DEATH OF INDIVIDUALISM « The Burning Platform
DEATH OF INDIVIDUALISM « The Burning Platform.
Posted from The Daily Bell without comment, an editorial by Wendy McElroy.
http://www.thedailybell.com/editorials/34802/Wendy-McElroy-Death-by-Methodological-Individualism/
The great political lie is that individuals need the state. It is a lie on at least two levels.
The first layer of the great lie: It states the opposite of what is true; the state needs individuals. And the state is desperate for you to believe it is indispensable to your life. If it were not there to “take care of you,” the state wants you to believe that your children would be uneducated, the roads would remain unpaved, health care would disappear, foreign tanks would roll past your doorstep and crime would run amok in the streets. Nonsense.
The state produces nothing; it only takes and consumes what productive individuals create. The few state ‘services’ that mimic free-market ones are so notoriously inefficient and incompetent that they are often worse than nothing at all; public schools are an example. Moreover, the purpose of the ‘services’ is not to benefit society but to skim tax dollars from it and to exert social control over it. If the state wanted society to function at its potential, then it would step out of the way of private competitors rather than hobble or ban them. Instead, it obstructs private services precisely because they perform far better and less expensively.
The second layer of the great lie is its foundation. Namely, there is no “state” as opposed to individuals. Both the state and society consist of nothing more than their individual members and the sum total of their interactions. In other words, the state consists of individuals who organize together according to a set of rules; the individuals cooperate together in order to perform specific acts, from passing legislation to delivering tax bills. But every act of the state devolves to one individual dealing with another individual. In his magnum opus, Human Action, the Austrian economist Ludwig von Mises described this dynamic. “First we must realize that all actions are performed by individuals… If we scrutinize the meaning of the various actions performed by individuals we must necessarily learn everything about the actions of the collective whole. For a social collective has no existence and reality outside of the individual members’ actions.” The state exists only through its individual members.
In viewing abstractions such as “the state” as the sum total of their individual members, Mises did not deny the importance of the abstractions. Quite the contrary. Mises explained, “Methodological individualism, far from contesting the significance of such collective wholes, considers it as one of its main tasks to describe and to analyze their becoming and their disappearing, their changing structures, and their operation. And it chooses the only method fitted to solve this problem satisfactorily.” Methodological individualism is an analytical tool through which to make sense of the collectives such as the state, society and family.
With regard to the state, Mises offered an example of how to analyze its dynamics. “The hangman, not the state, executes a criminal. It is the meaning of those concerned that discerns in the hangman’s action an action of the state.” This is a key point. The people who look upon the hanging see nothing more than one individual killing another individual; that is the visceral reality before their eyes. They ‘see’ a state action and an execution only because they grant the hangman the legitimacy of being a representative of the collective known as “the state.” Their belief converts what would be a wanton killing into a justified execution.
And, yet, Mises wrote, “It is illusory to believe that it is possible to visualize collective wholes… We can see a crowd, i.e., a multitude of people.” But, as with the hangman, we do not see authority or “the state”; all we see are people. Mises continued: “Whether this crowd is a mere gathering…or any other kind of social entity is a question which can only be answered by understanding the meaning which they themselves attach to their presence. And this meaning is always the meaning of individuals…. [A] mental process makes us recognize social entities.” Individuals who form the state through their membership attach a specific meaning to gathering and coordinating with each other. The meaning or purpose is to exercise the perceived privilege to rule over individuals who are non-members. To do so, it is necessary to convince non-members of the state’s legitimacy.
The 18th century political philosopher William Godwin – the first modern proponent of anarchism – observed, “Government is founded on an opinion… A nation must have learned to respect a king, before a king can exercise any authority over them.” The process by which this opinion is formed can be called “mystification.” This is the process by which the commonplace is elevated to the exalted. Thus the state comes to be seen as more than its individual members, as higher than society. The state becomes an independent entity to which individuals swear loyalty, for which they send their children to die in wars and toward which they genuflect. The mystique is maintained in many ways, including: the pomp of swearing-in ceremonies; awe-inspiring buildings such as the Supreme Court; the rituals of saluting flags with hands over the heart; uniforms that minimize individuality; the appeal to tradition such as the American Revolution; and, most importantly, the public schools that teach the legitimacy of the state along with the alphabet.
Mystification sanctifies the actions taken by individuals in the name of the state. That is, a double standard of morality is introduced – one for individuals who are members of the state and another for non-members. The double standard contradicts a longstanding principle of liberty; namely, that a violation of violates committed by an individual remains a violation of rights when performed by a group of individuals. The group does not relinquish personal responsibility by acting in someone else’s name. Rape is no less rape because a gang is involved or because they shout “do for England!” A 1657 pamphlet (ascribed to the rebel Colonel Titan) argued, “What can be more absurd in nature and contrary to all common sense than to call him Thief and kill him that comes alone… and to call him Lord Protector and obey him that robs me with regiments and troops?” And, yet, this is what the state accomplishes. It converts an act that would be theft if committed by an individual into a ‘legitimate’ act of taxation when committed by a group in the name of the state.
The state pulls off this moral sleight-of-hand because non-member individuals accept that it functions by a different standard of morality. The radical individualist R.C. Hoiles, who built a publishing empire, called this double standard “The Most Harmful Error Most Honest People Make.” An editorial in his flagship newspaper The Orange County Register (Dec. 17, 1956) explained that the error “is the belief that a group or a government can do things that would be harmful and wicked if done by an individual and produce results that are not harmful, unjust and wicked. It is the belief that a number of people doing a thing that is wrong for an individual to do, can make it right and just.”
Hoiles went one step farther. He went beyond the visible violations of right that occur under the double standard to make a more subtle point. In another Register editorial (Oct. 31, 1958), he argued that the “profit motive” was more accurately called the “hope of rewards.” A man worked for one of two reasons: “Either he has hope of rewards or he is forced.” The former was freedom; the latter was slavery. A double standard by which the state expropriated the wealth which individuals had freely produced only created slavery. The state destroyed the “hope of rewards” not only through direct violation of rights such as taxation but also by granting legal privileges to individuals who comprised entities such as corporations. The privileges constituted theft because they robbed private producers of the right to compete fairly and, so, they robbed individuals of hope itself.
The state exists as an engine of privilege only because the vast majority of people believe that the individuals who comprise it can properly operate on a double standard. If state agents, from the president to post office workers, were viewed as individuals who are bound to the same rules of decency as the rest of us, then the state as we know it would crumble as the illusion it is. Freedom will come when the same standard of morality is applied to the individuals who are the state; the path to freedom is methodological individualism.
