The Final Swindle Of Private American Wealth Has Begun
The Final Swindle Of Private American Wealth Has Begun.
I began writing analysis on the macro-economic situation of the American financial structure back in 2006, and in the eight years since, I have seen an undeniably steady trend of fiscal decline.
I have never had any doubt that the U.S. economy as we know it was headed for total and catastrophic collapse, the only question was when, exactly, the final trigger event would occur. As I have pointed out in the past, economic implosion is a process. It grows over time, like the ice shelf on a mountain developing into a potential avalanche. It is easy to shrug off the danger because the visible destruction is not immediate, it is latent; but when the avalanche finally begins, it is far too late for most people to escape…
If you view the progressive financial breakdown in America as some kind of “comedy of errors” or a trial of unlucky coincidences, then there is not much I can do to educate you on the reasons behind the carnage. If, however, you understand that there is a deliberate motivation behind American collapse, then what I have to say here will not fall on biased ears.
The financial crash of 2008, the same crash which has been ongoing for years, is NOT an accident. It is a concerted and engineered crisis meant to position the U.S. for currency disintegration and the institution of a global basket currency controlled by an unaccountable supranational governing body like the International Monetary Fund (IMF). The American populace is being conditioned through economic fear to accept the institutionalization of global financial control and the loss of sovereignty.
Anyone skeptical of this conclusion is welcome to study my numerous past examinations on the issue of globalization; I don’t have the time within this article to re-explain, and frankly, with so much information on deliberate dollar destruction available to the public today I’ve grown tired of anyone with a lack of awareness.
If you continue to believe that the Fed actually exists to “help” stabilize our economy or our currency, then you will never find the logic behind what they do. If you understand that the goal of the Fed and the globalists is to dismantle the dollar and the U.S. economic system to make way for something “new”, then certain recent events and policy initiatives do start to make sense.
The year of 2014 has been looming as a serious concern for me since the final quarter of 2013, and you can read about those concerns and the evidence that supports them in my articleExpect Devastating Global Economic Changes In 2014.
At the end of 2013 we saw at least three major events that could have sent America spiraling into total collapse. The first was the announcement of possible taper measures by the Fed, which have now begun. The second was the possible invasion of Syria which the Obama Administration is still desperate for despite successful efforts by the liberty movement to deny him public support for war. And, the third event was the last debt ceiling debate (or debt ceiling theater depending on how you look at it), which placed the U.S. squarely on the edge of fiscal default.
As we begin 2014, these same threatening issues remain (along with many others), only at greater levels and with more prominence. New developments reinforce my original position that this year will be remembered by historians as the year in which the final breakdown of the U.S. monetary dynamic was set in motion. Here are some of those developments explained…
Taper Of QE3
When I first suggested that a Fed taper was not only possible but probable months ago, I was met with a bit (a lot) of criticism from some in the alternative economic world. You can read my taper articles here and here.
This was understandable. The Fed uses multiple stimulus outlets besides QE in order to manipulate U.S. markets. Artificially lowering interest rates is very much a form of stimulus in itself, for instance.
However, I think a dangerous blindness to threats beyond money printing has developed within our community of analysts and this must be remedied. People need to realize first that the Fed does NOT care about the continued health of our economy, and they may not care about presenting a facade of health for much longer either. Alternative analysts also need to come to grips with the reality that overt money printing is not the only method at the disposal of globalists when destroying the greenback. A debt default is just as likely to cause loss of world reserve status and devaluation – no printing press required. Blame goes to government and political gridlock while the banks slither away in the midst of the chaos.
The taper of QE3 is not a “head fake”, it is very real, but there are many hidden motivations behind such cuts.
Currently, $20 billion has been trimmed from the $85 billion per month program, and we are already beginning to see what APPEAR to be market effects, including a flight from emerging market currencies from Argentina to Turkey. A couple of years ago investors viewed these markets as among the few places they could exploit to make a positive return, or in other words, one of the few places they could successfully gamble. The Fed taper, though, seems to be shifting the flow of capital away from emerging markets.
The mainstream argument is that stimulus was flowing into such markets, giving them liquidity support, and the taper is drying up that liquidity. Whether this is actually true is hard to say, given that without a full audit we have no idea how much fiat the Federal Reserve has actually created and how much of it they send out into foreign markets.
I stand more on the position that the Fed taper was actually begun in preparation for a slowdown in global markets that was already in progress. In fact, I believe central bankers have been well aware that a decline in every sector was coming, and are moving to insulate themselves.
Is it just a “coincidence” that the central bankers have initiated their taper of QE right when global manufacturing numbers begin to plummet?
http://www.agweb.com/article/us_stocks_drop_as_manufacturing_gauge_falls_more_than_forecast_BLMG/
http://www.bloomberg.com/news/2014-02-01/china-manufacturing-gauge-falls-to-six-month-low.html
Is it just “coincidence” the taper was started right when the Baltic Dry Index, a global indicator of shipping demand, has lost over 50% of its value in the past few weeks?
http://investmenttools.com/futures/bdi_baltic_dry_index.htm
Is it just “coincidence” that the taper is running tandem with dismal retail sales growth reports from across the globe coming in from the final quarter of 2013?
http://www.scmp.com/business/economy/article/1421025/no-christmas-cheer-hong-kongs-retailers
http://business.time.com/2013/11/14/walmart-sales-dip-as-low-income-americans-close-wallets/
And, is it just a “coincidence” that the Fed taper is accelerating right as the next debt ceiling debate begins in March, and when reports are being released by the Congressional Budget Office that over 2 million jobs (in work hours) may be lost due to Obamacare?
http://www.reuters.com/article/2014/02/04/us-usa-fiscal-obamacare-idUSBREA131B120140204
No, I do not think any of this is coincidence. Most if not all of these negative indicators needed months to generate, so they could not have been caused by the taper itself. The only explanation beyond “coincidence” is that the Federal Reserve WANTED to launch the taper program and protect itself before these signals began to reach the public.
