http://www.fcnp.com/commentary/national/5177-the-peak-oil-crisis-80-a-barrel.html
The Peak Oil Crisis: $80 a Barrel
Last week oil broke out of a months-long trading range and surged to $82 a barrel. For many of us who remember $140 oil from the summer of '08 this might not sound impressive until you are reminded that every time oil (adjusted for inflation) broke $80 a barrel some sort of economic recession occurred.In the wake of the breakout to the upside, the financial press is full of stories talking about $95 or $100 oil this winter.
The general theory behind all this is that an economic recovery led by China is occurring right now. To hear Beijing tell the story, their economic stimulus and loose lending practices worked like a charm so that China will soon be leading the world to self-sustaining growth.The international forecasting agencies are already talking of a jump in demand for oil next year which will put worldwide consumption back in the vicinity of where in was in 2008. Given that the world has only 2 or 3 million (or if you are optimistic 4 or 6 million) barrels a day (b/d) of spare oil production capacity and that it is taking all the industry can do to keep up with the roughly 4 million b/d that depletion is taking away each year, we will see tight oil supplies on of these days.
If this scenario plays out there will be much higher oil prices. We can't have it both ways. It will either be a really deep global recession and cheap gas or some sort of start at recovery and spiking oil prices. Discussions have already started as to what level of oil prices causes serious damage. In the past an inflation adjusted $80 a barrel was a favored recession inducing number as this was the price that seemed to cause recessions back in the 1970s and 80s when Middle Eastern wars and embargos restricted supplies.
The trouble with $80 oil, of course, is that we are already there and no analyst that draws a paycheck from Wall Street wants to say flat out that another leg of a recessionary downturn is inevitable unless oil prices decline soon. A typical example was a Dow Jones story earlier this week entitled "Oil Price Rise Poses Little Threat, Yet, To Economic Recovery". The article points out that the danger to economic recovery won't start until we get to $90 or $100 a barrel or $3 a gallon gasoline.
For the time being, however, oil prices do not have as much to do with supply and demand as they did in days gone by. There is enough reserve capacity in the Saudi Arabia and the Gulf states to increase production by anywhere from 2-6 million b/d (depending on who you ask), so for the time being unless some major geopolitical event intervenes, oil prices seem to be tied more closely to the fate of the dollar.As the dollar goes down vs. other currencies, oil prices go up. It does not seem to matter how much oil is building up in storage or how fast we are burning gasoline.
For the time being, the dollar is in the driver's seat. Given the unprecedented amount of deficit spending and federal borrowing that is likely to be going on for the foreseeable future, the outlook for the U.S. dollar as a world currency does not look that bright. The U.S. plans to sell at least $118 billion worth of government securities before the end of next month. Looking at numbers like these some analysts are convinced a further decline in the dollar is inevitable no matter what the Federal Reserve does to mitigate the situation.The current situation is clearly unsustainable.
If the dollar continues to sink, oil is going to move so high that all sorts of economic consequences are inevitable. OPEC is already in a dilemma for no matter how much they like the increasing revenues, the smarter governments realize that if prices move much higher, it will trigger off even worse economic times.In recent days, a new discussion has started as to just how much weaker the U.S. and OECD economies will be this winter as compared to the spring of 2008. Eighteen months ago oil prices had to spike well above $100 before the consequences became generally noticeable.
This time around, with unemployment much higher and industrial production and retail sales much lower, concern is growing that it may not take much more of a price increase before retail sales take another dip.Conventional wisdom holds that a national average of $3 a gallon gasoline (California is there already) is a psychological turning point where many stop visiting auto show rooms, cut back even more on driving, and become more fearful of making discretionary purchases.
Here, in America we are currently going through roughly 800 million gallons a day of oil in one form or another. This means that for every 10 cents the price of gasoline and other fuels increase we collectively have $79 million a day, $550 million a week, or $2.4 billion a month less to spend on other things. As very few of us are running up our credit cards or obtaining other forms of loans these days, purchases will inevitably diminish.
Keep watching your gasoline prices. Serious troubles may be closer than many want us to think.
Friday, October 30, 2009
SC97-12
http://www.informationclearinghouse.info/article23846.htm
Housing Rebound? "Not so fast"
..........Does it bother senators that the public is being plucked like a Thanksgiving turkey, once again?
Everything that has been done to prop up the ailing housing market, has really been aimed at helping the banks. The Fed has launched the biggest government intervention in history-- purchasing more than $900 billion in mortgage-backed securities, $200 billion in agency debt, and another $300 billion in long-term US Treasuries--all to stabilize a market which was sabotaged by the Fed's low interest rates and the banks abyssal lending standards. Private label "securitized" mortgages have defaulted at 5-times the rate of conventional loans, clear proof of fraud.
The Fed's capital injections will eventually add $2 trillion to the aggregate value of the residential real estate market. The Fed is doing its best to prevent the market from clearing by keeping home prices artificially high. That's the only way to avoid more bank failures.
The Fed's intervention is a sign of desperation. In the long-run, the action is unlikely to have any bearing on prices which will be determined by incomes and supply. Housing inventory is still unusually high, which is putting downward pressure on prices. Distress sales (short sales, foreclosures etc) represent 45 percent of all home sales, which reduces the number of creditworthy buyers for organic sales.
So, what has the Fed's multi-trillion dollar intervention achieved aside from creating a fake market with fake interest rates, fake financing, fake down-payment ($8,000 first-time home buyer giveaway) and fake media coverage of a fake rebound. Not much, really. The Wall Street Journal's James Hagerty sums it up like this in "Uncle Sam Adds 5% to Prices of Homes, Goldman Says":
"Uncle Sam’s interventions in the housing market have pushed home prices 5% higher on a national average than they would have been otherwise, Goldman Sachs estimates in a report released late Friday.... ...But these artificial props won’t last forever and may have created a false bottom in the market.
“The risk of renewed home-price declines remains significant,” Goldman economist Alec Phillips writes in the report, “and our working assumption is a further 5% to 10% decline by mid-2010.” (James Hagerty The Wall Street Journal)
Over $1 trillion has been committed so far, and prices have budged a mere 5%. Does Fed chair Ben Bernanke really believe this is an affordable plan?
The Administration’s Making Home Affordable Modification Program (HAMP) will have only a marginal effect on the rate of foreclosures when the next wave of pay-option adjustable-rate mortgages and other oddball loans come due. And, when the loans reset, more banks will default pushing even more inventory onto the market at firesale prices. Foreclosures have exceeded 300,000 for the last 3 months and the inventory-backlog suggests the worst is still to come.
This is from Diana Golobay at housingwire.com:
"Recent analysis by the Amherst Securities Group indicates the housing industry will not only worsen as a delayed pipeline of foreclosed loans begins to liquidate, but that the Administration’s Making Home Affordable Modification Program (HAMP) will have no lasting effect on keeping delinquent loans current...
Amherst estimates this “shadow inventory” at around 7m housing units, or 135% of a full year of existing home sales, compared with 1.27m units in this bucket in early 2005. The backlog is due to high transition rates, low cure rates and a longer timeline for loan liquidation — in other words, loans continue to transition into the delinquency/foreclosure pipeline at a rapid pace, but are moving out at a very slow pace.
The loans, however, are “destined to liquidate” and will impact the signs of recovery seen in recent months by pulling down house prices through distressed sales.("Amherst Sees 7m Foreclosures Poised to Distress House Prices", Diana Golobay, housingwire.com)
So, what can Bernanke do to head-off a bigger meltdown in housing?
The Fed revealed its long-term strategy in the minutes of its September 22-23 FOMC meeting. Here's an except from the Fed's statement:
"The Committee agreed that it would continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. Members discussed the importance of maintaining flexibility to expand the asset purchase programs should the economic outlook deteriorate or to scale back the programs should economic and financial conditions improve more than anticipated."
In other words, the Fed is planning to continue its quantitative easing (QE) program (monetisation) which pumps liquidity into the system and puts more downward pressure on the dollar. Bernanke is trying to inflate-away the problems in housing, but with little success. In fact, according to Robert Shiller, who created the index for measuring house prices in 20 major cities, the Fed may have generated another bubble. This is from the UK Telegraph:
"The S&P Case-Shiller index... showed that house prices were up 1 percent from the previous month, following a 1.2 percent increase in July. However, August's prices were still down 11.3 percent year-on-year, highlighting the continued problems in the market as a whole. Professor Shiller, who is credited with calling both the late 1990's tech market bubble and the bubble that led to the US property market crash three years ago, pointed to price increases in areas including San Francisco and Minneapolis, which have seen double-digit gains in the last four months. He said that if these rises are viewed on an annualised basis they could be seen as "bubble territory.'" (UK Telegraph)
Housing prices will continue to tumble through 2010 no matter what the Fed does. In fact, on Wednesday the Commerce Dept reported that sales of new one-family houses in September dropped to a rate of 402,000, down 3.8 percent from August. That's 7.8 percent below 2008, well below economists worst predictions. The news sent stocks plummeting.
The sense that the economy is returning to normal, is an illusion nurtured by the financial media. This week's dismal consumer confidence data, shows that the public "isn't buying it". And, neither are investors, who continue to avoid equities despite a seven-month, 68 percent rally in global stocks. According to Bloomberg, "Almost 40 percent of investors and analysts in the latest quarterly survey... say they are still hunkering down. U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive crouch." The mood is grim. The public has lost faith in the media, in the Fed, and in public institutions. The "cheery predictions" are no longer having any effect. No doubt, this will make it even harder to stabilize the teetering housing market.
Housing Rebound? "Not so fast"
..........Does it bother senators that the public is being plucked like a Thanksgiving turkey, once again?
Everything that has been done to prop up the ailing housing market, has really been aimed at helping the banks. The Fed has launched the biggest government intervention in history-- purchasing more than $900 billion in mortgage-backed securities, $200 billion in agency debt, and another $300 billion in long-term US Treasuries--all to stabilize a market which was sabotaged by the Fed's low interest rates and the banks abyssal lending standards. Private label "securitized" mortgages have defaulted at 5-times the rate of conventional loans, clear proof of fraud.
The Fed's capital injections will eventually add $2 trillion to the aggregate value of the residential real estate market. The Fed is doing its best to prevent the market from clearing by keeping home prices artificially high. That's the only way to avoid more bank failures.
The Fed's intervention is a sign of desperation. In the long-run, the action is unlikely to have any bearing on prices which will be determined by incomes and supply. Housing inventory is still unusually high, which is putting downward pressure on prices. Distress sales (short sales, foreclosures etc) represent 45 percent of all home sales, which reduces the number of creditworthy buyers for organic sales.
So, what has the Fed's multi-trillion dollar intervention achieved aside from creating a fake market with fake interest rates, fake financing, fake down-payment ($8,000 first-time home buyer giveaway) and fake media coverage of a fake rebound. Not much, really. The Wall Street Journal's James Hagerty sums it up like this in "Uncle Sam Adds 5% to Prices of Homes, Goldman Says":
"Uncle Sam’s interventions in the housing market have pushed home prices 5% higher on a national average than they would have been otherwise, Goldman Sachs estimates in a report released late Friday.... ...But these artificial props won’t last forever and may have created a false bottom in the market.
“The risk of renewed home-price declines remains significant,” Goldman economist Alec Phillips writes in the report, “and our working assumption is a further 5% to 10% decline by mid-2010.” (James Hagerty The Wall Street Journal)
Over $1 trillion has been committed so far, and prices have budged a mere 5%. Does Fed chair Ben Bernanke really believe this is an affordable plan?
The Administration’s Making Home Affordable Modification Program (HAMP) will have only a marginal effect on the rate of foreclosures when the next wave of pay-option adjustable-rate mortgages and other oddball loans come due. And, when the loans reset, more banks will default pushing even more inventory onto the market at firesale prices. Foreclosures have exceeded 300,000 for the last 3 months and the inventory-backlog suggests the worst is still to come.
This is from Diana Golobay at housingwire.com:
"Recent analysis by the Amherst Securities Group indicates the housing industry will not only worsen as a delayed pipeline of foreclosed loans begins to liquidate, but that the Administration’s Making Home Affordable Modification Program (HAMP) will have no lasting effect on keeping delinquent loans current...
Amherst estimates this “shadow inventory” at around 7m housing units, or 135% of a full year of existing home sales, compared with 1.27m units in this bucket in early 2005. The backlog is due to high transition rates, low cure rates and a longer timeline for loan liquidation — in other words, loans continue to transition into the delinquency/foreclosure pipeline at a rapid pace, but are moving out at a very slow pace.
The loans, however, are “destined to liquidate” and will impact the signs of recovery seen in recent months by pulling down house prices through distressed sales.("Amherst Sees 7m Foreclosures Poised to Distress House Prices", Diana Golobay, housingwire.com)
So, what can Bernanke do to head-off a bigger meltdown in housing?
The Fed revealed its long-term strategy in the minutes of its September 22-23 FOMC meeting. Here's an except from the Fed's statement:
"The Committee agreed that it would continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. Members discussed the importance of maintaining flexibility to expand the asset purchase programs should the economic outlook deteriorate or to scale back the programs should economic and financial conditions improve more than anticipated."
In other words, the Fed is planning to continue its quantitative easing (QE) program (monetisation) which pumps liquidity into the system and puts more downward pressure on the dollar. Bernanke is trying to inflate-away the problems in housing, but with little success. In fact, according to Robert Shiller, who created the index for measuring house prices in 20 major cities, the Fed may have generated another bubble. This is from the UK Telegraph:
"The S&P Case-Shiller index... showed that house prices were up 1 percent from the previous month, following a 1.2 percent increase in July. However, August's prices were still down 11.3 percent year-on-year, highlighting the continued problems in the market as a whole. Professor Shiller, who is credited with calling both the late 1990's tech market bubble and the bubble that led to the US property market crash three years ago, pointed to price increases in areas including San Francisco and Minneapolis, which have seen double-digit gains in the last four months. He said that if these rises are viewed on an annualised basis they could be seen as "bubble territory.'" (UK Telegraph)
Housing prices will continue to tumble through 2010 no matter what the Fed does. In fact, on Wednesday the Commerce Dept reported that sales of new one-family houses in September dropped to a rate of 402,000, down 3.8 percent from August. That's 7.8 percent below 2008, well below economists worst predictions. The news sent stocks plummeting.
The sense that the economy is returning to normal, is an illusion nurtured by the financial media. This week's dismal consumer confidence data, shows that the public "isn't buying it". And, neither are investors, who continue to avoid equities despite a seven-month, 68 percent rally in global stocks. According to Bloomberg, "Almost 40 percent of investors and analysts in the latest quarterly survey... say they are still hunkering down. U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive crouch." The mood is grim. The public has lost faith in the media, in the Fed, and in public institutions. The "cheery predictions" are no longer having any effect. No doubt, this will make it even harder to stabilize the teetering housing market.
Wednesday, October 28, 2009
SC97-11
http://www.ricefarmer.blogspot.com/
The New World Order Is Chaos.
I treated this topic somewhat here and here. Briefly stated, as energy becomes more expensive, holding together empires and maintaining sophisticated socioeconomic systems gets progressively more challenging. Add to this the excessive complexity of the global system and the threat of black swan events, and we have a recipe for instability, breakdown of the global system, and pockets of chaos breaking out here and there.
The fear of chaos makes governments more repressive, and at the same time makes the general public more amenable to repressive government, simply because everyone wants stability. This is now very evident in Russia, as indicated by a couple of recent articles. A BBC article, Democracy loses support in Russia, notes that fewer Russians feel democracy is suitable for Russia, and that in fact 43% think that Russia sometimes needs an “iron fist” leader. While this article gives us the view from the Russian public, a Reuters article, Kremlin warns against wrecking Russia with democracy, gives us the government view. A Kremlin official states that Russia needs stability and a strong guiding hand for development, and specifically warns of chaos arising because of liberal reforms.
Say what you like about the Russians, but in time we will see that many more governments and peoples around the world will start to say the same things. When push comes to shove and countries are competing for dwindling resources and energy, democracy will fly out the window.
The New World Order Is Chaos.
I treated this topic somewhat here and here. Briefly stated, as energy becomes more expensive, holding together empires and maintaining sophisticated socioeconomic systems gets progressively more challenging. Add to this the excessive complexity of the global system and the threat of black swan events, and we have a recipe for instability, breakdown of the global system, and pockets of chaos breaking out here and there.
The fear of chaos makes governments more repressive, and at the same time makes the general public more amenable to repressive government, simply because everyone wants stability. This is now very evident in Russia, as indicated by a couple of recent articles. A BBC article, Democracy loses support in Russia, notes that fewer Russians feel democracy is suitable for Russia, and that in fact 43% think that Russia sometimes needs an “iron fist” leader. While this article gives us the view from the Russian public, a Reuters article, Kremlin warns against wrecking Russia with democracy, gives us the government view. A Kremlin official states that Russia needs stability and a strong guiding hand for development, and specifically warns of chaos arising because of liberal reforms.
Say what you like about the Russians, but in time we will see that many more governments and peoples around the world will start to say the same things. When push comes to shove and countries are competing for dwindling resources and energy, democracy will fly out the window.
SC97-10
http://thearchdruidreport.blogspot.com/
Why Markets Fail
........This is a pervasive problem in most human societies, and it’s worth noting that those societies that survive over the long term tend to be the ones that work out ways to keep too much wealth from piling up uselessly in the hands of those with more power than others. This is why hunter-gatherers have customary rules for sharing out the meat from a large kill, why chieftains in so many tribal societies maintain their positions of influence by lavish generosity, and why those nations that got through the last Great Depression intact did so by imposing sensible checks and balances on concentrated wealth – though most of those checks and balances in the United States were scrapped several decades ago, with utterly predictable results.
