America's Financial Crisis

The Evolution of a Police State - November, 2011

2011-11-29T19:11:00.000-08:00

The main problem I have with the "Occupy Wall Street" people is essentially this: where the hell were they when the economic bubble was being artificially sustained by the same people they are now complaining about? Where the hell were they when the corrupt/criminal system they are only now protesting was for years exploiting the globe so that they could continue purchasing affordable slave-labor goods and be able to enjoy three thousand channels on cable?

There were only a few lonely voices sounding the alarm when things seemed so wonderful and the sheeple were happily grazing on the bullshit they were provided by their financial slave-masters. Nonetheless, better late than never. I am glad Americans are slowly waking up from their stupor. Although the Occupy movement is toothless and very small at this time, if it is somehow sustained, more and more people will be joining it, thereby giving it more power and more legitimacy. Needless to say, officials have been feverishly trying to figure out what to do with these spontaneous protests sweeping the nation. They are nervous because they see the potential for a major disaster. Thus, America's neo-Bolshevik ruling elite have four major options on the table:

1) Be aggressive towards protesters (e.g. intimidation, pepper spraying, beatings, mass arrests) and hope the protesters will dissipate

2) Send into protester's ranks agent-provocateurs to cause violence and property damage and use such actions to criminalize the movement and crack down on it with full force

3) Try to co-opt the movement by either making deals with its spokespersons/leaders or simply by sending into their ranks well spoken political activists or "left" leaning celebrities covertly connected to the government to hijack the movement

4) Just wait for the winter freeze to do its work and hope that the legendary short attention spans of Americans (thanks to poor education, controlled news press, over medication and 24/7 television entertainment) can finally put an end to it all

But one thing is for sure, they are definitely afraid of the movement growing out of control. The Occupy protests were inspired by similar movements around the world and it has in turn inspired other movements around the world. I quietly joined the protesters on a couple of occasions to get a feel for what it was all about. Based on what I saw and heard, I have to admit, I don't have much hope in their ability to get anything serious done. They are currently too fragmented, too timid, too disorganized, too politically naive, too utopian, too socialistic, too hippyish, too liberal and too small in numbers. And unlike the Washington-backed armed thugs fighting the legitimate governments of Iran, Libya and Syria, the Occupy movement in America does not have any kind of backing. With that said, what the movement has started may become a foundational template upon which better and more affective protests can be organized in the future.

Nevertheless, just imagine: what if, say Russia or China, decided to covertly or overtly arm, fund and/or organize this budding movement in the United States? Wouldn't all hell break loose? Wouldn't Washington go berserk and saturate American cities with federal agents and the national guard? Wouldn't protesters be rounded up en-mass and sent to FEMA camps? Wouldn't protesters get gunned down as terrorists? Wouldn't Washington send a naval carrier task force to threaten any nation meddling in its internal affairs?

Well, supporting, arming, funding, organizing or encouraging protesters, insurgents and terrorists alike is exactly what the West, namely Washington, has been doing in places like Russia and China, not to mention most of central and south Americas, Africa, Middle East and central Asia...

By what divine law does Washington reserve the right to label nations good or bad and meddle in their internal affairs as a result? Who gave Washington the right to intervene in other nation's internal matters? Some Americans, including politicians, claim American exceptionalism, as their right. In the mind of its lunatic adherents, American exceptionalism more-or-less means the United States of America has been placed on earth to lead the nations of the world. In other words, similar to what the "chosen" Jews think, American fanatics think God has chosen the United States to decide what nations are deemed evil and what nations are deemed good, what nations can be destroyed, what nations need to be protected and sometimes what nations created out of thin air. This absurd and dangerous situation has gone long enough. The world cannot remain unipolar. American officials cannot be given the right to lead anything. American exceptionalism needs a healthy dose of Russian and/or Chinese interventionism to put Washington back in its rightful place.

Ironically, of all the protests we are now seeing taking place around the world, the most scared and the most timid protesters, those even afraid of looking at policemen in the wrong way have been the ones in the United States - home of the free land of the brave! But I don't blame them for being scared, they have been beaten by batons, shot at with deadly rubber-bullets, stun-grenaded, teargassed, maced and mass-arrested for merely trying to exercise their rights to speak up against financial exploitation and government corruption. Although "Joe six-pack" on Main street does not yet realize this, Americans are by-far the least free of all developed nations.

A fundamental problem we have here is that the state no longer fears its citizenry. This is fundamentally an un-American state of affairs, and it is against the very principals of the nation's founding fathers. For a governing body to be somewhat more considerate towards its subjects, it has to first fear them. This is why for generations Americans have been armed to the teeth. This is why for generations Americans have had large numbers of armed citizens' militias. This is the reason why America once had a free news press. And this is also the reason why the nation's financial/political elite has co-opted the nation's news press and it is currently working on disarming the population. Having already taken control of almost everything else in American life, if they manage to finally disarm the American citizenry, this nation will turn into a massive prison virtually overnight.

The only element in the nation that can potentially keep the hijacked federal government in check are the American militias of the Midwest. However, even these militias have been systematically defanged during the past several decades. Many of them today, if not all, are infested with informants and undercover agents. A couple of recent cases proves my point (see last two articles at the bottom of this page).

Sadly, the once proud and fiercely independent American is dying a slow and miserable death as the American dream turns into an American nightmare. Hollywood, pharmaceuticals, the controlled news press and the nation's indoctrinations centers also known as - schools - have turned a once vibrant and dynamic population into a mass of apolitical, mindless, materialistic and self-absorbed zombies. Despite what today's American sheeple want to believe, through their fearless actions the people of Europe have shown us all that they are far more independent - in body, mind and soul - than Americans.

America's neo-Bolshevik elite is currently seeking to turn the vast majority of the nation's work force into low wage earning slaves and mindless robots willing to fight and die for a handful of special interests in Washington. The US government is already by far the largest employer in the nation and they already regulate virtually everything in the lives of the citizenry. The ruling elite is running the nation like a corporation and the people as slave labor; and armed thugs in uniforms, be it the FBI, police or national guardsmen, are the ones tasked with making sure that the system stays intact. What we are seeing take place in the United States today is the evolution of a massive police state.

Arevordi
November, 2011

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Occupation Nation: US cops serve & protect the 1%: http://www.youtube.com/watch?v=0y7XROtjmAk

I AM NOT MOVING - Short Film - Occupy Wall Street: http://www.youtube.com/watch?feature=player_embedded&v=RGRXCgMdz9A

An INTENSE moment of TRUTH with MAINSTREAM Media: http://www.youtube.com/watch?feature=player_embedded&v=KLkMrJSXfdo#!

