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http://thearchdruidreport.blogspot.com/

The End of the Shale Bubble?

It’s been a little more than a year since I launched the present series of posts on the end of America’s global empire and the future of democracy in the wake of this nation’s imperial age. Over the next few posts I plan on wrapping that theme up and moving on. However traumatic the decline and fall of the American empire turns out to be, after all, it’s just one part of the broader trajectory that this blog seeks to explore, and other parts of that trajectory deserve discussion as well.

I’d planned to have this week’s post take last week’s discussion of voluntary associations further, and talk about some of the other roles that can be filled, in a time of economic contraction and social disarray, by groups of people using the toolkit of democratic process and traditional ways of managing group activities and assets. Still, that topic is going to have to wait another week, because one of the other dimensions of the broader trajectory just mentioned is moving rapidly toward crisis.

It’s hard to imagine that anybody in today’s America has escaped the flurry of enthusiastic media coverage of the fracking phenomenon. Still, that coverage has included so much misinformation that it’s probably a good idea to recap the basics here. Hydrofracturing—“fracking” in oil industry slang—is an old trick that has been used for decades to get oil and natural gas out of rock that isn’t porous enough for conventional methods to get at them. As oil and gas extraction techniques go, it’s fairly money-, energy- and resource-intensive, and so it didn’t see a great deal of use until fairly recently.

Then the price of oil climbed to the vicinity of $100 a barrel and stayed there. Soaring oil prices drove a tectonic shift in the US petroleum industry, making it economically feasible to drill for oil in deposits that weren’t worth the effort when prices were lower. One of those deposits was the Bakken shale, a sprawling formation of underground rock in the northern Great Plains, which was discovered back in the 1970s and sat neglected ever since due to low oil prices. To get any significant amount of oil out of the Bakken, you have to use fracking technology, since the shale isn’t porous enough to let go of its oil any other way. Once the rising price of crude oil made the Bakken a paying proposition, drilling crews headed that way and got to work, launching a lively boom.

Another thoroughly explored rock formation further east, the Marcellus shale, attracted attention from the drilling rigs for a different reason, or rather a different pair of reasons. The Marcellus contains no oil to speak of, but some parts of it have gas that is high in natural gas liquids—“wet gas” is the industry term for this—and since those liquids can replace petroleum in some applications, they can be sold at a much higher price than natural gas. Meanwhile, companies across the natural gas industry looked at the ongoing depletion of US coal reserves, and the likelihood of government mandates favoring natural gas over coal for power generation, and decided that these added up to a rosy future for natural gas prices. Several natural gas production firms thus started snapping up leases in the Marcellus country of Pennsylvania and neighboring states, and a second boom got under way.

As drilling in the Bakken and Marcellus shales took off, several other shale deposits, some containing oil and natural gas, others just natural gas, came in for the same sort of treatment. The result was a modest temporary increase in US petroleum production, and a more substantial but equally temporary increase in US natural gas production. It could never be anything more than temporary, for reasons hardwired into the way fracking technology works.

If you’ve ever shaken a can of soda pop good and hard and then opened it, you know something about fracking that countless column inches of media cheerleading on the subject have sedulously avoided. The technique is different, to be sure, but the effect of hydrofracturing on oil and gas trapped in shale is not unlike the effect of a hard shake on the carbon dioxide dissolved in soda pop: in both cases, you get a sudden rush toward the outlet, which releases most of what you’re going to get. Oil and gas production from fracked wells thus starts out high but suffers ferocious decline rates—up to 90% in the first year alone. Where a conventional, unfracked well can produce enough oil or gas to turn a profit for decades if it’s well managed, fracked wells in tight shales like the Bakken and Marcellus quite often stop becoming a significant source of oil or gas within a few years of drilling.

The obvious response to this problem is to drill more wells, and this accordingly happened. That isn’t a panacea, however. Oil and gas exploration is a highly sophisticated science, and oil and gas drilling companies can normally figure out the best sites for wells long before the drill bit hits the ground. Since they are in business to make money, they normally drill the best sites first. When that sensible habit intersects with the rapid production decline rates found in fracked wells, the result is a brutal form of economic arithmetic: as the best sites are drilled and the largest reserves drained, drilling companies have to drill more and more wells to keep the same amount of oil or gas flowing. Costs go up without increasing production, and unless prices rise, profits get hammered and companies start to go broke.

They start to go broke even more quickly if the price of the resource they’re extracting goes down as the costs of maintaining production go up. In the case of natural gas, that’s exactly what happened. Each natural gas production company drew up its projections of future prices on the assumption that ordinary trends in production would continue. As company after company piled into shale gas, though, production soared, and the harsh economic downturn that followed the 2008 housing market crash kept plummeting natural gas prices from spurring increased use of the resource; so many people were so broke that even cheap natural gas was too expensive for any unnecessary use.

Up to that point, the fracking story followed a trajectory painfully familiar to anyone who knows their way around the economics of alternative energy. From the building of the first solar steam engines before the turn of the last century, through the boom-and-bust cycle of alternative energy sources in the late 1970s, right up to the ethanol plants that were launched with so much fanfare a decade ago and sold for scrap much more quietly a few years later, the pattern’s the same, a repeated rhythm of great expectations followed by shattered dreams. .

Here’s how it works. A media panic over the availability of some energy resource or other sparks frantic efforts to come up with a response that won’t require anybody to change their lifestyles or, heaven help us, conserve. Out of the flurry of available resources and technologies, one or two seize the attention of the media and, shortly thereafter, the imagination of the general public. Money pours into whatever the chosen solution happens to be, as investors convince themselves that there’s plenty of profit to be made backing a supposedly sure thing, and nobody takes the time to ask hard questions. In particular, investors tend to lose track of the fact that something can be technically feasible without being economically viable, and rosy estimates of projected cash flow and return on investment take the place of meaningful analysis.

Then come the first financial troubles, brushed aside by cheerleading “analysts” as teething troubles or the results of irrelevant factors certain to pass off in short order. The next round of bad news follows promptly, and then the one after that; the first investors begin to pull out; sooner or later, one of the hot companies that has become an icon in the new industry goes suddenly and messily bankrupt, and the rush for the exits begins. Barring government subsidies big enough to keep some shrunken form of the new industry stumbling along thereafter, that’s usually the end of the road for the former solution du jour, and decades can pass before investors are willing to put their money into the same resource or technology again.

That’s the way that the fracking story started, too. By the time it was well under way, though, a jarring new note had sounded: the most prestigious of the US mass media suddenly started parroting the most sanguine daydreams of the fracking industry. They insisted at the top of their lungs that the relatively modest increases in oil and gas production from fracked shales marked a revolutionary new era, in which the United States would inevitably regain the energy independence it last had in the 1950s, and prosperity would return for all—or at least for all who jumped aboard the new bandwagon as soon as possible. Happy days, we were told, were here again.

What made this barrage of propaganda all the more fascinating was the immense gaps that separated it from the realities on and under the ground in Pennsylvania and North Dakota. The drastic depletion rates from fracked wells rarely got a mention, and the estimates of how much oil and gas were to be found in the various shale deposits zoomed upwards with wild abandon. Nor did the frenzy stop there; blatant falsehoods were served up repeatedly by people who had every reason to know that they were false—I’m thinking here of the supposedly energy-literate pundits who insisted, repeatedly and loudly, that the Green River shale in the southwest was just like the Bakken and Marcellus shales, and would yield abundant oil and gas once it was fracked. (The Green River shale, for those who haven’t been keeping score, contains no oil or gas at all; instead, it contains kerogen, a waxy hydrocarbon goo that would have turned into oil or gas if it had stayed deep underground for a few million years longer, and kerogen can’t be extracted by fracking—or, for that matter, by any other economically viable method.)

Those who were paying attention to all the hoopla may have noticed that the vaporous claims being retailed by the mainstream media around the fracking boom resembled nothing so much as the equally insubstantial arguments most of the same media were serving up around the housing boom in the years immediately before the 2008 crash. The similarity isn’t accidental, either. The same thing happened in both cases: Wall Street got into the act.

A recent report from financial analyst Deborah Rogers, Shale and Wall Street (you can download a copy in PDF format here), offers a helpful glimpse into the three-ring speculative circus that sprang up around shale oil and shale gas during the last three years or so. Those of my readers who suffer from the delusion that Wall Street might have learned something from the disastrous end of the housing bubble are in for a disappointment: the same antics, executed with the same blissful disregard for basic honesty and probity, got trotted out again, with results that will be coming down hard on what’s left of the US economy in the months immediately ahead of us.

