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The U.S. has Installed a Neo-Nazi Government in Ukraine | Global Research

The U.S. has Installed a Neo-Nazi Government in Ukraine | Global Research.

Global Research, March 02, 2014
Ukraine extreme-droite

According to the New York Times, “The United States and the European Union have embraced the revolution here as anotherflowering of democracy, a blow to authoritarianism and kleptocracy in the former Soviet space.” ( After Initial Triumph, Ukraine’s Leaders Face Battle for Credibility,  NYTimes.com, March 1, 2014, emphasis added)

“Flowering Democracy, Revolution”?  The grim realities are otherwise. What is a stake is a US-EU-NATO sponsored coup d’Etat in blatant violation of international law.

The forbidden truth is that the West has engineered –through a carefully staged covert operation– the formation of a proxy regime integrated by Neo-Nazis.

Confirmed by Assistant Secretary of State Victoria Nuland, key organizations in the Ukraine including the Neo-Nazi party Svoboda were generously supported by Washington: “We have invested more than 5 billion dollars to help Ukraine to achieve these and other goals. … We will continue to promote Ukraine to the future it deserves.”

The Western media has casually avoided to analyze the composition and ideological underpinnings of the government coalition. The word “Neo-Nazi” is a taboo. It has been excluded from the dictionary of mainstream media commentary. It will not appear in the pages of the New York Times, the Washington Post or The Independent. Journalists have been instructed not to use the term “Neo-Nazi” to designate Svoboda and the Right Sector.

Composition of the Coalition Government

We are not dealing with a transitional government in which Neo-Nazi elements integrate the fringe of the coalition, formally led by the Fatherland party.

The Cabinet is not only integrated by the Svoboda and Right Sector (not to mention former members of defunct fascist UNA-UNSO), the two main Neo-Nazi entities have been entrusted with key positions which grant them de facto control over the Armed Forces, Police, Justice and National Security.

While Yatsenuyk’s Fatherland Party controls the majority of portfolios and Svoboda Neo-Nazi leader Oleh Tyahnybok was not granted a major cabinet post (apparently at the request of assistant Secretary of State Victoria Nuland), members of Svoboda and the Right Sector occupy key positions in the areas of Defense, Law Enforcement, Education and Economic Affairs.

Neo Nazi Svoboda leader Oleh Tyahnybok

nuland in ukraine

US Assistant Secretary of State Victoria Nuland together Neo Nazi Svoboda leader Oleh Tyahnybok (left)

Andriy parubiy.jpgAndriy Parubiy [right] co-founder of the Neo-Nazi  Social-National Party of Ukraine (subsequently renamed Svoboda) was appointed Secretary of the National Security and National Defense Committee (RNBOU). (Рада національної безпеки і оборони України), a key position which overseas the Ministry of Defense, the Armed Forces, Law Enforcement, National Security and Intelligence. The RNBOU is central decision-making body. While it is formally headed by the president, it is run by the Secretariat with a staff of 180 people including defense, intelligence and national security experts.

Parubiy was one of the main leaders behind the Orange Revolution in 2004. His organization was funded by the West. He is referred to by the Western media as the “kommandant” of the EuroMaidan movement. Andriy Parubiy together with party leader Oleh Tyahnybok is a follower of Ukrainian Nazi Stepan Bandera, who collaborated in the mass murderer of Jews and Poles during World War II. Reuters / Gleb Garanich

Neo-Nazi march honoring Stepan Bandera

In turn, Dmytro Yarosh, leader of the Right Sector delegation in the parliament, has been appointed Parubiy’s deputy Secretary of the RNBOU.

Yarosh was the leader of the Brown Shirt Neo-Nazi paramilitary during the EuroMaidan “protest” movement. He has called for disbanding the Party of the regions and the Communist Party.

Dmytro Yarosh speech at Euromaidan (Centre)

The Neo Nazi party also controls the judicial process with the appointment of  Oleh Makhnitsky of the Svoboda party to the position of prosecutor-general of Ukraine. What kind of justice will prevail with a reknown Neo-Nazi in charge of the Prosecutor’s Office of Ukraine?

Cabinet positions were also allocated to former members of the Neo-Nazi fringe organizationUkrainian National Assembly – Ukrainian National Self Defense (UNA-UNSO):

“Tetyana Chernovol, portrayed in the Western press as a crusading investigative journalist without reference to her past involvement in the anti-Semitic UNA-UNSO, was named chair of the government’s anti-corruption committee. Dmytro Bulatov,known for his alleged kidnapping by police, but also with UNA-UNSO connections, was appointed minister of youth and sports.

Yegor Sobolev, leader of a civic group in Independence Maidan and politically close to Yatsenyuk, was appointed chair of the Lustration Committee, charged with purging followers of President Yanukovych from government and public life. (See Ukraine Transition Government: Neo-Nazis in Control of Armed Forces, National Security, Economy, Justice and Education, Global Research, March 02, 2014

The Lustration Committee is to organize the Neo-Nazi witch-hunt against all opponents of the new Neo-Nazi regime. The targets of the lustration campaign are people in positions of authority within the civil service, regional and municipal governments, education, research, etc.  The term lustration refers to the “mass disqualification” of people associated with the former government. It also has racial overtones. It will in all likelihood be directed against Communists, Russians  and members of the Jewish community.

It is important to reflect on the fact that the West, formally committed to democratic values, has not only spearheaded the demise of an elected president, it has instated a political regime integrated by Neo-Nazis.

This is a proxy government which enables the US, NATO and EU to interfere in Ukraine’s internal affairs and dismantle its bilateral relations with the Russian Federation. It should be understood, however, that the Neo-Nazis do not ultimately call the shots: Under a “regime of indirect rule” they take their orders on crucial military and foreign policy issues –including the deployment of troops directed against the Russian federation– from the the US State Department, the Pentagon and NATO.