OWS Contagious: Global Revolution Live: http://www.youtube.com/user/russiatoday?blend=1&ob=4#p/u/25/ZQNSCwo__rQ

Occupy World St.: From NYC to Everywhere: http://www.youtube.com/user/russiatoday?blend=1&ob=4#p/u/12/73gtsiWu8g4

Athens Clashes LIVE: RT at Greece massive protest showdown: http://www.youtube.com/user/RussiaToday#p/u/6/1clq1yVlIS4

First night video of Occupy Rome clashes, cop cars on fire: http://www.youtube.com/user/RussiaToday#p/u/10/Ws29I_Afb48

Occupy London clashes: Fighting erupts at UK protest: http://www.youtube.com/user/russiatoday?blend=1&ob=4#p/u/13/HpqPM7E7PO0

Occupation rolls on: OWS raises $300K in funds: http://www.youtube.com/user/RussiaToday#p/u/2/xkbH3McUYqI

CrossTalk: Occupy Globe (ft. Pepe Escobar): http://www.youtube.com/user/RussiaToday#p/u/8/ufOTAFidGY8

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Buoyed by Wall St. Protests, Rallies Sweep the Globe

Buoyed by the longevity of the Occupy Wall Street encampment in Manhattan, a wave of protests swept across Asia, the Americas and Europe over the weekend, with hundreds and in some cases thousands of people expressing discontent with the economic tides in marches, rallies and occasional clashes with the police. In Rome on Saturday, a rally thick with tension spread over several miles. Small groups of restive young people turned a largely peaceful protest into a riot, setting fire to at least one building and a police van and clashing with police officers, who responded with water cannons and tear gas. The police estimated that dozens of protesters had been injured, along with 26 law enforcement officials; 12 people were arrested.

By early Sunday in New York, 92 people had been arrested, including 24 accused of trespassing in a Greenwich Village branch of Citibank and 45 during a raucous rally of thousands of people in and around Times Square. More than 1,000 people filled Washington Square Park on Saturday night, but almost all of them left after dozens of police officers with batons and helmets streamed through the arch and warned that they would be enforcing a midnight curfew. Fourteen were arrested for remaining in the park.Three police officers were injured dealing with a rambunctious crowd at 46th Street and 7th Avenue; they were treated at Bellevue Hospital Center and released.

In Chicago, about 175 people were arrested at about 1 a.m. on Sunday after refusing to leave Grant Park before the 11 p.m. closing time, said Officer Laura Kubiak, a spokeswoman for the Chicago Police Department. Other than in Rome, the demonstrations across Europe were largely peaceful, with thousands of people marching past ancient monuments and gathering in front of capitalist symbols like the European Central Bank in Frankfurt. Similar scenes unfolded across cities on several continents, including in Sydney, Australia; Tokyo; Hong Kong; Toronto; and Los Angeles, where several thousand people marched to City Hall as passing drivers honked their support.

But just as the rallies in New York have represented a variety of messages — signs have been held in opposition to President Obama yards away from signs in support of him — so did Saturday’s protests contain a grab bag of sentiments, opposing nuclear power, political corruption and the privatization of water. Yet despite the difference in language, landscape and scale, the protests were united in frustration with the widening gap between the rich and the poor.

“I have no problem with capitalism,” Herbert Haberl, 51, said in Berlin. “But I find the way the financial system is functioning deeply unethical . We shouldn’t bail out the banks. We should bail out the people.”

In New York, where the occupation of Zuccotti Park in Lower Manhattan was moving into its second month, a large crowd marched north early Saturday afternoon to Washington Square Park, where it was joined by several hundred college students who decried, among other things, student debt and unemployment. In late afternoon, the crowds marched up Avenue of the Americas toward a heavily barricaded Times Square, beseeching onlookers to join in with cries of “You are the 99 percent.” At Times Square, they convened with thousands of other protesters and caught hundreds of tourists unawares. “We thought they were going to stay down on Wall Street,” said Sandi Bernard — who is 59 and was visiting from Waldorf, Md. — while wondering if she would have trouble making the 8 p.m. curtain call for “Spider-Man: Turn Off the Dark.”

Some tourists pumped their fists and whooped from atop double-decker sightseeing buses as the protesters cheered back. To keep 42nd Street clear the police shunted marchers up to 46th Street, where officers and the pressed-in masses had several run-ins. At one point the police pushed the barricades in toward the crowd, and the crowd pushed back. At another point two mounted officers moved their horses briefly into the throng.

Three people were arrested trying to take down barricades, the police said. Later, as officers tried to disperse people east on 46th Street, 42 people who the police said defied their orders were taken away, in plastic handcuffs, in three police wagons. One witness, Harry Kaback, a 26-year-old comic selling tickets to the Ha! comedy club, said the protesters were “getting rowdy” with the police and shouting in their faces. For the protesters, marching on Times Square held almost as much significance as did protesting against Wall Street.

“Times Square represents business as usual — buy, buy, buy in this economic climate, watch the latest show,” said Elias Holtz, 29, a Web designer who lives in Bushwick, Brooklyn. “But the crisis is everywhere.” The protest moved back to Washington Square Park, where people listened to speeches and debated whether to stay while police officers marched down Fifth Avenue and into the square. One officer gave a warning as midnight approached: “The park closes at 24:00 hours. You can exit to the east, west or south. You have 10 minutes.”

Virtually everyone chose to leave, save 14 protesters who remained sitting in the dry bed of the park’s fountain and were arrested, the police said. Many headed back to Zuccotti Park, where there is no curfew. Earlier, about a dozen protesters entered a Chase branch in Lower Manhattan and withdrew their money from the bank while 300 other people circled the block, some shouting chants and beating on drums. The former Chase customers, who declined to reveal how much they had in their accounts — though a few acknowledged it was not much — said they planned to put their money into smaller banks or credit unions.

“The more resources we give to small institutions, the more they’ll be able to provide conveniences like free A.T.M.’s and streamlined online banking so they can compete with the larger banks,” said Hannah Appel, 33, a postdoctoral fellow at Columbia University.

Five people wearing masks were arrested during the march to Times Square for “loitering with masks,” said Paul J. Browne, the Police Department’s chief spokesman, an apparent reference to an old state law prohibiting masked gatherings (the law does not apply to masquerade parties). And two dozen people were arrested at a Citibank branch on LaGuardia Place on trespassing charges. Some witnesses said that the protesters had tried to leave but were locked inside by bank employees. “They were trying to leave, but they wouldn’t let them,” said Meaghan Linick, 23, of Greenpoint, Brooklyn. She said one woman who had been inside and left was forced back inside by police officers.