If you remember the housing bubble, you know what happened. Leases on undrilled shale fields were bundled and flipped on the basis of grotesquely inflated claims of their income potential; newly minted investment vehicles of more than Byzantine complexity—VPPs, "volumetric production payments," are an example you’ll be hearing about quite a bit in a few months, once the court cases begin—were pushed on poorly informed investors and promptly began to crash and burn; as the price of natural gas dropped and fracking operations became more and more unprofitable, "pump and dump" operations talked up the prospects of next to worthless properties, which could then be unloaded on chumps before the bottom fell out. It’s an old story, if a tawdry one, and all the evidence suggests that it’s likely to finish running its usual course in the months immediately ahead.

There are at least two points worth making as that happens. The first is that we can expect more of the same in the years immediately ahead. Wall Street culture—not to mention the entire suite of economic expectations that guides the behavior of governments, businesses, and most individuals in today’s America—assumes that the close-to-zero return on investment that’s become standard in the last few years is a temporary anomaly, and that a good investment ought to bring in what used to be considered a good annual return: 4%, 6%, 8%, or more. What only a few thinkers on the fringes have grasped is that such returns are only normal in a growing economy, and we no longer have a growing economy.

Sustained economic growth, of the kind that went on from the beginning of the industrial revolution around 1700 to the peak of conventional oil production around 2005, is a rare anomaly in human history. It became a dominant historical force over the last three centuries because cheap abundant energy from fossil fuels could be brought into the economy at an ever-increasing rate, and it stopped because geological limits to fossil fuel extraction put further increases in energy consumption permanently out of reach. Now that fossil fuels are neither cheap nor abundant, and the quest for new energy sources vast and concentrated enough to replace them has repeatedly drawn a blank, we face several centuries of sustained economic contraction—which means that what until recently counted as the groundrules of economics have just been turned on their head.

You will not find many people on Wall Street capable of grasping this. The burden of an outdated but emotionally compelling economic orthodoxy, to say nothing of a corporate and class culture that accords economic growth the sort of unquestioned aura of goodness other cultures assign to their gods, make the end of growth and the coming of permanent economic decline unthinkable to the financial industry, or for that matter to the millions of people in the industrial world who rely on investments to pay their bills. There’s a strong temptation to assume that those 8% per annum returns must still be out there, and when something shows up that appears to embody that hope, plenty of people are willing to rush into it and leave the hard questions for later. Equally, of course, the gap thus opened between expectations and reality quickly becomes a happy hunting ground for scoundrels of every stripe.

Vigorous enforcement of the securities laws might be able to stop the resulting spiral into a permanent bubble-and-bust economy. For all the partisan bickering in Washington DC, though, a firm bipartisan consensus since the days of George W. Bush has placed even Wall Street’s most monumental acts of piracy above the reach of the law. The Bush and Obama administrations both went out of their way to turn a blind eye toward the housing bubble’s spectacular frauds, and there’s no reason to think Obama’s appointees in the Justice Department will get around to doing their jobs this time either. Once the imminent shale bust comes and goes, in other words, it’s a safe bet that there will be more bubbles, each one propping up the otherwise dismal prospects of the financial industry for a little while, and then delivering another body blow to the economies of America and the world as it bursts.

This isn’t merely a problem for those who have investments, or those whose jobs depend in one way or another on the services the financial industry provides when it’s not too busy committing securities fraud to get around to it. The coming of a permanent bubble-and-bust economy puts a full stop at the end of any remaining prospect for even the most tentative national transition away from our current state of dependence on fossil fuels. Pick a project, any project, from so sensible a step as rebuilding the nation’s long-neglected railroads all the way to such pie-in-the-sky vaporware as solar power satellites, and it’s going to take plenty of investment capital. If it’s to be done on any scale, furthermore, we’re talking about a period of decades in which more capital every year will have to flow into the project.

The transition to a bubble-and-bust economy makes that impossible. Bubbles last for an average of three years or so, so even if the bubble-blowers on Wall Street happen by accident on some project that might actually help, it will hardly have time to get started before the bubble turns to bust, the people who invested in the project get burned, and the whole thing tumbles down into disillusionment and bankruptcy. If past experience is anything to go by, furthermore, most of the money thus raised will be diverted from useful purposes into the absurd bonuses and salaries bankers and brokers think society owes them for their services.

Over the longer run, a repeated drumbeat of failed investments and unpunished fraud puts the entire system of investment itself at risk. The trust that leads people to invest their assets, rather than hiding them in a hole in the ground, is a commons; like any commons, it can be destroyed by abuse; and since the federal government has abandoned its statutory duty to protect that commons by enforcing laws against securities fraud, a classic tragedy of the commons is the most likely outcome, wrecking the system by which our society directs surplus wealth toward productive uses and putting any collective response to the end of the fossil fuel age permanently out of reach.

All these are crucial issues. Still, there’s a second point of more immediate importance. I don’t think anybody knows exactly how big the shale bubble has become, but it’s been one of Wall Street’s few really large profit centers over the last three years. It’s quite possible that the bubble is large enough to cause a major financial panic when it bursts, and send the United States and the world down into yet another sharp economic downturn. As Yogi Berra famously pointed out, it’s tough to make predictions, especially about the future; still, I don’t think it’s out of place to suggest that sensible preparations for hard times might be wise just now, and if any of my readers happen to have anything invested in the shale or financial industries, I’d encourage them to consider other options in the fairly near term.

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http://www.blacklistednews.com/Crumbling_Global_Economy_Passes_Point_of_No_Return/24285/0/38/38/Y/M.html

Crumbling Global Economy Passes Point of No Return

As bad as the global economy is right now, it is unfortunately going to get far worse. Many central banks around the world are now racing to devalue their currencies through the implementation of debt monetization programs and low interest rates. Despite statements coming out of the G20 saying otherwise, many insiders and former insiders are fully admitting that there is an on-going global currency war and that this war is accelerating. The Bank of Japan’s recent announcement of a massive bond purchase program is the latest episode in an already sorry state of affairs. It is a historical fact that prosperity has never been obtained by devaluing a nation’s money which makes it all the more insane that the central planners are actually trying to sell the general public on these policies. In fact if monetary devaluation resulted in economic growth, Zimbabwe which recently experienced a period of rampant hyperinflation would easily be the wealthiest nation in the world instead of one of the poorest. Ancient Rome had a strong monetary unit when the nation rose to prominence but degenerated after the ruling powers decided to devalue its coinage. In more recent times both the British Empire and the United States reached great heights when they maintained a sound money system. With this said, you really don’t need to be an economics guru to figure out that the result of today’s monetary policies will eventually result in a complete disaster for the global economy.

Despite all of the absurd propaganda from the major news networks, there is no question that much of the world is in a depression. The only reason there has not been a total collapse of the system is because of the fact that central banks have maintained artificially low interest rates and propped up sovereign bond markets by purchasing bonds with money that they created out of nothing. Taxpayer bailouts, stimulus programs and other nonsense haven’t helped matters either. These policies which were implemented following the crash of 2008 have simply set the world up for a much larger collapse in the future. There would have at least been an outside chance to fix the system had the central planners not intervened but now the situation is becoming increasingly hopeless. Take for example what happened in Iceland immediately following the 2008 financial crisis. The Icelandic people voted against using taxpayer money to prop up failed Icelandic banks. Even though there was a great deal of short term economic pain with foreign depositors and foreign bond holders losing billions, the country is now on the road to recovery.

On the other hand, Ireland which decided to bailout its banking system with taxpayer money is still dealing with the after effects of the crisis. In 2010, Ireland actually had to accept a bailout from the European Union and the International Monetary Fund because the government could no longer afford the burden. Just weeks ago thousands of people rightfully filled the streets of Irish cities protesting against the bank bailouts. Before the bailouts, Ireland had one of the stronger economies in the European Union with one of the lowest debt-to-GDP ratios in Europe. After the bailouts, the Irish economy has struggled even being mentioned in the same breath as Spain and Greece.

Sadly even with all of these monetary stimulus programs, the United States economy is barely treading water. It was recently reported that the U.S. economy shrunk 0.1 percent in Q4 of 2012 according to official numbers from the U.S. Commerce Department. Considering economic statistics from the government are questionable at best, it is quite possible that the real numbers are far worse. If the U.S. economy is actually shrinking with these types of monetary policies in place, it is painfully obvious that the Federal Reserve has no exit strategy from the status quo. Any attempt to defend the value of the U.S. Dollar by suspending debt purchases and raising interest rates would send the economy into a tailspin. Ben Bernanke the Federal Reserve Chairman once famously said that he would throw money out of a helicopter to keep the economy going so we should fully expect him to continue these activities. In fact, we already know through the Federal Reserve’s own policy statements that they will be continuing near zero interest rate policies well into the future. At this point that’s really all they can do since it is politically infeasible for them to tighten the purse strings so they just continue to print more and more money out of nothing.