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Eighteen Years After First Experiments, FBI Makes New Push to Deploy Drones Across US | Motherboard
Eighteen Years After First Experiments, FBI Makes New Push to Deploy Drones Across US | Motherboard.
Judge orders release of hundreds of heavily-redacted documents
The FBI has been contemplating using aerial surveillance drones since 1995, and are investing heavily in the technology as a cheap and stealthy alternative to manned surveillance aircraft. A new set of documents released by the Bureau—400 heavily-redacted pages of emails, memos and invoices—sheds new light on the deployment of unmanned aerial vehicles for federal investigations.
The Bureau has also sought new authority from the FAA, the agency which regulates unmanned aerial flights over the U.S., to “greatly expand the FBI’s potential deployment scenarios for UAVs.”
On October 30, the U.S. District Court in D.C. ordered the FBI to release its drone documents on a rolling basis to Citizens for Ethics and Responsibility in Washington (CREW), which had submitted a Freedom of Information Act request in June. While MuckRock and Motherboard’s own requests to the FBI as part of the Drone Census are still in process (and the Bureau is hardly eager to release anything), the 431 pages of documents offer a more authoritative and exhaustive view of the Bureau’s investigations into and deployments of drone technology than ever before.
Presentation slides from the FBI’s Operational Technology Division indicates that the agency’s interest in drones dates back to 1995, when researchers “experimented with model helicopters and model planes but discarded the program as it did not prove to be a useful surveillance tool.”
The FBI’s Technical Response Team researched UAVs more aggressively beginning in 2003, but a white paper explains that, before 2005, “UAVs available were either too large or too expensive to meet FBI requirements.”
Invoices confirm that the FBI made its first drone purchase in September 2005. The Justice Department Inspector General reported in September that the FBI had spent $3 million on drone technology, maintenance and software through May 2013, but all quantities, model numbers and dollar amounts are redacted in the released purchase documents.
March 2013 emails indicate that the FBI has seen an “increase in funding” due to a “need for more UAVs.”
Like all government agencies, the FBI must apply for authorization from the Federal Aviation Administration prior to deploying drones. While the FAA so far has released authorization documents back to 2009, an email from the chief of the Tracking Technology Unit claims that the Bureau’s “first operational deployment was in October 2006.”
In a July letter to Rand Paul, the FBI indicated that it had used drones in ten operations since 2006, and that all applications had been approved by the FAA. The FAA has begun releasing its authorization documents on a rolling basis after losing its own lawsuits to the Electronic Frontier Foundation.
As of a May 2011 newsletter, the FBI’s UAV Program was “mission ready and fully operational.” In an email that July, the program manager all but begged agents across the country to request drone backup.
“The time is now here and we are offering these services,” the agent wrote to all field office administrators. “We have available several small Unmanned Aerial Systems available for deployment.”
What’s remains murky is precisely what kind of drones they have, the funding source for their drone purchases, and in what ways the FBI’s program has interacted with other federal and local law enforcement agencies.
While it’s well-established that Customs and Border Protection, a component of the Department of Homeland Security, flies unarmed Predator drones along the border, the FBI refuses to detail its the circumstances of their own drone use or the number of agents trained to operate them.
Officials at the FBI have previously indicated the Bureau has relied on drones in cases where agents’ lives are at stake. In February 2011, the LA Times reported that the FBI used a Department of Homeland Security Predator drone based in Grand Forks, N.D., to collect aerial images of the house of Martin Luther King Jr. Day bomber Kevin W. Harpham, which it used to plan the raid that captured him on March 9, 2011. The Bureau also used a drone during an Alabama hostage incident earlier this year.
In a 35-page report released in September by the Justice Department’s inspector general, auditors revealed that the U.S. Marshals Service and the Drug Enforcement Administration have also purchased and tested drones but decided not to deploy them actively. The Justice Department has also awarded at least $1.2 million to local police departments to purchase small drones, said the report. While these drones have not been used in police actions, the auditors found that the Justice Dept. had failed to track exactly how that drone procurement money was spent.
Above, former FBI director Robert Mueller testifying in a Congressional oversight hearing in July
Auditors also found that the FBI had not addressed the danger of violating privacy rights in its use of drones, which have set off alarms among privacy advocates across the country, and led various municipalities to restrict their use. The report said that officials at the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives told auditors that there was “no need” to write new privacy guidelines. During an oversight hearing over the summer, the Bureau’s former director Robert Mueller said the FBI was in the “initial stages” of writing privacy policies.
FAA hurdles
According to the documents, the primary roadblock holding back the FBI’s drone program appears to be FAA approval, but the Bureau is working to eliminate obstacles to wider deployment. While current FAA rules authorize drone flights over particular geographic areas, the FBI has launched a coordinated effort with other law enforcement agencies to set up a blanket approval in domestic airspace, described as a “nationwide, standing Certificate of Authorization for federal law enforcement use, which will greatly expand the FBI’s potential deployment scenarios for UAVs.”
In October, the FBI reported to the court that it had found approximately 2,750 pages of documents on its drone fleet. CREW has indicated that it intends to appeal the FBI’s heavy-handed redaction of all released documents.
Motherboard and MuckRock are continuing to sift through this first release for more specifics on the FBI’s use of drones, including its policies around using unmanned aerial surveillance for tactical missions.
The FBI sent its first batch on November 27, which CREW has put online in full.
Before this release, the only timelines of FBI drone use have been cobbled together from anonymous official statements, Director Robert Mueller’s vague testimony, responses toSenator Rand Paul and reports from Justice Department Inspector General and various federal research offices.
See more from the Motherboard / MuckRock Drone Census
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Gold Is Disappearing from the West: Alasdair Macleod | Peak Prosperity
Gold Is Disappearing from the West: Alasdair Macleod | Peak Prosperity.
Western central banks have tried to shake off the constraints of gold for a long time, which has created enormous difficulties for them. They have generally succeeded in managing opinion in the developed nations but been demonstrably unsuccessful in the lesser-developed world, particularly in Asia. It is the growing wealth earned by these nations that has fuelled demand for gold since the late 1960s. There is precious little bullion left in the West today to supply rapidly increasing Asian demand. It is important to understand how little there is and the dangers this poses for financial stability.
An examination of the facts shows that central banks have been on the back foot with respect to Asian gold demand since the emergence of the petrodollar. In the late 1960s, demand for oil began to expand rapidly, with oil pegged at $1.80 per barrel. By 1971, the average price had increased to $2.24, and there is little doubt that the appetite for gold from Middle-Eastern oil exporters was growing. It should have been clear to President Nixon’s advisers in 1971 that this was a developing problem when he decided to halt the run on the United States’ gold reserves by suspending the last vestiges of gold convertibility.