By neglecting and even arguing against these necessary redistributive processes, neoclassical economics has helped feed economic disparities, and these in turn have played a major role in driving cycles of boom and bust. It’s no accident that the most devastating speculative bubbles happen in places and times when the distribution of wealth is unusually lopsided, as it was in America, for example, in the 1920s and the period from 1990 to 2008. The connection here is simple: when wealth is widely distributed, more of it circulates in the productive economy of wages and consumer purchases; when wealth is concentrated in the hands of a few, more of it moves into the investment economy where the well-to-do keep their wealth, and a buildup of capital in the investment economy is one of the necessary preconditions for a speculative binge.
More broadly, concentrations of wealth can be cashed in for political influence, and political influence can be used to limit the economic choices available to others. Individuals can and do rationally choose to maximize the benefits available to them by exercising influence in this way, but the results can impose destructive inefficiencies on the whole economy. In effect, political manipulation of the economy by the rich for private gain does an end run around normal economic processes by way of the world of politics; what starts in the economic sphere, as a concentration of wealth, and ends there, as a distortion of the economic opportunities available to others, ducks through the political sphere in between.
A similar end run drives speculative bubbles, although here the noneconomic sphere involved is that of crowd psychology rather than politics. Very often, the choices made by participants in a bubble are not rational decisions that weigh costs against benefits; it’s not accidental that the first, and still one of the best, analyses of speculative binges and panics is titled Extraordinary Popular Delusions and the Madness of Crowds. Here again, a speculative bubble starts in the economic sphere, as a buildup of excessive wealth in the hands of investors, which drives the price of some favored class of assets out of its normal relationship with the rest of the economy, and it ends in the economic sphere, with the crater left by the assets in question as their price plunges roughly as far below the mean as it rose above it, dragging the rest of the economy with it. It’s the middle of the trajectory that passes through a particular form of crowd psychology, and since this is outside the economic sphere, neoclassical economics can’t deal with it.
This would be no problem if neoclassical economists by and large recognized these limitations. Unfortunately a great many of them do not, and the result is the classic type of myopia in which theory trumps reality. Since neoclassical theory claims that economic decisions are made by individuals acting freely and rationally to maximize the benefits accruing to them, it’s seemingly all too easy for economists to believe that any economic decision, no matter how harshly constrained by political power or wildly distorted by the delusional psychology of a bubble in full roar, must be a free and rational decision that will allow individuals to maximize their own benefits and benefit society as a whole.
Now of course, as mentioned in an earlier post, those who practice this sort of purblind thinking often find it very lucrative to do so. Economists who urged more free trade on the Third World at a time when “free trade” distorted by inequalities of power between nations was beggaring the Third World, like economists who urged people to buy houses at a time when houses were preposterously overpriced and facing an imminent price collapse, not uncommonly prospered by giving such appallingly bad advice. Still, it seems unreasonable to claim that all economists are motivated by greed, when the potent force of a fundamentally flawed economic paradigm also pushes them in the same direction.
That same pressure, with the same financial incentives to back it up, also drives the equally bad advice so many neoclassical economists are offering governments and businesses about the future of fossil fuels. The geological and thermodynamic limits to energy growth, like political power and the mob psychology of bubbles, lie outside the economic sphere. The interaction of economic processes with energy resources creates another end run: extraction of fossil fuels to run the world’s economies, an economic process, drives the depletion of oil and other fossil fuel reserves, a noneconomic process, and this promises to flow back into the economic sphere in the extended downward spiral of contraction and impoverishment I’ve called the Long Descent.
Here again, neoclassical economics is poorly equipped to deal with the reality of noneconomic constraints on economic processes. It thus comes as no surprise that when an economist enters the peak oil debate, it is almost always to claim that there is nothing to worry about, because the market will solve any shortfall that happens to emerge. As shortfalls emerge, expect to hear the claim – already floated by a few economists – that declining production is simply a sign that the demand for fossil fuel energy has decreased. No doubt when people are starving in the streets, we will hear claims that this is simply because the demand for food has dropped............
Why Markets Fail
........This is a pervasive problem in most human societies, and it’s worth noting that those societies that survive over the long term tend to be the ones that work out ways to keep too much wealth from piling up uselessly in the hands of those with more power than others. This is why hunter-gatherers have customary rules for sharing out the meat from a large kill, why chieftains in so many tribal societies maintain their positions of influence by lavish generosity, and why those nations that got through the last Great Depression intact did so by imposing sensible checks and balances on concentrated wealth – though most of those checks and balances in the United States were scrapped several decades ago, with utterly predictable results.
By neglecting and even arguing against these necessary redistributive processes, neoclassical economics has helped feed economic disparities, and these in turn have played a major role in driving cycles of boom and bust. It’s no accident that the most devastating speculative bubbles happen in places and times when the distribution of wealth is unusually lopsided, as it was in America, for example, in the 1920s and the period from 1990 to 2008. The connection here is simple: when wealth is widely distributed, more of it circulates in the productive economy of wages and consumer purchases; when wealth is concentrated in the hands of a few, more of it moves into the investment economy where the well-to-do keep their wealth, and a buildup of capital in the investment economy is one of the necessary preconditions for a speculative binge.
More broadly, concentrations of wealth can be cashed in for political influence, and political influence can be used to limit the economic choices available to others. Individuals can and do rationally choose to maximize the benefits available to them by exercising influence in this way, but the results can impose destructive inefficiencies on the whole economy. In effect, political manipulation of the economy by the rich for private gain does an end run around normal economic processes by way of the world of politics; what starts in the economic sphere, as a concentration of wealth, and ends there, as a distortion of the economic opportunities available to others, ducks through the political sphere in between.
A similar end run drives speculative bubbles, although here the noneconomic sphere involved is that of crowd psychology rather than politics. Very often, the choices made by participants in a bubble are not rational decisions that weigh costs against benefits; it’s not accidental that the first, and still one of the best, analyses of speculative binges and panics is titled Extraordinary Popular Delusions and the Madness of Crowds. Here again, a speculative bubble starts in the economic sphere, as a buildup of excessive wealth in the hands of investors, which drives the price of some favored class of assets out of its normal relationship with the rest of the economy, and it ends in the economic sphere, with the crater left by the assets in question as their price plunges roughly as far below the mean as it rose above it, dragging the rest of the economy with it. It’s the middle of the trajectory that passes through a particular form of crowd psychology, and since this is outside the economic sphere, neoclassical economics can’t deal with it.
This would be no problem if neoclassical economists by and large recognized these limitations. Unfortunately a great many of them do not, and the result is the classic type of myopia in which theory trumps reality. Since neoclassical theory claims that economic decisions are made by individuals acting freely and rationally to maximize the benefits accruing to them, it’s seemingly all too easy for economists to believe that any economic decision, no matter how harshly constrained by political power or wildly distorted by the delusional psychology of a bubble in full roar, must be a free and rational decision that will allow individuals to maximize their own benefits and benefit society as a whole.
Now of course, as mentioned in an earlier post, those who practice this sort of purblind thinking often find it very lucrative to do so. Economists who urged more free trade on the Third World at a time when “free trade” distorted by inequalities of power between nations was beggaring the Third World, like economists who urged people to buy houses at a time when houses were preposterously overpriced and facing an imminent price collapse, not uncommonly prospered by giving such appallingly bad advice. Still, it seems unreasonable to claim that all economists are motivated by greed, when the potent force of a fundamentally flawed economic paradigm also pushes them in the same direction.
That same pressure, with the same financial incentives to back it up, also drives the equally bad advice so many neoclassical economists are offering governments and businesses about the future of fossil fuels. The geological and thermodynamic limits to energy growth, like political power and the mob psychology of bubbles, lie outside the economic sphere. The interaction of economic processes with energy resources creates another end run: extraction of fossil fuels to run the world’s economies, an economic process, drives the depletion of oil and other fossil fuel reserves, a noneconomic process, and this promises to flow back into the economic sphere in the extended downward spiral of contraction and impoverishment I’ve called the Long Descent.
Here again, neoclassical economics is poorly equipped to deal with the reality of noneconomic constraints on economic processes. It thus comes as no surprise that when an economist enters the peak oil debate, it is almost always to claim that there is nothing to worry about, because the market will solve any shortfall that happens to emerge. As shortfalls emerge, expect to hear the claim – already floated by a few economists – that declining production is simply a sign that the demand for fossil fuel energy has decreased. No doubt when people are starving in the streets, we will hear claims that this is simply because the demand for food has dropped............
Monday, October 26, 2009
SC97-9
http://www.informationclearinghouse.info/article23810.htm#
Are You Ready for the Next Crisis?
Evidence that the US is a failed state is piling up faster than I can record it. One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests.
Another conclusive hallmark is rising income inequality as the insiders manipulate economic policy for their enrichment at the expense of everyone else. Income inequality in the US is now the most extreme of all countries. The 2008 OECD report, “Income Distribution and Poverty in OECD Countries,” concludes that the US is the country with the highest inequality and poverty rate across the OECD and that since 2000 nowhere has there been such a stark rise in income inequality as in the US.
The OECD finds that in the US the distribution of wealth is even more unequal than the distribution of income. On October 21, 2009, Business Week reported that a new report from the United Nations Development Program concluded that the US ranked third among states with the worst income inequality. As number one and number two, Hong Kong and Singapore, are both essentially city states, not countries, the US actually has the shame of being the country with the most inequality in the distribution of income.
The stark increase in US income inequality in the 21st century coincides with the offshoring of US jobs, which enriched executives with “performance bonuses” while impoverishing the middle class, and with the rapid rise of unregulated OTC derivatives, which enriched Wall Street and the financial sector at the expense of everyone else.
Millions of Americans have lost their homes and half of their retirement savings while being loaded up with government debt to bail out the banksters who created the derivative crisis. Frontline’s October 21 broadcast, “The Warning,” documents how Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert Rubin, Deputy Treasury Secretary Larry Summers, and Securities and Exchange Commission Chairman Arthur Levitt blocked Brooksley Born, head of the Commodity Futures Trading Commission, from performing her statutory duties and regulating OTC derivatives.
After the worst crisis in US financial history struck, just as Brooksley Born said it would, a disgraced Alan Greenspan was summoned out of retirement to explain to Congress his unequivocal assurances that no regulation of derivatives was necessary. Greenspan had even told Congress that regulation of derivatives would be harmful. A pathetic Greenspan had to admit that the free market ideology on which he had relied turned out to have a flaw. Greenspan may have bet our country on his free market ideology, but does anyone believe that Rubin and Summers were doing anything other than protecting the enormous fraud-based profits that derivatives were bringing Wall Street? As Brooksley Born stressed, OTC derivatives are a “dark market.” There is no transparency. Regulators have no information on them and neither do purchasers.
Even after Long Term Capital Management blew up in 1998 and had to be bailed out, Greenspan, Rubin, and Summers stuck to their guns. Greenspan, Rubin and Summers, and a roped-in gullible Arthur Levitt who now regrets that he was the banksters’ dupe, succeeded in manipulating a totally ignorant Congress into blocking the CFTC from doing its mandated job. Brooksley Born, prevented by the public’s elected representatives from protecting the public, resigned. Wall Street money simply shoved facts and honest regulators aside, guaranteeing government inaction and the financial crisis that hit in 2008 and continues to plague our economy today.
The financial insiders running the Treasury, White House, and Federal Reserve shifted to taxpayers the cost of the catastrophe that they had created. When the crisis hit, Henry Paulson, appointed by President Bush as Rubin’s replacement as the Goldman Sachs representative running the US Treasury, hyped fear to obtain from “our” representatives in Congress with no questions asked hundreds of billions of taxpayers’ dollars (TARP money) to bail out Goldman Sachs and the other malefactors of unregulated derivatives. When Goldman Sachs recently announced that it was paying massive six and seven figure bonuses to every employee, public outrage erupted. In defense of banksters, saved with the public’s money, paying themselves bonuses in excess of most people’s life-time earnings, Lord Griffiths, Vice Chairman of Goldman Sachs International, said that the public must learn to “tolerate the inequality as a way to achieve greater prosperity for all.” In other words, “Let them eat cake.”
According to the UN report cited above, Great Britain has the 7th most unequal income distribution in the world. After the Goldman Sachs bonuses, the British will move up in distinction, perhaps rivaling Israel for the fourth spot in the hierarchy. Despite the total insanity of unregulated derivatives, the high level of public anger, and Greenspan’s confession to Congress, still nothing has been done to regulate derivatives. One of Rubin’s Assistant Treasury Secretaries, Gary Gensler, has replaced Brooksley Born as head of the CFTC. Larry Summers is the head of President Obama’s National Economic Council. Former Federal Reserve official Timothy Geithner, a Paulson protege, runs the Obama Treasury. A Goldman Sachs vice president, Adam Storch, has been appointed the chief operating officer of the Securities and Exchange Commission.
The Banksters are still in charge.
Are You Ready for the Next Crisis?
Evidence that the US is a failed state is piling up faster than I can record it. One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests.
Another conclusive hallmark is rising income inequality as the insiders manipulate economic policy for their enrichment at the expense of everyone else. Income inequality in the US is now the most extreme of all countries. The 2008 OECD report, “Income Distribution and Poverty in OECD Countries,” concludes that the US is the country with the highest inequality and poverty rate across the OECD and that since 2000 nowhere has there been such a stark rise in income inequality as in the US.
The OECD finds that in the US the distribution of wealth is even more unequal than the distribution of income. On October 21, 2009, Business Week reported that a new report from the United Nations Development Program concluded that the US ranked third among states with the worst income inequality. As number one and number two, Hong Kong and Singapore, are both essentially city states, not countries, the US actually has the shame of being the country with the most inequality in the distribution of income.
The stark increase in US income inequality in the 21st century coincides with the offshoring of US jobs, which enriched executives with “performance bonuses” while impoverishing the middle class, and with the rapid rise of unregulated OTC derivatives, which enriched Wall Street and the financial sector at the expense of everyone else.
Millions of Americans have lost their homes and half of their retirement savings while being loaded up with government debt to bail out the banksters who created the derivative crisis. Frontline’s October 21 broadcast, “The Warning,” documents how Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert Rubin, Deputy Treasury Secretary Larry Summers, and Securities and Exchange Commission Chairman Arthur Levitt blocked Brooksley Born, head of the Commodity Futures Trading Commission, from performing her statutory duties and regulating OTC derivatives.
After the worst crisis in US financial history struck, just as Brooksley Born said it would, a disgraced Alan Greenspan was summoned out of retirement to explain to Congress his unequivocal assurances that no regulation of derivatives was necessary. Greenspan had even told Congress that regulation of derivatives would be harmful. A pathetic Greenspan had to admit that the free market ideology on which he had relied turned out to have a flaw. Greenspan may have bet our country on his free market ideology, but does anyone believe that Rubin and Summers were doing anything other than protecting the enormous fraud-based profits that derivatives were bringing Wall Street? As Brooksley Born stressed, OTC derivatives are a “dark market.” There is no transparency. Regulators have no information on them and neither do purchasers.
Even after Long Term Capital Management blew up in 1998 and had to be bailed out, Greenspan, Rubin, and Summers stuck to their guns. Greenspan, Rubin and Summers, and a roped-in gullible Arthur Levitt who now regrets that he was the banksters’ dupe, succeeded in manipulating a totally ignorant Congress into blocking the CFTC from doing its mandated job. Brooksley Born, prevented by the public’s elected representatives from protecting the public, resigned. Wall Street money simply shoved facts and honest regulators aside, guaranteeing government inaction and the financial crisis that hit in 2008 and continues to plague our economy today.
The financial insiders running the Treasury, White House, and Federal Reserve shifted to taxpayers the cost of the catastrophe that they had created. When the crisis hit, Henry Paulson, appointed by President Bush as Rubin’s replacement as the Goldman Sachs representative running the US Treasury, hyped fear to obtain from “our” representatives in Congress with no questions asked hundreds of billions of taxpayers’ dollars (TARP money) to bail out Goldman Sachs and the other malefactors of unregulated derivatives. When Goldman Sachs recently announced that it was paying massive six and seven figure bonuses to every employee, public outrage erupted. In defense of banksters, saved with the public’s money, paying themselves bonuses in excess of most people’s life-time earnings, Lord Griffiths, Vice Chairman of Goldman Sachs International, said that the public must learn to “tolerate the inequality as a way to achieve greater prosperity for all.” In other words, “Let them eat cake.”
According to the UN report cited above, Great Britain has the 7th most unequal income distribution in the world. After the Goldman Sachs bonuses, the British will move up in distinction, perhaps rivaling Israel for the fourth spot in the hierarchy. Despite the total insanity of unregulated derivatives, the high level of public anger, and Greenspan’s confession to Congress, still nothing has been done to regulate derivatives. One of Rubin’s Assistant Treasury Secretaries, Gary Gensler, has replaced Brooksley Born as head of the CFTC. Larry Summers is the head of President Obama’s National Economic Council. Former Federal Reserve official Timothy Geithner, a Paulson protege, runs the Obama Treasury. A Goldman Sachs vice president, Adam Storch, has been appointed the chief operating officer of the Securities and Exchange Commission.
The Banksters are still in charge.
SC97-8
http://kunstler.com/blog/2009/10/self-jiving-nation.html
Self-jiving Nation
The scene in the White House these days must be a sort of Opera Bouffe, in which an earnest and rather grave young man moves from one roomful of lesser officials to another in which all agree to pretend that they have prevented the nation from falling into something they call "the abyss." At the end of Act I, a young deputy FDIC commissioner in the Little Mary Sunshine mold gets down on one knee, belts out a show-stopper about the glories of a bright and shining "tomorrow," and the audience goes out for intermission to discover that the city has been burning down around the theater all night.
Out in America-the-Real, Halloween time in this year of 2009 has an interesting "Day of the Locust" flavor. There's more than a whiff of smoke in the air, along with an odor of dead carp wafting out of all the the offices and institutions we depend on to define reality. Like the Hollywood of Nathaniel West's dark 1939 novel, America today seems poised in the gate of some harsh judgment. When the historians look back at this era - especially at the time between January 20th and the holiday season of 2009 - won't they marvel at how well-understood our predicament actually was, by so many parties to it, and the gulf between that comprehension and the story we told ourselves: that we were "recovering."
