http://www.informationclearinghouse.info/article28373.htm
This Hero Didn’t Stand a Chance
Tim DeChristopher is scheduled to be sentenced in a Salt Lake City courtroom by U.S. District Judge Dee Benson on July 26. He faces up to 10 years in prison and a $750,000 fine for fraudulently bidding in December 2008 on parcels of land, including areas around eastern Utah’s national parks, which were being sold off by the Bush administration to the oil and natural gas industry. As Bidder No. 70, he drove up the prices of some of the bids and won more than a dozen other parcels for $1.8 million. The government is asking Judge Benson to send DeChristopher to prison for four and a half years.
His prosecution is evidence that our moral order has been turned upside down. The bankers and swindlers who trashed the global economy and wiped out some $40 trillion in wealth amass obscene amounts of money, much of it provided by taxpayers. They do not go to jail. Regulatory agencies, compliant to the demands of corporations, refuse to impede the destruction unleashed by the coal, oil and natural gas companies as they turn the planet into a hothouse of pollutants, poisoned water, fouled air and contaminated soil in the frenzied quest for greater and greater profits. Those who manage and make fortunes from pre-emptive wars, embrace torture, carry out extrajudicial assassinations, deny habeas corpus and run up the largest deficits in human history are feted as patriots. But when a courageous citizen such as DeChristopher peacefully derails the corporate and governmental destruction of the ecosystem, he is sent to jail.
“The rules are written by those who profit from the status quo,” DeChristopher said when I reached him by phone this weekend in Minneapolis. “If we want to change that status quo we have to step outside of those rules. We have to put pressure on those within the political system to choose one side or another.”
DeChristopher, whose defense is being assisted by the website Peaceful Uprising, knew the government would be auctioning off public land in a sale in Salt Lake City, where he had gone to college. He knew it was wrong. He knew he had to do something.
But he did not know what. So he did what all of us should begin to do. He showed up.
“I went there with the intention of standing in the way of the auction,” he told me. “I had no idea what that would look like. I thought I might give a speech or yell something. It was right after the guy threw a shoe at Bush. That was on my mind. I went there and at the front desk they said, ‘Would you like to be a bidder?’ I said, ‘Yes, I would.’ I was still thinking when I signed up, ‘OK, I’ll sign up to be a bidder so I can get inside and make a speech.’ It wasn’t until I got inside the auction room that I saw I had a huge opportunity to stand in the way of the auction.
I had been preparing myself over the course of 2008 in a general way to take that level of action. I had been building up that commitment. I was looking for the opportunity at that point. I was ready to capitalize on it. I had prepared myself for it.”
But what he had not prepared himself for was the way the justice system would be stacked against him. It became clear during the selection of the jury that he did not stand a chance. As the prospective jurors entered the court, activists handed them a pamphlet printed by the Fully Informed Jury Association. It said that jurors had a right to come to any decision based on the evidence and their consciences.
“When the judge and the prosecutor found that out, the prosecutor, especially, flipped his shit,” DeChristopher said. “He insisted that the judge tell the jurors that this information was not true. The judge pulled most of the jurors in[to] the chambers and questioned them one at a time. He talked about what was in the pamphlet. He said that regardless of what the pamphlet said it was not their job to decide if this is right or wrong, but to listen to what he said was the law and follow that even if they thought it was morally unjust. They were not allowed to use [their] conscience. They were told they would be violating their oath if they decided this on conscience rather than the evidence that he told them to listen to.
I was sitting in that chamber and could see one person after another accept this notion. I could see it in their faces, that they had to do what they were told even if they thought it was morally unjust. That is a scary thing to witness in another human being. I saw it in one person after another brought in the courtroom, sitting at the end of a long table in front of the paternalistic figure of [the] judge with all the majesty around him. They accepted it. They did not question it. It gave me a really good understanding of how some of the great human atrocities happened with the consent of the population, that people can accept what is happening, that it is not their job to question whether any of this is right or wrong.”
As the trial began, the judge refused to let DeChristopher’s defense team inform the jury that the auction was later overturned and declared illegal. The judge also refused to let the defense team inform the jury that DeChristopher had raised the money for the initial payment and offered it to the Bureau of Land Management (BLM), which then refused to accept it.
“When our Founding Fathers created the jury system they called it the best defense against legislative tyranny,” he said. “They expected that if the government was passing laws that were out of line with the values of the community, then people would break those laws and take their case before a jury of their peers who would decide whether or not that person’s actions were justified. That was the system our country was founded upon. That shifted radically as the role of the jury has been minimized in our criminal justice system. Juries are no longer given the opportunity to weigh all the factors of a case and are specifically told they are not allowed to use their conscience. It is not their job to decide if things are right or wrong. This is a drastic departure from the system that was originally created in this country.”
When I asked DeChristopher why he did not work within the system, perhaps by backing a progressive Democrat, he answered that “if there was such a thing I might consider it.”
“I don’t see anyone in our political system advocating for significant change,” he said. “I haven’t ignored the political system. I paid attention when the Waxman-Markey [cap and trade] bill was being debated. I saw that there was a Republican amendment that if energy prices in any region of the country ever go up by more than 10 percent the whole bill is null and void. In other words, if the survival of our children ever costs more than about $300 a year per household, we are going to stop and give up. Both sides debated for over an hour whether it would or not ever cost $300. But there was no one who ever stood up and said maybe the cost was worth it, maybe that was too low a price to put on the heads of your children, maybe it was immoral to put any price on the heads of our children. There was no one standing up and addressing the severity of climate change.”
DeChristopher helped organize a grass-roots campaign in an unsuccessful effort to unseat five-term U.S. Rep. Jim Matheson of Utah.
“I saw after the experience with the Waxman-Markey bill that our Blue Dog Democrats in Utah had to go,” he said. He worked for candidate Claudia Wright in a campaign that split the delegate vote and forced a runoff primary.
“There is value in working within the democratic system, but first we need to create a democratic system,” he said. “When we ran Claudia Wright it started with a Craig’s List ‘help wanted’ ad for a ‘Courageous Congressperson.’ We pulled together a panel of longtime activists who were well respected in Utah representing various issues, from environmental issues to peace and justice to LGBT rights, labor, immigration rights and health care. That panel held public interviews at the Salt Lake City Library with all the people who had applied to the Craig’s List ad. Everybody from the district was invited and got to vote in instant runoff voting. That is how we came up with that candidate. We started from scratch.”
“If we were going to have a democracy, what would it look like? That was one experiment,” he said. “Craig’s List is probably not the ultimate answer. But we started from the acknowledgement that if we want to work within the democratic process we had to build it first.”
DeChristopher, who is 29, admits he was “cautiously optimistic” during the 2008 presidential campaign.
“I saw that nothing Obama was saying was actually good enough in terms of the climate crisis,” he said. “There was a faint hope in me that perhaps he was saying what he needed to say to get elected and then he would turn out to actually be a progressive.”
He heard Naomi Klein give a talk shortly before the election. She told her listeners that if Barack Obama was a centrist and the center was not good enough to defend our survival then our job was to move the center.
“That resonated with me,” DeChristopher said. “That was where my thinking at the time was. We as a movement had to move the center. That is another reason I turned to civil disobedience. I was looking to do something beyond what was considered acceptable to shift those boundaries, to create more space where people could be more aggressive without being on the radical edge.”
“The chair of the Intergovernmental Panel on Climate Change said what we do in the next two or three years will determine our future, and he said that in 2007 and we didn’t do anything,” he said. “A lot of folks like Jim Hansen admit it off the record, but won’t say it publicly, that it is actually too late for any amount of emission reductions to prevent some sort of collapse of our industrial civilization. That certainly doesn’t mean all is lost. It means we are in a position where we are definitely going to be navigating the most intense period of change humanity has ever seen. What that means for us is that it really matters who is in charge during that intense period of change. It means that things are going to be desperate.”
“Generally in desperate times those in power do desperate things to hold on to their power in the name of order and security,” he went on. “That is when things have gotten really ugly in the localized examples of collapse that we have in history, whether they were economically induced as in Germany in the 1930s or environmentally induced as in Darfur. Rather than an opportunity for mass reflection, which it could be, where we could say we had this coming because of fundamental flaws in the way we structured our society, that maybe greed and competition were not the best values to base everything off of, rather than doing that, it is much more common in those historical examples to say, ‘Oh, it was because of those people.’ A class of people was scapegoated. The powerful said, ‘Those are the people who are causing our problems and if we take it out on them we can maintain order and security for the rest of us.’ That is when things get really ugly and dehumanizing.”
“We are starting to see hints of that already with the rather minor ripples that we have been having in the past few years with the economic situation,” he said. “Rather than admit the fundamental flaws, many of those in power have said, ‘Oh, it is because of those immigrants that are taking people’s jobs, or those Arabs, or those unions, whoever the scapegoat is, to try and vilify someone. What we are on track for are much larger ripples than we have had in the past couple years with the economic problems. If we go into that collapse with our current power structure and a world run by corporations, where we have ignorant and apathetic people who are afraid of their own government and think their job is to do what they are told, even if they think it is immoral, that is when things can get really ugly.
If we go into that collapse with an awakened and educated population that views it as their role to create the society they want and hold their government accountable then we have the opportunity, whatever hardships we might face, to actually build a better world on the ashes of this one.”
“Our strategies must be to not only change our energy system and food system, but to change our power structures,” he said. “We shouldn’t be looking for the big corporations running the show to become a little greener and cleaner. We should be overthrowing those corporations running our government. Our job as a movement is not just to reduce emissions; while we still need to do that, we also have this other challenge of maintaining our humanity through whatever challenges lie ahead. This is much more abstract and foreign to this movement.”
“Civil disobedience puts us in a vulnerable position,” DeChristopher said. “It puts us in a position where we are refusing to be obedient to injustice. Civil disobedience puts us in a position where we are making a risk and possibly making a sacrifice to stand up against that injustice. It also puts us in a position where with that vulnerability we see how much we need other people. This is something I have experienced over the past few years as people have come out of nowhere to support me, to make actions more powerful and to help me personally get through this experience and grow from it. Appreciating these connections is one of the most important parts of resiliency. A lot of the unwillingness to take bold action is coming from a disempowerment that comes from a lack of connection. When we view ourselves as isolated individuals it does not make sense to stand up to a big powerful institution like a big corporation or big government. It is not until we gain the understanding that we are part of something much bigger that we feel empowered to take those necessary actions. This is a self-reinforcing cycle. The more we stick our neck out the more connected we become and the more empowered we become to do it again.”
DeChristopher, who attends a Unitarian church in Salt Lake City, comes out of the religious left. This left, defined by Christian anarchists such as Dorothy Day, Philip Berrigan and his brother Father Daniel Berrigan, as well as Dr. Martin Luther King, takes a moral stance not because it is always effective but because it is right, because to live the moral life means that there is no alternative. This life demands a commitment to justice no matter how bleak the future appears. And what sustains DeChristopher is what sustained the religious radicals who went before him—faith.
“The connection to a religious community for me is a big part of the empowerment,” he said. “From talking with a lot of the old Freedom Riders and other folks in the civil rights movement, it was in the church community that people found the strength and the faith that, no matter what happened to them when they sat at that lunch counter or got on that bus, there would be another wave of people coming behind them to take their place and another wave behind that and behind that. And that is part of what is missing from the progressive community today. Part of my belief system is an appreciation of our connectedness to the natural world, the interconnected web of life of which I am a part. I am not an isolated individual, and this understanding is what empowers me, but also in a more direct way in that I am connected to the church community who I knew would support me. Sitting in that auction when I was deciding to do this I was thinking about whether anyone would support me. The people I knew would have my back were in the church. That helped drive me to action.”
And because of that he understands that any resistance can never succumb to the temptation of violence.