Look at it this way – The taper program distances the bankers from responsibility for crisis in our financial framework, at least in the eyes of the general public. If a market calamity takes place WHILE stimulus measures are still at full speed, this makes the banks look rather guilty, or at least incompetent. People would begin to question the validity of central bank methods, and they might even question the validity of the central bank’s existence. The Fed is creating space between itself and the economy because they know that a trigger event is coming. They want to ensure that they are not blamed and that stimulus itself is not seen as ineffective, or seen as the cause.
We all know that the claims of recovery are utter nonsense. Beyond the numerous warning signs listed above, one need only look at true unemployment numbers, household wage decline, and record low personal savings of the average American. The taper is not in response to an improving economic environment. Rather, the taper is a signal for the next stage of collapse.
Stocks are beginning to plummet around the world and all mainstream pundits are pointing fingers at a reduction in stimulus which has very little to do with anything. What is the message they want us to digest? That we “can’t live” without the aid and oversight of central banks.
The real reason stocks and other indicators are stumbling is because the effectiveness of stimulus manipulation has a shelf life, and that shelf life is over for the Federal Reserve. I suspect they will continue cutting QE every month for the next year as stocks decline. Will the Fed restart QE? If they do, it will probably not occur until after a substantial breakdown has ensued and the public is sufficiently shell-shocked. The possibility also exists that the Fed will never return to stimulus measures (if debt default is the plan), and QE stimulus will eventually be replaced by IMF “aid”.
Government Controlled Investment
Last month, just as taper measures were being implemented, the White House launched an investment program called MyRA; a retirement IRA program in which middle class and low wage Americans can invest part of their paycheck in government bonds.
That’s right, if you wanted to know where the money was going to come from to support U.S. debt if the Fed cuts QE, guess what, the money is going to come from YOU.
For a decade or so China was the primary buyer and crutch for U.S. debt spending. After the derivatives crash of 2008, the Federal Reserve became the largest purchaser of Treasury bonds. With the decline of foreign interest in long term U.S. debt, and the taper in full effect, it only makes sense that the government would seek out an alternative source of capital to continue the debt cycle. The MyRA program turns the general American public into a new cash stream, but there’s more going on here than meets the eye…
I find it rather suspicious that a government-controlled retirement program is suddenly introduced just as the Fed has begun to taper, as stocks are beginning to fall, and as questions arise over the U.S. debt ceiling. I have three major concerns:
First, is it possible that like the Fed, the government is also aware that a crash in stocks is coming? And, are they offering the MyRA program as an easy outlet (or trap) for people to pour in what little savings they have as panic over declining equities accelerates? Bonds do tend to look appetizing to uninformed investors during an equities rout.
Second, the program is currently voluntary, but what if the plan is to make it mandatory? Obama has already signed mandatory health insurance “taxation” into law, which is meant to steal a portion of every paycheck. Why not steal an even larger portion from every paycheck in order to support U.S. debt? It’s for the “greater good,” after all.
Third, is this a deliberate strategy to corral the last vestiges of private American wealth into the corner of U.S. bonds, so that this wealth can be confiscated or annihilated? What happens if there is indeed an eventual debt default, as I believe there will be? Will Americans be herded into bonds by a crisis in stocks only to have bonds implode as well? Will they be conned into bond investment out of a “patriotic duty” to save the nation from default? Or, will the government just take their money through legislative wrangling, as was done in Cyprus not long ago?
The Final Swindle
Again, the next debt ceiling debate is slated for the end of this month. If the government decides to kick the can down the road for another quarter, I believe this will be the last time. The most recent actions of the Fed and the government signal preparations for a stock implosion and ultimate debt calamity. Default would have immediate effects in foreign markets, but the appearance of U.S. stability could drag on for a time, giving the globalists ample opportunity to siphon every ounce of financial blood from the public.
It is difficult to say how the next year will play out, but one thing is certain; something very strange and ugly is afoot. The goal of the globalists is to engineer desperation. To create a catastrophe and then force the masses to beg for help. How many hands of “friendship” will be offered in the wake of a U.S. wealth and currency crisis? What offers for “aid” will come from the IMF? How much of our country and how many of our people will be collateralized to secure that aid? And, how many Americans will go along with the swindle because they were not prepared in advance?
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Activist Post: Top Adviser To The Chinese Government Calls For A “Global Currency” To Replace The U.S. Dollar
Michael Snyder
Activist Post
The former chief economist at the World Bank, Justin Yifu Lin, is advising the Chinese government that the time has come for a single global currency. Lin, who is also a professor at Peking University, says that the U.S. dollar “is the root cause of global financial and economic crises” and that moving to a “global super-currency” will bring much needed stability to the global financial system. And considering how recklessly the Federal Reserve has been pumping money into the global financial system and how recklessly the U.S. government has been going into debt, it is hard to argue with his logic.
Why would anyone want to trust the United States to continue to run things after how badly we have abused our position? The United States has greatly benefited from having the de factoreserve currency of the planet for the past several decades, but now that era is coming to an end. In fact, the central bank of China has already announced that it will no longer be stockpiling more U.S. dollars.
The rest of the world is getting tired of playing our game. Our debt is wildly out of control and we are creating money as if there was no tomorrow. As the rest of the world starts moving away from the U.S. dollar, global power is going to shift even more to the East, and that is going to have very serious consequences for ordinary Americans.
Sadly, most Americans don’t even realize what is happening. These comments by a top adviser to the Chinese government should have made front page news all over the nation. I had to go to China Daily to find the following excerpt…
The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.
“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.”
Lin, now a professor at Peking University and a leading adviser to the Chinese government, said expanding the basket of major reserve currencies — the dollar, the euro, the Japanese yen and pound sterling — will not address the consequences of a financial crisis. Internationalizing the Chinese currency is not the answer, either, he said.
And this is not the first time that we have heard these kinds of comments coming out of China. For example, Xinhua News Agency called for a “de-Americanized world” back on October 14th…It is perhaps a good time for the befuddled world to start considering building a de-Americanized world.
That particular news agency is controlled by the Chinese government, and if the Chinese government did not approve of that statement it never would have made it into the paper.
Then in November, the central bank of China announcedthat it is going to stop stockpiling U.S. dollars.
Most Americans don’t want to hear this, but what we are witnessing is a massive shift in global power. China is catching up to us in a multitude of ways, and they are getting tired of playing second fiddle to the United States. In fact, China is already surpassing the U.S. in a number of key areas…
-China accounts for more global trade than anyone else in the world.