Citibank, in a statement, said the protesters “were very disruptive and refused to leave after being repeatedly asked, causing our staff to call 911.” The statement continued, “The police asked the branch staff to close the branch until the protesters could be removed.” In Washington, several hundred people marched through downtown, beginning in the early morning, passing by several banks. Escorted by the police, the marchers also demonstrated in front of the White House and the Treasury Department before moving on to a rally on the National Mall, where they were joined by representatives of unions and other supporters.

“You see how people are beholden to corporate interests no matter how hard you might have worked to get them elected,” said Kelly Mears, 24, a former software engineer. “There is a disconnect.”

Saturday’s protests sprang not only from the Occupy Wall Street movement that began last month in New York, but also from demonstrations in Spain in May. This weekend, the global protest effort came as finance ministers and central bankers from the Group of 20 industrialized nations meet in Paris to discuss economic issues, including ways to tackle Europe’s sovereign debt crisis. Tens of thousands of protesters assembled in Madrid on Saturday evening, when chants mingled with live music, including a rendition of Beethoven’s “Ode to Joy,” lending the downtown area an upbeat feel on an unusually balmy fall afternoon.

Brief clashes were reported in London, where the police were out in force with dozens of riot vans, canine units and hundreds of officers. But the gathering, attended by people of all ages, was largely peaceful, with a picnic atmosphere and people streaming in and out of a nearby Starbucks.

The WikiLeaks founder, Julian Assange, made an appearance when a crowd assembled in front of St. Paul’s Cathedral. To loud cheers, Mr. Assange called the protest movement “the culmination of a dream.” In Rome, the protests Saturday were as much about the growing dissatisfaction with the government of Prime Minister Silvio Berlusconi, who narrowly survived a vote of confidence on Friday, as they were about global financial inequities. Tens of thousands of people turned out for what started as peaceful protests and then devolved into ugly violence. The windows of shops and banks were smashed, a police van was destroyed, and some Defense Ministry offices were set alight.

“We don’t feel represented by the government. We feel made fun of,” Alessia Tridici, 18, said in Rome. “We’re upset because we don’t have prospects for the future. We’ll never see a pension. We’ll have to work until we die.”

Source: http://www.nytimes.com/2011/10/16/world/occupy-wall-street-protests-worldwide.html?_r=1&ref=world

Countless Grievances, One Thread: We’re Angry

Ken Alandt’s guitar, which he covered with bumper stickers and waved in the air at the Occupy Phoenix protest on Monday, is a symbol of the movement itself — a mélange of disparate causes, all of which prompt his blood to boil. Mr. Alandt, 53, an out-of-work stagehand and one of hundreds participating in Phoenix’s version of Occupy Wall Street, is furious that people are dying in foreign wars. He is angry that medical marijuana was still considered illegal despite Arizona voters’ approval of it. He is livid about his lot in life.

“Bro, I have been lied to so many times that I don’t know who to believe,” Mr. Alandt said. “All the world’s problems run downhill, and I’m at the bottom.”

Protesters have taken to the streets and parks in cities across America, and in foreign capitals to boot, all under the banner of the Occupy movement. But not every group that has embraced the name, nor every individual who answers its call, necessarily marches in the same contentious lockstep. While the protesters seem united in feeling that the system is stacked against them, with the rules written to benefit the rich and the connected, they are also just as often angry about issues closer to home, like education and the local environment. Each gathering bubbles up from its own particular city’s stew of circumstances and grievances, and the protesters bring along their pantheons of saints and villains.

“Peace activists, indigenous rights activists, immigrant activists — they’re all here,” said Liz Hourican, 40, who belongs to the antiwar group Code Pink and was scrawling a message in pink chalk on a sidewalk in downtown Phoenix, calling on American troops to come home. “It may sound different to you, but it’s all the same. We’re all stepping up and saying something’s wrong.” There may be no common manifesto or list of goals — something that has drawn criticism from both inside and outside the movement — but there is one common thread: anger. Some have looked for jobs for months; others have lost their homes to foreclosure. Angry, they all are.

“What brings me out here? Outrage — outrage with what’s going on in this country,” said Lucy Horwitz, 79, who participated in Occupy Los Angeles. “Right now, the first issue on my mind is that corporations can buy congressmen.”

In Lower Manhattan on Monday afternoon, protesters were drawn by a vast array of concerns: stark income inequality in the city, their family’s suffering from salary cuts, the embarrassment of resorting to food stamps despite working 40 hours a week. Kay Merryweather, 34, an artist on the Lower East Side, volunteers at Trinity Church, giving out food. She said that during the financial crisis, when banks were receiving bailouts and financial executives were receiving multimillion-dollar bonuses, the church often ran out before the long lines of working poor were fed. “The bankers were getting all of these millions,” Ms. Merryweather said. “And we didn’t have enough food.”

But not far away, Benny Zable, 66, a longtime activist, was protesting while wearing a gas mask and a suit that read “Work Consume Be Silent Die.” He said his outrage came from the heedlessness of economic growth. “It’s the greed factor,” Mr. Zable said. In Chicago, where 175 protesters were arrested over the weekend for curfew violations, a crowd outside the Federal Reserve Bank marched to the beat of improvised drums. “Education is a part of it; housing is a part of it; jobs are a part of it,” said Maryem Alyhabib, 34, who left her three children with her mother to protest for an hour and a half on Monday for the first time.

Without the symbolic power of a Wall Street, many local activists have improvised by occupying parks, street corners, always someplace with a link to the power structure they denounce. The many arrests that have taken place across the country have linked protesters in spirit.

“Just because you’re not on Wall Street doesn’t mean you’re not affected by what they do and the decisions that they make,” said Daniel Saltzman, 23, who was cited on a charge of criminal trespass over the weekend at Occupy Tucson. “Unfortunately, we don’t have the money to fly to New York, but we still can make a difference in our community.”

Some protesters in Phoenix shifted on Monday from a park near downtown to the State Capitol, where Michele Bachmann of Minnesota, a Republican presidential candidate, was meeting with local politicians who favor building more border fences.

Russell Pearce, the president of the Arizona State Senate, the Republican who has led the state’s immigration crackdown, dismissed the protesters. “Even the anarchists have a right to march down the street and hate America,” he said in an interview.

In Boston, a hub of colleges and universities, a higher education theme emerged among protesters. “What did I spend the last four years doing?” asked Becky De Freitas, a recent graduate of Gordon College in Wenham, Mass. “Fluent in Mandarin and French and no one wants to go for that? And it’s like, now what?”