“Violence is the realm our current power structure is really good at,” he said. “They are eager to play that game. Any opportunity we give them [to use violence], they will win. That is the game they win at. The history of social movements in this country shows that we are far more powerful with nonviolent civil disobedience than we are with what our audience considers to be violence.”
“Once our actions are deemed to be violent then that justifies repressive tactics on the part of the government,” he said. “With a nonviolent movement we are still inviting a strong reaction from the government or ruling authorities. We are inviting a powerful reaction against ourselves. But it undermines the moral legitimacy of our current government. That is the path we need to pursue. Rather than reinforcing their legitimacy we need to undermine their legitimacy.”
Friday, June 24, 2011
SC107-5
http://www.informationclearinghouse.info/article28371.htm
Waging Another Unconstitutional War
The meticulous Harvard Law Review editors should be rolling over in their footnotes. The recidivist violations of constitutional and statutory requirements by their celebrated predecessor at that journal - Barack Obama has reached Orwellian dimensions in the war against Libya.
You see, the widespread daily bombing of Libya, the strict naval blockade of Muammar Gadhafi-controlled Libya, the destruction of Gadhafi's family compound and tent encampment in the desert--killing his son and three grandchildren--and the deployment of special forces inside Libya is not a "War." It is in the Obama White House's evasive nomenclature just a "time-limited, scope-limited military action" Can you find that phrase in the Constitution?
If Obama used the word "War," he would have a more difficult time explaining to Congress and the American people (three out of four oppose this war) why he did not (1) seek a declaration of war under Article I, section 8, clause 11 of the Constitution, or (2) seek Congressional authorization for appropriated funds to further the war with our NATO co-warriors, or (3) comply with the deadlines of the War Powers Resolution. He threw all three lawful restraints on his Presidential unilateralism overboard.
So, in the invidious tradition of George W. Bush and his indentured confessor, Justice Department lawyer, John Yoo, now comfortably ensconced on the law faculty of the University of California Berkeley, Mr. Obama is blithely claiming as authority for taking our country into another war "the inherent powers of the President under Article II of the Constitution." This wouldn't pass the laugh test by Jefferson, Madison, Franklin Mason or even Hamilton. James Madison believed placing the war-declaring power in the exclusive hands of Congress was the most significant achievement during the convention in Philadelphia that summer of 1787. No more King George substitutes for America's future, they demanded.
Note that Libya did not attack the U.S. or its appendages, and did not attack a member of NATO. Obama admits these points. Libya's trusting government sovereign fund even left $37 billion in the U.S. which Obama promptly froze. Lacking even the prevaricatory pretenses for Bush's illegal invasion of Iraq in 2003, Obama and Hillary Clinton now say the U.S. is militarily involved "to protect our interests and advance our values" in the region and, of course, to protect the "universal rights" of the Libyan people. (Opportunities abound for this Obama doctrine around the world from the Congo to Syria, to Burma, to occupied Palestine and many other areas.)
Desperately seeking legitimacy, Mr. Obama cites the UN resolution, NATO, and the Arab League instead of seeking it from Congress. For all treaties with foreign countries, including the UN Charter, are trumped by the U.S. Constitution (Reid v. Covert, 354 U.S. 1 (1957)). As a former teacher of constitutional law, the President knows this basic principle but then, as Lord Acton declared: "Power corrupts and absolute power corrupts absolutely."
Congress, rendered a rubber stamp by President George W. Bush, is bestirring itself. On June 3, 2011, the House of Representatives passed H.R. Res 292 declaring that the President shall not deploy, establish, or maintain the presence of units and members of the United States Armed Forces on the ground in Libya. On this matter, Obama pleads state secrets.
On June 16, 2011, ten members of the House - five conservative Republicans (including Walter B. Jones (Rep. N.C.) and Ron Paul (Rep. Texas) and five Democrats (including Dennis Kucinich (Dem. Ohio) and John Conyers (Dem. Mich.) filed suit against President Obama in federal district court for an order declaring the U.S. war in Libya "without a declaration of Congress with the use of funds never approved for such a war" to be unconstitutional. Given past judicial decisions declaring members of Congress to have "no standing to sue" on what they call "political matters," this suit is facing an uphill barrier.
Congress has appropriated no money for this war, already costing nearly a billion dollars, nor has the lawless Obama asked for it because he knows there will be strong bi-partisan resistance.
So where is the Congress to go but to the courts to decide this internal, domestic issue affecting the separation of powers provoked by a clearly lawless President? The degraded, politicized, formerly professional, Office of Legal Counsel is a sleazy apologist for presidential overreaching for over two decades.
The expanding immunities of the Executive branch, now increasingly embracing the military contractors of the corporate state, is destroying the remaining pretensions that we are a nation under law. When he was inaugurated as President in January 2009, President Obama said he wanted his Administration to be known as one of "transparency and the rule of law." You'll recall during his 2008 campaign he trumpeted that he would obey the Constitution, inferring the the Republican regime was trampling the Rule of Law.
Indeed in 2007, then Senator Barack Obama stated that "the president does not have any power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation." Vice President Biden was even more vehement on this issue. And Secretary of Defense Robert Gates originally opposed the attack on Libya before falling in line.
Gadhafi's dictatorship is a brutal one. Civil wars are brutal. People are dying and suffering. The country is being torn apart. Obama and NATO are not adequately testing offers for a truce and supervised elections. Top level officials are defecting from Gadhafi and hoping to help lead any successor government.
Regimes brutalize their people whether as dictatorships, authoritarian rulers, connected with dominant oligarchies, or through racial, religious or other sectarian repressions. Is the U.S., mired in deep recession, debt and its own kleptocracy, going to continue to police the world with bases, interventions, subversions or occupation?
The cause of human rights everywhere, needs a permanent, well-quipped professional United Nations peace-keeping force and effective international courts to prevent mass massacres and mass brutalities. That time is not near but it should be at the top of the agenda of civilized nations.
The U.S., as the number one military superpower, provoking antagonisms by its penchant for control throughout the world, should not imperially advance the empire. It is that belief which is bringing Right and Left together, not just in Congress, but around the country.
Waging Another Unconstitutional War
The meticulous Harvard Law Review editors should be rolling over in their footnotes. The recidivist violations of constitutional and statutory requirements by their celebrated predecessor at that journal - Barack Obama has reached Orwellian dimensions in the war against Libya.
You see, the widespread daily bombing of Libya, the strict naval blockade of Muammar Gadhafi-controlled Libya, the destruction of Gadhafi's family compound and tent encampment in the desert--killing his son and three grandchildren--and the deployment of special forces inside Libya is not a "War." It is in the Obama White House's evasive nomenclature just a "time-limited, scope-limited military action" Can you find that phrase in the Constitution?
If Obama used the word "War," he would have a more difficult time explaining to Congress and the American people (three out of four oppose this war) why he did not (1) seek a declaration of war under Article I, section 8, clause 11 of the Constitution, or (2) seek Congressional authorization for appropriated funds to further the war with our NATO co-warriors, or (3) comply with the deadlines of the War Powers Resolution. He threw all three lawful restraints on his Presidential unilateralism overboard.
So, in the invidious tradition of George W. Bush and his indentured confessor, Justice Department lawyer, John Yoo, now comfortably ensconced on the law faculty of the University of California Berkeley, Mr. Obama is blithely claiming as authority for taking our country into another war "the inherent powers of the President under Article II of the Constitution." This wouldn't pass the laugh test by Jefferson, Madison, Franklin Mason or even Hamilton. James Madison believed placing the war-declaring power in the exclusive hands of Congress was the most significant achievement during the convention in Philadelphia that summer of 1787. No more King George substitutes for America's future, they demanded.
Note that Libya did not attack the U.S. or its appendages, and did not attack a member of NATO. Obama admits these points. Libya's trusting government sovereign fund even left $37 billion in the U.S. which Obama promptly froze. Lacking even the prevaricatory pretenses for Bush's illegal invasion of Iraq in 2003, Obama and Hillary Clinton now say the U.S. is militarily involved "to protect our interests and advance our values" in the region and, of course, to protect the "universal rights" of the Libyan people. (Opportunities abound for this Obama doctrine around the world from the Congo to Syria, to Burma, to occupied Palestine and many other areas.)
Desperately seeking legitimacy, Mr. Obama cites the UN resolution, NATO, and the Arab League instead of seeking it from Congress. For all treaties with foreign countries, including the UN Charter, are trumped by the U.S. Constitution (Reid v. Covert, 354 U.S. 1 (1957)). As a former teacher of constitutional law, the President knows this basic principle but then, as Lord Acton declared: "Power corrupts and absolute power corrupts absolutely."
Congress, rendered a rubber stamp by President George W. Bush, is bestirring itself. On June 3, 2011, the House of Representatives passed H.R. Res 292 declaring that the President shall not deploy, establish, or maintain the presence of units and members of the United States Armed Forces on the ground in Libya. On this matter, Obama pleads state secrets.
On June 16, 2011, ten members of the House - five conservative Republicans (including Walter B. Jones (Rep. N.C.) and Ron Paul (Rep. Texas) and five Democrats (including Dennis Kucinich (Dem. Ohio) and John Conyers (Dem. Mich.) filed suit against President Obama in federal district court for an order declaring the U.S. war in Libya "without a declaration of Congress with the use of funds never approved for such a war" to be unconstitutional. Given past judicial decisions declaring members of Congress to have "no standing to sue" on what they call "political matters," this suit is facing an uphill barrier.
Congress has appropriated no money for this war, already costing nearly a billion dollars, nor has the lawless Obama asked for it because he knows there will be strong bi-partisan resistance.
So where is the Congress to go but to the courts to decide this internal, domestic issue affecting the separation of powers provoked by a clearly lawless President? The degraded, politicized, formerly professional, Office of Legal Counsel is a sleazy apologist for presidential overreaching for over two decades.
The expanding immunities of the Executive branch, now increasingly embracing the military contractors of the corporate state, is destroying the remaining pretensions that we are a nation under law. When he was inaugurated as President in January 2009, President Obama said he wanted his Administration to be known as one of "transparency and the rule of law." You'll recall during his 2008 campaign he trumpeted that he would obey the Constitution, inferring the the Republican regime was trampling the Rule of Law.
Indeed in 2007, then Senator Barack Obama stated that "the president does not have any power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation." Vice President Biden was even more vehement on this issue. And Secretary of Defense Robert Gates originally opposed the attack on Libya before falling in line.
Gadhafi's dictatorship is a brutal one. Civil wars are brutal. People are dying and suffering. The country is being torn apart. Obama and NATO are not adequately testing offers for a truce and supervised elections. Top level officials are defecting from Gadhafi and hoping to help lead any successor government.
Regimes brutalize their people whether as dictatorships, authoritarian rulers, connected with dominant oligarchies, or through racial, religious or other sectarian repressions. Is the U.S., mired in deep recession, debt and its own kleptocracy, going to continue to police the world with bases, interventions, subversions or occupation?
The cause of human rights everywhere, needs a permanent, well-quipped professional United Nations peace-keeping force and effective international courts to prevent mass massacres and mass brutalities. That time is not near but it should be at the top of the agenda of civilized nations.
The U.S., as the number one military superpower, provoking antagonisms by its penchant for control throughout the world, should not imperially advance the empire. It is that belief which is bringing Right and Left together, not just in Congress, but around the country.
SC107-4
http://www.postcarbon.org/blog-post/371474-global-youth-uprising-dashed-hopes-anger
Global Youth Uprising: Dashed Hopes, Anger, and Realism
Media reports often fail to connect recurring demonstrations in Greece and Spain with those in the Middle East and North Africa (Tunisia, Egypt, Syria, Yemen, Libya, Bahrain). After all, the MENA demonstrations are ostensibly about democracy, while European countries already have functioning electoral systems. Protestors in Greece and Spain are instead decrying austerity programs resulting from governmental efforts to rein in deficits and debt burdens.