Like a lot of other observer-interlocutors, I'd like to know what folks imagine we are recovering to. To a renewed orgy of credit-card spending? To yet another round of suburban expansion, with the boys in the yellow hard-hats driving stakes out in the sagebrush for another new thousand-unit pop-up "community?" For a next generation of super-cars built to look like medieval war wagons? That's the "hope" that our officials seem to pretend to offer. It's completely inconsistent with any reality-based trend-lines, by the way.
Perhaps it's time to redefine "hope" in the greater social sense of the word. To me, hope is not synonymous with "wishes fulfilled." In fact, hope should not be about wishing at all. Hope should be based on confidence that the individual or group is reliably competent enough to meet the challenges that circumstances present. Hope is justified when people demonstrate to themselves that they can behave ably and bravely. Hope is not really possible in the face of patent untruthfulness. It is derived from a clear-eyed and courageous view of what is really going on. I don't think that defines any of the behavior in the United States these days. We've become a self-jiving nation intent on playing shell games, running Ponzi schemes, and working Polish blanket tricks on ourselves.
It begins to look now as if the Obama team is determined to run this creaking vessel right over the falls. We could have bravely faced the structural perversities in banking the past year, but we decided not to. So far only a tiny minority of the public - unfortunately the "tea-bagging" race-baiters - have been the only ones to squawk. I look around at my fellow baby-boomer ex-hippie, ex-political radical age-cohorts and I see a sad-ass claque of passive, played-out, defeated dreamers too depressed to form a coherent thought about what's really going on... lost in sentimental fantasies about "world peace," or free heart-transplants-for-everybody as they, the boomers themselves, lurch toward the graveyard.
Obama was not a boomer, not one of "us," so I had expectations that he'd rise above the fog of wishful thinking. But he begins to look more like Millard Fillmore and less like an earlier president from Illinois who got elected on the eve of a terrible national political convulsion. I think about Lincoln a lot these days, about how circumstances shoved him to act when Southern secessionists fired on Fort Sumter barely a month after the new president took the oath of office (which was done in March back then). There was no spinning the news on it, no wiggling away from reality: an organized insurrection led by rogue U.S. military officers fired on their fellow officers... and that was that. The issue, as the saying goes, was joined.
If you think we have been in a crisis of finance and economy for the past year or so, consider that we have also been sunk in a comprehensive crisis of leadership. Nobody in authority is willing to face the truth, state the truth, and offer a reality-based idea about how to meet the truth, This is a leadership failure not just in politics and government, but also in business, in the university faculties, in the editorial and production offices of the news media, and even among a barely-breathing clergy.
Americans look around and see nobody standing up for their interests. Their greatest interest is a vision of a fruitful society that they can help build and be a part of beyond the current wreckage of revolving-debt consumerism. It will have to be a vision based on fewer resources and on new arrangements for daily living. It will have to recognize losses frankly, and enable us to let go of things whose time is over, whether that is Happy Motoring, college-for-everybody, vast industries devoted to vanished leisure, or procedures geared to getting something-for-nothing.
For now, I still see the inflection point as coming by the holiday season, when the masters-of-the-universe on Wall Street will have to publicly post their Christmas bonuses (and as publicly held corporations, they will have to). It is also well within the realm of possibility that a Black Swan the size of Rodan the Flying Reptile will swoop through the stock markets to breath fire on the computer terminals and melt the glorious rally of 09 away. In the meantime, I wonder about that man in the White House, and those ever more comical meetings he attends every day. He must emerge from them spinning like a nine dollar gyroscope. Nobody wants to imagine what happens to him when the spinning stops.
Self-jiving Nation
The scene in the White House these days must be a sort of Opera Bouffe, in which an earnest and rather grave young man moves from one roomful of lesser officials to another in which all agree to pretend that they have prevented the nation from falling into something they call "the abyss." At the end of Act I, a young deputy FDIC commissioner in the Little Mary Sunshine mold gets down on one knee, belts out a show-stopper about the glories of a bright and shining "tomorrow," and the audience goes out for intermission to discover that the city has been burning down around the theater all night.
Out in America-the-Real, Halloween time in this year of 2009 has an interesting "Day of the Locust" flavor. There's more than a whiff of smoke in the air, along with an odor of dead carp wafting out of all the the offices and institutions we depend on to define reality. Like the Hollywood of Nathaniel West's dark 1939 novel, America today seems poised in the gate of some harsh judgment. When the historians look back at this era - especially at the time between January 20th and the holiday season of 2009 - won't they marvel at how well-understood our predicament actually was, by so many parties to it, and the gulf between that comprehension and the story we told ourselves: that we were "recovering."
Like a lot of other observer-interlocutors, I'd like to know what folks imagine we are recovering to. To a renewed orgy of credit-card spending? To yet another round of suburban expansion, with the boys in the yellow hard-hats driving stakes out in the sagebrush for another new thousand-unit pop-up "community?" For a next generation of super-cars built to look like medieval war wagons? That's the "hope" that our officials seem to pretend to offer. It's completely inconsistent with any reality-based trend-lines, by the way.
Perhaps it's time to redefine "hope" in the greater social sense of the word. To me, hope is not synonymous with "wishes fulfilled." In fact, hope should not be about wishing at all. Hope should be based on confidence that the individual or group is reliably competent enough to meet the challenges that circumstances present. Hope is justified when people demonstrate to themselves that they can behave ably and bravely. Hope is not really possible in the face of patent untruthfulness. It is derived from a clear-eyed and courageous view of what is really going on. I don't think that defines any of the behavior in the United States these days. We've become a self-jiving nation intent on playing shell games, running Ponzi schemes, and working Polish blanket tricks on ourselves.
It begins to look now as if the Obama team is determined to run this creaking vessel right over the falls. We could have bravely faced the structural perversities in banking the past year, but we decided not to. So far only a tiny minority of the public - unfortunately the "tea-bagging" race-baiters - have been the only ones to squawk. I look around at my fellow baby-boomer ex-hippie, ex-political radical age-cohorts and I see a sad-ass claque of passive, played-out, defeated dreamers too depressed to form a coherent thought about what's really going on... lost in sentimental fantasies about "world peace," or free heart-transplants-for-everybody as they, the boomers themselves, lurch toward the graveyard.
Obama was not a boomer, not one of "us," so I had expectations that he'd rise above the fog of wishful thinking. But he begins to look more like Millard Fillmore and less like an earlier president from Illinois who got elected on the eve of a terrible national political convulsion. I think about Lincoln a lot these days, about how circumstances shoved him to act when Southern secessionists fired on Fort Sumter barely a month after the new president took the oath of office (which was done in March back then). There was no spinning the news on it, no wiggling away from reality: an organized insurrection led by rogue U.S. military officers fired on their fellow officers... and that was that. The issue, as the saying goes, was joined.
If you think we have been in a crisis of finance and economy for the past year or so, consider that we have also been sunk in a comprehensive crisis of leadership. Nobody in authority is willing to face the truth, state the truth, and offer a reality-based idea about how to meet the truth, This is a leadership failure not just in politics and government, but also in business, in the university faculties, in the editorial and production offices of the news media, and even among a barely-breathing clergy.
Americans look around and see nobody standing up for their interests. Their greatest interest is a vision of a fruitful society that they can help build and be a part of beyond the current wreckage of revolving-debt consumerism. It will have to be a vision based on fewer resources and on new arrangements for daily living. It will have to recognize losses frankly, and enable us to let go of things whose time is over, whether that is Happy Motoring, college-for-everybody, vast industries devoted to vanished leisure, or procedures geared to getting something-for-nothing.
For now, I still see the inflection point as coming by the holiday season, when the masters-of-the-universe on Wall Street will have to publicly post their Christmas bonuses (and as publicly held corporations, they will have to). It is also well within the realm of possibility that a Black Swan the size of Rodan the Flying Reptile will swoop through the stock markets to breath fire on the computer terminals and melt the glorious rally of 09 away. In the meantime, I wonder about that man in the White House, and those ever more comical meetings he attends every day. He must emerge from them spinning like a nine dollar gyroscope. Nobody wants to imagine what happens to him when the spinning stops.
Sunday, October 25, 2009
SC97-7
http://www.globalresearch.ca/index.php?context=va&aid=15768
Financial Machinations: The Global Debt Crisis is Destroying the Economic Structure
...........The charade in NYC and Washington goes on. There is no question that our government is controlled by the unelected that lurks behind the scenes or who are appointed as bureaucrats to run our country. It was never more evident than when administrations changed last January. Team A replaced Team B, all of whom just happen to be members of the Council on Foreign Relations, the Trilateral Commission and the Bilderberg Group. There is no debate. There is only one plan and that is for one-world government. These are the Illuminists who will Shepard us into final bondage. This is what our government is all about today and has been since WWII.
The heart of the elitist control mechanism is the Federal Reserve and the Treasury Department. Control of our country emanates from these two entities. They control the purse strings of our nation. They allow us to pay for our own destruction. This is achieved by taxation and debt. The system in place has been used for centuries to keep control over people. The elitists want total power over us and all the inhabitants of the world.
Their plans to bring down the world’s economic and financial structure is well underway. The problem is that the public has begun to discover what they are up too via talk radio, the Internet and publications such as the International Forecaster. That has caused the elitists to accelerate their plans and that has opened the window of opportunity for us.
This is why now it is the appropriate time to pass HR1207 and SB604, bills to audit and investigate the Federal Reserve. Once the public discovers what these elitists have been doing to the American people for almost a century, they will disband the Fed and turn its job of monetary policy back to the Treasury where it was placed by our Constitution. This way we will have control and transparency. The next step will be to close the revolving door between Wall Street and Washington.
It has been two years since the beginning of the credit crisis and the breakdown of our economic and financial structure. The plan by the elitists since then has been to keep the system functioning as long as possible so that they can continue their massive frauds and corruption; or until the time is ripe to allow the system to collapse. These plans are ably assisted by 95% of our House and Senate who are bought and paid for. The corruption is so widespread that investigations do not take place and the guilty are protected and at worst pay a fine.
Due to these machinations the America we have known is gone. Our country is run by thugs in $3,000 suits with Ivy League degrees.
Most Americans do not understand what is going on or don’t care to know. Most are ill-educated and do not really stand a chance of comprehending what is going on. That is compounded by drugs and alcohol and a steady stream of media propaganda and brainwashing produced by NYC and Washington. Our daughter teaches the fourth grade and 20 of 23 students are not passing. They are split three ways: white, black and Spanish speaking. Then there is no ‘Child Left Behind,’ which will make sure they pass summer school and when they graduate they will be functionally illiterate. It doesn’t get much worse than this. When we went to school one or maybe two out of 30 wouldn’t pass and they were kept back for a year. It is outrageous. They spend all their time studying for federal government mandated tests, and learn little else. Our three grandchildren read one to four extra books a week and fortunately really excel in their studies. It can be done, but it takes lots of work and dedication something that most parents do not have time for. This in part is what is responsible for America’s failure and lack of leadership. Leadership, which is totally in the hands of the wealthy Illuminists. If it is any consolation the rest of the world isn’t doing much better.
The geniuses, the masters of the universe, have a broken system. This time the system they have deliberately destroyed cannot be resurrected. Due to talk radio, the Internet and publications such as the IF they had to accelerate their program for on-world government and they are scrambling, hoping they’ll be successful, and unscathed. We will make sure they’ll be no chance of that.
As a result of these machinations America is at the mercy of its creditors and for all intents and purposes is bankrupt. The only thing left holding America together is its imperial armies that eventually will collapse for lack of funding. Foreigners are not going to stand for monetization indefinitely. Yes, the players know the system has failed, and some have already broken ranks. If they had not Forex assets in sovereign reserves would not have fallen from 64.5% to 62.8% over the past nine months, as proof of that.
We have told you where we have been headed over and over again for more than ten years and we have been almost totally right unfortunately. If we do not stop these monsters we and our ancestors will live in bondage for ever. That is why passage of HR1207 and SB604 are so important. We have to drive a stake through the heart of the Illuminist machine. That heart is the Fed. If we are unsuccessful we are doomed to chaos and perhaps revolution. Americans had best wake up and snap out of denial.
Most analysts try to figure out what others within the financial and economic sphere are doing. Unfortunately they are burdened by playing within the system. They cannot see what is really going on because for one reason or another they are forced to frame their results within the inner sanctum of the Illuminists. This is the cover that is used for deliberately destroying nations. These ideas cannot simply be avoided. You would think reading history that all these brilliant people wouldn’t be deceived, but they have been. Every time, what they are doing has been tried, has been a failure. Deliberate collapses, destroyed currencies, social chaos and revolution. During the French Revolution 300,000 people such as these lost their heads. Perhaps this time it will be 3 million. Inflation can only be controlled by deflation and deflation is totally uncontrollable. Misguided isn’t the word for it. Smug and arrogant they’ll again be proven wrong and unfortunately we will all pay a terrible price.
The progenitors of this false economic policy, Keynesianism, have brought the distortion of price mechanisms, created unlimited opportunities for speculation and they have thrown all discipline to the wind. This is the basis for our current Federal Reserve System, which is the engine for such a philosophy. As a result of this policy we will be entering hyperinflation next year and the dollar will continue to fall in value.
Even though gold and silver are suppressed, gold hit a new high this past week. The CRB index did as well with oil leading the way. This is all a manifestation of coming hyperinflation and a falling dollar.
The Keynesians are pumping the money supply and monetizing domestic and foreign debt at a wild pace. The deflationary undertow continues strong as residential and commercial property prices continue their decent. The final impact is still two or more years away.
There are few financial reports that do not include bogus accounting. The FASB changed the rules last year and allowed mark-to-model accounting. Let’s see if they reinstate mark-to-market January 1st. The Basel Accords have been simply ignored and no one discusses them. Exclusive of present on and off balance sheet losses, banks are going to get hit with more residential foreclosure losses and they will be hit by 35% more commercial losses over the next two years. If nothing else the banks cannot refinance perfectly good loans because they do not have the funds to do so.
The big question for the banks is will the government perpetuate this fraud? We do not know, but we rather think they may for the good of the country. If fraud continues it will be for the benefit of Illuminists who run the banks, brokerage houses, insurance companies and transnational conglomerates. Either way again all they are doing is buying time; the end result will be the same. The banking, brokerage and insurance businesses are still broke. Nothing has been done to fix the underlying problem. There have been no structural changes, just the same old criminality. Any changes are patchwork for the public. Stimulus packages, home loan modification and $250 checks for seniors who will not get a COLA increase for the next three years. It is like the mad hatter has been set loose..........
Financial Machinations: The Global Debt Crisis is Destroying the Economic Structure
...........The charade in NYC and Washington goes on. There is no question that our government is controlled by the unelected that lurks behind the scenes or who are appointed as bureaucrats to run our country. It was never more evident than when administrations changed last January. Team A replaced Team B, all of whom just happen to be members of the Council on Foreign Relations, the Trilateral Commission and the Bilderberg Group. There is no debate. There is only one plan and that is for one-world government. These are the Illuminists who will Shepard us into final bondage. This is what our government is all about today and has been since WWII.
The heart of the elitist control mechanism is the Federal Reserve and the Treasury Department. Control of our country emanates from these two entities. They control the purse strings of our nation. They allow us to pay for our own destruction. This is achieved by taxation and debt. The system in place has been used for centuries to keep control over people. The elitists want total power over us and all the inhabitants of the world.
Their plans to bring down the world’s economic and financial structure is well underway. The problem is that the public has begun to discover what they are up too via talk radio, the Internet and publications such as the International Forecaster. That has caused the elitists to accelerate their plans and that has opened the window of opportunity for us.
This is why now it is the appropriate time to pass HR1207 and SB604, bills to audit and investigate the Federal Reserve. Once the public discovers what these elitists have been doing to the American people for almost a century, they will disband the Fed and turn its job of monetary policy back to the Treasury where it was placed by our Constitution. This way we will have control and transparency. The next step will be to close the revolving door between Wall Street and Washington.
It has been two years since the beginning of the credit crisis and the breakdown of our economic and financial structure. The plan by the elitists since then has been to keep the system functioning as long as possible so that they can continue their massive frauds and corruption; or until the time is ripe to allow the system to collapse. These plans are ably assisted by 95% of our House and Senate who are bought and paid for. The corruption is so widespread that investigations do not take place and the guilty are protected and at worst pay a fine.
Due to these machinations the America we have known is gone. Our country is run by thugs in $3,000 suits with Ivy League degrees.
Most Americans do not understand what is going on or don’t care to know. Most are ill-educated and do not really stand a chance of comprehending what is going on. That is compounded by drugs and alcohol and a steady stream of media propaganda and brainwashing produced by NYC and Washington. Our daughter teaches the fourth grade and 20 of 23 students are not passing. They are split three ways: white, black and Spanish speaking. Then there is no ‘Child Left Behind,’ which will make sure they pass summer school and when they graduate they will be functionally illiterate. It doesn’t get much worse than this. When we went to school one or maybe two out of 30 wouldn’t pass and they were kept back for a year. It is outrageous. They spend all their time studying for federal government mandated tests, and learn little else. Our three grandchildren read one to four extra books a week and fortunately really excel in their studies. It can be done, but it takes lots of work and dedication something that most parents do not have time for. This in part is what is responsible for America’s failure and lack of leadership. Leadership, which is totally in the hands of the wealthy Illuminists. If it is any consolation the rest of the world isn’t doing much better.
The geniuses, the masters of the universe, have a broken system. This time the system they have deliberately destroyed cannot be resurrected. Due to talk radio, the Internet and publications such as the IF they had to accelerate their program for on-world government and they are scrambling, hoping they’ll be successful, and unscathed. We will make sure they’ll be no chance of that.
As a result of these machinations America is at the mercy of its creditors and for all intents and purposes is bankrupt. The only thing left holding America together is its imperial armies that eventually will collapse for lack of funding. Foreigners are not going to stand for monetization indefinitely. Yes, the players know the system has failed, and some have already broken ranks. If they had not Forex assets in sovereign reserves would not have fallen from 64.5% to 62.8% over the past nine months, as proof of that.