The World is at a dangerous crossroads: The structures and composition of this proxy government installed by the West do not favor dialogue with the Russian government and military.The RNBOU

A scenario of military escalation leading to confrontation of Russia and NATO is a distinct possibility. The Ukraine’s National Security and National Defense Committee (RNBOU) which is controlled by Neo-Nazis plays a central role in military affairs.  In the confrontation with Moscow, decisions taken by the RNBOU headed by Neo-Nazi Parubiy and his brown Shirt deputy Dmytro Yarosh –in consultation with Washington and Brussels– could potentially have devastating consequences.

However, it goes without saying that “support” to the formation of a Neo-Nazi government does not in any way imply the development of “fascist tendencies” within the White House, the State Department and the US Congress.

“The flowering of democracy” in Ukraine –to use the words of the New York Times– is endorsed by Republicans and Democrats. It’s a bipartisan project. Lest we forget, Senator John McCain is a firm supporter and friend of Neo Nazi Svoboda leader Oleh Tyahnybok (Image right).

The U.S. has Installed a Neo-Nazi Government in Ukraine | Global Research

The U.S. has Installed a Neo-Nazi Government in Ukraine | Global Research.

Global Research, March 02, 2014
Ukraine extreme-droite

According to the New York Times, “The United States and the European Union have embraced the revolution here as anotherflowering of democracy, a blow to authoritarianism and kleptocracy in the former Soviet space.” ( After Initial Triumph, Ukraine’s Leaders Face Battle for Credibility,  NYTimes.com, March 1, 2014, emphasis added)

“Flowering Democracy, Revolution”?  The grim realities are otherwise. What is a stake is a US-EU-NATO sponsored coup d’Etat in blatant violation of international law.

The forbidden truth is that the West has engineered –through a carefully staged covert operation– the formation of a proxy regime integrated by Neo-Nazis.

Confirmed by Assistant Secretary of State Victoria Nuland, key organizations in the Ukraine including the Neo-Nazi party Svoboda were generously supported by Washington: “We have invested more than 5 billion dollars to help Ukraine to achieve these and other goals. … We will continue to promote Ukraine to the future it deserves.”

The Western media has casually avoided to analyze the composition and ideological underpinnings of the government coalition. The word “Neo-Nazi” is a taboo. It has been excluded from the dictionary of mainstream media commentary. It will not appear in the pages of the New York Times, the Washington Post or The Independent. Journalists have been instructed not to use the term “Neo-Nazi” to designate Svoboda and the Right Sector.

Composition of the Coalition Government

We are not dealing with a transitional government in which Neo-Nazi elements integrate the fringe of the coalition, formally led by the Fatherland party.

The Cabinet is not only integrated by the Svoboda and Right Sector (not to mention former members of defunct fascist UNA-UNSO), the two main Neo-Nazi entities have been entrusted with key positions which grant them de facto control over the Armed Forces, Police, Justice and National Security.

While Yatsenuyk’s Fatherland Party controls the majority of portfolios and Svoboda Neo-Nazi leader Oleh Tyahnybok was not granted a major cabinet post (apparently at the request of assistant Secretary of State Victoria Nuland), members of Svoboda and the Right Sector occupy key positions in the areas of Defense, Law Enforcement, Education and Economic Affairs.

Neo Nazi Svoboda leader Oleh Tyahnybok

nuland in ukraine

US Assistant Secretary of State Victoria Nuland together Neo Nazi Svoboda leader Oleh Tyahnybok (left)

Andriy parubiy.jpgAndriy Parubiy [right] co-founder of the Neo-Nazi  Social-National Party of Ukraine (subsequently renamed Svoboda) was appointed Secretary of the National Security and National Defense Committee (RNBOU). (Рада національної безпеки і оборони України), a key position which overseas the Ministry of Defense, the Armed Forces, Law Enforcement, National Security and Intelligence. The RNBOU is central decision-making body. While it is formally headed by the president, it is run by the Secretariat with a staff of 180 people including defense, intelligence and national security experts.

Parubiy was one of the main leaders behind the Orange Revolution in 2004. His organization was funded by the West. He is referred to by the Western media as the “kommandant” of the EuroMaidan movement. Andriy Parubiy together with party leader Oleh Tyahnybok is a follower of Ukrainian Nazi Stepan Bandera, who collaborated in the mass murderer of Jews and Poles during World War II. Reuters / Gleb Garanich

Neo-Nazi march honoring Stepan Bandera

In turn, Dmytro Yarosh, leader of the Right Sector delegation in the parliament, has been appointed Parubiy’s deputy Secretary of the RNBOU.

Yarosh was the leader of the Brown Shirt Neo-Nazi paramilitary during the EuroMaidan “protest” movement. He has called for disbanding the Party of the regions and the Communist Party.

Dmytro Yarosh speech at Euromaidan (Centre)

The Neo Nazi party also controls the judicial process with the appointment of  Oleh Makhnitsky of the Svoboda party to the position of prosecutor-general of Ukraine. What kind of justice will prevail with a reknown Neo-Nazi in charge of the Prosecutor’s Office of Ukraine?

Cabinet positions were also allocated to former members of the Neo-Nazi fringe organizationUkrainian National Assembly – Ukrainian National Self Defense (UNA-UNSO):

“Tetyana Chernovol, portrayed in the Western press as a crusading investigative journalist without reference to her past involvement in the anti-Semitic UNA-UNSO, was named chair of the government’s anti-corruption committee. Dmytro Bulatov,known for his alleged kidnapping by police, but also with UNA-UNSO connections, was appointed minister of youth and sports.

Yegor Sobolev, leader of a civic group in Independence Maidan and politically close to Yatsenyuk, was appointed chair of the Lustration Committee, charged with purging followers of President Yanukovych from government and public life. (See Ukraine Transition Government: Neo-Nazis in Control of Armed Forces, National Security, Economy, Justice and Education, Global Research, March 02, 2014

The Lustration Committee is to organize the Neo-Nazi witch-hunt against all opponents of the new Neo-Nazi regime. The targets of the lustration campaign are people in positions of authority within the civil service, regional and municipal governments, education, research, etc.  The term lustration refers to the “mass disqualification” of people associated with the former government. It also has racial overtones. It will in all likelihood be directed against Communists, Russians  and members of the Jewish community.