-China imports more oil from Saudi Arabia than anyone else in the world.
-China imports more oil overall than anyone else in the world.
-It is now being projected that Chinese GDP will surpass U.S. GDP in 2017.
When the rest of the world quits using U.S. dollars to trade with one another and quits lending our dollars back to us at ultra-low interest rates, things are going to start changing very rapidly.
In a previous article, I discussed why having the reserve currency of the world is so important to the United States…
The largest exporting nations such as Saudi Arabia (oil) and China (cheap plastic trinkets at Wal-Mart) end up with massive piles of U.S. dollars.
Instead of just sitting on all of that cash, these exporting nations often reinvest much of that cash into low risk securities that can be rapidly turned back into dollars if necessary.
For a very long time, U.S. Treasury bonds have been considered to be the perfect way to do this. This has created tremendous demand for U.S. government debt and has helped keep interest rates super low. So every year, massive amounts of money that gets sent out of the country ends up being loaned back to the U.S. Treasury at super low interest rates.
And it has been a very good thing for the U.S. economy that the federal government has been able to borrow money so cheaply, because the interest rate on 10 year U.S. Treasuries affects thousands upon thousands of other interest rates throughout our financial system. For example, as the rate on 10 year U.S. Treasuries has risen in recent months, so have the rates on U.S. home mortgages.
Our entire way of life in the United States depends upon this game continuing. We must have the rest of the world use our currency and loan it back to us at ultra low interest rates. At this point we have painted ourselves into a corner by accumulating so much debt. We simply cannot afford to have rates rise significantly.
As the rest of the globe moves away from the dollar, demand for the dollar is going to go down and that is going to cause a lot of inflation – especially for imported goods. So the days of piling lots of cheap plastic stuff made in China into your shopping carts is coming to an end.
And as the rest of the globe moves away from U.S. debt, interest rates are going to go much higher than they are today. Eventually, the U.S. government will be paying out more than a trillion dollars a year just in interest on the national debt and all loans throughout our entire financial system will have higher interest rates. This is going to cause economic activity to slow down dramatically.
On the global economic stage, China is playing checkers and we are playing chess, and we are getting dangerously close to checkmate.
Meanwhile, China is also rapidly catching up to us militarily.
At a time when U.S. military spending is actually decreasing, China is spending money on the military aggressively.
In 2014, Chinese military spending will rise to $148 billion, which represents an increase of 6 percent over 2013.
The balance of power is shifting right in front of our eyes.
For example, at one time the U.S. Navy reigned supreme and the Chinese Navy was a joke.
But now that is rapidly changing. The following is from an article posted on military.com…
The Chinese navy has 77 surface combatants, more than 60 submarines, 55 amphibious ships and about 85 missile-equipped small ships, according to the report first published by the U.S. Naval Institute. The report explains that more than 50 naval ships were “laid down, launched or commissioned” in 2013 and a similar number is planned for 2014.
Of particular concern is the growth of the Chinese submarine fleet. The Chinese now have submarine launched ballistic missiles with a maximum range of about 4,000 miles…
ONI raised concerns about China’s fast-growing submarine force, to include the Jin-class ballistic nuclear submarines, which will likely commence deterrent patrols in 2014, according to the report. The expected operational deployment of the Jin SSBN “would mark China’s first credible at-sea-second-strike nuclear capability,” the report states.
The submarine would fire the JL-2 submarine launched ballistic missile, which has a range of 4,000 nautical miles and would “enable the Jin to strike Hawaii, Alaska and possibly western portions of CONUS [continental United States] from East Asian waters,” ONI assessed.
In addition, China is also working on “hypersonic glide vehicles” that can travel “at speeds of up to Mach 10 or 7,680 miles an hour”. The following is an excerpt from a recent Washington Free Beacon article…
The Washington Free Beacon first disclosed China’s Jan. 9 flight test of a hypersonic glide vehicle that the Pentagon has called the WU-14.
The experimental weapon is a new strategic strike capability China’s military is developing that is designed to defeat U.S. missile defenses. China could use the vehicle for both nuclear and conventional precision strikes on targets, including aircraft carriers at sea.
U.S. officials said that, while the glide vehicle test was not an intelligence surprise, it showed China is moving much more rapidly than in the past in efforts to research, develop, and test advanced weaponry.
The world is changing, and the United States is not the only superpower anymore. China is thriving and Russia is also on the rise. Five years from now, the world is going to look far, far different than it does today.
Sadly, most Americans do not care about these things at all. Most of them are much more concerned about the latest celebrity scandal or about what Justin Bieber has been doing.
In the end, most Americans will have no idea what is happening until it is far too late to do anything about it.
This article first appeared here at the American Dream. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
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State Department Confirms Authenticity Of Intercepted Ukraine Phone Call: Accuses Russia Of Dirty Tricks | Zero Hedge
If there was any doubt whether the intercepted “Fuck the EU” phone call between Assistant Secretary of State Nuland and the US Ambassador to the Ukraine Pyatt was authentic, it can now be laid to rest: in an earlier response to questions from reporters, State Department spokeswoman Jen Psaki did not dispute authenticity of recording and essentially confirmed it was real “I didn’t say it was inauthentic.”
However, in the tried and true fashion of assigning blame elsewhere, the world learned that it was really all Russia’s fault and the released intercept was a “new low of Russian tradecraft.” Psaki added that there are moments “in every diplomatic relationship” when you disagree, Psaki says. But the absolute punchline: “It’s concerning that private conversation was recorded.”
Perhaps maybe the NSA can opine on the concernability of a private conversation being recorded.
Then again in a world in which only the NSA is allowed to record every single private conversation, one can easily see why the State Dept thought it was safe to discuss its state subordination strategy over what appears to have been an unencrypted landline. At least the CIA used to communicate by encrypted redlines.
Finally, while Russian “tradecraft” may have hit a new low, so did US reputation and standing abroad, however offset by the humiliation and embarrassment of US foreign policymakers which has never been higher.
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What the TransCanada Pipeline Will Really Cost Us | Carl Duivenvoorden
What the TransCanada Pipeline Will Really Cost Us | Carl Duivenvoorden.