At the core, though, all of these uprisings are about the simultaneous failure of modern economics and modern politics—even though systems differ somewhat from country to country. People in all of the nations mentioned have one thing in common: crushed expectations. Economists and politicians have promised jobs and growth, but instead citizens are seeing spreading unemployment, rising food and energy prices, and increasing economic inequality. Nowhere are there realistic prospects for a political remedy to worsening economic conditions. Thus, while unrest seems destined to spread and intensify in the months and years ahead, it has no clear long-term strategy or goal.
Consider Spain. Unemployment for the populace as a whole is running at about 20 percent, but among young people the jobless portion approaches half. Even many employed Spaniards find rising food and fuel prices impossible to keep up with. Meanwhile, there is only austerity to look forward to now that a real estate bubble has burst and years of government overspending and imprudent bank lending are bearing bitter fruit.
It’s easy to understand why youth would be populating street encampments and leading demonstrations: they have nothing to lose and little to look forward to. Young people have led revolts before throughout history, though the current instance marks a strong contrast with a fairly recent comparable example—the youth revolt of 1968: then young people rose up because they could afford to; now they’re doing so because they can’t afford not to.
The frustrations of the demonstrators cannot adequately be framed in traditional left-right political rhetoric. In Spain, the uprisings have led to the election of a center-right government—not because that’s what demonstrators want, but because incumbent socialists had failed to head off worsening economic conditions. In Yemen, demonstrators are battling an entrenched right-leaning monarchy for much the same reason. Everywhere, the demand is essentially simply to throw out the old parties and start over.
And that means throwing out the old economy and starting over. Implicit in many uprisings is a demand to divorce the debt and refuse the banks. Of all nations hit with a banking crisis, Iceland has come closest actually to doing this, and has emerged relatively well off as a result. For Greece and Spain, however, similar actions would inspire a contagion of default throughout the EU and beyond, so efforts in this direction are being strongly discouraged by the IMF and other EU countries.
The prospects for substantive change elsewhere, leading to genuine improvement in economic conditions, are similarly dim. In Egypt, after a coordinated youth-led revolt succeeded in unseating long-time strongman Mubarak, the army is in charge until elections later this year, while the Egyptian economy appears to be teetering on the verge of collapse. Dictators in Bahrain, Syria, and Yemen are fighting ruthlessly to maintain control of their countries, leading some commentators to speak of a summer of counter-revolution (following the spring of uprisings). In Libya, Muammar Gaddafi’s eventual replacement will almost certainly be hand-picked by the CIA; meanwhile, however, that nation appears to be fracturing permanently, so that it may never again comprise a single coherent entity. A similar fate may await Yemen.
The difficulty of finding solutions reflects the enormity of the problem. Much of humanity has spent the past century and more living on one-time-only jolt of cheap fossil energy. We used cheap energy to speed up and intensify the extraction of renewable and non-renewable resources of all kinds—from cod to copper. Our population has dramatically and rapidly expanded to take advantage of temporary abundance. We redesigned our monetary systems so that money could be loaned into existence in any quantity desired—and we trusted that quantities being borrowed would always increase, so that interest on existing debt could always be repaid.
Politicians (whether elected parliamentarians or hereditary dictators) promised that consumption levels would continue to rise, and that investors would continue to enjoy high rates of return.
After the 1970s, growth in the real economy began to stall in the older industrial nations (the US and Europe), and so politicians and investors encouraged continued growth through debt expansion—at all levels of society, from household mortgages to securitization and derivatives, to government borrowing. This shifted the cost of today’s consumption binge onto the backs of tomorrow’s taxpayers and debtors. Now the game is nearly up—and no one knows where the money will come from either to pay the debt for the last three decades of consumption, or to pay for today’s continued consumption.
In the short term, and especially in the cases of Greece, Ireland, and Spain, hounding politicians from office is unlikely to yield much real change. After all, politicians are merely doing what bankers are demanding—with a metaphorical gun held to the head of the hostage economy. Bankers and investors expect to be made whole for debt that cannot in fact be repaid. Protestors are right to insist that their nations simply stiff the banks, which will then be forced to write off tons of bad debt now rather than later. Better to get the defaults over with and keep what’s left of national treasures that would otherwise be auctioned off to make a few desultory payments under doomed IMF restructuring agreements. Next step: Replace debt-money systems controlled by private banks with currencies issued by the government or state-owned banks. Downsize the economy fairly.
That will all be difficult enough. But what comes after is the real clincher. All of this will only buy time unless national economies are fundamentally redesigned to become sustainable in the face of ongoing global resource depletion. Renewable resources must be used at less than the rate of natural replenishment. Non-renewable resource extraction rates must decline, and materials must be recycled wherever possible. Waste from industrial processes must be food for other industrial processes or natural systems. These essential principles are simple enough that a child can understand them. Economists and politicians ignored them in decades past, though that meant passing a burden to future generations. Now the bills are coming due and facts must be faced.
Adjusting to a world of limited resources and starkly lower consumption levels will be hard. The key is to make the adjustment fairly. If we do this, we can get through this difficult historic transition peacefully. The social principle that must guide us is every bit as axiomatic as the ecological principles mentioned in the preceding paragraph: Those who will be impacted by social change must have a voice in shaping it.
Today Damascus and Athens, tomorrow Washington and Beijing. The trends for energy, resources, debt, and politics are inexorable. The only really relevant question is, how will the inevitable transition be handled—with peace and fairness, or bloody repression?
Perhaps things will go more smoothly if protestors and politicians at least know what is at stake, what the larger constraints are, and what may be possible within them.
Global Youth Uprising: Dashed Hopes, Anger, and Realism
Media reports often fail to connect recurring demonstrations in Greece and Spain with those in the Middle East and North Africa (Tunisia, Egypt, Syria, Yemen, Libya, Bahrain). After all, the MENA demonstrations are ostensibly about democracy, while European countries already have functioning electoral systems. Protestors in Greece and Spain are instead decrying austerity programs resulting from governmental efforts to rein in deficits and debt burdens.
At the core, though, all of these uprisings are about the simultaneous failure of modern economics and modern politics—even though systems differ somewhat from country to country. People in all of the nations mentioned have one thing in common: crushed expectations. Economists and politicians have promised jobs and growth, but instead citizens are seeing spreading unemployment, rising food and energy prices, and increasing economic inequality. Nowhere are there realistic prospects for a political remedy to worsening economic conditions. Thus, while unrest seems destined to spread and intensify in the months and years ahead, it has no clear long-term strategy or goal.
Consider Spain. Unemployment for the populace as a whole is running at about 20 percent, but among young people the jobless portion approaches half. Even many employed Spaniards find rising food and fuel prices impossible to keep up with. Meanwhile, there is only austerity to look forward to now that a real estate bubble has burst and years of government overspending and imprudent bank lending are bearing bitter fruit.
It’s easy to understand why youth would be populating street encampments and leading demonstrations: they have nothing to lose and little to look forward to. Young people have led revolts before throughout history, though the current instance marks a strong contrast with a fairly recent comparable example—the youth revolt of 1968: then young people rose up because they could afford to; now they’re doing so because they can’t afford not to.
The frustrations of the demonstrators cannot adequately be framed in traditional left-right political rhetoric. In Spain, the uprisings have led to the election of a center-right government—not because that’s what demonstrators want, but because incumbent socialists had failed to head off worsening economic conditions. In Yemen, demonstrators are battling an entrenched right-leaning monarchy for much the same reason. Everywhere, the demand is essentially simply to throw out the old parties and start over.
And that means throwing out the old economy and starting over. Implicit in many uprisings is a demand to divorce the debt and refuse the banks. Of all nations hit with a banking crisis, Iceland has come closest actually to doing this, and has emerged relatively well off as a result. For Greece and Spain, however, similar actions would inspire a contagion of default throughout the EU and beyond, so efforts in this direction are being strongly discouraged by the IMF and other EU countries.
The prospects for substantive change elsewhere, leading to genuine improvement in economic conditions, are similarly dim. In Egypt, after a coordinated youth-led revolt succeeded in unseating long-time strongman Mubarak, the army is in charge until elections later this year, while the Egyptian economy appears to be teetering on the verge of collapse. Dictators in Bahrain, Syria, and Yemen are fighting ruthlessly to maintain control of their countries, leading some commentators to speak of a summer of counter-revolution (following the spring of uprisings). In Libya, Muammar Gaddafi’s eventual replacement will almost certainly be hand-picked by the CIA; meanwhile, however, that nation appears to be fracturing permanently, so that it may never again comprise a single coherent entity. A similar fate may await Yemen.
The difficulty of finding solutions reflects the enormity of the problem. Much of humanity has spent the past century and more living on one-time-only jolt of cheap fossil energy. We used cheap energy to speed up and intensify the extraction of renewable and non-renewable resources of all kinds—from cod to copper. Our population has dramatically and rapidly expanded to take advantage of temporary abundance. We redesigned our monetary systems so that money could be loaned into existence in any quantity desired—and we trusted that quantities being borrowed would always increase, so that interest on existing debt could always be repaid.
Politicians (whether elected parliamentarians or hereditary dictators) promised that consumption levels would continue to rise, and that investors would continue to enjoy high rates of return.
After the 1970s, growth in the real economy began to stall in the older industrial nations (the US and Europe), and so politicians and investors encouraged continued growth through debt expansion—at all levels of society, from household mortgages to securitization and derivatives, to government borrowing. This shifted the cost of today’s consumption binge onto the backs of tomorrow’s taxpayers and debtors. Now the game is nearly up—and no one knows where the money will come from either to pay the debt for the last three decades of consumption, or to pay for today’s continued consumption.
In the short term, and especially in the cases of Greece, Ireland, and Spain, hounding politicians from office is unlikely to yield much real change. After all, politicians are merely doing what bankers are demanding—with a metaphorical gun held to the head of the hostage economy. Bankers and investors expect to be made whole for debt that cannot in fact be repaid. Protestors are right to insist that their nations simply stiff the banks, which will then be forced to write off tons of bad debt now rather than later. Better to get the defaults over with and keep what’s left of national treasures that would otherwise be auctioned off to make a few desultory payments under doomed IMF restructuring agreements. Next step: Replace debt-money systems controlled by private banks with currencies issued by the government or state-owned banks. Downsize the economy fairly.
That will all be difficult enough. But what comes after is the real clincher. All of this will only buy time unless national economies are fundamentally redesigned to become sustainable in the face of ongoing global resource depletion. Renewable resources must be used at less than the rate of natural replenishment. Non-renewable resource extraction rates must decline, and materials must be recycled wherever possible. Waste from industrial processes must be food for other industrial processes or natural systems. These essential principles are simple enough that a child can understand them. Economists and politicians ignored them in decades past, though that meant passing a burden to future generations. Now the bills are coming due and facts must be faced.
Adjusting to a world of limited resources and starkly lower consumption levels will be hard. The key is to make the adjustment fairly. If we do this, we can get through this difficult historic transition peacefully. The social principle that must guide us is every bit as axiomatic as the ecological principles mentioned in the preceding paragraph: Those who will be impacted by social change must have a voice in shaping it.
Today Damascus and Athens, tomorrow Washington and Beijing. The trends for energy, resources, debt, and politics are inexorable. The only really relevant question is, how will the inevitable transition be handled—with peace and fairness, or bloody repression?
Perhaps things will go more smoothly if protestors and politicians at least know what is at stake, what the larger constraints are, and what may be possible within them.
SC107-3
http://www.globalresearch.ca/index.php?context=va&aid=25339
9/11 and the Orwellian Redefinition of "Conspiracy Theory"
While we were not watching, conspiracy theory has undergone Orwellian redefinition.
A “conspiracy theory” no longer means an event explained by a conspiracy. Instead, it now means any explanation, or even a fact, that is out of step with the government’s explanation and that of its media pimps.