The Federal Reserve’s bond purchasing programs have effectively fueled a rally in bonds pushing yields of various U.S. government debt instruments towards historical lows. This has fooled people into believing that U.S. government debt is a safe haven play which is astounding on so many levels. The rate of return on these debt instruments is actually negative when factoring in the real rate of inflation. The government and establishment media love to tout the Consumer Price Index or CPI as the ultimate gauge of inflation. However, the CPI doesn’t even include food and energy in its calculation thus making it a completely worthless indicator of true inflation. Maybe if people didn’t eat, didn’t use oil to heat their homes and didn’t fill their automobiles with gasoline the CPI might have some relevance.

In reality, there’s little question that that the CPI is a purposely manipulated figure designed to mislead people into believing that inflation is lower than it actually is. The CPI also provides the basis for cost of living adjustments that directly affects how much money Social Security recipients receive. This allows the government to get away with paying far less than if real inflation was used as the benchmark to calculate these adjustments. The true measure of inflation calculated using the same statistical models used by the U.S. government during the 1970s has inflation closer to 10% on an annual basis. Even if we were to assume that inflation is half of that figure, U.S. Treasury bond holders would still be getting a negative rate of return on their investment.

Cleary, this is a dangerous game that is being played by the world's central banks. Looking specifically at the Fed they announced late last year that they would be purchasing $85 billion worth of securities on a monthly basis for an indefinite period of time until unemployment is substantially reduced. This adds up to roughly $1 trillion worth of bond purchases per year which is approximately what the federal government’s annual budget deficit has been under the Obama regime. The Fed is essentially monetizing enough debt for the federal government to finance its $1 trillion annual budget deficit. In other words they are creating close to $1 trillion new dollars out of nothing and dumping it into the system. The end result is that you have a larger supply of dollars chasing the same goods and services which ultimately means there will be higher prices because each dollar will be worth less.

This policy is essentially an invisible tax on the average person because it robs them of their purchasing power. Combine this with the fact that the Obama regime actually raised taxes on poor and middle class Americans as part of the recent fiscal cliff deal and the additional burden Obama’s universal healthcare plan has placed on businesses and it is no wonder why the economy is sputtering. Not only is the currency being devalued but they are financially damaging the base from which they collect taxes. Evidence of this economic reality can be seen from a leaked internal e-mail from a Wal-Mart Vice President who stated that sales were a total disaster and that February 2013 sales were off to its slowest start in the 7 years he’s been with the company. Since average people now have less purchasing power to buy things with, it shouldn’t be any surprise that we see reports like this.

One would think sanity would prevail and the Obama regime would at least end the costly foreign wars and make a few domestic spending cuts. Since we live in a world where insanity seems to be the prevailing thought process, we are not going to see this happen. At the recent State of the Union speech Obama actually proposed more spending programs including a ridiculous multi-billion dollar universal preschool initiative. With a debt over $16 trillion, unfunded liabilities that some have argued approach $100 trillion or higher and $1 trillion annual budget deficits where do they think they’ll get the money to pay for these new programs? Either this is pure stupidity of the most epic magnitude or they are intentionally trying to destroy what’s left of the economy. Regardless of what you believe, these policies are leading us towards disaster.

As a result of these crazy policies, huge bubbles are being created in the U.S. Treasury bond market, the U.S. stock market and most importantly in the U.S. Dollar itself. Since the Fed is buying an increasing amount of bonds it has artificially propped up the market causing investors to venture into the stock market for greater returns on investment which has resulted in the Dow Jones Industrial Average hitting the 14,000 level. Contrary to what the talking head clowns on CNBC say, this is not the sign of a healthy economy but instead an indicator of gross manipulations by the Fed which has forced investors to take on more risk to achieve any real rate of return. At some point the market is going to reject these policies when fewer and fewer market participants are willing to purchase U.S. Treasury bonds at historically low yields while the U.S. Dollar is simultaneously devalued. This alone will cause the bond bubble to burst, yields to skyrocket and force the U.S. government to pay even more money to service the interest on the debt. Considering that the U.S. government is already having a difficult time making payments to service the debt with historically low yields, any reversal would be extremely problematic.

It is comical that there are still ratings agencies that rate U.S. sovereign debt with a Triple-A status considering the train wreck we are witnessing. S&P which was the one ratings agency that actually downgraded U.S. sovereign debt is now being sued by the U.S. government over inaccurate securities ratings leading up to the 2008 financial crisis. This is not an attempt to defend S&P by any means, but there are a number of questions as to why they are the only ratings agency being sued. All of the big ratings agencies were guilty of grossly exaggerating the quality of different types of securities in the years leading up to the 2008 financial crash. The only thing that differentiates S&P from the other ratings agencies is that they had the nerve to downgrade U.S. sovereign debt. This lawsuit appears to be retaliation against them for that downgrade and nothing else. If this isn’t the case, then why haven’t lawsuits been filed against all of the major ratings agencies? Clearly, each one of them was involved in some sort of chicanery leading up to the crash. With this said, there is no reason to trust what any of these major ratings firms are saying about U.S. sovereign debt. It is highly probable that their ratings of U.S. sovereign debt are being affected by the possibility that the U.S. government would threaten legal action against them if they fail to provide a favorable analysis.

It is also becoming more apparent that the central planners have been suppressing the gold and silver price as part of an effort to maintain the illusion that these debt based currencies still have value. The German Bundesbank recently announced its intention to take delivery of over half of its gold reserves by 2020 from the Fed and other central banks. The main question here is why would it take 7 years to complete this process? China has been buying huge sums of physical gold on the open market and so far have had no logistical problems receiving prompt delivery of their gold. This gives additional credence to the accusations that central banks have been leasing out physical gold as part of a scam to suppress the price. In other words, the gold that Germany is requesting delivery of is no longer available which is why the gold cannot be immediately delivered. In all likelihood, this is why an agreement was struck to deliver the gold over 7 years so the central banks could save face without having to transparently expose the gold manipulation fraud they are engaged in.

Either way, it is quite obvious that the gold and silver markets have both been manipulated for some time now. If you study the daily charts of gold and silver there are often huge price disruptions to the down side that have no fundamental explanation. If other countries follow suit and request physical delivery of their gold, this could put an end to these suppression schemes resulting in a massive upswing in the price of gold.

It is often said that gold goes where wealth is being generated. If we use that as a measuring stick it is clear that wealth is being transferred from the west over to Asia. Specifically of interest is the fact that gold is being purchased in large sums by both the Chinese and Russian governments. There is even speculation that the Chinese are preparing to officially back the Yuan with gold. We also see huge gold demand from India whose gold imports surged 23% this past January. In fact gold demand has been so strong that India just raised taxes on gold imports to try to reduce demand. Unfortunately for the west, these countries that are net buyers of gold are going to be in a very good financial position once the full effect of these debt monetization and low interest policies are felt. Gold is real money and stores value unlike the debt based garbage that these central banks are creating by typing digits into a computer.

There is very little question that the global financial system is at a point where it cannot be repaired. The policies of unlimited money creation that are currently being implemented by the Fed and other central banks are unfortunately going to continue until the entire system collapses. It is now inevitable that there will be a huge crash in the U.S. stock market, the U.S. bond market and eventually the U.S. Dollar. Gold, silver and other precious metals should perform very well as this scenario unfolds so there are safe havens available for people wishing to preserve their wealth. It is unfortunate that the only question remaining now is not if this collapse is going to happen but when this collapse is going to happen.

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http://www.informationclearinghouse.info/article33888.htm

Empire Of Panic And Ephemera: Applying Rigorous Imagination To America's Paranoid Style

"Handsomely equipped to fail, I went out into the world.”
― John Fowles, from The Magus

In the consumer paradigm, one is induced to exist by Eric Hoffer's dictum: "You can never get enough of what you really don't need." Wherein: The individual exists in a state of perpetual adolescence, emotionally oscillating between life lived as a bliss ninny and evincing chronic dissatisfaction.

Ever shifting, inchoate compulsions and endless distractions define the days of the denizens of the consumer state. Text messages and tweets gibber like souls stranded in a limbo realm between the worlds of the living and the damned.

Craving and angst are interwoven. Held by the dazzle of light playing over the surface of a deep abyss, the consumer floats along on waxen wings of debt. The landscape does not seem solid.