Carl Duivenvoorden
Sustainability consultant
As the Energy East Pipeline dominates ever more headlines, editorials, ads and press conferences in my home province of New Brunswick and elsewhere, I’m reminded of an interview given by Calgary Mayor Naheed Nenshi on the CBC Radio’s The House in February 2013.
Mayor Nenshi said:
We’ve got a resource that is valuable to us and to our kids and to our grandkids, and we know that someday it’s not going to be that valuable; someday we’ll have a low carbon world. And I think it would be deeply irresponsible for us to leave that resource in the ground so that it will be worthless for future generations.
Ponder that statement and you get to the heart of the current lust for pipelines out of Alberta, whether south, west, north or east. You get to the heart of why the Energy East Pipeline, a project barely contemplated just a year ago, has quickly received nearly universal adulations and blessings, and seems on an ultrafast track to reality.
But before we place our chips on the pipeline, perhaps the costs and benefits are worth closer scrutiny.
Economic gains
Almost every assessment of the pipeline stresses the economic gains it will provide to New Brunswick. A recent report by Deloitte and Touche (commissioned, interestingly, by TransCanada, the company building the pipeline) suggests our province will earn about $700 million in tax revenues over 40 years. That sounds like a lot, but, in context, it’s roughly $20 million per year in a province with an annual budget of about $8,000 million, or about 0.25 per cent of our budget. Not exactly a windfall.
The same report suggests NB would see about 1550 direct jobs as a result of the pipeline. That sounds tempting too. But over 90 per cent would be temporary, lasting three years at most. In context, NB’s construction industry presently provides 27,000 jobs, or nearly 20 times as many.
Finally, because Alberta oil is landlocked and therefore traditionally sold below world prices, it’s been suggested that bringing it east will lower energy prices for us. As rosy as it might be to imagine that world oil prices will suddenly drop because Alberta crude has arrived in Atlantic Canada, it’s probably more realistic to expect that Alberta crude will get more expensive as soon as a pipeline links it to us, and the world market.
So — economic glitter perhaps, but not necessarily economic gold.
Environmental costs
It’s interesting, and perhaps telling, that the Deloitte and Touche study specifically excluded any assessment of the environmental aspects of the pipeline project. So has much of the official conversation. That’s like ignoring elephants in the room.
First, there’s the issue of pipeline integrity and the potential for spills. Pipelines have a long and mostly successful history, so it’s probably fair to assume that if they are well engineered, constructed, maintained and operated, the risk of ruptures is small. A spill is possible, but it’s probably the baby elephant in the room.
The jumbo elephant, quietly ignored in most of the conversation so far, is climate change. No matter what any of us may wish to believe, burning oil produces greenhouse gases, and greenhouse gases are warming our planet and disrupting our weather. The Energy East Pipeline, the Keystone XL Pipeline, the Northern Gateway Pipeline and the hinted Beaufort Sea option – all are big, new drinking straws stuck into that bituminous milkshake called the oil sands, serving it up to an addicted world that needs to break its addiction.
The International Energy Agency, a leading global authority, has stated that if we are to put the brakes on climate change, most of our known global fossil fuel reserves must remain untouched in the ground. Kudos to Mayor Nenshi for implicitly acknowledging that; but shame on those who interpret it as a signal to get as much oil to market as quickly as possible while it’s still worth something. Hence the pipeline bonanza in which we are being asked to partake.
Our choice
Jobs come and go but climate change is permanent. Years from now, our grandkids will look back on the decision we are facing today. I can’t imagine them being very sympathetic or understanding if we choose to trade away their long term climate stability for our short term prosperity. But that’s the very trade we’re contemplating as we consider the Energy East pipeline.
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Why The Next Global Crisis Will Be Unlike Any In The Last 200 Years | CYNICONOMICS
Why The Next Global Crisis Will Be Unlike Any In The Last 200 Years | CYNICONOMICS.
Sometime soon, we’ll take a shot at summing up our long-term economic future with just a handful of charts and research results. In the meantime, we’ve created a new chart that may be the most important piece. There are two ideas behind it:
- Wars and political systems are the two most basic determinants of an economy’s long-term path. America’s unique pattern of economic performance differs from Russia’s, which differs from Germany’s, and so on, largely because of the outcomes of two types of battles: military and political.
- The next attribute that most obviously separates winning from losing economies is fiscal responsibility. Governments of winning economies normally meet their debt obligations; losing economies are synonymous with fiscal crises and sovereign defaults. You can argue causation in either direction, but we’re not playing that game here. We’re simply noting that a lack of fiscal responsibility is a sure sign of economic distress (think banana republic).
Our latest chart isolates the fiscal piece by removing war effects and considering only large, developed countries. In particular, we look at government budget balances without military spending components.
(Military spending requires a different evaluation because it succeeds or fails based on whether wars are won or lost. Or, in the case of America’s adventures of the past six decades, whether war mongering policies serve any national interest at all. In any case, military spending isn’t our focus here.)
There are 11 countries in our analysis, chosen according to a rule we’ve used in the past – GDP must be as large as that of the Netherlands. We start in 1816 for four of the 11 (the U.S., U.K., France and Netherlands). Others are added at later dates, depending mostly on data availability. (See this “technical notes” post for further detail.) Here’s the chart:
Not only has the global, non-defense budget balance dropped to never-before-seen levels, but it’s falling along a trend line that shows no sign of flattening. The trend line spells fiscal disaster. It suggests that we’ve never been in a predicament comparable to today. Essentially, the world’s developed countries are following the same path that’s failed, time and again, in chronically insolvent nations of the developing world.
Look at it this way: the chart shows that we’ve turned the economic development process inside out. Ideally, advanced economies would stick to the disciplined financial practices that helped make them strong between the early-19th and mid-20th centuries, while emerging economies would “catch up” by building similar track records. Instead, advanced economies are catching down and threatening to throw the entire world into the kind of recurring crisis mode to which you’re accustomed if you live in, say, Buenos Aires.
How did things get so bad?
Here are eight developments that help to explain the post-World War 2 trend:
- In much of the world, the Great Depression triggered a gradual expansion in the role of the state.
