banksters to go “fly a kite!”

PS:  Speaking of money, look how much of it is being spent in the Middle East — and not here at home where it is needed!

According to a recent blog-post at thehill.com, the first official estimates of the ISIS price tag from the Pentagon showed that, “the costs of intervention between mid-June and late-August was $7.5 million per day.  At that rate, the U.S. has spent $850 million on operations against ISIS as of October 8, adding up to about $2.74 billion per year.  The Pentagon has since revised the estimate up to as high as $10 million per day, or $3.65 billion per year.  In reality, both of those numbers are quite likely to be underestimates of what’s to come.”

Looks like the US military is just as bad as the US banksters when it comes to cleaning out America’s pocketbooks — after they both have put us to sleep with false promises and false news https://www.youtube.com/watch?v=ZewopnA6H7E.

What we Americans really need to do these days is to once again take Mary Poppins’s advice and “Stay Awake”!  https://www.youtube.com/watch?v=8yC_voMY6kY


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

Stocks Plunge 460 Points On QE Exit

October 17, 2014 by · Leave a Comment 

“Financial markets are faced with uncertainty that isn’t going away. The slowdown in Europe is probably in the early innings, the Fed hasn’t begun to raise interest rates, and geopolitical crises seem to pop up by the day.” Jeff Cox, Finance editor, CNBC

Six years of zero rates and trillions of dollars of asset purchases couldn’t stop stocks from falling sharply on Wednesday. All three major indices moved deep into the red, with the Dow Jones leading the pack, dropping an eye-watering 460 points before rebounding nearly 300 points by the end of the session. Risk-free assets, particularly US Treasuries, rallied hard on the flight-to-safety move with the benchmark 10-year Treasury yield slipping to a Depression era 1.87 percent before climbing back above the 2 percent mark. US financials were the worst hit sector, taking it on the chin for 9 percent by mid-day, while Brent crude was soundly walloped, falling to a 47-month low on oversupply and deflation fears. Stock market gains for the year had nearly been wiped out before a miraculous about-face turned Armageddon into a so-so day with survivable losses. Even so, analysts have already started paring back their estimates for 4th quarter growth while traders stocked up on antacid for Thursday’s opening bell.

The proximate cause of Wednesday’s bloodbath was weaker than expected economic data from Europe–which is sliding towards its third recession in five years– droopy retail sales in the US, and a report from Department of Labor showing that wholesale prices for producers are edging closer towards deflation, the opposite of what the Fed is trying to achieve via its aggressive monetary policy.

But the real trigger for the selloff was not the dismal data, but the policies that have been in place since the Financial Crisis of 2008. While the Obama administration has steadily decreased demand by shaving the deficits which provide vital fiscal stimulus for the economy, (On Wednesday, the USG announced the budget deficit fell to $483 billion, the lowest since 2008) the Federal Reserve has been providing trillions of dollars of cheap money to the banks and brokerages. The result of this one-two combo has not only been the biggest transfer of wealth in human history, but also “a fundamental breakdown in the functioning of the global capitalist economy.” As the International Monetary Fund (IMF) noted in a recent paper on the global recovery: “a pickup in investment has not yet materialized…reflecting concerns about low medium-term growth potential and subdued private consumption.” Demand shortfalls in the advanced countries “could lead to sustained global economic weakness over a five-year period.” (IMF report records global economic breakdown, Nick Beams, World Socialist Web Site)

Simply put: The Fed’s policies have made investors richer, but they haven’t created opportunities for recycling profits, which is a critical part of capitalism’s so called virtuous circle. Anemic investment, means less hiring, less spending, weaker demand and slower growth, all of which are visible in today’s sluggish, underperforming economy. Pumping money into financial assets (QE) can fatten the bank accounts of rich speculators, but it doesn’t do jack for the economy. It just creates bubbles that burst in a flurry of panic selling. Here’s more from Larry Elliot at the Guardian:

“Six years after the global banking system had its near-death experience, interest rates are still at emergency levels. Even attaining the mediocre levels of activity expected by the IMF in the developed countries requires central banks to continue providing large amounts of stimulus. The hope has been that copious amounts of dirt-cheap money will find its way into productive uses, with private investment leading to stronger and better balanced growth.

It hasn’t happened like that. Instead, as the IMF rightly pointed out, the money has not gone into economic risk-taking but into financial risk-taking. Animal spirits of entrepreneurs have remained weak but asset prices have been strong. Tighter controls on banks have been accompanied by the emergence of a powerful and largely unchecked shadow banking system. Investors have been piling into all sorts of dodgy-looking schemes, just as they did pre-2007. Recovery, such as it is, is once again reliant on rising debt levels. Central bankers know this but also know that jacking up interest rates would push their economies back into recession. They cross their fingers and hope for the best.” (World leaders play war games as the next financial crisis looms, Larry Elliot, Guardian)

The policies implemented by the Obama administration and Fed have achieved precisely what they were designed to achieve; they’ve enriched the voracious plutocrats who run the system but left everyone else scraping by on less and less. An article in the Washington Post explains what’s going on in greater detail. Here’s a short excerpt from the piece titled “Why is the recovery so weak? It’s the austerity, stupid”:

“Welcome to Austerity U.S.A., where the deficit is back below 3 percent of GDP and growth is still disappointing—which aren’t unrelated facts.

