http://www.informationclearinghouse.info/article24098.htm
The World’s Least Powerful Man
The Obama Puppet
It didn’t take the Israel Lobby very long to bring President Obama to heel regarding his prohibition against further illegal Israeli settlements on occupied Palestinian land. Obama discovered that a mere American president is powerless when confronted by the Israel Lobby and that the United States simply is not allowed a Middle East policy separate from Israel’s.
Obama also found out that he cannot change anything else either, if he ever intended to do so.
The military/security lobby has war and a domestic police state on its agenda, and a mere American president can’t do anything about it.
President Obama can order the Guantanamo torture chamber closed and kidnapping and rendition and torture to be halted, but no one carries out the order.
Essentially, Obama is irrelevant.
President Obama can promise that he is going to bring the troops home, and the military lobby says, “No, you are going to send them to Afghanistan, and in the meantime start a war in
Pakistan and maneuver Iran into a position that will provide an excuse for a war there, too. Wars are too profitable for us to let you stop them.” And the mere president has to say, “Yes, Sir!”
Obama can promise health care to 50 million uninsured Americans, but he can’t override the veto of the war lobby and the insurance lobby. The war lobby says its war profits are more important than health care and that the country can’t afford both the “war on terror” and “socialized medicine.”
The insurance lobby says health care has to be provided by private health insurance; otherwise, we can’t afford it.
The war and insurance lobbies rattled their campaign contribution pocketbooks and quickly convinced Congress and the White House that the real purpose of the health care bill is to save money by cutting Medicare and Medicaid benefits, thereby “getting entitlements under control.”
Entitlements is a right-wing word used to cast aspersion on the few things that the government did, in the distant past, for citizens. Social Security and Medicare, for example, are denigrated as “entitlements.” The right-wing goes on endlessly about Social Security and Medicare as if they were welfare give-aways to shiftless people who refuse to look after themselves, whereas in actual fact citizens are vastly overcharged for the meager benefits with a 15% tax on their wages and salaries.
Indeed, for decades now the federal government has been funding its wars and military budgets with the surplus revenues collected by the Social Security tax on labor.
To claim, as the right-wing does, that we can’t afford the only thing in the entire budget that has consistently produced a revenue surplus indicates that the real agenda is to drive the mere citizen into the ground.
The real entitlements are never mentioned. The “defense” budget is an entitlement for the military/security complex about which President Eisenhower warned us 50 years ago. A person has to be crazy to believe that the United States, “the world’s only superpower,” protected by oceans on its East and West and by puppet states on its North and South, needs a “defense” budget larger than the military spending of the rest of the world combined.
The military budget is nothing but an entitlement for the military/security complex. To hide this fact, the entitlement is disguised as protection against “enemies” and passed through the Pentagon.
I say cut out the middleman and simply allocate a percentage of the federal budget to the military/security complex. This way we won’t have to concoct reasons for invading other countries and go to war in order for the military/security complex to get its entitlement. It would be a lot cheaper just to give them the money outright, and itwould save a lot of lives and grief at home and abroad.
The US invasion of Iraq had nothing whatsoever to do with American national interests. It had to do with armaments profits and with eliminating an obstacle to Israeli territorial expansion.
The cost of the war, aside from the $3 trillion, was over 4,000 dead Americans, over 30,000 wounded and maimed Americans, tens of thousands of broken American marriages and lost careers, one million dead Iraqis, four million displaced Iraqis, and a destroyed country.
All of this was done for the profits of the military/security complex and to make paranoid Israel, armed with 200 nuclear weapons, feel “secure.”
My proposal would make the military/security complex even more wealthy as the companies would get the money without having to produce the weapons. Instead, all the money could go for multi-million dollar bonuses and dividend payouts to shareholders. No one, at home or abroad, would have to be killed, and the taxpayer would be better off.
No American national interest is served by the war in Afghanistan. As the former UK Ambassador Craig Murray disclosed, the purpose of the war is to protect Unocal’s interest in the Trans-Afghanistan pipeline. The cost of the war is many times greater than Unocal’s investment in the pipeline. The obvious solution is to buy out Unocal and give the pipeline to the Afghans as partial compensation for the destruction we have inflicted on that country and its population, and bring the troops home.
The reason my sensible solutions cannot be effected is that the lobbies think that their entitlements would not survive if they were made obvious. They think that if the American people knew that the wars were being fought to enrich the armaments and oil industries, the people would put a halt to the wars.
In actual fact, the American people have no say about what “their” government does. Polls of the public show that half or more of the American people do not support the wars in Iraq or
Afghanistan and do not support President Obama’s escalation of the war in Afghanistan. Yet, the occupations and wars continue. According to General Stanley McChrystal, the additional 40,000 troops are enough to stalemate the war, that is, to keep it going forever, the ideal situation for the armaments lobby.
The people want health care, but the government does not listen.
The people want jobs, but Wall Street wants higher priced stocks and forces American firms to offshore the jobs to countries where labor is cheaper.
The American people have no effect on anything. They can affect nothing. They have become irrelevant like Obama. And they will remain irrelevant as long as organized interest groups can purchase the US government.
The inability of the American democracy to produce any results that the voters want is a demonstrated fact. The total unresponsiveness of government to the people is conservatism’s contribution to American democracy. Some years ago there was an effort to put government back into the hands of the people by constraining the ability of organized interest groups to pour enormous amounts of money into political campaigns and, thus, obligate the elected official to those whose money elected him. Conservatives said that any restraints would be a violation of the First Amendment’s guarantee of free speech.
The same “protectors” of “free speech” had no objection to the Israel Lobby’s passage of the “hate speech” bill, which has criminalized criticism of Israel’s genocidal treatment of the
Palestinians and continuing theft of their lands.
In less than one year, President Obama has betrayed all of his supporters and broken all of his promises. He is the total captive of the oligarchy of the ruling interest groups. Unless he is saved by an orchestrated 9/11-type event, Obama is a one-term president. Indeed, the collapsing economy will doom him regardless of a “terrorist event.”
The Republicans are grooming Palin. Our first female president, following our first black president, will complete the transition to an American police state by arresting critics and protesters of Washington’s immoral foreign and domestic policies, and she will complete the destruction of America’s reputation abroad.
Russia’s Putin has already compared the US to Nazi Germany, and the Chinese premier has likened the US to an irresponsible, profligate debtor.
Increasingly the rest of the world sees the US as the sole source of all of its problems. Germany has lost the chief of its armed forces and its defense minister, because the US convinced or pressured, by hook or crook, the German government to violate its Constitution and to send troops to fight for Unocal’s interest in Afghanistan. The Germans had pretended that their troops were not really fighting, but were were engaged in a “peace-keeping operation.” This more or less worked until the Germans called in an air strike that murdered 100 women and children lined up for a fuel allotment.
The British are investigating their leading criminal, former prime minister Tony Blair, and his deception of his own cabinet in order to do Bush’s bidding and provide some cover for Bush’s illegal invasion of Iraq. The UK investigators have been denied the ability to bring criminal charges, but the issue of war based entirely on orchestrated deception and lies is getting a hearing. It will reverberate throughout the world, and the world will note that there is no corresponding investigation in the US, the country that originated the False War.
Meanwhile, the US investment banks, which have wrecked the financial stability of many governments, including that of the US, continue to control, as they have done since the Clinton administration, US economic and financial policy. The world has suffered terribly from the Wall Street gangsters, and now looks upon America with a critical eye..............
Tuesday, December 1, 2009
SC99-4
http://www.vtcommons.org/journal/2009/11/editorial-beyond-baracks-bamboozling-obamamania-fizzles-vermonters-take-fresh-look-i
Beyond Barack's Bamboozling - As Obamamania Fizzles, Vermonters Take A Fresh Look At Independence
Turn back the clock for a moment. It was one year ago this month that the majority of U.S. voters (if corporately-owned voting machine counts are to be believed) threw their weight behind a presidential candidate who promised to push the “reset button” and jump-start the United States Empire.
My favorite joke of last fall: Who was the loneliest person in the United States the day after the Obama election?
A Vermont secessionist.
Even funnier is the constant drumbeating about Obama the “progressive,” the “liberal,” the “Democrat,” which is about as accurate as calling Obama a “socialist,” a “Communist” or a “terrorist”.
Pundits from both the left and the right have completely missed the point of the already-stale “Obama phenomenon.” Obama is simply the new chauffeur, the newest driver of the getaway car that is the U.S. Empire.
In a stunning new book entitled Barack Obama and the Future of American Politics (Paradigm Publishers, 2009 - reviewed this season at our web site), historian and journalist Paul Street meticulously uncovers the media-manufactured mythology that has cloaked “Brand Obama” these past several years.
His conclusion about the man mainstream liberals (and 70 percent of Vermont voters) pinned their “hope” for “change” on?
“Obama,” he writes, “stands to the conservative business-and-empire-friendly side of majority U.S. opinion on key issues like national health insurance, campaign finance, trade, Iraq, and foreign relations in general.”
No surprise to our readers – but a wake-up call to those who pinned their hopes on Mr. O.
The Commander In Speech’s brilliance, of course, lies in his use of carefully cultivated rhetoric designed to convince attentive audiences that he is at least paying “lip service” attention to national problems (witness the so-called national health care “debate”) or global crises (climate change and Peak Oil come to mind).
But, with his Harvard/Columbia pedigree, his huge financial and political base of support among the multinational banksters, and his “professorial” demeanor (long on words, short on action), Obama knows better than most that none of these deeply rooted structural problems is ever going to be solved by Establishment imperial interests who seek to profit from exploiting these crises. The United States is an Empire that is simply too big, too corrupt, and too much governed by entrenched interests to respond to the needs and desires of its citizens.Perhaps the most compelling evidence of Obama's empty rhetoric? His passage of the largest imperial Pentagon "Defense" budget ($680 billion) in U.S. history, just 3 weeks after winning the 2009 Nobel Peace Prize.
“Disaster capitalism,” in other words, trumps “the audacity of hope.”
And that is why Vermont Commons: Voices of Independence is here. To remind Vermonters that our 21st-century future is shaping up to look very different from our past, and that the pursuit of economic decentralization, non-violent secession, and political independence for our once-and-future republic is in our best interest.
A return to our first principles:
We at Vermont Commons believe that the United States is no longer a republic governed by its citizens, but an Empire that is essentially ungovernable.
We believe that a sovereign state's right to nonviolently secede, first championed in the United States by the citizens of 19th century New England, is a right that demands re-exploration in the 21st century.
We believe that a 21st century Vermont, working in concert with our neighbors and the rest of the world, may better be able to feed, power, educate and care for its citizens as an independent 21st century republic than as one of fifty states within the U.S. Empire, given the new century's emerging realities: climate change, global peak oil, and an "endless war on terror" for "full-spectrum dominance" being waged by the U.S. government for geo-strategic control of the world's remaining fossil fuel energy resources.
Our vision for 2010 and beyond is to remain in statewide print publication six times per year, and to continue our efforts to pioneer a new and sustainable model for 21st century independent multimedia journalism.
Elements of our emerging model include
1. Our Not-For-Profit Approach: We see our news journal as a nonprofit “statewide multimedia coffeehouse,” not a commercially run for-profit business.