After all, the new arrangement was: America issued the petrodollars to pay for the oil, which were then recycled to Latin America and other countries in the West’s sphere of influence through the American banks. The Arabs knew exactly what was happening; gold was simply their escape route from this dodgy deal.
The run on U.S. gold reserves leading up to the Nixon Shock in August 1971 is blamed by monetary historians on France. But note this important passage from Ferdinand Lips’ book GoldWars:
Because Arabs did not understand bonds and stocks they invested their surplus funds in either real estate and/or gold. Since Biblical times, gold has been the best means to keep wealth and to transfer it from generation to generation. Gold therefore was the ideal vehicle for them. Furthermore after their oil reserves are exhausted in the distant future, they would still own gold. And gold, contrary to oil, could never be wasted.
According to Lips, Swiss private bankers, to whom many of the newly-enriched Arabs turned, recommended that a minimum of 10% and even as much as 40% should be held in gold bullion. This advice was wholly in tune with Arab thinking, creating extra demand for America’s gold reserves, some of which were auctioned off in the following years. Furthermore, Arab investors were unlikely to have been deterred by high dollar interest rates in the early eighties, because high interest rates simply compounded their rapidly-growing exposure to dollars.
Using numbers from BP’s Statistical Review and contemporary U.S. Treasury 10-year bond yields to gauge dollar returns, we can estimate gross Arab petrodollar income, including interest from 1965 to 2000, to total about $4.5 trillion. Taking average annual gold prices over that period, ten percent of this would equate to about 50,500 tonnes, which compares with total mine production during those years of 62,750 tonnes, over 90% of which went into jewellery.
This is not to say that 50,000 tonnes were bought by the Arabs; it could only be partly accommodated even if the central banks supplied them gold in very large quantities, of which there is some evidence that they did. Instead, it is to ram the point home that the Arabs, awash with printed-for-export petrodollars, had good reason to buy all available gold. And importantly, it also gives substance to Frank Veneroso’s conclusion in 2002that official intervention – i.e., undeclared sales of significant quantities of government-owned gold – was effectively being used to manage the price in the face of persistent demand for physical gold as late as the 1990s.
Transition from Arab demand
Arabs trying to invest a portion of their petrodollars would have left very little investment gold for the advanced economies. As it happened, U.S. citizens had been banned from holding bullion until 1974, and British citizens were banned until 1971. Instead, they invested mainly in mining shares and Krugerrands, continuing this tradition by using derivatives and unbacked unallocated accounts with bullion banks in preference to bullion itself. This meant that, until the mid-seventies, investment in physical gold in the West was minimal, almost all gold being held in illiquid jewellery form. Western bullion investors were restricted to mainly Germans, French, and Italians, mostly through Swiss banks. The 1970s bull market was therefore an Arab affair, and they continued to absorb gold through the subsequent bear market.
By the late-nineties, a new generation of Swiss investment managers, schooled in modern portfolio theory and less keen on gold, persuaded many of their European clients to reduce and even eliminate bullion holdings. At the same time, a younger generation of Western-educated Arabs began to replace more conservative patriarchs, so it is reasonable to assume that Arab demand for gold waned somewhat, as infrastructure spending and investment in equity markets began to provide portfolio diversification. This was therefore a period of transition for bullion, driven by declining Western investment sentiment and changing social structures in the Arab world.
It also marked the beginning of accelerating demand in emerging economies, notably India, but also in other countries such as Turkey and those in Southeast Asia, which were rapidly industrialising. In 1990, the Indian Government freed up the gold market by abolishing the Gold Control Act of 1968, paving the way for Indians to become the largest officially-recognised importers of gold until overtaken by China last year.
Lower prices in the 1990s stimulated demand for jewellery in the advanced economies, with Italy becoming the largest European manufacturing centre. At the same time, gold leasing by central banks increased substantially, as bullion banks exploited the differential between gold lease rates and the yield on short-term government debt. This leased gold satisfied jewellery demand as well continuing Asian demand for gold bars.
So, despite the fall in prices between 1997-2000, all supply was absorbed into firm hands. When gold prices bottomed out, Western central banks almost certainly had less gold than publicly stated, the result of managing the price until 1985, and through leasing thereafter. This was the background to the London Bullion Market Association, which was founded in 1987.
The LBMA
In 1987, the unallocated account system became formalized under London Bullion Market Association (LBMA) rules, allowing the bullion banks to issue gold IOUs to their customers, making efficient use of the bullion available. The ability to expand customer business in the gold market without having to acquire physical bullion is the chief characteristic of the LBMA to this day. Futures markets in the U.S. also expanded, and so derivatives and unallocated accounts became central to Western investment in gold. Today the only significant bullion held by Western investors is likely to be a small European residual plus exchange-traded fund (ETF) holdings. In total (including ETFs), this probably amounts to no more than a few thousand tonnes.
The LBMA was established in 1987 in the wake of the Financial Services Act in 1986. Prior to that date, the twice-daily gold fix had become the standard pricing mechanism for international dealers, whose ranks grew on the back of the 1970s bull market. This meant that international banks established their bullion dealing activities in London in preference to Zurich, which was the investment centre for physical bullion. The establishment of the LBMA was the formalization of an existing gold market based on the 400-ounce “good delivery” standard and the operation of both allocated and unallocated accounts.
During the twenty-year bear market, attitudes to gold diverged, with capital markets increasingly taking the view that the inflation dragon had been slain and gold’s bull market with it. At the same time, Asian demand – initially from the Arab oil exporters but increasingly from other nations led by Turkey, India, and Iran – ensured that there were buyers for all the physical gold available. Mine supply, which benefited from the introduction of heap-leaching techniques, had increased from 1,314 tonnes in 1980 to 2,137 tonnes in 1990 and 2,625 tonnes by 2000. Together with scrap supply, London was in a strong position to intermediate between a substantial increase in gold flows to Asian buyers, and it was from this that central bank leasing naturally developed.
Gold backed by these physical flows was the ideal asset for the carry trade. A bullion bank would lease gold from a central bank, sell the gold, and invest the proceeds in short-term government debt. It was profitable for the bullion bank, governments were happy to have the finance, and the lessor was happy to see an idle asset work up some extra income. However, leasing only works so long as the bullion bank can hedge by accessing future supply so that the lease can eventually be terminated.
Before 2000, this was a growing activity, fuelled further by Swiss portfolio disinvestment in the late 1990s. As is usual in markets with a long-term behavioral trend, competition for this business extended the risks beyond being dangerous. This culminated in a crisis in September 1999, when a 30% jump in the price threatened to bankrupt some of the bullion banks who were in the habit of running short positions.