- Public officials failed to establish a sustainable structure for their social safety nets, and got away with this partly by sweeping the true costs of their programs under the carpet.
- Profligate politicians were abetted by the economics profession, which was more than happy to serve up unrealistic theories that account for neither unintended consequences nor long-term costs of deficit spending.
- With economists having succeeded in knocking loose the old-time moorings to budgetary discipline (see first 150 years of chart), responsible politicians became virtually unelectable.
- Central bankers suppressed normal (and healthy) market mechanisms for forcing responsibility, by slashing interest rates and buying up government debt.
- Regulators took markets further out of the equation by rewarding private banks for lending to governments, while politicians and central bankers effectively underwrote the private bankers’ risks.
- Monetary policies also encouraged dangerous private credit growth and other financial excesses, resulting in budget-destroying setbacks such as stagflation and banking crises.
- Budget decisions were made without consideration of the inevitability of these setbacks, because economists wielding huge influence over the budgeting process (think CBO, for example) assumed a naïve utopia of endless economic expansion.
Sadly, all of these developments are still very much intact (excepting small improvements in budget projections that we’ll address next week). They tell us we’ll need substantial changes in political processes, central banking and the economics profession to avert the disaster predicted by our chart. And we’re rapidly running out of time, as discussed in “Fonzi or Ponzi? One Theory on the Limits to Government Debt.”
On the bright side, a fiscal disaster should help trigger the needed changes. Every kick of the can lends more weight to the view expressed by some that the debt super-cycle – including public and private debt – needs to go the distance, eventually reaching a Keynesian end game of massive collapse. At that time, we would expect a return to old-fashioned, conservative attitudes toward debt.
As for the chart, it helps to flesh out a handful of ideas we’ve been either writing about or thinking of writing about. We’ll return to it in future posts, including one drilling down to the individual country level that we’ll publish soon.
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News Coverage of U.S. Foreign Policy. Media Bias by Omission | Global Research
News Coverage of U.S. Foreign Policy. Media Bias by Omission | Global Research.
“Bias in favor of the orthodox is frequently mistaken for ‘objectivity’. Departures from this ideological orthodoxy are themselves dismissed as ideological.” – Michael Parenti
An exchange in January with Paul Farhi, Washington Postcolumnist, about coverage of US foreign policy:
Dear Mr. Farhi,
Now that you’ve done a study of al-Jazeera’s political bias in supporting Mohamed Morsi in Egypt, is it perhaps now time for a study of the US mass media’s bias on US foreign policy? And if you doubt the extent and depth of this bias, consider this:
There are more than 1,400 daily newspapers in the United States. Can you name a single paper, or a single TV network, that was unequivocally opposed to the American wars carried out against Libya, Iraq, Afghanistan, Yugoslavia, Panama, Grenada, and Vietnam? Or even opposed to any two of these wars? How about one? In 1968, six years into the Vietnam war, the Boston Globe surveyed the editorial positions of 39 leading US papers concerning the war and found that “none advocated a pull-out”.
Now, can you name an American daily newspaper or TV network that more or less gives any support to any US government ODE (Officially Designated Enemy)? Like Hugo Chávez of Venezuela or his successor, Nicolás Maduro; Fidel or Raúl Castro of Cuba; Bashar al-Assad of Syria; Mahmoud Ahmadinejad of Iran; Rafael Correa of Ecuador; or Evo Morales of Bolivia? I mean that presents the ODE’s point of view in a reasonably fair manner most of the time? Or any ODE of the recent past like Slobodan Milosevic of Serbia, Moammar Gaddafi of Libya, Robert Mugabe of Zimbabwe, or Jean-Bertrand Aristide of Haiti?
Who in the mainstream media supports Hamas of Gaza? Or Hezbollah of Lebanon? Who in the mainstream media is outspokenly critical of Israel’s treatment of the Palestinians? And keeps his or her job?
Who in the mainstream media treats Julian Assange or Chelsea Manning as the heroes they are?
And this same mainstream media tell us that Cuba, Venezuela, Ecuador, et al. do not have a real opposition media.
The ideology of the American mainstream media is the belief that they don’t have any ideology; that they are instead what they call “objective”. I submit that there is something more important in journalism than objectivity. It is capturing the essence, or the truth, if you will, with the proper context and history. This can, as well, serve as “enlightenment”.
It’s been said that the political spectrum concerning US foreign policy in the America mainstream media “runs the gamut from A to B”.
Sincerely, William Blum, Washington, DC
(followed by some of my writing credentials)
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Reply from Paul Farhi:
I think you’re conflating news coverage with editorial policy. They are not the same. What a newspaper advocates on its editorial page (the Vietnam example you cite) isn’t the same as what or how the story is covered in the news columns. News MAY have some advocacy in it, but it’s not supposed to, and not nearly as overt or blatant as an editorial or opinion column. Go back over all of your ODE examples and ask yourself if the news coverage was the same as the opinions about those ODEs. In most cases. I doubt it was.
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Dear Mr. Farhi,
Thank you for your remarkably prompt answer.
Your point about the difference between news coverage and editorial policy is important, but the fact is, as a daily, and careful, reader of the Post for the past 20 years I can attest to the extensive bias in its foreign policy coverage in the areas I listed. Juan Ferrero in Latin America and Kathy Lally in the Mideast are but two prime examples. The bias, most commonly, is one of omission more than commission; which is to say it’s what they leave out that distorts the news more than any factual errors or out-and-out lies. My Anti-Empire Report contains many examples of these omissions, as well as some errors of commission.
Incidentally, since 1995 I have written dozens of letters to the Post pointing out errors in foreign-policy coverage. Not one has been printed.
Happy New Year
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I present here an extreme example of bias by omission, in the entire American mainstream media: In my last report I wrote of the committee appointed by the president to study NSA abuses – Review Group on Intelligence and Communications Technologies – which actually came up with a few unexpected recommendations in its report presented December 13, the most interesting of which perhaps are these two:
“Governments should not use surveillance to steal industry secrets to advantage their domestic industry.”
“Governments should not use their offensive cyber capabilities to change the amounts held in financial accounts or otherwise manipulate the financial systems.”