In Atlanta, protesters marched to the intersection of Peachtree and Mitchell Streets, where many businesses have closed. “That block of businesses is a microcosm of everywhere,” said Sara Amis, 42, a writing instructor at the University of Georgia. “These problems are everywhere. What happened at Peachtree and Mitchell is happening all over the state, all over the country, and all over the world.”

In London, where thousands of protesters occupy a space under the soaring dome of St. Paul’s Cathedral in the city’s financial district, a bearded man in a Greenpeace jacket, George Barda, 35, engaged in a heated debate with a passer-by, Naveed Somani, 24, who works in development for the Commonwealth Secretariat, an intergovernmental organization.

Mr. Somani had stopped to express skepticism that such a nebulous movement could succeed. Mr. Barda said he hoped that all the Occupy protests around the world would unite, in time, to lay out concrete aims. “What we need to do is come up with demands that are common sense, inevitable,” Mr. Barda said.

Mr. Somani countered, “It’s nice to have a romantic fantasy.” The ad hoc nature of the protests led to some discord. Jean Marie Simpson, an actor and peace activist, objected when her fellow demonstrators at Occupy Tucson surrounded a man who had assailed the movement, shouting at him and thrusting signs in his face. “I left disappointed and disillusioned,” she said of her fellow occupiers.

But the inclusive nature of the movement, many said, gave it its strength. In Occupy Los Angeles, mothers from Malibu gathered outside City Hall with homeless people who took advantage of the free food offered in a tent city that is growing by the day. “Everyone is here for very separate reasons, and that’s one of the reasons that this movement works,” said Sam Agger, an Occupy Tucson participant.

Reporting was contributed by Ford Burkhart, Michelle A. Monroe and Kellie Mejdrich from Tucson; Jess Bidgood from Boston; Steven Yaccino from Chicago; Ian Lovett from Los Angeles; Isolde Raftery from Seattle; Dan Frosch from Denver; Robbie Brown from Atlanta; Ravi Somaiya from London; and Cara Buckley from New York.

Source: http://www.nytimes.com/2011/10/18/us/the-occupy-movements-common-thread-is-anger.html?_r=1&ref=us

Is an International Financial Conspiracy Driving World Events?

Was Alan Greenspan really as dumb as he looks in creating the late housing bubble that threatens to bring the entire Western debt-based economy crashing down? Was something as easy to foresee as this really the trigger for a meltdown that could destroy the world’s financial system? Or was it done, perhaps, "accidentally on purpose"? And if so, why? Let’s turn to the U.S. personage that conspiracy theorists most often mention as being at the epicenter of whatever elite plan is reputed to exist. This would be David Rockefeller, the 92-year-old multibillionaire godfather of the world’s financial elite. The lengthy Wikipedia article on Rockefeller provides the following version of a celebrated statement he allegedly made in an opening speech at the Bilderberg conference in Baden-Baden, Germany, in June 1991:

"We are grateful to the Washington Post, the New York Times, Time magazine, and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during these years. But the world is now more sophisticated and prepared to march towards a world government which will never again know war, but only peace and prosperity for the whole of humanity. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in the past centuries."

This speech was made 17 years ago. It came at the beginning in the U.S. of the Bill Clinton administration. Rockefeller speaks of an "us." This "us," he says, has been having meetings for almost 40 years. If you add the 17 years since he gave the speech it was 57 years ago—two full generations. Not only has "us" developed a "plan for the world," but the attempt to "develop" the plan has evidently been successful, at least in Rockefeller’s mind. The ultimate goal of "us" is to create "the supranational sovereignty of an intellectual elite and world bankers." This will lead, he says, toward a "world government which will never again know war."

Just as an intellectual exercise, let’s assume that David Rockefeller is as important and powerful a person as he seems to think he is. Let’s give the man some credit and assume that he and "us" have in fact succeeded to a degree. This would mean that the major decisions and events since Rockefeller gave the speech in 1991 have probably also been part of the plan or that they have at least represented its features and intent.

Therefore by examining these decisions and events we can determine whether in fact Rockefeller is being truthful in his assessment that the Utopia he has in mind is on its way or has at least come closer to being realized. In no particular order, some of these decisions and events are as follows:

The implementation of the North American Free Trade Agreement by the Bill Clinton and George W. Bush administrations has led to the elimination of millions of U.S. manufacturing jobs as well as the destruction of U.S. family farming in favor of global agribusiness.

Similar free trade agreements, including those under the auspices of the World Trade Organization, have led to export of millions of additional manufacturing jobs to China and elsewhere. Average family income in the U.S. has steadily eroded while the share of the nation’s wealth held by the richest income brackets has soared. Some Wall Street hedge fund managers are making $1 billion a year while the number of homeless, including war veterans, pushes a million.

The housing bubble has led to a huge inflation of real estate prices in the U.S. Millions of homes are falling into the hands of the bankers through foreclosure. The cost of land and rentals has further decimated family agriculture as well as small business. Rising property taxes based on inflated land assessments have forced millions of lower-and middle-income people and elderly out of their homes.

The fact that bankers now control national monetary systems in their entirety, under laws where money is introduced only through lending at interest, has resulted in a massive debt pyramid that is teetering on collapse. This "monetarist" system was pioneered by Rockefeller-family funded economists at the University of Chicago. The rub is that when the pyramid comes down and everyone goes bankrupt the banks which have been creating money "out of thin air" will then be able to seize valuable assets for pennies on the dollar, as J.P. Morgan Chase is preparing to do with the businesses owned by Carlyle Capital. Meaningful regulation of the financial industry has been abandoned by government, and any politician that stands in the way, such as Eliot Spitzer, is destroyed.

The total tax burden on Americans from federal, state, and local governments now exceeds forty percent of income and is rising. Today, with a recession starting, the Democratic-controlled Congress, while supporting the minuscule "stimulus" rebate, is hypocritically raising taxes further, even for middle-income earners. Back taxes, along with student loans, can no longer be eliminated by bankruptcy protection.

Gasoline prices are soaring even as companies like Exxon-Mobil are recording record profits. Other commodity prices are going up steadily, including food prices, with some countries starting to experience near-famine conditions. 40 million people in America are officially classified as "food insecure." Corporate control of water and mineral resources has removed much of what is available from the public commons, and the deregulation of energy production has led to huge increases in the costs of electricity in many areas.