Post-2000
Bull markets always start with very little mainstream and public involvement, and so it has proved with gold since the start of this century. So let us recap where all the gold was at that time:
- Total above-ground gold stocks were about 129,000 tonnes, of which 31,800 tonnes were officially monetary gold. Of the balance, approximately 85-90% was turned into jewellery or other wrought forms, leaving only 10-15,000 tonnes invested in bar and coins and allocated for industrial use.
- Out of a maximum of 15,000 tonnes, coins (mostly Krugerrands) accounted for about 1,500 tonnes and other uses (non-recovered industrial and dental), say, 1,000 tonnes. This leaves a maximum of 12,500 tonnes and possibly as little as 7,500 tonnes of investment gold worldwide at that time.
- After Swiss fund managers disposed of most of the bullion held in portfolios for their clients in the late 1990s, there was very little investment gold left in European and American ownership.
- Frank Veneroso in 2002 concluded, after diligent research, that central banks had by then supplied between 10-15,000 tonnes of monetary gold into the market. Much of this would have gone into jewellery, particularly in Asia, but some would have gone to the Middle East. This explains how extra investment gold may have been supplied to satisfy Middle Eastern demand.
- Middle Eastern countries must have been the largest holders of non-monetary gold in bar form at this time. We can see that 10% of petrodollars invested in gold would have totalled over 50,000 tonnes, yet there can only have been between 7,500-12,500 tonnes available in bar form for all investor categories world-wide. This may have been increased somewhat by the addition of monetary gold leased by central banks and acquired through the market.
It was at this point that the second gold bull market commenced against a background of very little liquidity. Investment bullion was tightly held, the central banks were badly short of their declared holdings of monetary gold, and from about 2004 onwards, ETFs were to grow to over 1,500 tonnes. Asian demand continued to grow (led by India), and China began actively promoting private ownership of gold at about the same time.
Other than through physically-backed ETFs, Western investors were encouraged to satisfy their demand for bullion through derivatives and unallocated accounts at the bullion banks. There are no publicly available records detailing the extent of these unallocated accounts, but the point is that Western demand has not resulted in increased holdings of bullion except through securitised ETFs. Instead, the liabilities faced by the bullion banks on uncovered accounts will have increased to accommodate growth in demand. Therefore, the vested interests of the bullion banks and the central banks overseeing the gold market call for continued suppression of the gold price, so as to avoid a repeat of the crisis faced in September 1999 when the price increased by 30% in only two weeks.
Where are the sellers?
Price suppression can only be a temporary stop-gap, and there has never been sufficient supply to allow the central banks to retrieve their leased gold from the bullion banks. Therefore, Frank Veneroso’s conclusion in 2002 that there had to be existing leases totalling 10-15,000 tonnes is a starting point from which leases and loans have increased. There are two events which will almost certainly have increased this figure dramatically:
- When the price rose to $1900 in September 2011, there was a concerted attempt to suppress the price from further rises. The lesson from the 1999 crisis is that the bullion banks’ geared exposure to unallocated accounts was forcing a crisis upon them; if they had been forced to cash-settle these accounts, the gold price would almost certainly have risen further, risking a widespread monetary crisis.
- Through 2012, Asian demand, particularly from China, coinciding with continued investor demand for ETFs, was already proving impossible to contain. In February this year, the Cyprus bail-in banking crisis warned depositors in the Eurozone that all bank deposits over the insured limit risked being confiscated in the event of a wider Eurozone banking crisis. This drove many unallocated account holders to seek delivery of physical gold from their banks, forcing ABN-AMRO and Rabobank to suspend all gold deliveries from their unallocated accounts. This was followed by a concerted central- and bullion-bank bear raid on the market in early April, driving the price down to trigger stop-loss sales in derivative markets and subsequent liquidation of ETF holdings.
It is widely assumed that the unexpected rise in demand for bullion that resulted from the April take-down was satisfied through ETF sales, but an examination of the quantities involved shows they were insufficient. The table below includes officially reported demand for China and India alone, not taking into account escalating demand from the Chinese diaspora in the Far East and from elsewhere in Asia:
These figures do not include Chinese and Indian purchases of gold in foreign markets and stored abroad, typically carried out by the rich and very rich. Nor do they include foreign purchases by the Chinese Government and its agencies. Despite these omissions, in 2012, recorded demand from these two countries left the world in a supply deficit of 131 tonnes. Furthermore, ahead of the April smash-down in the first quarter of this year, the deficit had jumped to 88 tons, or an annualised rate of 352 tonnes.
Demands for delivery by panicking Europeans in the wake of the Cyprus fiasco could only provoke one reaction. On Friday 12th April, 400 tonnes of paper gold were dumped on the market in two orders, triggering stop-loss sales and turning market sentiment bearish in the extreme. Western investors started to think about cutting their losses, and they sold down ETF holdings to the tune of 325 tonnes in 2013 by the end of May. However, this triggered record demand among those who looked on gold as insurance against currency and systemic risks.
Later that year, in July, Ben Bernanke told the Senate Banking Committee he didn’t understand gold. That was probably a reference to the April gold price smash orchestrated by the central banks and how it unleashed record levels of demand. It was an admission that he thought everyone would follow the new trend by acting like portfolio investors, forgetting that if you lower the price of a commodity, you merely unleash demand. It was also an important admission of policy failure.
Since those events in April, someone has been supplying the market with significant quantities of gold to keep the price down. We know it is not Arab gold, because I have discovered through interviewing a director of a major Swiss refiner that Arab gold is being recast from LBMA specification bars into one-kilo .9999 bars, which has become the new Asian standard. Arab gold does not appear to be being sold, only recast, and anyway, it is only a small part of their overall wealth. We also know from our long-term analysis that any European gold bullion is relatively small in quantity and tightly held. There can only be one source for this gold, and that is the central banks.
I discovered that there was a discrepancy in the Bank of England’s custodial gold of up to 1,300 tonnes between the date of its last Annual Report (28th February) and mid-June, when a lower figure was given out to the public on the Bank’s website. This fits in well with the additional amount of gold needed to manage the price between those months. Furthermore, the Finnish Central Bank recently admitted that all its gold held at the Bank of England was “invested” – i.e., sold – and further added that the practice “was common for central banks.”
Bearing in mind Veneroso’s conclusion in 2002 that there must be 10,000-15,000 tonnes out on lease and loan from the central banks at that time, one could imagine that this figure has increased significantly. Officially, the signatories of the Central Bank Gold Agreement, plus the U.S. and U.K. own 20,393 tonnes. A number of other central banks are likely to have been persuaded to “invest” their gold, but this is bound to exclude Russia, China, the Central Asian states, Iran, and Venezuela. Taking these holders out (amounting to about 3,000 tonnes) leaves a balance of 8,401 tonnes for all the rest. If we further assume that half of that has been deposited in London, New York, or Zurich and leased out, that means the total gold leased and available for leasing since 2002 is about 12,000 tonnes. And once that has gone, there is no monetary gold left for the purpose of price suppression.