Constant craving and callous disregard ascend to the throne room of consciousness in this empire of ephemera. The passions of the heart are circumvented by chronic discontent. In this manic mythos of the eternal moment, consumer items are collected, clutched, and discarded, like the idols and talismans of a dying cult. But there is neither the time nor inclination to erect statues to these gods of the limbic system; the gods exist as ever-reconfiguring constellations of pixels…As noxious as nixies, they hold the senses enthralled as the global, capitalist paradigm sinks beneath a drowning tide of self-created illusion.

Beneath the endless obligation of debt servitude and the manic distractions of the consumer state, an amorphous dread gathers. Shunted aside, it is experienced as free floating, low grade paranoia.

As I place these words to pixel, members of the U.S military sit hunched before computer screens, enacting slaughter by means of predator drone strike. These cubicle-bound soldiers of the consumer state (who have spent their lifetimes within the mass media hologram of late capitalism) regard delivering death from across vast distances as a type of instant, consumerist gratification.

But their actions do not instill a sense of safety within the homeland. Incrementally, it increases the gathering dread; thus, this war-by-remote-control is self-perpetuating: warfare experienced as consumer craving, the mode of mind of a shopping addict, but instead of possessing closets bloated with unneeded consumer items, the empire collects corpses.

Izzy Stone famously averred, "Governments lie."

It is a given, government and corporate insiders scheme and plot. In the days before they had to create the illusion that government officials were responsive to the dictates of the electorate, rulers, their advisors and counselors created deceptive strategies in pursuit of holding and acquiring greater power, in secret, behind closed doors. Withal, their plots were not termed conspiracies; their machinations and attendant acts were called…a day at work.

“Panic is the sudden realization that everything around you is alive.” -- William S. Burroughs, from Ghost of Chance

The U.S. possesses a cheap seats view of reality but skybox level self-deceptions.

A conspiracy-apprehending mode of mind attempts to find connections and detect affinities. In this respect, it is similar to a poetic sense of awareness. Although, this distinction is imperative: a habitually paranoiac perspective must have a tendency toward introspective self-awareness i.e., an ego-leavening element, or it tends to become pathologically self-centered. Thus: An inner conspiracy is locked into place, confining the psyche of the sufferer in a mental realm of self reference – whereby life itself, in its unknowable vastness, threatens to penetrate, causing the fragile ego-construct of the paranoia prone to erect even greater barriers of insularity, thus creating the effect of a psychical room of infinity mirrors.

The U.S. is a paranoid culture. The nation has no foreign enemies posing an existential threat, yet it swoons in collective fear and bristles with the apparatus of the national security state.

The corporate/militarist government of the U.S. is paranoid by nature; therefore, the populace has good reason to be fearful.

It is not a lack of conviction that brings so much suffering to humanity; it is a lack of rigorous imagination.

Rigorous imagination is not the same thing as a desperate need for belief or a tendency to become convinced of the reality of any notion that arrives in your head.

Rigorous imagination allows you to engage in democratic discourse with the disparate beings inhabiting the polis of your psyche, but not be swept away by mob rule or entranced by charismatic, neurotic, or paranoiac characters within you who have a monomaniacal agenda.

These inner characters, gods, animals, and monsters can be helpful to you; it is futile to attempt to repress them. But you must have a grip on them -- or they will have a grip on you.

Ergo, this is the difference between clinging to narrow convictions and a heart-opening, senses-awakening, mind-vivifying embrace of rigorous imagination.

Our convictions, beliefs, and motives have been formed from a mixture of apprehensions (sprung from seeds of bias) and misapprehensions (that contain a tiny measure of truth). Generally, what we term thinking and knowing is, more often than not, an autonomous process -- an unconscious seeking of affinities -- a mating dance of known quantities and recognizable possibilities allowing one to view the world as the unfolding of the plausible -- a trek across recognizable, navigable terrain -- and not a bewildering bog of proliferating novelty, lacking both familiar landmark and the lexicon of a known tongue.

As a people, what is our legacy to future generations? Depressing, isn't it? Ecocide. Debt slavery. War without end. A social milieu in which privileged psychopaths not only thrive but decide the fate of the multitudes.

Let's take a digressive scan of the known landscape of the late capitalist era where there exists a desperate campaign by the economic elite to have the floundering system be accepted as not only viable -- but the only rational option available to all concerned. Yet a predominance of evidence stands to the contrary. Withal, the present economic system can only maintain the illusion of viability -- growing ever tenuous by the hour -- by lurching from market bubble to market bubble, in combination with governmental infusions of trillions upon trillions of dollars, as well as the complicity of the corporate media and government officialdom in the swindle (swindles past and ongoing) by abandoning their roles as advocates for the many and assuming the position of operatives of a moneyed elite.

Whistleblowers, dissidents -- all of those who harbor a proclivity to apprehend the true nature of the circumstances that the forces of self-serving power have wrought and ruthlessly strive to maintain -- innately carry within and speak a language that is both alien and threatening to the status quo.

Opening oneself to one's condition, even when the criteria is depressing, allows one to open a window to the verities of the heart and gaze upon a kind of beauty that is both awful and awe inspiring. Thus: One is called upon, regardless of the degree of success or the extent of failure, to attempt to align these visions as a corrective to culture.

Circumstances do not change unless perceptions change. Accordingly, the big lie promulgated by the elite of our corrupt era is...there is something wrong with an individual who will not or cannot accept their version of events.

On a personal basis, I am deficient in those qualities that would allow me to adapt to the conventions of our age.

Yet, through it all, a mutant seed, nourished by the composting convictions of our culture, dreams within my soul, that contains a blueprint that will allow me to live my way into the unknowable future.

In the final years and the concomitant, violent death throes of the corporate/consumer paradigm, the compulsive pursuit of happiness brings the opposite effect: insatiable craving, chronic dissatisfaction, panic, paranoia, nettling resentment, burnout, and disillusionment. Instead, try this: embrace the inherent sorrow that comes at the end of things: The blank countenance of an indifferent winter sky; the spiraling dance of the ashes of prior convictions in a clashing cross breeze; the manner that trees, buildings, birds rise from the earth like musical notes.

You can attempt to check-out i.e., approach life, as people in the U.S. do, as virtuosos of reality avoidance -- but reality knows your home address: the human psyche. Your psyche is with you for life. You cannot drop off your psyche at an Interstate rest stop, and drive away. Glance in the rear view mirror and it will be lounging in the backseat of your vehicle tapping its foot to the music swelling from the car radio.

You can no more discard the psyche than rid yourself of its organ of expression -- the human heart -- by storing it in a deep freeze. The images of the psyche pulse through your veins.

Neglect of the psyche causes it to become a thief in the night that, by stealth, steals back into consciousness, and is misapprehended as a home invasion…of which, a private arsenal, no matter its degree of firepower, would prove of zero use in warding off.

It is anathema to the human heart for one to imagine oneself as being primarily an economic animal whose fate is yolked to the crackpot pragmatist's bottom line-fetishizing mindset of late capitalist feudalism.
In contrast, by living among…by conversing, collaborating, grappling…being moved, mortified, and transfigured by the images dwelling in the polis and the ecosystem of my heart (also known as the imagination) -- I become myself, by losing myself. The shackles of the first person singular have been lightened, allowing me to wend in the direction of my calling.

By means of rigorous imagination, one must seek collaboration with the figures populating the landscape of the psyche. Because: how is it possible to navigate the bewildering terrain of one's fate alone?

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http://www.blacklistednews.com/Guest_Post%3A_ALL_IS_WELL%21%21%21/24087/0/0/0/Y/M.html

ALL IS WELL!!!

“Facts do not cease to exist because they are ignored.” – Aldous Huxley

I woke up this past Saturday morning and opened my local paper to find out that all was well. An Associated Press article declared a healthy jobs market, fantastic auto sales, a surging housing market, and a stock market rocketing to new all-time highs. What’s not to love? If the mainstream media says the economy is as good as new, it must be so. Why should we let facts get in the way of a good storyline? The stock market has surged to 2007 highs, so the country’s employment situation must be strong.

The chart above tells a slightly different story. The S&P 500 has regained almost all its losses since October 2007 as Bernanke and Washington politicians chose to save Wall Street and screw over Main Street. The working age population has risen by 12.8 million since 2007 and there are 4 million less Americans employed. The December Household Survey from the BLS being touted by the mainstream media as proof of a jobs recovery told a slightly different story:

The number of unemployed Americans went up by 126,000 in one month
Another 169,000 Americans left the workforce evidently because their stock market gains made them wealthy.
There are 250,000 more Americans unemployed than there were in September 2012.
There are 6,000 less Americans employed than there were in October 2012.
The unemployment rate reported to the masses went up to 7.9% (the true rate reached 23%).
This is just the picture over the last few months. The picture since 2007 is beyond horrific, as more than 10 million Americans have left the workforce. Everyone knows people willingly leave the labor force when the economy crashes and their net worth is reduced by 30%. Who needs a paying job then? Just because there are 101 million working age Americans not working and the labor participation rate of 63.6% is at a three decade low, certainly doesn’t mean we aren’t experiencing a tremendous jobs recovery, according to the mainstream media.