2. Our Place-Based “Commons” Focus: We are focused on the goings-on of a single place – Vermont – and its relationship with the rest of the world, with a specific focus on breathing life back into idea of “the Commons.”
3. Our Civically Minded and Solutions-Oriented Content: We seek out writers and ask them to submit their work as unpaid citizen journalists, chronicling solutions-oriented work being done by Vermonters across the state.
4. Our Fiercely Subjective Yet Non-Partisan Politics: We make no pretense to “Objectivity.” Instead, we are modeling ourselves after 19th-century republican newspapers in the new U.S. republic – we have a definite point of view. But we balance this with a non-partisan approach, seeing ourselves as a “big tent” for a variety of voices from a variety of political perspectives – liberal, conservative, progressive, libertarian, and decentralist/mutualist.
5. Our Collaborative Funding Model: As a not-for-profit, we rely on funding from generous individuals, subscriptions, and advertising from like-minded businesses and nonprofits............
Beyond Barack's Bamboozling - As Obamamania Fizzles, Vermonters Take A Fresh Look At Independence
Turn back the clock for a moment. It was one year ago this month that the majority of U.S. voters (if corporately-owned voting machine counts are to be believed) threw their weight behind a presidential candidate who promised to push the “reset button” and jump-start the United States Empire.
My favorite joke of last fall: Who was the loneliest person in the United States the day after the Obama election?
A Vermont secessionist.
Even funnier is the constant drumbeating about Obama the “progressive,” the “liberal,” the “Democrat,” which is about as accurate as calling Obama a “socialist,” a “Communist” or a “terrorist”.
Pundits from both the left and the right have completely missed the point of the already-stale “Obama phenomenon.” Obama is simply the new chauffeur, the newest driver of the getaway car that is the U.S. Empire.
In a stunning new book entitled Barack Obama and the Future of American Politics (Paradigm Publishers, 2009 - reviewed this season at our web site), historian and journalist Paul Street meticulously uncovers the media-manufactured mythology that has cloaked “Brand Obama” these past several years.
His conclusion about the man mainstream liberals (and 70 percent of Vermont voters) pinned their “hope” for “change” on?
“Obama,” he writes, “stands to the conservative business-and-empire-friendly side of majority U.S. opinion on key issues like national health insurance, campaign finance, trade, Iraq, and foreign relations in general.”
No surprise to our readers – but a wake-up call to those who pinned their hopes on Mr. O.
The Commander In Speech’s brilliance, of course, lies in his use of carefully cultivated rhetoric designed to convince attentive audiences that he is at least paying “lip service” attention to national problems (witness the so-called national health care “debate”) or global crises (climate change and Peak Oil come to mind).
But, with his Harvard/Columbia pedigree, his huge financial and political base of support among the multinational banksters, and his “professorial” demeanor (long on words, short on action), Obama knows better than most that none of these deeply rooted structural problems is ever going to be solved by Establishment imperial interests who seek to profit from exploiting these crises. The United States is an Empire that is simply too big, too corrupt, and too much governed by entrenched interests to respond to the needs and desires of its citizens.Perhaps the most compelling evidence of Obama's empty rhetoric? His passage of the largest imperial Pentagon "Defense" budget ($680 billion) in U.S. history, just 3 weeks after winning the 2009 Nobel Peace Prize.
“Disaster capitalism,” in other words, trumps “the audacity of hope.”
And that is why Vermont Commons: Voices of Independence is here. To remind Vermonters that our 21st-century future is shaping up to look very different from our past, and that the pursuit of economic decentralization, non-violent secession, and political independence for our once-and-future republic is in our best interest.
A return to our first principles:
We at Vermont Commons believe that the United States is no longer a republic governed by its citizens, but an Empire that is essentially ungovernable.
We believe that a sovereign state's right to nonviolently secede, first championed in the United States by the citizens of 19th century New England, is a right that demands re-exploration in the 21st century.
We believe that a 21st century Vermont, working in concert with our neighbors and the rest of the world, may better be able to feed, power, educate and care for its citizens as an independent 21st century republic than as one of fifty states within the U.S. Empire, given the new century's emerging realities: climate change, global peak oil, and an "endless war on terror" for "full-spectrum dominance" being waged by the U.S. government for geo-strategic control of the world's remaining fossil fuel energy resources.
Our vision for 2010 and beyond is to remain in statewide print publication six times per year, and to continue our efforts to pioneer a new and sustainable model for 21st century independent multimedia journalism.
Elements of our emerging model include
1. Our Not-For-Profit Approach: We see our news journal as a nonprofit “statewide multimedia coffeehouse,” not a commercially run for-profit business.
2. Our Place-Based “Commons” Focus: We are focused on the goings-on of a single place – Vermont – and its relationship with the rest of the world, with a specific focus on breathing life back into idea of “the Commons.”
3. Our Civically Minded and Solutions-Oriented Content: We seek out writers and ask them to submit their work as unpaid citizen journalists, chronicling solutions-oriented work being done by Vermonters across the state.
4. Our Fiercely Subjective Yet Non-Partisan Politics: We make no pretense to “Objectivity.” Instead, we are modeling ourselves after 19th-century republican newspapers in the new U.S. republic – we have a definite point of view. But we balance this with a non-partisan approach, seeing ourselves as a “big tent” for a variety of voices from a variety of political perspectives – liberal, conservative, progressive, libertarian, and decentralist/mutualist.
5. Our Collaborative Funding Model: As a not-for-profit, we rely on funding from generous individuals, subscriptions, and advertising from like-minded businesses and nonprofits............
Friday, November 27, 2009
SC99-3
http://www.informationclearinghouse.info/article24076.htm
The Economic Crisis And What Must Be Done
The United States does not control its own destiny. Rather it is controlled by an international financial elite, of which the American branch works out of big New York banks like J.P. Morgan Chase, Wall Street investment firms such as Goldman Sachs, and the Federal Reserve System.
They in turn control the White House, Congress, the military, the mass media, the intelligence agencies, both political parties, the universities, etc. No one can rise to the top in any of these institutions without the elite’s stamp of approval.
This elite has been around since the nation began, becoming increasingly dominant as the 19th century progressed. A key date was passage of the National Banking Act of 1863, when the system was put into place whereby federal government debt was used to collateralize bank lending. Since then we’ve paid the freight through our taxes for bank control of the economy.
The final nails in the coffin came with the passage of the Federal Reserve Act of 1913.
In 1929 the bankers plunged the nation into the Great Depression by constricting the money supply. With Franklin D. Roosevelt as president, the nation struggled through the decade of the 1930s but did not pull out of the Depression until the industrial explosion during World War II.
After the war came the Golden Age of the U.S. economy, when the working man, protected by strong labor unions, became a true partner in the prosperity of the industrial age. That era lasted a full generation. The bankers were largely spectators as Americans led the world in exports, standard of living, science and space exploration, and every measure of health, longevity, and culture.
Roosevelt had kept the bankers subservient to the interests of the economy at large. The Federal Reserve was part of the New Deal team, and interest rates were held at historic lows despite a large federal deficit. One main impact was the huge increase in home ownership. After World War II, the G.I. Bill allowed home ownership to grow further and millions of veterans to attend college. The influx of educated graduates led to productivity growth and the emergence of new high-tech industries.
But the bankers were laying their plans. In the early 1950s they got the government to agree to allow the Federal Reserve to escape its subservience to the U.S. Treasury Department and set interest rates on its own. Rates rose throughout the 1950s and 1960s. By the time of the interest rate hikes of 1968, the economy was slowing down. Both federal budget and trade deficits were beginning to replace the post-war surpluses. High interest rates were the likely cause.
In 1971, President Richard Nixon removed the dollar’s gold peg, allowing the huge inflation resulting from oil price increases that the international bankers engineered through control of U.S. foreign policy when Henry Kissinger was national security adviser and secretary of state. Nixon’s opening to China resulted in early agreements, also overseen by banking interests, to begin to transfer U.S. industry to overseas producers like China which had cheap labor costs.
By the mid-1970s, the U.S. had been taken over by a behind the scenes coup-d’etat that included events in 1963 when President John F. Kennedy was assassinated by a conspiracy that could only have been instigated by the highest levels of world financial control. In the election of 1976, David Rockefeller succeeded in placing fellow Trilateral Commission member Jimmy Carter in the White House, but Carter upset the banking community, thoroughly Zionist in orientation, by working toward peace in the Middle East and elsewhere.
I was working in the Carter White House in 1979-80. Unbeknownst to the president, Federal Reserve Chairman Paul Volcker, another Rockefeller protégé, suddenly raised interest rates to fight the inflation the bankers had caused by the OPEC oil price deals, and plunged the nation into recession. Carter was made to look weak and uninformed and was defeated in the election of 1980 by Republican candidate Ronald Reagan. It was through the “Reagan Revolution” that the regulatory controls over the banking industry were lifted, mainly in allowing the banks to use their fractional reserve privileges in making mortgage loans.
Volcker’s recession shattered American manufacturing and hastened the flight of jobs abroad. Under the “Reagan Doctrine,” the U.S. military embarked on an unprecedented mission of world conquest by attacking one small nation at a time, starting with Nicaragua. Global capitalism was also on the march, with the U.S. armed forces its own private police force. With the invasion of Iraq under George H.W. Bush in 1991, mainland Asia was revealed as the principle target.
The economy was floated by productivity gains through computer automation and a huge sell-off of assets through the merger-acquisition bubble of the late 1980s which ended in a recession. This resulted in the defeat of Bush by Bill Clinton in the election of 1992. Clinton was able to create another bubble through a strong dollar policy that attracted foreign capital.
The dot-com bubble that resulted lasted all the way through to the crash of December 2000. Meanwhile, the U.S. Air Force led the way in the destruction of the sovereign state of Yugoslavia, whereby the international bankers took over the resource wealth of the entire Balkan region, and the U.S. military gained forward bases for further incursions into Asia.
Do we need to say that none of this was ever voted on by the American electorate? But they bought into it nevertheless, both with their silence and through participation in a generally favorable job market in the emerging service occupations, particularly finance.
By the time George W. Bush was inaugurated president in January 2001, the U.S. was facing a disaster. $4 trillion in wealth had vanished when the dot.com bubble collapsed. NAFTA caused even more American manufacturing jobs to disappear abroad. The Neocons who were moving into key jobs in the Pentagon knew they would soon have new wars to fight in the Middle East, with invasion plans for Afghanistan and Iraq ready to be pulled off the shelf.
But the U.S. had no economic engine available to generate the tax revenues Bush would need for the planned wars. At this moment Chairman Alan Greenspan of the Federal Reserve stepped in. Over a two year period from 2001-2003 the Fed lowered interest rates by over 500 basis points. Meanwhile, the federal government removed all regulatory controls on mortgage lending, and the housing bubble was on. $4 trillion in new home loans were pumped into the economy, much of it through subprime loans borrowers could not afford.
The Fed began to put on the brakes in 2003, but the mighty work of re-floating a moribund economy had been accomplished. By late 2006 another recession loomed, but it would take two more years before the crisis of October 2008 brought the entire system down.