For example, online news broadcasts of RT have been equated with conspiracy theories by the New York Times simply because RT reports news and opinions that the New York Times does not report and the US government does not endorse.
In other words, as truth becomes uncomfortable for government and its Ministry of Propaganda, truth is redefined as conspiracy theory, by which is meant an absurd and laughable explanation that we should ignore.
When piles of carefully researched books, released government documents, and testimony of eye witnesses made it clear that Oswald was not President John F. Kennedy’s assassin, the voluminous research, government documents, and verified testimony was dismissed as “conspiracy theory.”
In other words, the truth of the event was unacceptable to the authorities and to the Ministry of Propaganda that represents the interests of authorities.
The purest example of how Americans are shielded from truth is the media’s (including many Internet sites’) response to the large number of professionals who find the official explanation of September 11, 2001, inconsistent with everything they, as experts, know about physics, chemistry, structural engineering, architecture, fires, structural damage, the piloting of airplanes, the security procedures of the United States, NORAD’s capabilities, air traffic control, airport security, and other matters. These experts, numbering in the thousands, have been shouted down by know-nothings in the media who brand the experts as “conspiracy theorists.”
This despite the fact that the official explanation endorsed by the official media is the most extravagant conspiracy theory in human history.
Let’s take a minute to re-acquaint ourselves with the official explanation, which is not regarded as a conspiracy theory despite the fact that it comprises an amazing conspiracy. The official truth is that a handful of young Muslim Arabs who could not fly airplanes, mainly Saudi Arabians who came neither from Iraq nor from Afghanistan, outwitted not only the CIA and the FBI, but also all 16 US intelligence agencies and all intelligence agencies of US allies including Israel’s Mossad, which is believed to have penetrated every terrorist organization and which carries out assassinations of those whom Mossad marks as terrorists.
In addition to outwitting every intelligence agency of the United States and its allies, the handful of young Saudi Arabians outwitted the National Security Council, the State Department, NORAD, airport security four times in the same hour on the same morning, air traffic control, caused the US Air Force to be unable to launch interceptor aircraft, and caused three well-built steel-structured buildings, including one not hit by an airplane, to fail suddenly in a few seconds as a result of limited structural damage and small, short-lived, low-temperature fires that burned on a few floors.
The Saudi terrorists were even able to confound the laws of physics and cause WTC building seven to collapse at free fall speed for several seconds, a physical impossibility in the absence of explosives used in controlled demolition.
The story that the government and the media have told us amounts to a gigantic conspiracy, really a script for a James Bond film. Yet, anyone who doubts this improbable conspiracy theory is defined into irrelevance by the obedient media.
Anyone who believes an architect, structural engineer, or demolition expert who says that the videos show that the buildings are blowing up, not falling down, anyone who believes a Ph.D. physicist who says that the official explanation is inconsistent with known laws of physics, anyone who believes expert pilots who testify that non-pilots or poorly-qualified pilots cannot fly airplanes in such maneuvers, anyone who believes the 100 or more first responders who testify that they not only heard explosions in the towers but personally experienced explosions, anyone who believes University of Copenhagen nano-chemist Niels Harrit who reports finding unreacted nano-thermite in dust samples from the WTC towers, anyone who is convinced by experts instead of by propaganda is dismissed as a kook.
In America today, and increasingly throughout the Western world, actual facts and true explanations have been relegated to the realm of kookiness. Only people who believe lies are socially approved and accepted as patriotic citizens.
Indeed, a writer or newscaster is not even permitted to report the findings of 9/11 skeptics. In other words, simply to report Professor Harrit’s findings now means that you endorse them or agree with them. Everyone in the US print and TV media knows that he/she will be instantly fired if they report Harrit’s findings, even with a laugh. Thus, although Harrit has reported his findings on European television and has lectured widely on his findings in Canadian universities, the fact that he and the international scientific research team that he led found unreacted nano-thermite in the WTC dust and have offered samples to other scientists to examine has to my knowledge never been reported in the American media.
Even Internet sites on which I am among the readers’ favorites will not allow me to report on Harrit’s findings.
As I reported earlier, I myself had experience with a Huffington Post reporter who was keen to interview a Reagan presidential appointee who was in disagreement with the Republican wars in the Middle East. After he published the interview that I provided at his request, he was terrified to learn that I had reported findings of 9/11 investigators. To protect his career, he quickly inserted on the online interview that my views on the Iraq and Afghanistan invasions could be dismissed as I had reported unacceptable findings about 9/11.
The unwillingness or inability to entertain any view of 9/11 different from the official view dooms to impotence many Internet sites that are opposed to the wars and to the rise of the domestic US police state. These sites, for whatever the reasons, accept the government’s explanation of 9/11; yet, they try to oppose the “war on terror” and the police state which are the consequences of accepting the government’s explanation. Trying to oppose the consequences of an event whose explanation you accept is an impossible task.
If you believe that America was attacked by Muslim terrorists and is susceptible to future attacks, then a “war on terror” and a domestic police state to root out terrorists become necessary to make Americans safe. The idea that a domestic police state and open-ended war might be more dangerous threats to Americans than terrorists is an impermissible thought.
A country whose population has been trained to accept the government’s word and to shun those who question it is a country without liberty in its future.
9/11 and the Orwellian Redefinition of "Conspiracy Theory"
While we were not watching, conspiracy theory has undergone Orwellian redefinition.
A “conspiracy theory” no longer means an event explained by a conspiracy. Instead, it now means any explanation, or even a fact, that is out of step with the government’s explanation and that of its media pimps.
For example, online news broadcasts of RT have been equated with conspiracy theories by the New York Times simply because RT reports news and opinions that the New York Times does not report and the US government does not endorse.
In other words, as truth becomes uncomfortable for government and its Ministry of Propaganda, truth is redefined as conspiracy theory, by which is meant an absurd and laughable explanation that we should ignore.
When piles of carefully researched books, released government documents, and testimony of eye witnesses made it clear that Oswald was not President John F. Kennedy’s assassin, the voluminous research, government documents, and verified testimony was dismissed as “conspiracy theory.”
In other words, the truth of the event was unacceptable to the authorities and to the Ministry of Propaganda that represents the interests of authorities.
The purest example of how Americans are shielded from truth is the media’s (including many Internet sites’) response to the large number of professionals who find the official explanation of September 11, 2001, inconsistent with everything they, as experts, know about physics, chemistry, structural engineering, architecture, fires, structural damage, the piloting of airplanes, the security procedures of the United States, NORAD’s capabilities, air traffic control, airport security, and other matters. These experts, numbering in the thousands, have been shouted down by know-nothings in the media who brand the experts as “conspiracy theorists.”
This despite the fact that the official explanation endorsed by the official media is the most extravagant conspiracy theory in human history.
Let’s take a minute to re-acquaint ourselves with the official explanation, which is not regarded as a conspiracy theory despite the fact that it comprises an amazing conspiracy. The official truth is that a handful of young Muslim Arabs who could not fly airplanes, mainly Saudi Arabians who came neither from Iraq nor from Afghanistan, outwitted not only the CIA and the FBI, but also all 16 US intelligence agencies and all intelligence agencies of US allies including Israel’s Mossad, which is believed to have penetrated every terrorist organization and which carries out assassinations of those whom Mossad marks as terrorists.
In addition to outwitting every intelligence agency of the United States and its allies, the handful of young Saudi Arabians outwitted the National Security Council, the State Department, NORAD, airport security four times in the same hour on the same morning, air traffic control, caused the US Air Force to be unable to launch interceptor aircraft, and caused three well-built steel-structured buildings, including one not hit by an airplane, to fail suddenly in a few seconds as a result of limited structural damage and small, short-lived, low-temperature fires that burned on a few floors.
The Saudi terrorists were even able to confound the laws of physics and cause WTC building seven to collapse at free fall speed for several seconds, a physical impossibility in the absence of explosives used in controlled demolition.
The story that the government and the media have told us amounts to a gigantic conspiracy, really a script for a James Bond film. Yet, anyone who doubts this improbable conspiracy theory is defined into irrelevance by the obedient media.
Anyone who believes an architect, structural engineer, or demolition expert who says that the videos show that the buildings are blowing up, not falling down, anyone who believes a Ph.D. physicist who says that the official explanation is inconsistent with known laws of physics, anyone who believes expert pilots who testify that non-pilots or poorly-qualified pilots cannot fly airplanes in such maneuvers, anyone who believes the 100 or more first responders who testify that they not only heard explosions in the towers but personally experienced explosions, anyone who believes University of Copenhagen nano-chemist Niels Harrit who reports finding unreacted nano-thermite in dust samples from the WTC towers, anyone who is convinced by experts instead of by propaganda is dismissed as a kook.
In America today, and increasingly throughout the Western world, actual facts and true explanations have been relegated to the realm of kookiness. Only people who believe lies are socially approved and accepted as patriotic citizens.
Indeed, a writer or newscaster is not even permitted to report the findings of 9/11 skeptics. In other words, simply to report Professor Harrit’s findings now means that you endorse them or agree with them. Everyone in the US print and TV media knows that he/she will be instantly fired if they report Harrit’s findings, even with a laugh. Thus, although Harrit has reported his findings on European television and has lectured widely on his findings in Canadian universities, the fact that he and the international scientific research team that he led found unreacted nano-thermite in the WTC dust and have offered samples to other scientists to examine has to my knowledge never been reported in the American media.
Even Internet sites on which I am among the readers’ favorites will not allow me to report on Harrit’s findings.
As I reported earlier, I myself had experience with a Huffington Post reporter who was keen to interview a Reagan presidential appointee who was in disagreement with the Republican wars in the Middle East. After he published the interview that I provided at his request, he was terrified to learn that I had reported findings of 9/11 investigators. To protect his career, he quickly inserted on the online interview that my views on the Iraq and Afghanistan invasions could be dismissed as I had reported unacceptable findings about 9/11.
The unwillingness or inability to entertain any view of 9/11 different from the official view dooms to impotence many Internet sites that are opposed to the wars and to the rise of the domestic US police state. These sites, for whatever the reasons, accept the government’s explanation of 9/11; yet, they try to oppose the “war on terror” and the police state which are the consequences of accepting the government’s explanation. Trying to oppose the consequences of an event whose explanation you accept is an impossible task.
If you believe that America was attacked by Muslim terrorists and is susceptible to future attacks, then a “war on terror” and a domestic police state to root out terrorists become necessary to make Americans safe. The idea that a domestic police state and open-ended war might be more dangerous threats to Americans than terrorists is an impermissible thought.
A country whose population has been trained to accept the government’s word and to shun those who question it is a country without liberty in its future.
SC107-2
http://kunstler.com/blog/2011/06/a-distant-sound-of-churning-1.html
A Distant Sound of Churning
In my last dream of a febrile night, I put my flat-screen TV on top of an old house in town and watched it crash onto the street. There was nothing inside it. The darn thing was empty. The ghost of Little Caylee wasn't even in there.
From the news this weekend, you'd think the world was in a coma, but I swear I heard ominous bassoon phrases through the night rain... something large groaning out there in the dark. A great churn, coming closer. The world is in a box, tortured with its obsolete ideas about how economies are supposed to run, especially the money part, and the economists are clueless.
A case in point: the eminent Vincent Reinhart at the Council of Foreign Relations last week. (Conspiracy theorists just shut your pie-holes):
"There are very few debt defaults... there are a whole lot of restructurings. For most of history, default is something the strong declare on the weak when they lose their patience. And if you're members of the same club, you're less likely to lose your patience. Hence you're less likely to default. Greece is in the club."
The club he refers to - the Euro money club - is less a jolly fraternal lodge than a funeral insurance association. The latest restructuring for Greece he referred to is a cockamamie perpetual rollover with no redemptions allowed, while Greece has to agree to become more like its neighbor, Albania, in lifestyle - that is, like Borat, minus the joie de vivre.
