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Gary Edwards

The Sides Are Forming For The Coming Civil War. | Militia News - 1 views

  • America is in the choosing sides phase of the coming civil war. To use a college recruiting phrase, it is accurate to state that the letters of intent to join one side or another have mostly been signed and the commitments offered. However, there is one big uncommitted piece, but very soon the sides will be drawn.
  • The Chess Pieces of Civil War What is going on today in America all about choosing sides. There are clear lines being formed in the United States. The recruiting pool consists of the Department of Homeland Security, the American military, local law enforcement, the Russian troops pouring into the United States, the trickle of Chinese troops coming into the country through Hawaii and, of course, the poor, the middle class and elite. This is the recruiting pool which will form the chess pieces of the coming American Civil War. Even if all parties in this country wanted the country to continue, even in its present mortally wounded state, it would be foolish to believe that it could continue for much longer.
  • Barring a false flag event, US martial law will have a trigger event, which will lead to martial law, that will be financial and it will naturally occur as we are already on a collision course with destiny.
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  • The net result of these staggering numbers can only end one way, and that is with a financial collapse, followed by a bank holiday, rioting in the streets and the full roll out of martial law. These financial numbers guarantee that the party cannot continue much longer. Since America, in her present form, cannot continue much longer without experiencing a cataclysmic shift, we would be wise to realize what resources are going to be the impetus for civil war. When you play the board game, Monopoly, the properties on Boardwalk are among the most coveted. It is no different in real life. The biggest prize of the coming conflict is real estate. Homes, office buildings and shopping malls are the most coveted prize. The MERS mortgage fraud continues unabated as millions of homes have been confiscated through mortgage fraud. When the dollar is worthless and is awaiting its replacement (e.g. the Amero or the Worldo), real estate will be more valuable than gold.
  • Other big game that is being hunted by both sides in the coming civil war will be bank accounts, which must be looted before the dormant computer digits we call money can be converted into hard assets. That is why my advice is, and has been, convert your cash into tangible assets which can enhance your survivability in the upcoming crash.
  • Also, your pensions, your 401K’s and your various entitlement programs are also at risk as evidenced by Secretary of Treasury Jack Lew’s “borrowing” from various Federal retirement accounts in order to increase the debt ceiling fight that will resurface in Congress, again, early next year.
  • Again, my advice is to convert your assets in tangible items which will aid in getting you through some very dark days coming up in the near future.
  • Before the cognitive dissonance crowd rears their ugly heads and accuses me of fear mongering, ask yourself what the elite did prior to the crash of the economy in 1929. For example, Joseph Kennedy took his money out of the stock market the day BEFORE it crashed. Vanderbilt, Rockefeller, Westinghouse, et al., all took their money out just prior to the crash, leaving the ignorant masses unaware of what was coming. Don’t make the same mistake.
  • I have news for you, there are Federal officials in every town, city and county in America. If one violates HR 347, they will be immediately arrested and charged with a felony.
  • The NDAA constitutes another big fence being built around the people in which all due process will soon be gone. The NDAA will allow the administration the “legal” right to secretly remove any burgeoning leadership of citizen opposition forces.
  • There are three paramount numbers that every American should be paying attention to and they are (1) national deficit ($17 trillion dollars), (2) the unfunded liabilities debt ($238 trillion dollars), and (3) the derivatives/futures debt (one quadrillion dollars which is 16 times the entire wealth of the planet.
  • In short, this spells the potential enslavement of the American people.
  • For those of you who still have your blinders on, research the NDAA and EO 13603 and then when you realize that I am correct in my interpretation, ask yourself one question; If the powers that be were not going to seize every important asset, then why would the government give itself the power to do just that?
  • And while you are at it, remember the Clean Water Act gives the EPA to control all private property as well as the precious resources of all water. And then of course, the FDA and the conflicts with local farmers is escalating.
  • And if this is not enough to convince the sheep of this country that the storm clouds are overhead, then take a look at HR 347 which outlaws protesting and takes away the First Amendment. This unconstitutional legislation makes it illegal to criticize the President and the government, as a whole, in the presence of Federal officials.
  • The second provision which will allow this country to quickly transition to martial law is Executive Order (EO) 13603 which allows the President to take control over any resource, property and even human labor within the United States. This EO gives the President unlimited authority including the ability to initiate a civilian draft as well as a military draft.
  • I just saw the Hunger Games sequel, Catching Fire, and this is eerily similar to what I saw in the movies in that the people are being provoked to revolution.
  • in the TV show, Revolution, the most evil entity in the series is the re-emergence of the United States government and the heroes of the show are rebelling against the abuse.
  • It seems like everywhere we turn in the media, the people are being encouraged to rise up now and challenge authority. I am sure the establishment would rather confront a small group of dissidents and squelch the rebellion now, before the numbers can become significant and overwhelming to the establishment and this theme is being carried out in the media.
  • The final action will consist of gun confiscation and one side of the coming conflict is attempting to position themselves to do that in the near future and that would be the DHS, the Russians and the Chinese.
  • I cannot think of another legitimate reason which would describe why they are here.
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    While I'd be the first to agree that the degree of fiscal mismanagement of this nation's economy is beyond insane and have to admit that I see very little to admire in Barack Obama's presidency, the meme about Executive Order 13603 authorizing confiscation of any property and enslavement of the American public needs to be put to rest. See http://www.archives.gov/federal-register/executive-orders/2012.html#13603 E.O. 13603 is not much more than an updating of similar executive orders issued by prior presidents beginning with Dwight Eisenhower. In fact, in skimming it a few minutes ago, I didn't see anything drastically different from some of the prior related orders. E.g., it reflects that a bunch of agencies that were formerly either independent or under other departments are now under the newish Department of Homeland Security, whose Secretary now gets the authority formerly delegated to other department and agency heads. If blame must be cast, it belongs on the Congress that enacted the Defense Production Act of 1950, 50 U.S.C. 2061, et seq. The executive order does no more than obey that Act's instructions. For example there is a section authorizing pre-emption of manufacturing capacity of critical industries over any existing civilian contracts in the event of a national emergency, but that language is in the statute as well. But that power hasn't had much traction since Harry Truman tried to nationalize the steel industry to break a nationwide strike. The Supreme Court swatted down that effort as an abuse of a power that would be lawful in a true emergency, like another major. But even that semi-radical "survival" power is ameliorated by other provisions of the statute and the order that authorize loan guarantees for companies' construction and maintenance of critical productive capacity. Much of that has been implemented over the years as outright grants. So for example, many chemical manufacturing plants were built with Defense Production Act funds, with
Gary Edwards

The Daily Bell - Gerald Celente on Multinationalism, Breaking the Chains and Individual... - 0 views