The impact on the job market was immediate and profound. By the time Barack Obama was elected president in November 2008, the U.S. was mired in seemingly endless wars in Afghanistan and Iraq, and the worst recession since the Great Depression was picking up speed. In order to prevent total disaster, the Bush administration ended its eight years of catastrophic misrule with a flourish, by allocating over $700 billion in financial system bailouts to cover the bad loans the banks had been making since Greenspan gave the housing bubble the green light.
It is now November 2009. Since Barack Obama was inaugurated in January, unemployment has soared from 7.9 percent to 10.2 percent. A few hundred billion dollars were allocated for “stimulus” purposes, but most of that went to pay unemployment benefits and to keep state and local governments from laying off more employees.
A fraction has been distributed for highway improvements, but largely through the bank bailouts the federal deficit has been running at an annual rate of $1.5 trillion, by far the largest in history, with the national debt now topping $12 trillion. Ironically, those Americans who still have productive jobs continue to grow in efficiency, with productivity up over five percent in the last year.
So much federal money has been spent that the Obama administration has been struggling to make its health care proposals budget-neutral through a raft of new taxes, fees, and penalties, and by announcing in recent days that the government’ first priority must now shift to deficit reduction. The word “austerity” has been mentioned for the first time since the Carter administration. Yet Congress voted $655 billion in military expenditures to continue fighting in the Middle East. A U.S. military attack on Iran, possibly in conjunction with Israel, would surprise no one.
So where do we now stand?
At present, the Federal Reserve is trying to prevent a total economic collapse. Interest rates are near-zero, to the chagrin of foreign investors in U.S. Treasury securities, and close to half of new Treasury debt instruments have been bought by the Federal Reserve itself as a way of providing free money for federal government expenditures.
But the U.S. economy shows no signs of coming back, with no economic driver emerging that could bring it back. For all the talk about alternative energy, there has been no significant growth of any home-grown industry that could possibly make up so much lost ground in either the short or the long-term.
The industries in the U.S. that are holding up are the military, including arms exports, universities that are attracting large numbers of students from abroad, especially China, and health care, especially for the aging baby boomer population. But the war industry produces nothing with a long-term economic benefit, and health care exists mainly to treat sick people, not produce anything new.
None of this provides a foundation that can bring about a restoration of prosperity to 300 million people when the jobs of making articles of consumption are increasingly scarce. On top of everything else, since government inevitably looks to its own requirements first, the total tax burden continues to increase to the point where the average employee now pays close to 50 percent of his or her income on taxes of all types, including federal and state income taxes, real estate taxes, payroll taxes, excise taxes, government fees, etc. Plus the cost of utilities continues to rise steadily and threatens to skyrocket if cap-and-trade legislation is passed.
The Obama administration has no plans to deal with any of this. They have projected a budget for 15 years hence that shows the budget deficit decreasing and tax revenues going way up, but it is all lies. They have no roadmap for getting us there and no plans for following the roadmap if it portrayed a realistic goal. And yet the U.S. military is still trying to conquer Asia. It is madness.
And it is madness because the big decisions are not made by the U.S., by Congress, or by the Obama administration. The U.S. has, for half-a-century, been marching to the tune played by the international financial elite, and this fact did not change with the election of 2008. The financiers have put the people of this nation $57 trillion in debt, according to the latest reports, counting debt at the federal, state, business, and household levels. Interest alone on this debt is over $3 trillion of a GDP of $14 trillion. Failure of our political leadership to deal with this tragedy over the past three decades is nothing less than treason.
But then again, at some point the decision was made that the U.S. and its population would be discarded by history, the economic status of the nation reduced to a shadow of what it once was, but that its military machine would be used for the financial elite’s takeover of the world until it is replaced by that of some other nation. All indications are that the next country up to bat as military enforcer for the financiers is China.
There you have it. That, in my opinion, is the past, present, and future of this nation in a nutshell. Great evils have been done in the world in the last century, and there is nothing anyone can do about it.
Except…. and that’s what each person caught up in these travesties must decide. What are you going to do about it?
In mulling over this question, it would be wise to recognize that the dominance of the financial elite has largely been exercised through their control of the international monetary system based on bank lending and government debt. Therefore it’s through the monetary system that change can and must be made.
The progressives are wrong to think the government should go deeper in debt to create more jobs. This will just create an even deeper hole of debt future generations will have to crawl out of.
Rather the key is monetary reform, whether at the local or national levels. People have lost control of their ability to earn a living. But change could be accomplished through sovereign control by people and nations of the monetary means of exchange.
This control has been stolen. It is time to take it back..........
The Economic Crisis And What Must Be Done
The United States does not control its own destiny. Rather it is controlled by an international financial elite, of which the American branch works out of big New York banks like J.P. Morgan Chase, Wall Street investment firms such as Goldman Sachs, and the Federal Reserve System.
They in turn control the White House, Congress, the military, the mass media, the intelligence agencies, both political parties, the universities, etc. No one can rise to the top in any of these institutions without the elite’s stamp of approval.
This elite has been around since the nation began, becoming increasingly dominant as the 19th century progressed. A key date was passage of the National Banking Act of 1863, when the system was put into place whereby federal government debt was used to collateralize bank lending. Since then we’ve paid the freight through our taxes for bank control of the economy.
The final nails in the coffin came with the passage of the Federal Reserve Act of 1913.
In 1929 the bankers plunged the nation into the Great Depression by constricting the money supply. With Franklin D. Roosevelt as president, the nation struggled through the decade of the 1930s but did not pull out of the Depression until the industrial explosion during World War II.
After the war came the Golden Age of the U.S. economy, when the working man, protected by strong labor unions, became a true partner in the prosperity of the industrial age. That era lasted a full generation. The bankers were largely spectators as Americans led the world in exports, standard of living, science and space exploration, and every measure of health, longevity, and culture.
Roosevelt had kept the bankers subservient to the interests of the economy at large. The Federal Reserve was part of the New Deal team, and interest rates were held at historic lows despite a large federal deficit. One main impact was the huge increase in home ownership. After World War II, the G.I. Bill allowed home ownership to grow further and millions of veterans to attend college. The influx of educated graduates led to productivity growth and the emergence of new high-tech industries.
But the bankers were laying their plans. In the early 1950s they got the government to agree to allow the Federal Reserve to escape its subservience to the U.S. Treasury Department and set interest rates on its own. Rates rose throughout the 1950s and 1960s. By the time of the interest rate hikes of 1968, the economy was slowing down. Both federal budget and trade deficits were beginning to replace the post-war surpluses. High interest rates were the likely cause.
In 1971, President Richard Nixon removed the dollar’s gold peg, allowing the huge inflation resulting from oil price increases that the international bankers engineered through control of U.S. foreign policy when Henry Kissinger was national security adviser and secretary of state. Nixon’s opening to China resulted in early agreements, also overseen by banking interests, to begin to transfer U.S. industry to overseas producers like China which had cheap labor costs.
By the mid-1970s, the U.S. had been taken over by a behind the scenes coup-d’etat that included events in 1963 when President John F. Kennedy was assassinated by a conspiracy that could only have been instigated by the highest levels of world financial control. In the election of 1976, David Rockefeller succeeded in placing fellow Trilateral Commission member Jimmy Carter in the White House, but Carter upset the banking community, thoroughly Zionist in orientation, by working toward peace in the Middle East and elsewhere.
I was working in the Carter White House in 1979-80. Unbeknownst to the president, Federal Reserve Chairman Paul Volcker, another Rockefeller protégé, suddenly raised interest rates to fight the inflation the bankers had caused by the OPEC oil price deals, and plunged the nation into recession. Carter was made to look weak and uninformed and was defeated in the election of 1980 by Republican candidate Ronald Reagan. It was through the “Reagan Revolution” that the regulatory controls over the banking industry were lifted, mainly in allowing the banks to use their fractional reserve privileges in making mortgage loans.
Volcker’s recession shattered American manufacturing and hastened the flight of jobs abroad. Under the “Reagan Doctrine,” the U.S. military embarked on an unprecedented mission of world conquest by attacking one small nation at a time, starting with Nicaragua. Global capitalism was also on the march, with the U.S. armed forces its own private police force. With the invasion of Iraq under George H.W. Bush in 1991, mainland Asia was revealed as the principle target.
The economy was floated by productivity gains through computer automation and a huge sell-off of assets through the merger-acquisition bubble of the late 1980s which ended in a recession. This resulted in the defeat of Bush by Bill Clinton in the election of 1992. Clinton was able to create another bubble through a strong dollar policy that attracted foreign capital.
The dot-com bubble that resulted lasted all the way through to the crash of December 2000. Meanwhile, the U.S. Air Force led the way in the destruction of the sovereign state of Yugoslavia, whereby the international bankers took over the resource wealth of the entire Balkan region, and the U.S. military gained forward bases for further incursions into Asia.
Do we need to say that none of this was ever voted on by the American electorate? But they bought into it nevertheless, both with their silence and through participation in a generally favorable job market in the emerging service occupations, particularly finance.
By the time George W. Bush was inaugurated president in January 2001, the U.S. was facing a disaster. $4 trillion in wealth had vanished when the dot.com bubble collapsed. NAFTA caused even more American manufacturing jobs to disappear abroad. The Neocons who were moving into key jobs in the Pentagon knew they would soon have new wars to fight in the Middle East, with invasion plans for Afghanistan and Iraq ready to be pulled off the shelf.
But the U.S. had no economic engine available to generate the tax revenues Bush would need for the planned wars. At this moment Chairman Alan Greenspan of the Federal Reserve stepped in. Over a two year period from 2001-2003 the Fed lowered interest rates by over 500 basis points. Meanwhile, the federal government removed all regulatory controls on mortgage lending, and the housing bubble was on. $4 trillion in new home loans were pumped into the economy, much of it through subprime loans borrowers could not afford.
The Fed began to put on the brakes in 2003, but the mighty work of re-floating a moribund economy had been accomplished. By late 2006 another recession loomed, but it would take two more years before the crisis of October 2008 brought the entire system down.
The impact on the job market was immediate and profound. By the time Barack Obama was elected president in November 2008, the U.S. was mired in seemingly endless wars in Afghanistan and Iraq, and the worst recession since the Great Depression was picking up speed. In order to prevent total disaster, the Bush administration ended its eight years of catastrophic misrule with a flourish, by allocating over $700 billion in financial system bailouts to cover the bad loans the banks had been making since Greenspan gave the housing bubble the green light.
It is now November 2009. Since Barack Obama was inaugurated in January, unemployment has soared from 7.9 percent to 10.2 percent. A few hundred billion dollars were allocated for “stimulus” purposes, but most of that went to pay unemployment benefits and to keep state and local governments from laying off more employees.
A fraction has been distributed for highway improvements, but largely through the bank bailouts the federal deficit has been running at an annual rate of $1.5 trillion, by far the largest in history, with the national debt now topping $12 trillion. Ironically, those Americans who still have productive jobs continue to grow in efficiency, with productivity up over five percent in the last year.
So much federal money has been spent that the Obama administration has been struggling to make its health care proposals budget-neutral through a raft of new taxes, fees, and penalties, and by announcing in recent days that the government’ first priority must now shift to deficit reduction. The word “austerity” has been mentioned for the first time since the Carter administration. Yet Congress voted $655 billion in military expenditures to continue fighting in the Middle East. A U.S. military attack on Iran, possibly in conjunction with Israel, would surprise no one.