The destruction of family farming in the U.S. by NAFTA (along with family farming in Mexico and Canada) has been mirrored by policies toward other nations on the part of the International Monetary Fund and World Bank. Around the world, due to pressure from the "Washington consensus," local food self-sufficiency has been replaced by raising of crops primarily for export. Migration off the land has fed the population of huge slums around the cities of underdeveloped countries.

Since the 1980s the U.S. has been fighting wars throughout the world either directly or by proxy. The former Yugoslavia was dismembered by NATO. Under cover of 9/11 and by utilizing off-the-shelf plans, the U.S. is now engaged in the military conquest and permanent military occupation of the Middle East. A worldwide encirclement of Russia and China by U.S. and NATO forces is underway, and a new push to militarize space has begun. The Western powers are clearly preparing for at least the possibility of another world war.

The expansion of the U.S. military empire abroad is mirrored by the creation of a totalitarian system of surveillance at home, whereby the activities of private citizens are spied upon and tracked by technology and systems which have been put into place under the heading of the "War on Terror." Human microchip implants for tracking purposes are starting to be used. The military-industrial complex has become the nation’s largest and most successful industry with tens of thousands of planners engaged in devising new and better ways, both overt and covert, to destroy both foreign and domestic "enemies."

Meanwhile, the U.S. has the largest prison population of any country on earth. Plus everyday life for millions of people is a crushing burden of government, insurance, and financial fees, charges, and paperwork. And the simplest business transactions are burdened by rake-offs for legions of accountants, lawyers, bureaucrats, brokers, speculators, and middlemen.

Finally, the deteriorating conditions of everyday life have given rise to an extraordinary level of stress-related disease, as well as epidemic alcohol and drug addiction. Governments themselves around the world engage in drug trafficking. Instead of working to lower stress levels, public policy is skewed in favor of an enormous prescription drug industry that grows rich off the declining level of health through treatment of symptoms rather than causes. Many of these heavily-advertised medications themselves have devastating side-effects.

This list should at least give us enough to go on in order to ask a hard question. Assuming again that all these things are parts of the elitist plan which Mr. Rockefeller boasts to have been developing, isn’t it a little strange that the means which have been selected to achieve "peace and prosperity for the whole of humanity" involve so much violence, deception, oppression, exploitation, graft, and theft?

In fact it looks to me as though "our plan for the world" is one that is based on genocide, world war, police control of populations, and seizure of the world’s resources by the financial elite and their puppet politicians and military forces. In particular, could there be a better way to accomplish all this than what appears to be a concentrated plan to remove from people everywhere in the world the ability to raise their own food? After all, genocide by starvation may be slow, but it is very effective. Especially when it can be blamed on "market forces."

And can it be that the "us" which is doing all these things, including the great David Rockefeller himself, are just criminals who have somehow taken over the seats of power? If so, they are criminals who have done everything they can to watch their backs and cover their tracks, including a chokehold over the educational system and the monopolistic mainstream media. One thing is certain: The voters of America have never knowingly agreed to any of this.

Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared on numerous websites. His book on monetary reform entitled We Hold These Truths: The Promise of Monetary Reform is in preparation. He is also the author of Challenger Revealed: An Insider’s Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age, called by one reviewer, "the most important spaceflight book of the last twenty years." His website is at www.richardccook.com

Source: http://www.globalresearch.ca/index.php?context=va&aid=8450

Outrage Over Veteran Injured at ‘Occupy’ Protest

For supporters of the Occupy Wall Street movement, whose diffuse anger has been a defining and sometimes distracting characteristic, the wounding of an Iraq war veteran here has provided a powerful central rallying point. The veteran, Scott Olsen, 24, was critically injured on Tuesday night when he was hit in the head with a projectile thrown or shot by law enforcement officers combating protesters trying to re-enter a downtown plaza that had been cleared of an encampment earlier in the day. Mr. Olsen, who served two tours of duty in Iraq as a Marine, suffered a fractured skull.

And while Mr. Olsen’s condition has since improved, his injury — and the oddity of a Marine who faced enemy fire only to be attacked at home — has prompted an outpouring of sympathy, as well as calls for solidarity among the scores of Occupy encampments around the nation. On Thursday night, camps in several major cities — including New York, Chicago and Philadelphia — were expected to participate in a vigil for Mr. Olsen, according to Iraq Veterans Against the War, of which he is a member.

“I think people would have been outraged even had this been a civilian,” said Jose Vasquez, the group’s executive director, “but the fact that he survived two tours of duty and then to have this happen to him, people are really upset about that.”

Friends of Mr. Olsen — who worked in computer systems at a Bay Area technology company — said that he had eagerly joined the Occupy movement, heading to the San Francisco camp after work and sleeping on the streets in solidarity with the campers there. He was in Oakland on Tuesday to take part in the demonstration there. “He was loving it,” said Jason Matherne, a fellow Iraq war veteran who met Mr. Olsen several months ago. “I think he believed that corporate greed needs to end, and I think he felt the war economy was part of that.”

Video of Mr. Olsen, lying bleeding and stunned, has been shown on the Internet and on television news reports, though what exactly hit him remained unclear. But Joshua Shepherd, 27, another veteran, said there had been a “barrage of police tear gas canisters flying everywhere.” “I did not know Scott had been hit,” Mr. Shepherd said. “People dragged him away.”

Since the skirmish, which resulted in more than 100 arrests, several liberal groups — including Amnesty International — have condemned the use of tear gas as well as the actions of Mayor Jean Quan of Oakland, who said the measures were justified because protesters threw rocks. The Oakland police have since promised an investigation, and Ms. Quan repeated on Wednesday that Oakland is a “very progressive city” that supports the goals of Occupy Wall Street. But petitions were already circulating calling for the resignation of Oakland’s interim police chief, Howard Jordan.

Some 3,000 people gathered peaceably on Wednesday night, debating the merits of calling a general strike in Oakland next week, echoing calls from some Occupy supporters for a national strike. That event was followed by a march through downtown. Unlike Tuesday night, the Oakland police kept their distance.

Outside City Hall on Thursday, meanwhile, several tents had once again sprung up on the contested campground, after protesters removed a police barricade the night before. Nearby, a makeshift tribute to Mr. Olsen had been built around a flagpole, with the words “Pray 4 Scott” chalked onto the pavement. A handful of protesters also stood guard, including Joann Herr, 60, of Oakland, who said Mr. Olsen’s injury had enraged her. “I was mad,” Ms. Herr said. “How could you not be?”