We have told you where we have been headed over and over again for more than ten years and we have been almost totally right unfortunately. If we do not stop these monsters we and our ancestors will live in bondage for ever. That is why passage of HR1207 and SB604 are so important. We have to drive a stake through the heart of the Illuminist machine. That heart is the Fed. If we are unsuccessful we are doomed to chaos and perhaps revolution. Americans had best wake up and snap out of denial.
Most analysts try to figure out what others within the financial and economic sphere are doing. Unfortunately they are burdened by playing within the system. They cannot see what is really going on because for one reason or another they are forced to frame their results within the inner sanctum of the Illuminists. This is the cover that is used for deliberately destroying nations. These ideas cannot simply be avoided. You would think reading history that all these brilliant people wouldn’t be deceived, but they have been. Every time, what they are doing has been tried, has been a failure. Deliberate collapses, destroyed currencies, social chaos and revolution. During the French Revolution 300,000 people such as these lost their heads. Perhaps this time it will be 3 million. Inflation can only be controlled by deflation and deflation is totally uncontrollable. Misguided isn’t the word for it. Smug and arrogant they’ll again be proven wrong and unfortunately we will all pay a terrible price.
The progenitors of this false economic policy, Keynesianism, have brought the distortion of price mechanisms, created unlimited opportunities for speculation and they have thrown all discipline to the wind. This is the basis for our current Federal Reserve System, which is the engine for such a philosophy. As a result of this policy we will be entering hyperinflation next year and the dollar will continue to fall in value.
Even though gold and silver are suppressed, gold hit a new high this past week. The CRB index did as well with oil leading the way. This is all a manifestation of coming hyperinflation and a falling dollar.
The Keynesians are pumping the money supply and monetizing domestic and foreign debt at a wild pace. The deflationary undertow continues strong as residential and commercial property prices continue their decent. The final impact is still two or more years away.
There are few financial reports that do not include bogus accounting. The FASB changed the rules last year and allowed mark-to-model accounting. Let’s see if they reinstate mark-to-market January 1st. The Basel Accords have been simply ignored and no one discusses them. Exclusive of present on and off balance sheet losses, banks are going to get hit with more residential foreclosure losses and they will be hit by 35% more commercial losses over the next two years. If nothing else the banks cannot refinance perfectly good loans because they do not have the funds to do so.
The big question for the banks is will the government perpetuate this fraud? We do not know, but we rather think they may for the good of the country. If fraud continues it will be for the benefit of Illuminists who run the banks, brokerage houses, insurance companies and transnational conglomerates. Either way again all they are doing is buying time; the end result will be the same. The banking, brokerage and insurance businesses are still broke. Nothing has been done to fix the underlying problem. There have been no structural changes, just the same old criminality. Any changes are patchwork for the public. Stimulus packages, home loan modification and $250 checks for seniors who will not get a COLA increase for the next three years. It is like the mad hatter has been set loose..........
SC97-6
http://www.globalresearch.ca/index.php?context=va&aid=15686
An Imperial Strategy for a New World Order: The Origins of World War III
Introduction
In the face of total global economic collapse, the prospects of a massive international war are increasing. Historically, periods of imperial decline and economic crisis are marked by increased international violence and war. The decline of the great European empires was marked by World War I and World War II, with the Great Depression taking place in the intermediary period.
Currently, the world is witnessing the decline of the American empire, itself a product born out of World War II. As the post-war imperial hegemon, America ran the international monetary system and reigned as champion and arbitrator of the global political economy.
To manage the global political economy, the US has created the single largest and most powerful military force in world history. Constant control over the global economy requires constant military presence and action.
Now that both the American empire and global political economy are in decline and collapse, the prospect of a violent end to the American imperial age is drastically increasing.
This essay is broken into three separate parts. The first part covers US-NATO geopolitical strategy since the end of the Cold War, at the beginning of the New World Order, outlining the western imperial strategy that led to the war in Yugoslavia and the “War on Terror.” Part 2 analyzes the nature of “soft revolutions” or “colour revolutions” in US imperial strategy, focusing on establishing hegemony over Eastern Europe and Central Asia. Part 3 analyzes the nature of the imperial strategy to construct a New World Order, focusing on the increasing conflicts in Afghanistan, Pakistan, Iran, Latin America, Eastern Europe and Africa; and the potential these conflicts have for starting a new world war with China and Russia.
Defining a New Imperial Strategy
In 1991, with the collapse of the Soviet Union, US-NATO foreign policy had to re-imagine its role in the world. The Cold War served as a means of justifying US imperialist expansion across the globe with the aim of “containing” the Soviet threat. NATO itself was created and existed for the sole purpose of forging an anti-Soviet alliance. With the USSR gone, NATO had no reason to exist, and the US had to find a new purpose for its imperialist strategy in the world.
In 1992, the US Defense Department, under the leadership of Secretary of Defense Dick Cheney [later to be George Bush Jr.’s VP], had the Pentagon’s Under Secretary of Defense for Policy, Paul Wolfowitz [later to be George Bush Jr.’s Deputy Secretary of Defense and President of the World Bank], write up a defense document to guide American foreign policy in the post-Cold War era, commonly referred to as the “New World Order.”
The Defense Planning Guidance document was leaked in 1992, and revealed that, “In a broad new policy statement that is in its final drafting phase, the Defense Department asserts that America’s political and military mission in the post-cold-war era will be to ensure that no rival superpower is allowed to emerge in Western Europe, Asia or the territories of the former Soviet Union,” and that, “The classified document makes the case for a world dominated by one superpower whose position can be perpetuated by constructive behavior and sufficient military might to deter any nation or group of nations from challenging American primacy.”
Further, “the new draft sketches a world in which there is one dominant military power whose leaders ‘must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role’.” Among the necessary challenges to American supremacy, the document “postulated regional wars against Iraq and North Korea,” and identified China and Russia as its major threats. It further “suggests that the United States could also consider extending to Eastern and Central European nations security commitments similar to those extended to Saudi Arabia, Kuwait and other Arab states along the Persian Gulf.”
The War on Terror and the Project for the New American Century (PNAC)
When Bill Clinton became President, the neo-conservative hawks from the George H.W. Bush administration formed a think tank called the Project for the New American Century, or PNAC. In 2000, they published a report called, Rebuilding America’s Defenses: Strategy, Forces, and Resources for a New Century. Building upon the Defense Policy Guidance document, they state that, “the United States must retain sufficient forces able to rapidly deploy and win multiple simultaneous large-scale wars.”[23] Further, there is “need to retain sufficient combat forces to fight and win, multiple, nearly simultaneous major theatre wars,”[24] and that “the Pentagon needs to begin to calculate the force necessary to protect, independently, US interests in Europe, East Asia and the Gulf at all times.”[25]
Interestingly, the document stated that, “the United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.”[26] However, in advocating for massive increases in defense spending and expanding the American empire across the globe, including the forceful destruction of multiple countries through major theatre wars, the report stated that, “Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.”[27] That event came one year later with the events of 9/11. Many of the authors of the report and members of the Project for the New American Century had become officials in the Bush administration, and were conveniently in place to enact their “Project” after they got their “new Pearl Harbor.”
The plans for war were “already under development by far right Think Tanks in the 1990s, organisations in which cold-war warriors from the inner circle of the secret services, from evangelical churches, from weapons corporations and oil companies forged shocking plans for a new world order.” To do this, “the USA would need to use all means - diplomatic, economic and military, even wars of aggression - to have long term control of the resources of the planet and the ability to keep any possible rival weak.”
Among the people involved in PNAC and the plans for empire, “Dick Cheney - Vice President, Lewis Libby - Cheney's Chief of Staff, Donald Rumsfeld - Defence Minister, Paul Wolfowitz - Rumsfeld's deputy, Peter Rodman - in charge of 'Matters of Global Security', John Bolton - State Secretary for Arms Control, Richard Armitage - Deputy Foreign Minister, Richard Perle - former Deputy Defence Minister under Reagan, now head of the Defense Policy Board, William Kristol - head of the PNAC and adviser to Bush, known as the brains of the President, Zalmay Khalilzad,” who became Ambassador to both Afghanistan and Iraq following the regime changes in those countries..................
...............The War on Terror and the Project for the New American Century (PNAC)
When Bill Clinton became President, the neo-conservative hawks from the George H.W. Bush administration formed a think tank called the Project for the New American Century, or PNAC. In 2000, they published a report called, Rebuilding America’s Defenses: Strategy, Forces, and Resources for a New Century. Building upon the Defense Policy Guidance document, they state that, “the United States must retain sufficient forces able to rapidly deploy and win multiple simultaneous large-scale wars.”[23] Further, there is “need to retain sufficient combat forces to fight and win, multiple, nearly simultaneous major theatre wars,”[24] and that “the Pentagon needs to begin to calculate the force necessary to protect, independently, US interests in Europe, East Asia and the Gulf at all times.”[25]
Interestingly, the document stated that, “the United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.”[26] However, in advocating for massive increases in defense spending and expanding the American empire across the globe, including the forceful destruction of multiple countries through major theatre wars, the report stated that, “Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.”[27] That event came one year later with the events of 9/11. Many of the authors of the report and members of the Project for the New American Century had become officials in the Bush administration, and were conveniently in place to enact their “Project” after they got their “new Pearl Harbor.”
The plans for war were “already under development by far right Think Tanks in the 1990s, organisations in which cold-war warriors from the inner circle of the secret services, from evangelical churches, from weapons corporations and oil companies forged shocking plans for a new world order.” To do this, “the USA would need to use all means - diplomatic, economic and military, even wars of aggression - to have long term control of the resources of the planet and the ability to keep any possible rival weak.”
Among the people involved in PNAC and the plans for empire, “Dick Cheney - Vice President, Lewis Libby - Cheney's Chief of Staff, Donald Rumsfeld - Defence Minister, Paul Wolfowitz - Rumsfeld's deputy, Peter Rodman - in charge of 'Matters of Global Security', John Bolton - State Secretary for Arms Control, Richard Armitage - Deputy Foreign Minister, Richard Perle - former Deputy Defence Minister under Reagan, now head of the Defense Policy Board, William Kristol - head of the PNAC and adviser to Bush, known as the brains of the President, Zalmay Khalilzad,” who became Ambassador to both Afghanistan and Iraq following the regime changes in those countries.[28]
Brzezinski’s “Grand Chessboard”
Arch-hawk strategist, Zbigniew Brzezinski, co-founder of the Trilateral Commission with David Rockefeller, former National Security Adviser and key foreign policy architect in Jimmy Carter’s administration, also wrote a book on American geostrategy. Brzezinski is also a member of the Council on Foreign Relations and the Bilderberg Group, and has also been a board member of Amnesty International, the Atlantic Council and the National Endowment for Democracy. Currently, he is a trustee and counselor at the Center for Strategic and International Studies (CSIS), a major US policy think tank.
In his 1997 book, The Grand Chessboard, Brzezinski outlined a strategy for America in the world. He wrote, “For America, the chief geopolitical prize is Eurasia. For half a millennium, world affairs were dominated by Eurasian powers and peoples who fought with one another for regional domination and reached out for global power.” Further, “how America ‘manages’ Eurasia is critical. Eurasia is the globe’s largest continent and is geopolitically axial. A power that dominates Eurasia would control two of the world’s three most advanced and economically productive regions. A mere glance at the map also suggests that control over Eurasia would almost automatically entail African subordination.”[29]
He continued in outlining a strategy for American empire, stating that, “it is imperative that no Eurasian challenger emerges, capable of dominating Eurasia and thus of also challenging America. The formulation of a comprehensive and integrated Eurasian geostrategy is therefore the purpose of this book.”[30] He explained that, “Two basic steps are thus required: first, to identify the geostrategically dynamic Eurasian states that have the power to cause a potentially important shift in the international distribution of power and to decipher the central external goals of their respective political elites and the likely consequences of their seeking to attain them: [and] second, to formulate specific U.S. policies to offset, co-opt, and/or control the above.”[31]
What this means is that is it of primary importance to first identify states that could potentially be a pivot upon which the balance of power in the region exits the US sphere of influence; and secondly, to “offset, co-opt, and/or control” such states and circumstances. An example of this would be Iran; being one of the world’s largest oil producers, and in a strategically significant position in the axis of Europe, Asia and the Middle East. Iran could hold the potential to alter the balance of power in Eurasia if it were to closely ally itself with Russia or China, or both – giving those nations a heavy supply of oil as well as a sphere of influence in the Gulf, thus challenging American hegemony in the region.
Brzezinski removed all subtlety from his imperial leanings, and wrote, “To put it in a terminology that harkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.”[32]
Brzezinski referred to the Central Asian republics as the “Eurasian Balkans,” writing that, “Moreover, they [the Central Asian Republics] are of importance from the standpoint of security and historical ambitions to at least three of their most immediate and more powerful neighbors, namely Russia, Turkey and Iran, with China also signaling an increasing political interest in the region. But the Eurasian Balkans are infinitely more important as a potential economic prize: an enormous concentration of natural gas and oil reserves is located in the region, in addition to important minerals, including gold.”[33] He further wrote that, “It follows that America's primary interest is to help ensure that no single power comes to control this geopolitical space and that the global community has unhindered financial and economic access to it.”[34] This is a clear example of America’s role as an engine of empire; with foreign imperial policy designed to maintain US strategic positions, but primarily and “infinitely more important,” is to secure an “economic prize” for “the global community.” In other words, the United States is an imperial hegemon working for international financial interests.
Brzezinski also warned that, “the United States may have to determine how to cope with regional coalitions that seek to push America out of Eurasia, thereby threatening America's status as a global power,”[35] and he, “puts a premium on maneuver and manipulation in order to prevent the emergence of a hostile coalition that could eventually seek to challenge America's primacy.” Thus, “The most immediate task is to make certain that no state or combination of states gains the capacity to expel the United States from Eurasia or even to diminish significantly its decisive arbitration role.”[36]
The War on Terror and Surplus Imperialism
In 2000, the Pentagon released a document called Joint Vision 2020, which outlined a project to achieve what they termed, “Full Spectrum Dominance,” as the blueprint for the Department of Defense in the future. “Full-spectrum dominance means the ability of U.S. forces, operating alone or with allies, to defeat any adversary and control any situation across the range of military operations.” The report “addresses full-spectrum dominance across the range of conflicts from nuclear war to major theater wars to smaller-scale contingencies. It also addresses amorphous situations like peacekeeping and noncombat humanitarian relief.” Further, “The development of a global information grid will provide the environment for decision superiority.”[37]
As political economist, Ellen Wood, explained, “Boundless domination of a global economy, and of the multiple states that administer it, requires military action without end, in purpose or time.”[38] Further, “Imperial dominance in a global capitalist economy requires a delicate and contradictory balance between suppressing competition and maintaining conditions in competing economies that generate markets and profit. This is one of the most fundamental contradictions of the new world order.”[39]
Following 9/11, the “Bush doctrine” was put in place, which called for “a unilateral and exclusive right to preemptive attack, any time, anywhere, unfettered by any international agreements, to ensure that ‘[o]ur forces will be strong enough to dissuade potential adversaries from pursuing a military build-up in hope of surpassing, or equaling, the power of the United States’.”[40]
NATO undertook its first ground invasion of any nation in its entire history, with the October 2001 invasion and occupation of Afghanistan. The Afghan war was in fact, planned prior to the events of 9/11, with the breakdown of major pipeline deals between major western oil companies and the Taliban. The war itself was planned over the summer of 2001 with the operational plan to go to war by mid-October.[41]
Afghanistan is extremely significant in geopolitical terms, as, “Transporting all the Caspian basin's fossil fuel through Russia or Azerbaijan would greatly enhance Russia's political and economic control over the central Asian republics, which is precisely what the west has spent 10 years trying to prevent. Piping it through Iran would enrich a regime which the US has been seeking to isolate. Sending it the long way round through China, quite aside from the strategic considerations, would be prohibitively expensive. But pipelines through Afghanistan would allow the US both to pursue its aim of ‘diversifying energy supply’ and to penetrate the world's most lucrative markets.”[42]
As the San Francisco Chronicle pointed out a mere two weeks following the 9/11 attacks, “Beyond American determination to hit back against the perpetrators of the Sept. 11 attacks, beyond the likelihood of longer, drawn-out battles producing more civilian casualties in the months and years ahead, the hidden stakes in the war against terrorism can be summed up in a single word: oil.” Explaining further, “The map of terrorist sanctuaries and targets in the Middle East and Central Asia is also, to an extraordinary degree, a map of the world's principal energy sources in the 21st century. The defense of these energy resources -- rather than a simple confrontation between Islam and the West -- will be the primary flash point of global conflict for decades to come.”
Among the many notable states where there is a crossover between terrorism and oil and gas reserves of vital importance to the United States and the West, are Saudi Arabia, Libya, Bahrain, the Gulf Emirates, Iran, Iraq, Egypt, Sudan and Algeria, Turkmenistan, Kazakhstan, Azerbaijan, Chechnya, Georgia and eastern Turkey. Importantly, “this region accounts for more than 65 percent of the world's oil and natural gas production.” Further, “It is inevitable that the war against terrorism will be seen by many as a war on behalf of America's Chevron, ExxonMobil and Arco; France's TotalFinaElf; British Petroleum; Royal Dutch Shell and other multinational giants, which have hundreds of billions of dollars of investment in the region.”[43]
It’s no secret that the Iraq war had much to do with oil. In the summer of 2001, Dick Cheney convened an Energy Task Force, which was a highly secret set of meetings in which energy policy was determined for the United States. In the meetings and in various other means of communication, Cheney and his aides met with top officials and executives of Shell Oil, British Petroleum (BP), Exxon Mobil, Chevron, Conoco, and Chevron.[44] At the meeting, which took place before 9/11 and before there was any mention of a war on Iraq, documents of Iraqi oilfields, pipelines, refineries and terminals were presented and discussed, and “Saudi Arabian and United Arab Emirates (UAE) documents likewise feature a map of each country’s oilfields, pipelines, refineries and tanker terminals.”[45] Both Royal Dutch Shell and British Petroleum have since received major oil contracts to develop Iraqi oilfields.[46]
The war on Iraq, as well as the war on Afghanistan, also largely serve specifically American, and more broadly, Western imperial-strategic interests in the region. In particular, the wars were strategically designed to eliminate, threaten or contain regional powers, as well as to directly install several dozen military bases in the region, firmly establishing an imperial presence. The purpose of this is largely aimed at other major regional players and specifically, encircling Russia and China and threatening their access to the regions oil and gas reserves. Iran is now surrounded, with Iraq on one side, and Afghanistan on the other...................