There's a third option that Reinhart ignores: the Greek populace can riot in the streets, toss out their government, install some kind of rump leadership and hoist its middle fingers at the Euro management team, opting out of the club. Why this does not occur to Reinhart (and many other vested poobahs) I can't say, despite the fact that there are many places around the world (especially Europe these days) where the natives are obviously getting restless. Besides, it's not lost on the Greek people that they're being asked to go Albanian for the sake of a dozen banks up in Germany, France, and Holland, not their own country's sacred honor.
The proposed restructuring is all about the Great Fear that haunts the inner sanctums of finance (like the ghost of Caylee haunts America): counter-party obligations on a Burj Dubai of side bets over things such as the soundness of bonds and the movement of interest rates. The world of money imagines a thundering crash of cascading defaults as the various counter-parties are revealed to be broke, naked, and ashamed. And rightly so, because the creakings and groanings of this tower of paper will not only crash, but burn, too. The bankers can already smell it.
Anyway, let's be clear that money has become a world unto itself now, a self-referential hall-of-mirrors that only sees itself and is increasingly confused by what it sees in that self. Outside that blinding little box there are real economies of people trying like hell to go about their daily life, and there is much to be fretful about. Economies are caught in the permanent compressive contraction of fossil fuel based activities. When you hear a politician utter the word "growth" note that he/she is speaking out of his/her ass. Contraction is contraction, not growth. We're done with growth of that kind because our fuel supplies are shrinking, not growing. The vaunted "recovery" is a political three-card-monte trick.
The sad fact is we don't want to go where history wants to take us: to a smaller human imprint on the planet, with all that implies. This is true especially of the intellectual avant-garde, who can't imagine a world without the joys of perpetual techno-narcissistic novelty, of levitating skyscraper cities with hanging gardens and flying cars, full of girls with green nail-polish in get-ups so fantastic mere mortals could never have dreamed them up, flaunting hand-held gadgets so miraculous that life itself seems besides the point. Oh, shimmering future! Oh Ray Kurzweil and your nano-ladder to the worm-holes of forever!
This Ancien Régime is about to be swept away on the tsunami of its own futility.
The failure of leadership around the world is now complete. Nobody who needs to get it gets it. Our own money management team here in the USA is in a box even worse than Europe's. It's not even a hall of mirrors. It's a broke-down Winnebago with moldy upholstery and the propane line is leaking inside. Everybody's wondering if Ben Bernanke is going to light a cigarette. What else can he do? If he doesn't keep the QE-ZIRP racket going, the wheels will come off the Winnebago. If he lights that American Spirit, she'll blow.
The US banking system can easily implode, anyway, if a European nation or two opts out of ECB-peristroika. God knows who is a counter-party to whom in the mammoth international clusterfuck of accounting fraud that passes for a commerce in capital. Hence, everybody is nervous - except the fools at the Nascar oval with Big Gulps in their fists. When the Greeks and Spain's youth corps, and even the bleery folk of Dublin take to the central square to express their rage, and hoist middle fingers to those who would chisel them into debt serfdom, Americans will have no central squares to go to. Will we take to the highway strips and burn down a Taco Bell or two? Maybe President Obama will ask congress for a home mortgage TARP, guaranteeing that nobody will ever buy a house again, at least not on an installment loan. Maybe in tonight's New Hampshire "debate," Michele Bachman will appeal to Jesus for the release of Little Caylee from eternity's impoundment lot, and the stunt will carry her overwhelmingly to the oval office.
By then, America, too, will be more like Albania. You can take that to the bank, if there's one left standing. Yesterday a little US flag appeared on every mailbox in the neighborhood. Someone is trying to help remind us what country this is. Most years, this is just ceremonial routine, but now I suspect a lot of people get up and scratch their heads over it. And, believe me, just waving that old flag is not going to furnish any kind of idea you can really hang onto.
Out of the current stillness in world events, a horrible churning waits. Men in impeccable suits on Swiss terraces cannot hide their anxiety. One might even lose it and jump a hotel maid - you never know. Bernanke, Obama, Geithner are powerless against the dark lurking churn, though they can easily make it worse. What a summer we're in for. Get out of the stock market.
A Distant Sound of Churning
In my last dream of a febrile night, I put my flat-screen TV on top of an old house in town and watched it crash onto the street. There was nothing inside it. The darn thing was empty. The ghost of Little Caylee wasn't even in there.
From the news this weekend, you'd think the world was in a coma, but I swear I heard ominous bassoon phrases through the night rain... something large groaning out there in the dark. A great churn, coming closer. The world is in a box, tortured with its obsolete ideas about how economies are supposed to run, especially the money part, and the economists are clueless.
A case in point: the eminent Vincent Reinhart at the Council of Foreign Relations last week. (Conspiracy theorists just shut your pie-holes):
"There are very few debt defaults... there are a whole lot of restructurings. For most of history, default is something the strong declare on the weak when they lose their patience. And if you're members of the same club, you're less likely to lose your patience. Hence you're less likely to default. Greece is in the club."
The club he refers to - the Euro money club - is less a jolly fraternal lodge than a funeral insurance association. The latest restructuring for Greece he referred to is a cockamamie perpetual rollover with no redemptions allowed, while Greece has to agree to become more like its neighbor, Albania, in lifestyle - that is, like Borat, minus the joie de vivre.
There's a third option that Reinhart ignores: the Greek populace can riot in the streets, toss out their government, install some kind of rump leadership and hoist its middle fingers at the Euro management team, opting out of the club. Why this does not occur to Reinhart (and many other vested poobahs) I can't say, despite the fact that there are many places around the world (especially Europe these days) where the natives are obviously getting restless. Besides, it's not lost on the Greek people that they're being asked to go Albanian for the sake of a dozen banks up in Germany, France, and Holland, not their own country's sacred honor.
The proposed restructuring is all about the Great Fear that haunts the inner sanctums of finance (like the ghost of Caylee haunts America): counter-party obligations on a Burj Dubai of side bets over things such as the soundness of bonds and the movement of interest rates. The world of money imagines a thundering crash of cascading defaults as the various counter-parties are revealed to be broke, naked, and ashamed. And rightly so, because the creakings and groanings of this tower of paper will not only crash, but burn, too. The bankers can already smell it.
Anyway, let's be clear that money has become a world unto itself now, a self-referential hall-of-mirrors that only sees itself and is increasingly confused by what it sees in that self. Outside that blinding little box there are real economies of people trying like hell to go about their daily life, and there is much to be fretful about. Economies are caught in the permanent compressive contraction of fossil fuel based activities. When you hear a politician utter the word "growth" note that he/she is speaking out of his/her ass. Contraction is contraction, not growth. We're done with growth of that kind because our fuel supplies are shrinking, not growing. The vaunted "recovery" is a political three-card-monte trick.
The sad fact is we don't want to go where history wants to take us: to a smaller human imprint on the planet, with all that implies. This is true especially of the intellectual avant-garde, who can't imagine a world without the joys of perpetual techno-narcissistic novelty, of levitating skyscraper cities with hanging gardens and flying cars, full of girls with green nail-polish in get-ups so fantastic mere mortals could never have dreamed them up, flaunting hand-held gadgets so miraculous that life itself seems besides the point. Oh, shimmering future! Oh Ray Kurzweil and your nano-ladder to the worm-holes of forever!
This Ancien Régime is about to be swept away on the tsunami of its own futility.
The failure of leadership around the world is now complete. Nobody who needs to get it gets it. Our own money management team here in the USA is in a box even worse than Europe's. It's not even a hall of mirrors. It's a broke-down Winnebago with moldy upholstery and the propane line is leaking inside. Everybody's wondering if Ben Bernanke is going to light a cigarette. What else can he do? If he doesn't keep the QE-ZIRP racket going, the wheels will come off the Winnebago. If he lights that American Spirit, she'll blow.
The US banking system can easily implode, anyway, if a European nation or two opts out of ECB-peristroika. God knows who is a counter-party to whom in the mammoth international clusterfuck of accounting fraud that passes for a commerce in capital. Hence, everybody is nervous - except the fools at the Nascar oval with Big Gulps in their fists. When the Greeks and Spain's youth corps, and even the bleery folk of Dublin take to the central square to express their rage, and hoist middle fingers to those who would chisel them into debt serfdom, Americans will have no central squares to go to. Will we take to the highway strips and burn down a Taco Bell or two? Maybe President Obama will ask congress for a home mortgage TARP, guaranteeing that nobody will ever buy a house again, at least not on an installment loan. Maybe in tonight's New Hampshire "debate," Michele Bachman will appeal to Jesus for the release of Little Caylee from eternity's impoundment lot, and the stunt will carry her overwhelmingly to the oval office.
By then, America, too, will be more like Albania. You can take that to the bank, if there's one left standing. Yesterday a little US flag appeared on every mailbox in the neighborhood. Someone is trying to help remind us what country this is. Most years, this is just ceremonial routine, but now I suspect a lot of people get up and scratch their heads over it. And, believe me, just waving that old flag is not going to furnish any kind of idea you can really hang onto.
Out of the current stillness in world events, a horrible churning waits. Men in impeccable suits on Swiss terraces cannot hide their anxiety. One might even lose it and jump a hotel maid - you never know. Bernanke, Obama, Geithner are powerless against the dark lurking churn, though they can easily make it worse. What a summer we're in for. Get out of the stock market.
SC107-1
http://hawaiinewsdaily.com/2011/06/10-tipping-points-which-could-potentially-plunge-the-world-into-a-horrific-economic-nightmare/
10 Tipping Points Which Could Potentially Plunge The World Into Economic Nightmare
The global economy has become so incredibly unstable at this point that it is not going to take much to plunge the world into a horrific economic nightmare. The foundations of the world economic system are so decayed and so corrupted that even a stiff breeze could potentially topple the entire structure over. Over the past couple of months a constant parade of bad economic news has come streaming in from Europe, Asia and the United States. Signs of an impending economic slowdown are everywhere. So what “tipping point” will trigger the next global economic downturn? Nobody knows for sure, but potential tipping points are all around us. Today, the global economic system is even more vulnerable than it was back in 2008. Virtually none of the systemic problems that contributed to the 2008 collapse have been fixed. Mark Mobius, the head of the emerging markets desk at Templeton Asset Management, was recently was quoted in Forbes as saying the following [2]….
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis.”
The “financial reform” law that Barack Obama and the Congress passed a while back was a complete and total joke. They might as well have written the law on toilet paper for all the good that it is doing. We did not learn from our mistakes and our future economic lessons are going to be even more painful. The world is drowning in a mountain of debt, the global financial system is packed to the gills with toxic derivatives, everyone is leveraged to the hilt and the dominoes could start falling at any time. I am not the only one that is warning that another financial collapse is coming. In fact, a whole lot of people have been warning about the next financial collapse [3] lately. So what will the tipping point for the next collapse be? The following are some potential nominees….
Tipping Point #1: Syria Syria is a situation to watch very, very closely. The Syrian government is in a lot of trouble right now. Sadly, the instability inside Syria probably makes war with Israel even more likely. Make no mistake – a war between Israel and Syria has been brewing for a long, long time and at some point it will happen. When it happens, the entire Middle East may erupt in warfare. Just the other day, a very troubling incident happened in the area around the Golan Heights. The following is an excerpt from a report by The Daily Mail [4] about the incident….
“About 20 pro-Palestinian demonstrators were killed and 325 injured yesterday when Israeli forces opened fire on them as they crossed the border from Syria into occupied territories, according to reports.”
At this point, the Syrian government is probably glad that the attention has been taken off of them at least for a while. The Syrian government has been getting a lot of bad press lately. The following is an excerpt from a recent report [5] by Human Rights Watch about the treatment of protesters inside Syria….