Source: http://www.nytimes.com/2011/10/28/us/veterans-injury-at-occupy-protest-prompts-outrage.html?scp=1&sq=olsen&st=cse

The Shocking Truth About the Crackdown on Occupy

US citizens of all political persuasions are still reeling from images of unparallelled police brutality in a coordinated crackdown against peaceful OWS protesters in cities across the nation this past week. An elderly woman was pepper-sprayed in the face; the scene of unresisting, supine students at UC Davis being pepper-sprayed by phalanxes of riot police went viral online; images proliferated of young women – targeted seemingly for their gender – screaming, dragged by the hair by police in riot gear; and the pictures of a young man, stunned and bleeding profusely from the head, emerged in the record of the middle-of-the-night clearing of Zuccotti Park.

But just when Americans thought we had the picture – was this crazy police and mayoral overkill, on a municipal level, in many different cities? – the picture darkened. The National Union of Journalists and the Committee to Protect Journalists issued a Freedom of Information Act request to investigate possible federal involvement with law enforcement practices that appeared to target journalists. The New York Times reported that "New York cops have arrested, punched, whacked, shoved to the ground and tossed a barrier at reporters and photographers" covering protests. Reporters were asked by NYPD to raise their hands to prove they had credentials: when many dutifully did so, they were taken, upon threat of arrest, away from the story they were covering, and penned far from the site in which the news was unfolding. Other reporters wearing press passes were arrested and roughed up by cops, after being – falsely – informed by police that "It is illegal to take pictures on the sidewalk."

In New York, a state supreme court justice and a New York City council member were beaten up; in Berkeley, California, one of our greatest national poets, Robert Hass, was beaten with batons. The picture darkened still further when Wonkette and Washingtonsblog.com reported that the Mayor of Oakland acknowledged that the Department of Homeland Security had participated in an 18-city mayor conference call advising mayors on "how to suppress" Occupy protests. To Europeans, the enormity of this breach may not be obvious at first. Our system of government prohibits the creation of a federalised police force, and forbids federal or militarised involvement in municipal peacekeeping.

I noticed that rightwing pundits and politicians on the TV shows on which I was appearing were all on-message against OWS. Journalist Chris Hayes reported on a leaked memo that revealed lobbyists vying for an $850,000 contract to smear Occupy. Message coordination of this kind is impossible without a full-court press at the top. This was clearly not simply a case of a freaked-out mayors', city-by-city municipal overreaction against mess in the parks and cranky campers. As the puzzle pieces fit together, they began to show coordination against OWS at the highest national levels.

Why this massive mobilisation against these not-yet-fully-articulated, unarmed, inchoate people? After all, protesters against the war in Iraq, Tea Party rallies and others have all proceeded without this coordinated crackdown. Is it really the camping? As I write, two hundred young people, with sleeping bags, suitcases and even folding chairs, are still camping out all night and day outside of NBC on public sidewalks – under the benevolent eye of an NYPD cop – awaiting Saturday Night Live tickets, so surely the camping is not the issue. I was still deeply puzzled as to why OWS, this hapless, hopeful band, would call out a violent federal response.

That is, until I found out what it was that OWS actually wanted. The mainstream media was declaring continually "OWS has no message". Frustrated, I simply asked them. I began soliciting online "What is it you want?" answers from Occupy. In the first 15 minutes, I received 100 answers. These were truly eye-opening.

The No 1 agenda item: get the money out of politics. Most often cited was legislation to blunt the effect of the Citizens United ruling, which lets boundless sums enter the campaign process. No 2: reform the banking system to prevent fraud and manipulation, with the most frequent item being to restore the Glass-Steagall Act – the Depression-era law, done away with by President Clinton, that separates investment banks from commercial banks. This law would correct the conditions for the recent crisis, as investment banks could not take risks for profit that create kale derivatives out of thin air, and wipe out the commercial and savings banks.

No 3 was the most clarifying: draft laws against the little-known loophole that currently allows members of Congress to pass legislation affecting Delaware-based corporations in which they themselves are investors. When I saw this list – and especially the last agenda item – the scales fell from my eyes. Of course, these unarmed people would be having the shit kicked out of them.

For the terrible insight to take away from news that the Department of Homeland Security coordinated a violent crackdown is that the DHS does not freelance. The DHS cannot say, on its own initiative, "we are going after these scruffy hippies". Rather, DHS is answerable up a chain of command: first, to New York Representative Peter King, head of the House homeland security subcommittee, who naturally is influenced by his fellow congressmen and women's wishes and interests. And the DHS answers directly, above King, to the president (who was conveniently in Australia at the time).

In other words, for the DHS to be on a call with mayors, the logic of its chain of command and accountability implies that congressional overseers, with the blessing of the White House, told the DHS to authorise mayors to order their police forces – pumped up with millions of dollars of hardware and training from the DHS – to make war on peaceful citizens.

But wait: why on earth would Congress advise violent militarised reactions against its own peaceful constituents? The answer is straightforward: in recent years, members of Congress have started entering the system as members of the middle class (or upper middle class) – but they are leaving DC privy to vast personal wealth, as we see from the "scandal" of presidential contender Newt Gingrich's having been paid $1.8m for a few hours' "consulting" to special interests. The inflated fees to lawmakers who turn lobbyists are common knowledge, but the notion that congressmen and women are legislating their own companies' profitsis less widely known – and if the books were to be opened, they would surely reveal corruption on a Wall Street spectrum. Indeed, we do already know that congresspeople are massively profiting from trading on non-public information they have on companies about which they are legislating – a form of insider trading that sent Martha Stewart to jail.

Since Occupy is heavily surveilled and infiltrated, it is likely that the DHS and police informers are aware, before Occupy itself is, what its emerging agenda is going to look like. If legislating away lobbyists' privileges to earn boundless fees once they are close to the legislative process, reforming the banks so they can't suck money out of fake derivatives products, and, most critically, opening the books on a system that allowed members of Congress to profit personally – and immensely – from their own legislation, are two beats away from the grasp of an electorally organised Occupy movement … well, you will call out the troops on stopping that advance.

So, when you connect the dots, properly understood, what happened this week is the first battle in a civil war; a civil war in which, for now, only one side is choosing violence. It is a battle in which members of Congress, with the collusion of the American president, sent violent, organised suppression against the people they are supposed to represent. Occupy has touched the third rail: personal congressional profits streams. Even though they are, as yet, unaware of what the implications of their movement are, those threatened by the stirrings of their dreams of reform are not.

Sadly, Americans this week have come one step closer to being true brothers and sisters of the protesters in Tahrir Square. Like them, our own national leaders, who likely see their own personal wealth under threat from transparency and reform, are now making war upon us.