The PNAC crew were long making their plans for world domination, and integral to their intended objectives was the needed occurance of a grand shocking event ( like a New Pearl Harbor ) to catapult their plans into reality. And right on time they got it, or rather facilitated it, in the form of what occurred on 9-11. Anyone who takes the time to responsibly research the vast data now available in the many solid internet sites on the subject, or in books like Crossing The Rubicon by Micheal Ruppert and The New Pearl Harbor Revisited by David Ray Griffin can see completely clearly that 9-11 was no " fortunate accident ". This false flag travesty of gigantic proportions gave the New World Order goons the catalizing event that supercharged their plans and ambitions of " attempting " to reign supreme over the rest of the world's peoples and nations. But they will ultimately fail, the history of this world makes that crystal clear. Empires rise and fall and the thuggish corrupt brutes without conscience that run them also always meet their eventual demise. But the horriblness of it all never disappears, it just gets reborn again and again, over and over in succesive power centers throughout the span of history. Mark Twain wrote the book The Damned Human Race, and its content refers to this sad truth about the history of human interaction, what Twain saw in his time, and its likeness to past social behavior and the natural human tendency towards corruption and evil deeds.
An Imperial Strategy for a New World Order: The Origins of World War III
Introduction
In the face of total global economic collapse, the prospects of a massive international war are increasing. Historically, periods of imperial decline and economic crisis are marked by increased international violence and war. The decline of the great European empires was marked by World War I and World War II, with the Great Depression taking place in the intermediary period.
Currently, the world is witnessing the decline of the American empire, itself a product born out of World War II. As the post-war imperial hegemon, America ran the international monetary system and reigned as champion and arbitrator of the global political economy.
To manage the global political economy, the US has created the single largest and most powerful military force in world history. Constant control over the global economy requires constant military presence and action.
Now that both the American empire and global political economy are in decline and collapse, the prospect of a violent end to the American imperial age is drastically increasing.
This essay is broken into three separate parts. The first part covers US-NATO geopolitical strategy since the end of the Cold War, at the beginning of the New World Order, outlining the western imperial strategy that led to the war in Yugoslavia and the “War on Terror.” Part 2 analyzes the nature of “soft revolutions” or “colour revolutions” in US imperial strategy, focusing on establishing hegemony over Eastern Europe and Central Asia. Part 3 analyzes the nature of the imperial strategy to construct a New World Order, focusing on the increasing conflicts in Afghanistan, Pakistan, Iran, Latin America, Eastern Europe and Africa; and the potential these conflicts have for starting a new world war with China and Russia.
Defining a New Imperial Strategy
In 1991, with the collapse of the Soviet Union, US-NATO foreign policy had to re-imagine its role in the world. The Cold War served as a means of justifying US imperialist expansion across the globe with the aim of “containing” the Soviet threat. NATO itself was created and existed for the sole purpose of forging an anti-Soviet alliance. With the USSR gone, NATO had no reason to exist, and the US had to find a new purpose for its imperialist strategy in the world.
In 1992, the US Defense Department, under the leadership of Secretary of Defense Dick Cheney [later to be George Bush Jr.’s VP], had the Pentagon’s Under Secretary of Defense for Policy, Paul Wolfowitz [later to be George Bush Jr.’s Deputy Secretary of Defense and President of the World Bank], write up a defense document to guide American foreign policy in the post-Cold War era, commonly referred to as the “New World Order.”
The Defense Planning Guidance document was leaked in 1992, and revealed that, “In a broad new policy statement that is in its final drafting phase, the Defense Department asserts that America’s political and military mission in the post-cold-war era will be to ensure that no rival superpower is allowed to emerge in Western Europe, Asia or the territories of the former Soviet Union,” and that, “The classified document makes the case for a world dominated by one superpower whose position can be perpetuated by constructive behavior and sufficient military might to deter any nation or group of nations from challenging American primacy.”
Further, “the new draft sketches a world in which there is one dominant military power whose leaders ‘must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role’.” Among the necessary challenges to American supremacy, the document “postulated regional wars against Iraq and North Korea,” and identified China and Russia as its major threats. It further “suggests that the United States could also consider extending to Eastern and Central European nations security commitments similar to those extended to Saudi Arabia, Kuwait and other Arab states along the Persian Gulf.”
The War on Terror and the Project for the New American Century (PNAC)
When Bill Clinton became President, the neo-conservative hawks from the George H.W. Bush administration formed a think tank called the Project for the New American Century, or PNAC. In 2000, they published a report called, Rebuilding America’s Defenses: Strategy, Forces, and Resources for a New Century. Building upon the Defense Policy Guidance document, they state that, “the United States must retain sufficient forces able to rapidly deploy and win multiple simultaneous large-scale wars.”[23] Further, there is “need to retain sufficient combat forces to fight and win, multiple, nearly simultaneous major theatre wars,”[24] and that “the Pentagon needs to begin to calculate the force necessary to protect, independently, US interests in Europe, East Asia and the Gulf at all times.”[25]
Interestingly, the document stated that, “the United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.”[26] However, in advocating for massive increases in defense spending and expanding the American empire across the globe, including the forceful destruction of multiple countries through major theatre wars, the report stated that, “Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.”[27] That event came one year later with the events of 9/11. Many of the authors of the report and members of the Project for the New American Century had become officials in the Bush administration, and were conveniently in place to enact their “Project” after they got their “new Pearl Harbor.”
The plans for war were “already under development by far right Think Tanks in the 1990s, organisations in which cold-war warriors from the inner circle of the secret services, from evangelical churches, from weapons corporations and oil companies forged shocking plans for a new world order.” To do this, “the USA would need to use all means - diplomatic, economic and military, even wars of aggression - to have long term control of the resources of the planet and the ability to keep any possible rival weak.”
Among the people involved in PNAC and the plans for empire, “Dick Cheney - Vice President, Lewis Libby - Cheney's Chief of Staff, Donald Rumsfeld - Defence Minister, Paul Wolfowitz - Rumsfeld's deputy, Peter Rodman - in charge of 'Matters of Global Security', John Bolton - State Secretary for Arms Control, Richard Armitage - Deputy Foreign Minister, Richard Perle - former Deputy Defence Minister under Reagan, now head of the Defense Policy Board, William Kristol - head of the PNAC and adviser to Bush, known as the brains of the President, Zalmay Khalilzad,” who became Ambassador to both Afghanistan and Iraq following the regime changes in those countries..................
...............The War on Terror and the Project for the New American Century (PNAC)
When Bill Clinton became President, the neo-conservative hawks from the George H.W. Bush administration formed a think tank called the Project for the New American Century, or PNAC. In 2000, they published a report called, Rebuilding America’s Defenses: Strategy, Forces, and Resources for a New Century. Building upon the Defense Policy Guidance document, they state that, “the United States must retain sufficient forces able to rapidly deploy and win multiple simultaneous large-scale wars.”[23] Further, there is “need to retain sufficient combat forces to fight and win, multiple, nearly simultaneous major theatre wars,”[24] and that “the Pentagon needs to begin to calculate the force necessary to protect, independently, US interests in Europe, East Asia and the Gulf at all times.”[25]
Interestingly, the document stated that, “the United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.”[26] However, in advocating for massive increases in defense spending and expanding the American empire across the globe, including the forceful destruction of multiple countries through major theatre wars, the report stated that, “Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.”[27] That event came one year later with the events of 9/11. Many of the authors of the report and members of the Project for the New American Century had become officials in the Bush administration, and were conveniently in place to enact their “Project” after they got their “new Pearl Harbor.”
The plans for war were “already under development by far right Think Tanks in the 1990s, organisations in which cold-war warriors from the inner circle of the secret services, from evangelical churches, from weapons corporations and oil companies forged shocking plans for a new world order.” To do this, “the USA would need to use all means - diplomatic, economic and military, even wars of aggression - to have long term control of the resources of the planet and the ability to keep any possible rival weak.”
Among the people involved in PNAC and the plans for empire, “Dick Cheney - Vice President, Lewis Libby - Cheney's Chief of Staff, Donald Rumsfeld - Defence Minister, Paul Wolfowitz - Rumsfeld's deputy, Peter Rodman - in charge of 'Matters of Global Security', John Bolton - State Secretary for Arms Control, Richard Armitage - Deputy Foreign Minister, Richard Perle - former Deputy Defence Minister under Reagan, now head of the Defense Policy Board, William Kristol - head of the PNAC and adviser to Bush, known as the brains of the President, Zalmay Khalilzad,” who became Ambassador to both Afghanistan and Iraq following the regime changes in those countries.[28]
Brzezinski’s “Grand Chessboard”
Arch-hawk strategist, Zbigniew Brzezinski, co-founder of the Trilateral Commission with David Rockefeller, former National Security Adviser and key foreign policy architect in Jimmy Carter’s administration, also wrote a book on American geostrategy. Brzezinski is also a member of the Council on Foreign Relations and the Bilderberg Group, and has also been a board member of Amnesty International, the Atlantic Council and the National Endowment for Democracy. Currently, he is a trustee and counselor at the Center for Strategic and International Studies (CSIS), a major US policy think tank.
In his 1997 book, The Grand Chessboard, Brzezinski outlined a strategy for America in the world. He wrote, “For America, the chief geopolitical prize is Eurasia. For half a millennium, world affairs were dominated by Eurasian powers and peoples who fought with one another for regional domination and reached out for global power.” Further, “how America ‘manages’ Eurasia is critical. Eurasia is the globe’s largest continent and is geopolitically axial. A power that dominates Eurasia would control two of the world’s three most advanced and economically productive regions. A mere glance at the map also suggests that control over Eurasia would almost automatically entail African subordination.”[29]
He continued in outlining a strategy for American empire, stating that, “it is imperative that no Eurasian challenger emerges, capable of dominating Eurasia and thus of also challenging America. The formulation of a comprehensive and integrated Eurasian geostrategy is therefore the purpose of this book.”[30] He explained that, “Two basic steps are thus required: first, to identify the geostrategically dynamic Eurasian states that have the power to cause a potentially important shift in the international distribution of power and to decipher the central external goals of their respective political elites and the likely consequences of their seeking to attain them: [and] second, to formulate specific U.S. policies to offset, co-opt, and/or control the above.”[31]
What this means is that is it of primary importance to first identify states that could potentially be a pivot upon which the balance of power in the region exits the US sphere of influence; and secondly, to “offset, co-opt, and/or control” such states and circumstances. An example of this would be Iran; being one of the world’s largest oil producers, and in a strategically significant position in the axis of Europe, Asia and the Middle East. Iran could hold the potential to alter the balance of power in Eurasia if it were to closely ally itself with Russia or China, or both – giving those nations a heavy supply of oil as well as a sphere of influence in the Gulf, thus challenging American hegemony in the region.
Brzezinski removed all subtlety from his imperial leanings, and wrote, “To put it in a terminology that harkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.”[32]
Brzezinski referred to the Central Asian republics as the “Eurasian Balkans,” writing that, “Moreover, they [the Central Asian Republics] are of importance from the standpoint of security and historical ambitions to at least three of their most immediate and more powerful neighbors, namely Russia, Turkey and Iran, with China also signaling an increasing political interest in the region. But the Eurasian Balkans are infinitely more important as a potential economic prize: an enormous concentration of natural gas and oil reserves is located in the region, in addition to important minerals, including gold.”[33] He further wrote that, “It follows that America's primary interest is to help ensure that no single power comes to control this geopolitical space and that the global community has unhindered financial and economic access to it.”[34] This is a clear example of America’s role as an engine of empire; with foreign imperial policy designed to maintain US strategic positions, but primarily and “infinitely more important,” is to secure an “economic prize” for “the global community.” In other words, the United States is an imperial hegemon working for international financial interests.
Brzezinski also warned that, “the United States may have to determine how to cope with regional coalitions that seek to push America out of Eurasia, thereby threatening America's status as a global power,”[35] and he, “puts a premium on maneuver and manipulation in order to prevent the emergence of a hostile coalition that could eventually seek to challenge America's primacy.” Thus, “The most immediate task is to make certain that no state or combination of states gains the capacity to expel the United States from Eurasia or even to diminish significantly its decisive arbitration role.”[36]
The War on Terror and Surplus Imperialism
In 2000, the Pentagon released a document called Joint Vision 2020, which outlined a project to achieve what they termed, “Full Spectrum Dominance,” as the blueprint for the Department of Defense in the future. “Full-spectrum dominance means the ability of U.S. forces, operating alone or with allies, to defeat any adversary and control any situation across the range of military operations.” The report “addresses full-spectrum dominance across the range of conflicts from nuclear war to major theater wars to smaller-scale contingencies. It also addresses amorphous situations like peacekeeping and noncombat humanitarian relief.” Further, “The development of a global information grid will provide the environment for decision superiority.”[37]
As political economist, Ellen Wood, explained, “Boundless domination of a global economy, and of the multiple states that administer it, requires military action without end, in purpose or time.”[38] Further, “Imperial dominance in a global capitalist economy requires a delicate and contradictory balance between suppressing competition and maintaining conditions in competing economies that generate markets and profit. This is one of the most fundamental contradictions of the new world order.”[39]
Following 9/11, the “Bush doctrine” was put in place, which called for “a unilateral and exclusive right to preemptive attack, any time, anywhere, unfettered by any international agreements, to ensure that ‘[o]ur forces will be strong enough to dissuade potential adversaries from pursuing a military build-up in hope of surpassing, or equaling, the power of the United States’.”[40]
NATO undertook its first ground invasion of any nation in its entire history, with the October 2001 invasion and occupation of Afghanistan. The Afghan war was in fact, planned prior to the events of 9/11, with the breakdown of major pipeline deals between major western oil companies and the Taliban. The war itself was planned over the summer of 2001 with the operational plan to go to war by mid-October.[41]
Afghanistan is extremely significant in geopolitical terms, as, “Transporting all the Caspian basin's fossil fuel through Russia or Azerbaijan would greatly enhance Russia's political and economic control over the central Asian republics, which is precisely what the west has spent 10 years trying to prevent. Piping it through Iran would enrich a regime which the US has been seeking to isolate. Sending it the long way round through China, quite aside from the strategic considerations, would be prohibitively expensive. But pipelines through Afghanistan would allow the US both to pursue its aim of ‘diversifying energy supply’ and to penetrate the world's most lucrative markets.”[42]
As the San Francisco Chronicle pointed out a mere two weeks following the 9/11 attacks, “Beyond American determination to hit back against the perpetrators of the Sept. 11 attacks, beyond the likelihood of longer, drawn-out battles producing more civilian casualties in the months and years ahead, the hidden stakes in the war against terrorism can be summed up in a single word: oil.” Explaining further, “The map of terrorist sanctuaries and targets in the Middle East and Central Asia is also, to an extraordinary degree, a map of the world's principal energy sources in the 21st century. The defense of these energy resources -- rather than a simple confrontation between Islam and the West -- will be the primary flash point of global conflict for decades to come.”
Among the many notable states where there is a crossover between terrorism and oil and gas reserves of vital importance to the United States and the West, are Saudi Arabia, Libya, Bahrain, the Gulf Emirates, Iran, Iraq, Egypt, Sudan and Algeria, Turkmenistan, Kazakhstan, Azerbaijan, Chechnya, Georgia and eastern Turkey. Importantly, “this region accounts for more than 65 percent of the world's oil and natural gas production.” Further, “It is inevitable that the war against terrorism will be seen by many as a war on behalf of America's Chevron, ExxonMobil and Arco; France's TotalFinaElf; British Petroleum; Royal Dutch Shell and other multinational giants, which have hundreds of billions of dollars of investment in the region.”[43]
It’s no secret that the Iraq war had much to do with oil. In the summer of 2001, Dick Cheney convened an Energy Task Force, which was a highly secret set of meetings in which energy policy was determined for the United States. In the meetings and in various other means of communication, Cheney and his aides met with top officials and executives of Shell Oil, British Petroleum (BP), Exxon Mobil, Chevron, Conoco, and Chevron.[44] At the meeting, which took place before 9/11 and before there was any mention of a war on Iraq, documents of Iraqi oilfields, pipelines, refineries and terminals were presented and discussed, and “Saudi Arabian and United Arab Emirates (UAE) documents likewise feature a map of each country’s oilfields, pipelines, refineries and tanker terminals.”[45] Both Royal Dutch Shell and British Petroleum have since received major oil contracts to develop Iraqi oilfields.[46]
The war on Iraq, as well as the war on Afghanistan, also largely serve specifically American, and more broadly, Western imperial-strategic interests in the region. In particular, the wars were strategically designed to eliminate, threaten or contain regional powers, as well as to directly install several dozen military bases in the region, firmly establishing an imperial presence. The purpose of this is largely aimed at other major regional players and specifically, encircling Russia and China and threatening their access to the regions oil and gas reserves. Iran is now surrounded, with Iraq on one side, and Afghanistan on the other...................
The PNAC crew were long making their plans for world domination, and integral to their intended objectives was the needed occurance of a grand shocking event ( like a New Pearl Harbor ) to catapult their plans into reality. And right on time they got it, or rather facilitated it, in the form of what occurred on 9-11. Anyone who takes the time to responsibly research the vast data now available in the many solid internet sites on the subject, or in books like Crossing The Rubicon by Micheal Ruppert and The New Pearl Harbor Revisited by David Ray Griffin can see completely clearly that 9-11 was no " fortunate accident ". This false flag travesty of gigantic proportions gave the New World Order goons the catalizing event that supercharged their plans and ambitions of " attempting " to reign supreme over the rest of the world's peoples and nations. But they will ultimately fail, the history of this world makes that crystal clear. Empires rise and fall and the thuggish corrupt brutes without conscience that run them also always meet their eventual demise. But the horriblness of it all never disappears, it just gets reborn again and again, over and over in succesive power centers throughout the span of history. Mark Twain wrote the book The Damned Human Race, and its content refers to this sad truth about the history of human interaction, what Twain saw in his time, and its likeness to past social behavior and the natural human tendency towards corruption and evil deeds.