  • Gerald Celente: As I said, they're in a trap and it's a tapering trap, the quantitative easing trap. They can't keep printing more money because it's going to devalue the currency. And by the way, this is complicated, because it's not only the United States that's doing it; most of the central banks are doing it. China, the Europeans – they're all pumping money into their systems to keep them afloat. They're all in a trap. A time comes when you just can't keep doing it anymore. You can only take heroin so much before it kills you. This is monetary methadone and it's not going to cure the problem so they're going to have to stop. When it stops, that's when we go back into a recession and/or a depression.
  • Is it a depression? Is it a depression if you live in Greece or Spain or Portugal? Is it a depression if you're among the over 12% unemployed in Italy? When you look at John Williams's ShadowStats, in the US we're looking at about 22% unemployment. So yes, it's a depression for a lot of people. And then again, median household income in the US, accounting for inflation, is 10% below 1999 levels. That's a fact. So if you're earning 10 percent less for your family than you were in 1999 and the costs have skyrocketed since then, particularly in healthcare, food, rent, property, gas and other costs, do you think you're living in a depression? Daily Bell: Is central banking an art, a science or just a fraud?
  • Gerald Celente: Neither. It's a criminal operation. Throughout the 1800s, one of the major issues of every presidential election was whether or not to have a central bank. They fought it successfully not to have one until 1913. These are private banks that are running our country and many others. This goes back to the scriptures; it's Christ chasing the moneychangers out of the temple. The moneychangers have just got new names – Deutsche Bank, Societe Generale, Goldman Sachs, JPMorgan Chase, and, of course, JPMorgan Chase got that name because you're going to have to chase them to get your money because they just put a limit on how much you can withdraw or deposit each month in certain accounts, with a limit of $50,000.
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  • Daily Bell: It seems like people don't believe in central banking anymore so why does it continue? What holds it up in a so-called democracy where people have a vote? Gerald Celente: Most people don't even know what a central bank is and they still believe the lie that the Federal Reserve is a quasi-government institution when it's not. It's a totally private bank. Most people don't even know that. So most people are uninformed and like in all countries, they follow their leaders. Very few people rebel. There was an incident that happened in late October in the States. Hillary Clinton was speaking in Buffalo, delivering her model for what is required to solve complex problems. There was a heckler in the crowd who she admonished by saying, "... which doesn't include yelling. It includes sitting down and talking." What patronizing bullshit. You know what happened? The audience of 6,500 stood up and gave her a standing ovation that extended on and on. So it's the people. The people can blame the politicians all they want, but as I see it, it's the people's responsibility for the state of their nation.
  • Daily Bell: What's the employment picture like going forward in the US?
  • Gerald Celente: Lower paying jobs, less benefits, more temporary jobs and I think the question at the end is rather than going forward in the US it should be what's going forward in Slavelandia, because that's what it's become. You get out of college and you're an indentured servant. For the rest of your life you have to pay off your debt for your degree in worthlessness, for the most part. There are degrees that are worth something but not a lot of them. Where are you going to work? Name the company – Macy's? Starbucks? You can become a barista. Are they going to start teaching Shipping & Handling 101 in college? What are they going to do? Who are you going to work for? What are you going to do – stock shelves? This is better than slavery because when they had the plantation you had to take care of the slaves. Now you can just use them up and send them home. It's kind of like Bangladesh right here in the good 'ol USA.
  • Daily Bell: How about the rest of the world? Give us a global summary.
  • Gerald Celente: The global summary is this: Everybody can see what happened when the Federal Reserve talked about tapering several months ago. All of a sudden you saw the emerging markets start to crash; they dropped about 11% in a year before the Fed reversed its policy because all the hot, low-interest rate money that was leaving the US was flowing into the emerging markets, where you could borrow the money cheaply. So when they started to talk about tapering the hot money started flowing out of these countries, such as India, Brazil. They were really suffering from it and so were their stock markets. So without the cheap money flowing from the central banks, the entire global economy goes on stall and then it turns negative. You can see what's going on in China now; they're facing a banking crisis. Real estate prices in cities like Shanghai and Beijing have gone up over 20% in a year and no matter how the government tries to deflate it, the housing bubble keeps growing. The banks also have a lot of bad loans they're carrying. Now the Chinese government is trying to restrain that free-flow of cheap money, and what happens to their stock market when they do? It dives and the contagion spreads to other Asian equity markets. They all start dropping. It's all tied to cheap money and when the cheap money spigot begins to tighten up the global economy goes down. As I've made very clear, when the interest rates go up the economies go down – it's as simple as that. They've run out of this game. Compare this with the Great Depression, when it began essentially in 1930. This recession begin in 2008. It's now 2013 – we're only in 1935.
  • Daily Bell: China and the BRICS seem to be making noises about setting up their own monetary infrastructure without the dollar. Will that happen?
  • Gerald Celente: Yes, they are making noise, but reality is another issue, and the currency issue is complicated. The dollar goes down but where are you going to go, the euro? We were talking briefly about what's going on in Europe. There's financial market propaganda boasting that the worst of the eurozone crisis is over. They're bragging that The GDP of Spain was just reported to have gone up 0.1% and they made a big deal out of it. "The recession's over" is the B.S. message. No, the recession is not over! They're cooking the numbers to make a rotten situation look less rotten. In countries like Greece and Spain, youth unemployment is running above 50% and overall unemployment around 30%. The recession continues unabated, and there's absolutely no way out of this and they can't print their way out. Portugal, Italy, Greece, Spain, Ireland are doing terrible – what would anyone substitute euros for dollars? And what other currency choices are there, the yuan? As I mentioned, China has plenty of its own problems. They've been dumping a lot of cash into that society to keep it going. You know what China's greatest fear is? It's not the Spratly Islands or the South and China Sea territorial problems that are going on between them, the Philippines, Vietnam or the Japanese. China's greatest fear is its people. They've got 1.2 billion of them and if they're hungry or not happy there's going to be a lot of problems.
  • Again, what do you substitute the dollar for, Brazil's real or the Indian rupee? Remember, we saw what happened when the hot money started leaving the emerging market countries. The South African rand is also under pressure. The BRIC nations can speak as much as they want and they may have the greatest intention to create another reserve currency, but the fact is their economies are not robust or independent enough to create one at this time. As I said, talk is one thing, facts are another and although the world is less dependent on the dollar it is still by far the major reserve currency of the world and I don't see that rapidly changing unless there's a catastrophe that would cause it to happen. However, over the years, I do expect a new reserve model to develop.
  • Daily Bell: Let's talk about military action, particularly in Syria where Al Qaeda types have been fighting on the side of the US and NATO. Why does the US want to destabilize Syria and what country will be next – Iran? Russia?
  • Gerald Celente: We wrote about this in the Trends Journal going back to 2011. After Libya fell, Syria was the only port that the Chinese and the Russians had in the Mediterranean – the Port of Tartus. And also, Syria's only real ally in that area is Iran and, of course, Hezbollah in Lebanon. So with Syria out of the way there's nothing in the Middle East other than Iran to stop the continued spread of US influence and control in that area. It's really more about that than anything we see – again, having more control over that area for the US to do as it wants, with Iran really being the main target.
  • When President Obama backed off his red line threat and didn't attack Syria that was a tipping point. And, as important, the vast majority of Americans opposed the attack plan. That was a significant statement. The country said it was tired of war – and so are a lot of other nations.
  • Gerald Celente: Again, talk about morality and the recent Amnesty International report that said the United States was breaking international law in its use of drones to kill people that were convicted of nothing in addition to innocent people. How much more immoral could you get?
  • I can tell you how much immoral. How about starting wars in Afghanistan and Iraq – in Iraq with the proof that a war was started that killed at least a half a million people that was started under fake reasons; lies that Saddam Hussein had weapons of mass destruction and ties to al Qaeda. An Afghan war that's the longest war in American history, the war in Libya that they called a time-limed, scope-limited kinetic action that's destroyed the entire nation. You want to talk about immorality? How about the "too big to fail"? The government mandated immoral act of stealing money from the American people to give it to the banks, financiers and favored corporations? They say the fish rots from the head down and that's it; the fish has rotted in America for a long time. It didn't start with Obama. It goes back to Bush, Clinton, and keeps going back. Society gets the message from the top and, as I see it, they're simply following their leaders. For example, if their leader can start wars, rob people, take their money, why shouldn't I? Why should I operate on a moral level when immorality is condoned at the top?
  • Most recently, the United States government, in virtually every fashion of behavior, has been fascist. I don't say that by throwing the word out loosely. It's called the merger of corporate state and powers. It goes back to "too big to fail." Under capitalism there's no such thing. You're not too big to fail; you fail. Big, small, medium, you fail – it's capitalism.
  • Not anymore. You have your money taken from you by government order and it's transferred to the people who are the most favored by those in power. That's the only reason why the stock market keeps going up and why the multinationals are doing so well. That's where the $85 billion a month that the Federal Reserve is using in their quantitative easing is going. Then when you look at the other levels of immorality, as I mentioned, why shouldn't people feel as though they can do anything the government is doing? That's why it just keeps getting worse and worse. It's reflected in the music, the politics, every element of culture – both pop culture and political culture.
  • Under the dictates of the eurozone and globalization, the love of one's culture and pride of nation is denounced as "populism."
  • Daily Bell: Let's talk hard money. Can you give us an update on the price action of gold and silver? How about equity? Where is the stock market headed? We think the big boys are trying to rev it up and go for one last killing. Your thoughts?
  • Gerald Celente: The stock market will continue to rise as long as interest rates stay low. That's the best estimate you could give. They keep all of this quantitative easing that, for example, benefits the big private equity firms. Look what's going on in the United States with Blackstone Group. They own 40,000 homes. Where are they getting the money? Deutsche Bank is loaning them tons of money because they're getting money with overnight rates near zero, and they in turn loan it to the "bigs" really cheaply so it is just another example of what's keeping the whole stock market scam going.
  • As long as the money stays cheap the stock market keeps going up. As the money stays cheap gold and silver go up, and you're seeing gold making a bit of a rebound lately because of, again going back to the employment numbers in the States – there is no recovery, the jobs stink, they're not creating enough jobs. The tapering keeps going on, which is a devaluation of the currency, and quantitative easing continues. As long as money stays cheap gold goes up. Now, gold may go down when quantitative easing and tapering slow down. However, that's only going to be temporary because when that happens the bond market's going to explode, when interest rates go up, there's going to be another financial crisis. My best analysis at this time is the second quarter of 2014. The 'experts' are saying the stock market is booming. It has gone from a 14,000 high in 2007 to mid-15,000 now. Accounting for inflation, the stock market has to be about 15,750 just to be back at the 2007 level.
  • Daily Bell: There are other trends, of course, ones you often mention. You spoke to us last time about the New Millennium Renaissance.
  • Gerald Celente: Back to the renaissance... To me, that's the only thing that's going to change the future. We need a cultural, artistic and moral redevelopment, a restoration. Every issue that we've been talking about so far is based on human behavior and the human spirit – morality or immorality. Until morality is restored and the human spirit rises, nothing's going to change. As I was mentioning before, the fish rots from the head down. If you see the people at the head acting immorally, and from the head all the way down, why shouldn't you or I act immorally? What license do they have to steal that we don't? What license do they have to kill that we shouldn't?
Gary Edwards

How World War I Paved the Way for the Warfare State :: The Mises Economics Blog: The Ci... - 0 views

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    Part ONE "by David Stockman Remarks To The Committee For The Republic, Washington DC, February 2014 (Part 1 of 6 Parts) [From David Stockman's Contra Corner.] Flask in hand, Boris Yelstin famously mounted a tank outside the Soviet Parliament in August 1991. Presently, the fearsome Red Army stood down-an outcome which 45 years of Cold War military mobilization by the West had failed to accomplish. At the time, the U.S. Warfare State's budget- counting the pentagon, spy agencies, DOE weapons, foreign aid, homeland security and veterans--was about $500 billion in today's dollars.  Now, a quarter century on from the Cold War's end, that same metric stands at $900 billion. This near doubling of the Warfare State's fiscal girth is a tad incongruous.  After all, America's war machine was designed to thwart a giant, nuclear-armed industrial state, but, alas, we now have no industrial state enemies left on the planet. The much-shrunken Russian successor to the Soviet Union, for example, has become a kleptocracy run by a clever thief who prefers stealing from his own citizens. Likewise, the Red Chinese threat consists of a re-conditioned aircraft carrier bought second-hand from a former naval power--otherwise known as the former Ukraine. China's bubble-ridden domestic economy would collapse within six weeks were it to actually bomb the 4,000 Wal-Mart outlets in America on which its mercantilist export machine utterly depends. On top of that, we've been fired as the world's policeman, al Qaeda has splintered among warlords who inhabit the armpits of the world from Yemen to Somalia and during last September's Syria war scare the American people even took away the President's keys to the Tomahawk missile batteries.  In short, the persistence of America's trillion dollar Warfare State budget needs some serious "splainin". The Great War and Its Aftermath My purpose tonight is to sketch the long story of how it all happened, starti
Gary Edwards

Porter Stansberry- Porter Stansberry: These events confirm my greatest fears - 0 views

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    The Central Banksters of the World are printing money as fast as possible, and using this paper to buy up tons of GOLD.  Rather than lending to productive businesses, the Banksters are using their fiat paper volumes to buy up hard assets, with land, precious metals, and controlling positions in asset rich productive or leading commodity enterprises.  This is not going to end well for those left holding paper when it all crashes. "If you didn't take our warnings or strategies seriously before, I hope now you can see that we have been right: The authorities mean to print their bad sovereign debts away through an ongoing and massive inflation. Just how big is this inflation likely to be? When you look at the world's largest external debt positions, two economic areas appear as outliers: the European Union ($16 trillion) and the U.S. ($14.7 trillion). Even on a per-capita basis, the external foreign debts of the U.S. are enormous ($50,000 per person). Many countries in the European Union are in an even more precarious position. France has $74,000 in external debt per person. Germany has $57,000. These countries obviously have much to gain by printing the currency necessary to repay their obligations. I estimate we'll see at least another doubling of the monetary base in both the U.S. and the ECB. The question is how these nations' creditors will respond. In response... the West's creditors are piling into the one reserve asset no one can print: gold. Since the beginning of quantitative easing in America, Russia has almost doubled its holdings of gold, buying 500 tons. China bought 454 tons during the same period. And it's not only America's economic and military rivals who obviously no longer trust the U.S. dollar or the euro. In the last year, Switzerland's central bank has quietly increased its holdings of gold by nearly 25%. We are approaching the moment of a global paper currency collapse: In the second quarter of this year, central banks around the world
Paul Merrell