It started when the stimulus ran out. Then state and local governments had to balance their budgets amidst a still-weak economy. And finally, there was the debt ceiling deal with its staggered $2.1 trillion of cuts over the next decade. Add it all up, and there’s been a big fiscal tightening the past few years, something like 4 percent of potential GDP. Indeed, as Paul Krugman points out, real government spending per capita has been falling faster now than any time since the Korean War demobilization. (chart)


Fiscal Impact Measure
Source: Hutchins Center

And, as you can see above, all this austerity has been hurting GDP growth since 2011. It shows the Hutchins Center’s new “fiscal impact measure,” which looks at how much total government tax-and-spending decisions have helped or harmed growth. The dark blue line is what policy has actually done, and the light blue one is what a neutral policy would have done. So, in other words, if the dark blue line is below the light blue one, like it has the last three years, then policy has subtracted from growth.” (Why is the recovery so weak? It’s the austerity, stupid. Washington Post)

By cutting the deficits, Obama reduced the blood flow to the real economy and weakened demand. That’s what torpedoed the recovery. In contrast, stocks and bonds have done remarkably well, mainly because the Fed pumped $4 trillion into financial assets which was a taken as a greenlight by risk takers everywhere to load up on everything from overpriced equities to low-yield junk. Now, after more than three years without as much as a 10 percent correction, the momentum has shifted, volatility has returned, earnings are looking wobbly, and the fear is palpable. Stocks appear to be headed for a major repricing event. Here’s how investment guru John Hussman sums it up in his Weekly Market Comment:

“Our concerns at present mirror those that we expressed at the 2000 and 2007 peaks, as we again observe an overvalued, overbought, overbullish extreme that is now coupled with a clear deterioration in market internals, a widening of credit spreads, and a breakdown in our measures of trend uniformity…

…it has become urgent for investors to carefully examine all risk exposures. When extreme valuations on historically reliable measures, lopsided bullishness, and compressed risk premiums are joined by deteriorating market internals, widening credit spreads, and a breakdown in trend uniformity, it’s advisable to make certain that the long position you have is the long position you want over the remainder of the market cycle. As conditions stand, we currently observe the ingredients of a market crash.” (The Ingredients of a Market Crash, John P. Hussman, Ph.D., Hussman Funds)

Sounds ominous, doesn’t it? And Hussman is not alone either. The bearish mood on Wall Street is gaining pace even among those who focus more on geopolitical issues than fundamentals, like the Bank for International Settlements’ Guy Debelle who said in an interview on CNBC on Tuesday that he was concerned about the possibility of a “violent” market drop, particularly in bonds.

“If I had told you that there were heightened tensions in the Middle East and Eastern Europe, uncertainty about the turning point in U.S. monetary policy, a succession of strong U.S. job numbers, uncertainty about the future direction of policy in Europe and Japan, as well as increased concern about the strength of the Chinese economy, you would not be expecting that to make for a benign time in financial markets,” Guy Debelle of the BIS said. “But that is what we have seen for much of this year.” (CNBC)

But stocks aren’t cratering because of tensions in the Middle East or Eastern Europe. That’s baloney. And they’re not falling because of decelerating global growth, plunging oil prices or Ebola. They’re falling because no one knows what the heck is going to happen when QE stops at the end of October. That’s what has everyone in a lather.

Keep in mind, that 20 percent of the current market cap (more than $4 trillion) is stock buybacks, that is, corporations that have bought their own shares to juice prices. Do you really think that corporate bosses are going to play as fast and loose after the Fed stops its liquidity injections?

Not on your life. They’re going to pull in their horns and see what happens next. And if things go sideways, (which they very well could) they’re going to cash in and call it a day. That’s going to drive down stock prices and send markets reeling.

Stocks have nearly tripled since March 2009 when the Fed started this “credit easing” fiasco. So if stocks rode higher on an ocean of Fed liquidity, then how low are they going to go when the spigot is turned off? There are some, like technical strategist Abigail Doolittle, who think the S and P 500 could suffer a major heart attack, dropping as much as 60 percent before equities touch down. Check it out from CNBC:

“(Abigail) Doolittle, founder of Peak Theories Research, has made headlines lately suggesting a market correction worse than anyone thinks is ahead. The long-term possibility, she has said, is a 60 percent collapse for the S&P 500.

In early August, Doolittle was warning both of a looming “super spike” in the CBOE Volatility Index as well as a “death cross” in the 10-year Treasury note.

And so it’s come to pass at least for the VIX, which has jumped 74 percent over the past three months and crossed the 20 threshold that historically has served as a dividing line between complacency and fear. That’s its highest level in nearly two years. From Doolittle’s perspective, the spike represents a bad-news/bad-news scenario … that the near-term selling action is likely to continue and even accelerate…

…she thinks “violent waves of selling action” could send the VIX all the way to 90—even beyond its peak during the financial crisis.” (CNBC)

Now maybe Doolittle is just exaggerating or paranoid, but her conclusions do seem to square with CNN Money. Here’s a clip from yesterday’s article:

“CNNMoney’s Fear & Greed Index is a good indicator of market momentum. Today it hit zero. That’s a huge red flag and showcases extreme fear in the stock market. The only other time the index ever touched that low point is in August 2011 — shortly after Standard & Poor’s downgraded the U.S. debt.

Volatility — or what some are calling “market whiplash” — is clearly back in the market. The VIX, an index that measures volatility and is one of the factors that goes into the Fear & Greed Index — spiked again today. It’s up a whopping 60% in the past week alone.” (Extreme Fear in stock market, CNN Money)

So fear and volatility are back, but liquidity has suddenly gone missing. That sounds like a prescription for disaster to me. So what can we expect in the weeks to come?

Well, more of the same, at least that’s how Pimco’s former chief executive officer Mohamed El Erian sees it. Here’s how he summed it up on Wednesday in a Bloomberg editorial:

“Though unlikely to be as dramatic as today, market volatility can be expected to continue in the days and weeks to come as two forces compete: first, the forced deleveraging of certain investors, particularly overstretched hedge funds registering big October losses; second, central banks scrambling to say all sorts of reassuring things. All of this will serve to reinforce October’s longstanding reputation as a threatening month for investors around the world.” (October’s Wild Ride Isn’t Over Yet, Mohamed A. El-Erian, Bloomberg)

Did he say “forced deleveraging”?

Uh huh. So, after a 6 year bacchanal, the Fed is finally going to take away the punch bowl and force the revelers to pay down their debts, clean up their balance sheets, and take a few less risks. Is that it?

Yep. It sure looks like it. But, that could change in the blink of an eye, after all, the Fed has its friends to think of. Which means that Ms. Yellen could announce QE4 any day now.