It is important to reflect on the fact that the West, formally committed to democratic values, has not only spearheaded the demise of an elected president, it has instated a political regime integrated by Neo-Nazis.

This is a proxy government which enables the US, NATO and EU to interfere in Ukraine’s internal affairs and dismantle its bilateral relations with the Russian Federation. It should be understood, however, that the Neo-Nazis do not ultimately call the shots: Under a “regime of indirect rule” they take their orders on crucial military and foreign policy issues –including the deployment of troops directed against the Russian federation– from the the US State Department, the Pentagon and NATO.

The World is at a dangerous crossroads: The structures and composition of this proxy government installed by the West do not favor dialogue with the Russian government and military.The RNBOU

A scenario of military escalation leading to confrontation of Russia and NATO is a distinct possibility. The Ukraine’s National Security and National Defense Committee (RNBOU) which is controlled by Neo-Nazis plays a central role in military affairs.  In the confrontation with Moscow, decisions taken by the RNBOU headed by Neo-Nazi Parubiy and his brown Shirt deputy Dmytro Yarosh –in consultation with Washington and Brussels– could potentially have devastating consequences.

However, it goes without saying that “support” to the formation of a Neo-Nazi government does not in any way imply the development of “fascist tendencies” within the White House, the State Department and the US Congress.

“The flowering of democracy” in Ukraine –to use the words of the New York Times– is endorsed by Republicans and Democrats. It’s a bipartisan project. Lest we forget, Senator John McCain is a firm supporter and friend of Neo Nazi Svoboda leader Oleh Tyahnybok (Image right).

Russia Warns Kerry’s “Threats Are Unacceptable” As Europe Weighs Sanctions | Zero Hedge

Russia Warns Kerry’s “Threats Are Unacceptable” As Europe Weighs Sanctions | Zero Hedge.

Russia has lashed out following comments from US Secretary of State John Kerry:

  • *RUSSIA SAYS KERRY THREATS ARE `UNACCEPTABLE’
  • *RUSSIA SAYS KERRY ISN’T ANALYSING SITUATION IN UKRAINE
  • *KERRY IS USING COLD WAR SLOGANS, RUSSIA FOREIGN MINISTRY SAYS

In comments on the Russian foreign ministry website, Lavrov added:

  • *RUSSIAN MEASURES IN UKRAINE ARE `REASONABLE,’ `LEGAL’: FOR.MIN.
  • *U.S., ALLIES IGNORED VIOLENCE, RUSSOPHOBIA IN UKRAINE PROTESTS
  • *G-8 HALT OF PREPARATIONS FOR SUMMIT IS UNCONSTRUCTIVE: RUSSIA

 

In addition, EU ministers debate freezing the assets of Ukrainians responsible for corruption and “targeted measures” against Russia if no change of course is undertaken.

  • *EU Ministers Debate Freezing Assets of Ukrainians Responsible for Corruption – Draft Text
  • *EU Debates Calling Russian Crimea Actions “Invasion” – Draft Text
  • *EU Commends Ukraine’s Response to Russia Actions – Draft
  • *EU Will Suspend Visa Negotiations with Russia – Draft Text
  • *EU Debating Placing Arms Embargo on Russia If No Change of Course
  • *EU Could Prepare Future “Targeted Measures” vs Russia If No Change in Course – Draft

Perhaps most notable though this morning was the following headline:

  • *RUSSIA DEP FORMIN KARASIN SPOKE ON UKRAINE W/ CHINA COUNTERPART
  • *RUSSIA: CHINA EXPRESSED UNDERSTANDING OF ITS UKRAINE ANALYSIS
  • *RUSSIA, CHINA DISCUSSED UKRAINE’S INTERNAL POLITICAL CRISIS

In other words, China was well aware of the plan and appears comfortable taking sides.

Russia Warns Kerry's "Threats Are Unacceptable" As Europe Weighs Sanctions | Zero Hedge

Russia Warns Kerry’s “Threats Are Unacceptable” As Europe Weighs Sanctions | Zero Hedge.

Russia has lashed out following comments from US Secretary of State John Kerry:

  • *RUSSIA SAYS KERRY THREATS ARE `UNACCEPTABLE’
  • *RUSSIA SAYS KERRY ISN’T ANALYSING SITUATION IN UKRAINE
  • *KERRY IS USING COLD WAR SLOGANS, RUSSIA FOREIGN MINISTRY SAYS

In comments on the Russian foreign ministry website, Lavrov added:

  • *RUSSIAN MEASURES IN UKRAINE ARE `REASONABLE,’ `LEGAL’: FOR.MIN.
  • *U.S., ALLIES IGNORED VIOLENCE, RUSSOPHOBIA IN UKRAINE PROTESTS
  • *G-8 HALT OF PREPARATIONS FOR SUMMIT IS UNCONSTRUCTIVE: RUSSIA

 

In addition, EU ministers debate freezing the assets of Ukrainians responsible for corruption and “targeted measures” against Russia if no change of course is undertaken.

  • *EU Ministers Debate Freezing Assets of Ukrainians Responsible for Corruption – Draft Text
  • *EU Debates Calling Russian Crimea Actions “Invasion” – Draft Text
  • *EU Commends Ukraine’s Response to Russia Actions – Draft
  • *EU Will Suspend Visa Negotiations with Russia – Draft Text
  • *EU Debating Placing Arms Embargo on Russia If No Change of Course
  • *EU Could Prepare Future “Targeted Measures” vs Russia If No Change in Course – Draft

Perhaps most notable though this morning was the following headline:

  • *RUSSIA DEP FORMIN KARASIN SPOKE ON UKRAINE W/ CHINA COUNTERPART
  • *RUSSIA: CHINA EXPRESSED UNDERSTANDING OF ITS UKRAINE ANALYSIS
  • *RUSSIA, CHINA DISCUSSED UKRAINE’S INTERNAL POLITICAL CRISIS

In other words, China was well aware of the plan and appears comfortable taking sides.