Russia and China: Watch Out Moody's, Here We Come! | New Eastern Outlook - 0 views

  • In 1945 it was easy to get a defeated Europe to agree to Bretton Woods Gold Exchange Standard in which all currencies would be fixed to the US dollar and the dollar alone fixed to gold at $35 an ounce, where it remained until the system collapsed in August 1971 and Nixon abandoned gold-dollar convertibility. By then Europe was booming with modern reconstructed industry and the USA was becoming a rustbelt. France and Germany demanded US gold bullion instead of inflated dollars, and US gold reserves were vanishing. After 1971, the dollar flooded the world unfettered by gold reserve requirements and US military might during the Cold War forced Japan, Western Europe and others including OPEC to accept constantly inflating paper US dollars. From 1970 until about 2000 the volume of dollars in the world had risen some 2,900%. Because the dollar was the world “reserve currency” needed by all for trade in oil, goods, grains, the world was forced to swallow a de facto mammoth inflation after 1971.First appeared: http://journal-neo.org/2015/01/22/watch-out-moody-s-here-we-come/
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    The established New York credit agencies would play a strategic role in this post-1971 dollar system. During the 1970's the US Government's Securities & Exchange Commission, charged with oversight of bond and stock markets, issued a ruling giving the then-dominant New York credit rating agencies-Moody's and Standard & Poor's (and later Fitch Ratings)-a de facto guaranteed monopoly in an unregulated market, when they ruled that only "Nationally Recognized Statistical Rating Organizations" would be qualified to issue appropriate ratings, i.e. only Moody's and S&P. Corruption was made endemic to the US ratings game and Washington was party to the dirty deal. By the end of the 1970's, using the vast amount of OPEC "petro-dollars" from the two oil price shocks in 1973 and 1979, New York international banks, using London, began to loan to the rest of the world to finance imports of oil and other essentials. The New York credit rating agencies, previously primarily rating US corporate bonds, expanded into the new foreign debt markets as the largest and only established rating agencies in the new phase of dollarization and globalization of capital markets. They set up branches in Germany, France, Japan, Mexico, Argentina and other emerging markets much like the US Big Five accounting firms. During the 1980s the rating agencies played a key role in down-rating the debt of the Latin American debtor countries such as Mexico and Argentina. Their ratings determined if the debtor countries could borrow or not. Financial market insiders in London and New York openly spoke of the "political" rating agencies using their de facto monopoly to advance the agenda of Wall Street and the Dollar System behind it. Then in the 1990's, the New York rating agencies played a decisive role in spreading the "Asia Crisis" of 1997-98. With the precise timing of its downgrades they could worsen the panic because they had been suspiciously silent right up un
Paul Merrell

US's Saudi Oil Deal from Win-Win to Mega-Loose | nsnbc international - 0 views

  • Who would’ve thought it would come to this? Certainly not the Obama Administration, and their brilliant geo-political think-tank neo-conservative strategists. John Kerry’s brilliant “win-win” proposal of last September during his September 11 Jeddah meeting with ailing Saudi King Abdullah was simple: Do a rerun of the highly successful State Department-Saudi deal in 1986 when Washington persuaded the Saudis to flood the world market at a time of over-supply in order to collapse oil prices worldwide, a kind of “oil shock in reverse.” In 1986 was successful in helping to break the back of a faltering Soviet Union highly dependent on dollar oil export revenues for maintaining its grip on power. So, though it was not made public, Kerry and Abdullah agreed on September 11, 2014 that the Saudis would use their oil muscle to bring Putin’s Russia to their knees today.
  • It seemed brilliant at the time no doubt. On the following day, 12 September 2014, the US Treasury’s aptly-named Office of Terrorism and Financial Intelligence, headed by Treasury Under-Secretary David S. Cohen, announced new sanctions against Russia’s energy giants Gazprom, Gazprom Neft, Lukoil, Surgutneftgas and Rosneft. It forbid US oil companies to participate with the Russian companies in joint ventures for oil or gas offshore or in the Arctic. Then, just as the ruble was rapidly falling and Russian major corporations were scrambling for dollars for their year-end settlements, a collapse of world oil prices would end Putin’s reign. That was clearly the thinking of the hollowed-out souls who pass for statesmen in Washington today. Victoria Nuland was jubilant, praising the precision new financial warfare weapon at David Cohen’s Treasury financial terrorism unit. In July, 2014 West Texas Intermediate, the benchmark price for US domestic oil pricing, traded at $101 a barrel. The shale oil bonanza was booming, making the US into a major oil player for the first time since the 1970’s. When WTI hit $46 at the beginning of January this year, suddenly things looked different. Washington realized they had shot themselves in the foot.
  • They realized that the over-indebted US shale oil industry was about to collapse under the falling oil price. Behind the scenes Washington and Wall Street colluded to artificially stabilize what then was an impending chain-reaction bankruptcy collapse in the US shale oil industry. As a result oil prices began a slow rise, hitting $53 in February. The Wall Street and Washington propaganda mills began talking about the end of falling oil prices. By May prices had crept up to $62 and almost everyone was convinced oil recovery was in process. How wrong they were.
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  • Since that September 11 Kerry-Abdullah meeting (curious date to pick, given the climate of suspicion that the Bush family is covering up involvement of the Saudis in or around the events of September 11, 2001), the Saudis have a new ageing King, Absolute Monarch and Custodian of the Two Holy Mosques, King Salman, replacing the since deceased old ageing King, Abdullah. However, the Oil Minister remains unchanged—79-year-old Ali al-Naimi. It was al-Naimi who reportedly saw the golden opportunity in the Kerry proposal to use the chance to at the same time kill off the growing market challenge from the rising output of the unconventional USA shale oil industry. Al-Naimi has said repeatedly that he is determined to eliminate the US shale oil “disturbance” to Saudi domination of world oil markets. Not only are the Saudis unhappy with the US shale oil intrusion on their oily Kingdom. They are more than upset with the recent deal the Obama Administration made with Iran that will likely lead in several months to lifting Iran economic sanctions. In fact the Saudis are beside themselves with rage against Washington, so much so that they have openly admitted an alliance with arch foe, Israel, to combat what they see as the Iran growing dominance in the region—in Syria, in Lebanon, in Iraq.
  • This has all added up to an iron Saudi determination, aided by close Gulf Arab allies, to further crash oil prices until the expected wave of shale oil company bankruptcies—that was halted in January by Washington and Wall Street manipulations—finishes off the US shale oil competition. That day may come soon, but with unintended consequences for the entire global financial system at a time such consequences can ill be afforded. According to a recent report by Wall Street bank, Morgan Stanley, a major player in crude oil markets, OPEC oil producers have been aggressively increasing oil supply on the already glutted world market with no hint of a letup. In its report Morgan Stanley noted with visible alarm, “OPEC has added 1.5 million barrels/day to global supply in the last four months alone…the oil market is currently 800,000 barrels/day oversupplied. This suggests that the current oversupply in the oil market is fully due to OPEC’s production increase since February alone.” The Wall Street bank report adds the disconcerting note, “We anticipated that OPEC would not cut, but we didn’t foresee such a sharp increase.” In short, Washington has completely lost its strategic leverage over Saudi Arabia, a Kingdom that had been considered a Washington vassal ever since FDR’s deal to bring US oil majors in on an exclusive basis in 1945.
  • That breakdown in US-Saudi communication adds a new dimension to the recent June 18 high-level visit to St. Petersburg by Muhammad bin Salman, the Saudi Deputy Crown Prince and Defense Minister and son of King Salman, to meet President Vladimir Putin. The meeting was carefully prepared by both sides as the two discussed up to $10 billion of trade deals including Russian construction of peaceful nuclear power reactors in the Kingdom and supplying of advanced Russian military equipment and Saudi investment in Russia in agriculture, medicine, logistics, retail and real estate. Saudi Arabia today is the world’s largest oil producer and Russia a close second. A Saudi-Russian alliance on whatever level was hardly in the strategy book of the Washington State Department planners.…Oh shit! Now that OPEC oil glut the Saudis have created has cracked the shaky US effort to push oil prices back up. The price fall is being further fueled by fears that the Iran deal will add even more to the glut, and that the world’s second largest oil importer, China, may cut back imports or at least not increase them as their economy slows down. The oil market time bomb detonated in the last week of June. The US price of WTI oil went from $60 a barrel then, a level at which at least many shale oil producers can stay afloat a bit longer, to $49 on July 29, a drop of more than 18% in four weeks, tendency down. Morgan Stanley sounded loud alarm bells, stating that if the trend of recent weeks continues, “this downturn would be more severe than that in 1986. As there was no sharp downturn in the 15 years before that, the current downturn could be the worst of the last 45+ years. If this were to be the case, there would be nothing in our experience that would be a guide to the next phases of this cycle…In fact, there may be nothing in analyzable history.”
  • October is the next key point for bank decisions to roll-over US shale company loans or to keep extending credit on the (until now) hope that prices will slowly recover. If as strongly hinted, the Federal Reserve hikes US interest rates in September for the first time in the eight years since the global financial crisis erupted in the US real estate market in 2007, the highly-indebted US shale oil producers face disaster of a new scale. Until the past few weeks the volume of US shale oil production has remained at the maximum as shale producers desperately try to maximize cash flow, ironically, laying the seeds of the oil glut globally that will be their demise. The reason US shale oil companies have been able to continue in business since last November and not declare bankruptcy is the ongoing Federal Reserve zero interest rate policy that leads banks and other investors to look for higher interest rates in the so-called “High Yield” bond market. Back in the 1980’s when they were first created by Michael Millken and his fraudsters at Drexel Burnham Lambert, Wall Street appropriately called them “junk bonds” because when times got bad, like now for Shale companies, they turned into junk. A recent UBS bank report states, “the overall High-Yield market has doubled in size; sectors that witnessed more buoyant issuance in recent years, like energy and metals mining, have seen debt outstanding triple or quadruple.”
  • Assuming that the most recent downturn in WTI oil prices continues week after week into October, there well could be a panic run to sell billions of dollars of those High-Yield, high-risk junk bonds. As one investment analyst notes, “when the retail crowd finally does head for the exits en masse, fund managers will be forced to come face to face with illiquid secondary corporate credit markets where a lack of market depth…has the potential to spark a fire sale.” The problem is that this time, unlike in 2008, the Federal Reserve has no room to act. Interest rates are already near zero and the Fed has bought trillions of dollars of bank bad debt to prevent a chain-reaction US bank panic. One option that is not being discussed at all in Washington would be for Congress to repeal the disastrous 1913 Federal Reserve Act that gave control of our nation’s money to a gang of private bankers, and to create a public National Bank, owned completely by the United States Government, that could issue credit and sell Federal debt without the intermediaries of corrupt Wall Street bankers as the Constitution intended. At the same time they could completely nationalize the six or seven “Too Big To Fail” banks behind the entire financial mess that is destroying the foundations of the United States and by extension of the role of the dollar as world reserve currency, of most of the world.
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    I give a lot of credibility to this article's author when it comes to matters involving the oil market. Remember when reading that the only thing propping up the U.S. dollar is the Saudi (later extended to all OPEC nations) insistence that they be paid for their oil and natural gas in U.S. dollars, which creates artificial demand for the dollar globally. If the Gulf Coast States begin accepting payment in rubles or yuan, it is curtains for the U.S. dollar in global markets.  
Paul Merrell