The deep thinkers at CNBC, Fox, CNN and the rest of the captured corporate status quo mouthpieces, propagate the false storyline that the reason for Americans leaving the workforce is Baby Boomers retiring. Considering the average Boomer has $90,000 of total savings and 28% of them have less than $1,000 saved, I suspect there are few willingly leaving the workforce. The Boomers have taken on 4 million additional jobs since the low point in 2009, while the 16 to 54 year olds have lost an additional 2.9 million jobs. Does this reflect a strengthening jobs market? Does the fact that real hourly wages have fallen for the last two years reflect an improving labor market?

Inquiring minds might wonder how auto sales could be booming when there are 4 million less employed Americans and real wages are falling. Of course, mainstream media faux journalists aren’t paid to inquire, think critically, or even think at all. They are paid to regurgitate propaganda designed to keep the masses sedated and ignorant. The “fabulous” rebound in auto sales has been buoyed by the return of easy money lending, even to deadbeat borrowers with lousy credit histories. There is a reason the Federal government hasn’t attempted to spin off their 80% control of Ally Financial (aka GMAC, Ditech, Rescap). The Feds are attempting to manufacture a recovery by doling out subprime auto loans to anyone who can scratch an X on a loan document and offering 0% loans over 7 years to good credits. How exactly does a finance company generate a profit by making 0% loans for seven years and approving loans to people with no means of paying them back? Experian recently noted that 44% of ALL auto loans have been to subprime borrowers over the last year. When a financing company doesn’t have to worry about profits or loan losses, everyone gets a Cadillac Escalade. The losses on these subprime loans will be in the billions when the next leg down in this Crisis hits. The taxpayer will unknowingly pick up the tab, just as they have been doing for the last five years. The trend in this chart is nothing but a Federal government induced fraud.

PhD in Stupidity

The Federal government induced sham auto recovery is small peanuts compared to the bubble they are blowing in the higher education realm. Since the Federal government took over 85% of the student loan market in 2009, the debt outstanding has surged to over $1 trillion from below $600 billion. The Feds don’t care about credit risk or loan losses. You’re on the hook for the losses. The purpose for doubling the amount of student loans was to artificially lower the unemployment rate by removing as many people from the labor force as possible. The 600,000 University of Phoenix enrollees getting their on-line master’s degrees in basket weaving while sitting in their mother’s basement, subsidized with $20,000 loans from the taxpayer, didn’t count as unemployed.

Enrollment in these diploma mills has begun to plunge, as the scam has been revealed. The New York Times reported that:

“Enrollments at the University of Phoenix and in the for-profit sector over all have been declining in the last two years, partly because of growing competition from other online providers, including nonprofit and public universities, and a steady drumroll of negative publicity about the sector’s recruiting abuses, low graduation rates and high default rates … including many charges that the schools enrolled students who had almost no chance of succeeding, to get their federal student aid.”

Enrolling students who have no chance of graduating is exactly what the Obama Administration and the status quo want.

Based upon the chart below you would think the United States is producing the brightest bunch of young people in U.S. history. Nothing could be further from the truth. Only 43% of the 1.66 million private and public school students who took the college-entrance exam posted scores showing they are prepared to do well in college, according to data released by the College Board, the nonprofit group that administers the SAT. The SAT data mirror scores from the ACT college-entrance exam which showed about 75% of students failed to meet college-readiness standards. If SAT scores are at decade lows, how could college enrollment be at record highs? Our government controlled public school system is graduating functionally illiterate dullards and the government is then subsidizing these subprime students as they matriculate into substandard colleges across the land. Approximately 3.4 million seniors are graduating from our high schools every year. The 1.66 million seniors who took the SAT exam are the cream of the crop. If the 50% of students who took the SAT exam could score so pitifully, imagine how dimwitted the 50% of students who didn’t even take the exam must be. The upshot of these tests are that only 700,000 of all the graduating high school seniors (21%) are capable of getting a B minus or above in college.

Think about that for one second. Only 21% of all graduating high school seniors are intelligent enough to get a B minus in college, but 70% of them are enrolling in college. Of course enrolling in college and graduating college are two different things. Only 30% actually graduate college. The other 40% get drunk, fornicate, sleep late, fail, rack up gobs of debt, and then drop out. There are approximately 13 million 18 to 24 year olds enrolled in college today and at least 6 million of them have little to no chance of graduating. If the Federal government was not subsidizing them with loans, they would rightfully be looking for jobs geared to their intellectual capabilities. Would tuition rates be soaring if there were 6 million less drones matriculating into one of the 4,000 mostly mediocre higher learning institutions in this country?

The Federal government bureaucrats who think they can control the levers of finance to steer our economy to greater heights are creating a new subprime bubble. The absolute implosion of the for profit diploma mills, that have fed like bloated pigs at the Federal loan trough, is the Bear Stearns moment for the massive student loan losses that will be foisted on the shoulders of the American taxpayer. The deceptive schemes, fraud, and financial aid manipulation practices of the publicly traded diploma mills – Corinthian Colleges (down 90%), ITT (down 90%), Apollo Group (down 80%) and DeVry (down 60%) have been revealed, as their ill- gotten profits have evaporated and their stock prices have crashed. Enrollment at the king of worthless online degrees, the University of Phoenix, has plunged from 600,000 to 400,000 and they are closing 115 of their 227 campuses. The proof that much of the student loan bubble has been created by these for-profit shysters can be seen by the fact that 60% of all student loans are owed by people over 30 years old, with 33% owed by people over 40 years old. These people bought into the re-training fallacy perpetuated by government drones and mainstream media mouthpieces.

But still the Federal government continues to blow the bubble bigger and bigger as non-revolving consumer debt has reached all-time highs. Peter Thiel recently compared this bubble to the housing bubble we are still dealing with:

“We have a bubble in education, like we had a bubble in housing…everybody believed you had to have a house, they’d pay whatever it took. Today, everybody believes that we need to go to college, and people will pay– whatever it takes. There are all sorts of vocational careers that pay extremely well today, so the average plumber makes as much as the average doctor. I did not realize how screwed up the education system is. We now have $1 trillion in student debt in the U.S. Cynically you can say it’s paid for $1 trillion of lies about how good education is.”

Delinquency rates have already begun to skyrocket as the diploma mill scam implodes, dropouts can’t make loan payments with their EBT cards and even graduates from legitimate colleges are stuck waitressing at TGI Fridays and can’t make their payments. Millions of millenials are ensnared in the chains of debt servitude, with no chance of escape.

Delinquency rates on student loans made in the past two years stand at 15%, according to FICO, versus 12.4% for loans made from 2005 to 2007. This is proof that loans doled out since the Federal government took control of the market have been distributed willy-nilly in a frantic effort to artificially reduce the unemployment rate. Average student- loan debt last year rose to $27,253 from $17,233 in 2005, with almost 605 of bank managers surveyed in December expecting delinquencies to worsen in six months, according to FICO. Andrew Jennings, chief analytics officer of Fair Issac, said in a statement:

“This situation is simply unsustainable and we’re already suffering the consequences. When wage growth is slow and jobs are not as plentiful as they once were, it is impossible for individuals to continue taking out ever-larger student loans without greatly increasing the risk of default.”

When subprime mortgages blew up, at least there was collateral to alleviate some of the losses. When the subprime auto loans blow up, at least there will be vehicles to repossess. Student loan debts are the ultimate in subprime, with no collateral and millions of jobless debtors. The situation is much worse than the delinquency numbers reveal. More than half of the student loans are in deferment, grace periods, or forbearance, meaning they are not currently requiring repayment. This means the true delinquency rates are twice as high as the reported figure of 15%. What happens next can be succinctly summed up by the esteemed economist John Kenneth Galbraith:

“Then the shit hit the fan.” – John Kenneth Galbraith

The involuntary taxpayer bailout for this Federal Government created disaster will exceed $200 billion after the shit is done hitting the fan.

Do You Want Pepperoni on that Housing Recovery?