Mike Whitney is a regular columnist for Veracity Voice

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

The Power Barons: Humanism’s Deities

October 12, 2014 by · 1 Comment 

A recent study by Harvard Business School found that United States corporate executives make over 300 times as much as the average worker.  Based on a $30,000 annual worker income and a 40 hour week the CEO gets $4326.00 an hour while the worker gets $14.42.

In the mid-thirties during the depth of a serious depression executives at General Motors were making 200 times as much as their workers. It was this disparity that helped set the stage for a power shift from the corporate moguls to John L .Lewis  and his CIO (Congress of Industrial Organizations).  John L. Lewis and hundreds of thousands of disgruntled workers succeeded in forcing well-armed and well connected corporate executives to allow collective bargaining which ultimately unionized large portions of the U. S work force.

It was a struggle of epic proportions that bared the fangs of the power elite against the will and leadership of the workers.  It began at the Chevrolet Body Plant in Cleveland, Ohio and spread to Flint, Michigan then to Atlanta, Kansas City, Pontiac, and finally to Detroit itself.  Nearly half a million workers were involved.  At Flint they staged a sit in where the workers sat at their stations day and night.  Machine guns were brought in.  The courts got involved. Finally an injunction was issued.

The strike began on December 28, 1936.  The edict ordered prison sentences and million dollar fines if the strike was not stopped by February 3rd.  Governor Frank Murphy of Michigan called out the National Guard who along with strike breakers armed with clubs and crowbars surround the Flint Plant.

According to William Manchester’s account in “The Glory and the Dream” Governor Murphy was ready to send the bayonets of the National Guard against the workers when at the last moment he called John L. Lewis asking what he should do. Lewis replied, “You want my answer, sir?  I shall personally enter General Motors Chevrolet Plant Number Four.  I shall order the men to disregard your order, to stand fast.  I shall walk up to the largest window in the plant, open it, divest myself of my outer raiment, remove my shirt and bare my bosom.  Then when you order your troops to fire, mine will be the first breast that those bullets will strike.  And as my body falls to the ground, you will listen to the voice of your grandfather as he whispers in your ear, ‘Frank, are you sure you are doing the right thing?’” (Murphy’s grandfather had been hanged in an Irish uprising.)

Fourteen strikers were wounded during the night but Murphy backed down and finally ordered GM not to prevent the strikers from carrying food to the sitting strikers.  With President Roosevelt silent and Governor Murphy aiding the strikers the corporate elites succumbed, signing contracts for collective bargaining.  Unionization spread rapidly into other big corporations.

Globalization was anathema to union workers.  When the rape of United States markets was set in place by our elected officials through ratification of international trade legislation a great burden was placed on unions.  The rush to be competitive in world markets was diametrical to unionism.

Justice is a prerequisite to peace.  When human power is concentrated and not prescribed ghastly actions often result.  God’s overarching legal system provides perfect justice and a necessary restraint; when it is cast off the power swings that marked unions and management replace it.

In our time a more insidious power structure threatens our well-being. For at least a century a systematic plan has been in place to bring the nations of the world under international law.  Nation after nation has been subverted by monstrous, opaque centralized power.  Every major nation of the Western world has been subjected to stealth control. Debt is the weapon.  Since Islam forbids most debt, Muslim nations are harder to conquer.   Military force is necessary and the United States is being used as an instrument of conquest.

Corporate mergers have created behemoths that have little competition and are tyrannical in their own rite. The furtive power seekers are not planning a free society.  Their vision appears to be a controlled environment similar to China.  As economic pressure drains wealth from the United States and oppression ramps up, our standard of living falls, eventually bringing us to par with third world labor.  It is like a 007 movie where James Bond has accepted a bribe to join Blofeld.

Globalization is marred by the illegal procedures used to bring it about.  Wealthy and powerful men and women conspired to burglarize, undermine, and tyrannize the entire population of the world. Their methods are bribery and intimidation and the results of their evil intentions are apparent around the globe.

One wonders if an honest, forthright free-will proposition had been presented to the people of Western Civilization they might have voluntarily participated in bringing the Far Eastern Nations into their economic circle and endorsed an international legal code that would guide global trade.  Conspiracies are sometimes successful but they are wicked and harsh.

Recently, the National Press Club hosted a debate on War and the Constitution between Bruce Fein, a Ron Paul adviser and resident scholar at the Turkish Coalition of America, and John Yoo,  a wily Korean born Constitutional Lawyer and prominent Bush II adviser. C-Span carried the debate.  Yoo maintained that the increase in the power of the Executive Branch of our government was a result of congressional acquiescence and Fein maintained that it is up to the people to elect officials that will abide by the Constitution.

The contending positons were logical and convincing but as with all of public discourse the core issues were evaded.  No one mentioned the fact the incumbent elected official have the political clout to codify unconstitutional and tyrannical law while continuing to garner enough votes to stay in office.  Yoo claimed that congressional leaders are regularly consulted on Executive Orders and other major decision.inclosed sessions; no one mentioned that this plotting is inimical to the well-being and health of the nation.

Consider the repercussions if a nuclear bomb had been dropped on the city of Detroit!   Legislation passed by our elected officials has caused similar damage.  In a recent interview a Detroit official said that there are 80,000 derelict homes in the city. They are being demolished in a process that is similar to cleaning up after a major attack.  The destruction of this once great city is a result of the heretical actions of our own government and it has been done without as much as a whimper from our citizens.

Fein was right when he placed responsibility with the people but at this point the statement was mute for not only has the damage been done but our people are still inert and deluded. Because we have forsaken the Creator and cleaved to the creature our delusion has allowed us to sink so far into the quicksand that escape seems improbable.

Rousas Rushdoony writes “To control the god of any system is to control the men within it. The long battle between church and state has this fact at its roots.  Orthodox Christianity gives us a God who is beyond the control of church and state alike.  Hence the God of Scripture has been resented by civil governments, and attempts to subvert orthodox Christianity and its churches have been legion.  The church too often has been restless under so sovereign a God; churchmen too prefer a god who can be put into man’s pocket.”