Goldberg Sees Crisis in US-Israel Ties, Blames Bibi « LobeLog - 0 views

  • While everyone ritually insists that the bonds between Israel and the United States are “unbreakable,” yesterday’s analysis by Jeffrey Goldberg, “The Crisis in U.S.-Israel Relations Is Officially Here,” argues that they’re currently under unprecedented strain and that the fault lies mainly with Prime Minister Bibi Netanyahu. The analysis argues further that, post-November, the Obama administration may no longer be inclined to protect Israel (at least to the same pathetic extent) at the UN Security Council and may even be willing to go a step further by presenting “a public full lay-down of the administration’s vision for a two-state solution, including maps delineating Israel’s borders. These borders, to Netanyahu’s horror, would based on 1967 lines, with significant West Bank settlement blocs attached to Israel in exchange for swapped land elsewhere. Such a lay-down would make explicit to Israel what the U.S. expects of it.” I’m not a big fan of Goldberg, but this analysis is definitely worth a read if for no other reason than his voice is a very important one in the US Jewish community, including among the right-wing leadership of its major national organizations. And he essentially gives over most of the article—in a way that suggests he shares their views—to anonymous administration officials who have clearly grown entirely contemptuous of the Israeli leader, calling him, among other names, “chickenshit.” Goldberg himself describes the Netanyahu government’s policy toward Palestinians as being “disconnected from reality” and stresses what he calls the “unease felt by mainstream American Jewish leaders about recent Israeli government behavior.” It seems that his chief envoy and confidante here, Ron Dermer, is not doing a good job.
  • Of particular interest to readers of this blog, however, are Goldberg’s observations about how the administration views Bibi’s bluster about Iran: The official said the Obama administration no longer believes that Netanyahu would launch a preemptive strike on Iran’s nuclear facilities in order to keep the regime in Tehran from building an atomic arsenal. “It’s too late for him to do anything. Two, three years ago, this was a possibility. But ultimately he couldn’t bring himself to pull the trigger. It was a combination of our pressure and his own unwillingness to do anything dramatic. Now it’s too late.” This assessment represents a momentous shift in the way the Obama administration sees Netanyahu. In 2010, and again in 2012, administration officials were convinced that Netanyahu and his then-defense minister, the cowboyish ex-commando Ehud Barak, were readying a strike on Iran. To be sure, the Obama administration used the threat of an Israeli strike in a calculated way to convince its allies (and some of its adversaries) to line up behind what turned out to be an effective sanctions regime. But the fear inside the White House of a preemptive attack (or preventative attack, to put it more accurately) was real and palpable—as was the fear of dissenters inside Netanyahu’s Cabinet, and at Israel Defense Forces headquarters. At U.S. Central Command headquarters in Tampa, analysts kept careful track of weather patterns and of the waxing and waning moon over Iran, trying to predict the exact night of the coming Israeli attack.
  • Today, there are few such fears. “The feeling now is that Bibi’s bluffing,” this second official said. “He’s not Begin at Osirak,” the official added, referring to the successful 1981 Israeli Air Force raid ordered by the ex-prime minister on Iraq’s nuclear reactor. The belief that Netanyahu’s threat to strike is now an empty one has given U.S. officials room to breathe in their ongoing negotiations with Iran. This is a significant passage. It suggests that the administration has decided to essentially ignore Netanyahu and his threats to take unilateral action, including when they are conveyed by members of Congress close to the Israel lobby. It also suggests strongly that the administration will not back up Israel if it should indeed undertake a strike of its own in hopes that Washington would be dragged into to finishing the job.
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  • Goldberg’s analysis about the state of the relationship is, in some ways, mirrored by Bret Stephens’s weekly “Global View” column in Tuesday’s Wall Street Journal, “Bibi and Barack on the Rocks,” although he, entirely predictably given his pro-settler worldview, sees Bibi as the wronged party. And, unlike Goldberg, he doesn’t see the US as the more powerful. Noting how Defense Minister Moshe Yaalon was snubbed by senior administration officials with whom he requested to meet, Stephens, a former editor of the Jerusalem Post, writes: The administration also seems to have forgotten that two can play the game. Two days after the Yaalon snub, the Israeli government announced the construction of 1,000 new housing units in so-called East Jerusalem, including 600 new units in the Ramat Shlomo neighborhood that was the subject of a 2010 row with Joe Biden. Happy now, Mr. Vice President? Stephens calls for a “trial separation” by the two countries in which Israel will give up its $3 billion dollar/year US aid package to free itself from US interference
  • The administration likes to make much of the $3 billion a year it provides Israel (or, at least, U.S. defense contractors) in military aid, but that’s now less than 1% of Israeli GDP. Like some boorish husband of yore fond of boasting that he brings home the bacon, the administration thinks it’s the senior partner in the marriage. Except this wife can now pay her own bills. And she never ate bacon to begin with. It’s time for some time away. Israel needs to look after its own immediate interests without the incessant interventions of an overbearing partner. The administration needs to learn that it had better act like a friend if it wants to keep a friend. It isn’t as if it has many friends left. This is precisely where Goldberg believes current Israeli policy is leading it.
  • Netanyahu, and the even more hawkish ministers around him, seem to have decided that their short-term political futures rest on a platform that can be boiled down to this formula: “The whole world is against us. Only we can protect Israel from what’s coming.” …But for Israel’s future as an ally of the United States, this formula is a disaster.”
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    If Goldberg and Stephens have it right, a U.S./Israel divorce might just spell the end of the appartheid state of Israel. It is only the U.S. veto on the U.N. Security Council that has enabled Israel to continue to treat Palestinians with impunity and to retain control of and colonize the territory it seized in the 1967 war that it launched. (The right to acquire territory by conquest was abolished by the U.N. Charter and the Fourth Geneva Convention in the late 1940s.)  Israel is now a pariah state internationally, with only the U.S., Canada, and a few minor island nations dependent on the U.S. still voting for Israel even in the U.N. General Council. Moreover, the U.S. public is fed up with the foreign wars the U.S. has been waging in the Mideast in aid of Israel's empirical goal of destabilizing and Balkanizing Israel's Arab neighbors. A U.S./Israel divorce would almost certainly bring down Netanyahu's government. On the other hand, the Obama Administration's relationship with Israel has been a departure from the historical norm in the U.S. and Obama's likely successor, Hillary Clinton, has long been much more friendly with the Israel Lobby than Obama.  Many close observers believe that Netanyahu's strategy with Obama has been to wait until Obama is out of office, betting that his successor will be much more amenable to Bibi's desires. But with Bernie Sanders hat in the ring for Auction 2016 and possibly Elizabeth Warren as well, it's conceivable that issues they raise might push Hillary to adopt a less Israel-friendly stance. But on yet another hand, Obama's stance on ISIL is entirely consistent with Israel's longstanding goal of regime change in Syria and Balkanization of Iraq into three nations along ethnic/religious lines, an independent  Kurdistan in the north, a Shia-stan in the South, and a Sunni state in the middle. Note in this regard Obama's strategy of arming "moderate" Syrians only to defend territory ISIL has not yet seized, then to bring down t
Gary Edwards

Global Financial Meltdown Coming? Clear Signs That The Great Derivatives Crisis Has Now... - 0 views