Everywhere I turn I’m hearing about the strong housing recovery that is propelling our economy, generating jobs and spurring a resurgence in retail spending by the millions of deleveraged consumers. Wall Street paid economists on CNBC, NYT economic “journalists”, and even the Fox News blond bimbo brigade all assure me the housing market is in a strong recovery and it’s the best time to buy. There are just two small problems with the story. None of the propaganda spouted by the mouthpieces of the kleptocracy is supported by the facts. And what little uptick in sales and prices that has occurred is due to collusion, fraud and manipulation by Wall Street, the Federal Reserve, the Treasury Department, and connected crony corporate interests.

I challenge anyone to show me the tremendous housing recovery on the new home sales chart below. New homes sales have “surged” to an annual pace of 369,000, only 74% below the 2006 peak and about 50% below the long term average. New home sales fell in December at the fastest rate since February 2011. Existing home sales also fell in December, are pacing at 1999 levels, and are still 30% below 2006 levels. In a country of 115 million households, with mortgage rates at all-time lows, there were a total of 26,000 new homes sold in December, and only 10,000 of them were actually built. For some perspective, new home sales are at the same level as they were in 1967 when the U.S. population was 200 million.

The kleptocrats’ master plan has multiple dimensions designed to lure unsuspecting dupes back into the market. The Federal Reserve has bought over $1 trillion of toxic mortgage debt, freeing the criminal Wall Street banks to start raping the American public again. Bernanke has driven mortgage rates to near all-time lows by tripling his balance sheet, with promises to quadruple it before the end of the year. By driving real interest rates below zero Bernanke has the dual purpose of driving people into the stock market for a positive return and luring “investors” into the housing market.

The Wall Street part of this grand scheme has been to delay the foreclosure process on millions of homes, thereby restricting the amount of inventory on the market. By artificially creating an inventory “shortage”, they have been able to drive prices higher, with the purpose of trying to get the 25% of underwater homeowners back to breakeven. The Treasury Department, through their captured entities (Fannie, Freddie, FHA) are guaranteeing 95% of all mortgages, with the FHA requiring only 3.5% down payments, with the hundreds of billions in present and future losses being incurred by the American taxpayer. You’ve heard of the cycle of life. This is the government cycle of fraud.

The last part of the plan has been to lure investors into the market. Fannie Mae and Freddie Mac have sold huge blocks of foreclosed homes to connected friends of Wall Street at below market rates so they could convert them to rental properties. This has further artificially reduced inventory available for sale, and jacked up prices by as much as 20% in the former bubble markets of Phoenix, Las Vegas and California. Investors and flippers account for 30% of all home sales, with another 24% of home sales listed as distressed sales. Sure sounds like a healthy market to me. With this full court press by the powers that be to produce a housing recovery, the chart below reveals the utter ineptitude of their effort. Real home prices, even using the fake government manipulated CPI, have barely budged from their lows and sit at 1990 levels. Real home prices are still down 40% from their 2006 highs.

If a true housing recovery was underway how could mortgage purchase applications be at 1997 levels? If housing was recovering there would be more mortgage applications. It really is that simple. Do supposed journalists have any critical thinking skills or are they just playing their assigned role in this kleptocracy?

Essentially, the kleptocrats’ primary purpose has been to protect and enhance the wealth of the oligarchs that control Wall Street, Washington DC, and corporate America. They have achieved their goal, while destroying the middle class and sentencing unborn generations to a life sentence of debt servitude.

If we have been experiencing a solid jobs recovery, strong automobile sales, a resurgence of consumer spending, and rising home sales and home prices, how could GDP be negative in the 4th quarter? The mainstream media immediately declared it the best negative GDP of all-time. They pompously declared that GDP would have been positive if government defense spending hadn’t plummeted. These disgraceful excuses for journalists failed to mention the huge surge in government and defense spending in the 3rd quarter just prior to the presidential election that accounted for a 3.1% GDP and helped get Obama re-elected. A less trusting person than myself might question why the surge in government spending prior to the election.

Did the mainstream media government mouthpieces question the absolutely laughable 0.60% inflation rate used to calculate the 4th quarter GDP? No they didn’t. That wouldn’t support their storyline of recovery. Using even the bastardized CPI figure of 2.0% would have produced a -1.5% GDP figure. Using real inflation figures over time reveals what every middle class family in America knows in their bones – the economy has essentially been in recession since the early 2000s. The massive dose of debt issued by the government has masked the true nature of our economic decline.

All is not well. Any awake and aware citizen knows the economic, financial, societal and social fabric of this country is in tatters, and is getting progressively worse by the day. Since this supposed economic recovery began in mid-2009, the country has added 4 million jobs, more than 100% of which went to workers over the age of 55, forced into the workforce by Bernanke’s zero interest rate policy. Over this same time frame of economic recovery, 16 million Americans went on food stamps. How could this possibly happen if the economy has been recovering? Either the government and mainstream media are lying about the economic recovery or the Obama administration has been fraudulently encouraging people to go on food stamps to win votes in elections. Which of these truths is more palatable to your sensibilities?

It comes down to this. The monied interests, high financiers, corporate interests, captured politicians, government apparatchiks, and corporate media have a vested interest in maintaining the corrupt and destructive status quo. They have become rich and powerful through their manipulation of the currency, ravenous sacking of the national wealth, destruction of the working middle class, and ability to use mass media propaganda to convince the willfully ignorant masses to learn to love their debt servitude. Our once proud, liberty minded, self-sufficient nation of freedom loving individuals has devolved into a kleptocracy, where a small cadre of powerful men run the show solely to increase the personal wealth and political power of officials and the ruling class at the expense of the wider population. They are essentially running a state sponsored embezzlement and Ponzi scheme to pillage the wealth of the dumbed down, sedated, technologically distracted masses. Our entire system has been captured and we are entering the final stages of decay and ultimately a day of reckoning where the guilty and innocent alike will suffer the awful consequences of currency collapse, death and destruction on a wide scale, and likely civil and world war.

“The Fed is now engaged in a control fraud, and what appears to be racketeering in conjunction with a few big investment banks. They may have entered into it with good intentions, but they seem to have been turned towards deceit and corruption. This is not an historical event, but an ongoing theft in conjunction with a number of Wall Street banks, and politicians whom they have paid off through a corrupt system of campaign financing and influence peddling. This is nothing new in history if one reads the un-sanitized version. But people never think it can happen today, that somehow yesterday things were different, as if one is looking at some distant, foreign land. This is a facet of the illusion of general progress.

We are now in the cover-up stage of a scandal, similar to Watergate when the White House was stone-walling. The difference is that the corruption and capture of the government is much more pervasive now, and includes a significant portion of the mainstream media, so meaningful reform is difficult. Most of what has transpired so far has been designed to distract and placate the people in their righteous anger. The Fed deceives the Congress and the public, turns a blind eye to glaring conflicts of interest, and is essentially debasing the currency while transferring the wealth of the nation to their cronies. And still the regulators do not enforce the laws they have, and Washington drags its feet while accepting buckets of cash from the perpetrators.” – Jesse

The entire system is corrupt to its core. Both political parties, regulatory agencies, Wall Street, the Federal Reserve, and mainstream media are participants in this enormous fraud. They grow more desperate and bold by the day. The lies, misinformation and propaganda being spewed on a daily basis become more outrageous and audacious. They are using the Big Lie method on a grand scale. They frantically need to lure the muppets into the stock market and the housing market to keep the game going a little longer. You can sense we are reaching a tipping point. The system they have created is mathematically unsustainable. Therefore, it will not be sustained. The world is going mad. Governments across the globe are all trying to out debase each other. Austerity and inflation for the peasants and caviar and champagne for the Davos class is the chosen path. All is not well. Ben Bernanke and the oligarchs running the show will be immortalized in history books forever when this farce comes to a spectacular conclusion.

“If all else fails, immortality can always be assured by spectacular error.” – John Kenneth Galbraith

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http://www.blacklistednews.com/The_U.S._Government_Is_Preparing_For_War_Against_The_American_People/24130/0/38/38/Y/M.html

The U.S. Government Is Preparing For War Against The American People

At this point there should be very little doubt that the United States government is preparing to wage war against its own people. Earlier this week, news broke about how the Obama regime through the Department of Justice is claiming in a memorandum that they have the power to use drone strikes to kill American citizens under the guise of the so-called war on terror. In fact, the memorandum claims through the use of vague language that they have the power to kill Americans even if they do not have any sort of actionable intelligence confirming that they pose a threat. It has been proven time and time again that the war on terror is a hoax used as a tool to justify endless war and draconian anti-freedom policies domestically. The official story of nearly every alleged terror event that has transpired in the 21st century has been torn apart and criticized by many independent researchers. Not to mention, Al-Qaeda the shadowy terror organization we are constantly told that wants to kill Americans, actually originated from within American intelligence circles. We have also seen the United States, Israel and other Western governments financing and supporting Al-Qaeda type entities. Western support of Al-Qaeda linked rebel groups in both Libya and Syria is well documented and shows what a big joke the war on terror is.