“The methods of torture included prolonged beatings with sticks, twisted wires, and other devices; electric shocks administered with Tasers and electric batons; use of improvised metal and wooden ‘racks’; and, in at least one case documented by Human Rights Watch, the rape of a male detainee with a baton. “Interrogators and guards also subjected detainees to various forms of humiliating treatment, such as urinating on the detainees, stepping on their faces, and making them kiss the officers’ shoes. Several detainees said they were repeatedly threatened with imminent execution.”
So in light of the “precedent” that we recently set in Libya, does this mean that we will be “forced” to conduct a “humanitarian mission” inside Syria as well? Syria is one tipping point that we all need to keep a close eye on.
Tipping Point #2: Iran The Iranian nuclear program is in the news again. A new report by RAND Corporation researcher Gregory S. Jones claims that Iran could have a nuclear weapon within 2 months [6]. His report is based on recent findings by the International Atomic Energy Agency. According to Jones, airstrikes alone would be incapable of stopping Iran’s nuclear weapons program at this point. Instead, Jones says that a “military occupation” would be required. It is a minor miracle that a war with Iran has not erupted yet. It seems almost inevitable that at some point either the United States or Israel will use military force to try to stop Iran’s nuclear program. When that happens, it is going to cause a major shock to the global economy.
Tipping Point #3: Libya NATO has made it abundantly clear that Moammar Gadhafi will no longer be tolerated. In fact, NATO apparently plans to reduce Tripoli to a heap of smoking ruins if that is what it takes to bring about the fall of Gadhafi. What a “humanitarian mission” we have going in Libya, eh? It turns out that NATO believes that the United Nations gave it permission to bomb television stations [7] and to make attack runs with helicopters. Russian Deputy Prime Minister Sergei Ivanov recently said that by using attack helicopters, NATO has moved dangerously close [8] to turning the Libya operation into a ground invasion….
“Using attack helicopters, in my view, is the last but one step before the land operation.”
So why is Libya a potential tipping point? It isn’t because Gadhafi is a threat. He is toast. It is because the rest of the world is watching what is happening in Libya, and that is raising global tensions. Even if Gadhafi falls, the Libyan operation will still be a failure because it has brought us all significantly closer to World War III.
Tipping Point #4: More Revolutions In The Middle East The revolutions throughout the Middle East earlier this year sent oil prices absolutely skyrocketing and they have remained at elevated levels. And in case you haven’t noticed, revolutions continue to sweep the Middle East. Have you seen what has been happening in Yemen lately? Yemeni President Ali Abdullah Saleh has burns over 40% of his body [9] and he has suffered a collapsed lung as a result of a recent attack. If violence and protests throughout the Middle East become even more intense as the weather warms up this summer that could have a very significant impact on world financial markets.
Tipping Point #5: Fukushima The mainstream news has gotten a bit tired of covering it, but the situation at Fukushima is still a complete and total disaster. Japan’s Nuclear Emergency Response Headquarters admitted on Monday that three reactors experienced “full meltdowns [10]” in the aftermath of the earthquake and tsunami in March. Did it really take them nearly three months to figure this out, or were they lying to the rest of the world all of this time? The truth is that the nuclear disaster at Fukushima is far worse than the mainstream media has been telling us. If you doubt this, just check out this excellent article [11] or this article by Natural News: “Land around Fukushima now radioactive dead zone; resembles target struck by atomic bomb [12]“. The economic impact of the Fukushima disaster is going to continue to unfold over an extended period of time. It turns out that Japan is now officially in a recession [13]. Their economy contracted at a 3.7 percent annualized rate during the first quarter. Look for more bad economic numbers to come out of Japan for the rest of the year. Considering the fact that the Japanese economy is the third largest economy in the world, the fact that they are struggling so badly right now is not a good sign for the rest of us.
Tipping Point #6: Oil Prices The price of oil is going to continue to be one of the biggest economic stories for the rest of this year and for 2012 as well. The last time U.S. energy expenditures were over 9 percent of GDP was in 2008 [14] and we quickly plunged into the deepest economic downturn since the Great Depression. Well, we have reached the significant 9 percent figure once again in 2011 [14], and many fear that once again high oil prices will cause another major economic decline.
Tipping Point #7: Government Austerity In the United States, it is not just the federal government that is drowning in debt. All over America, there are state and local governments that are financial basket cases. I don’t always agree with the time frames that Meredith Whitney puts out there, but she is absolutely correct that we are going to see a massive municipal bond crisis. The following is an excerpt from a recent report about Whitney’s predictions on CNN [15]….
“Meredith Whitney is issuing a fresh warning to mutual funds, banks, and politicians: The state of state finances is far worse than what you think, or at least than what you’ve been willing to tell the investors and taxpayers who will eventually carry the burden.”
Many state and local governments are attempting to get their budgets balanced by making huge budget cuts. But most of the time these austerity programs also include the elimination of a lot of government jobs. UBS Investment Research is projecting that state and local governments will combine to slash a whopping 450,000 jobs [16] by the end of next year. So where will the half a million good jobs come from to replace all of those lost jobs?
Tipping Point #8: The European Sovereign Debt Crisis Greece is just the tip of the iceberg in Europe. Moody’s downgraded Greek debt again last Wednesday. This time Moody’s downgraded Greek debt by three levels all the way down to Caa1 [17]. At this point, the yield on 10-year Greek bonds is over 15 percent [18]. The EU has been going crazy trying to deal with the Greek debt crisis. The truth is that a default by the Greek government would be absolutely catastrophic. If you do not understand the kind of chaos a Greek default would set off on world financial markets, just read this editorial [19]. But Greece is not the only major European nation with a massive debt problem. The government of Ireland is already indicating that they may need another bailout [20]. Portugal, Spain and Italy are also on the verge of collapse. So will the EU bail all of these nations out for years and years to come? At some point will the whole house of cards come crashing down? Everyone needs to keep watching what is going on in Europe. The status quo is not sustainable and it cannot go on forever.
Tipping Point #9: The Dying U.S. Dollar The euro is not the only major currency that is in trouble. The U.S. dollar is also slowly dying. On April 18th, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned that the U.S. could soon lose its prized AAA rating [21]. The sad truth is that faith in the U.S. dollar and in U.S. Treasuries is rapidly declining. The mainstream news is not reporting on it much, but right now the Chinese are rapidly dumping [22] U.S. government debt. As the dollar declines, so will the purchasing power of average Americans. We are already seeing a tremendous amount of inflation in 2011 [23]. But this is just the beginning. A lot worse is going to be coming down the road.
Tipping Point #10: Drought A lot of people that read my articles doubt that we will ever see a major global food crisis [24]. But one is coming. It is just a matter of time. Even now, many areas of the world are experiencing very serious droughts. The following is from a recent Bloomberg article [25]….
Parts of China, the biggest grower, had the least rain in a century, some European regions are the driest in 50 years and almost half the winter-wheat crop in the U.S., the largest exporter, is rated poor or worse. Inventory is dropping 8.8 percent, the most in five years, Rabobank International says. Prices will advance 20 percent to as high as $9.25 a bushel by Dec. 31, a Bloomberg survey of 14 analysts and traders shows.
Are you concerned yet? You should be. But if you prefer some mindless pablum that will make you feel better, we have some of that for you too. Larry Summers, the former director of the National Economic Council under Barack Obama, recently told CNBC the following [26]….
“We definitely hit a slower patch, but I think the basic fact that the terrible financial strains we had are abating, remains in place, and I expect this recovery to continue for a substantial period of time.”
Does that make you feel better? Larry Summers says that everything is going to be okay. It would be great if Summers was actually right, but sadly he is not. In fact, the worst economic times that America has ever seen are ahead. The following is a brief excerpt from a recent interview with Dmitry Orlov about the coming economic collapse that was posted on shtfplan.com [27]….
First you have financial collapse, which is basically the volume of debt that has to be taken on in order for the economy to continue functioning, cannot continue. We’re seeing that right now in Greece, we’re probably going to see that in Japan, we’re definitely at a point now in the United States where even if you raised the income tax to 100 percent, there’s absolutely no way of covering the liabilities of the U.S. federal government. So, we’re at that point now but the workout of the financial collapse is not all quite there. We don’t quite have a worthless currency but that’s in the works. That, of course, is followed by commercial collapse especially in a country like the United States that imports two thirds of its oil. A lot of that is on credit and if a little bit of that oil goes missing then the economy starts to fall apart because nothing moves unless you burn oil in the United States and, of course, a lot of goods that are sold everywhere are imported again, on credit.
When the U.S. dollar dies and our financial system collapses we are not going to be able to get all of the things that we need from the rest of the world so cheaply any longer. That is going to cause fundamental changes inside the United States. Right now, the economic news just seems to get worse and worse, but this is just the beginning. What is eventually going to happen in this country is going to be so nightmarish that most Americans could not even imagine it right now. So are our leaders doing anything to prepare for the coming economic crisis? No, they are too busy with other things. The big political news of the day was U.S. Representative Anthony Weiner finally admitting that he sent out lewd photos of himself over Twitter [28] to women that he was not married to. We have become the laughingstock of the world and the economic collapse has not even happened yet.
10 Tipping Points Which Could Potentially Plunge The World Into Economic Nightmare
The global economy has become so incredibly unstable at this point that it is not going to take much to plunge the world into a horrific economic nightmare. The foundations of the world economic system are so decayed and so corrupted that even a stiff breeze could potentially topple the entire structure over. Over the past couple of months a constant parade of bad economic news has come streaming in from Europe, Asia and the United States. Signs of an impending economic slowdown are everywhere. So what “tipping point” will trigger the next global economic downturn? Nobody knows for sure, but potential tipping points are all around us. Today, the global economic system is even more vulnerable than it was back in 2008. Virtually none of the systemic problems that contributed to the 2008 collapse have been fixed. Mark Mobius, the head of the emerging markets desk at Templeton Asset Management, was recently was quoted in Forbes as saying the following [2]….
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis.”
The “financial reform” law that Barack Obama and the Congress passed a while back was a complete and total joke. They might as well have written the law on toilet paper for all the good that it is doing. We did not learn from our mistakes and our future economic lessons are going to be even more painful. The world is drowning in a mountain of debt, the global financial system is packed to the gills with toxic derivatives, everyone is leveraged to the hilt and the dominoes could start falling at any time. I am not the only one that is warning that another financial collapse is coming. In fact, a whole lot of people have been warning about the next financial collapse [3] lately. So what will the tipping point for the next collapse be? The following are some potential nominees….
Tipping Point #1: Syria Syria is a situation to watch very, very closely. The Syrian government is in a lot of trouble right now. Sadly, the instability inside Syria probably makes war with Israel even more likely. Make no mistake – a war between Israel and Syria has been brewing for a long, long time and at some point it will happen. When it happens, the entire Middle East may erupt in warfare. Just the other day, a very troubling incident happened in the area around the Golan Heights. The following is an excerpt from a report by The Daily Mail [4] about the incident….
“About 20 pro-Palestinian demonstrators were killed and 325 injured yesterday when Israeli forces opened fire on them as they crossed the border from Syria into occupied territories, according to reports.”
At this point, the Syrian government is probably glad that the attention has been taken off of them at least for a while. The Syrian government has been getting a lot of bad press lately. The following is an excerpt from a recent report [5] by Human Rights Watch about the treatment of protesters inside Syria….
“The methods of torture included prolonged beatings with sticks, twisted wires, and other devices; electric shocks administered with Tasers and electric batons; use of improvised metal and wooden ‘racks’; and, in at least one case documented by Human Rights Watch, the rape of a male detainee with a baton. “Interrogators and guards also subjected detainees to various forms of humiliating treatment, such as urinating on the detainees, stepping on their faces, and making them kiss the officers’ shoes. Several detainees said they were repeatedly threatened with imminent execution.”
So in light of the “precedent” that we recently set in Libya, does this mean that we will be “forced” to conduct a “humanitarian mission” inside Syria as well? Syria is one tipping point that we all need to keep a close eye on.