  • No one “understands” derivatives. How many times have readers heard that thought expressed (please round-off to the nearest thousand)? Why does no one understand derivatives? For many; the answer to that question is that they have simply been thinking too hard. For others; the answer is that they don’t “think” at all. Derivatives are bets. This is not a metaphor, or analogy, or generalization. Derivatives are bets. Period. That’s all they ever were. That’s all they ever can be.
  • One very large financial institution that appears to be in serious trouble with these financial weapons of mass destruction is Glencore.  At one time Glencore was considered to be the 10th largest company on the entire planet, but now it appears to be coming apart at the seams, and a great deal of their trouble seems to be tied to derivatives.  The following comes from Zero Hedge… Of particular concern, they said, was Glencore’s use of financial instruments such as derivatives to hedge its trading of physical goods against price swings. The company had $9.8 billion in gross derivatives in June 2015, down from $19 billion in such positions at the end of 2014, causing investors to query the company about the swing. Glencore told investors the number went down so drastically because of changes in market volatility this year, according to people briefed by Glencore. When prices vary significantly, it can increase the value of hedging positions. Last year, there were extreme price moves, particularly in the crude-oil market, which slid from about $114 a barrel in June to less than $60 a barrel by the end of December.
  • That response wasn’t satisfying, said Michael Leithead, a bond fund portfolio manager at EFG Asset Management, which managed $12 billion as of the end of March and has invested in Glencore’s debt.
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  • According to Bank of America, the global financial system has about 100 billion dollars of exposure overall to Glencore.  So if Glencore goes bankrupt that is going to be a major event.  At this point, Glencore is probably the most likely candidate to be “the next Lehman Brothers”. And it isn’t just Glencore that is in trouble.  Other financial giants such as Trafigura are in deep distress as well.  Collectively, the global financial system has approximately half a trillion dollars of exposure to these firms… Worse, since it is not just Glencore that the banks are exposed to but very likely the rest of the commodity trading space, their gross exposure blows up to a simply stunning number:
  • For the banks, of course, Glencore may not be their only exposure in the commodity trading space. We consider that other vehicles such as Trafigura, Vitol and Gunvor may feature on bank balance sheets as well ($100 bn x 4?)
  • Call it half a trillion dollars in very highly levered exposure to commodities: an asset class that has been crushed in the past year. The mainstream media is not talking much about any of this yet, and that is probably a good thing.  But behind the scenes, unprecedented moves are already taking place. When I came across the information that I am about to share with you, I was absolutely stunned.  It comes from Investment Research Dynamics, and it shows very clearly that everything is not “okay” in the financial world… Something occurred in the banking system in September that required a massive reverse repo operation in order to force the largest ever Treasury collateral injection into the repo market.   Ordinarily the Fed might engage in routine reverse repos as a means of managing the Fed funds rate.   However, as you can see from the graph below, there have been sudden spikes up in the amount of reverse repos that tend to correspond the some kind of crisis – the obvious one being the de facto collapse of the financial system in 2008:
  • What in the world could possibly cause a spike of that magnitude? Well, that same article that I just quoted links the troubles at Glencore with this unprecedented intervention… What’s even more interesting is that the spike-up in reverse repos occurred at the same time – September 16 – that the stock market embarked on an 8-day cliff dive, with the S&P 500 falling 6% in that time period.  You’ll note that this is around the same time that a crash in Glencore stock and bonds began.   It has been suggested by analysts that a default on Glencore credit derivatives either by Glencore or by financial entities using derivatives to bet against that event would be analogous to the “Lehman moment” that triggered the 2008 collapse. The blame on the general stock market plunge was cast on the Fed’s inability to raise interest rates.  However that seems to be nothing more than a clever cover story for something much more catastrophic which began to develop out sight in the general liquidity functions of the global banking system. Back in 2008, Lehman Brothers was not “perfectly fine” one day and then suddenly collapsed the next.  There were problems brewing under the surface well in advance. Well, the same thing is happening now at banking giants such as Deutsche Bank, and at commodity trading firms such as Glencore, Trafigura and The Noble Group. And of course a lot of smaller fish are starting to implode as well.  I found this example posted on Business Insider earlier today…
  • On September 11, Spruce Alpha, a small hedge fund which is part of a bigger investment group, sent a short report to investors. The letter said that the $80 million fund had lost 48% in a month, according the performance report seen by Business Insider. There was no commentary included in the note. No explanation. Just cold hard numbers.
  • Wow – how do you possibly lose 48 percent in a single month? It would be hard to do that even if you were actually trying to lose money on purpose. Sadly, this kind of scenario is going to be repeated over and over as we get even deeper into this crisis. Meanwhile, our “leaders” continue to tell us that there is nothing to worry about.  For example, just consider what former Fed Chairman Ben Bernanke is saying…
  • Former Federal Reserve chairman Ben Bernanke doesn’t see any bubbles forming in global markets right right now. But he doesn’t think you should take his word for it. And even if you did, that isn’t the right question to ask anyway. Speaking at a Wall Street Journal event on Wednesday morning, Bernanke said, “I don’t see any obvious major mispricings. Nothing that looks like the housing bubble before the crisis, for example. But you shouldn’t trust me.”
  • I certainly agree with that last sentence.  Bernanke was the one telling us that there was not going to be a recession back in 2008 even after one had already started.  He was clueless back then and he is clueless today. Most of our “leaders” either don’t understand what is happening or they are not willing to tell us. So that means that we have to try to figure things out for ourselves the best that we can.  And right now there are signs all around us that another 2008-style crisis has begun. Personally, I am hoping that there will be a lot more days like today when the markets were relatively quiet and not much major news happened around the world. Unfortunately for all of us, these days of relative peace and tranquility are about to come to a very abrupt end.
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    "Warren Buffett once referred to derivatives as "financial weapons of mass destruction", and it was inevitable that they would begin to wreak havoc on our financial system at some point.  While things may seem somewhat calm on Wall Street at the moment, the truth is that a great deal of trouble is bubbling just under the surface.  As you will see below, something happened in mid-September that required an unprecedented 405 billion dollar surge of Treasury collateral into the repo market.  I know - that sounds very complicated, so I will try to break it down more simply for you.  It appears that some very large institutions have started to get into a significant amount of trouble because of all the reckless betting that they have been doing.  This is something that I have warned would happen over and over again.  In fact, I have written about it so much that my regular readers are probably sick of hearing about it.  But this is what is going to cause the meltdown of our financial system. Many out there get upset when I compare derivatives trading to gambling, and perhaps it would be more accurate to describe most derivatives as a form of insurance.  The big financial institutions assure us that they have passed off most of the risk on these contracts to others and so there is no reason to worry according to them. Well, personally I don't buy their explanations, and a lot of others don't either.  On a very basic, primitive level, derivatives trading is gambling.  This is a point that Jeff Nielson made very eloquently in a piece that he recently published…"
Paul Merrell

BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit - Bloomberg - 0 views

  • Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation. The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.
  • Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC- insured bank accounts from risks generated by investment-banking operations. Bank of America, which got a $45 billion bailout during the financial crisis, had $1.04 trillion in deposits as of midyear, ranking it second among U.S. firms. “The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.”
  • Moody’s Investors Service downgraded Bank of America’s long-term credit ratings Sept. 21, cutting both the holding company and the retail bank two notches apiece. The holding company fell to Baa1, the third-lowest investment-grade rank, from A2, while the retail bank declined to A2 from Aa3.
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  • The Moody’s downgrade spurred some of Merrill’s partners to ask that contracts be moved to the retail unit, which has a higher credit rating, according to people familiar with the transactions. Transferring derivatives also can help the parent company minimize the collateral it must post on contracts and the potential costs to terminate trades after Moody’s decision, said a person familiar with the matter. Bank of America estimated in an August regulatory filing that a two-level downgrade by all ratings companies would have required that it post $3.3 billion in additional collateral and termination payments, based on over-the-counter derivatives and other trading agreements as of June 30. The figure doesn’t include possible collateral payments due to “variable interest entities,” which the firm is evaluating, it said in the filing.
  • Derivatives are financial instruments used to hedge risks or for speculation. They’re derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in the weather or interest rates. Dodd-Frank Rules Keeping such deals separate from FDIC-insured savings has been a cornerstone of U.S. regulation for decades, including last year’s Dodd-Frank overhaul of Wall Street regulation. The legislation gave the FDIC, which liquidates failing banks, expanded powers to dismantle large financial institutions in danger of failing. The agency can borrow from the Treasury Department to finance the biggest lenders’ operations to stem bank runs. It’s required to recoup taxpayer money used during the resolution process through fees on the largest firms.
  • Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades. That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.
  • Moving derivatives contracts between units of a bank holding company is limited under Section 23A of the Federal Reserve Act, which is designed to prevent a lender’s affiliates from benefiting from its federal subsidy and to protect the bank from excessive risk originating at the non-bank affiliate, said Saule T. Omarova, a law professor at the University of North Carolina at Chapel Hill School of Law. “Congress doesn’t want a bank’s FDIC insurance and access to the Fed discount window to somehow benefit an affiliate, so they created a firewall,” Omarova said. The discount window has been open to banks as the lender of last resort since 1914. As a general rule, as long as transactions involve high- quality assets and don’t exceed certain quantitative limitations, they should be allowed under the Federal Reserve Act, Omarova said.
  • In 2009, the Fed granted Section 23A exemptions to the banking arms of Ally Financial Inc., HSBC Holdings Plc, Fifth Third Bancorp, ING Groep NV, General Electric Co., Northern Trust Corp., CIT Group Inc., Morgan Stanley and Goldman Sachs Group Inc., among others, according to letters posted on the Fed’s website. The central bank terminated exemptions last year for retail-banking units of JPMorgan, Citigroup, Barclays Plc, Royal Bank of Scotland Plc and Deutsche Bank AG. The Fed also ended an exemption for Bank of America in March 2010 and in September of that year approved a new one. Section 23A “is among the most important tools that U.S. bank regulators have to protect the safety and soundness of U.S. banks,” Scott Alvarez, the Fed’s general counsel, told Congress in March 2008.
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    So according to Bloomberg, JPMorgan's commercial bank was the recipient of 99 percent of JPMorgan's $79 trillion (face value of derivatives) in bad bets. So adding JPMorgan's $78 trillion or so to the $75 trillion in bad bets Bank of America unloaded on its FDIC insured subsidiary, we arrive at $153 trillion in bad bets moved by two investment banks alone under the FDIC umbrella. Meanwhile, FDIC has authority under Dodd-Frank to liquidate these insolvent banks but doesn't, despite several successful lawsuits to recover the value of toxic derivatives that they sold to smaller banks that failed (which implies that FDIC could tell JPMorgan and BoA's investment banksters that they've got to pay off the toxic assets they transferred to their commercial banks, rather than diluting the insurance for normal depositors. Problem: the two big investment banks don't have sufficient assets to absorb those losses, so the too-politically-connected-to-fail factor kicks in. Note that I have not done any legal research in regard to these issues and am basing these observations on what has been stated about legal requirements in various media articles.
Gary Edwards

Seth Lipsky: The Gold Standard Goes Mainstream - WSJ.com - 0 views

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    Excellent discussion of where the Republican Party stands in relationship to the destruction of the dollar and new interest in linking the dollar to GOLD.  Good stuff.  Personally i'm in the Ron Paul camp, hook, line and sinker. excerpt: "In the ferment within today's Republican Party, the gold standard has become almost the centrist position. On the left would be those who favor a system of discretionary activism in which brilliant technocrats, such as Ben Bernanke at the Fed, use their judgment in setting interest rates. A bit to their right would be advocates of a rule, such as John Taylor's rule linking interest rates to various conditions, or one that requires the Fed to target the price of gold but stops short of defining the dollar in terms of specie. In the center would be advocates of a classical gold standard, in which a dollar is defined as a fixed amount of gold. These include, among others, Mr. Lehrman, James Grant of Grant's Interest Rate Observer, publisher Steve Forbes, economist Judy Shelton, and Sean Fieler of the American Principles Project. A bit further to the right would be partisans of the Austrian school of economics, including Rep. Paul. He advocates less for a gold standard than for an idea of Friedrich Hayek, the Nobel laureate who came to favor what he called the denationalization of money and a system centered on private coinage and currency that would compete with government-issued money. Further right are purists such as the radical constitutionalist Edwin Vieira Jr., who would simply price things in weights of gold or silver. A good bit of overlap exists among the camps, but Congress has come alive to all points on this spectrum. Rep. Kevin Brady, a Texas Republican who is vice chairman of the Joint Economic Committee, is seeking to pass the Sound Dollar Act, which would end the Fed's mandate to keep unemployment down, instead having the central bank focus only on stable prices. Rep. Paul is pressing the Free Competition in Curr
Paul Merrell