The citizens of the United States of America worship humanistic gods.  Our deities are designed and controlled by human beings.  These gods, created in human minds, have been in place for most of United States history.

Now the chickens have come home to roost!

Human beings were not created to govern themselves and when the anarchy of human opinion gains leverage over society, absurdity, chaos, and tyranny soon follow.

In the Harvard survey U. S. citizens guessed that corporate executives were making about 30 times the average worker’s wage.   Citizens in other nations made similar errors in estimates.

It is readily apparent that the captain of the ship fills a more important role than a kitchen worker but to accurately measure and quantify that difference is difficult.

What is interesting, however, is that the U. S. tops the world in the size of its wage inequity.  Switzerland is 2nd and Germany is 3rd, both have disparities of about 150 times the average worker or half that of the U. S. Wage inequity is not the only area in which our nation excels:  We incarcerate the larger percentage of our citizens than any other nation in the world (including China and Russia); we have the world’s largest army.  We had the world’s largest economy before the power barons began to dismantle it.  We are probably the most violent nation.  Violence brought the United States independence, violence freed the slaves and preserved the nation, violence conquered the West, it was the instrument of land acquisition, and of efforts to subdue rebels.  Now it is being used to subdue the Muslim world.

When we are too lethargic to stop voting in elections that are rigged and too lazy to verify that our news is mostly propaganda and lies, we have no chance of helping to bring our profligate nation back under the sovereignty of the One True God.

God’s Law provides perfect justice.  Peace is impossible without justice.  When injustice becomes ingrained in a society that society comes under judgment and God’s judgment can be grueling.  If Bruce Fein’s charge to U. S. citizens ever finds fertile ground it must start with Christians.  Christians are required to be the light of the world.  Light reveals what darkness hides.  It is long past time for Christians to discern and reveal the evil that confronts us.


Al Cronkrite is a writer living in Florida, reach him at: trueword13@yahoo.com

Al Cronkrite is a regular columnist for Veracity Voice

Enter The Shift

September 20, 2014 by · Leave a Comment 

Random encounters between passing travelers crossing paths at the cosmic nexus lead to long conversations with philosophical overtones deep into the heart of night. Strangers meet near the end of the earth and hash out the best possible way to move forward, coming to terms on evolutionary solutions to the problems that plague this world. Open season declared on the honest form of communication. High above, dancing through the constellations, shooting stars in a crystal clear sky become plastered with the pure intention of truth. Cascading energy flows freely from a source somewhat undefined. Edging out to the periphery. Looking over the abyss. Eying what potential fate awaits us.

Will America go the route of austerity, leading it to riot like Greece in the streets? Or the way of Iceland, auditing the privatized printing press and bringing about the realization that the fiat-created debt belongs to the central bank and not the people it tries to keep shackled with its fractional reserve monetary policies of madness. The main plank of the communist manifesto involves setting up a central bank. Another plank near the top of the list deals with establishing a graduated income tax. Ha. America got the wool pulled over its eyes quite awhile ago when the Federal Reserve was created. In fact, it’s been over a hundred years now since that whopper of a lie was laid on the backs of the population. And the Beast continues to swallow everything in its ungodly path to this very day.

Blinding lights flash and burn in apocalyptic rapture as the fiery sun makes its daily appearance, rising on the horizon with a spectacular show of solar fury. Either turn away or let the light wash over. Either choose the cover of shadows and cower away forevermore in apathetic ignorance, or step into the bright awareness of awesome illumination. Sometimes a wound must hurt a little bit first before it can eventually heal. So it goes. The muscle has to be broken down before it can grow stronger. So, too, must a phase shift go through a state of chaos before a higher level of order can emerge. Welcome to the Cycle of the Phoenix. The fire scorches everything in its wake. Naught but a pile of ash remains. The new energy rises from out the decay and forms a more harmonious inclination toward liberty and freedom. An Empire in decline. Personal sovereignty on the rise.

The neat trick that must somehow be pulled off now is to simultaneously erase all imaginary lines of boundary drawn by the creeps that make up the wicked Priest Class while also breaking away from the centralized, command and control, structural apparatus of the ruling elite toward the prospect of bringing about a more tribal, anarchic arrangement of civilization. Global awareness coupled with local government. The two opposites can be cohesive. The yin/yang balance act. The dichotic wholeness of completely dualistic Oneness.

Breathed in through clean lungs. Experienced intimately by a clean heart. Known rationally within a clean mind. Felt intuitively in the core of clean guts. Pushed forward via a clean intention. Seen perfectly with a clear purpose. Razor sharp. Steadfast. Focused in on the zero point.

Truth rallies strong in the bottom of the ninth. A hail marry pass from the fifty yard line as the clock winds down to the final tick, caught by a leaping wide receiver and tucked away as two safeties smash him to the turf in the end zone. A final second buzzer beater heaved up from behind half court.

Nothing but net as it swooshes through. Miraculous for the winners. A crushing defeat for those who had the game in their grasp until it slipped away in the final moments. A lesson learned on seeing things through to the end. Sometimes bitter. Sometimes full of sweet honey. Bear claw in the hive. Sticky substance to coat the teeth. A layer of fat for the winter weather. Cold snap fever induced upon entering the cave.

We can only do so much. But then must, somehow, find the will to do a little more. Push the envelope. Bend back the layers of reality. Peel the onion skin until the gaseous irritant makes you weep. What do you see beneath? What is revealed where you never thought to look? How far down the rabbit hole can you stand to go? Is the jump taken as a leap of faith? Or are you fighting the fall all the way to the bottom?

Hands up as the roller coaster dives down. Hearts lift as the conspiracy unravels. A cabal of secrets revealed. A horde of Dark Wizards exposed. Shamans unite to drive out the virus. Gurus on the street come together to fight off the plague. Yogis breathe a new type of ecstatic spiritual energy into the body politic. A Druid Priest Warrior of Light. An Angel Pagan Goddess of Love. Together, hand in hand, they enter the zone where peace reigns.