The Answer is 42 | Two Ice Floes

The Answer is 42 | Two Ice Floes.

One would think that the answer is entirely dependent upon the question, and normally I would agree with that logical deduction. But when pondering sticky questions, particularly those that involve Cognitive Dissonance, the Hitchhiker’s Guide to the Galaxy’s famous “Ultimate Question of Life, the Universe, and Everything” answer (The answer is 42) seems just as apropos as anything you or I could, and regularly do, pull out of our bums.

For example, why is there near universal agreement that politicians, (governmental) institutions and other ‘author-ity’ figures (those who author their own justification or rationalization to receive/take our power) lie, cheat and steal, with special emphasis on lie, yet we eviscerate them when they actually tell the truth? Worse, when they actually admit to lying (supposedly to keep the peace) why do we derisively condemn them every which way to Sunday?

I suspect people tend to panic when confronted with the truth because we’ve been so conditioned to accept their lies that when told the truth (which incidentally we intuitively know is the truth without seeking an external authority for confirmation) we panic, logically thinking that it must really be bad if they are being ‘honest’, or as close to honest as they can get without becoming tongue tied. I now understand that the answer to my question is (obviously) 42.

Case in point, a while back Jean-Claude Juncker, former Luxembourg Prime Minister and Head Euro-Zone Finance Minister, was quoted as saying “When it becomes serious, you have to lie.” For this little moment of clarity and truth he was unmercilessly pilloried in the mainstream press, blogs, opinion pieces and various international pancake houses for speaking the truth about lying when the shit hits the fan.

Lying JunkerIf his lips are moving…….

Of course the bastard lies, and often for the very same reasons our children lie to us and why we lie to our friends, children, bosses, spouses, strangers and ultimately ourselves. To save our asses from immediate consequences, if only for a short period of time

Bottom line the perceived benefits of (self) deception are often considered to be much greater than the perceived consequences of being caught, regardless of whether the perceived benefits are in fact ‘real’ or just imagined. For example, think about the benefits of having your bias confirmed as an ‘imagined’ benefit that supports further self deception. I’m getting that tingling feeling between my toes just thinking about it.

We all conduct a quick mental check before deciding to lie or not, a sort of Ben Franklin Close (aka The Balance Sheet Close) where we list the so-called benefits on one side of a sheet of paper and the costs on the other, though it is often done in real time with lots of presupposed assumptions (beliefs and ideologies) and outcomes plugged into the variables.

Often when the ‘believed’ consequences of lying are small (or the social acceptance of our little ‘white lie’ is high) the cognitive path to (self) deception is not only cleared, but there’s a tail wind blowing our lie in for a safe three point landing.

Other than becoming the laughing stock of the world for a day or so, exactly what consequences did Juncker suffer? Was his pay reduced or his bonus pulled after he admitted that he lies? Did he lose his position of power and influence? Was he sent to the nearest corner for some down time to reflect upon his transgression?

None-of-the above is the proper response here because Juncker suffered no lasting consequences and, dare I say it, might even have received some (extra) consolatory loving from Mrs. Juncker (but most likely his Mistress because he is European banker after all) for being so brave.

Before the Ponzi and its supporting control system became so blatantly obvious (to us we tell ourselves, everyone else still being too stupid to see the blatantly obvious) one needed to look and listen closely for the flaws in the control system. Nowadays the insanity is on display for all to see 24/7/365 and the proof is the endless material for WilliamBanzai7 to hit out of the ballpark at least twice a day here on ZeroHedge.

G8 Lying PoliticiansThe G8 Liars Club

Let’s take a look at another example. Why is it that we can clearly see when foreign politicians are pandering to their ‘electorate’ (or indentured economic slaves as the case may be) for local consumption, yet we fail to recognize the exact same behavior when we are pandered to by ‘our’ own politicians? The answer (naturally) is 42. It never ceases to amaze me how brilliant we are when recognizing other people’s stupidity and how utterly stupid we are when failing to recognize our own idiocy.

How often have we read about this or that foreign diplomat or politician delivering a troubling speech berating those evil Americans/French/English/Germans (insert your own nationality here)?

Now…..if it was ‘our’ enemy doing the berating the politician/writer/news anchor would assume the proper righteously indignant tone of voice and declare the bastard our national enemy number one…..who was (of course) lying through his teeth to his own people about ‘us’.

By the way, since when did I personally piss off Kim Jong-un or Hugo Chavez (may his lying ass rest in peace) enough that they became my own personal enemy? I have a hard enough time dealing with that prissy checkout girl at the local Wawa without worrying about some lying fool half way around the world whom I never met.

Kim Jong-oopsBad boy, bad boy, what ya gonna do?

However if the foreign leader insulting ‘us’ is our ‘friend’ (I certainly don’t remember ‘friending’ the bastard, but what the hell) the politician/writer/news anchor assumes a consolatory tone of voice and soothingly assures us that the poor foreign leader, our bosom buddy and lifelong pal, was simply delivering a speech ‘for domestic consumption’ and really didn’t mean it. In other words, s/he was lying through his/her teeth to the local population in order to pander to the idiots, so ignore what s/he’s saying.

Ultimately we should be asking ourselves why we tolerate lies from complete strangers who just happen to be ‘our’ leaders. Or why we tell ourselves we don’t believe a lying word out of their mouths, then jump all over them for telling the truth about the fact that they lie to us. To be perfectly honest (pun most definitely intended) the reason we tolerate lies from others is because we want them to tolerate our lies. What goes around (hopefully) comes around, at least when it comes to lying.