German Economy Hit by US, EU Sanctions on Russia - SPIEGEL ONLINE - 0 views

  • The US, for its part, penalized a dozen leading Russian conglomerates, including oil giant Rosneft, natural gas producer Novatek, Gazprombank and the weapons manufacturer Kalashnikov. From now on, they are forbidden from borrowing money from American monetary institutions and from issuing medium- and long-term debt to investors with ties to the US.
  • Even prior to the sanctions, the Russian economy had been struggling. Now, though, the Ukraine crisis is beginning to make itself felt in Germany as well. German industry's Committee on Eastern European Economic Relations believes that the crisis could endanger up to 25,000 jobs in Germany. Were a broad recession to befall Russia, German growth could sink by 0.5 percent, according to a Deutsche Bank study.
  • The most recent US sanctions, warns Eckhard Cordes, head of the Committee on Eastern European Economic Relations, have placed an additional strain "on the general investment climate." Particularly, he adds, because European companies have to conform to the American penalties.
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  • Already, the uneasiness can be seen in the Ifo Business Climate Index. One in three of the companies surveyed at the end of June said it expected adverse effects. "Russian customers have begun looking for suppliers outside of Europe," says Ulrich Ackermann, a foreign trade expert with the German engineering association VDMA. "They are concerned that European companies, because of the threat of increased sanctions, won't be able to deliver."
  • Even prior to the latest sanctions, business has been slowing in almost all sectors. The Düsseldorf-based energy giant E.on, for example, recently built power stations in Russia worth €9 billion. Most of the generators are already online, but because the economy in Russia is suffering, the returns are much lower than forecast. Volkswagen is a further example. The carmaker's sales figures for 2014 are 10 percent lower than they were last year. Opel's figures dropped by 12 percent during the first five months of the year.
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    Germany, and other European nations whose economies are interdependent on Russia's, are beginning to feel the pain from U.S. efforts to blockade BRICS nations from doing business with Europe. That's what U.S. meddling in Ukraine is about, another of the key U.S. initiatives in the the new Iron Curtain being constructed between BRICS and the U.S.-led Bankster Empire. I suspect that the sanctions will prove to be a dumb move. The BRICS nations will develop new industry to replace the goods it had been buying from Europe, all paid for without U.S. dollars. A pinch in the beginning, but longer term economic growth because the BRICS nations will also sell their new products to developing nations eager to hop off the U.S. dollar. That's when the new BRICS development bank counterpart to the IMF comes to the fore. That's the handwriting on the wall that the U.S. is painting for Germany and the rest of the E.U. Will Germany take that kind of economic hit out of loyalty to the U.S. and love of the sinking value of the dollar? The only end in sight for the dollar's sinking value is the inevitable crash. Or does Germany part ways with the dollar and hitch its wagon to the rising star of the BRICS nations' economy? Because Germany is the island of prosperity in the Eurozone, as goes Germany, so goes the future of the E.U. and NATO. Meanwhile, the Fed manipulates the gold market to keep the price artificially low and thus prop up the dollar a bit longer. But that keeps the price of gold low for China too. The drama of gangster capitalism's demise. http://goo.gl/DGfEq6
Gary Edwards

Allen West to Democrats: Get your leftism the hell out of America! » The Righ... - 1 views

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    Throw the socialist out!  The full video of Col. Allan West's speech at the Lincoln Day Dinner in West Palm Beach Florida.  Incredible and well worth your time.  You will want to stand up and cheer.   Left lengthy note in the new Diigo Quick Note.  Wish i could do the same with EverNote!!!  Quick note is okay.  Very convenient, but no tags, groups or lists.  And the only HTML-Rich Text editing is at Diigo where you can edit a QuickNote.  No bookmarking either with QuickNote either.  Hopefully Diigo users will persuade QucikNote to improve this useful product.  And hopefully EverNote will come to see the advantages of Diigo. Need to edit the QuickNote with some quick definitions of the isms: Conservatism, the ,any Socialisms, Fascism, Nazism, Communism, Obammunism and libertarianism. My QuickNote discusses three corners: Libertarianism, Socialism and Fascism. Some quick comments:  Libertarianism differs from Conservatism in that conservatives champion conservative-judeo-christian social values.  The kind you think of when you hear God, Country, Community and Family.  The Libertarian champions the founding documents; the Declaration and the Constitution.  Here the only "value" the founding fathers desired to be embedded in the governing structure was that of "individual liberty".  Making the governing structure a Republic focused entirely on the objective of "ordered liberty". socialist are also focused on social values, but their primary objective is the welfare of the group.  More often than not, the individual's liberty is sacrificed to the welfare of the group.  In fact, in knee jerk socialism, the individual only exist to benefit the greater society.  When the individual becomes a drag, euthanasia is the tool of choice for a socialist.  Not though that as long as the individual is a voting and consuming member of the group that is overturning the Constitutional Republic, and clamoring to replace the Republic with mobocracy democracy, the
Paul Merrell

The United Nations' Response to ISIS Beheadings in Syria. "Resolutions" Calling for "Re... - 0 views

  • Following the gruesome beheading of James Foley, by a terrorist group called “The Islamic State of Iraq and Syria,” and the group’s threats to behead other captives in August 2014, The New York Times headline on page A19 reads, with Kafkaesque “logic”:  “U.S. Invokes Defense of Iraq in Legal Justification of Syria Strikes.”  US/NATO had failed, for three years, to get UN Security Council authorization for military action against Syria, and unilateral military action against Syria would be a violation of international law. However, the very visible emergence of ISIS, now defined as the most dangerous terrorist organization in the Middle East, or, perhaps, globally, and their widely publicized video beheadings of James Foley, Steve Sotloff and others, appeared to give some form of de facto justification for broader military action, including against Syria.  On August 22, 2014, The New York Times reported, page A6: “When the United States began airstrikes in Iraq this month, senior Obama administration officials went out of their way to underscore the limited nature of their action.  ‘This was not an authorization of a broad-based counterterrorism campaign,’ a senior Obama administration official told reporters at the time.  But the beheading of an American journalist and the possibility that more American citizens being held by the group might be slain has prompted outrage at the highest levels of the American government.”
  • In an interview with Anderson Cooper, Diane Foley stated that a military official forbade the family from going to the media and threatened to prosecute them for supporting terrorism if they attempted to raise the $1.32 million dollar ransom demanded by ISIS. “Three times he intimidated us with that message.  We were horrified he would say that.  He just told us we would be prosecuted.  We knew we had to save our son, we had to try,” Mrs. Foley told Anderson Cooper. Foley’s brother, Michael noted in an interview that he was ‘directly threatened with possible prosecution for violating anti-terrorism laws by a State Department official.”  Reporter Michael Isikoff states, in a September 12 article: “The parents of murdered journalist Steven Sotloff were told by a White House counterterrorism official at a meeting last May that they could face criminal prosecution if they paid ransom to try to free their son.”
  • Indeed, it can be asserted that these same administration officials who claimed “outrage” after the beheadings, inflicted the most extreme psychological torture upon the families of James Foley and Stephen Sotloff, who were desperately trying to save the lives of their sons and brother. On September 12, 2014, ABC news reported:  “Obama administration officials repeatedly threatened the family of murdered journalist James Foley that they might face criminal charges for supporting terrorism if they paid ransom to the ISIS killers who ultimately beheaded their son, his mother and brother said this week.  ‘We were told that several times and we took it as a threat and it was appalling,’ Foley’s mother Diane told ABC news in an interview.  She said the warnings over the summer came primarily from a highly decorated military officer serving on the White House National Security Council staff, which five outraged current and former officials with direct knowledge of the Foley case also recounted to ABC news in recent weeks.”
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  • Mrs. Foley diplomatically implies that her son’s death was in the “strategic interest” and she stops just short of accusing the administration of using her son’s beheading as the fig-leaf they needed to justify the administration’s unilateral attack on Syria, which was in violation of international law. If saving Foley was not in the “strategic interest,” a very frightening possibility exists. The murders of Foley and Sotloff, both of whom were beheaded by ISIS, were called ‘acts of barbarism’ by Obama in his speech announcing a military campaign to destroy the terrorist organization. Frenzied hysteria over human rights abuses in Syria continues to be incited by mainstream media, as the middle east is fragmented and decomposed by US/NATO bombings and internecine warfare so complex that the UN’s call for the “diplomatic resolution” of multiple devastating conflicts becomes an increasingly remote possibility.  Saudi Arabia and Qatar continue arming the terrorist opposition.
  • “Sotloff’s father, Art, was ‘shaking’ after the meeting with the official, who works for the National Security Council.  Sources close to the family say that at the time of the White House meeting the Sotloffs and Foleys were exploring lining up donors who would help pay multimillion dollar ransoms to free their sons.  But after the meeting those efforts collapsed, one source said, because of concerns that ‘donors could expose themselves to prosecution.’” James Nye for Mailonline reported:  “Mrs. Foley poured scorn on the Pentagon’s claim they tried to rescue Foley on July 4, only to raid the wrong base…Throughout the 20 month ordeal, Mrs. Foley said she came to regard her and her family’s efforts to rescue James as an ‘annoyance’ to the administration and began to feel that their desperation to bring James Foley home did not ‘seem to be in the strategic interest, if you will.’”
  • The front page headline states:  “U.S. General Says Raiding Syria is Key to Halting Isis.  The Islamic State in Iraq and Syria cannot be defeated unless the United States or its partners take on the Sunni militants in Syria,’ General Martin Dempsey, Chairman of the Joint Chiefs of Staff said on August 21, 2014. ‘This is an organization that has an apocalyptic end-of-days strategic vision that will eventually have to be defeated.  Can they be defeated without addressing that part of the organization that resides in Syria?  The answer is no.” Public horror at the beheading of James Foley and Steven Sotloff transformed public reluctance to engage in yet another seemingly endless and futile distant war, paid for by the U.S. taxpayer, into public outrage and support for retaliation against the terrorists who beheaded Foley and Sotloff.  US/NATO now had a de facto form of support and legitimacy for attacking Syria.  Given little publicity, however, then and now, was the fact that ISIS offered to exchange the lives of James Foley and Stephen Sotloff for $100 million dollars in ransom.  Although top U.S. officials used their “outrage” at the beheading of Foley and Sotloff to “justify” a unilateral attack on Syria, they were not sufficiently outraged to do what was necessary to prevent these beheadings, which, once executed, provided a convenient fig-leaf for the attack on Syria for which  they had sought and failed to attain legal justification during the preceding three years.
  • At the same time that the military-industrial complex thrives on huge profits derived from these geo-politically engineered conflicts, it is worth recalling the September 10, 2014 report by Mazzetti, Schmitt and Landler in The New York Times: “Washington – “The violent ambitions of the Islamic State in Iraq and Syria have been condemned across the world:  in Europe and the Middle East, by Sunni nations and Shiite ones, and by sworn enemies like Israel and Iran.  Pope Francis joined the call for ISIS to be stopped. “As President Obama prepares to send the United States on what could be yearslong military campaign against the militant group (ISIS), American intelligence agencies have concluded that it poses no immediate threat to the United States.  Some officials and terrorism experts believe that the actual danger posed by ISIS has been distorted in hours of television punditry and alarmist statements by politicians, and that there has been little substantive public debate about the unintended consequences of expanding American military action in the Middle East. “Daniel Benjamin, who served as the State Department’s top counterterrorism adviser during Mr. Obama’s first term, said the public discussion about the ISIS threat has been a ‘farce,’ with ‘members of the cabinet and top military officers all over the place describing the threat in lurid terms that are not justified.’  “It’s hard to imagine a better indication of the ability of elected officials and TV talking heads to spin the public into a panic, with claims that the nation is honeycombed with sleeper cells, that operatives are streaming across the border into Texas or that the group will soon be spraying Ebola virus on mass transit systems – all on the basis of no corroborated information,’ said Mr. Benjamin, who is now a scholar at Dartmouth College.”
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    The Feds' "no ransom" policy might better be changed to "pay the ransom then extract retribution." It would still serve as a deterrent. Nonetheless, that policy is now part of a U.N. Security Council Resolution. 
Gary Edwards