So where do we now stand?
At present, the Federal Reserve is trying to prevent a total economic collapse. Interest rates are near-zero, to the chagrin of foreign investors in U.S. Treasury securities, and close to half of new Treasury debt instruments have been bought by the Federal Reserve itself as a way of providing free money for federal government expenditures.
But the U.S. economy shows no signs of coming back, with no economic driver emerging that could bring it back. For all the talk about alternative energy, there has been no significant growth of any home-grown industry that could possibly make up so much lost ground in either the short or the long-term.
The industries in the U.S. that are holding up are the military, including arms exports, universities that are attracting large numbers of students from abroad, especially China, and health care, especially for the aging baby boomer population. But the war industry produces nothing with a long-term economic benefit, and health care exists mainly to treat sick people, not produce anything new.
None of this provides a foundation that can bring about a restoration of prosperity to 300 million people when the jobs of making articles of consumption are increasingly scarce. On top of everything else, since government inevitably looks to its own requirements first, the total tax burden continues to increase to the point where the average employee now pays close to 50 percent of his or her income on taxes of all types, including federal and state income taxes, real estate taxes, payroll taxes, excise taxes, government fees, etc. Plus the cost of utilities continues to rise steadily and threatens to skyrocket if cap-and-trade legislation is passed.
The Obama administration has no plans to deal with any of this. They have projected a budget for 15 years hence that shows the budget deficit decreasing and tax revenues going way up, but it is all lies. They have no roadmap for getting us there and no plans for following the roadmap if it portrayed a realistic goal. And yet the U.S. military is still trying to conquer Asia. It is madness.
And it is madness because the big decisions are not made by the U.S., by Congress, or by the Obama administration. The U.S. has, for half-a-century, been marching to the tune played by the international financial elite, and this fact did not change with the election of 2008. The financiers have put the people of this nation $57 trillion in debt, according to the latest reports, counting debt at the federal, state, business, and household levels. Interest alone on this debt is over $3 trillion of a GDP of $14 trillion. Failure of our political leadership to deal with this tragedy over the past three decades is nothing less than treason.
But then again, at some point the decision was made that the U.S. and its population would be discarded by history, the economic status of the nation reduced to a shadow of what it once was, but that its military machine would be used for the financial elite’s takeover of the world until it is replaced by that of some other nation. All indications are that the next country up to bat as military enforcer for the financiers is China.
There you have it. That, in my opinion, is the past, present, and future of this nation in a nutshell. Great evils have been done in the world in the last century, and there is nothing anyone can do about it.
Except…. and that’s what each person caught up in these travesties must decide. What are you going to do about it?
In mulling over this question, it would be wise to recognize that the dominance of the financial elite has largely been exercised through their control of the international monetary system based on bank lending and government debt. Therefore it’s through the monetary system that change can and must be made.
The progressives are wrong to think the government should go deeper in debt to create more jobs. This will just create an even deeper hole of debt future generations will have to crawl out of.
Rather the key is monetary reform, whether at the local or national levels. People have lost control of their ability to earn a living. But change could be accomplished through sovereign control by people and nations of the monetary means of exchange.
This control has been stolen. It is time to take it back..........
Wednesday, November 25, 2009
SC99-2
http://www.globalresearch.ca/index.php?context=va&aid=16281
Investors Buy Gold...Review of financial markets
.........Long ago the world’s central banks set the course for a planned collapse of the world economy to implement world government and there is now no turning back. We have proof stretching back to 1965 that intervention by the Treasury and the Fed was taking place in the gold market. The illegal sale of gold on 10/19/87 was a good example of that. Then came the FOMC memos of the 1980s and 1990s to kill the perception that gold be allowed to reflect a policy of a weak dollar unbacked by gold. It is all there and probably more proof which our government and the Fed hides from us. We have to laugh at the smug who say why would the Treasury bother to rig the gold price? The point is they have and they are still doing it.
The perception now is that the massive stimulus put into international markets, especially US markets, will be withdrawn as interest rates are allowed to float upward. This stimulus was responsible for the stock market climbing from Dow 6600 to 10,500, a 60% leap built on monetization. If the punch bowl is removed the market will return to test 6600. In addition, the deflationary undertow kept at bay by the stimulus, will overcome monetary policy and the nation and the world will slip into monetary, deflationary depression.
The Fed is now forced to allow gold to trade higher and the dollar to fall lower. What else would one expect under current monetary circumstances? This policy will allow both gold and the dollar to play out to their full extent. The Fed’s job has been very difficult considering a fiscal budget deficit of $1.5 trillion not counting off budget items that take it over $2 trillion – a condition we are told that will persist for the next ten years. The solution has been the creation of ever more money and credit. There has been no cooperation. Nothing has worked together. All the problems have gone spinning off into a number of directions. There is no control on fiscal or monetary policy. What the players refuse to understand is that until the system is purged the situation is only going to get worse. There is no recovery. It is only an interlude in an ongoing depression.
The result will be gold at $2,500 by the end of 2010, and perhaps much sooner. The buyers know what we know. Real inflation since 1980 dictates $6,700 to $7,200 gold. Even official inflation demands a $2,400 price. In both instances how much inflation will 2010 bring? We are projecting 14% real inflation and government and the Fed keep telling us inflation is 1.2%. Our figures show 6-1/8%. In addition the fundamentals show us that gold production has been in shortfall to usage by 150 or more tons for years and that situation will worsen over the next ten years. Yes, we have hit peak gold. Interest rates rises won’t come for at least a year, if ever, and 5% growth in aggregates is in the realm of wishful thinking. Less gold is currently produced annually than in 1980 and there are trillions more dollars sloshing about the world financial system, a good part of it for speculative purposes. Without changes in monetary and fiscal policies, gold and silver prices will just keep rising. The further our government, via Goldman Sacks, JPMorgan Chase, HSBC and Citigroup, short gold and silver and the shares, the greater price appreciation will be in the future as they ultimately will have to cover their shorts. We are at the confluence of big things happening. The fiscal debt overhand is so onerous that a ¾% rise in interest rates would mean the Fed would have to monetize another $150 billion and a 5% increase in interest rates would increase debt service interest by $600 billion additional dollars. Yes, gold could reach $3,000 in 2010 and 2011 could bring another doubling as a result of the Fed and government just continuing what they are doing. Will inflation reach 25% or 30% in 2011? We don’t know, but as we reflect on what the Fed has been doing we say that possibility certainly exists. Could that mean $11,000 gold? Perhaps it does, we won’t know until we get there.
Even if inflation abated in 2011 or 2012 and a deflationary depression took command, gold would still be the go to investment. That is because for 6,000 years it has been the only currency that has owed no one anything. Would you really be ready to trade it for a fiat currency? We don’t think so. All bond markets as well as stock markets would have collapsed with the exception of gold and silver shares. Just look at the 1930s and see the gains Homestake had, if you don’t think gold stocks can make fortunes during a depression. Gold and silver are the investments for all seasons as long as you have patience. The banking system may collapse. What better to use than gold and silver coins for barter. This past year we have seen lending by banks fall 16.2% y-o-y or by $600 billion. Just double that figure and you are in depression. Can you imagine what it will be like with little or no lending? Unemployment is 22.2%. Under such conditions the unemployed could be 35% or more. What do we do, let the Illuminati create another world war to cover up their machinations? The dollar is already falling and probably will eventually collapse. Could it be 1-1/2 to 2-1/2 years from now that there will be an official 2/3’s devaluation? The exchange of three old dollars for one new dollar and a 2/3’s default on all debt by all nations with one another and the revaluation and devaluation of all currencies followed by a new international trading unit made up of the top G-20 currencies weighted in an index. That is certainly plausible as the dollar ceases to be the international reserve currency.
These events could push residential and commercial values down 75% or more from their highs. All investments except gold and silver could fall 60% to 95% as they did during the 1930s. The Fed won’t be able to cut interest rates, which will already be at zero. Demand for capital will force real rates higher and bonds lower. All issuers of consumer debt will most likely go broke, as 50% of debtors won’t be able to service their debt.
Real nasty times are just around the corner and nothing can be done to prevent them. The system must be purged. More major layoffs are on the way, real wages will fall and taxes will rise. The Dow will settle somewhere between 1,500 and 4,200. We won’t know where until we get a lot closer. Companies have maintained the bottom line by firing people, offshoring and outsourcing and using illegal aliens. That method of cutting costs is approaching a threshold of diminishing returns. The next big wave of layoffs will be municipal in towns, cities, counties and states that no longer have the reserve to pay employees. Some states, such as Florida has no funds to pay for unemployment benefits and were it not for the stimulus plan they would have stopped issuing checks a year ago. At this rate in many states municipalities will cease to function and schools, fire and police will be disbanded. That is where this is all headed. Americans have to be told the truth about what is really going on and who and what caused it and how we can fix it.
There is no question in our minds that the Fed will monetize and inflate until they cannot anymore. We see no end to increasing deficit spending. That first will perhaps bring about an Argentinean economy and if we do not come to terms with reality then it is Weimarization or Zimbabweization. When this happens everything will be out of control.........
........Wall Street, banking and our government continue to steal from the American people with the assistance of the Federal Reserve. Is it no wonder that 75% to 80% of Americans want the Fed audited? We must also keep in mind that the public still only knows a fraction of what has been done to them. They know little about front running, naked shorting or bogus gold bars, thanks to our media. Criminals are doing 20 to 30 years for much less than what these crooks have done and the core, the heart of the mechanism, springs from the Federal Reserve. The Fed is the center from which the fraud emanates..........
Investors Buy Gold...Review of financial markets
.........Long ago the world’s central banks set the course for a planned collapse of the world economy to implement world government and there is now no turning back. We have proof stretching back to 1965 that intervention by the Treasury and the Fed was taking place in the gold market. The illegal sale of gold on 10/19/87 was a good example of that. Then came the FOMC memos of the 1980s and 1990s to kill the perception that gold be allowed to reflect a policy of a weak dollar unbacked by gold. It is all there and probably more proof which our government and the Fed hides from us. We have to laugh at the smug who say why would the Treasury bother to rig the gold price? The point is they have and they are still doing it.
The perception now is that the massive stimulus put into international markets, especially US markets, will be withdrawn as interest rates are allowed to float upward. This stimulus was responsible for the stock market climbing from Dow 6600 to 10,500, a 60% leap built on monetization. If the punch bowl is removed the market will return to test 6600. In addition, the deflationary undertow kept at bay by the stimulus, will overcome monetary policy and the nation and the world will slip into monetary, deflationary depression.
The Fed is now forced to allow gold to trade higher and the dollar to fall lower. What else would one expect under current monetary circumstances? This policy will allow both gold and the dollar to play out to their full extent. The Fed’s job has been very difficult considering a fiscal budget deficit of $1.5 trillion not counting off budget items that take it over $2 trillion – a condition we are told that will persist for the next ten years. The solution has been the creation of ever more money and credit. There has been no cooperation. Nothing has worked together. All the problems have gone spinning off into a number of directions. There is no control on fiscal or monetary policy. What the players refuse to understand is that until the system is purged the situation is only going to get worse. There is no recovery. It is only an interlude in an ongoing depression.