So what do we have here? The NSA being used to steal industrial secrets; nothing to do with fighting terrorism. And the NSA stealing money and otherwise sabotaging unnamed financial systems, which may also represent gaining industrial advantage for the United States.
Long-time readers of this report may have come to the realization that I’m not an ecstatic admirer of US foreign policy. But this stuff shocks even me. It’s the gross pettiness of “The World’s Only Superpower”.
A careful search of the extensive Lexis-Nexis database failed to turn up a single American mainstream media source, print or broadcast, that mentioned this revelation. I found it only on those websites which carried my report, plus three other sites: Techdirt, Lawfare, and Crikey (First Digital Media).
For another very interesting and extreme example of bias by omission, as well as commission, very typical of US foreign policy coverage in the mainstream media: First read the January 31, page one, Washington Post article making fun of socialism in Venezuela and Cuba.
Then read the response from two Americans who have spent a lot of time in Venezuela, are fluent in Spanish, and whose opinions about the article I solicited.
I lived in Chile during the 1972-73 period under Salvadore Allende and his Socialist Party. The conservative Chilean media’s sarcastic claims at the time about shortages and socialist incompetence were identical to what we’ve been seeing for years in the United States concerning Venezuela and Cuba. The Washington Post article on Venezuela referred to above could have been lifted out of Chile’s El Mercurio, 1973.
[Note to readers: Please do not send me the usual complaints about my using the name “America(n)” to refer to “The United States”. I find it to be a meaningless issue, if not plain silly.]
JFK, RFK, and some myths about US foreign policy
On April 30, 1964, five months after the assassination of President John F. Kennedy, his brother, Attorney General Robert F. Kennedy, was interviewed by John B. Martin in one of a series of oral history sessions with RFK. Part of the interview appears in the book “JFK Conservative” by Ira Stoll, published three months ago. (pages 192-3)
RFK: The president … had a strong, overwhelming reason for being in Vietnam and that we should win the war in Vietnam.
MARTIN: What was the overwhelming reason?
RFK: Just the loss of all of Southeast Asia if you lost Vietnam. I think everybody was quite clear that the rest of Southeast Asia would fall.
MARTIN: What if it did?
RFK: Just have profound effects as far as our position throughout the world, and our position in a rather vital part of the world. Also it would affect what happened in India, of course, which in turn has an effect on the Middle East. Just as it would have, everybody felt, a very adverse effect. It would have an effect on Indonesia, hundred million population. All of those countries would be affected by the fall of Vietnam to the Communists.
MARTIN: There was never any consideration given to pulling out?
RFK: No.
MARTIN: … The president was convinced that we had to keep, had to stay in there …
RFK: Yes.
MARTIN: … And couldn’t lose it.
RFK: Yes.
These remarks are rather instructive from several points of view:
- Robert Kennedy contradicts the many people who are convinced that, had he lived, JFK would have brought the US involvement in Vietnam to a fairly prompt end, instead of it continuing for ten more terrible years. The author, Stoll, quotes a few of these people. And these other statements are just as convincing as RFK’s statements presented here. And if that is not confusing enough, Stoll then quotes RFK himself in 1967 speaking unmistakably in support of the war.It appears that we’ll never know with any kind of certainty what would have happened if JFK had not been assassinated, but I still go by his Cold War record in concluding that US foreign policy would have continued along its imperial, anti-communist path. In Kennedy’s short time in office the United States unleashed many different types of hostility, from attempts to overthrow governments and suppress political movements to assassination attempts against leaders and actual military combat; with one or more of these occurring in Vietnam, Cambodia, Laos, British Guiana, Iraq, Haiti, Dominican Republic, Cuba and Brazil.
- “Just have profound effects as far as our position throughout the world, and our position in a rather vital part of the world.”Ah yes, a vital part of the world. Has there ever been any part of the world, or any country, that the US has intervened in that was not vital? Vital to American interests? Vital to our national security? Of great strategic importance? Here’s President Carter in his 1980 State of the Union Address: “An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America”.“What a country calls its vital economic interests are not the things which enable its citizens to live, but the things which enable it to make war.” – Simone Weil (1909-1943), French philosopher
- If the US lost Vietnam “everybody was quite clear that the rest of Southeast Asia would fall.”As I once wrote:
Thus it was that the worst of Washington’s fears had come to pass: All of Indochina – Vietnam, Cambodia and Laos – had fallen to the Communists. During the initial period of US involvement in Indochina in the 1950s, John Foster Dulles, Dwight Eisenhower and other American officials regularly issued doomsday pronouncements of the type known as the “Domino Theory”, warning that if Indochina should fall, other nations in Asia would topple over as well. In one instance, President Eisenhower listed no less than Taiwan, Australia, New Zealand, the Philippines and Indonesia amongst the anticipated “falling dominos”.
Such warnings were repeated periodically over the next decade by succeeding administrations and other supporters of US policy in Indochina as a key argument in defense of such policy. The fact that these ominous predictions turned out to have no basis in reality did not deter Washington officialdom from promulgating the same dogma up until the 1990s about almost each new world “trouble-spot”, testimony to their unshakable faith in the existence and inter-workings of the International Communist Conspiracy.
Killing suicide
Suicide bombers have become an international tragedy. One can not sit in a restaurant or wait for a bus or go for a walk downtown, in Afghanistan or Pakistan or Iraq or Russia or Syria and elsewhere without fearing for one’s life from a person walking innocently by or a car that just quietly parked nearby. The Pentagon has been working for years to devise a means of countering this powerful weapon.
As far as we know, they haven’t come up with anything. So I’d like to suggest a possible solution. Go to the very source. Flood selected Islamic societies with this message: “There is no heavenly reward for dying a martyr. There are no 72 beautiful virgins waiting to reward you for giving your life for jihad. No virgins at all. No sex at all.”
Using every means of communication, from Facebook to skywriting, from billboards to television, plant the seed of doubt, perhaps the very first such seed the young men have ever experienced. As some wise anonymous soul once wrote:
A person is unambivalent only with regard to those few beliefs, attitudes and characteristics which are truly universal in his experience. Thus a man might believe that the world is flat without really being aware that he did so – if everyone in his society shared the assumption. The flatness of the world would be simply a “self-evident” fact. But if he once became conscious of thinking that the world is flat, he would be capable of conceiving that it might be otherwise. He might then be spurred to invent elaborate proofs of its flatness, but he would have lost the innocence of absolute and unambivalent belief.