Thursday, October 22, 2009
SC97-5
http://www.globalresearch.ca/index.php?context=va&aid=15735
The Rich Have Stolen The Economy
Bloomberg reports that Treasury Secretary Timothy Geithner's closest aides earned millions of dollars a year working for Goldman Sachs, Citigroup and other Wall Street firms. Bloomberg reports that none of these aides faced Senate confirmation. Yet, they are overseeing the handout of hundreds of billions of dollars of taxpayer funds to their former employers.
The gifts of billions of dollars of taxpayers' money provided the banks with an abundance of low cost capital that has boosted the banks' profits, while the taxpayers who provided the capital are increasingly unemployed and homeless.
JPMorgan Chase announced that it has earned $3.6 billion in the third quarter of this year.
Goldman Sachs has made so much money during this year of economic crisis that enormous bonuses are in the works. London Evening Standard reports that Goldman Sachs' “5,500 London staff can look forward to record average payouts of around 500,000 pounds ($800,000) each. Senior executives will get bonuses of several million pounds each with the highest paid as much as 10 million pounds ($16 million).“
In the event the banksters can't figure out how to enjoy the riches, the Financial Times is offering a new magazine--”How To Spend It.” New York City's retailers are praying for some of it, suffering a 15.3% vacancy rate on Fifth Avenue. Statistician John Williams (shadowstats.com) reports that retail sales adjusted for inflation have declined to the level of 10 years ago: “Virtually 10 years worth of real retail sales growth has been destroyed in the still unfolding depression.”
Meanwhile, New York City's homeless shelters have reached the all time high of 39,000, 16,000 of whom are children.
New York City government is so overwhelmed that it is paying $90 per night per apartment to rent unsold new apartments for the homeless. Desperate, the city government is offering one-way free airline tickets to the homeless if they will leave the city and charging rent to shelter residents who have jobs. A single mother earning $800 per month is paying $336 in shelter rent.
Long-term unemployment has become a serious problem across the country, doubling the unemployment rate from the reported 10% to 20%. Now hundreds of thousands more Americans are beginning to run out of extended unemployment benefits. High unemployment has made 2009 a banner year for military recruitment.
A record number of Americans, more than one in nine, are on food stamps. Mortgage delinquencies are rising as home prices fall. According to Jay Brinkmann of the Mortgage Bankers Association, job losses have spread the problem from subprime loans to prime fixed-rate loans. On a Wise, Virginia, fairgrounds, 2,000 people waited in lines for free dental and health care.
While the US speeds plans for the ultimate bunker buster bomb and President Obama prepares to send another 45,000 troops into Afghanistan, 44,789 Americans die every year from lack of medical treatment. National Guardsmen say they would rather face the Taliban than the US economy.
Little wonder. In the midst of the worst unemployment since the Great Depression, US corporations continue to offshore jobs and to replace their remaining US employees with lower paid foreigners on work visas.
The offshoring of jobs, the bailout of rich banksters, and war deficits are destroying the value of the US dollar. Since last spring the US dollar has been rapidly losing value. The currency of the hegemonic superpower has declined 14% against the Botswana pula, 22% against Brazil's real, and 11% against the Russian ruble. Once the dollar loses its reserve currency status, the US will be unable to pay for its imports or to finance its government budget deficits.
Offshoring has made Americans heavily dependent on imports, and the dollar's loss of purchasing power will further erode American incomes. As the Federal Reserve is forced to monetize Treasury debt issues, domestic inflation will break out. Except for the banksters and the offshoring CEOs, there is no source of consumer demand to drive the US economy.
The political system is unresponsive to the American people. It is monopolized by a few powerful interest groups that control campaign contributions. Interest groups have exercised their power to monopolize the economy for the benefit of themselves, the American people be damned.
The Rich Have Stolen The Economy
Bloomberg reports that Treasury Secretary Timothy Geithner's closest aides earned millions of dollars a year working for Goldman Sachs, Citigroup and other Wall Street firms. Bloomberg reports that none of these aides faced Senate confirmation. Yet, they are overseeing the handout of hundreds of billions of dollars of taxpayer funds to their former employers.
The gifts of billions of dollars of taxpayers' money provided the banks with an abundance of low cost capital that has boosted the banks' profits, while the taxpayers who provided the capital are increasingly unemployed and homeless.
JPMorgan Chase announced that it has earned $3.6 billion in the third quarter of this year.
Goldman Sachs has made so much money during this year of economic crisis that enormous bonuses are in the works. London Evening Standard reports that Goldman Sachs' “5,500 London staff can look forward to record average payouts of around 500,000 pounds ($800,000) each. Senior executives will get bonuses of several million pounds each with the highest paid as much as 10 million pounds ($16 million).“
In the event the banksters can't figure out how to enjoy the riches, the Financial Times is offering a new magazine--”How To Spend It.” New York City's retailers are praying for some of it, suffering a 15.3% vacancy rate on Fifth Avenue. Statistician John Williams (shadowstats.com) reports that retail sales adjusted for inflation have declined to the level of 10 years ago: “Virtually 10 years worth of real retail sales growth has been destroyed in the still unfolding depression.”
Meanwhile, New York City's homeless shelters have reached the all time high of 39,000, 16,000 of whom are children.
New York City government is so overwhelmed that it is paying $90 per night per apartment to rent unsold new apartments for the homeless. Desperate, the city government is offering one-way free airline tickets to the homeless if they will leave the city and charging rent to shelter residents who have jobs. A single mother earning $800 per month is paying $336 in shelter rent.
Long-term unemployment has become a serious problem across the country, doubling the unemployment rate from the reported 10% to 20%. Now hundreds of thousands more Americans are beginning to run out of extended unemployment benefits. High unemployment has made 2009 a banner year for military recruitment.
A record number of Americans, more than one in nine, are on food stamps. Mortgage delinquencies are rising as home prices fall. According to Jay Brinkmann of the Mortgage Bankers Association, job losses have spread the problem from subprime loans to prime fixed-rate loans. On a Wise, Virginia, fairgrounds, 2,000 people waited in lines for free dental and health care.
While the US speeds plans for the ultimate bunker buster bomb and President Obama prepares to send another 45,000 troops into Afghanistan, 44,789 Americans die every year from lack of medical treatment. National Guardsmen say they would rather face the Taliban than the US economy.
Little wonder. In the midst of the worst unemployment since the Great Depression, US corporations continue to offshore jobs and to replace their remaining US employees with lower paid foreigners on work visas.
The offshoring of jobs, the bailout of rich banksters, and war deficits are destroying the value of the US dollar. Since last spring the US dollar has been rapidly losing value. The currency of the hegemonic superpower has declined 14% against the Botswana pula, 22% against Brazil's real, and 11% against the Russian ruble. Once the dollar loses its reserve currency status, the US will be unable to pay for its imports or to finance its government budget deficits.
Offshoring has made Americans heavily dependent on imports, and the dollar's loss of purchasing power will further erode American incomes. As the Federal Reserve is forced to monetize Treasury debt issues, domestic inflation will break out. Except for the banksters and the offshoring CEOs, there is no source of consumer demand to drive the US economy.
The political system is unresponsive to the American people. It is monopolized by a few powerful interest groups that control campaign contributions. Interest groups have exercised their power to monopolize the economy for the benefit of themselves, the American people be damned.
SC97-4
http://www.rollingstone.com/politics/story/30481512/wall_streets_naked_swindle/1
Wall Street’s Naked Swindle : Rolling Stone
.......Like all the great merchants of the bubble economy, Bear and Lehman were leveraged to the hilt and vulnerable to collapse. Many of the methods that outsiders used to knock them over were mostly legal: Credit markers were pulled, rumors were spread through the media, and legitimate short-sellers pressured the stock price down. But when Bear and Lehman made their final leap off the cliff of history, both undeniably got a push — especially in the form of a flat-out counterfeiting scheme called naked short-selling.
That this particular scam played such a prominent role in the demise of the two firms was supremely ironic. After all, the boom that had ballooned both companies to fantastic heights was basically a counterfeit economy, a mountain of paste that Wall Street had built to replace the legitimate business it no longer had. By the middle of the Bush years, the great investment banks like Bear and Lehman no longer made their money financing real businesses and creating jobs. Instead, Wall Street now serves, in the words of one former investment executive, as “Lucy to America’s Charlie Brown,” endlessly creating new products to lure the great herd of unwitting investors into whatever tawdry greed-bubble is being spun at the moment: Come kick the football again, only this time we’ll call it the Internet, real estate, oil futures. Wall Street has turned the economy into a giant asset-stripping scheme, one whose purpose is to suck the last bits of meat from the carcass of the middle class.
What really happened to Bear and Lehman is that an economic drought temporarily left the hyenas without any more middle-class victims — and so they started eating each other, using the exact same schemes they had been using for years to fleece the rest of the country. And in the forensic footprint left by those kills, we can see for the first time exactly how the scam worked — and how completely even the government regulators who are supposed to protect us have given up trying to stop it.
This was a brokered bloodletting, one in which the power of the state was used to help effect a monstrous consolidation of financial and political power. Heading into 2008, there were five major investment banks in the United States: Bear, Lehman, Merrill Lynch, Morgan Stanley and Goldman Sachs. Today only Morgan Stanley and Goldman survive as independent firms, perched atop a restructured Wall Street hierarchy. And while the rest of the civilized world responded to last year’s catastrophes with sweeping measures to rein in the corruption in their financial sectors, the United States invited the wolves into the government, with the popular new president, Barack Obama — elected amid promises to clean up the mess — filling his administration with Bear’s and Lehman’s conquerors, bestowing his papal blessing on a new era of robbery.
To the rest of the world, the brazenness of the theft — coupled with the conspicuousness of the government’s inaction — clearly demonstrates that the American capital markets are a crime in progress. To those of us who actually live here, however, the news is even worse. We’re in a place we haven’t been since the Depression: Our economy is so completely fucked, the rich are running out of things to steal.
If you squint hard enough, you can see that the derivative-driven economy of the past decade has always, in a way, been about counterfeiting. At their most basic level, innovations like the ones that triggered the global collapse — credit-default swaps and collateralized debt obligations — were employed for the primary purpose of synthesizing out of thin air those revenue flows that our dying industrial economy was no longer pumping into the financial bloodstream. The basic concept in almost every case was the same: replacing hard assets with complex formulas that, once unwound, would prove to be backed by promises and IOUs instead of real stuff. Credit-default swaps enabled banks to lend more money without having the cash to cover potential defaults; one type of CDO let Wall Street issue mortgage-backed bonds that were backed not by actual monthly mortgage payments made by real human beings, but by the wild promises of other irresponsible lenders. They even called the thing a synthetic CDO — a derivative contract filled with derivative contracts — and nobody laughed. The whole economy was a fake........
.........While naked short-selling was the weapon used to bring down both Bear and Lehman, it would be preposterous to argue that the practice caused the financial crisis. The most serious problems in this economy were the result of other, broader classes of financial misdeed: corruption of the ratings agencies, the use of smoke-and-mirrors like derivatives, an epidemic tulipomania called the housing boom and the overall decline of American industry, which pushed Wall Street to synthesize growth where none existed.
But the “phantom” shares produced by naked short-sellers are symptomatic of a problem that goes far beyond the stock market. “The only reason people talk about naked shorting so much is that stock is sexy and so much attention is paid to the stock market,” says a former investment executive. “This goes on in all the markets.”
Take the commodities markets, where most of those betting on the prices of things like oil, wheat and soybeans have no product to actually deliver. “All speculative selling of commodity futures is ‘naked’ short selling,” says Adam White, director of research at White Knight Research and Trading. While buying things that don’t actually exist isn’t always harmful, it can help fuel speculative manias, like the oil bubble of last summer. “The world consumes 85 million barrels of oil per day, but it’s not uncommon to trade 1 billion barrels per day on the various commodities exchanges,” says White. “So you’ve got 12 paper barrels trading for every physical barrel.”
The same is true for mortgages. When lenders couldn’t find enough dope addicts to lend mansions to, some simply went ahead and started selling the same mortgages over and over to different investors. There are now a growing number of cases of such double-selling of mortgages: “It makes Bernie Madoff seem like chump change,” says April Charney, a legal-aid attorney based in Florida. Just like in the stock market, where short-sellers delivered IOUs instead of real shares, traders of mortgage-backed securities sometimes conclude deals by transferring “lost-note affidavits” — basically a “my dog ate the mortgage” note — instead of the actual mortgage. A paper presented at the American Bankruptcy Institute earlier this year reports that up to a third of all notes for mortgage-backed securities may have been “misplaced or lost” — meaning they’re backed by IOUs instead of actual mortgages.
How about bonds? “Naked short-selling of stocks is nothing compared to what goes on in the bond market,” says Trimbath, the former DTC staffer. Indeed, the practice of selling bonds without delivering them is so rampant it has even infected the market for U.S. Treasury notes. That’s right — Wall Street has actually been brazen enough to counterfeit the debt of the United States government right under the eyes of regulators, in the middle of a historic series of government bailouts! In fact, the amount of failed trades in Treasury bonds — the equivalent of “phantom” stocks — has doubled since 2007. In a single week last July, some $250 billion worth of U.S. Treasury bonds were sold and not delivered.
The counterfeit nature of our economy is troubling enough, given that financial power is concentrated in the hands of a few key players — “300 white guys in Manhattan,” as a former high-placed executive puts it. But over the course of the past year, that group of insiders has also proved itself brilliantly capable of enlisting the power of the state to help along the process of concentrating economic might — making it less and less likely that the financial markets will ever be policed, since the state is increasingly the captive of these interests.
The new president for whom we all had such high hopes went and hired Michael Froman, a Citigroup executive who accepted a $2.2 million bonus after he joined the White House, to serve on his economic transition team — at the same time the government was giving Citigroup a massive bailout. Then, after promising to curb the influence of lobbyists, Obama hired a former Goldman Sachs lobbyist, Mark Patterson, as chief of staff at the Treasury. He hired another Goldmanite, Gary Gensler, to police the commodities markets. He handed control of the Treasury and Federal Reserve over to Geithner and Bernanke, a pair of stooges who spent their whole careers being bellhops for New York bankers. And on the first anniversary of the collapse of Lehman Brothers, when he finally came to Wall Street to promote “serious financial reform,” his plan proved to be so completely absent of balls that the share prices of the major banks soared at the news.
The nation’s largest financial players are able to write the rules for own their businesses and brazenly steal billions under the noses of regulators, and nothing is done about it. A thing so fundamental to civilized society as the integrity of a stock, or a mortgage note, or even a U.S. Treasury bond, can no longer be protected, not even in a crisis, and a crime as vulgar and conspicuous as counterfeiting can take place on a systematic level for years without being stopped, even after it begins to affect the modern-day equivalents of the Rockefellers and the Carnegies. What 10 years ago was a cheap stock-fraud scheme for second-rate grifters in Brooklyn has become a major profit center for Wall Street. Our burglar class now rules the national economy. And no one is trying to stop them.
Wall Street’s Naked Swindle : Rolling Stone
.......Like all the great merchants of the bubble economy, Bear and Lehman were leveraged to the hilt and vulnerable to collapse. Many of the methods that outsiders used to knock them over were mostly legal: Credit markers were pulled, rumors were spread through the media, and legitimate short-sellers pressured the stock price down. But when Bear and Lehman made their final leap off the cliff of history, both undeniably got a push — especially in the form of a flat-out counterfeiting scheme called naked short-selling.
That this particular scam played such a prominent role in the demise of the two firms was supremely ironic. After all, the boom that had ballooned both companies to fantastic heights was basically a counterfeit economy, a mountain of paste that Wall Street had built to replace the legitimate business it no longer had. By the middle of the Bush years, the great investment banks like Bear and Lehman no longer made their money financing real businesses and creating jobs. Instead, Wall Street now serves, in the words of one former investment executive, as “Lucy to America’s Charlie Brown,” endlessly creating new products to lure the great herd of unwitting investors into whatever tawdry greed-bubble is being spun at the moment: Come kick the football again, only this time we’ll call it the Internet, real estate, oil futures. Wall Street has turned the economy into a giant asset-stripping scheme, one whose purpose is to suck the last bits of meat from the carcass of the middle class.
What really happened to Bear and Lehman is that an economic drought temporarily left the hyenas without any more middle-class victims — and so they started eating each other, using the exact same schemes they had been using for years to fleece the rest of the country. And in the forensic footprint left by those kills, we can see for the first time exactly how the scam worked — and how completely even the government regulators who are supposed to protect us have given up trying to stop it.
This was a brokered bloodletting, one in which the power of the state was used to help effect a monstrous consolidation of financial and political power. Heading into 2008, there were five major investment banks in the United States: Bear, Lehman, Merrill Lynch, Morgan Stanley and Goldman Sachs. Today only Morgan Stanley and Goldman survive as independent firms, perched atop a restructured Wall Street hierarchy. And while the rest of the civilized world responded to last year’s catastrophes with sweeping measures to rein in the corruption in their financial sectors, the United States invited the wolves into the government, with the popular new president, Barack Obama — elected amid promises to clean up the mess — filling his administration with Bear’s and Lehman’s conquerors, bestowing his papal blessing on a new era of robbery.
To the rest of the world, the brazenness of the theft — coupled with the conspicuousness of the government’s inaction — clearly demonstrates that the American capital markets are a crime in progress. To those of us who actually live here, however, the news is even worse. We’re in a place we haven’t been since the Depression: Our economy is so completely fucked, the rich are running out of things to steal.