Could this have disappeared since 2002 at an average rate of 1,000 tonnes per annum? Quite possibly, in which case, the central banks are very close to losing all control over the gold price.
In Part II: The Very Real Danger of a Failure in the Gold Market, I discuss why the Chinese are buying so much gold and why the Reserve Bank of India is trying to suppress gold demand. I show that gold is substantially undervalued and why that undervaluation is likely to correct itself spectacularly, precipitating a financial crisis.
Click here to access Part II of this report (free executive summary; enrollment required for full access).
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The Fed Turns 100: A Survey of the Critics – Gregory Bresiger – Mises Daily
The Fed Turns 100: A Survey of the Critics – Gregory Bresiger – Mises Daily.
End America’s central bank because it caused the crashes of 2008, 1987, and 1929 and will blunder again.
That’s what many critics are saying about the Federal Reserve System (the Fed), which turns 100 on December 23. They note that on the Fed’s watch America has endured numerous bubbles, crashes, and inflationary cycles that have greatly devalued the dollar. The Fed, they say, has caused or aggravated several crashes.
“The Fed’s performance over the century has been abysmal, no matter how you look at it,” says Professor Joseph Salerno, a business professor and monetary expert at Pace University.
“If you say the goal of the Fed was to prevent calamities, then you have to say that it has been a failure,” says William A. Fleckenstein, a hedge fund manager and the author of Greenspan’s Bubbles.
Fleckenstein says he’s seen two bubbles over the past quarter century. He also believes that, under the Fed’s system of easy money, of interest rates of close to zero percent over the past few years that, “the Fed is once again creating a bubble.” The Fed should be abolished, he adds, because it has no accountability for its mistakes.
The length of the Fed’s charter is indefinite, said Fed sources, who would only speak on background. And that is generally the only way Fed sources will speak when asked about the bank’s current policies or historical record.
What is the Fed?
The Fed is a bank for banks that creates money. It is designed to be a lender of last resort to sick banks in times of crisis. And crisis is one reason why the United States finally returned to authorizing a central bank a century ago. (America had previously had a central bank in the 19th century, but its legislative re-authorization was vetoed by Andrew Jackson who railed against a central bank as the tool of moneyed interests.)
The Fed began with the goal of protecting the dollar. It was given the exclusive right to create money in 1913.
The Fed would “provide a means by which periodic panics which shake the American Republic, and do it enormous injury, would be stopped,” according to Robert Latham Owen, one of the authors of the original Federal Reserve Act.
Why was it given these powers?
After the Wall Street banking Panic of 1907 led numerous banks to fail, “there was a growing consensus among all Americans that a central banking authority was needed to ensure a healthy banking system and provide for an elastic currency,” according to the official Federal Reserve history.
But critics claim the Fed has made things worse. Subsequent problems were the result of Fed governors giving in to political pressure, providing elastic or “cheap money.” This is the controversial Fed policy of setting interest rates. If set too low, the rates will mislead consumers and businesses, causing them to borrow too much. And that can lead to a cycle of boom and bust.
That’s what many believe happened in 2007-2008 as millions of Americans were encouraged through cheap-money policies to use subprime loans to buy homes they couldn’t afford. But Fed critics contend that it had happened before.
For instance, interest rates were dirt cheap in 1972, which led later to an economic disaster as inflation jumped to 10 percent and interest rates went to over 20 percent in the 1970s.
“The consequence of the monetary framework of the 1970s was two bouts of double-digit inflation,” said Fed Chairman Bernard Bernanke in a recent speech entitled, “A Century of U.S. Central Banking: Goals, Framework, Accountability.” These 1970s events killed interest sensitive industries and destroyed many small businesses that couldn’t obtain credit.
These controversial money policies have lead to crashes, depressions, and recessions, including the crash of 1929 and resulting Great Depression, critics say. Some 10,000 banks failed between 1930 and 1933, according to Fed numbers.
“Tragically, the Fed failed to meet the mandate to maintain financial stability,” Bernanke said in his speech.
“Many people,” according to the official Fed history, “blamed the Fed for failing to stem speculative lending that led to the crash, and some argued that inadequate understanding of monetary economics kept the Fed from pursuing polices that could have lessened the depth of the Depression.”
One of the people blaming the Fed was economist and monetary historian Milton Friedman. He criticized Fed policies for triggering the 1929 crash and then causing a depression that lasted over a decade.
“Throughout the contraction, the System [the Fed] had ample powers to cut short the tragic process of monetary deflation and banking collapse,” according to The Great Contraction 1929-1933, by Milton Friedman and Anna Schwartz.
To Fed critics, the Great Depression of 1929 and the great inflation of the 1970s were part of a series of policy blunders that happened again in 2008.
“There never would have been a subprime mortgage crisis if the Fed had been alert,” Schwartz told the Wall Street Journal. “This is something Alan Greenspan must answer for.”
In Greenspan’s memoir, The Age of Turbulence, the former Fed chairman conceded that Fed actions leading up to the crisis were dangerous. He wrote: “I was aware that the loosening of mortgage credit terms for subprime borrowers increased financial risk, and that subsidized home ownership initiatives distort market outcomes.” Still, Greenspan said he believes in the idea of every American having a home.
Economist Laurence Kotlikoff of Boston University says he’d give the Fed a C grade in its first century.
“It didn’t prevent the Great Depression or the Great Recession. It hasn’t fixed the core problems: opacity and leverage in the banking system,” Kotlikoff said.
“Central banking has a poor record but other methods do as well,” adds Jeffrey Gundlach, the manager of the Doubleline Total Return Bond Fund, which invests in mortgage backed securities. Gundlach has been very critical of cheap money policies of the Fed and predicted the crash of 2008. He believes the government should balance the budget first and then consider the Fed’s future.
Other critics, in reviewing the Fed’s record are harsher. They say it is time to end the Fed, in part because it favors certain banking interests.
“The Fed is an instrument of crony capitalism,” warns Hunter Lewis, a money manager and the co-founder of Cambridge Associates, an investment advisory firm.
“The Fed should be abolished because its legal monopoly of the money supply renders it an inherently inflationary institution able to create money at will and without limit,” says Salerno, noting that the value of a 1913 dollar is now five cents.
“History and current experience,” Salerno adds, “reveal to us that groups endowed with a legal monopoly over any area of the economy are prone to use it to the hilt to enrich themselves, their friends and allies.”