The result will be gold at $2,500 by the end of 2010, and perhaps much sooner. The buyers know what we know. Real inflation since 1980 dictates $6,700 to $7,200 gold. Even official inflation demands a $2,400 price. In both instances how much inflation will 2010 bring? We are projecting 14% real inflation and government and the Fed keep telling us inflation is 1.2%. Our figures show 6-1/8%. In addition the fundamentals show us that gold production has been in shortfall to usage by 150 or more tons for years and that situation will worsen over the next ten years. Yes, we have hit peak gold. Interest rates rises won’t come for at least a year, if ever, and 5% growth in aggregates is in the realm of wishful thinking. Less gold is currently produced annually than in 1980 and there are trillions more dollars sloshing about the world financial system, a good part of it for speculative purposes. Without changes in monetary and fiscal policies, gold and silver prices will just keep rising. The further our government, via Goldman Sacks, JPMorgan Chase, HSBC and Citigroup, short gold and silver and the shares, the greater price appreciation will be in the future as they ultimately will have to cover their shorts. We are at the confluence of big things happening. The fiscal debt overhand is so onerous that a ¾% rise in interest rates would mean the Fed would have to monetize another $150 billion and a 5% increase in interest rates would increase debt service interest by $600 billion additional dollars. Yes, gold could reach $3,000 in 2010 and 2011 could bring another doubling as a result of the Fed and government just continuing what they are doing. Will inflation reach 25% or 30% in 2011? We don’t know, but as we reflect on what the Fed has been doing we say that possibility certainly exists. Could that mean $11,000 gold? Perhaps it does, we won’t know until we get there.
Even if inflation abated in 2011 or 2012 and a deflationary depression took command, gold would still be the go to investment. That is because for 6,000 years it has been the only currency that has owed no one anything. Would you really be ready to trade it for a fiat currency? We don’t think so. All bond markets as well as stock markets would have collapsed with the exception of gold and silver shares. Just look at the 1930s and see the gains Homestake had, if you don’t think gold stocks can make fortunes during a depression. Gold and silver are the investments for all seasons as long as you have patience. The banking system may collapse. What better to use than gold and silver coins for barter. This past year we have seen lending by banks fall 16.2% y-o-y or by $600 billion. Just double that figure and you are in depression. Can you imagine what it will be like with little or no lending? Unemployment is 22.2%. Under such conditions the unemployed could be 35% or more. What do we do, let the Illuminati create another world war to cover up their machinations? The dollar is already falling and probably will eventually collapse. Could it be 1-1/2 to 2-1/2 years from now that there will be an official 2/3’s devaluation? The exchange of three old dollars for one new dollar and a 2/3’s default on all debt by all nations with one another and the revaluation and devaluation of all currencies followed by a new international trading unit made up of the top G-20 currencies weighted in an index. That is certainly plausible as the dollar ceases to be the international reserve currency.
These events could push residential and commercial values down 75% or more from their highs. All investments except gold and silver could fall 60% to 95% as they did during the 1930s. The Fed won’t be able to cut interest rates, which will already be at zero. Demand for capital will force real rates higher and bonds lower. All issuers of consumer debt will most likely go broke, as 50% of debtors won’t be able to service their debt.
Real nasty times are just around the corner and nothing can be done to prevent them. The system must be purged. More major layoffs are on the way, real wages will fall and taxes will rise. The Dow will settle somewhere between 1,500 and 4,200. We won’t know where until we get a lot closer. Companies have maintained the bottom line by firing people, offshoring and outsourcing and using illegal aliens. That method of cutting costs is approaching a threshold of diminishing returns. The next big wave of layoffs will be municipal in towns, cities, counties and states that no longer have the reserve to pay employees. Some states, such as Florida has no funds to pay for unemployment benefits and were it not for the stimulus plan they would have stopped issuing checks a year ago. At this rate in many states municipalities will cease to function and schools, fire and police will be disbanded. That is where this is all headed. Americans have to be told the truth about what is really going on and who and what caused it and how we can fix it.
There is no question in our minds that the Fed will monetize and inflate until they cannot anymore. We see no end to increasing deficit spending. That first will perhaps bring about an Argentinean economy and if we do not come to terms with reality then it is Weimarization or Zimbabweization. When this happens everything will be out of control.........
........Wall Street, banking and our government continue to steal from the American people with the assistance of the Federal Reserve. Is it no wonder that 75% to 80% of Americans want the Fed audited? We must also keep in mind that the public still only knows a fraction of what has been done to them. They know little about front running, naked shorting or bogus gold bars, thanks to our media. Criminals are doing 20 to 30 years for much less than what these crooks have done and the core, the heart of the mechanism, springs from the Federal Reserve. The Fed is the center from which the fraud emanates..........
Tuesday, November 24, 2009
SC99-1
http://kunstler.com/blog/2009/11/courting-convulsion.html
Courting Convulsion
.........If a "recovery" is not in the cards, then what exactly is going on out there?
What's going on in the US economy is a slow-motion convulsion from which we will emerge as a very different nation with a different economy. The wild irresponsibility of the media in pretending otherwise is only going to make the convulsion worse, more painful, more socially and politically destructive. The convulsion can be described with precision as one of compressive contraction. Historic circumstances are requiring us to change our behavior, to make new arrangements for everyday life in all the major particulars: capital accumulation and deployment; food production; commerce; habitation; transport; education; and health care. These new arrangements must be organized at a smaller and finer scale, and on a much more local basis.
The main "historic circumstance" mandating these changes goes under the heading of "peak oil." We've come to the end of our ability in this world to increase energy inputs to the global economy. The routine "growth" in industrial activity and production that has been the basis of our financial arrangements for 200-odd years is no longer possible. Offsetting this decline in oil energy "input" with "alt.energy" is a dangerous fantasy because it distracts us from the urgent task of making new arrangements for trade, food production, et cetera - the very things that would provide jobs and social roles for our citizens in the future.
We are seeing a comprehensive failure of leadership in every sector and every level of American life - in politics, business, banking, education, news media, medicine, and the clergy. All are determined to pretend that we can somehow continue the habits and behaviors of the pre peak oil era. They are all unwilling to face reality, and are all engaged in mutually supporting each other's dangerous fantasies.
If we don't attend to the transformation of American life by downscaling our activities and changing the way they are carried out, and re-localizing them, we will see our society disintegrate - and I use the word "dis-integrate" with purposeful precision. Everything will come apart - our political arrangements, our households, our health and well-being.
At the moment, banking is disintegrating. It's happening because the end of regular, predictable, cyclical, industrial growth means the end of our ability to generate credit without limits, and in fact we passed this point by stealth some time ago leaving the banks in "Wile E. Coyote" suspension above an abyss, where they have lately been joined by government at all levels and the indebted citizens of the land. The profound nausea spreading through the offices of America is the somatic recognition of exactly where we are in all this: off the cliff.
It's important to remind readers that so-called "capitalism" is not to blame. Capitalism is not an ideology. It refers to a set of laws governing the disposition of surplus wealth. There is going to be surplus wealth somewhere in the years ahead, even if our living standards fall substantially, even under the strictures of peak oil. All the communist experiments of the 20th century produced some kind of surplus wealth. All of them were subject to the phenomenon of compound interest. What matters in the disposition of capital are the rules created for accumulating and deploying it. In the USA the past two decades, we ignored the rules, repealed some of the critical laws, and failed to enforce the existing ones so that, when faced by the historic circumstances of peak oil, we allowed fraud and swindling to run wild - just at the moment when we should have taken the most care. That is why our money system ran off the rails.
We're now seeing worldwide a kind of race between the assertion of peak oil and the failures of capital management as to which will provoke a widespread convulsion first. They are obviously related and whichever gets us in the most trouble fastest, our destination is the same: the absolute necessity to reorganize how we live. Among the many elements of this is the fact that "globalism," in the Thomas Friedman sense of the word, is over. The urgent need to re-localize economies makes this self-evident. As a practical matter for us, this means committing to import replacement - making things we need in the US, probably much more regionally. "Globalism" now joins the many other fantasies that we can no longer indulge in.
At the moment, going into Thanksgiving 2009, America's leadership has dedicated itself to the worst action it could take under the circumstances: a campaign to sustain the unsustainable. This is what's embodied in the foolish term "recovery." The way we try to explain things to ourselves matters, if we don't want to be crushed by history............
Courting Convulsion
.........If a "recovery" is not in the cards, then what exactly is going on out there?
What's going on in the US economy is a slow-motion convulsion from which we will emerge as a very different nation with a different economy. The wild irresponsibility of the media in pretending otherwise is only going to make the convulsion worse, more painful, more socially and politically destructive. The convulsion can be described with precision as one of compressive contraction. Historic circumstances are requiring us to change our behavior, to make new arrangements for everyday life in all the major particulars: capital accumulation and deployment; food production; commerce; habitation; transport; education; and health care. These new arrangements must be organized at a smaller and finer scale, and on a much more local basis.
The main "historic circumstance" mandating these changes goes under the heading of "peak oil." We've come to the end of our ability in this world to increase energy inputs to the global economy. The routine "growth" in industrial activity and production that has been the basis of our financial arrangements for 200-odd years is no longer possible. Offsetting this decline in oil energy "input" with "alt.energy" is a dangerous fantasy because it distracts us from the urgent task of making new arrangements for trade, food production, et cetera - the very things that would provide jobs and social roles for our citizens in the future.
We are seeing a comprehensive failure of leadership in every sector and every level of American life - in politics, business, banking, education, news media, medicine, and the clergy. All are determined to pretend that we can somehow continue the habits and behaviors of the pre peak oil era. They are all unwilling to face reality, and are all engaged in mutually supporting each other's dangerous fantasies.
If we don't attend to the transformation of American life by downscaling our activities and changing the way they are carried out, and re-localizing them, we will see our society disintegrate - and I use the word "dis-integrate" with purposeful precision. Everything will come apart - our political arrangements, our households, our health and well-being.
At the moment, banking is disintegrating. It's happening because the end of regular, predictable, cyclical, industrial growth means the end of our ability to generate credit without limits, and in fact we passed this point by stealth some time ago leaving the banks in "Wile E. Coyote" suspension above an abyss, where they have lately been joined by government at all levels and the indebted citizens of the land. The profound nausea spreading through the offices of America is the somatic recognition of exactly where we are in all this: off the cliff.
It's important to remind readers that so-called "capitalism" is not to blame. Capitalism is not an ideology. It refers to a set of laws governing the disposition of surplus wealth. There is going to be surplus wealth somewhere in the years ahead, even if our living standards fall substantially, even under the strictures of peak oil. All the communist experiments of the 20th century produced some kind of surplus wealth. All of them were subject to the phenomenon of compound interest. What matters in the disposition of capital are the rules created for accumulating and deploying it. In the USA the past two decades, we ignored the rules, repealed some of the critical laws, and failed to enforce the existing ones so that, when faced by the historic circumstances of peak oil, we allowed fraud and swindling to run wild - just at the moment when we should have taken the most care. That is why our money system ran off the rails.
We're now seeing worldwide a kind of race between the assertion of peak oil and the failures of capital management as to which will provoke a widespread convulsion first. They are obviously related and whichever gets us in the most trouble fastest, our destination is the same: the absolute necessity to reorganize how we live. Among the many elements of this is the fact that "globalism," in the Thomas Friedman sense of the word, is over. The urgent need to re-localize economies makes this self-evident. As a practical matter for us, this means committing to import replacement - making things we need in the US, probably much more regionally. "Globalism" now joins the many other fantasies that we can no longer indulge in.