It is no secret that the Department of Homeland Security was originally setup as a force to be used domestically against the American people. In the early 2000s, propaganda was used to sell the formation of this organization as a more effective way to protect the American people from Al-Qaeda. Over time this has been proven to be a complete and total lie considering all of their policies have been directed towards the American people instead of so-called foreign Al-Qaeda terrorists. They’ve left the border wide open, setup unconstitutional checkpoints at airports with naked body scanning devices and have even gone so far as to setup unlawful security checkpoints at bus stations, highways and train stations. In 2012 they purchased 1.6 billion rounds of ammunition and just recently ordered another 21.6 million rounds of ammunition to add to their stockpile. The amount of ammunition that they have ordered is enough to wage a war for many years. Since they are not a military organization and they are based domestically here in the United States, it doesn’t take a rocket scientist to figure out that the ammunition is being stored in case they need to use it against the American people. This is all happening at the same time Congress is attempting to shove through several gun control laws that would restrict the average American from purchasing firearms and ammunition. Since the Obama regime and the assorted control freaks in Congress are attempting to dismantle the second amendment on every front, it is entirely hypocritical to see them purchase such a large amount of ammunition.

Going back to the DOJ drone memorandum, the White House Press Secretary Jay Carney actually referred to the policy as legal, ethical and wise. Essentially the Obama regime is claiming that it is lawful and ethical for them to exercise the power of judge, jury and executioner against an American citizen through a drone strike just because they say a person represents a threat. As mentioned previously, they are claiming that they don’t need to have any sort of concrete actionable intelligence. They are basically saying that they can just kill you just because they believe you represent a threat. This is the type of behavior that you would see from war criminals. In fact, numerous reports have confirmed that some of these Obama ordered drone strikes have actually killed innocent women in children proving that they are war criminals. Of course we never saw Obama or the corporate media attempt to humanize the death of the people they killed in these drone strikes in foreign countries. That’s because they’ll only humanize an event if it benefits their agenda. This is why Obama used the alleged Sandy Hook shooting incident and staged a public relations stunt with children when he signed his executive orders on gun control. Humanizing that event enabled them to push their ridiculous gun control program.

Deputy National Security Advisor for Homeland Security and Counterterrorism John Brennan who is widely considered to be the architect of this disgusting drone strike program has been nominated by Obama to be the next Director of the Central Intelligence Agency. Apparently if you agree to participate and engage in war crimes you are elevated to positions of greater authority within the Obama regime.

Let’s not forget that prior to the Obama regime coming into power; the Bush 43 regime implemented U.S. Northern Command which currently claims military authority over North America. This is an institution that would absolutely be unleashed against the American people in the case of mass civil strife. There has even been a bill proposed to implement FEMA camps under the guise of National Emergency Centers in Congress. This would actually help expand the number of government run facilities that are capable of being used to house large numbers of people. Essentially, we are talking about facilities that could be used as concentration camps. Although this particular bill has yet to be officially passed, it was actually just proposed again in the U.S. House of Representatives.

So why is the federal government doing all of these things? The answer is actually very simple. It is no secret that the economy around the world is having severe problems. In the United States there are roughly 50 million people now on food stamps. Students graduating college find themselves in debt and can’t find a decent paying job. Inflation is running wild because of 0% interest rate policies and rampant monetization of debt from the Federal Reserve as well as out of control spending from the criminals in Washington DC. As a result, the cost of goods and services is going through the roof despite absurd claims that inflation is low. People are having an increasingly difficult time getting by and the American middle class is being systematically destroyed because of these policies. It is obvious that this economic system is unsustainable and when the day of reckoning comes, you are going to have millions of angry people out on the streets. Therefore, it is in the interest of the power structure to buy vast quantities of ammunition, set legal precedence for drone strikes against American citizens, expand the authority of the Department of Homeland Security and implement whatever gun control laws they can push through.

There will be a day when the economic system completely unravels and when that happens, millions of Americans who are currently obsessed with breads and circus spectacles, reality television and other junk will immediately become aware of how badly they’ve been screwed. They will direct their anger and outrage towards the federal government and this is why they are preparing for war against the American people. The chances of a civil war happening in the United States is unquestionably becoming a more likely possibility by the day especially when there is zero possibility of any real change happening in Washington DC.

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http://www.truthdig.com/report/item/breaking_the_chains_of_debt_peonage_20130203/

Breaking the Chains of Debt Peonage

The corporate state has made it clear there will be no more Occupy encampments. The corporate state is seeking through the persistent harassment of activists and the passage of draconian laws such as Section 1021(b)(2) of the National Defense Authorization Act—and we will be in court next Wednesday to fight the Obama administration’s appeal of the Southern District Court of New York’s ruling declaring Section 1021 unconstitutional—to shut down all legitimate dissent. The corporate state is counting, most importantly, on its system of debt peonage to keep citizens—especially the 30 million people who make up the working poor—from joining our revolt.

Workers who are unable to meet their debts, who are victimized by constantly rising interest rates that can climb to as high as 30 percent on credit cards, are far more likely to remain submissive and compliant. Debt peonage is and always has been a form of political control. Native Americans, forced by the U.S. government onto tribal agencies, were required to buy their goods, usually on credit, at agency stores. Coal miners in southern West Virginia and Kentucky were paid in scrip by the coal companies and kept in perpetual debt servitude by the company store. African-Americans in the cotton fields in the South were forced to borrow during the agricultural season from their white landlords for their seed and farm equipment, creating a life of perpetual debt. It soon becomes impossible to escape the mounting interest rates that necessitate new borrowing.

Debt peonage is a familiar form of political control. And today it is used by banks and corporate financiers to enslave not only individuals but also cities, municipalities, states and the federal government. As the economist Michael Hudson points out, the steady rise in interest rates, coupled with declining public revenues, has become a way to extract the last bits of capital from citizens as well as government. Once individuals, or states or federal agencies, cannot pay their bills—and for many Americans this often means medical bills—assets are sold to corporations or seized. Public land, property and infrastructure, along with pension plans, are privatized. Individuals are pushed out of their homes and into financial and personal distress.

Debt peonage is a fundamental tool for control. This debt peonage must be broken if we are going to build a mass movement to paralyze systems of corporate power. And the most effective weapon we have to liberate ourselves as well as the 30 million Americans who make up the working poor is a sustained movement to raise the minimum wage nationally to at least $11 an hour. Most of these 30 million low-wage workers are women and people of color. They and their families struggle at a subsistence level and play one lender off another to survive. By raising their wages we raise not only the quality of their lives but we increase their capacity for personal and political power. We break one of the most important shackles used by the corporate state to prevent organized resistance.

Ralph Nader, whom I spoke with on Thursday, has been pushing activists to mobilize around raising the minimum wage. Nader, who knows more about corporate power and has been fighting it longer than any other American, has singled out, I believe, the key to building a broad-based national movement. There is among these underpaid 30 million workers—and some of them are with us tonight—a mounting despair at being unable to meet even the basic requirements to maintain a family. Nader points out that Walmart’s 1 million workers, like most of the 30 million low-wage workers, are making less per hour, adjusted for inflation, than workers made in 1968, although these Walmart workers do the work required of two Walmart workers 40 years ago.

If the federal minimum wage from 1968 were adjusted for inflation it would be $10.50. Instead, although costs and prices have risen sharply, the federal minimum wage remains stuck at $7.25 an hour. It is the lowest of the major industrial countries. Meanwhile, Mike Duke, the CEO of Walmart, makes $11,000 an hour. And he is not alone. These corporate chiefs make this much money because they have been able to keep in place a system by which workers are effectively disempowered, forced to work for substandard wages and denied the possibility through unions or the formal electoral systems of power to defend workers’ rights. This is why corporations lavish these CEOs with obscene salaries. These CEOs are the masters of plantations. And the moment workers rise up and demand justice is the moment the staggering inequality of wealth begins to be reversed.

Being a member of the working poor, as Barbara Ehrenreich chronicles in her important book “Nickel and Dimed,” is “a state of emergency.” It is “acute distress.” It is a daily and weekly lurching from crisis to crisis. The stress, the suffering, the humiliation and the job insecurity means that workers are reduced to doing little more than eating, sleeping—never enough—and working. And, most importantly, they are kept in a constant state of fear. Ehrenreich writes:

" When someone works for less pay than she can live on—when, for example, she goes hungry so that you can eat more cheaply and conveniently—then she has made a great sacrifice for you, she has made you a gift of some part of her abilities, her health, and her life. The “working poor,” as they are approvingly termed, are in fact the major philanthropists of our society. They neglect their own children so that the children of others will be cared for; they live in substandard housing so that other homes will be shiny and perfect; they endure privation so that inflation will be low and stock prices high. To be a member of the working poor is to be an anonymous donor, a nameless benefactor, to everyone else "

It is time to halt the sacrifice of the working poor. It is time to empower the 30 million low-wage workers—two-thirds of which are employed by large corporations such as Walmart and McDonald’s—to fight back.