Tipping Point #2: Iran The Iranian nuclear program is in the news again. A new report by RAND Corporation researcher Gregory S. Jones claims that Iran could have a nuclear weapon within 2 months [6]. His report is based on recent findings by the International Atomic Energy Agency. According to Jones, airstrikes alone would be incapable of stopping Iran’s nuclear weapons program at this point. Instead, Jones says that a “military occupation” would be required. It is a minor miracle that a war with Iran has not erupted yet. It seems almost inevitable that at some point either the United States or Israel will use military force to try to stop Iran’s nuclear program. When that happens, it is going to cause a major shock to the global economy.
Tipping Point #3: Libya NATO has made it abundantly clear that Moammar Gadhafi will no longer be tolerated. In fact, NATO apparently plans to reduce Tripoli to a heap of smoking ruins if that is what it takes to bring about the fall of Gadhafi. What a “humanitarian mission” we have going in Libya, eh? It turns out that NATO believes that the United Nations gave it permission to bomb television stations [7] and to make attack runs with helicopters. Russian Deputy Prime Minister Sergei Ivanov recently said that by using attack helicopters, NATO has moved dangerously close [8] to turning the Libya operation into a ground invasion….
“Using attack helicopters, in my view, is the last but one step before the land operation.”
So why is Libya a potential tipping point? It isn’t because Gadhafi is a threat. He is toast. It is because the rest of the world is watching what is happening in Libya, and that is raising global tensions. Even if Gadhafi falls, the Libyan operation will still be a failure because it has brought us all significantly closer to World War III.
Tipping Point #4: More Revolutions In The Middle East The revolutions throughout the Middle East earlier this year sent oil prices absolutely skyrocketing and they have remained at elevated levels. And in case you haven’t noticed, revolutions continue to sweep the Middle East. Have you seen what has been happening in Yemen lately? Yemeni President Ali Abdullah Saleh has burns over 40% of his body [9] and he has suffered a collapsed lung as a result of a recent attack. If violence and protests throughout the Middle East become even more intense as the weather warms up this summer that could have a very significant impact on world financial markets.
Tipping Point #5: Fukushima The mainstream news has gotten a bit tired of covering it, but the situation at Fukushima is still a complete and total disaster. Japan’s Nuclear Emergency Response Headquarters admitted on Monday that three reactors experienced “full meltdowns [10]” in the aftermath of the earthquake and tsunami in March. Did it really take them nearly three months to figure this out, or were they lying to the rest of the world all of this time? The truth is that the nuclear disaster at Fukushima is far worse than the mainstream media has been telling us. If you doubt this, just check out this excellent article [11] or this article by Natural News: “Land around Fukushima now radioactive dead zone; resembles target struck by atomic bomb [12]“. The economic impact of the Fukushima disaster is going to continue to unfold over an extended period of time. It turns out that Japan is now officially in a recession [13]. Their economy contracted at a 3.7 percent annualized rate during the first quarter. Look for more bad economic numbers to come out of Japan for the rest of the year. Considering the fact that the Japanese economy is the third largest economy in the world, the fact that they are struggling so badly right now is not a good sign for the rest of us.
Tipping Point #6: Oil Prices The price of oil is going to continue to be one of the biggest economic stories for the rest of this year and for 2012 as well. The last time U.S. energy expenditures were over 9 percent of GDP was in 2008 [14] and we quickly plunged into the deepest economic downturn since the Great Depression. Well, we have reached the significant 9 percent figure once again in 2011 [14], and many fear that once again high oil prices will cause another major economic decline.
Tipping Point #7: Government Austerity In the United States, it is not just the federal government that is drowning in debt. All over America, there are state and local governments that are financial basket cases. I don’t always agree with the time frames that Meredith Whitney puts out there, but she is absolutely correct that we are going to see a massive municipal bond crisis. The following is an excerpt from a recent report about Whitney’s predictions on CNN [15]….
“Meredith Whitney is issuing a fresh warning to mutual funds, banks, and politicians: The state of state finances is far worse than what you think, or at least than what you’ve been willing to tell the investors and taxpayers who will eventually carry the burden.”
Many state and local governments are attempting to get their budgets balanced by making huge budget cuts. But most of the time these austerity programs also include the elimination of a lot of government jobs. UBS Investment Research is projecting that state and local governments will combine to slash a whopping 450,000 jobs [16] by the end of next year. So where will the half a million good jobs come from to replace all of those lost jobs?
Tipping Point #8: The European Sovereign Debt Crisis Greece is just the tip of the iceberg in Europe. Moody’s downgraded Greek debt again last Wednesday. This time Moody’s downgraded Greek debt by three levels all the way down to Caa1 [17]. At this point, the yield on 10-year Greek bonds is over 15 percent [18]. The EU has been going crazy trying to deal with the Greek debt crisis. The truth is that a default by the Greek government would be absolutely catastrophic. If you do not understand the kind of chaos a Greek default would set off on world financial markets, just read this editorial [19]. But Greece is not the only major European nation with a massive debt problem. The government of Ireland is already indicating that they may need another bailout [20]. Portugal, Spain and Italy are also on the verge of collapse. So will the EU bail all of these nations out for years and years to come? At some point will the whole house of cards come crashing down? Everyone needs to keep watching what is going on in Europe. The status quo is not sustainable and it cannot go on forever.
Tipping Point #9: The Dying U.S. Dollar The euro is not the only major currency that is in trouble. The U.S. dollar is also slowly dying. On April 18th, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned that the U.S. could soon lose its prized AAA rating [21]. The sad truth is that faith in the U.S. dollar and in U.S. Treasuries is rapidly declining. The mainstream news is not reporting on it much, but right now the Chinese are rapidly dumping [22] U.S. government debt. As the dollar declines, so will the purchasing power of average Americans. We are already seeing a tremendous amount of inflation in 2011 [23]. But this is just the beginning. A lot worse is going to be coming down the road.
Tipping Point #10: Drought A lot of people that read my articles doubt that we will ever see a major global food crisis [24]. But one is coming. It is just a matter of time. Even now, many areas of the world are experiencing very serious droughts. The following is from a recent Bloomberg article [25]….
Parts of China, the biggest grower, had the least rain in a century, some European regions are the driest in 50 years and almost half the winter-wheat crop in the U.S., the largest exporter, is rated poor or worse. Inventory is dropping 8.8 percent, the most in five years, Rabobank International says. Prices will advance 20 percent to as high as $9.25 a bushel by Dec. 31, a Bloomberg survey of 14 analysts and traders shows.
Are you concerned yet? You should be. But if you prefer some mindless pablum that will make you feel better, we have some of that for you too. Larry Summers, the former director of the National Economic Council under Barack Obama, recently told CNBC the following [26]….
“We definitely hit a slower patch, but I think the basic fact that the terrible financial strains we had are abating, remains in place, and I expect this recovery to continue for a substantial period of time.”
Does that make you feel better? Larry Summers says that everything is going to be okay. It would be great if Summers was actually right, but sadly he is not. In fact, the worst economic times that America has ever seen are ahead. The following is a brief excerpt from a recent interview with Dmitry Orlov about the coming economic collapse that was posted on shtfplan.com [27]….
First you have financial collapse, which is basically the volume of debt that has to be taken on in order for the economy to continue functioning, cannot continue. We’re seeing that right now in Greece, we’re probably going to see that in Japan, we’re definitely at a point now in the United States where even if you raised the income tax to 100 percent, there’s absolutely no way of covering the liabilities of the U.S. federal government. So, we’re at that point now but the workout of the financial collapse is not all quite there. We don’t quite have a worthless currency but that’s in the works. That, of course, is followed by commercial collapse especially in a country like the United States that imports two thirds of its oil. A lot of that is on credit and if a little bit of that oil goes missing then the economy starts to fall apart because nothing moves unless you burn oil in the United States and, of course, a lot of goods that are sold everywhere are imported again, on credit.
When the U.S. dollar dies and our financial system collapses we are not going to be able to get all of the things that we need from the rest of the world so cheaply any longer. That is going to cause fundamental changes inside the United States. Right now, the economic news just seems to get worse and worse, but this is just the beginning. What is eventually going to happen in this country is going to be so nightmarish that most Americans could not even imagine it right now. So are our leaders doing anything to prepare for the coming economic crisis? No, they are too busy with other things. The big political news of the day was U.S. Representative Anthony Weiner finally admitting that he sent out lewd photos of himself over Twitter [28] to women that he was not married to. We have become the laughingstock of the world and the economic collapse has not even happened yet.
SC106-15
http://www.chrismartenson.com/blog/death-debt/58941
Death By Debt
One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can’t be fixed. By this I mean that the old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past. At least they are for the debt-encrusted developed nations over the short haul — and, over the long haul, across the entire soon-to-be energy-starved globe.
The sooner we can accept that idea and make other plans the better. To paraphrase a famous saying, Anything that can’t be fixed, won’t.
The basis for this view stems from understanding that debt-based money systems operate best when they can grow exponentially forever. Of course, nothing can, which means that even without natural limits, such systems are prone to increasingly chaotic behavior, until the money that undergirds them collapses into utter worthlessness, allowing the cycle to begin anew.
All economic depressions share the same root cause. Too much credit that does not lead to enhanced future cash flows is extended. In other words, this means lending without regard for the ability of the loan to repay both the principal and interest from enhanced production; money is loaned for consumption, and poor investment decisions are made. Eventually gravity takes over, debts are defaulted upon, no more borrowers can be found, and the system is rather painfully scrubbed clean. It’s a very normal and usual process.
When we bring in natural limits, however, (such as is the case for petroleum right now), what emerges is a forcing function that pushes a debt-based, exponential money system over the brink all that much faster and harder.
But for the moment, let’s ignore the imminent energy crisis. On a pure debt, deficit, and liability basis, the US, much of Europe, and Japan are all well past the point of no return. No matter what policy tweaks, tax and benefit adjustments, or spending cuts are made — individually or in combination — nothing really pencils out to anything that remotely resembles a solution that would allow us to return to business as usual.
At the heart of it all, the developed nations blew themselves a gigantic credit bubble, which fed all kinds of grotesque distortions, of which housing is perhaps the most visible poster child. However outsized government budgets and promises might be, overconsumption of nearly everything imaginable, bloated college tuition costs, and rising prices in healthcare utterly disconnected from economics are other symptoms, too. This report will examine the deficits, debts, and liabilities in such a way as to make the case that there’s no possibility of a return of generally rising living standards for most of the developed world. A new era is upon us.
There’s always a slight chance , should some transformative technology come along, like another Internet, or perhaps the equivalent of another Industrial Revolution, but no such catalysts are on the horizon, let alone at the ready.
At the end, we will tie this understanding of the debt predicament to the energy situation raised in my prior report to fully develop the conclusion that we can — and really should — seriously entertain the premise that there’s just no way for all the debts to be paid back. There are many implications to this line of thinking, not the least of which is the risk that the debt-based, fiat money system itself is in danger of failing.
Too Little Debt! (or, Your One Chart That Explains Everything)
[Note: this next section is an excerpt from a recent Martenson Blog entry, so if this seems familiar to any site members, it's because you've seen it before.]
If I were to be given just one chart, by which I had to explain everything about why Bernanke’s printed efforts have so far failed to actually cure anything and why I am pessimistic that further efforts will fall short, it is this one:
There’s a lot going on in this deceptively simple chart so let’s take it one step at a time. First, “Total Credit Market Debt” is everything – financial sector debt, government debt (federal, state, and local), household debt, and corporate debt – and that is the bold red line (data from the Federal Reserve).
Next, if we start in January 1970 and ask the question, “How long before that debt doubled and then doubled again?” we find that debt has doubled five times in four decades (blue triangles).