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Japan Secures Final Passage Of Secrecy Bill – Designed by Kafka & Inspired By Hitler?!! | Zero Hedge
Japan Secures Final Passage Of Secrecy Bill – Designed by Kafka & Inspired By Hitler?!! | Zero Hedge.
Shinzo Abe secured final passage of a bill granting Japan’s govt sweeping powers to declare state secrets. The Bill won final approval of the measures at about 11:20 p.m. Tokyo time after opposition parties first forced a no-confidence vote in Abe’s govt in the lower house. The first rule of the pending Japan’s Special Secrets Bill is that what will be a secret is secret. The right to know has now been officially superseded by the right of the government to make sure you don’t know what they don’t want you to know. It might all seems like a bad joke, except for the Orwellian nature of the bill and a key Cabinet member expressing his admiration for the Nazis, “just as Germany needed a strong man like Hitler to revive defeated Germany, Japan needs people like Abe to dynamically induce change.”
Submitted by Subcultureist of Japan’s Subculture Research Center blog,
The first rule of the pending Japan’s Special Secrets Bill is that what will be a secret is secret. The second rule is that anyone who leaks a secret and a reporter who writes it up can face up to ten years in jail. The third rule is that there are no rules at to what government agency can declare state secrets and no checks on them to determine they don’t misuse the privilege; even of no longer existent agencies may have the power to declare their information secret. The fourth rule is that anything pertaining to nuclear energy is of course a state secret so there will not longer be any problem with nuclear power in this country because we won’t know anything about it. And what we don’t know can’t hurt us.
The right to know has now been officially superseded by the right of the government to make sure you don’t know what they don’t want you to know.
Legal experts note that even asking pointed questions about a state secret, whether you know or don’t know it’s a secret, could be treated as “instigating leaks” and the result in an arrest and a possible jail term up to five years. Of course, the trial would be complicated since the judge would not be allowed to know what secret the accused was suspected of trying to obtain.
Ask the wrong question, five years in jail.
And of course, trials about state secrets, would by the nature of the law, also be secret trials and closed to the public.
At this point in time, no one has really claimed authorship of the secrecy bill. The author is a secret. Kafka would seem the most likely scrivener for this perplexing legislation, if he was still alive, but ruling coalition members acknowledge that another famous white man from the past may have provided the real inspiration for the bill and its implementation.
An Upper House member of the Diet said on background to JSRC, “Deputy Prime Minister Aso Taro sort of telegraphed the punches of the administration by expressing his admiration for how the Nazi Party forcefully changed the German constitution this summer.
Obviously, we’re not Nazis in Japan–because we hardly have any Jews, but we are like the defeated post World War I Germany in that we do not have the right to wage war to defend ourselves from our enemies. Just as Germany needed a strong man like Hitler to revive defeated Germany, Japan needs people like Abe to dynamically induce change.”
In August this year, Aso Taro, who is also the Finance Minister stated at a seminar, “Germany’s Weimar Constitution was changed into the Nazi Constitution before anyone knew. It was changed before anyone else noticed. Why don’t we learn from that method?”
It’s obvious that the Abe administration which pushed this bill into the Diet without public hearings and even the standard deliberations with Japan’s legal establishment has been an apt pupil of their German predecessors. They even attempted to pass the bill in the middle of the night yesterday while most of Japan was sleeping. The administration hasn’t been able to set a fire to the Diet building to justify a harsher crackdown but the LDP Secretary General was kind enough to say that those noisily protesting the bill were committing “terrorist acts.”
The hawkish Prime Minister Abe has publicly stated his ambition to revise Japan’s constitution to rid it of Article 9, which forbids Japan from waging war. Upper house Diet member, Taro Yamamoto and others have publicly stated they believe the current bill is a stepping-stone to recreate a fascist Japan, as it existed prior to the Second World War.
It might all seems like a bad joke, except for the Orwellian nature of the bill being proposed and a key Cabinet member expressing his admiration for the Nazis.
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Arctic resources claim deadline today for Canada – Politics – CBC News
Arctic resources claim deadline today for Canada – Politics – CBC News.
The U.S. Coast Guard Cutter Healy breaks ice ahead of the Canadian Coast Guard Ship Louis S. St-Laurent in the Arctic Ocean. The two ships were taking part in a multi-year, multi-agency Arctic survey that will help define the Arctic continental shelf. (Petty Officer Patrick Kelley/U.S. Coast Guard/Associated Press)Today is the deadline for Canada to file scientific evidence to justify its claim to Arctic resources beyond its 200 nautical mile exclusive economic zone.
The federal government is being cagey about the submission that it is supposed to file within 10 years of signing the UN Convention on the Law of the Sea, an international treaty setting out maritime rules.
“It’s being a really closely held secret. The big thing that everyone is wondering about is how far up the Lomonosov Ridge we’re [Canada] actually going to go,” says University of Calgary professor and Arctic expert Rob Huebert.
The Lomonosov Ridge is an undersea mountain range that runs between Ellesmere Island, Canada’s most northern land mass, and the east Siberian coast in Russia.
The science package that Canada will file with the UN is essentially a series of undersea co-ordinates that map what the government claims is this country’s extended continental shelf. Under Article 76 of the UN maritime treaty, any coastal country can claim rights to the seabed and sub-seabed up to 150 nautical miles beyond its exclusive economic zone.
In one exception, a country can claim beyond 150 nautical miles if there is a ridge that juts out from its extended continental shelf.
Overlapping claims
Canada could potentially have conflicting claims with Denmark on its border with Greenland and with the U.S. in the Beaufort Sea. But the contentious overlap might be with Russia on the Lomonosov Ridge.
Russia presented its claim to the Commission on the Limits of the Continental Shelf in 2001. That claim ran along the Lomonosov Ridge right up to the North Pole. If Canada has a claim to the Lomonosov Ridge, it could reach 200 nautical miles beyond the pole. That is the halfway point between Canada and Russia.
A titanium capsule with the Russian flag is seen seconds after it was planted by the Mir-1 mini-submarine on the Arctic Ocean seabed under the North Pole during a record dive on Aug. 2, 2007. (Association of Russian Polar Explorers/Associated Press)The UN commission just judges the science and doesn’t have the power to resolve competing claims. Those have to be resolved state-to-state.
University of Ottawa Russia specialist Ivan Katchanovski doesn’t expect there will be a conflict, even if the Canadian and Russian claims overlap.
“There is potential for significant dispute, but don’t expect this is going to lead to a major confrontation or cold war,” Katchanovski told CBC News.
He argued that such a confrontation would make Russian President Vladimir Putin look weak.
“Putin wants to collaborate with Western powers. He does not want to be treated as a secondary power. He wants to be considered to be equal,” Katchanovski explained. “Any confrontation would be detrimental to the Russian image abroad.”