Jeff Gundlach June Webcast Presentation - Business Insider - 0 views

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    Fascinating presentation filled with stats and charts depicting the state of the world's economy.  51 slides in total, so it takes some time.  The summation is clear though.  We are in a world of hurt.  The $85 Billion per month the Federal Reserve Bankster Cartel is pumping into the financial markets is the only thing holding the world economy together.  When the dollar collapses, the USA must officially devaluate the dollar, the QEII $85 Billion per month joy ride will be over. ""Something happened in the middle of May," said investing god Jeff Gundlach as he began his latest webcast on the state of the global markets and the economy. He was referring to how global interest rates quietly rallied and how the Japanese stock market fell spectacularly. He notes that the magnitude of the interest rate rally isn't unusual.  Having said that, Gundlach believes rates will stay low thanks to a "put" by the Federal Reserve. Should rates rise, Gundlach believes the Fed would actually expand quantitative easing. This is because high interest rates would put too much pressure on the economy, and it would cause Federal interest expenses to become too onerous. "I certainly think the Fed is going to reduce quantitative easing," he said. But he attributes the reduction to the shrinking Federal deficit. "I'm starting to like long-term Treasuries," said Gundlach as he predicted the 10-year Treasury yield would end the year at 1.7%. All of Gundlach's theses are based on the fact that the global economy remains weak, GDP growth forecasts continue to come down, and unemployment remains high and lop-sided. He communicates all of this in his eye-opening, hand-picked collection of charts on growth, employment, inflation, stocks, bonds, and other critical global macro indicators. Anyone who is serious about investing must consider his charts. And for anyone who's just curious, these charts will give you a peek into how Gundlach thinks. Click Here To See Gundlach's Presentation >"
Gary Edwards

PETER SCHIFF: The Housing Bust Was Just A Preview For The Coming Catastrophe - Business... - 0 views

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    Peter Schiff talks about his new book "The Real Crash: America's Coming Bankruptcy, How to Save Yourself and Your Country".  I caught the Coast-to-Coast "Financial Crisis Special" interview with Peter earlier this week where he spoke on the "Real Crash" issues.  Stunning stuff.  His hour on Coast was followed by Lindsey Williams who pointed out that the New World Order - Illuminati - Bankster trigger point would be signaled by a collapse in the derivatives market. The derivatives market is now over a quadrillion dollars of  casino style gambling.  This is where Banksters make huge bets on things like whether or not interest rates will go up or down.  Then they take out insurance to cover their bets, which further compounds the cost.  Recent events like the Jon Corzine MF Global gamble that the Federal Reserve Bankster Cartel would backstop explosive European sovereign bankster debt are the first indications of collapse in the derivatives market.  We now know that JP Morgan placed similar bets on a European bailout by the Federal Reserve and World Bank, and lost big.  The only difference is that Corzine robbed his clients personal accounts to cover his bets. While Schiff argues the facts on the table, the "what", Lindsay argued the "why"; claiming that this escalating debt mess is all by design.  Lindsay claims that an operational fundamental of the New World Order elites is to first overturn the USA Constitution.  Using a Machiavellian Principle known as, "out of chaos comes order", they seek to de-stabilize and overthrow the USA Constitutional Republic using massive and crushing debt to first destroy the dollar currency.  This will create massive chaos requiring martial law and government seizure of private property and production. Peter Schiff warns that the government is driving us deeper into debt at exactly the time we should be saving and investing those savings in future private sector productivity.  Lindsay argues that this is all by desig
Paul Merrell

Frightening People into Silence by Andrew P. Napolitano -- Antiwar.com - 0 views

  • by Andrew P. Napolitano, July 17, 2014 Print This | Share This “Chilling” is the word lawyers use to describe governmental behavior that does not directly interfere with constitutionally protected freedoms, but rather tends to deter folks from exercising them. Classic examples of “chilling” occurred in the 1970s, when FBI agents and U.S. Army soldiers, in business suits with badges displayed or in full uniform, showed up at anti-war rallies and proceeded to photograph and tape record protesters. When an umbrella group of protesters sued the government, the Supreme Court dismissed the case, ruling that the protesters lacked standing – meaning, because they could not show that they were actually harmed, they could not invoke the federal courts for redress. Yet, they were harmed, and the government knew it. Years after he died, longtime FBI boss J. Edgar Hoover was quoted boasting of the success of this program. The harm existed in the pause or second thoughts that protesters gave to their contemplated behavior because they knew the feds would be in their faces – figuratively and literally. The government’s goal, and its limited success, was to deter dissent without actually interfering with it. Even the government recognized that physical interference with and legal prosecutions of pure speech are prohibited by the First Amendment. Eventually, when this was exposed as part of a huge government plot to stifle dissent, known as COINTELPRO, the government stopped doing it.
  • Until now. Now, the government fears the verbal slings and arrows of dissenters, even as the means for promulgating one’s criticisms of the government in general and of President Obama in particular have been refined and enhanced far beyond those available to the critics of the government in the 1970s. So, what has the Obama administration done to stifle, or chill, the words of its detractors? For starters, it has subpoenaed the emails and home telephone records of journalists who have either challenged it or exposed its dark secrets. Among those journalists are James Risen of The New York Times and my colleague and friend James Rosen of Fox News. This is more personal than the NSA spying on everyone, because a subpoena is an announcement that a specific person’s words or effects have been targeted by the government, and that person continues to remain in the government’s crosshairs until it decides to let go.
  • This necessitates hiring legal counsel and paying legal fees. Yet, the targeting of Risen and Rosen was not because the feds alleged that they broke the law – there were no such allegations. Rather, the feds wanted to see their sources and their means of acquiring information. What journalist could perform his work with the feds watching? The reason we have a First Amendment is to assure that no journalist would need to endure that.
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  • And just last week, Attorney General Eric Holder, while in London, opined that much of the criticism of Obama is based on race – meaning that if Obama were fully white, his critics would be silent. This is highly inflammatory, grossly misleading, patently without evidential support and, yet again, chilling. Tagging someone as a racist is the political equivalent of applying paint that won’t come off. Were the Democrats who criticized Attorney General Alberto Gonzales or Secretary of State Condoleezza Rice racists? Is it appropriate for government officials to frighten people into silence by giving them pause before they speak, during which they basically ask themselves whether the criticism they are about to hurl is worth the pain the government will soon inflict in retaliation? The whole purpose of the First Amendment is to permit, encourage and even foment open, wide, robust debate about the policies and personnel of the government. That amendment presumes that individuals – not the government – will decide what language to read and hear. Because of that amendment, the marketplace of ideas – not the government – will determine which criticisms will sink in and sting and which will fall by the wayside and be forgotten.
  • Surely, government officials can use words to defend themselves; in fact, one would hope they would. Yet, when the people fear exercising their expressive liberties because of how the governmental targets they criticize might use the power of the government to stifle them, we are no longer free. Expressing ideas, no matter how bold or brazen, is the personal exercise of a natural right that the government in a free society is powerless to touch, directly or indirectly. Yet, when the government succeeds in diminishing public discourse so that it only contains words and ideas of which the government approves, it will have succeeded in establishing tyranny. This tyranny – if it comes – will not come about overnight. It will begin in baby steps and triumph before we know it. Yet we do know that it already has begun.
Gary Edwards

Roger L. Simon » Is America in a Pre-Revolutionary State this July 4th? - 0 views

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    As we approach July 4, 2013, is America in a pre-revolutionary state? Are we headed for a Tahrir Square of our own with the attendant mammoth social turmoil, possibly even violence. Could it happen here? We are two-thirds of the way into the most incompetent presidency in our history. People everywhere are fed up. Even many of the so-called liberals who propelled Barack Obama into office have stopped defending him in the face of an unprecedented number of scandals coming at us one after the other like hideous monsters in some non-stop computer game. And now looming is the monster of monsters, ObamaCare, the healthcare reform almost no one wanted and fewer understood. It will be administered by the Internal Revenue Service, an organization that has been revealed to be a kind of post-modern American Gestapo, asking not just to examine our accounting books but the books we read . What could be more totalitarian than that? Meanwhile, the Wall Street Journal warns the costs of ObamaCare are close to tripling what were promised , and the number of doctors in our country is rapidly diminishing. No more "My son, the doctor!" It doesn't pay. And young people most of all will not be able to afford escalating health insurance costs and will end up paying the fine to the IRS, simultaneously bankrupting the health system and enhancing the brutal power of the IRS - all this while unemployment numbers remain near historical highs. No one knows how many have given up looking for work while crony capitalist friends of the administration enrich themselves on mythological clean-energy projects. In fact, everywhere we look on this July Fourth sees a great civilization in decline. And much of that decline can be laid at the foot of the incumbent. Especially his own people, African Americans, have suffered.  Their unemployment numbers are catastrophic, their real needs ignored while hustlers like Sharpton, Jackson, and, sadly, even the president fan the flames of non-exi
Paul Merrell

US Federal Reserve to end quantitative easing programme | Business | The Guardian - 0 views

  • The US Federal Reserve has called time on its $4.5tn bond-buying programme, halting a radical monetary policy introduced nearly six years ago to steer the world’s largest economy through the financial crisis. The central bank, led by Janet Yellen, said the final tranche of bonds under its quantitative easing programme would be bought this month, but it committed to keeping record low interest rates for “a considerable time”. Announcing the decision on QE, made at its October policy meeting, the Fed said: “The committee judges that there has been a substantial improvement in the outlook for the labour market since the inception of its current asset purchase programme. Moreover, the committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the committee decided to conclude its asset purchase programme this month.”
  • It brings to an end a programme which marked a departure for US monetary policy when it was launched in December 2008, hugely swelling the Fed’s balance sheet in an effort to prop up a battered financial system. The Fed began to slow its purchase of Treasury bonds and mortgage-backed securities in January, but until now it had not confirmed an end date. The central bank has steadily reduced its monthly bond purchases from a peak of $85bn a month to $15bn a month. Despite the end of its bond-buying programme, US monetary policy remains ultra loose, with an interest rate range at a record low of between zero and 0.25% since December 2008.
Paul Merrell