At the moment, going into Thanksgiving 2009, America's leadership has dedicated itself to the worst action it could take under the circumstances: a campaign to sustain the unsustainable. This is what's embodied in the foolish term "recovery." The way we try to explain things to ourselves matters, if we don't want to be crushed by history............
Monday, November 23, 2009
SC98-15
http://www.globalresearch.ca/index.php?context=va&aid=16218
Red Alert: The Second Wave of The Financial Tsunami
The Wave Is gathering force & could hit between the first & second quarter of 2010
........The New Game
The financial architects at Goldman Sachs had a master plan – to dominate the global financial system. The means to achieve this financial power was the Shadow Banking System, the lynchpin being the derivative market and the securitization of assets, real and synthetic. The stakes would be huge, in the hundreds of US$ trillions and the way to transform the market was through massive leverage at all levels of the financial game.
But there was an inherent weakness in the overall scheme – the threat of inflation, more precisely hyperinflation. Such huge amounts of liquidity in the system would invariably trigger the depreciation of the reserve currency and the confidence in the system.
Hence the need for a system to keep in check price inflation and the illusion that the purchasing power of the toilet paper reserve currency could be maintained.
This is where China came in. Once China became the world’s factory, the problem would be resolved. When a suit which previously cost US$600 could be had for less than US$100, and a pair of shoes for less than US$5, the scam masterminds concluded that there would be no foreseeable threat to the largest casino operation in history.
China agreed to the exchange as it has over a billion mouths to feed and jobs for hundreds of millions needed to be secured, without which the system could not be maintained. But China was pragmatic enough to have two “economic systems” – a Yuan based domestic economy and a US$ based export economy, in the hope that the profits and benefits of the export economy would enable China to transform and establish a viable and dynamic domestic market which in time would replace the export dependent economy. It was a deal made with the devil, but there were no viable alternative options at the material time, more so after the collapse of the Soviet Union.
The Next Level of the Game
The next level of the game was reached when the toilet paper reserve currency literally went virtual – through the simple operation of a click of the mouse in the computers of the global banks.
The big boys at Goldman Sachs and other global banks were more than content to leave Las Vegas for the mafia and their miserable billions in turnover. The profits were considered dimes when compared to the hundreds of trillions generated by the virtual casino. It was a financial conquest beyond their wildest dreams. They even called themselves, “Master of the Universe”. Creating massive debts was the new game, and the big boys could even leverage more than 40 times capital! Asset values soared with so much liquidity chasing so few good assets.
However, the financial wizards failed to appreciate and or underestimate the amount of financial products that were needed to keep the game in play. They resorted to financial engineering – the securitization of assets. And when real assets were insufficient for securitization, synthetic assets were created. Soon enough, toxic waste was even considered as legitimate instruments for the game so long as it could be unloaded to greedy suckers with no recourse to the originators of these so-called investments.
For a time, it looked as if the financial wizards have solved the problem of how to feed the global casino monster.
Unfortunately, the music stopped and the bubble burst! And as they say the rest is history.
The Goldman Sachs Remedy
When losses are in the US$ trillions and whatever assets / capital remaining are in the US$ billions, we have a huge problem – a financial black-hole.
The preferred remedy by the financial masterminds at Goldman Sachs was to create another hoax – that if the big global banks were to fail triggering a systemic collapse, there would be Armageddon. These “too big to fail” banks must be injected with massive amount of virtual monies to recapitalize and get rid of the toxic assets on their balance sheet. The major central banks in the developed countries in cahoots with Goldman Sachs sang the same tune. All sorts of schemes were conjured to legitimize this bailout.
In essence, what transpired was the mere transfer of monies from the left pocket to the right pocket, with the twist that the banks were in fact helping the Government to overcome the financial crisis.
The Fed and key central banks agreed to lend “virtual monies” to the “too big to fail” global banks at zero or near zero interest rate and these banks in turn would “deposit” these monies with the Fed and other central banks at agreed interest rates. These transactions are all mere book entries. Other “loans” from the Fed and central banks (again at zero or near zero interest rates) are used to purchase government debts, these debts being the stimulus monies needed to revive the real economy and create jobs for the growing unemployed. So in essence, these banks are given “free money” to lend to the government at prior agreed interest rates with no risks at all. It is a hoax!
These “monies” are not even the dollar bills, but mere book entries created out of thin air.
So when the Fed injects US$ trillions into the banking system, it merely credits the amount in the accounts of the “too big to fail” banks at the Fed.
When the system is applied to international trade, the same modus operandi is used to pay for the goods imported from China, Japan etc.
For the rest of world, when buying goods denominated in US$, these countries must produce goods and services, sell them for dollars in order to purchase goods needed in their country. Simply put, they have to earn an income to purchase whatever goods and services needed. In contrast, all that the US needs to do is to create monies out of thin air and use them to pay for their imports!
The US can get away with this scam because it has the military muscle to compel and enforce this hoax. As stated earlier, this status quo was accepted especially during the Cold War and with some reluctance post the collapse of the Soviet Union, but with a proviso – that the US agrees to be the consumer of last resort. This arrangement provided some comfort because countries which have sold their goods to the US, can now use the dollars to buy goods from other countries as more than 80 per cent of world trade is denominated in dollars especially crude oil, the lifeline of the global economy.
But with the US in full bankruptcy and its citizens (the largest consumers in the world) being unable to borrow further monies to buy fancy goods from China, Japan and the rest of the world, the demand for dollar has evaporated. The dollar status as a reserve currency and its usefulness is being questioned more vocally.
The End Game
The present fallout can be summarized in simple terms:
Should a bankrupt country (the US) be allowed to use money created out of thin air to pay for goods produced with the sweat and tears of hardworking citizens of exporting countries? Adding insult to injury, the same dollars are now purchasing a lot less than before. So what is the use of being paid in a currency that is losing rapidly its value?
On the other hand, the US is telling the whole world, especially the Chinese that if they are not happy with the status quo, there is nothing to stop them from selling to the other countries and accepting their currencies. But if they want to sell to the mighty USA, they must accept US toilet paper reserve currency and its right to create monies out of thin air!
This is the ultimate poker game and whosoever blinks first loses and will suffer irreparable financial consequences. But who has the winning hand?
The US does not have the winning hand. Neither has China the winning hand.
This state of affairs cannot continue for long, for whatever cards the US or China may be contemplating to throw at the table to gain strategic advantage, any short term gains will be pyrrhic, for it will not be able to address the underlying antagonistic contradictions.
When the survival of the system is dependent on the availability of credit (i.e. accumulating more debts) it is only a matter of time before both the debtor and creditor come to the inevitable conclusion that the debt will never be paid. And unless the creditor is willing to write off the debt, resorting to drastic means to collect the outstanding debt is inevitable.
It would be naïve to think that the US would quietly allow itself to be foreclosed! When we reach that stage, war will be inevitable. It will be the US-UK-Israel Axis against the rest of the world.
The Prelude to the End Game
The US economy will be spiraling out of control in the coming months and will reach critical point by the end of the 1st quarter 2010 and implode by the 2nd quarter.
The massive US$ trillions of dollars stimulus has failed to turn the economy around. The massive blood transfusion may have kept the patient alive, but there are numerous signs of multi-organ failure.
There will be another wave of foreclosures of residential and more importantly commercial properties by end December and early 2010. And the foreclosed properties in 2009 will lead to depressed prices once they come through the pipeline. Home and commercial property values will plunge. Banks’ balance sheets will turn ugly and whatever “record profits” in the last two quarters of 2009 will not cover the additional red ink.
Given the above situation, will the Fed continue to buy mortgage-backed securities to prop up the markets? The Fed has already spent trillions buying Fannie Mae and Freddie Mac mortgages with no potential substitute buyer in sight. Therefore, the Fed’s balance sheet is as toxic as the “too big to fail” banks that it rescued.
In the circumstances, it makes no sense for anyone to assert that the worst is over and that the global economy is on the road to recovery.
And the surest sign that all is not well with the big banks is the recent speech by the President of the Federal Reserve Bank of New York, William Dudley at Princeton, New Jersey when he said that the Fed would curtail the risk of future liquidity crisis by providing a “backstop” to solvent firms with sufficient collateral.
This warning and assurance deserves further consideration. Firstly, it is a contradiction to state that a solvent firm with sufficient collateral would in fact encounter a liquidity crisis to warrant the need for a fall back on the Fed. It is in fact an admission that banks are not sufficiently capitalized and when the second wave of the tsunami hits them again, confidence will be sorely lacking.
Dudley actually said that, “the central bank could commit to being the lender of last resort... [and this would reduce] the risk of panics sparked by uncertainty among lenders about what other creditors think”.
To put it bluntly what he is saying is that the Fed will endeavour to avoid the repeat of the collapse of Bear Stearns, Lehman Bros and AIG. It is also an indication that the remaining big banks are in trouble.
It is interesting to note that a Bloomberg report in early November revealed that Citigroup Inc and JP Morgan Chase have been hoarding cash. The former has almost doubled its cash holdings to US$244.2 billion. In the case of the latter, the cash hoard amounted to US$453.6 billion. Yet, given this hoarding by the leading banks, the New York Federal Reserve Bank had to reassure the financial community that it is ready to inject massive liquidity to prop up the system.
It should come as no surprise that the value of the dollar is heading south.
When currencies are being debased, volatility in the stock market increases. But the gains are not worth the risks and if anyone is still in the market, they will be wiped out by the 1st quarter of 2010. The S&P may have shot up since the beginning of the year by over 25 per cent but it has been out-performed by gold. The gains have also lagged behind the official US inflation rate. It has in fact delivered a total return after inflation of approximately minus 25 per cent. When Meredith Whitney remarked that, “I don’t know what’s going on in the market right now, because it makes no sense to me”, it is time to get out of the market fast.
In a report to its clients, Société Générale warned that public debt would be massive in the next two years – 105 per cent of GDP in the UK, 125 per cent in the US and in Europe and 270 per cent in Japan. Global debt would reach US$45 trillion.
At some point in time, all these debts must be repaid. How will these debts be repaid?
If we go by what Bernanke has been preaching and practising, it means more toilet paper currency will be created to repay the debts.
As a result, debasement of currencies will continue and this will further aggravate existing tensions between the competing economies. And when creditors have enough of this toilet paper scam, expect violent reactions!
Red Alert: The Second Wave of The Financial Tsunami
The Wave Is gathering force & could hit between the first & second quarter of 2010
........The New Game
The financial architects at Goldman Sachs had a master plan – to dominate the global financial system. The means to achieve this financial power was the Shadow Banking System, the lynchpin being the derivative market and the securitization of assets, real and synthetic. The stakes would be huge, in the hundreds of US$ trillions and the way to transform the market was through massive leverage at all levels of the financial game.
But there was an inherent weakness in the overall scheme – the threat of inflation, more precisely hyperinflation. Such huge amounts of liquidity in the system would invariably trigger the depreciation of the reserve currency and the confidence in the system.