If you squint hard enough, you can see that the derivative-driven economy of the past decade has always, in a way, been about counterfeiting. At their most basic level, innovations like the ones that triggered the global collapse — credit-default swaps and collateralized debt obligations — were employed for the primary purpose of synthesizing out of thin air those revenue flows that our dying industrial economy was no longer pumping into the financial bloodstream. The basic concept in almost every case was the same: replacing hard assets with complex formulas that, once unwound, would prove to be backed by promises and IOUs instead of real stuff. Credit-default swaps enabled banks to lend more money without having the cash to cover potential defaults; one type of CDO let Wall Street issue mortgage-backed bonds that were backed not by actual monthly mortgage payments made by real human beings, but by the wild promises of other irresponsible lenders. They even called the thing a synthetic CDO — a derivative contract filled with derivative contracts — and nobody laughed. The whole economy was a fake........
.........While naked short-selling was the weapon used to bring down both Bear and Lehman, it would be preposterous to argue that the practice caused the financial crisis. The most serious problems in this economy were the result of other, broader classes of financial misdeed: corruption of the ratings agencies, the use of smoke-and-mirrors like derivatives, an epidemic tulipomania called the housing boom and the overall decline of American industry, which pushed Wall Street to synthesize growth where none existed.
But the “phantom” shares produced by naked short-sellers are symptomatic of a problem that goes far beyond the stock market. “The only reason people talk about naked shorting so much is that stock is sexy and so much attention is paid to the stock market,” says a former investment executive. “This goes on in all the markets.”
Take the commodities markets, where most of those betting on the prices of things like oil, wheat and soybeans have no product to actually deliver. “All speculative selling of commodity futures is ‘naked’ short selling,” says Adam White, director of research at White Knight Research and Trading. While buying things that don’t actually exist isn’t always harmful, it can help fuel speculative manias, like the oil bubble of last summer. “The world consumes 85 million barrels of oil per day, but it’s not uncommon to trade 1 billion barrels per day on the various commodities exchanges,” says White. “So you’ve got 12 paper barrels trading for every physical barrel.”
The same is true for mortgages. When lenders couldn’t find enough dope addicts to lend mansions to, some simply went ahead and started selling the same mortgages over and over to different investors. There are now a growing number of cases of such double-selling of mortgages: “It makes Bernie Madoff seem like chump change,” says April Charney, a legal-aid attorney based in Florida. Just like in the stock market, where short-sellers delivered IOUs instead of real shares, traders of mortgage-backed securities sometimes conclude deals by transferring “lost-note affidavits” — basically a “my dog ate the mortgage” note — instead of the actual mortgage. A paper presented at the American Bankruptcy Institute earlier this year reports that up to a third of all notes for mortgage-backed securities may have been “misplaced or lost” — meaning they’re backed by IOUs instead of actual mortgages.
How about bonds? “Naked short-selling of stocks is nothing compared to what goes on in the bond market,” says Trimbath, the former DTC staffer. Indeed, the practice of selling bonds without delivering them is so rampant it has even infected the market for U.S. Treasury notes. That’s right — Wall Street has actually been brazen enough to counterfeit the debt of the United States government right under the eyes of regulators, in the middle of a historic series of government bailouts! In fact, the amount of failed trades in Treasury bonds — the equivalent of “phantom” stocks — has doubled since 2007. In a single week last July, some $250 billion worth of U.S. Treasury bonds were sold and not delivered.
The counterfeit nature of our economy is troubling enough, given that financial power is concentrated in the hands of a few key players — “300 white guys in Manhattan,” as a former high-placed executive puts it. But over the course of the past year, that group of insiders has also proved itself brilliantly capable of enlisting the power of the state to help along the process of concentrating economic might — making it less and less likely that the financial markets will ever be policed, since the state is increasingly the captive of these interests.
The new president for whom we all had such high hopes went and hired Michael Froman, a Citigroup executive who accepted a $2.2 million bonus after he joined the White House, to serve on his economic transition team — at the same time the government was giving Citigroup a massive bailout. Then, after promising to curb the influence of lobbyists, Obama hired a former Goldman Sachs lobbyist, Mark Patterson, as chief of staff at the Treasury. He hired another Goldmanite, Gary Gensler, to police the commodities markets. He handed control of the Treasury and Federal Reserve over to Geithner and Bernanke, a pair of stooges who spent their whole careers being bellhops for New York bankers. And on the first anniversary of the collapse of Lehman Brothers, when he finally came to Wall Street to promote “serious financial reform,” his plan proved to be so completely absent of balls that the share prices of the major banks soared at the news.
The nation’s largest financial players are able to write the rules for own their businesses and brazenly steal billions under the noses of regulators, and nothing is done about it. A thing so fundamental to civilized society as the integrity of a stock, or a mortgage note, or even a U.S. Treasury bond, can no longer be protected, not even in a crisis, and a crime as vulgar and conspicuous as counterfeiting can take place on a systematic level for years without being stopped, even after it begins to affect the modern-day equivalents of the Rockefellers and the Carnegies. What 10 years ago was a cheap stock-fraud scheme for second-rate grifters in Brooklyn has become a major profit center for Wall Street. Our burglar class now rules the national economy. And no one is trying to stop them.
SC97-3
http://www.informationclearinghouse.info/article23788.htm
How Did America Fall So Fast?
In 2000, America was described as the sole remaining superpower - or even the world's "hyperpower". Now we're in real trouble.
How did it happen so fast?
As everyone knows, the war in Iraq - which will end up costing $3-5 trillion dollars - was launched based upon false justifications. Indeed, the government apparently planned both the Afghanistan war (see this and this) and the Iraq war before 9/11.
And the financial system collapsed last year due to looting and fraud.
How Empires Fall
But Paul Farrel provides a bigger-picture analysis, quoting Jared Diamond and Marc Faber.
Diamond's book 's, Collapse: How Societies Choose to Fail or Succeed, studies the collapse of civilizations throughout history, and finds:
Civilizations share a sharp curve of decline. Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power...
One of the choices has depended on the courage to practice long-term thinking, and to make bold, courageous, anticipatory decisions at a time when problems have become perceptible but before they reach crisis proportions
And PhD economist Faber states:
How [am I] so sure about this final collapse?
Of all the questions I have about the future, this is the easiest one to answer. Once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent ... overspends ... costly wars ... wealth inequity and social tensions increase; and society enters a secular decline.
[Quoting 18th century Scottish historian Alexander Fraser Tytler:] The average life span of the world's greatest civilizations has been 200 years progressing from "bondage to spiritual faith ... to great courage ... to liberty ... to abundance ... to selfishness ... to complacency ... to apathy ... to dependence and ... back into bondage"
[Where is America in the cycle?] It is most unlikely that Western societies, and especially the U.S., will be an exception to this typical "society cycle." ... The U.S. is somewhere between the phase where it moves "from complacency to apathy" and "from apathy to dependence."
In other words, America's rapid fall is not really that novel after all.
How Consumers, Politicians and Wall Street All Contributed to the Fall
On the individual level, people became "fat and happy", the abundance led to selfishness ("greed is good"), and then complacency, and then apathy.
Indeed, if you think back about tv and radio ads over the last couple of decades, you can trace the tone of voice of the characters from Gordon Gecko-like, to complacent, to apathetic and know-nothing.
On the political level, there was no courage in the White House or Congress "to practice long-term thinking, and to make bold, courageous, anticipatory decisions". Of course, the bucket loads of donations from Wall Street didn't hurt, but there was also a religion of deregulation promoted by Greenspan, Rubin, Gensler and others which preached that the economy was self-stabilizing and self-sustaining. This type of false ideology only can spread during times of abundance and complacency, when an empire is at its peak and people can fool themselves into thinking "the empire has always been prosperous, we've solved all of the problems, and we will always prosper" (incidentally, this type of false thinking was also common in the 1920's, when government and financial leaders said that the "modern banking system" - overseen by the Federal Reserve - had destroyed instability once and for all).
And as for Wall Street, the best possible time to pillage is when your victim is at the peak of wealth. With America in a huge bubble phase of wealth and power, the Wall Street looters sucked out vast sums through fraudulent subprime loans, derivatives and securitization schemes, Ponzi schemes and high frequency trading and dark pools and all of the rest.
Like the mugger who waits until his victim has made a withdrawal from the ATM, the white collar criminals pounced when America's economy was booming (at least on paper).
Given that the people were in a contented stupor of consumption, and the politicians were flush with cash and feel-good platitudes, the job of the criminals became easier.
A study of the crash of the Roman - or almost any other - empire would show something very similar.
How Did America Fall So Fast?
In 2000, America was described as the sole remaining superpower - or even the world's "hyperpower". Now we're in real trouble.
How did it happen so fast?
As everyone knows, the war in Iraq - which will end up costing $3-5 trillion dollars - was launched based upon false justifications. Indeed, the government apparently planned both the Afghanistan war (see this and this) and the Iraq war before 9/11.
And the financial system collapsed last year due to looting and fraud.
How Empires Fall
But Paul Farrel provides a bigger-picture analysis, quoting Jared Diamond and Marc Faber.
Diamond's book 's, Collapse: How Societies Choose to Fail or Succeed, studies the collapse of civilizations throughout history, and finds:
Civilizations share a sharp curve of decline. Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power...
One of the choices has depended on the courage to practice long-term thinking, and to make bold, courageous, anticipatory decisions at a time when problems have become perceptible but before they reach crisis proportions
And PhD economist Faber states:
How [am I] so sure about this final collapse?
Of all the questions I have about the future, this is the easiest one to answer. Once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent ... overspends ... costly wars ... wealth inequity and social tensions increase; and society enters a secular decline.
[Quoting 18th century Scottish historian Alexander Fraser Tytler:] The average life span of the world's greatest civilizations has been 200 years progressing from "bondage to spiritual faith ... to great courage ... to liberty ... to abundance ... to selfishness ... to complacency ... to apathy ... to dependence and ... back into bondage"
[Where is America in the cycle?] It is most unlikely that Western societies, and especially the U.S., will be an exception to this typical "society cycle." ... The U.S. is somewhere between the phase where it moves "from complacency to apathy" and "from apathy to dependence."
In other words, America's rapid fall is not really that novel after all.
How Consumers, Politicians and Wall Street All Contributed to the Fall
On the individual level, people became "fat and happy", the abundance led to selfishness ("greed is good"), and then complacency, and then apathy.
Indeed, if you think back about tv and radio ads over the last couple of decades, you can trace the tone of voice of the characters from Gordon Gecko-like, to complacent, to apathetic and know-nothing.
On the political level, there was no courage in the White House or Congress "to practice long-term thinking, and to make bold, courageous, anticipatory decisions". Of course, the bucket loads of donations from Wall Street didn't hurt, but there was also a religion of deregulation promoted by Greenspan, Rubin, Gensler and others which preached that the economy was self-stabilizing and self-sustaining. This type of false ideology only can spread during times of abundance and complacency, when an empire is at its peak and people can fool themselves into thinking "the empire has always been prosperous, we've solved all of the problems, and we will always prosper" (incidentally, this type of false thinking was also common in the 1920's, when government and financial leaders said that the "modern banking system" - overseen by the Federal Reserve - had destroyed instability once and for all).
And as for Wall Street, the best possible time to pillage is when your victim is at the peak of wealth. With America in a huge bubble phase of wealth and power, the Wall Street looters sucked out vast sums through fraudulent subprime loans, derivatives and securitization schemes, Ponzi schemes and high frequency trading and dark pools and all of the rest.
Like the mugger who waits until his victim has made a withdrawal from the ATM, the white collar criminals pounced when America's economy was booming (at least on paper).
Given that the people were in a contented stupor of consumption, and the politicians were flush with cash and feel-good platitudes, the job of the criminals became easier.
A study of the crash of the Roman - or almost any other - empire would show something very similar.
Tuesday, October 20, 2009
SC97-2
http://www.commondreams.org/view/2009/10/19
A Reality Check From the Brink of Extinction
We can join Bill McKibben on Oct. 24 in nationwide protests over rising carbon emissions. We can cut our consumption of fossil fuels. We can use less water. We can banish plastic bags. We can install compact fluorescent light bulbs. We can compost in our backyard. But unless we dismantle the corporate state, all those actions will be just as ineffective as the Ghost Dance shirts donned by native American warriors to protect themselves from the bullets of white soldiers at Wounded Knee.
“If we all wait for the great, glorious revolution there won’t be anything left,” author and environmental activist Derrick Jensen told me when I interviewed him in a phone call to his home in California. “If all we do is reform work, this culture will grind away. This work is necessary, but not sufficient. We need to use whatever means are necessary to stop this culture from killing the planet. We need to target and take down the industrial infrastructure that is systematically dismembering the planet. Industrial civilization is functionally incompatible with life on the planet, and is murdering the planet. We need to do whatever is necessary to stop this.”
The oil and natural gas industry, the coal industry, arms and weapons manufacturers, industrial farms, deforestation industries, the automotive industry and chemical plants will not willingly accept their own extinction. They are indifferent to the looming human catastrophe. We will not significantly reduce carbon emissions by drying our laundry in the backyard and naively trusting the power elite. The corporations will continue to cannibalize the planet for the sake of money. They must be halted by organized and militant forms of resistance. The crisis of global heating is a social problem. It requires a social response.
The United States, after rejecting the Kyoto Protocol, went on to increase its carbon emissions by 20 percent from 1990 levels. The European Union countries during the same period reduced their emissions by 2 percent. But the recent climate negotiations in Bangkok, designed to lead to a deal in Copenhagen in December, have scuttled even the tepid response of Kyoto. Kyoto is dead. The EU, like the United States, will no longer abide by binding targets for emission reductions. Countries will unilaterally decide how much to cut. They will submit their plans to international monitoring. And while Kyoto put the burden of responsibility on the industrialized nations that created the climate crisis, the new plan treats all countries the same. It is a huge step backward.
“All of the so-called solutions to global warming take industrial capitalism as a given,” said Jensen, who wrote “Endgame: The Problem of Civilization” and “The Culture of Make Believe.” “The natural world is supposed to conform to industrial capitalism. This is insane. It is out of touch with physical reality. What’s real is real. Any social system—it does not matter if we are talking about industrial capitalism or an indigenous Tolowa people—their way of life, is dependent upon a real, physical world. Without a real, physical world you don’t have anything. When you separate yourself from the real world you start to hallucinate. You believe the machines are more real than real life. How many machines are within 10 feet of you and how many wild animals are within a hundred yards? How many machines do you have a daily relationship with? We have forgotten what is real.”
The latest studies show polar ice caps are melting at a record rate and that within a decade the Arctic will be an open sea during summers. This does not give us much time. White ice and snow reflect 80 percent of sunlight back to space, while dark water reflects only 20 percent, absorbing a much larger heat load. Scientists warn that the loss of the ice will dramatically change winds and sea currents around the world. And the rapidly melting permafrost is unleashing methane chimneys from the ocean floor along the Russian coastline. Methane is a greenhouse gas 25 times more toxic than carbon dioxide, and some scientists have speculated that the release of huge quantities of methane into the atmosphere could asphyxiate the human species. The rising sea levels, which will swallow countries such as Bangladesh and the Marshall Islands and turn cities like New Orleans into a new Atlantis, will combine with severe droughts, horrific storms and flooding to eventually dislocate over a billion people. The effects will be suffering, disease and death on a scale unseen in human history.
We can save groves of trees, protect endangered species and clean up rivers, all of which is good, but to leave the corporations unchallenged would mean our efforts would be wasted. These personal adjustments and environmental crusades can too easily become a badge of moral purity, an excuse for inaction. They can absolve us from the harder task of confronting the power of corporations.
The damage to the environment by human households is minuscule next to the damage done by corporations. Municipalities and individuals use 10 percent of the nation’s water while the other 90 percent is consumed by agriculture and industry. Individual consumption of energy accounts for about a quarter of all energy consumption; the other 75 percent is consumed by corporations. Municipal waste accounts for only 3 percent of total waste production in the United States. We can, and should, live more simply, but it will not be enough if we do not radically transform the economic structure of the industrial world.
“If your food comes from the grocery store and your water from a tap you will defend to the death the system that brings these to you because your life depends on it,” said Jensen, who is holding workshops around the country called Deep Green Resistance [click here and here] to build a militant resistance movement. “If your food comes from a land base and if your water comes from a river you will defend to the death these systems. In any abusive system, whether we are talking about an abusive man against his partner or the larger abusive system, you force your victims to become dependent upon you. We believe that industrial capitalism is more important than life.”
Those who run our corporate state have fought environmental regulation as tenaciously as they have fought financial regulation. They are responsible for our personal impoverishment as well as the impoverishment of our ecosystem. We remain addicted, courtesy of the oil, gas and automobile industries and a corporate-controlled government, to fossil fuels. Species are vanishing. Fish stocks are depleted. The great human migration from coastlines and deserts has begun. And as temperatures continue to rise, huge parts of the globe will become uninhabitable. NASA climate scientist James Hansen has demonstrated that any concentration of carbon dioxide greater than 350 parts per million in the atmosphere is not compatible with maintenance of the biosphere on the “planet on which civilization developed and to which life on earth is adapted.” He has determined that the world must stop burning coal by 2030—and the industrialized world well before that—if we are to have any hope of ever getting the planet back down below that 350 number. Coal supplies half of our electricity in the United States.
“We need to separate ourselves from the corporate government that is killing the planet,” Jensen said. “We need to get really serious. We are talking about life on the planet. We need to shut down the oil infrastructure. I don’t care, and the trees don’t care, if we do this through lawsuits, mass boycotts or sabotage. I asked Dahr Jamail how long a bridge would last in Iraq that was not defended. He said probably six to 12 hours. We need to make the economic system, which is the engine for so much destruction, unmanageable. The Movement for the Emancipation of the Niger Delta has been able to reduce Nigerian oil output by 20 percent. We need to stop the oil economy.”