As for the Danes and Americans, Canada worked closely with both of them on mapping the sea floor. Denmark submitted its claim to the commission in November.
U.S. hasn’t signed treaty
The U.S. situation is a little more complicated. It has yet to ratify the maritime treaty, so it doesn’t have the right to submit a scientific claim to the UN commission.
That hasn’t stopped the Americans from working with Canada, though.
“We get along pretty well with the Canadians, and with respect to the surveying of the extended continental shelf, the two countries found that they could co-operate, and that would be a win-win that would save the taxpayers money,” said John P. Bellinger III, an international law expert and former adviser to the last Bush administration on the treaty.
Bellinger said the U.S. would accept Canada’s submission to the UN commission even if there was overlap, “provided that it does not prejudice the U.S. claim.”
Bellinger did offer one caveat to the government in Ottawa.
“If Canada tries to take the North Pole just before Christmas, I think the United States would be very opposed to that.”
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Shanghai smog cancels flights, reduces visibility to metres – World – CBC News
Shanghai smog cancels flights, reduces visibility to metres – World – CBC News.
Shanghai’s concentration of tiny, harmful PM 2.5 particles reached 602.5 micrograms per cubic metre Friday afternoon, compared with the World Health Organization’s safety guideline of 25 micrograms. (China Daily/Reuters)
Shanghai authorities ordered schoolchildren indoors and halted all construction Friday as China’s financial hub suffered one its worst bouts of air pollution, bringing visibility down to a few dozen metres, delaying flights and obscuring the city’s spectacular skyline.
The financial district was shrouded in a yellow haze, and noticeably fewer people walked the city’s streets. Vehicle traffic also was thinner, as authorities pulled 30 per cent of government vehicles from the roads. They also banned fireworks and public sporting events.
“I feel like I’m living in clouds of smog,” said Zheng Qiaoyun, a local resident who kept her six-month-old son at home. “I have a headache, I’m coughing, and it’s hard to breathe on my way to my office.”
‘Today, Shanghai air really has a layered taste. At first, it tastes slightly astringent with some smokiness. Upon full contact with your palate, the aftertaste has some earthy bitterness…’– Alan Yu, chef
Shanghai’s concentration of tiny, harmful PM 2.5 particles reached 602.5 micrograms per cubic metre Friday afternoon, an extremely hazardous level that was the highest since the city began recording such data last December. That compares with the World Health Organization’s safety guideline of 25 micrograms.
The dirty air that has gripped Shanghai and its neighbouring provinces for days is attributed to coal burning, car exhaust, factory pollution and weather patterns, and is a stark reminder that pollution is a serious challenge in China. Beijing, the capital, has seen extremely heavy smog several times over the past year. In the far northeastern city of Harbin, some monitoring sites reported PM 2.5 rates up to 1,000 micrograms per cubic meter in October, when the winter heating season kicked off.
Pollution levels unusual for Shanghai
As a coastal city, Shanghai usually has mild to modest air pollution, but recent weather patterns have left the city’s air stagnant. On China’s social media, netizens swapped jokes over the rivalry between Shanghai and Beijing, saying the financial hub was catching up with the capital in air pollution.
Alan Yu, a chef in Shanghai, satirized the air on his microblog as though he were sampling a new vintage of wine.
“Today, Shanghai air really has a layered taste. At first, it tastes slightly astringent with some smokiness. Upon full contact with your palate, the aftertaste has some earthy bitterness, and upon careful distinguishing you can even feel some dust-like particulate matter,” Yu wrote.
The environmental group Greenpeace said slow-moving and low-hanging air masses had carried factory emissions from Jiangsu, Anhui and Shandong provinces to Shanghai. But it said the root problem lies with the excessive industrial emissions in the region, including Zhejiang province to the south.
“Both Jiangsu and Zhejiang should act as soon as possible to set goals to reduce their coal consumption so that the Yantze River Delta will again be green with fresh air,” Huang Wei, a Greenpeace project manager, said in a statement.
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Big Banks Are Being Hit With Cyberattacks “Every Minute Of Every Day”
Big Banks Are Being Hit With Cyberattacks “Every Minute Of Every Day”.
What would you do if you logged in to your bank account one day and it showed that you had a zero balance and that your bank had absolutely no record that you ever had any money in your account at all? What would you do if hackers shut down all online banking and all ATM machines for an extended period of time? What would you do if you requested a credit report and discovered that there were suddenly 50 different versions of “you” all using the same Social Security number? Don’t think that these things can’t happen. According to Symantec, there was a 42 percent increase in cyberattacks against U.S. businesses last year. And according to a recent report in the Telegraph, big banks are being hit with cyberattacks “every minute of every day”. These attacks are becoming more powerful and more sophisticated with each passing year. Most of the time the general public never hears much about the cyberattacks that are actually successful because authorities are determined to maintain confidence in the banking system. But if people actually knew the truth about what was going on, they would not have much confidence at all.
At this point, the attacks have become so frequent that there is literally no break between them. According to the Telegraph, major financial institutions are continually under assault, and the total number of attacks is constantly increasing…
Every minute, of every hour, of every day, a major financial institution is under attack.
Threats range from teenagers in their bedrooms engaging in adolescent “hacktivism”, to sophisticated criminal gangs and state-sponsored terrorists attempting everything from extortion to industrial espionage. Though the details of these crimes remain scant, cyber security experts are clear that behind-the-scenes online attacks have already had far reaching consequences for banks and the financial markets.
The amount of money that some of these hackers are stealing is absolutely staggering. For example, during “Operation High Roller” thieves got away with somewhere between 78 million and 2.5 billion dollars…
Dissected last year, Operation High Roller marked one of the biggest online thefts to have been made public. According to details of the investigation, somewhere between $78m (£48m) and $2.5bn was last year stolen from thousands of bank accounts across Europe, the US and Latin America.
Among the customers targeted were rich individuals and high-value commercial accounts, with sophisticated software identifying the victims’ main bank accounts and transferring money to prepaid debit cards which could be cashed anonymously. Once the money had been taken, the hackers were able to hide their thefts by changing the victims’ bank balances so they appeared unaltered.
Do you find it unsettling that the authorities don’t even know how much money was actually stolen?
I do.
And earlier this year, another gang of cyberthieves was able to steal 45 million dollars from ATM machines…
A global posse of cyberthieves, armed with laptops in place of guns, hacked into financial institutions and stole $45 million from automated teller machines in a first-of-its-kind heist made for the 21st century,authorities in New York said Thursday.
Over a seven-month period ending last month, the authorities said, hackers broke into computer networks of financial companies in the United States and India and eliminated the withdrawal limits on prepaid debit cards.