We have to capture the minds of these suicide bombers. At the same time we can work on our own soldiers. Making them fully conscious of their belief, their precious belief, that their government means well, that they’re fighting for freedom and democracy, and for that thing called “American exceptionalism”. It could save them from committing their own form of suicide.
Notes
- Boston Globe, February 18, 1968, p.2-A
- New York Times, April 8, 1954
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UK floods ravage south west – In Pictures – Al Jazeera English
UK floods ravage south west – In Pictures – Al Jazeera English.
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Thousands left without power as storms batter the English coastline.
Last updated: 06 Feb 2014 09:13
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Waves have destroyed a stretch of railway as well as a flood defence wall in the south west of England.The UK government pledged £100m ($163m) for flood works following the destruction which left thousands of people without power and forced others to flee their homes.
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 /Matt Cardy/Getty Images
Waves crash against the seafront and the railway line that has been closed due to storm damage at Dawlish on February 5 in Devon, England.  /Matt Cardy/Getty Images
A man walks in flood water as waves crash against the seafront and the railway line that has been closed due to storm damage at Dawlish.
 /Matt Cardy/Getty Images
Waves crash against the seafront at Dawlish on February 5.
 /Matt Cardy/Getty Images
Beach huts damaged by the storm waves at Dawlish on February 5.  /Matthew Horwood/Getty Images
Spectators watch as waves break over the harbour wall at Porthcawl. High tides combined with gale force winds and further heavy rain mean some parts of the UK are bracing themselves for more flooding.  /Matthew Horwood/Getty Images
A man and woman walk along the seafront as waves break over the harbour wall at Porthcawl.
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An onlooker takes a picture of Brighton’s dilapidated West Pier of which a large section was washed away in the storm on February 5.  /Mike Hewitt/Getty Images
Waves pound the seafront in Brighton, United Kingdom.
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US Threats Mount Against Journalists, Snowden | Global Research
US Threats Mount Against Journalists, Snowden | Global Research.
Congressional leaders and representatives of the US military-intelligence apparatus have stepped up their threats against Edward Snowden and the journalists who have worked with him to expose massive illegal spying by the National Security Agency (NSA).
At a hearing Tuesday of the House Intelligence Committee, Chairman Mike Rogers, a Michigan Republican, repeatedly suggested that journalists who received leaked NSA documents from Snowden and wrote articles about them were guilty of criminal acts.
These statements follow published death threats against Snowden from unnamed military and intelligence officials and demands from the Obama administration that he plead guilty and turn himself in.
Rogers engaged his main witness at Tuesday’s hearing, FBI Director James Comey, in a lengthy exchange over whether an unnamed journalist would be guilty of “fencing stolen material” if he published articles based on the Snowden revelations. Because reporters are paid for their work, Rogers suggested, they were engaged in selling stolen material for profit. He posed the question to Comey, “If I’m hocking stolen classified material that I’m not legally in possession of for personal gain and profit, is that not a crime?”
Comey was more cautious in his public utterances, agreeing that a journalist who sold stolen jewelry was guilty of a crime, but suggesting stolen documents might not be as clear a case. “I think that’s a harder question because it involves a news-gathering function,” he said. It “could have First Amendment implications,” he added. [Emphasis added].
However, Comey did not rule out prosecution. Rogers continued, “So if I’m a newspaper reporter for—fill in the blank—and I sell stolen material, is that legal because I’m a newspaper reporter?”
Comey eventually declared, after being pressed by Rogers, “I don’t want to talk about the case in particular because it’s an active investigation of ours.”
Rogers then asked, “It’s an active investigation for accomplices brokering in stolen information?” Comey replied, “We are looking at the totality of the circumstances around the theft and promulgation.”
After the hearing, Rogers made it clear that one of the journalists he had in mind was Glenn Greenwald, the former Guardian reporter who has written numerous articles on the NSA based on his access to the trove of documents taken by Snowden. “For personal gain, he’s now selling his access to information, that’s how they’re terming it,” Rogers claimed. “A thief selling stolen material is a thief.”
Rogers also said, referring to Snowden himself, “I can tell you from a whole series of classified meetings, the folks who do this for a living believe he is under the influence of the Russians.”
The obvious conclusion of the exchange between Rogers and Comey is that the Obama administration is considering criminal charges against Greenwald, as well as filmmaker Laura Poitras and Washington Post contributor Barton Gellman, who also have access to the Snowden documents and have reported on them.
Greenwald strongly defended his actions and the actions of his fellow journalists in interviews and Twitter postings after the House committee hearing. “There’s something that has become pretty sick about DC political culture if the idea of prosecuting journalists is now this mainstream,” he said on Twitter. “The main value in bandying about theories of prosecuting journalists is the hope that it will bolster the climate of fear for journalism.”
No journalist has ever been prosecuted in the United States on the claim that receiving unauthorized information was akin to receipt of stolen goods. Greenwald added, “What they’re trying to do is to remove it from the realm of journalism so that they can then criminalize it.”
The McCarthy-style threats against journalists by Rogers came amid mounting threats against Snowden and his allies by top military-intelligence officials.
Director of National Intelligence James Clapper, speaking at another hearing Tuesday, referred to the journalists who have extensively reported on the NSA as “accomplices” of Snowden, a term suggesting co-conspirators in a criminal enterprise. This comment followed Clapper’s testimony the previous week before the Senate Intelligence Committee, where he denounced Snowden as the architect of the “most damaging theft of intelligence information in our history.”
Army Lt. Gen. Michael Flynn, who commands the Defense Intelligence Agency, and Matt Olsen, chief of the National Counterterrorism Center, claimed that Snowden’s revelations had resulted in changes in how Al Qaeda and other terrorist groups conduct their communications activities.
“What we’ve seen in the last six to eight months is an awareness by these groups…of our ability to monitor communications and specific instances where they’ve changed the ways in which they communicate to avoid being surveilled,” Olsen said.