Most dysfunctional relationships, and there is no doubt that the relationship we have with ‘our’ leaders is the epitome of dysfunctional, requires and encourages mutual lying in order not to be held accountable to each other while presenting the facade that we are. And make no mistake about it, accountability works both ways, not just from the top of leadership down to ‘us’ peons.

Who reading this right now is actually willing to run this country, let alone try to ‘fix’ it, considering the present state of psychosis nearly everyone, not just ‘our’ leaders, are suffering from? Only a madman, a sociopath or someone suffering from NPD (narcissistic personality disorder in case you’re wondering) would beg to be put into the type of position where not only must they go along to get along, but they need to enable the other madmen and sociopaths or they might just find themselves taking a long walk off a short pier.

I’m not quite sure what is more outrageous, the fact that politicians lie to ‘us’, the fact that they actually desire the type of position that requires them to speak anything but the truth to the public or the fact that we tolerate, and at times enable, all of the above.

In fact I wonder why I’m outraged at all considering I’m just as insane as the rest of ‘us’ inmates in The Insane Asylum. The answer (naturally) is 42.

membersThe Insane Asylum

“The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”

-The Rothschild brothers of London writing to associates in New York, 1863.

The Answer is 42 | Two Ice Floes

The Answer is 42 | Two Ice Floes.

One would think that the answer is entirely dependent upon the question, and normally I would agree with that logical deduction. But when pondering sticky questions, particularly those that involve Cognitive Dissonance, the Hitchhiker’s Guide to the Galaxy’s famous “Ultimate Question of Life, the Universe, and Everything” answer (The answer is 42) seems just as apropos as anything you or I could, and regularly do, pull out of our bums.

For example, why is there near universal agreement that politicians, (governmental) institutions and other ‘author-ity’ figures (those who author their own justification or rationalization to receive/take our power) lie, cheat and steal, with special emphasis on lie, yet we eviscerate them when they actually tell the truth? Worse, when they actually admit to lying (supposedly to keep the peace) why do we derisively condemn them every which way to Sunday?

I suspect people tend to panic when confronted with the truth because we’ve been so conditioned to accept their lies that when told the truth (which incidentally we intuitively know is the truth without seeking an external authority for confirmation) we panic, logically thinking that it must really be bad if they are being ‘honest’, or as close to honest as they can get without becoming tongue tied. I now understand that the answer to my question is (obviously) 42.

Case in point, a while back Jean-Claude Juncker, former Luxembourg Prime Minister and Head Euro-Zone Finance Minister, was quoted as saying “When it becomes serious, you have to lie.” For this little moment of clarity and truth he was unmercilessly pilloried in the mainstream press, blogs, opinion pieces and various international pancake houses for speaking the truth about lying when the shit hits the fan.

Lying JunkerIf his lips are moving…….

Of course the bastard lies, and often for the very same reasons our children lie to us and why we lie to our friends, children, bosses, spouses, strangers and ultimately ourselves. To save our asses from immediate consequences, if only for a short period of time

Bottom line the perceived benefits of (self) deception are often considered to be much greater than the perceived consequences of being caught, regardless of whether the perceived benefits are in fact ‘real’ or just imagined. For example, think about the benefits of having your bias confirmed as an ‘imagined’ benefit that supports further self deception. I’m getting that tingling feeling between my toes just thinking about it.

We all conduct a quick mental check before deciding to lie or not, a sort of Ben Franklin Close (aka The Balance Sheet Close) where we list the so-called benefits on one side of a sheet of paper and the costs on the other, though it is often done in real time with lots of presupposed assumptions (beliefs and ideologies) and outcomes plugged into the variables.

Often when the ‘believed’ consequences of lying are small (or the social acceptance of our little ‘white lie’ is high) the cognitive path to (self) deception is not only cleared, but there’s a tail wind blowing our lie in for a safe three point landing.

Other than becoming the laughing stock of the world for a day or so, exactly what consequences did Juncker suffer? Was his pay reduced or his bonus pulled after he admitted that he lies? Did he lose his position of power and influence? Was he sent to the nearest corner for some down time to reflect upon his transgression?

None-of-the above is the proper response here because Juncker suffered no lasting consequences and, dare I say it, might even have received some (extra) consolatory loving from Mrs. Juncker (but most likely his Mistress because he is European banker after all) for being so brave.

Before the Ponzi and its supporting control system became so blatantly obvious (to us we tell ourselves, everyone else still being too stupid to see the blatantly obvious) one needed to look and listen closely for the flaws in the control system. Nowadays the insanity is on display for all to see 24/7/365 and the proof is the endless material for WilliamBanzai7 to hit out of the ballpark at least twice a day here on ZeroHedge.

G8 Lying PoliticiansThe G8 Liars Club

Let’s take a look at another example. Why is it that we can clearly see when foreign politicians are pandering to their ‘electorate’ (or indentured economic slaves as the case may be) for local consumption, yet we fail to recognize the exact same behavior when we are pandered to by ‘our’ own politicians? The answer (naturally) is 42. It never ceases to amaze me how brilliant we are when recognizing other people’s stupidity and how utterly stupid we are when failing to recognize our own idiocy.

How often have we read about this or that foreign diplomat or politician delivering a troubling speech berating those evil Americans/French/English/Germans (insert your own nationality here)?

Now…..if it was ‘our’ enemy doing the berating the politician/writer/news anchor would assume the proper righteously indignant tone of voice and declare the bastard our national enemy number one…..who was (of course) lying through his teeth to his own people about ‘us’.

By the way, since when did I personally piss off Kim Jong-un or Hugo Chavez (may his lying ass rest in peace) enough that they became my own personal enemy? I have a hard enough time dealing with that prissy checkout girl at the local Wawa without worrying about some lying fool half way around the world whom I never met.

Kim Jong-oopsBad boy, bad boy, what ya gonna do?