Hence the need for a system to keep in check price inflation and the illusion that the purchasing power of the toilet paper reserve currency could be maintained.
This is where China came in. Once China became the world’s factory, the problem would be resolved. When a suit which previously cost US$600 could be had for less than US$100, and a pair of shoes for less than US$5, the scam masterminds concluded that there would be no foreseeable threat to the largest casino operation in history.
China agreed to the exchange as it has over a billion mouths to feed and jobs for hundreds of millions needed to be secured, without which the system could not be maintained. But China was pragmatic enough to have two “economic systems” – a Yuan based domestic economy and a US$ based export economy, in the hope that the profits and benefits of the export economy would enable China to transform and establish a viable and dynamic domestic market which in time would replace the export dependent economy. It was a deal made with the devil, but there were no viable alternative options at the material time, more so after the collapse of the Soviet Union.
The Next Level of the Game
The next level of the game was reached when the toilet paper reserve currency literally went virtual – through the simple operation of a click of the mouse in the computers of the global banks.
The big boys at Goldman Sachs and other global banks were more than content to leave Las Vegas for the mafia and their miserable billions in turnover. The profits were considered dimes when compared to the hundreds of trillions generated by the virtual casino. It was a financial conquest beyond their wildest dreams. They even called themselves, “Master of the Universe”. Creating massive debts was the new game, and the big boys could even leverage more than 40 times capital! Asset values soared with so much liquidity chasing so few good assets.
However, the financial wizards failed to appreciate and or underestimate the amount of financial products that were needed to keep the game in play. They resorted to financial engineering – the securitization of assets. And when real assets were insufficient for securitization, synthetic assets were created. Soon enough, toxic waste was even considered as legitimate instruments for the game so long as it could be unloaded to greedy suckers with no recourse to the originators of these so-called investments.
For a time, it looked as if the financial wizards have solved the problem of how to feed the global casino monster.
Unfortunately, the music stopped and the bubble burst! And as they say the rest is history.
The Goldman Sachs Remedy
When losses are in the US$ trillions and whatever assets / capital remaining are in the US$ billions, we have a huge problem – a financial black-hole.
The preferred remedy by the financial masterminds at Goldman Sachs was to create another hoax – that if the big global banks were to fail triggering a systemic collapse, there would be Armageddon. These “too big to fail” banks must be injected with massive amount of virtual monies to recapitalize and get rid of the toxic assets on their balance sheet. The major central banks in the developed countries in cahoots with Goldman Sachs sang the same tune. All sorts of schemes were conjured to legitimize this bailout.
In essence, what transpired was the mere transfer of monies from the left pocket to the right pocket, with the twist that the banks were in fact helping the Government to overcome the financial crisis.
The Fed and key central banks agreed to lend “virtual monies” to the “too big to fail” global banks at zero or near zero interest rate and these banks in turn would “deposit” these monies with the Fed and other central banks at agreed interest rates. These transactions are all mere book entries. Other “loans” from the Fed and central banks (again at zero or near zero interest rates) are used to purchase government debts, these debts being the stimulus monies needed to revive the real economy and create jobs for the growing unemployed. So in essence, these banks are given “free money” to lend to the government at prior agreed interest rates with no risks at all. It is a hoax!
These “monies” are not even the dollar bills, but mere book entries created out of thin air.
So when the Fed injects US$ trillions into the banking system, it merely credits the amount in the accounts of the “too big to fail” banks at the Fed.
When the system is applied to international trade, the same modus operandi is used to pay for the goods imported from China, Japan etc.
For the rest of world, when buying goods denominated in US$, these countries must produce goods and services, sell them for dollars in order to purchase goods needed in their country. Simply put, they have to earn an income to purchase whatever goods and services needed. In contrast, all that the US needs to do is to create monies out of thin air and use them to pay for their imports!
The US can get away with this scam because it has the military muscle to compel and enforce this hoax. As stated earlier, this status quo was accepted especially during the Cold War and with some reluctance post the collapse of the Soviet Union, but with a proviso – that the US agrees to be the consumer of last resort. This arrangement provided some comfort because countries which have sold their goods to the US, can now use the dollars to buy goods from other countries as more than 80 per cent of world trade is denominated in dollars especially crude oil, the lifeline of the global economy.
But with the US in full bankruptcy and its citizens (the largest consumers in the world) being unable to borrow further monies to buy fancy goods from China, Japan and the rest of the world, the demand for dollar has evaporated. The dollar status as a reserve currency and its usefulness is being questioned more vocally.
The End Game
The present fallout can be summarized in simple terms:
Should a bankrupt country (the US) be allowed to use money created out of thin air to pay for goods produced with the sweat and tears of hardworking citizens of exporting countries? Adding insult to injury, the same dollars are now purchasing a lot less than before. So what is the use of being paid in a currency that is losing rapidly its value?
On the other hand, the US is telling the whole world, especially the Chinese that if they are not happy with the status quo, there is nothing to stop them from selling to the other countries and accepting their currencies. But if they want to sell to the mighty USA, they must accept US toilet paper reserve currency and its right to create monies out of thin air!
This is the ultimate poker game and whosoever blinks first loses and will suffer irreparable financial consequences. But who has the winning hand?
The US does not have the winning hand. Neither has China the winning hand.
This state of affairs cannot continue for long, for whatever cards the US or China may be contemplating to throw at the table to gain strategic advantage, any short term gains will be pyrrhic, for it will not be able to address the underlying antagonistic contradictions.
When the survival of the system is dependent on the availability of credit (i.e. accumulating more debts) it is only a matter of time before both the debtor and creditor come to the inevitable conclusion that the debt will never be paid. And unless the creditor is willing to write off the debt, resorting to drastic means to collect the outstanding debt is inevitable.
It would be naïve to think that the US would quietly allow itself to be foreclosed! When we reach that stage, war will be inevitable. It will be the US-UK-Israel Axis against the rest of the world.
The Prelude to the End Game
The US economy will be spiraling out of control in the coming months and will reach critical point by the end of the 1st quarter 2010 and implode by the 2nd quarter.
The massive US$ trillions of dollars stimulus has failed to turn the economy around. The massive blood transfusion may have kept the patient alive, but there are numerous signs of multi-organ failure.
There will be another wave of foreclosures of residential and more importantly commercial properties by end December and early 2010. And the foreclosed properties in 2009 will lead to depressed prices once they come through the pipeline. Home and commercial property values will plunge. Banks’ balance sheets will turn ugly and whatever “record profits” in the last two quarters of 2009 will not cover the additional red ink.
Given the above situation, will the Fed continue to buy mortgage-backed securities to prop up the markets? The Fed has already spent trillions buying Fannie Mae and Freddie Mac mortgages with no potential substitute buyer in sight. Therefore, the Fed’s balance sheet is as toxic as the “too big to fail” banks that it rescued.
In the circumstances, it makes no sense for anyone to assert that the worst is over and that the global economy is on the road to recovery.
And the surest sign that all is not well with the big banks is the recent speech by the President of the Federal Reserve Bank of New York, William Dudley at Princeton, New Jersey when he said that the Fed would curtail the risk of future liquidity crisis by providing a “backstop” to solvent firms with sufficient collateral.
This warning and assurance deserves further consideration. Firstly, it is a contradiction to state that a solvent firm with sufficient collateral would in fact encounter a liquidity crisis to warrant the need for a fall back on the Fed. It is in fact an admission that banks are not sufficiently capitalized and when the second wave of the tsunami hits them again, confidence will be sorely lacking.
Dudley actually said that, “the central bank could commit to being the lender of last resort... [and this would reduce] the risk of panics sparked by uncertainty among lenders about what other creditors think”.
To put it bluntly what he is saying is that the Fed will endeavour to avoid the repeat of the collapse of Bear Stearns, Lehman Bros and AIG. It is also an indication that the remaining big banks are in trouble.
It is interesting to note that a Bloomberg report in early November revealed that Citigroup Inc and JP Morgan Chase have been hoarding cash. The former has almost doubled its cash holdings to US$244.2 billion. In the case of the latter, the cash hoard amounted to US$453.6 billion. Yet, given this hoarding by the leading banks, the New York Federal Reserve Bank had to reassure the financial community that it is ready to inject massive liquidity to prop up the system.
It should come as no surprise that the value of the dollar is heading south.
When currencies are being debased, volatility in the stock market increases. But the gains are not worth the risks and if anyone is still in the market, they will be wiped out by the 1st quarter of 2010. The S&P may have shot up since the beginning of the year by over 25 per cent but it has been out-performed by gold. The gains have also lagged behind the official US inflation rate. It has in fact delivered a total return after inflation of approximately minus 25 per cent. When Meredith Whitney remarked that, “I don’t know what’s going on in the market right now, because it makes no sense to me”, it is time to get out of the market fast.
In a report to its clients, Société Générale warned that public debt would be massive in the next two years – 105 per cent of GDP in the UK, 125 per cent in the US and in Europe and 270 per cent in Japan. Global debt would reach US$45 trillion.
At some point in time, all these debts must be repaid. How will these debts be repaid?
If we go by what Bernanke has been preaching and practising, it means more toilet paper currency will be created to repay the debts.
As a result, debasement of currencies will continue and this will further aggravate existing tensions between the competing economies. And when creditors have enough of this toilet paper scam, expect violent reactions!
Saturday, November 21, 2009
SC98-14
http://transition-times.com/colorado/
WHICH WAY OUT?
The report which follows here…by our longtime friend and colleague Richard Heinberg, an associate member of IFG and senior fellow of the Post Carbon Institute, is the first to use the newly emerging techniques of “life cycle technology assessment,” and in particular “net energy” analyses, for in-depth comparisons among all presently dominant and newly touted “alternative” energy schemes. These include all the major renewable systems currently being advocated. For the first time we are able to fully realize the degree to which our future societal options are far more limited than we thought.
With fossil fuels fast disappearing, and their continuing supplies becoming ever more problematic and expensive, hopes have turned to renewable sources that we ask to save “our way of life” at more or less its current level. Alas, as we will see, the “net energy” gain from all alternative systems—that is, the amount of energy produced, compared with the amount of energy I as well as money and materials) that must be invested in building and operating them—is far too small to begin to sustain industrial society at its present levels. This is very grim news, and demands vast, rapid adjustments by all parties, from governments to industries and even environmental organizations, that thus far are not clearly in the offing. There are, however, viable pathways forward, most importantly and urgently the need for a wide-ranging push for conservation; it is only a question of realism, flexibility, dedication, and more than a little humility. Our beloved “way of life” must be reconsidered and more viable alternatives supported.
THE WRONG TREE
We observe daily the tragic, futile official processes that continue to unfold among national governments, as well as global political and financial institutions, as they give lip service to mitigating climate change and the multiple advancing related global environmental catastrophes. Those crises include not only climate disruption, and looming global fossil fuels shortages, but other profound depletions of key resources—fresh water, arable soils, ocean life, wood, crucial minerals, biodiversity, and breathable air, etc. All these crises are results of the same sets of values and operating systems, and all are nearing points of extreme urgency.