This is both unprovable and likely bogus, since the vast bulk of the Snowden revelations concern US government spying on ordinary citizens of the United States and other countries to accumulate a gigantic database of all the communications linking all individuals throughout the world. This has nothing to do with fighting terrorism and everything to do with profiling the population politically and preparing the military-intelligence apparatus to suppress movements from below that would threaten the profits and property of the financial aristocracy.
The Senate Intelligence Committee hearing coincided with the release of a 27-page report, “Worldwide Threat Assessment of the US Intelligence Community,” filed annually with Congress by the director of national intelligence (DNI). This year’s report for the first time cites internal leaks as a major danger to US national security and actually ranks such leaks ahead of terrorism as a threat.
“Trusted insiders with the intent to do harm can exploit their access to compromise vast amounts of sensitive and classified information as part of a personal ideology or at the direction of a foreign government,” the report warns. “The unauthorized disclosure of this information to state adversaries, non-state activists or other entities will continue to pose a critical threat.”
The DNI report now lists terrorism only third in its list of threats. Top billing is given to the danger of cyberattacks, with Russia, China, Iran and North Korea cited as the main concerns. This list gives a glimpse of the behind-the-scenes discussions in the Pentagon, CIA and State Department, where there is increasing focus on the prospect of direct military conflict with Russia and China, countries with the second- and third-largest nuclear arsenals after the United States.
The ranking of Snowden-type leakers ahead of terrorism as a threat has the most ominous implications. Terrorism has been used as the justification for an unprecedented assertion of presidential power to order the killing of American citizens without trial or any other judicial process. Obama has acknowledged giving the first such order, which was carried out in 2011 when a CIA-fired drone missile killed Anwar al-Awlaki, a US-born Islamic cleric living in Yemen.
If Snowden is an even bigger threat, as the DNI report suggests, what is to stop the “commander in chief” from ordering his assassination? In the course of the past month, there have been increasingly bloodthirsty declarations from NSA operatives and congressional Republicans advocating such an operation.
The White House has not joined in the open discussion of killing Snowden, but Obama’s style in such matters has been to act first and talk about it later.
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Ukraine Imposes Limits On Interbank Operations | Zero Hedge
Ukraine Imposes Limits On Interbank Operations | Zero Hedge.
Keep those dominoes steady… steady… and nobody exhale:
- UKRAINE IMPOSES LIMITS ON SOME INTERBANK FX OPERATIONS
- UKRAINE TIGHTENS RULES ON COPRORATE FOREIGN-CURRENCY PURCHASES
- UKRAINE CENTRAL BANK CITES HRYVNIA VOLATILITY ON FX MEASURES
There is of course, good news:
- UKRAINE CENTRAL BANK SAYS INTERBANK LIMITS ARE TEMPORARY
Just like in Cyprus.
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Gamblernomics | Zero Hedge
By Chris Andrew and Mustafa Zaidi at Clarmond
Gamblernomics
The concept of continuously doubling down in order to achieve financial and economic goals is now a respectable and established norm. Takahashi’s Wager of 1930s Japan shows that such a policy, while initially successful, can remove all sensible restraints
For a gambler on a losing streak the classic trap is to borrow money, trying to break even. Doubling down, time and time again, becomes routine as all caution is discarded; this does not make for sound financial planning.
In ‘Resurrecting Reflation’ (November 2012) we highlighted when this policy was first attempted; in 1931 Finance Minister of Japan, Takahashi Korekiyo, paid for Japan’s invasion of Manchuria whilst countering the collapse of capitalism around Japan with unorthodox measures of massive QE and deficit spending. These twin policies were heralded as a great success 70 years later by Governor Ben Bernanke and a decade after that by Prime Minister Abe.
‘Takahashi’s Wager’ led to a tripling of the Japanese stock market, a 40% currency devaluation and warfare spending that rose from 30% to 70% of the national budget. Having taken the gamble to reflate, the octogenarian established the principle that capital is costless and unlimited; doubling down had become routine.
This band-aid boom ended in a calamitous collapse years later; by then Takahashi was long gone…literally, as he had belatedly tried to slow the handout-hooked warfare train. In 1937 another ‘routine’ incident occurred at the Marco Polo Bridge, which gave Japan the excuse to invade the rest of China. This was, in effect another ‘doubling down’, but by this time Japanese economic statistics had plateaued, war casualties had hit a 100,000 and warfare spending comprised nearly the entire government budget. But the unorthodox ‘policy genie’ was out of the bottle, as Takahashi had demonstrated, one could double down again and again, as the goalposts for success were simply moved and all gambles appeared sane.
Loaded Dice
Modern day Japan finds itself in a similar predicament, but instead of warfare the Japanese leadership is confronting the dual burdens of welfare spending and interest payments, which, at current interest rates, now account for 60% of the budget.
The Bank of Japan’s unconventional policy of massive QE, which is nearly 18% of GDP, is intended to ignite inflation and break the twenty-year deflationary cycle. This scheme, put in place by the current Prime Minister, has been dubbed ‘Abenomics’. Given zero interest rates for last 15 years, and the occasional bout of QE, ‘Abenomics’ is another ‘doubling down’ but, this time, it has staked everything on this one final throw of the financial dice. Perhaps ‘Gamblernomics’ may be a more reasonable nomenclature.
On the surface ‘Gamblernomics’, like the ‘Takahashi Wager’, appears successful – the equity market has risen substantially, the currency has fallen, and government bond yields remain low. So far, so good.
How is the government gauging the success of this dice roll? They are looking for two percent inflation, a positive growth number, and have committed to two years of massive QE to achieve these goals. As time passes and these targets are not met, the policy makers will double down again, by which point interest payments and welfare spending are likely to comprise most of the budget. Emergency shall have become routine and all further gambles shall appear sane.
Lessons
All gamblers are aware of their accumulated losses, in economic parlance this means their ‘sunk costs.’ Today’s adherents of ‘Gamblernomics’ are not only found in Tokyo, but also reign in all major financial capitals, each playing their own version of a similar wager. All believe that doubling down is a sober strategy given the sunk costs of lost growth. As a new generation of gamblers sit at the table, ghosts of gamblers past whisper – “Place your bets.”
Olduvaiblog: Musings on the coming collapse 