ClubOrlov: Whiplash! - 0 views

  • Over the course of 2014 the prices the world pays for crude oil have tumbled from over $125 per barrel to around $45 per barrel now, and could easily drop further before heading much higher before collapsing again before spiking again. You get the idea. In the end, the wild whipsawing of the oil market, and the even wilder whipsawing of financial markets, currencies and the rolling bankruptcies of energy companies, then the entities that financed them, then national defaults of the countries that backed these entities, will in due course cause industrial economies to collapse. And without a functioning industrial economy crude oil would be reclassified as toxic waste. But that is still two or three decades off in the future.
  • An additional problem is the very high depletion rate of “fracked” shale oil wells in the US. Currently, the shale oil producers are pumping flat out and setting new production records, but the drilling rate is collapsing fast. Shale oil wells deplete very fast: flow rates go down by half in just a few months, and are negligible after a couple of years. Production can only be maintained through relentless drilling, and that relentless drilling has now stopped. Thus, we have just a few months of glut left. After that, the whole shale oil revolution, which some bobbleheads thought would refashion the US into a new Saudi Arabia, will be over. It won't help that most of the shale oil producers, who speculated wildly on drilling leases, will be going bankrupt, along with exploration and production companies and oil field service companies. The entire economy that popped up in recent years around the shale oil patch in the US, which was responsible for most of the growth in high-paying jobs, will collapse, causing the unemployment rate to spike.
  • The game they are playing is basically a game of chicken. If everybody pumps all the oil they can regardless of the price, then at some point one of two things will happen: shale oil production will collapse, or other producers will run out of money, and their production will collapse. The question is, Which one of these will happen first? The US is betting that the low oil prices will destroy the governments of the three major oil producers that are not under their political and/or military control. These are Venezuela, Iran and, of course, Russia. These are long shots, but, having no other cards to play, the US is desperate. Is Venezuela enough of a prize? Previous attempts at regime change in Venezuela failed; why would this one succeed? Iran has learned to survive in spite of western sanctions, and maintains trade links with China, Russia and quite a few other countries to work around them. In the case of Russia, it is as yet unclear what fruit, if any, western policies against it will bear. For example, if Greece decides to opt out of the European Union in order to get around Russia's retaliatory sanctions against the EU, then it will become entirely unclear who has actually sanctioned whom.
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  • The US is making a desperate attempt to knock over a petro-state or two or three before its shale oil runs out, with the Canadians, their tar sands now unprofitable, hitching a ride on its coat-tails, because if this attempt doesn't work, then it's lights out for the empire. But none of their recent gambits have worked. This is the winter of imperial discontent, and the empire is has been reduced to pulling pathetic little stunts that would be quite funny if they weren't also sinister and sad.
  • But a bunch of deluded people muttering to themselves in a dark corner, while the rest of the world points at them and laughs, does not an empire make. With this level of performance, I would venture to guess that nothing the empire tries from here on will work to its satisfaction.
  • Because it will recover. The fix for low oil prices is... low oil prices. Past some point high-priced producers will naturally stop producing, the excess inventory will get burned up, and the price will recover. Not only will it recover, but it will probably spike, because a country littered with the corpses of bankrupt oil companies is not one that is likely to jump right back into producing lots of oil while, on the other hand, beyond a few uses of fossil fuels that are discretionary, demand is quite inelastic. And an oil price spike will cause another round of demand destruction, because the consumers, devastated by the bankruptcies and the job losses from the collapse of the oil patch, will soon be bankrupted by the higher price. And that will cause the price of oil to collapse again. And so on until the last industrialist dies. His cause of death will be listed as “whiplash”: the “shaken industrialist syndrome,” if you will. Oil prices too high/low in rapid alternation will have caused his neck to snap.
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    Dmitry Orlov with a humorous yet inscisient take on the state and future of the oil market. Spoiler: He sees signs of desperation amongst the leaders of the American Empire, reduced to no viable options. 
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    "inscisient"? Make that "incisive." Follow reading Orlov's piece by reading Mike Whitney's latest at http://www.counterpunch.org/2015/01/20/are-plunging-petrodollar-revenues-behind-the-feds-projected-rate-hikes/ A lot of confirmation of what Orlov said in Whitney's article, citing hard numbers. Mass layoffs in the U.S. and Canadian oil industry; the petrodolar has stopped providing liquidity for the dollar; and the Fed plans to raise interest rates to force an influx of dollars from developing nations, in order to replace the petrodollar liquidity crisis. Whitney makes a strong case that it's a plot by the big banksters to steal another huge pile of cash at the expense of a huge number of jobs in the U.S. Both Orlov and Whitney say that it's going to be a very rough ride for the 99 per cent and for the population of developing nations. Indeed, Whitney's numbers say we are already over the precipice on jobs and well into free-fall.
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    But last night, Obama had the gall to claim that all is just peachy-k een on the jobs front. As he helps the banksters offshore another huge number of U.S. jobs.
Paul Merrell

Tomgram: Engelhardt, Who Rules Washington? | TomDispatch - 0 views

  • As every schoolchild knows, there are three check-and-balance branches of the U.S. government: the executive, Congress, and the judiciary. That’s bedrock Americanism and the most basic high school civics material. Only one problem: it’s just not so. During the Cold War years and far more strikingly in the twenty-first century, the U.S. government has evolved.  It sprouted a fourth branch: the national security state, whose main characteristic may be an unquenchable urge to expand its power and reach.  Admittedly, it still lacks certain formal prerogatives of governmental power.  Nonetheless, at a time when Congress and the presidency are in a check-and-balance ballet of inactivity that would have been unimaginable to Americans of earlier eras, the Fourth Branch is an ever more unchecked and unbalanced power center in Washington.  Curtained off from accountability by a penumbra of secrecy, its leaders increasingly are making nitty-gritty policy decisions and largely doing what they want, a situation illuminated by a recent controversy over the possible release of a Senate report on CIA rendition and torture practices.
  • All of this is or should be obvious, but remains surprisingly unacknowledged in our American world. The rise of the Fourth Branch began at a moment of mobilization for a global conflict, World War II.  It gained heft and staying power in the Cold War of the second half of the twentieth century, when that other superpower, the Soviet Union, provided the excuse for expansion of every sort.  Its officials bided their time in the years after the fall of the Soviet Union, when “terrorism” had yet to claim the landscape and enemies were in short supply.  In the post-9/11 era, in a phony “wartime” atmosphere, fed by trillions of taxpayer dollars, and under the banner of American “safety,” it has grown to unparalleled size and power.  So much so that it sparked a building boom in and around the national capital (as well as elsewhere in the country).  In their 2010 Washington Post series “Top Secret America,” Dana Priest and William Arkin offered this thumbnail summary of the extent of that boom for the U.S. Intelligence Community: “In Washington and the surrounding area,” they wrote, “33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings -- about 17 million square feet of space.”  And in 2014, the expansion is ongoing.
  • In this century, a full-scale second “Defense Department,” the Department of Homeland Security, was created.  Around it has grown up a mini-version of the military-industrial complex, with the usual set of consultants, K Street lobbyists, political contributions, and power relations: just the sort of edifice that President Eisenhower warned Americans about in his famed farewell address  in 1961.  In the meantime, the original military-industrial complex has only gained strength and influence. Increasingly, post-9/11, under the rubric of “privatization,” though it should more accurately have been called “corporatization,” the Pentagon took a series of crony companies off to war with it.  In the process, it gave “capitalist war” a more literal meaning, thanks to its wholesale financial support of, and the shrugging off of previously military tasks onto, a series of warrior corporations. Meanwhile, the 17 members of the U.S. Intelligence Community -- yes, there are 17 major intelligence outfits in the national security state -- have been growing, some at prodigious rates.  A number of them have undergone their own versions of corporatization, outsourcing many of their operations to private contractors in staggering numbers, so that we now have “capitalist intelligence” as well.  With the fears from 9/11 injected into society and the wind of terrorism at their backs, the Intelligence Community has had a remarkably free hand to develop surveillance systems that are now essentially “watching” everyone -- including, it seems, other branches of the government.
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  • From the Pentagon to the Department of Homeland Security to the labyrinthine world of intelligence, the rise to power of the national security state has been a spectacle of our time.  Whenever news of its secret operations begins to ooze out, threatening to unnerve the public, the White House and Congress discuss “reforms” which will, at best, modestly impede the expansive powers of that state within a state.  Generally speaking, its powers and prerogatives remain beyond constraint by that third branch of government, the non-secret judiciary.  It is deferred to with remarkable frequency by the executive branch and, with the rarest of exceptions, it has been supported handsomely with much obeisance and few doubts by Congress. And also keep in mind that, of the four branches of government, only two of them -- an activist Supreme Court and the national security state -- seem capable of functioning in a genuine policymaking capacity at the moment.
  • In that light, let’s turn to a set of intertwined events in Washington that have largely been dealt with in the media as your typical tempest in a teapot, a catfight among the vested and powerful.  I’m talking about the various charges and countercharges, anger, outrage, and irritation, as well as news of acts of seeming illegality now swirling around a 6,300-page CIA “torture report” produced but not yet made public by the Senate Intelligence Committee.  This ongoing controversy reveals a great deal about the nature of the checks and balances on the Fourth Branch of government in 2014.
  • Fourteen years into the twenty-first century, we’re so used to this sort of thing that we seldom think about what it means to let the CIA -- accused of a variety of crimes -- be the agency to decide what exactly can be known by the public, in conjunction with a deferential White House.  The Agency’s present director, it should be noted, has been a close confidant and friend of the president and was for years his key counterterrorism advisor.  To get a sense of what all this really means, you need perhaps to imagine that, in 2004, the 9/11 Commission was forced to turn its report over to Osama bin Laden for vetting and redaction before releasing it to the public.  Extreme as that may sound, the CIA is no less a self-interested party. And this interminable process has yet to end, although the White House is supposed to release something, possibly heavily redacted, as early as this coming week or perhaps in the dog days of August.
  • The fact is that, for the Fourth Branch, this remains the age of impunity.  Hidden in a veil of secrecy, bolstered by secret law and secret courts, surrounded by its chosen corporations and politicians, its power to define policy and act as it sees fit in the name of American safety is visibly on the rise.  No matter what setbacks it experiences along the way, its urge to expand and control seems, at the moment, beyond staunching.  In the context of the Senate’s torture report, the question at hand remains: Who rules Washington?
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    The indefatigable and perceptive Tom Englehardt finds formally secret features of the Dark State revealed in the ongoing political jockeying involving the CIA's torture, black prisons, and extarordinary rendition program. 
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