The reason the ecosystem is dying is not because we still have a dryer in our basement. It is because corporations look at everything, from human beings to the natural environment, as exploitable commodities. It is because consumption is the engine of corporate profits. We have allowed the corporate state to sell the environmental crisis as a matter of personal choice when actually there is a need for profound social and economic reform. We are left powerless.
Alexander Herzen, speaking a century ago to a group of Russian anarchists working to topple the czar, reminded his followers that they were not there to rescue the system.
“We think we are the doctors,” Herzen said. “We are the disease.”
A Reality Check From the Brink of Extinction
We can join Bill McKibben on Oct. 24 in nationwide protests over rising carbon emissions. We can cut our consumption of fossil fuels. We can use less water. We can banish plastic bags. We can install compact fluorescent light bulbs. We can compost in our backyard. But unless we dismantle the corporate state, all those actions will be just as ineffective as the Ghost Dance shirts donned by native American warriors to protect themselves from the bullets of white soldiers at Wounded Knee.
“If we all wait for the great, glorious revolution there won’t be anything left,” author and environmental activist Derrick Jensen told me when I interviewed him in a phone call to his home in California. “If all we do is reform work, this culture will grind away. This work is necessary, but not sufficient. We need to use whatever means are necessary to stop this culture from killing the planet. We need to target and take down the industrial infrastructure that is systematically dismembering the planet. Industrial civilization is functionally incompatible with life on the planet, and is murdering the planet. We need to do whatever is necessary to stop this.”
The oil and natural gas industry, the coal industry, arms and weapons manufacturers, industrial farms, deforestation industries, the automotive industry and chemical plants will not willingly accept their own extinction. They are indifferent to the looming human catastrophe. We will not significantly reduce carbon emissions by drying our laundry in the backyard and naively trusting the power elite. The corporations will continue to cannibalize the planet for the sake of money. They must be halted by organized and militant forms of resistance. The crisis of global heating is a social problem. It requires a social response.
The United States, after rejecting the Kyoto Protocol, went on to increase its carbon emissions by 20 percent from 1990 levels. The European Union countries during the same period reduced their emissions by 2 percent. But the recent climate negotiations in Bangkok, designed to lead to a deal in Copenhagen in December, have scuttled even the tepid response of Kyoto. Kyoto is dead. The EU, like the United States, will no longer abide by binding targets for emission reductions. Countries will unilaterally decide how much to cut. They will submit their plans to international monitoring. And while Kyoto put the burden of responsibility on the industrialized nations that created the climate crisis, the new plan treats all countries the same. It is a huge step backward.
“All of the so-called solutions to global warming take industrial capitalism as a given,” said Jensen, who wrote “Endgame: The Problem of Civilization” and “The Culture of Make Believe.” “The natural world is supposed to conform to industrial capitalism. This is insane. It is out of touch with physical reality. What’s real is real. Any social system—it does not matter if we are talking about industrial capitalism or an indigenous Tolowa people—their way of life, is dependent upon a real, physical world. Without a real, physical world you don’t have anything. When you separate yourself from the real world you start to hallucinate. You believe the machines are more real than real life. How many machines are within 10 feet of you and how many wild animals are within a hundred yards? How many machines do you have a daily relationship with? We have forgotten what is real.”
The latest studies show polar ice caps are melting at a record rate and that within a decade the Arctic will be an open sea during summers. This does not give us much time. White ice and snow reflect 80 percent of sunlight back to space, while dark water reflects only 20 percent, absorbing a much larger heat load. Scientists warn that the loss of the ice will dramatically change winds and sea currents around the world. And the rapidly melting permafrost is unleashing methane chimneys from the ocean floor along the Russian coastline. Methane is a greenhouse gas 25 times more toxic than carbon dioxide, and some scientists have speculated that the release of huge quantities of methane into the atmosphere could asphyxiate the human species. The rising sea levels, which will swallow countries such as Bangladesh and the Marshall Islands and turn cities like New Orleans into a new Atlantis, will combine with severe droughts, horrific storms and flooding to eventually dislocate over a billion people. The effects will be suffering, disease and death on a scale unseen in human history.
We can save groves of trees, protect endangered species and clean up rivers, all of which is good, but to leave the corporations unchallenged would mean our efforts would be wasted. These personal adjustments and environmental crusades can too easily become a badge of moral purity, an excuse for inaction. They can absolve us from the harder task of confronting the power of corporations.
The damage to the environment by human households is minuscule next to the damage done by corporations. Municipalities and individuals use 10 percent of the nation’s water while the other 90 percent is consumed by agriculture and industry. Individual consumption of energy accounts for about a quarter of all energy consumption; the other 75 percent is consumed by corporations. Municipal waste accounts for only 3 percent of total waste production in the United States. We can, and should, live more simply, but it will not be enough if we do not radically transform the economic structure of the industrial world.
“If your food comes from the grocery store and your water from a tap you will defend to the death the system that brings these to you because your life depends on it,” said Jensen, who is holding workshops around the country called Deep Green Resistance [click here and here] to build a militant resistance movement. “If your food comes from a land base and if your water comes from a river you will defend to the death these systems. In any abusive system, whether we are talking about an abusive man against his partner or the larger abusive system, you force your victims to become dependent upon you. We believe that industrial capitalism is more important than life.”
Those who run our corporate state have fought environmental regulation as tenaciously as they have fought financial regulation. They are responsible for our personal impoverishment as well as the impoverishment of our ecosystem. We remain addicted, courtesy of the oil, gas and automobile industries and a corporate-controlled government, to fossil fuels. Species are vanishing. Fish stocks are depleted. The great human migration from coastlines and deserts has begun. And as temperatures continue to rise, huge parts of the globe will become uninhabitable. NASA climate scientist James Hansen has demonstrated that any concentration of carbon dioxide greater than 350 parts per million in the atmosphere is not compatible with maintenance of the biosphere on the “planet on which civilization developed and to which life on earth is adapted.” He has determined that the world must stop burning coal by 2030—and the industrialized world well before that—if we are to have any hope of ever getting the planet back down below that 350 number. Coal supplies half of our electricity in the United States.
“We need to separate ourselves from the corporate government that is killing the planet,” Jensen said. “We need to get really serious. We are talking about life on the planet. We need to shut down the oil infrastructure. I don’t care, and the trees don’t care, if we do this through lawsuits, mass boycotts or sabotage. I asked Dahr Jamail how long a bridge would last in Iraq that was not defended. He said probably six to 12 hours. We need to make the economic system, which is the engine for so much destruction, unmanageable. The Movement for the Emancipation of the Niger Delta has been able to reduce Nigerian oil output by 20 percent. We need to stop the oil economy.”
The reason the ecosystem is dying is not because we still have a dryer in our basement. It is because corporations look at everything, from human beings to the natural environment, as exploitable commodities. It is because consumption is the engine of corporate profits. We have allowed the corporate state to sell the environmental crisis as a matter of personal choice when actually there is a need for profound social and economic reform. We are left powerless.
Alexander Herzen, speaking a century ago to a group of Russian anarchists working to topple the czar, reminded his followers that they were not there to rescue the system.
“We think we are the doctors,” Herzen said. “We are the disease.”
SC97-1
http://www.ricefarmer.blogspot.com/
Brazilian Police Helicopter Downed
An incident in which Brazilian drug gangs shot down a police helicopter is yet another example of how non-state actors are becoming more powerful and challenging state power. Pirates, Mexican drug cartels, and attacks on the Pakistani state apparatus are other indications that non-state actors are finding the weak spots in the system and pushing.
As the world situation continues to deteriorate, it will become more chaotic as the excessively top-heavy and complex global system progressively unravels and spins out of control.
Increasingly, nation-states will have their hands full just trying to hold themselves together in the face of economic collapse and separatist movements, and these non-state actors will move into the resulting power vacuum.
Stay tuned to this drama; the show is just getting started.
Brazilian Police Helicopter Downed
An incident in which Brazilian drug gangs shot down a police helicopter is yet another example of how non-state actors are becoming more powerful and challenging state power. Pirates, Mexican drug cartels, and attacks on the Pakistani state apparatus are other indications that non-state actors are finding the weak spots in the system and pushing.
As the world situation continues to deteriorate, it will become more chaotic as the excessively top-heavy and complex global system progressively unravels and spins out of control.
Increasingly, nation-states will have their hands full just trying to hold themselves together in the face of economic collapse and separatist movements, and these non-state actors will move into the resulting power vacuum.
Stay tuned to this drama; the show is just getting started.
SC96-15
http://www.informationclearinghouse.info/article23737.htm#
War Is Peace. Ignorance Is Strength
Barack Obama, winner of the 2009 Nobel Peace Prize, is planning another war to add to his impressive record. In Afghanistan, his agents routinely extinguish wedding parties, farmers and construction workers with weapons such as the innovative Hellfire missile, which sucks the air out of your lungs. According to the UN, 338,000 Afghan infants are dying under the Obama-led alliance, which permits only $29 per head annually to be spent on medical care.
Within weeks of his inauguration, Obama started a new war in Pakistan, causing more than a million people to flee their homes. In threatening Iran – which his secretary of state, Hillary Clinton, said she was prepared to “obliterate” – Obama lied that the Iranians were covering up a “secret nuclear facility”, knowing that it had already been reported to the International Atomic Energy Authority. In colluding with the only nuclear-armed power in the Middle East, he bribed the Palestinian Authority to suppress a UN judgment that Israel had committed crimes against humanity in its assault on Gaza – crimes made possible with US weapons whose shipment Obama secretly approved before his inauguration.
At home, the man of peace has approved a military budget exceeding that of any year since the end of the Second World War while presiding over a new kind of domestic repression. During the recent G20 meeting in Pittsburgh, hosted by Obama, militarised police attacked peaceful protesters with something called the Long-Range Acoustic Device, not seen before on US streets. Mounted in the turret of a small tank, it blasted a piercing noise as tear gas and pepper gas were fired indiscriminately. It is part of a new arsenal of “crowd-control munitions” supplied by military contractors such as Raytheon. In Obama’s Pentagon-controlled “national security state”, the concentration camp at Guantanamo Bay, which he promised to close, remains open, and “rendition”, secret assassinations and torture continue.
The Nobel Peace Prize-winner’s latest war is largely secret. On 15 July, Washington finalised a deal with Colombia that gives the US seven giant military bases. “The idea,” reported the Associated Press, “is to make Colombia a regional hub for Pentagon operations . . . nearly half the continent can be covered by a C-17 [military transport] without refuelling”, which “helps achieve the regional engagement strategy”.
Translated, this means Obama is planning a “rollback” of the independence and democracy that the people of Bolivia, Venezuela, Ecuador and Paraguay have achieved against the odds, along with a historic regional co-operation that rejects the notion of a US “sphere of influence”. The Colombian regime, which backs death squads and has the continent’s worst human rights record, has received US military support second in scale only to Israel. Britain provides military training. Guided by US military satellites, Colombian paramilitaries now infiltrate Venezuela with the goal of overthrowing the democratic government of Hugo Chávez, which George W Bush failed to do in 2002.
Obama’s war on peace and democracy in Latin America follows a style he has demonstrated since the coup against the democratic president of Honduras, Manuel Zelaya, in June. Zelaya had increased the minimum wage, granted subsidies to small farmers, cut back interest rates and reduced poverty. He planned to break a US pharmaceutical monopoly and manufacture cheap generic drugs. Although Obama has called for Zelaya’s reinstatement, he refuses to condemn the coup-makers and to recall the US ambassador or the US troops who train the Honduran forces determined to crush a popular resistance. Zelaya has been repeatedly refused a meeting with Obama, who has approved an IMF loan of $164m to the illegal regime. The message is clear and familiar: thugs can act with impunity on behalf of the US.
Obama, the smooth operator from Chicago via Harvard, was enlisted to restore what he calls “leadership” throughout the world. The Nobel Prize committee’s decision is the kind of cloying reverse racism that has beatified the man for no reason other than he is a member of a minority and attractive to liberal sensibilities, if not to the Afghan children he kills. This is the Call of Obama. It is not unlike a dog whistle: inaudible to most, irresistible to the besotted and boneheaded. “When Obama walks into a room,” gushed George Clooney, “you want to follow him somewhere, anywhere.”
The great voice of black liberation Frantz Fanon understood this. In The Wretched of the Earth, he described the “intermediary [whose] mission has nothing to do with transforming the nation: it consists, prosaically, of being the transmission line between the nation and a capitalism, rampant though camouflaged”. Because political debate has become so debased in our media monoculture – Blair or Brown; Brown or Cameron – race, gender and class can be used as seductive tools of propaganda and diversion. In Obama’s case, what matters, as Fanon pointed out in an earlier era, is not the intermediary’s “historic” elevation, but the class he serves. After all, Bush’s inner circle was probably the most multiracial in presidential history. There was Condoleezza Rice, Colin Powell, Clarence Thomas, all dutifully serving an extreme and dangerous power.
Britain has seen its own Obama-like mysticism. The day after Blair was elected in 1997, the Observer predicted that he would create “new worldwide rules on human rights” while the Guardian rejoiced at the “breathless pace [as] the floodgates of change burst open”. When Obama was elected last November, Denis MacShane MP, a devotee of Blair’s bloodbaths, unwittingly warned us: “I shut my eyes when I listen to this guy and it could be Tony. He is doing the same thing that we did in 1997.”
War Is Peace. Ignorance Is Strength
Barack Obama, winner of the 2009 Nobel Peace Prize, is planning another war to add to his impressive record. In Afghanistan, his agents routinely extinguish wedding parties, farmers and construction workers with weapons such as the innovative Hellfire missile, which sucks the air out of your lungs. According to the UN, 338,000 Afghan infants are dying under the Obama-led alliance, which permits only $29 per head annually to be spent on medical care.
Within weeks of his inauguration, Obama started a new war in Pakistan, causing more than a million people to flee their homes. In threatening Iran – which his secretary of state, Hillary Clinton, said she was prepared to “obliterate” – Obama lied that the Iranians were covering up a “secret nuclear facility”, knowing that it had already been reported to the International Atomic Energy Authority. In colluding with the only nuclear-armed power in the Middle East, he bribed the Palestinian Authority to suppress a UN judgment that Israel had committed crimes against humanity in its assault on Gaza – crimes made possible with US weapons whose shipment Obama secretly approved before his inauguration.
At home, the man of peace has approved a military budget exceeding that of any year since the end of the Second World War while presiding over a new kind of domestic repression. During the recent G20 meeting in Pittsburgh, hosted by Obama, militarised police attacked peaceful protesters with something called the Long-Range Acoustic Device, not seen before on US streets. Mounted in the turret of a small tank, it blasted a piercing noise as tear gas and pepper gas were fired indiscriminately. It is part of a new arsenal of “crowd-control munitions” supplied by military contractors such as Raytheon. In Obama’s Pentagon-controlled “national security state”, the concentration camp at Guantanamo Bay, which he promised to close, remains open, and “rendition”, secret assassinations and torture continue.
The Nobel Peace Prize-winner’s latest war is largely secret. On 15 July, Washington finalised a deal with Colombia that gives the US seven giant military bases. “The idea,” reported the Associated Press, “is to make Colombia a regional hub for Pentagon operations . . . nearly half the continent can be covered by a C-17 [military transport] without refuelling”, which “helps achieve the regional engagement strategy”.
Translated, this means Obama is planning a “rollback” of the independence and democracy that the people of Bolivia, Venezuela, Ecuador and Paraguay have achieved against the odds, along with a historic regional co-operation that rejects the notion of a US “sphere of influence”. The Colombian regime, which backs death squads and has the continent’s worst human rights record, has received US military support second in scale only to Israel. Britain provides military training. Guided by US military satellites, Colombian paramilitaries now infiltrate Venezuela with the goal of overthrowing the democratic government of Hugo Chávez, which George W Bush failed to do in 2002.
Obama’s war on peace and democracy in Latin America follows a style he has demonstrated since the coup against the democratic president of Honduras, Manuel Zelaya, in June. Zelaya had increased the minimum wage, granted subsidies to small farmers, cut back interest rates and reduced poverty. He planned to break a US pharmaceutical monopoly and manufacture cheap generic drugs. Although Obama has called for Zelaya’s reinstatement, he refuses to condemn the coup-makers and to recall the US ambassador or the US troops who train the Honduran forces determined to crush a popular resistance. Zelaya has been repeatedly refused a meeting with Obama, who has approved an IMF loan of $164m to the illegal regime. The message is clear and familiar: thugs can act with impunity on behalf of the US.
Obama, the smooth operator from Chicago via Harvard, was enlisted to restore what he calls “leadership” throughout the world. The Nobel Prize committee’s decision is the kind of cloying reverse racism that has beatified the man for no reason other than he is a member of a minority and attractive to liberal sensibilities, if not to the Afghan children he kills. This is the Call of Obama. It is not unlike a dog whistle: inaudible to most, irresistible to the besotted and boneheaded. “When Obama walks into a room,” gushed George Clooney, “you want to follow him somewhere, anywhere.”
The great voice of black liberation Frantz Fanon understood this. In The Wretched of the Earth, he described the “intermediary [whose] mission has nothing to do with transforming the nation: it consists, prosaically, of being the transmission line between the nation and a capitalism, rampant though camouflaged”. Because political debate has become so debased in our media monoculture – Blair or Brown; Brown or Cameron – race, gender and class can be used as seductive tools of propaganda and diversion. In Obama’s case, what matters, as Fanon pointed out in an earlier era, is not the intermediary’s “historic” elevation, but the class he serves. After all, Bush’s inner circle was probably the most multiracial in presidential history. There was Condoleezza Rice, Colin Powell, Clarence Thomas, all dutifully serving an extreme and dangerous power.
Britain has seen its own Obama-like mysticism. The day after Blair was elected in 1997, the Observer predicted that he would create “new worldwide rules on human rights” while the Guardian rejoiced at the “breathless pace [as] the floodgates of change burst open”. When Obama was elected last November, Denis MacShane MP, a devotee of Blair’s bloodbaths, unwittingly warned us: “I shut my eyes when I listen to this guy and it could be Tony. He is doing the same thing that we did in 1997.”
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