However if the foreign leader insulting ‘us’ is our ‘friend’ (I certainly don’t remember ‘friending’ the bastard, but what the hell) the politician/writer/news anchor assumes a consolatory tone of voice and soothingly assures us that the poor foreign leader, our bosom buddy and lifelong pal, was simply delivering a speech ‘for domestic consumption’ and really didn’t mean it. In other words, s/he was lying through his/her teeth to the local population in order to pander to the idiots, so ignore what s/he’s saying.

Ultimately we should be asking ourselves why we tolerate lies from complete strangers who just happen to be ‘our’ leaders. Or why we tell ourselves we don’t believe a lying word out of their mouths, then jump all over them for telling the truth about the fact that they lie to us. To be perfectly honest (pun most definitely intended) the reason we tolerate lies from others is because we want them to tolerate our lies. What goes around (hopefully) comes around, at least when it comes to lying.

Most dysfunctional relationships, and there is no doubt that the relationship we have with ‘our’ leaders is the epitome of dysfunctional, requires and encourages mutual lying in order not to be held accountable to each other while presenting the facade that we are. And make no mistake about it, accountability works both ways, not just from the top of leadership down to ‘us’ peons.

Who reading this right now is actually willing to run this country, let alone try to ‘fix’ it, considering the present state of psychosis nearly everyone, not just ‘our’ leaders, are suffering from? Only a madman, a sociopath or someone suffering from NPD (narcissistic personality disorder in case you’re wondering) would beg to be put into the type of position where not only must they go along to get along, but they need to enable the other madmen and sociopaths or they might just find themselves taking a long walk off a short pier.

I’m not quite sure what is more outrageous, the fact that politicians lie to ‘us’, the fact that they actually desire the type of position that requires them to speak anything but the truth to the public or the fact that we tolerate, and at times enable, all of the above.

In fact I wonder why I’m outraged at all considering I’m just as insane as the rest of ‘us’ inmates in The Insane Asylum. The answer (naturally) is 42.

membersThe Insane Asylum

“The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”

-The Rothschild brothers of London writing to associates in New York, 1863.

French Joblessness Surges To New Record High (Up 30 Of Last 32 Months) | Zero Hedge

French Joblessness Surges To New Record High (Up 30 Of Last 32 Months) | Zero Hedge.

It would appear French President Francois Hollande’s promise to bring jobs to the nation continues to fail dismally. Perhaps it was his recent trip to the US, but French Jobseekers rose more than expected for the 3rd month in a row to a new record high of 3.316 million. Joblessness has now risen for 30 of the last 32 months. The last 5 months have seen jobseekers reaccelerate – surging by 2.5% (the most in 6 months). So, in a nutshell, things are getting worse, faster for the 2nd largest economy in Europe (and 5th largest in the world).

 

 

Charts: Bloomberg

 

IMF report: ‘Debt is good’. What are these people smoking?

IMF report: ‘Debt is good’. What are these people smoking?.

February 18, 2014
Sovereign Valley Farm, Chile

Probably every kid in the world has at some point dreamed of having a time machine and being able to travel back to the past… usually to see dinosaurs or something like that.

Time travel is an almost universal fantasy. And if I could snap my fingers and turn the pages of time, I’d be seriously curious to check out the thousand-year period between the decline of the Western Roman Empire and the rise of the Renaissance.

They used to refer to this period as ‘the Dark Ages’ (though historians have since given up that moniker), a time when the entire European continent was practically at an intellectual standstill.

The Church became THE authority on everything– Science. Technology. Medicine. Education. And they kept the most vital information out of the hands of the people… instead simply telling everyone what to believe.

People living in that time had to trust that the high priests were smart guys and knew what they were talking about.

Interpreting facts and observations for yourself was heresy, and anyone who formed original thought and challenged the authority of church and state was burned at the stake.

Granted, human civilization has come a long way since then. But the basic building blocks are not terribly different than before.

Anyone who challenges the state is still burned at the stake. And our entire monetary system requires that we all trust the high priests of central banking and economics. Those that stray from the state’s message and spread economic heresy are cast down and vilified.

You may recall the case of Harvard professors Ken Rogoff and Carmen Reinhart who wrote the seminal work: “This Time is Different: Eight Centuries of Financial Folly”.

The book highlighted dozens of shocking historical patterns where once powerful nations accumulated too much debt and entered into terminal decline.

Spain, for example, defaulted on its debt six times between 1500 and 1800, then another seven times in the 19th century alone.

France defaulted on its debt EIGHT times between 1500 and 1800, including on the eve of the French Revolution in 1788. And Greece has defaulted five times since 1800.

The premise of their book was very simple: debt is bad. And when nations rack up too much of it, they get into serious trouble.

This message was not terribly convenient for governments that have racked up unprecedented levels of debt. So critics found some calculation errors in their Excel formulas, and the two professors were very publicly discredited.

Afterwards, it was as if the entire idea of debt being bad simply vanished.

Not to worry, though, the IMF has now stepped up with a work of its own to fill the void.

And surprise, surprise, their new paper “[does] not identify any clear debt threshold above which medium-term growth prospects are dramatically compromised.”

Translation: Keep racking up that debt, boys and girls, it’s nothing but smooth sailing ahead.

But that’s not all. They go much further, suggesting that once a nation reaches VERY HIGH levels of debt, there is even LESS of a correlation between debt and growth.

Clearly this is the problem for Europe and the US: $17 trillion? Pish posh. The economy will really be on fire once the debt hits $20 trillion.

There’s just one minor caveat. The IMF admits that they had to invent a completely different method to arrive to their conclusions, and that “caution should be used in the interpretation of our empirical results.”

But such details are not important.

What is important is that the economic high priests have proven once and for all that there are absolutely no consequences for countries who are deeply in debt.

And rather than pontificate what these people are smoking, we should all fall in line with unquestionable belief and devotion to their supreme wisdom.