Then, people involved in the heist withdrew tens of millions of dollars from ATMs in Manhattan and more than 20 other places around the world. In one case, surveillance cameras picked up a member of the “cashing crew” going from machine to machine, his cash-stuffed bag growing bigger with each hit.
But thefts involving tens of millions of dollars are just the beginning.
In the future, gangs of hackers, terror organizations or even foreign governments could use cyberattacks to bring the entire system down.
John McAfee (formerly of McAfee Associates) recently warned that we are now entering an era of apocalyptic cyberattacks. He said that in the “next world war … the aggressors will be people sitting at home in armchairs while their software turns … all of our guns, our bombs … against us.”
The truth is that it is not just our financial system that is vulnerable. Literally anything that is connected to the Internet could be attacked.
And that is a lot of stuff.
But for now, the big financial institutions remain the most prominent target. Just this week, we learned that a successful cyberattack on JPMorgan Chase resulted in the theft of the personal information of close to half a million corporate and government clients…
Personal information of nearly half a million corporate and government clients who hold prepaid cash cards issued by JPMorgan Chase & Co. (NYSE:JPM) may have been compromised in a cyberattack that took place on the bank’s network in July, the bank warned on Wednesday.
Corporations use JPMorgan’s cash card, known as UCard, to pay salaries, while government agencies use it for issuing tax refunds and unemployment benefits. JPMorgan said it discovered in September that web servers supporting its site, http://www.ucard.chase.com, had been hacked, potentially involving unauthorized access to the personal information of 465,000 cardholders, according to a Reuters report.
The issue was soon fixed and the incident has been brought to the attention of law enforcement authorities, JPMorgan said, adding that the bank has been trying to identify how many accounts were compromised in the attack.
Of course this was not the first major “technical glitch” that JPMorgan Chase has encountered this year. In fact, earlier this year thousands upon thousands of their customers logged into their bank accounts only to discover that their balances had all been reset to zero. That problem was fixed shortly thereafter, but I guarantee you that all of the customers that witnessed that “glitch” will remember it for a very long time.
And certainly JPMorgan Chase is far from alone in dealing with these kinds of issues. In fact, major U.S. bank websites were offline for a combined total of 249 hours during just one six week period earlier this year.
When it comes to the Internet, nobody is ever entirely safe. Every major website and every major company are being targeted. According to USA Today, a cyberattack that began on October 21st has resulted in the theft of the login information for about 2 million Internet accounts…
Almost 2 million accounts on Facebook, Google, Twitter, Yahoo and other social media and Internet sites have been breached, according to a Chicago-based cybersecurity firm.
The hackers stole 1.58 million website login credentials and 320,000 e-mail account credentials, among other items, the firm Trustwave reported. Included in the breaches were thefts of 318,121 passwords from Facebook, 59,549 from Yahoo, 54,437 from Google, 21,708 from Twitter and 8,490 from LinkedIn. The list also includes 7,978 from ADP, the payroll service provider. According to a Trustwave blog, “Payroll services accounts could actually have direct financial repercussions.”
So be cautious on the Internet. The bad guys are out there, and they are becoming more sophisticated with each passing day.
And if you think that “the government will protect us”, you are just being naive.
In fact, government agencies cannot even protect themselves from these guys. For example, identity thieves have been making fools of the IRS for years…
The Internal Revenue Service sent 655 tax refunds to a single address in Kaunas, Lithuania — failing to recognize that the refunds were likely part of an identity theft scheme. Another 343 tax refunds went to a single address in Shanghai, China.
Thousands more potentially fraudulent refunds — totaling millions of dollars — went to places in Bulgaria, Ireland and Canada in 2011.
In all, a report from the Treasury Inspector General for Tax Administration today found 1.5 million potentially fraudulent tax returns that went undetected by the IRS, costing taxpayers $3.6 billion.
So if you are waiting for the incompetent U.S. government to fix this problem, you are going to be waiting for a very, very long while.
As a society, we are constantly becoming even more dependent on the Internet.
Meanwhile, the attacks on the Internet are continually becoming even more sophisticated.
At some point those attacks are going to cause some major league problems.
It is just a matter of time.
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Japan Has Fallen Back Into Fascism After 68 Years: Japanese Senator Shouts “This is The Way the Reign of Terror Begins” … Then Others Physically Restrain Him Washington’s Blog
Photo Credit: SATOKO KAWASAKI, Japan Times
Xinua reports:
Meanwhile, protests comprising more than 7,000 demonstrators continued around the Diet building, mobilized by civic groups, unions and concerned individuals, following similar scenes Wednesday that saw more than 6,000 anti-secrecy law opponents march around the Diet building hand-in-hand.
And the impassioned pleas of Japanese Senators (via Xinhua):
So outraged was opposition lawmaker Hirokazu Shiba in the committee meeting Thursday, that he rose from his seat and shouted “This is the way the reign of terror begins!” His fervor led to his fellow lawmakers having to physically restrain Shiba, as tensions in the meeting reached fever pitch.
The secrecy bill is headed for passage Friday. Indeed, the bill has likely already passed by the time you read this.
Another Japanese Senator said:
“The path that Japan is taking is the recreation of a fascist state. I strongly believe that this secrecy bill represents a planned coup d’état by a group of politicians and bureaucrats,” he warned.
Just like the U.S. Japan is responding to crises of its own making by banning journalism.
The Guardian notes:
Whistleblowers and journalists in Japan could soon find themselves facing long spells in prison for divulging and reporting state secrets, possibly including sensitive information about the Fukushima nuclear disaster ….
“It is a threat to democracy,” said Keiichi Kiriyama, an editorial writer for the Tokyo Shimbun newspaper ….
“It can be used to hide whatever the government wishes to keep away from public scrutiny,” said Mizuho Fukushima, an opposition MP. ….
[The] justice minister, Sadakazu Tanigaki, refused to rule out police raids of newspapers suspected of breaking the law.
Indeed, the number 2 government official said last week that protest equals terrorism.
Foreign Policy notes that the U.S. is largely behind the bill:
Washington, for its part, has long supported stronger secrecy laws in Japan ….
The proposed measure is part of a larger effort by Prime Minister Shinzo Abe to move away from Japan’s pacifist past and establish a stronger military posture that is congenial to, or in line with U.S. preferences, according to Samuels. Among other initiatives, Abe plans to create Japan’s version of the U.S. National Security Council, the coordinating body of American foreign policy, and is pushing to reinterpret Japan’s constitution to expand its military’s limited self-defense role — giving it the authority to aid the United States and other allies, if they’re attacked.
The state secrets bill similarly seems to resemble U.S. policy.
Indeed, the U.S. controls a good deal of Japanese policy.
Olduvaiblog: Musings on the coming collapse 