Joe Sacco and I spent the last two years in the poorest pockets of the United States, our nation’s sacrifice zones, for our book “Days of Destruction, Days of Revolt.” We saw in Pine Ridge, S.D., Camden, N.J.—the poorest and the most dangerous city in the nation—the coalfields of southern West Virginia and the produce fields of Immokalee, Fla., how this brutal system of corporate exploitation works. In these sacrifice zones no one has legal protection. All institutions, from the press to the political class to the judiciary, are wholly owned subsidiaries of the corporate state. And what has been done to those in these sacrifice zones, those places corporations devastated first, is now being done to all of us.

There are no impediments within the electoral process or the formal structures of power to prevent predatory capitalism. We are all being forced to kneel before the dictates of the marketplace. The human cost, the attendant problems of drug and alcohol abuse, the neglect of children, the early deaths—in Pine Ridge the average life expectancy of a male is 48, the lowest in the Western Hemisphere outside of Haiti—is justified by the need to make greater and greater profit. And these costs are now being felt across the nation. The phrase “the consent of the governed” has become a cruel joke. We use a language to describe our systems of governance that no longer correspond to reality. The disconnect between illusion and reality makes us one of the most self-deluded populations on the planet.

The Weimarization of the American working class, and increasingly the middle class, is by design. It is part of a corporate reconfiguration of the national and global economy into a form of neofeudalism. It is about creating a world of masters and serfs, of empowered oligarchic elites and broken disempowered masses. And it is not only our wealth that is taken from us. It is our liberty. The so-called self-regulating market, as the economist Karl Polanyi wrote in “The Great Transformation,” always ends with mafia capitalism and a mafia political system. This system of self-regulation, Polanyi wrote, always leads to “the demolition of society.”

And this is what is happening—the demolition of our society and the demolition of the ecosystem that sustains the human species. In theological terms these corporate forces, driven by the lust for ceaseless expansion and exploitation, are systems of death. They know no limits. They will not stop on their own. And unless we stop them we are as a nation and finally as a species doomed. Polanyi understood the destructive power of unregulated corporate capitalism unleashed upon human society and the ecosystem. He wrote: “In disposing of a man’s labor power the system would, incidentally, dispose of the physical, psychological, and moral entity ‘man’ attached to the tag.”

Polanyi wrote of a society that surrendered to the dictates of the market. “Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as victims of acute social dislocation through vice, perversion, crime, and starvation. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed. Finally, the market administration of purchasing power would periodically liquidate business enterprise, for shortages and surfeits of money would prove as disastrous to business as floods and droughts in primitive society. Undoubtedly, labor, land, and money markets are essential to a market economy. But no society could stand the effects of such a system of crude fictions even for the shortest stretch of time unless its human and natural substance as well as its business organizations were protected against the ravages of this satanic mill.”

The global and national economy because of this “satanic mill” continues to deteriorate, and yet, curiously, stock market levels are close to their highs in 2007 before the global financial meltdown. This is because these corporations have been able to suppress wages, slash social programs and bilk the government for staggering sums of money. The Federal Reserve purchases about $85 billion worth of mortgage-backed securities and Treasury bills every month. This means that the Fed is printing endless streams of money to buy up government debt and toxic assets from the banks. The Federal Reserve now owns assets, much of them worthless, of $3.01 trillion. This is triple what it was in 2008.

And while corporations such as Citibank and General Electric loot the Treasury they exact more pounds of flesh in the name of austerity. General Electric, as Nader points out, is a net job exporter. Over the past decade, as Citizens for Tax Justice has documented, GE’s effective federal income tax rate on its $81.2 billion in pretax U.S. profits has been at most 1.8 percent. Because of the way General Electric’s accountants play with tax liabilities the company actually receives money from the Treasury. They have several billion dollars paid to them from the federal government into company bank accounts—and these are not tax refunds. The company, as Nader argues, is a net drain on the Treasury and a net drain on jobs. It violates a host of environmental and criminal laws. And yet Jeffery Immelt, the CEO of General Electric, was appointed to be the chairman of Obama’s Jobs Council. Immelt’s only major contribution to the jobs initiative was to get rid of 37,000 of his employees since 2001. Jim McNerney, president and CEO of Boeing, who also sat on the Jobs Council, has cut over 14,000 jobs since 2008, according to Public Campaign. The only jobs the CEOs on the Jobs Council were concerned with were the ones these CEOs eradicated. The Jobs Council, which Obama disbanded this week, is a microcosm of what is happening within the corridors of power. Corporations increasingly terminate jobs here to hire grossly underpaid workers in India or China while at the same time stealing as much as fast as they can on the way out the door.

As Michael Hudson has pointed out, financialization has created a new kind of class war. The old class warfare took place between workers and bosses. Workers organized to fight for fair wages, better work hours and safety conditions in the workplace as well as adequate pensions and medical benefits. But with a country of debtors and a government that must also borrow to continue operating, Hudson says, we have changed the way class warfare works. Finance, he points out, controls state and federal policy as well as the lives of ordinary workers. It is able to dictate working conditions. The financiers, who insist that cuts be made so governments can repay loans, impose draconian austerity and long-term unemployment to, as Hudson told a Greek newspaper, “drive down wages to a degree that could not occur in the company-by-company clash between industrial employers and their workers.”

The former Federal Reserve Chairman Alan Greenspan, testifying before Congress, was quite open about the role of debt peonage in keeping workers passive. Greenspan pointed out that since 1980 labor productivity has increased by about 83 percent. Yet real wages have stagnated. Greenspan said this was because workers were too burdened with mortgage debts, college loans, auto payments and credit-card debt to risk losing a job. Household debt in the United States is around $13 trillion. This is only $2 trillion less than the country’s total yearly economic output. Greenspan was right. Miss a payment on your credit card and your interest rates jumps to 30 percent. Fail to pay your mortgage and you lose your home. Miss your health insurance payments, which have been spiraling upwards, and if you are seriously ill you go into bankruptcy, as 1 million Americans who get sick do every year. Trash your credit rating and your fragile financial edifice, built on managing debt, collapses. Since most Americans feel, on some level, as Hudson points out, that they are a step or two away from being homeless, they are deeply averse to challenging corporate power. It is not worth the risk. And the corporate state knows it. Absolute power, the philosopher Thomas Hobbes wrote, depends on fear and passivity.

The only way to break this fear and passivity is to organize workers to break the cycle of mounting debt. And the first step to achieving independence from debt—the primary form of political control by the corporate state—is to raise the minimum wage. There are other solutions—forgiving mortgage and student debt, instituting universal health care, establishing a nationwide jobs program to rebuild the country’s Third World infrastructure, and green energy—but none of this will happen until we are able to mount a sustained mass movement that discredits the corporate state. This mass movement will arise, as Nader says, when we mobilize around the minimum wage.

The lowest-grade worker at the General Electric plant that makes high-tech health care devices outside Paterson in Totowa [New Jersey]—a pay grade known as the D 04—was just raised to $14,555 a year. That is under $8 an hour. The plant’s highest-paid hourly employee, known as D 16, earns $22,000. Immelt makes over $11 million a year. This vast disparity in income, and this wage abuse, is played out in every corporation in the country. No one in Washington intends to challenge it.

Only 11.3 percent of workers in this country belong to unions. This is the lowest percentage in 80 years. And nearly all these unions, and especially the AFL-CIO, have been emasculated by corporate power.

Nader is right when he warns that we are not going to be assisted in this effort by established unions. Union leaders are bought off. They are comfortable. They are pulling down at least five times what rank-and-file workers make. Nader says we have to mount protests not only outside the doors of Walmarts and General Electric plants, not only outside congressional offices, but outside the doors of the AFL-CIO. There is no established institution inside or outside government that will help us. They are all broken or complicit. But there are the 30 million working poor who, if we organize to break the system of debt peonage that holds them hostage, may be willing to rise up. We are bound with many chains and shackles. We will have to break them one at a time. But once we rise up, once we are able to threaten the corporate systems that keep us supine through fear, we will unleash a torrent of energy and passion that will confirm the worst nightmares of our corporate overlords.