European Banking Crisis: the calm before the storm ? | The Cantillon Observer

European Banking Crisis: the calm before the storm ? | The Cantillon Observer.

Austrian business cycle theory explains that the “bust” phase of that cycle is created by extension of cheap and plentiful credit by a fractional reserve banking (FRB) system.  A FRB  system is inherently fragile during the bust phase as its’ leverage(lending as % of own capital) exposes the banks to the emerging tsunami of non-performing loans and impaired collateral that are the manifestations of malinvestment.

Yet, in today’s  protected and regulated banking industry, the “bust” phase of the cycle is delayed and distorted by the wide-ranging interventionism of regulators, central banks and governments. The ongoing crisis in the European banking sector is evidence of this. Its’ problems of insolvency are unresolved. The ECB is at the centre of interventionist efforts to stall and mitigate a European  banking sector collapse that looks increasingly likely within the next 18 months. 1/

Last week the ECB kept interest rates unchanged at 0.25 %. The exchange value of the euro rose and the mainstream media and  financial industry pundits  all bemoaned Mr Draghi’s immobilism in the face of worsening price deflation 2/. As my November 2013 commentary indicated 3/, there is growing political pressure on the ECB from southern European governments to launch a new round of Eurozone members’ sovereign  bond purchases.4/ , as public debt to GDP ratios are increasing for countries on the periphery; and menacingly high too even for some core member countries.

So why has the ECB President kept his powder dry, and is the European banking crisis contained or still perilously at risk ?

Mr Draghi diplomatically hedged at a press conference, claiming that the data available failed to show definitively a confirmed deflationary trend  and that though officially measured price inflation at 0.8% was below the Bank’s mandated target 2%, there was no convincing evidence of a Japanese-style deflation in the Eurozone.

The Bank President’s words are meant to buy time, while two related processes –  one political, the other regulatory – play out.

The political process is to determine the how Eurozone governments proceed  (attempting) to manage the twin crises of growing sovereign debts and growing systemic insolvency risk in the banking sector.  The latest event in that process is the  German Constitutional Court’s ruling last week that it does not consider that the ECB has been acting within its mandate when conducting debt monetisation  – thus allying itself to the view of Jens Wiedmann the Bundesbank President – although it did not explicitly rule that the ECB broke the German Constitution, preferring to pass the parcel on to the European Court of Justice for a definitive ruling.

These legal challenges are a mere proxy war for the real political one between the “Teutonic” bloc led by  Germany and the “Club Med” periphery which currently also includes France.

Which returns us to the ECB, whose Governing Council members are composed of a clear majority from the “Club Med” faction.  Knowing he has this majority ready to vote eventually for a new round of asset purchases, Mr Draghi is playing a long game.

With ECB benchmark rates already negative in real terms, he is well aware that reducing nominal rates further does little to encourage bank lending. Even with effectively “free” credit, bank lending to businesses is down; as is inter-bank lending.  This lack of lending has multiple proximate  reasons, but the fundamental one is banks’ own continuing struggle to remain solvent since the onset of the financial crisis in 2007/08.  This is where the newest regulatory process comes in.

The ECB is soon to take on so-called “macroprudential” oversight of the Eurozone banking system – a new interventionist approach championed by the G20, IMF and Bank of International Settlements’ (BIS) to reduce risks of failure in the banking system by imposing higher core capital ratios.

Complementary to the EU Commission’s plans to establish a Banking Union (including a Special Resolution Mechanism –SRM – for “bailing in” failing banks), and the BIS’s  work to revise and tighten the Basel Rules on bank capital, the ECB is about to embark upon a massive exercise of stress testing all European banks. 5/ A previous round of such tests in 2010 was ridiculed as far too lax.  This time the bar has been set higher. It is expected  that some banks will fail the stress test, and interested parties are already speculating which, and attempting to guestimate the likely outcome in terms of new capital requirements . 6/

How rigorous these stress tests are is a critical matter for the ECB. Its’ supervisory responsibility for all Eurozone banks enters in force once the SRM measure is finalised later this year . The benchmarks applied for the tests are themselves partly derived from the work of the Basle Committee on Banking Supervision in defining banks’ permitted  leverage ratio. Mr Draghi is the chairman of the Group of Governors and Heads of Supervision which oversees these Basle regulators. Interestingly, they recently relaxed the rules on the definition of banks’ leverage, following feedback from the industry that the new rules would entail banks having to raise at least $200 billion in new capital to comply.  7/

The challenge that these regulatory initiatives attempt to address is the massive build-up of leverage in the banking system as a whole. The Eurozone’s banks are the most vulnerable, but the problem is global. Hence the pivotal role of the BIS in defining a common approach.

What has to be factored in here is not simply banks’ traditional business and real estate lending, important though those are to understanding actual and potential loan losses. Far bigger in scale are the  banks’ exposures to the shadow banking sector; their off balance sheet losses; and the recent likely losses on FX futures contracts and interest rate swaps caused by the sell off in Emerging Markets.

Derivatives positions in FX and interest rate swaps are staggering and the total derivatives market is estimated at $700 trillion. Amongst large European banks, Deutsche Bank is said to have Euro 55.6 trillion of gross notional derivatives exposure on its books.  This figure is some 200%+ greater than Germany’s annual GDP !  8/ Note, these are not losses, just exposures. Nevertheless, it would take only a very small proportion of these contracts to turn sour for Deutsche Bank’s entire core capital to be wiped out.

The BIS-defined leverage ratio  aims to limit banks’ reliance on debt, using a minimum standard for how much capital they must hold as a percentage of all assets on their books. However, the BIS found that “a quarter of large global lenders would have failed to meet a June version of the  leverage limit had it been in force at the end of 2012.” 9/

There is a perfect storm developing then in the European banking sector.

First, there is the increasing likelihood that the ECB will unleash a new round of asset purchases from the banks to flood them with the liquidity they need to buy up their respective national governments’ sovereign bonds and so hold bond yields down.