The inner illumination of greater graceful glory awakens with newfound purpose to shake loose the cobwebs from the kingdom of Heaven which resides within. The right side of God’s throne is centered in the third eye of pure consciousness. The seat of the soul. Nothing can stop an idea whose time has come. Nothing can hold back the wave that has risen on good intentions. Tsunami in the forecast. Big Bang Birth of the oncoming storm. Black ominous velvet clouds release their payload before the sky breaks open and the sunray shines through. It’s always darkest before the dawn.

Umbrellas at the ready shield us with shelter. Smooth and sanctified. Alert and called to attention. Hut Hut. Here comes the rush. Sidestep and tap dance away. Ballerina feet on the gridiron surface. Logic and emotion tied up with reason. Rational analysis of deep feelings. Science and spiritualism coalesce at a fine point. The Tao of Natural Law emerges in high fashion. Thermodynamic consequences enter a state of entropy. A nuclear ambition stalemate checked on the black and white floorboard. Which piece to move now? Which force will give first? An indomitable inertia puzzles the agenda and counteracts the initial resurgence. Everything gets laid out on the table. Double down and bet the farm. All the chickens are coming home to roost. Karma has a powerful way of equaling out all actions once the final judgment has been rendered.


Scott Thomas is a guest columnist for Veracity Voice


Scott Thomas Outlar is a researcher and truth seeker who enjoys writing essays, poetry and wild rants advocating for peace and karmic justice in this world gone mad with war. He can be reached at: 17Numa@gmail.com

Ukraine And Neo-Nazis

September 20, 2014 by · Leave a Comment 

Ever since serious protest broke out in Ukraine in February the Western mainstream media, particularly in the United States, has seriously downplayed the fact that the usual suspects – the US/European Union/NATO triumvirate – have been on the same side as the neo-Nazis. In the US it’s been virtually unmentionable. I’m sure that a poll taken in the United States on this issue would reveal near universal ignorance of the numerous neo-Nazi actions, including publicly calling for death to “Russians, Communists and Jews”. But in the past week the dirty little secret has somehow poked its head out from behind the curtain a bit.

On September 9 NBCnews.com reported that “German TV shows Nazi symbols on helmets of Ukraine soldiers”. The German station showed pictures of a soldier wearing a combat helmet with the “SS runes” of Hitler’s infamous black-uniformed elite corps. (Runes are the letters of an alphabet used by ancient Germanic peoples.) A second soldier was shown with a swastika on his helmet.

On the 13th, the Washington Post showed a photo of the sleeping quarter of a member of the Azov Battalion, one of the Ukrainian paramilitary units fighting the pro-Russian separatists. On the wall above the bed is a large swastika. Not to worry, the Post quoted the platoon leader stating that the soldiers embrace symbols and espouse extremist notions as part of some kind of “romantic” idea.

Yet, it is Russian president Vladimir Putin who is compared to Adolf Hitler by everyone from Prince Charles to Princess Hillary because of the incorporation of Crimea as part of Russia. On this question Putin has stated:

The Crimean authorities have relied on the well-known Kosovo precedent, a precedent our Western partners created themselves, with their own hands, so to speak. In a situation absolutely similar to the Crimean one, they deemed Kosovo’s secession from Serbia to be legitimate, arguing everywhere that no permission from the country’s central authorities was required for the unilateral declaration of independence. The UN’s international court, based on Paragraph 2 of Article 1 of the UN Charter, agreed with that, and in its decision of 22 July 2010 noted the following, and I quote verbatim: No general prohibition may be inferred from the practice of the Security Council with regard to unilateral declarations of independence.

Putin as Hitler is dwarfed by the stories of Putin as invader (Vlad the Impaler?). For months the Western media has been beating the drums about Russia having (actually) invaded Ukraine. I recommend reading: “How Can You Tell Whether Russia has Invaded Ukraine?” by Dmitry Orlov

And keep in mind the NATO encirclement of Russia. Imagine Russia setting up military bases in Canada and Mexico, from the Atlantic to the Pacific. Remember what a Soviet base in Cuba led to.

Has the United States ever set a bad example?

Ever since that fateful day of September 11, 2001, the primary public relations goal of the United States has been to discredit the idea that somehow America had it coming because of its numerous political and military acts of aggression. Here’s everyone’s favorite hero, George W. Bush, speaking a month after 9-11:

“How do I respond when I see that in some Islamic countries there is vitriolic hatred for America? I’ll tell you how I respond: I’m amazed. I’m amazed that there’s such misunderstanding of what our country is about that people would hate us. I am – like most Americans, I just can’t believe it because I know how good we are.”

Thank you, George. Now take your pills.

I and other historians of US foreign policy have documented at length the statements of anti-American terrorists who have made it explicitly clear that their actions were in retaliation for Washington’s decades of international abominations. But American officials and media routinely ignore this evidence and cling to the party line that terrorists are simply cruel and crazed by religion; which many of them indeed are, but that doesn’t change the political and historical facts.

This American mindset appears to be alive and well. At least four hostages held in Syria recently by Islamic State militants, including US journalist James Foley, were waterboarded during their captivity. The Washington Post quoted a US official: “ISIL is a group that routinely crucifies and beheads people. To suggest that there is any correlation between ISIL’s brutality and past U.S. actions is ridiculous and feeds into their twisted propaganda.”

The Post, however, may have actually evolved a bit, adding that the “Islamic State militants … appeared to model the technique on the CIA’s use of waterboarding to interrogate suspected terrorists after the Sept. 11, 2001, attacks.”

Talk given by William Blum at a Teach-In on US Foreign Policy, American University, Washington, DC, September 6, 2014

Each of you I’m sure has met many people who support American foreign policy, with whom you’ve argued and argued. You point out one horror after another, from Vietnam to Iraq. From god-awful bombings and invasions to violations of international law and torture. And nothing helps. Nothing moves this person.

Now why is that? Are these people just stupid? I think a better answer is that they have certain preconceptions. Consciously or unconsciously, they have certain basic beliefs about the United States and its foreign policy, and if you don’t deal with these basic beliefs you may as well be talking to a stone wall.