Source: http://www.guardian.co.uk/commentisfree/cifamerica/2011/nov/25/shocking-truth-about-crackdown-occupy/print

DHS's Federal Protective Services seen at Portland 'Occupy' arrests

The Department of Homeland Security (DHS) is a huge organization, with lots of smaller services lumped together in one big mis-matched umbrella. So when someone mentions "Homeland Security," they can be talking about anything from nuclear security to immigration agents. One lesser-known part of DHS is the Federal Protective Service (FPS), which is tasked with providing "integrated security and law enforcement services to federally owned and leased buildings, facilities, properties and other assets."

That mission might be one of the reasons that officers from the FPS have been spotted at several of the "Occupy" crackdowns, including the October 31 arrests in Portland. An OccupyPortland photographer was arrested by what appear to be officers from the Federal Protective Service, based on these photos, which include officers and vehicles bearing FPS logos. The photographer was arrested at Portland's Terry Shrunk Plaza, which is adjacient to both City Hall and the Edith Green-Wendall Wyatt Federal Building.

The plaza's location accounts for why FPS officers may have participated in the arrests, since the jurisdiction of the plaza is shared by both local and federal authorities. Both the Portland Police Department and the Federal Protective Service have not responded to a request for more information on this incident. At the time of the arrests, Chris Ortman, an agency spokesman in Washington, D.C. gave this statement to The Oregonian:

"FPS is working with the Portland Police Bureau to enforce the prohibition of overnight encampments at Schrunk Plaza, while protecting the safety and security of all involved."

The Federal Protective Service and their 15,000-plus contract security guards have been the target of Congressional scrutiny following a 2010 test in which officials from the Government Accounting Office (GAO) brought bomb-making materials into federal facilities without being detected by guards.

Source: http://www.examiner.com/top-news-in-minneapolis/dhs-s-federal-protective-services-seen-at-portland-occupy-arrests#ixzz1dwUNPmiC

"How Could This Happen in America?" Why Police Are Treating Americans Like Military Threats

Why is the armed might of the state, (necessary in waging war against foreign enemies) being applied to domestic policing of local communities and peaceful protests?

"How could this happen in America?"

"Is this still my country?"

In the past few days, those and similarly poignant Twitter posts have appealed to fundamental American values in objecting to the notorious U.C. Davis event, where police pepper-sprayed seated protesters, and to cities generally cracking down on the Occupy movement. The crackdowns have brought a military level of combativeness to what many Americans -- even those not in sympathy with the protesters -- would normally see as a police, not a military matter.

Police, not military. The distinction may seem academic, even absurd, when police are bringing rifles, helmets, armor, and helicopters to evict unarmed protesters. But it's an old and critical distinction in American law and ideology and in republican thought as a whole. The 17th-century English liberty writers, on whose ideas much of America's founding ethos was based, believed that turning the armed might of the state, (necessary in waging war against foreign enemies), to domestic policing of local communities tends to concentrate power in top-down executive action and vitiate treasured things like judiciary process, individual liberty, representative government, and free speech.

Constabulary and judiciary matters, high Whigs came to think, should never be handled by what they condemned as "standing armies." It's true, on the other hand, that keeping public order, not just aiding in prosecutions, is a duty of local police. When concerted crowd violence occurs against people and property, policing may be expected to be pretty violent too, and distinctions between combat and policing sometimes naturally blur.

But where protest is peaceful -- maybe loud, maybe deliberately annoying, combative in its rhetoric, even possibly illegal, yet not actually violent or dangerous -- treating it the way a state normally treats an outside military threat will give many Americans, across a broad political spectrum, a gut problem.

We've seen military hardware and tactics used in the Occupy crackdowns. We've seen them in post-9/11 federal funding in the states and municipalities for homeland security. We've seen them in the aptly named "war on drugs." And anyone who has watched shows like "Cops" has seen -- and may by now take for granted -- techniques and technologies of military-style police raids on homes, raids that in more upscale neighborhoods might amount to nothing more than knocking on a door and serving a warrant. A Twitter post from Joy Reid, of the blog the Reid Report, put it this way last week: "Disconnect: liberals see a suddenly 'militarized,' possibly federalized police force. Black people see 'the usual.'"

The police behavior at U.C. Davis -- manifestly not "rogue-cop," a trained, planned exercise -- reveals the cool military thinking behind the operation. Pepper-spraying looked surgical, preemptive, even robotic. The strategic directive must have been to conserve police effort and maintain police maneuverability at virtually any cost. Such efficiencies and capabilities would be important in a riot; they're not important when hoping to evict unarmed, seated protesters. It's not as if officers have been resorting to battle gear under otherwise unmanageable pressure or initiating violence only as a last resort. They've been arriving in battle gear. They've been construing noncompliance as potential attack. They've moved preemptively to disable attack where none existed, not just trying to evict but seemingly hoping to inspire fear, to punish and defeat.

The mood these operations convey is that failure to achieve police objectives must result in something awful for the body politic. In reality, leaving citizens sitting around a park or campus a few more days, even possibly illegally, might be frustrating for police and others; it's hardly the end of the world. Sometimes taking a few deep breaths is the only thing to do. But military training, tactics, and weaponry seem to inspire the idea in civic strategists that failure to achieve an objective is tantamount to fatal defeat by a hostile enemy. Intolerable. Not an option.

That mentality tends to place American governments at enmity with their dissident citizens -- and vice versa. The fact that much militarizing of police, over the past twenty years, has federal sources raises endlessly complicated questions that reflect strangely on the histories of American federalism and government suppression. A horrific theme of the Civil Rights Movement was police violence, and many Americans have branded on their brains the watercannons, clubs, dogs, fists, and boots used against nonviolent protesters in the 1950s; police involved were generally state and local. Then in 1957 federal troops -- the 101st Airborne Paratroopers -- entered Little Rock, Arkansas, with fixed bayonets, to enforce federal law by ensuring the entry of African American students to state school there; states-rights advocates talked about federal overreaching and police state, the end of liberty. Then again, in the 1960s and '70s the federal government, via its law-enforcement arm the FBI, carried out a covert war -- involving assassination, it's fairly uncontroversial to say -- on the militant activist group the Black Panthers, who it's fairly uncontroversial to say were not always peaceful protesters.

Responding now to police efforts against demonstrators, liberals and leftists have begun raising anew the issue of inappropriate police militarization and violence. Yet it's the libertarian right that has done much of the reporting and research on the issue in recent decades (Democracy Now! is among left-liberal institutions that have also covered the issue for many years). The current state of heightened awareness means there's a possibly interesting opportunity for people of varying backgrounds and politics to begin a new conversation. That conversation would involve some very strange bedfellows -- and might spark new enmities. The Salon columnist Joan Walsh's suggestion last weekend on Twitter that if police violence has federal sources, then President Obama bears some responsibility set off a torrent of invective violent even by Twitter standards.