Even our once great hopes that world governments would rally to achieve positive collective outcomes in some arenas; for example, at the United Nations climate change talks in Copenhagen, as well as other venues, are proving sadly fatuous. But certain things are ever-more clear: Global institutions, national governments, and even many environmental and social activists are barking up the wrong tree. Individually and as groups, they have not faced the full gravity and meaning of the global energy (and resource) conundrums. They continue to operate in most ways out of the same set of assumptions that we’ve all had for the past century—that fundamental systemic changes will not be required; that our complex of problems can be cured by human innovation, ingenuity, and technical efficiency, together with a few smart changes in our choices of energy systems.
Most of all, the prevailing institutions continue to believe in the primacy and efficacy of economic growth as the key indicator of systemic well-being, even in light of ever-diminishing resources. It will not be necessary, according to the dogma, to come to grips with the reality that ever-expanding economic growth is actually an absurdity in a finite system, preposterous on its face, and will soon be over even if activists do nothing to oppose it. Neither does the mainstream recognize that economic systems, notably capitalism, that require such endless growth for their own viability may themselves be doomed in the not very long run. In fact, they are already showing clear signs of collapse. As to any need for substantial changes in personal lifestyles, or to control and limit material consumption habits? Quite the opposite is being pushed—increased car sales, expanded “housing starts,” and increased industrial production remain the focused goals of our economy, even under Mr. Obama, and are still celebrated when/if they occur, without thought of environmental consequences. No alterations in conceptual frameworks are encouraged to appreciate the now highly visible limits of nature, which is both root source of all planetary benefits, and inevitable toxic sink for our excessive habits.
In this optimistic though self-deluding dominant vision, there is also dedicated avoidance of the need for any meaningful redistribution of the planet’s increasingly scarce remaining natural resources toward more equitable arrangements among nations and peoples—to at least slightly mitigate centuries of colonial and corporate plunder of the Third World. And on the similarly ignored question of the continued viability of a small planet that may soon need to support 8-10 billion people? Some actually say it’s a good thing. We should think of these billions as new consumers who may help enliven economic growth, so goes that argument. But only if we find a few more planets nearby, perhaps in a parallel universe somewhere, bursting with oil, gas, water, minerals, wood, rich agricultural lands, and a virginal atmosphere.
The scale of denial is breathtaking. For as Heinberg’s analysis makes depressingly clear, there will be NO combination of alternative energy solutions that might enable the long term continuation of economic growth, or of industrial societies in their present form and scale. Ultimately the solutions we desperately seek will not come from ever-greater technical genius and innovation. Far better and potentially more successful pathways can only come from a sharp turn to goals, values, and practices that emphasize conservation of material and energy resources, localization of most economic frameworks, and gradual population reduction to stay within the carrying capacities of the planet.
THE PARTY’S OVER
The central purpose of all our False Solutions documents, including this one, is to assert that this whole set of assumptions upon which our institutions have hung their collective hats, is tragically inaccurate, and only serves to delay, at a crucial moment, a major reckoning that must be understood immediately.
We are emphatically not against innovations and efficiencies where they can be helpful. But we are against the grand delusion that they can solve all problems, and we are against the tendency to ignore overarching inherent systemic limits that apply to energy supply, material supply, and the Earth itself. For example, the grandest techno-utopian predictions at large today, such as “clean coal,” via carbon sequestration, and “clean nuclear,” via a new “safe 4th generation of reactor design,” have already been revealed as little more than the wild fantasies of energy industries, as they peddle talking points to politicians to whom, on other days, they also supply with campaign cash. There is no persuasive evidence that clean coal, still in the realm of science fiction, will ever be achieved. Most likely it will occupy the same pantheon of technological fantasy as nuclear fusion, not to say human teleportation. In any case, the entire argument for clean coal, however absurd, still ignores what happens to the places from where it comes. Visit Appalachia sometime—now virtually desertified from mountain top removal, and its rivers poisoned to get at that soon-to-be “clean” coal. Clean nuclear offers similar anomalies—no currently contemplated solution for waste disposal is anywhere near practical—even if uranium supplies were not running out nearly as quickly as oil. To speak of nuclear as “clean” or “safe” is a clear sign of panic while, vampire-like, it’s permitted to again rise from its grave.
Okay, we know that some technological “progress” is useful, especially among renewable energy alternatives. Systemic transformations toward a highly touted new complex mix of “renewable” energy systems such as wind, solar, hydro, biomass, wave and several others, will certainly be positive, and together they could make meaningful contributions, free of many of the negative environmental impacts that fossil fuels have brought.
But, as this report exquisitely explains, as beneficial as those shifts may be, they will inevitably fall far short. They will never reach the scale or capacity to substitute for a fossil fuel system that, because of its (temporary) abundance and cheapness, has addicted industrial nations to a 20th century production and consumption spree that landed us, and the whole world, into this dire situation. As Richard Heinberg has so eloquently said before, and used as the title of one of his very important books, “the party’s over.”........
WHICH WAY OUT?
The report which follows here…by our longtime friend and colleague Richard Heinberg, an associate member of IFG and senior fellow of the Post Carbon Institute, is the first to use the newly emerging techniques of “life cycle technology assessment,” and in particular “net energy” analyses, for in-depth comparisons among all presently dominant and newly touted “alternative” energy schemes. These include all the major renewable systems currently being advocated. For the first time we are able to fully realize the degree to which our future societal options are far more limited than we thought.
With fossil fuels fast disappearing, and their continuing supplies becoming ever more problematic and expensive, hopes have turned to renewable sources that we ask to save “our way of life” at more or less its current level. Alas, as we will see, the “net energy” gain from all alternative systems—that is, the amount of energy produced, compared with the amount of energy I as well as money and materials) that must be invested in building and operating them—is far too small to begin to sustain industrial society at its present levels. This is very grim news, and demands vast, rapid adjustments by all parties, from governments to industries and even environmental organizations, that thus far are not clearly in the offing. There are, however, viable pathways forward, most importantly and urgently the need for a wide-ranging push for conservation; it is only a question of realism, flexibility, dedication, and more than a little humility. Our beloved “way of life” must be reconsidered and more viable alternatives supported.
THE WRONG TREE
We observe daily the tragic, futile official processes that continue to unfold among national governments, as well as global political and financial institutions, as they give lip service to mitigating climate change and the multiple advancing related global environmental catastrophes. Those crises include not only climate disruption, and looming global fossil fuels shortages, but other profound depletions of key resources—fresh water, arable soils, ocean life, wood, crucial minerals, biodiversity, and breathable air, etc. All these crises are results of the same sets of values and operating systems, and all are nearing points of extreme urgency.
Even our once great hopes that world governments would rally to achieve positive collective outcomes in some arenas; for example, at the United Nations climate change talks in Copenhagen, as well as other venues, are proving sadly fatuous. But certain things are ever-more clear: Global institutions, national governments, and even many environmental and social activists are barking up the wrong tree. Individually and as groups, they have not faced the full gravity and meaning of the global energy (and resource) conundrums. They continue to operate in most ways out of the same set of assumptions that we’ve all had for the past century—that fundamental systemic changes will not be required; that our complex of problems can be cured by human innovation, ingenuity, and technical efficiency, together with a few smart changes in our choices of energy systems.
Most of all, the prevailing institutions continue to believe in the primacy and efficacy of economic growth as the key indicator of systemic well-being, even in light of ever-diminishing resources. It will not be necessary, according to the dogma, to come to grips with the reality that ever-expanding economic growth is actually an absurdity in a finite system, preposterous on its face, and will soon be over even if activists do nothing to oppose it. Neither does the mainstream recognize that economic systems, notably capitalism, that require such endless growth for their own viability may themselves be doomed in the not very long run. In fact, they are already showing clear signs of collapse. As to any need for substantial changes in personal lifestyles, or to control and limit material consumption habits? Quite the opposite is being pushed—increased car sales, expanded “housing starts,” and increased industrial production remain the focused goals of our economy, even under Mr. Obama, and are still celebrated when/if they occur, without thought of environmental consequences. No alterations in conceptual frameworks are encouraged to appreciate the now highly visible limits of nature, which is both root source of all planetary benefits, and inevitable toxic sink for our excessive habits.
In this optimistic though self-deluding dominant vision, there is also dedicated avoidance of the need for any meaningful redistribution of the planet’s increasingly scarce remaining natural resources toward more equitable arrangements among nations and peoples—to at least slightly mitigate centuries of colonial and corporate plunder of the Third World. And on the similarly ignored question of the continued viability of a small planet that may soon need to support 8-10 billion people? Some actually say it’s a good thing. We should think of these billions as new consumers who may help enliven economic growth, so goes that argument. But only if we find a few more planets nearby, perhaps in a parallel universe somewhere, bursting with oil, gas, water, minerals, wood, rich agricultural lands, and a virginal atmosphere.
The scale of denial is breathtaking. For as Heinberg’s analysis makes depressingly clear, there will be NO combination of alternative energy solutions that might enable the long term continuation of economic growth, or of industrial societies in their present form and scale. Ultimately the solutions we desperately seek will not come from ever-greater technical genius and innovation. Far better and potentially more successful pathways can only come from a sharp turn to goals, values, and practices that emphasize conservation of material and energy resources, localization of most economic frameworks, and gradual population reduction to stay within the carrying capacities of the planet.
THE PARTY’S OVER
The central purpose of all our False Solutions documents, including this one, is to assert that this whole set of assumptions upon which our institutions have hung their collective hats, is tragically inaccurate, and only serves to delay, at a crucial moment, a major reckoning that must be understood immediately.
We are emphatically not against innovations and efficiencies where they can be helpful. But we are against the grand delusion that they can solve all problems, and we are against the tendency to ignore overarching inherent systemic limits that apply to energy supply, material supply, and the Earth itself. For example, the grandest techno-utopian predictions at large today, such as “clean coal,” via carbon sequestration, and “clean nuclear,” via a new “safe 4th generation of reactor design,” have already been revealed as little more than the wild fantasies of energy industries, as they peddle talking points to politicians to whom, on other days, they also supply with campaign cash. There is no persuasive evidence that clean coal, still in the realm of science fiction, will ever be achieved. Most likely it will occupy the same pantheon of technological fantasy as nuclear fusion, not to say human teleportation. In any case, the entire argument for clean coal, however absurd, still ignores what happens to the places from where it comes. Visit Appalachia sometime—now virtually desertified from mountain top removal, and its rivers poisoned to get at that soon-to-be “clean” coal. Clean nuclear offers similar anomalies—no currently contemplated solution for waste disposal is anywhere near practical—even if uranium supplies were not running out nearly as quickly as oil. To speak of nuclear as “clean” or “safe” is a clear sign of panic while, vampire-like, it’s permitted to again rise from its grave.
Okay, we know that some technological “progress” is useful, especially among renewable energy alternatives. Systemic transformations toward a highly touted new complex mix of “renewable” energy systems such as wind, solar, hydro, biomass, wave and several others, will certainly be positive, and together they could make meaningful contributions, free of many of the negative environmental impacts that fossil fuels have brought.
But, as this report exquisitely explains, as beneficial as those shifts may be, they will inevitably fall far short. They will never reach the scale or capacity to substitute for a fossil fuel system that, because of its (temporary) abundance and cheapness, has addicted industrial nations to a 20th century production and consumption spree that landed us, and the whole world, into this dire situation. As Richard Heinberg has so eloquently said before, and used as the title of one of his very important books, “the party’s over.”........
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