The most basic of these basic beliefs, I think, is a deeply-held conviction that no matter what the United States does abroad, no matter how bad it may look, no matter what horror may result, the government of the United States means well. American leaders may make mistakes, they may blunder, they may lie, they may even on the odd occasion cause more harm than good, but they do mean well. Their intentions are always honorable, even noble. Of that the great majority of Americans are certain.

Frances Fitzgerald, in her famous study of American school textbooks, summarized the message of these books: “The United States has been a kind of Salvation Army to the rest of the world: throughout history it had done little but dispense benefits to poor, ignorant, and diseased countries. The U.S. always acted in a disinterested fashion, always from the highest of motives; it gave, never took.”

And Americans genuinely wonder why the rest of the world can’t see how benevolent and self-sacrificing America has been. Even many people who take part in the anti-war movement have a hard time shaking off some of this mindset; they march to spur America – the America they love and worship and trust – they march to spur this noble America back onto its path of goodness.

Many of the citizens fall for US government propaganda justifying its military actions as often and as naively as Charlie Brown falling for Lucy’s football.

The American people are very much like the children of a Mafia boss who do not know what their father does for a living, and don’t want to know, but then wonder why someone just threw a firebomb through the living room window.

This basic belief in America’s good intentions is often linked to “American exceptionalism”. Let’s look at how exceptional US foreign policy has been. Since the end of World War 2, the United States has:

  1. Attempted to overthrow more than 50 foreign governments, most of which were democratically-elected.
  2. Dropped bombs on the people of more than 30 countries.
  3. Attempted to assassinate more than 50 foreign leaders.
  4. Attempted to suppress a populist or nationalist movement in 20 countries.
  5. Grossly interfered in democratic elections in at least 30 countries.
  6. Led the world in torture; not only the torture performed directly by Americans upon foreigners, but providing torture equipment, torture manuals, lists of people to be tortured, and in-person guidance by American teachers, especially in Latin America.

This is indeed exceptional. No other country in all of history comes anywhere close to such a record.

So the next time you’re up against a stone wall … ask the person what the United States would have to do in its foreign policy to lose his support. What for this person would finally be TOO MUCH. If the person mentions something really bad, chances are the United States has already done it, perhaps repeatedly.

Keep in mind that our precious homeland, above all, seeks to dominate the world. For economic reasons, nationalistic reasons, ideological, Christian, and for other reasons, world hegemony has long been America’s bottom line. And let’s not forget the powerful Executive Branch officials whose salaries, promotions, agency budgets and future well-paying private sector jobs depend upon perpetual war. These leaders are not especially concerned about the consequences for the world of their wars. They’re not necessarily bad people; but they’re amoral, like a sociopath is.

Take the Middle East and South Asia. The people in those areas have suffered horribly because of Islamic fundamentalism. What they desperately need are secular governments, which have respect for different religions. And such governments were actually instituted in the recent past. But what has been the fate of those governments?

Well, in the late 1970s through much of the 1980s, Afghanistan had a secular government that was relatively progressive, with full rights for women, which is hard to believe, isn’t it? But even a Pentagon report of the time testified to the actuality of women’s rights in Afghanistan. And what happened to that government? The United States overthrew it, allowing the Taliban to come to power. So keep that in mind the next time you hear an American official say that we have to remain in Afghanistan for the sake of women’s rights.

After Afghanistan came Iraq, another secular society, under Saddam Hussein. And the United States overthrew that government as well, and now the country is overrun by crazed and bloody jihadists and fundamentalists of all kinds; and women who are not covered up are running a serious risk.

Next came Libya; again, a secular country, under Moammar Gaddafi, who, like Saddam Hussein, had a tyrant side to him but could in important ways be benevolent and do marvelous things for Libya and Africa. To name just one example, Libya had a high ranking on the United Nation’s Human Development Index. So, of course, the United States overthrew that government as well. In 2011, with the help of NATO we bombed the people of Libya almost every day for more than six months. And, once again, this led to messianic jihadists having a field day. How it will all turn out for the people of Libya, only God knows, or perhaps Allah.

And for the past three years, the United States has been doing its best to overthrow the secular government of Syria. And guess what? Syria is now a playground and battleground for all manner of ultra militant fundamentalists, including everyone’s new favorite, IS, the Islamic State. The rise of IS owes a lot to what the US has done in Iraq, Libya, and Syria in recent years.

We can add to this marvelous list the case of the former Yugoslavia, another secular government that was overthrown by the United States, in the form of NATO, in 1999, giving rise to the creation of the largely-Muslim state of Kosovo, run by the Kosovo Liberation Army (KLA). The KLA was considered a terrorist organization by the US, the UK and France for years, with numerous reports of the KLA being armed and trained by al-Qaeda, in al-Qaeda camps in Pakistan, and even having members of al-Qaeda in KLA ranks fighting against the Serbs of Yugoslavia. Washington’s main concern was dealing a blow to Serbia, widely known as “the last communist government in Europe”.

The KLA became renowned for their torture, their trafficking in women, heroin, and human body parts; another charming client of the empire.

Someone looking down upon all this from outer space could be forgiven for thinking that the United States is an Islamic power doing its best to spread the word – Allah Akbar!

But what, you might wonder, did each of these overthrown governments have in common that made them a target of Washington’s wrath? The answer is that they could not easily be controlled by the empire; they refused to be client states; they were nationalistic; in a word, they were independent; a serious crime in the eyes of the empire.

So mention all this as well to our hypothetical supporter of US foreign policy and see whether he still believes that the United States means well. If he wonders how long it’s been this way, point out to him that it would be difficult to name a single brutal dictatorship of the second half of the 20th Century that was not supported by the United States; not only supported, but often put into power and kept in power against the wishes of the population. And in recent years as well, Washington has supported very repressive governments, such as Saudi Arabia, Honduras, Indonesia, Egypt, Colombia, Qatar, and Israel.