Then if we perform an exponential curve fit (blue line) and round up, we find a nearly perfect fit with a R2 of 0.99. This means that debt has been growing in a nearly perfect exponential fashion through the 1970′s, the 1980′s, the 1990′s and the 2000′s. In order for the 2010 decade to mirror, match, or in any way resemble the prior four decades, credit market debt will need to double again, from $52 trillion to $104 trillion.
Finally, note that the most serious departure between the idealized exponential curve fit and the data occurred beginning in 2008, and it has not yet even remotely begun to return to its former trajectory.
This explains everything.
It explains why Bernanke’s $2 trillion has not created a spectacular party in anything other than a few select areas (banking, corporate profits), which were positioned to directly benefit from the money. It explains why things don’t feel right, or the same, and why most people are still feeling quite queasy about the state of the economy. It explains why the massive disconnects between government pensions and promises, all developed and doled out during the prior four decades, cannot be met by current budget realities.
Our entire system of money, and by extension our sense of entitlement and expectations of future growth, were formed during and are utterly dependent on exponential credit growth. Of course, as you know, money is loaned into existence and is therefore really just the other side of the credit coin. This is why Bernanke can print a few trillion and not really accomplish all that much, because the main engine of growth expects, requires, and is otherwise dependent on credit doubling over the next decade.
To put this into perspective, a doubling will take us from $52 to $104 trillion, requiring close to $5 trillion in new credit creation each year of that decade. Nearly three years has passed without any appreciable increase in total credit market debt, which puts us roughly $15 trillion behind the curve.
What will happen when credit cannot grow exponentially? We already have our answers; it’s been the reality for the past three years. Debts cannot be serviced, the weaker and more highly leveraged participants get clobbered first (Lehman, Greece, Las Vegas housing, etc.), and the dominoes topple from the outside in towards the center. Money is dumped in, but traction is weak. What begins as a temporary program of providing liquidity becomes a permanent program of printing money needed in order for the system to merely function.
Debt and Europe
The debt situation in Europe is fairly typical of the developed world and mirrors the debt chart of the US seen above. There’s entirely too much debt, and most of the unserviceable amounts are concentrated in certain spots (i.e., PIIGS), while the amounts owed are concentrated in the German, French, and British banks.
This New York Times graphic did an excellent job of summing everything up:
If everybody owes everybody else, then kicking the can down the road only works if there’s more wealth, more growth, and sufficient economic activity down that road to service the past debts. If any one participant drops the baton in the debt relay race, the absurdity of the situation becomes unavoidable and the cause is lost.
When we hold this view, it is abundantly clear that adding more debt along the way only increases the burdens and is therefore ultimately counterproductive, although it does grant the gift of additional time to avoid facing the truth.
When all of the most indebted countries are stacked up, we see that all but Russia carry a total indebtedness greater than 100% of GDP and that nine are carrying debt levels higher than any that have ever been repaid historically.
Without mincing words, the world does not face a crisis of liquidity, nor a crisis of insufficient debt, but one of entirely too much debt. That’s the entire predicament in three words: too much debt.
More debt is only going to compound the predicament, yet that is what the world’s central banks and political structures are busy manufacturing. More debt.
Of course, debt is only one component of the story; there are also liabilities to consider. The above chart merely graphs the legally defined debts involved. If we bother to add back in the liability components, which are pensions, social security and government medical plans, the predicament is seen to be three to six times larger:
Whereas the prior chart showed all debts incurred by all sectors of each nation, the above chart only displays government debt and liabilities. For reference, the red bars, above, are the amounts that you read about in the paper when commentators note that the US, for example, still has a debt-to-GDP ratio that is under 100%. It’s a comforting tale, but not an accurate description of the situation.
Again, there are no historical examples of any country ever digging itself out from so deep a hole, and yet we find that the entire developed world has bravely pushed itself deep into unknown territory, seemingly without any serious discussions about whether or not this made sense.
Where We Are Now
So here we are, just a few weeks away from the end of the second round of quantitative easing (QE II) , with massive public debts and liabilities having only grown larger instead of shrinking during the Great Recession, everybody in nearly the same boat, and no clear plan for how all the sovereign debts will be funded from current productive cash flows (i.e., existing GDP).
This is why so many commentators, myself included, are convinced that more thin-air money printing is on the way. My thesis, laid out back in early March is that the Fed will stop QE II on schedule and that the financial markets will react exceptionally poorly to this loss of support. Commodities will tank first, then stocks, then bonds; from riskiest and most-leveraged to least.
Death By Debt
One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can’t be fixed. By this I mean that the old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past. At least they are for the debt-encrusted developed nations over the short haul — and, over the long haul, across the entire soon-to-be energy-starved globe.
The sooner we can accept that idea and make other plans the better. To paraphrase a famous saying, Anything that can’t be fixed, won’t.
The basis for this view stems from understanding that debt-based money systems operate best when they can grow exponentially forever. Of course, nothing can, which means that even without natural limits, such systems are prone to increasingly chaotic behavior, until the money that undergirds them collapses into utter worthlessness, allowing the cycle to begin anew.
All economic depressions share the same root cause. Too much credit that does not lead to enhanced future cash flows is extended. In other words, this means lending without regard for the ability of the loan to repay both the principal and interest from enhanced production; money is loaned for consumption, and poor investment decisions are made. Eventually gravity takes over, debts are defaulted upon, no more borrowers can be found, and the system is rather painfully scrubbed clean. It’s a very normal and usual process.
When we bring in natural limits, however, (such as is the case for petroleum right now), what emerges is a forcing function that pushes a debt-based, exponential money system over the brink all that much faster and harder.
But for the moment, let’s ignore the imminent energy crisis. On a pure debt, deficit, and liability basis, the US, much of Europe, and Japan are all well past the point of no return. No matter what policy tweaks, tax and benefit adjustments, or spending cuts are made — individually or in combination — nothing really pencils out to anything that remotely resembles a solution that would allow us to return to business as usual.
At the heart of it all, the developed nations blew themselves a gigantic credit bubble, which fed all kinds of grotesque distortions, of which housing is perhaps the most visible poster child. However outsized government budgets and promises might be, overconsumption of nearly everything imaginable, bloated college tuition costs, and rising prices in healthcare utterly disconnected from economics are other symptoms, too. This report will examine the deficits, debts, and liabilities in such a way as to make the case that there’s no possibility of a return of generally rising living standards for most of the developed world. A new era is upon us.
There’s always a slight chance , should some transformative technology come along, like another Internet, or perhaps the equivalent of another Industrial Revolution, but no such catalysts are on the horizon, let alone at the ready.
At the end, we will tie this understanding of the debt predicament to the energy situation raised in my prior report to fully develop the conclusion that we can — and really should — seriously entertain the premise that there’s just no way for all the debts to be paid back. There are many implications to this line of thinking, not the least of which is the risk that the debt-based, fiat money system itself is in danger of failing.
Too Little Debt! (or, Your One Chart That Explains Everything)
[Note: this next section is an excerpt from a recent Martenson Blog entry, so if this seems familiar to any site members, it's because you've seen it before.]
If I were to be given just one chart, by which I had to explain everything about why Bernanke’s printed efforts have so far failed to actually cure anything and why I am pessimistic that further efforts will fall short, it is this one:
There’s a lot going on in this deceptively simple chart so let’s take it one step at a time. First, “Total Credit Market Debt” is everything – financial sector debt, government debt (federal, state, and local), household debt, and corporate debt – and that is the bold red line (data from the Federal Reserve).
Next, if we start in January 1970 and ask the question, “How long before that debt doubled and then doubled again?” we find that debt has doubled five times in four decades (blue triangles).
Then if we perform an exponential curve fit (blue line) and round up, we find a nearly perfect fit with a R2 of 0.99. This means that debt has been growing in a nearly perfect exponential fashion through the 1970′s, the 1980′s, the 1990′s and the 2000′s. In order for the 2010 decade to mirror, match, or in any way resemble the prior four decades, credit market debt will need to double again, from $52 trillion to $104 trillion.
Finally, note that the most serious departure between the idealized exponential curve fit and the data occurred beginning in 2008, and it has not yet even remotely begun to return to its former trajectory.
This explains everything.
It explains why Bernanke’s $2 trillion has not created a spectacular party in anything other than a few select areas (banking, corporate profits), which were positioned to directly benefit from the money. It explains why things don’t feel right, or the same, and why most people are still feeling quite queasy about the state of the economy. It explains why the massive disconnects between government pensions and promises, all developed and doled out during the prior four decades, cannot be met by current budget realities.
Our entire system of money, and by extension our sense of entitlement and expectations of future growth, were formed during and are utterly dependent on exponential credit growth. Of course, as you know, money is loaned into existence and is therefore really just the other side of the credit coin. This is why Bernanke can print a few trillion and not really accomplish all that much, because the main engine of growth expects, requires, and is otherwise dependent on credit doubling over the next decade.
To put this into perspective, a doubling will take us from $52 to $104 trillion, requiring close to $5 trillion in new credit creation each year of that decade. Nearly three years has passed without any appreciable increase in total credit market debt, which puts us roughly $15 trillion behind the curve.
What will happen when credit cannot grow exponentially? We already have our answers; it’s been the reality for the past three years. Debts cannot be serviced, the weaker and more highly leveraged participants get clobbered first (Lehman, Greece, Las Vegas housing, etc.), and the dominoes topple from the outside in towards the center. Money is dumped in, but traction is weak. What begins as a temporary program of providing liquidity becomes a permanent program of printing money needed in order for the system to merely function.
Debt and Europe
The debt situation in Europe is fairly typical of the developed world and mirrors the debt chart of the US seen above. There’s entirely too much debt, and most of the unserviceable amounts are concentrated in certain spots (i.e., PIIGS), while the amounts owed are concentrated in the German, French, and British banks.
This New York Times graphic did an excellent job of summing everything up:
If everybody owes everybody else, then kicking the can down the road only works if there’s more wealth, more growth, and sufficient economic activity down that road to service the past debts. If any one participant drops the baton in the debt relay race, the absurdity of the situation becomes unavoidable and the cause is lost.
When we hold this view, it is abundantly clear that adding more debt along the way only increases the burdens and is therefore ultimately counterproductive, although it does grant the gift of additional time to avoid facing the truth.
When all of the most indebted countries are stacked up, we see that all but Russia carry a total indebtedness greater than 100% of GDP and that nine are carrying debt levels higher than any that have ever been repaid historically.
Without mincing words, the world does not face a crisis of liquidity, nor a crisis of insufficient debt, but one of entirely too much debt. That’s the entire predicament in three words: too much debt.
More debt is only going to compound the predicament, yet that is what the world’s central banks and political structures are busy manufacturing. More debt.
Of course, debt is only one component of the story; there are also liabilities to consider. The above chart merely graphs the legally defined debts involved. If we bother to add back in the liability components, which are pensions, social security and government medical plans, the predicament is seen to be three to six times larger:
Whereas the prior chart showed all debts incurred by all sectors of each nation, the above chart only displays government debt and liabilities. For reference, the red bars, above, are the amounts that you read about in the paper when commentators note that the US, for example, still has a debt-to-GDP ratio that is under 100%. It’s a comforting tale, but not an accurate description of the situation.
Again, there are no historical examples of any country ever digging itself out from so deep a hole, and yet we find that the entire developed world has bravely pushed itself deep into unknown territory, seemingly without any serious discussions about whether or not this made sense.
Where We Are Now
So here we are, just a few weeks away from the end of the second round of quantitative easing (QE II) , with massive public debts and liabilities having only grown larger instead of shrinking during the Great Recession, everybody in nearly the same boat, and no clear plan for how all the sovereign debts will be funded from current productive cash flows (i.e., existing GDP).
This is why so many commentators, myself included, are convinced that more thin-air money printing is on the way. My thesis, laid out back in early March is that the Fed will stop QE II on schedule and that the financial markets will react exceptionally poorly to this loss of support. Commodities will tank first, then stocks, then bonds; from riskiest and most-leveraged to least.
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