Second, there is a Eurozone-wide regulatory initiative to recapitalise the banks likely, following on from the results of the ECB’s bank stress tests. Third, there is an increasing chance of a deep stock market correction happening this summer. All three, taken collectively,  could trigger a crisis of confidence in the  banking sector. An  insolvency crisis too should not be ruled out in the event of some large banks failing to recover from derivatives markets exposures in an increasingly volatile currency, interest rate and stock markets environment.

_______________________________________________________________________________

NOTES/REFERENCES

1/ Using technical analysis and Austrian economic theory, it is being predicted that a stock market “crack up boom” is due some time near Christmas 2014, followed by a fiat currency collapse. Before that, a deep market correction is foreseen starting by the summer. see“The Globalisation Trap: full report”, Gordon T Long.com, 2014 01 15

2/ “Split ECB paralysed as deflation draws closer” A. Evans Pritchard, DailyTelegraph.co.uk,7th  February 2014

3/ “Eurozone’s Debt Crisis: is the next phase of the ECB’s “large scale asset purchases” imminent ?” November 2013, mises.org

4/ A few days after my commentary was published, the ECB’s executive board member Peter Praet let markets know that stimulus measures were on the menu via comments in a November 13th Wall Street Journal interview. “ ECB Bank Stress Tests: Catalyst Of The Final EU Crisis?”, SeekingAlpha.com, 2013 11 17

5/ “ECB Bank stess tests: catalyst of the final EU crisis ?” SeekingAlpha.com, 2013 11 17

6/  “Eurozone banks face £42bn ‘capital black hole’”, Kamal Ahmed, DailyTelegraph.co.uk, 8th February 2014

7/“Basel Regulators Ease Leverage-Ratio Rule for Banks”, Jim Brunsden , Bloomberg .com,   2014 01 13

8/ “On Death and Derivatives”, 29 January 2014, Golemxiv.co.uk

9/ op. cit., Bloomberg .com,   2014 01 13

Hayek On Keynes: “Economics Was A Sideline For Him” | Zero Hedge

Hayek On Keynes: “Economics Was A Sideline For Him” | Zero Hedge.

Keynes will be remembered as “a man with a great many ideas that knew very little economics,” Friedrich Hayek notes in this brief interview and when challenged on his ‘parochial’ knowledge of economic history he was “not sheepish in the least… he was much too self-assured.” Hayek’s perspective casts Keynes in a very different light than his fan’s apostolic adoration might suggest, “he wasutterly contemptuous of anything that had been done before.” While Hayek describes Keynes as one of the most intelligent people he had known, he perhaps sums up the man’s work in this brief phrase – “economics was just a side-line for him.” As we note below, many describe Keynesian policy as ‘dumb’, however a more appropriate word would be ‘foolish’.

Hayek On Keynes

Keynesian Policies: Not Dumb, Just Foolish (via the Ludwig von Mises Institute of Canada)

A lot of my Austrian friends refer to Keynesian policies as “idiotic,” “stupid,” etc., but that’s not really accurate. Indeed, the Keynesian policy prescriptions are so counterintuitive–they so defy common sense–that only very intelligent people with plenty of schooling could have the confidence to utter them with a straight face.

Rather than describing Keynesian policies as “dumb,” I think a more appropriate word is foolish, because the technical analyses of IS/LM curves, talk of the “liquidity trap” and so on, utterly ignore political realities. A great example of this is Matt Yglesias and his handling of Argentina. Back in May 2012–not that long ago, by any stretch–Yglesias held up Argentina as a model for the eurozone countries. He wrote:

Spain is in a complete economic crisis…But perhaps there is a way out, one suggested by the recent experience of Argentina, a nation that’s currently enjoying full employment. 
…[W]hen the world economy hit a snag in 2001, trouble emerged for Argentina. Unrelated hidden risks were revealed elsewhere in the global investment landscape and everywhere people got nervous. The foreign capital began to abandon Argentina, reducing investment, employment, and incomes. This in turn sharply reduced the Argentine government’s tax revenues and led to calls for sharp budgetary consolidation…Protesters and rioters took to the streets. President Fernando de la Rua’s party took a beating at the polls. Argentina defaulted on its external debt, broke the rigid linkage between the peso and the dollar, and went back to pursuing an independent monetary policy….
Default and devaluation were hardly a party. They destroyed the country’s banking system and wiped out many Argentines’ savings. But it did work. Argentina has grown rapidly in subsequent years and its unemployment rate has fallen steadily…

So Yglesias was recommending that Spain and other troubled countries ditch the euro and default on their sovereign debts, so they could free their printing press from the shackles of Brussels. The obvious Austrian (and generally free-market) response would be to warn that debasing the currency is hardly the path to prosperity, and that “solving” a crisis in this way would merely sow the seeds of a greater problem down the road. The prosperity coming from the printing press was an illusion.

Well, the economy in Argentina is now “melting down”–Yglesias’ own term. But our fearless Keynesian pundit has nothing for which to apologize. He explains in a January 2014 post:

With Argentina’s economy melting down, I’ve gotten various queries from people asking whether I regret having praised the country’s successful 2002 devaluation and default back in 2012 as an example for Spain and Greece to emulate.
The answer is: absolutely not!
Argentina is a country that has not, historically speaking, been well-governed. In fact one reason that the 2002 default was necessary was that Argentina  previously embarked on a deeply misguided currency board scheme. To say that Argentina’s 2002 default and devaluation was the right thing to do and that there are important lessons to be learned from it is not to say that all countries should always emulate Argentina in all respects.

So there you have it, folks: Countries that historically have been ill-governed should follow Argentina’s lead by defaulting on their debts and debasing their currencies, but they should stop right before the bad consequences of these actions come home to roost. Simple as pie. Sort of like giving a bottle of Jack Daniels to some frat guys and sending them to the library to study–what could possibly go wrong?

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