And what do American leaders think of their own record? Former Secretary of State Condoleezza Rice was probably speaking for the whole private club of our foreign-policy leadership when she wrote in 2000 that in the pursuit of its national security the United States no longer needed to be guided by “notions of international law and norms” or “institutions like the United Nations” because America was “on the right side of history.”

Let me remind you of Daniel Ellsberg’s conclusion about the US in Vietnam: “It wasn’t that we were on the wrong side; we were the wrong side.”

Well, far from being on the right side of history, we have in fact fought – I mean actually engaged in warfare – on the same side as al Qaeda and their offspring on several occasions, beginning with Afghanistan in the 1980s and 90s in support of the Islamic Moujahedeen, or Holy Warriors.

The US then gave military assistance, including bombing support, to Bosnia and Kosovo, both of which were being supported by al Qaeda in the Yugoslav conflicts of the early 1990s.

In Libya, in 2011, Washington and the Jihadists shared a common enemy, Gaddafi, and as mentioned, the US bombed the people of Libya for more than six months, allowing jihadists to take over parts of the country; and they’re now fighting for the remaining parts. These wartime allies showed their gratitude to Washington by assassinating the US ambassador and three other Americans, apparently CIA, in the city of Benghazi.

Then, for some years in the mid and late 2000s, the United States backed Islamic militants in the Caucasus region of Russia, an area that has seen more than its share of religious terror going back to the Chechnyan actions of the 1990s.

Finally, in Syria, in attempting to overthrow the Assad government, the US has fought on the same side as several varieties of Islamic militants. That makes six occasions of the US being wartime allies of jihadist forces.

I realize that I have fed you an awful lot of negativity about what America has done to the world, and maybe it’s been kind of hard for some of you to swallow. But my purpose has been to try to loosen the grip on your intellect and your emotions that you’ve been raised with – or to help you to help others to loosen that grip – the grip that assures you that your beloved America means well. US foreign policy will not make much sense to you as long as you believe that its intentions are noble; as long as you ignore the consistent pattern of seeking world domination, which is a national compulsion of very long standing, known previously under other names such as Manifest Destiny, the American Century, American exceptionalism, globalization, or, as Madeleine Albright put it, “the indispensable nation” … while others less kind have used the term “imperialist”.

In this context I can’t resist giving the example of Bill Clinton. While president, in 1995, he was moved to say: “Whatever we may think about the political decisions of the Vietnam era, the brave Americans who fought and died there had noble motives. They fought for the freedom and the independence of the Vietnamese people.” Yes, that’s really the way our leaders talk. But who knows what they really believe?

It is my hope that many of you who are not now activists against the empire and its wars will join the anti-war movement as I did in 1965 against the war in Vietnam. It’s what radicalized me and so many others. When I hear from people of a certain age about what began the process of losing their faith that the United States means well, it’s Vietnam that far and away is given as the main cause. I think that if the American powers-that-be had known in advance how their “Oh what a lovely war” was going to turn out they might not have made their mammoth historical blunder. Their invasion of Iraq in 2003 indicates that no Vietnam lesson had been learned at that point, but our continuing protest against war and threatened war in Afghanistan, Iran, Syria, and elsewhere may have – may have! – finally made a dent in the awful war mentality. I invite you all to join our movement. Thank you.

Notes

  1. NBC News, “German TV Shows Nazi Symbols on Helmets of Ukraine Soldiers”, September 6 2014
  2. BBC, March 18, 2014
  3. Information Clearinghouse, “How Can You Tell Whether Russia has Invaded Ukraine?”, September 1 2014
  4. Boston Globe, October 12, 2001
  5. See, for example, William Blum, Rogue State: A Guide to the World’s Only Superpower(2005), chapter 1
  6. Washington Post, August 28, 2014
  7. Foreign Affairs magazine (Council on Foreign Relations), January/February 2000


William Blum is the author of:

  • Killing Hope: US Military and CIA Interventions Since World War 2
  • Rogue State: A Guide to the World’s Only Superpower
  • West-Bloc Dissident: A Cold War Memoir
  • Freeing the World to Death: Essays on the American Empire


Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Email to bblum6@aol.com

Website: WilliamBlum.org

William Blum is a regular columnist for Veracity Voice

Suckering The Public On A War On Terror

September 13, 2014 by · Leave a Comment 

The gullibility of the American public only exceeded by the ease that the fascist establishment is able to conduct their criminal government without any meaningful protest – just keeps rolling along. The mainstream media is still able to practice their black art of painting their masterpiece, entitled discovering a new cell of terrorists in every news report. Making up a scripted narrative to fix all seasons, take the creative ability of a screenwriter and the guidance of the intelligence community to shepherd the story to fix the immediate political objective. In a world where truth is the rarest of all commodities, you can be assured that the simpletons, who believe the psychological warfare accounts reported as fact, will invariably remain docile fools.

The news machine has become pure government propaganda. If the fantasy spin was merely benign diversion or trivia, one might be able to simply ignore or dismiss the poppycock as the price of driving broadcasts for ratings. However, when national survival as a free society, systematically being dismantled to rationalize some phony made up terrorist threat, the luxury of pampering an imbecilic public attitude that accept lies as reality, can no longer be tolerated.

Mikael Thalen’s article, ISIS Beheadings of Journalists: CIA Admitted to Staging Fake Jihadist Videos in 2010, cites “A 2010 Washington Post article authored by former Army Intelligence Officer Jeff Stein features a detailed account of how the CIA admittedly filmed a fake Bin Laden video during the run up to the 2003 Iraq war.”

Mr. Thalen goes on to say: “Only days after Infowars’ questioned several discrepancies in the James Foley beheading video, top British forensic experts concluded that the video was likely staged using “camera trickery and slick post-production techniques.”

Whether or not Foley lost his head, the accounts provided by a hysterical media, calling for an immediate reversal from rejecting a bombing campaign against Syria, has the smell of a cooked up plan to expand the Middle East regional conflict.

Note that the LiveLeak provides several links to information that supports the claim, Headless James Foley – His Secret Life and the CIA.

“James Foley was a key propagandist in sparking the U.S. air invasion of Libya, in 2011. The proof is here. Believe it or not, it was through his kidnapping then ALSO… part of it spent on a posh resort island! Just about a year after his ‘release’ from that, he’s kidnapped AGAIN! This time, he’s calling us to attack Assad… apparently.

There seems to be plenty of evidence, that we have NOT been told the truth about Foley’s life at all – AND, perhaps not surprisingly, that he works for the CIA… under “press” cover.”

Most people only hear, and sequentially believe, what their prejudicial indoctrination from the government press releases say, and reported as fact, by the controlled media. Those who doubt this occurrence need to reflect on the Intercept account by Ken Silverstein, The CIA’S Mop-Up Man: L.A. Times Reported Cleared Stories With Agency Before Publication.

“A prominent national security reporter for the Los Angeles Times routinely submitted drafts and detailed summaries of his stories to CIA press handlers prior to publication, according to documents obtained by The Intercept.

Email exchanges between CIA public affairs officers and Ken Dilanian, now an Associated Press intelligence reporter who previously covered the CIA for the Times, show that Dilanian enjoyed a closely collaborative relationship with the agency, explicitly promising positive news coverage and sometimes sending the press office entire story drafts for review prior to publication. In at least one instance, the CIA’s reaction appears to have led to significant changes in the story that was eventually published in the Times.

“I’m working on a story about congressional oversight of drone strikes that can present a good opportunity for you guys,” Dilanian wrote in one email to a CIA press officer, explaining that what he intended to report would be “reassuring to the public” about CIA drone strikes. In another, after a series of back-and-forth emails about a pending story on CIA operations in Yemen, he sent a full draft of an unpublished report along with the subject line, “does this look better?” In another, he directly asks the flack: “You wouldn’t put out disinformation on this, would you?”

Some of the most bold and significant revelations appear under the byline of the Intercept. It comes as no surprise that the founding editor Glenn Greenwald is front and center on the government’s radar as a press source that needs silencing. Simply dismissing him as a tin foil hat conspiracy kook does not fly even in the delusional minds of the NeoCons.

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Now that the thirteenth anniversary of the false flag spectacle of September 11, 2001 approaches, it would be useful to review the two BATR articles. 911 has become the ultimate excuse and 911 Ten Years After. With all the chatter and hype, that another attack is imminent coming from the airwaves and presses, creating another diversion to warrant the insidious police state, which has engulfed our land, is probable.
The “presstitutes” are the gatekeepers for the New World Order, AKA the Nefarious Warrior Organism. The War of Terror is and always has been a colossal fraud. Even so, the collective mind of the MSM audience sucks up the disinformation and spin and accepts the account as fact and truth. If this was not so, how can it be objectively explained why it is so easy to turn the psyche dislocation of society on the preverbal dime?

Volumes in the social literature, written on the techniques and practices of mind manipulation, do not adequately excuse, and certainly do not vindicate the pernicious undermining of our lawful and traditional social order. Most analysis makes a feeble attempt to rationalize the scientific perfection of mass adverting and focus group polling to gauge current public sentiment.

In a gonzo and ideological viewpoint published in Truthout, Dr. Cynthia Boaz presents her Fourteen Propaganda Techniques Fox “News” Uses to Brainwash Americans.

1. Panic Mongering

2. Character Assassination/Ad Hominem

3. Projection/Flipping

4. Rewriting History

5. Scapegoating/Othering

6. Conflating Violence With Power and Opposition to Violence With Weakness

7. Bullying

8. Confusion

9. Populism

10. Invoking the Christian God

11. Saturation

12. Disparaging Education

13. Guilt by Association

14. Diversion

“Pause for a moment and ask yourself what it means that the world’s largest, most profitable and most popular news channel passes off as fact every whim, impulse and outrageously incompetent analysis of its so-called reporters. How did we get here?

My curiosity about this question compelled me to sit down and document the most oft-used methods by which willful ignorance has been turned into dogma by Fox News and other propagandists disguised as media. The techniques I identify here also help to explain the simultaneously powerful identification the Fox media audience has with the network, as well as their ardent, reflexive defenses of it.”
Academia liberal bias never disappoints. Even a proponent of peaceful nonviolent struggle and civil resistance backs herself in a corner by simply trashing FAUX News as a purveyor of indoctrination. Surely, the collectivist progressives teach the brain path road to authoritarian fascism better than any self respecting genuine “conservative”. The NeoCon persuasion from such stalwart beacons of “Kill’em all, and let God sort’em out” philosophy, does not solely reside at Fox. There is more than enough blood on the hands of the last two Democratic administrations to rival the horrible record of George W. Bush.

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Government propaganda continues under a bipartisan umbrella of protection. The War of Terror, entirely embraced by the political class of careerist parasites, has only one litmus test; namely, preservation of the empire.

Deflecting the emphasis away from the root cause in the despotism that is rampant in every institution and agency of government merely practices several of the propaganda techniques that Dr. Boaz condemns.

Rewriting history is the function and purpose of an obedient press. Who can dispute that the corporatist media coverage of the entire Obama administration is a textbook example of submissive adoration? The reign of terror is real, but it stems from internal tyrannical policy, not from an external terrorism, which reinvents itself as the situation demands. ISIS is just the latest morphing of a manufactured enemy whose existence is a direct result of clandestine funding, training and mission selection, from our own intelligence community.

Why has this latest maturation of Islamic assassins not set their sights on Zionist Israel? Just look to the controllers of U.S. foreign policy for the obvious answer. Yet a trusting domestic public so easily accepts the latest photoshop images and video cropping of a bogyman executioner. Jihad John, single handily shifted public sentiment to bomb Syria now that you can envision what the lying eyes in the media sees. It is assured that future ISIS locations for drone annihilations must protect all those stolen weapons from Muammar Gaddafi Libya’s arsenals.

The War of Terror is the surest bet in town. Tricking American suckers is just as easy as tuning into your latest government propaganda public service announcement.


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

Sartre is a regular columnist for Veracity Voice

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