James Madison may offer some long-range perspective. During the 1787 Constitutional Convention, arguing for forming a nation instead of retaining the confederation of states, he said that force applied to citizens collectively rather than individually ceases to be law enforcement and becomes war; groups so treated will seize the opportunity to dissolve all compacts by which they might otherwise have been bound. Madison's argued against militarism in favor not of anarchy but of a higher kind of law and order.

And in 1794, Secretary of State Edmund Randolph, advising President Washington (to no avail) to eschew military adventure against the so-called Whiskey Rebels, and to use prosecutions instead, argued passionately that the real strength of government always lies not in coercion but in the affection of the people. Randolph was facing an actual insurrection, with threat of secession, not a peaceful protest; there were federal crimes involved. Still he advised against a military operation. The loathing of military suppression as a substitute for due process of law, going back to our first administration, runs deep in the American psyche.

But it's worth remembering that equally strong feelings have always run the other way. Long before events known as the Whiskey Rebellion had risen to any kind of crisis, Alexander Hamilton, Secretary of the Treasury, was urging Washington to bring military force against citizens somewhere in the country; otherwise, Hamilton believed, authority would always be in question. When Washington did so, he ignored habeas corpus and nearly every individual right set out in the new Bill of Rights, federalizing militias to bring overwhelming force to shock and awe innocent citizens of an entire region of the country. In his book Crisis and Command, John Yoo, author of the notorious "torture memo," has defended the George W. Bush administration's tactics in dealing with suspected terrorists by citing precedent -- not wrongly -- in Washington's behavior in the 1790s.

"Is this still my country?" That's been a question from day one, asked by Americans of widely diverging views in response to government crackdowns on protest. Objecting to military violence against protesting citizens may be inherently American. The urge to crack down can look inherently American too.

William Hogeland is the author of the narrative histories 'Declaration' and 'The Whiskey Rebellion' and a collection of essays, 'Inventing American History.'

Source: http://www.alternet.org/occupywallst/153170/%22how_could_this_happen_in_america%22_why_police_are_treating_americans_like_military_threats/?page=entire

Senators Demand the Military Lock Up American Citizens in a “Battlefield” They Define as Being Right Outside Your Window

While nearly all Americans head to family and friends to celebrate Thanksgiving, the Senate is gearing up for a vote on Monday or Tuesday that goes to the very heart of who we are as Americans. The Senate will be voting on a bill that will direct American military resources not at an enemy shooting at our military in a war zone, but at American citizens and other civilians far from any battlefield — even people in the United States itself. Senators need to hear from you, on whether you think your front yard is part of a “battlefield” and if any president can send the military anywhere in the world to imprison civilians without charge or trial.

The Senate is going to vote on whether Congress will give this president—and every future president — the power to order the military to pick up and imprison without charge or trial civilians anywhere in the world. Even Rep. Ron Paul (R-Texas) raised his concerns about the NDAA detention provisions during last night’s Republican debate. The power is so broad that even U.S. citizens could be swept up by the military and the military could be used far from any battlefield, even within the United States itself.

The worldwide indefinite detention without charge or trial provision is in S. 1867, the National Defense Authorization Act bill, which will be on the Senate floor on Monday. The bill was drafted in secret by Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.) and passed in a closed-door committee meeting, without even a single hearing.

I know it sounds incredible. New powers to use the military worldwide, even within the United States? Hasn’t anyone told the Senate that Osama bin Laden is dead, that the president is pulling all of the combat troops out of Iraq and trying to figure out how to get combat troops out of Afghanistan too? And American citizens and people picked up on American or Canadian or British streets being sent to military prisons indefinitely without even being charged with a crime. Really? Does anyone think this is a good idea? And why now?

The answer on why now is nothing more than election season politics. The White House, the Secretary of Defense, and the Attorney General have all said that the indefinite detention provisions in the National Defense Authorization Act are harmful and counterproductive. The White House has even threatened a veto. But Senate politics has propelled this bad legislation to the Senate floor.

But there is a way to stop this dangerous legislation. Sen. Mark Udall (D-Colo.) is offering the Udall Amendment that will delete the harmful provisions and replace them with a requirement for an orderly Congressional review of detention power. The Udall Amendment will make sure that the bill matches up with American values.

In support of this harmful bill, Sen. Lindsey Graham (R-S.C.) explained that the bill will “basically say in law for the first time that the homeland is part of the battlefield” and people can be imprisoned without charge or trial “American citizen or not.” Another supporter, Sen. Kelly Ayotte (R-N.H.) also declared that the bill is needed because “America is part of the battlefield.”

The solution is the Udall Amendment; a way for the Senate to say no to indefinite detention without charge or trial anywhere in the world where any president decides to use the military. Instead of simply going along with a bill that was drafted in secret and is being jammed through the Senate, the Udall Amendment deletes the provisions and sets up an orderly review of detention power. It tries to take the politics out and put American values back in.

In response to proponents of the indefinite detention legislation who contend that the bill “applies to American citizens and designates the world as the battlefield,” and that the “heart of the issue is whether or not the United States is part of the battlefield,” Sen. Udall disagrees, and says that we can win this fight without worldwide war and worldwide indefinite detention.

The senators pushing the indefinite detention proposal have made their goals very clear that they want an okay for a worldwide military battlefield, that even extends to your hometown. That is an extreme position that will forever change our country. Now is the time to stop this bad idea. Please urge your senators to vote YES on the Udall Amendment to the National Defense Authorization Act.

UPDATE: Don’t be confused by anyone claiming that the indefinite detention legislation does not apply to American citizens. It does. There is an exemption for American citizens from the mandatory detention requirement (section 1032 of the bill), but no exemption for American citizens from the authorization to use the military to indefinitely detain people without charge or trial (section 1013 of the bill). So, the result is that, under the bill, the military has the power to indefinitely imprison American citizens, but it does not have to use its power unless ordered to do so.

But you don’t have to believe us. Instead, read what one of the bill’s sponsors, Sen. Lindsey Graham said about it on the Senate floor: “1031, the statement of authority to detain, does apply to American citizens and it designates the world as the battlefield, including the homeland.” There you have it — indefinite military detention of American citizens without charge or trial. And the Senate is likely to vote on it Monday or Tuesday.

Source: http://www.aclu.org/blog/national-security/senators-demand-military-lock-american-citizens-battlefield-they-define-being

When the Police Go Military

RIOT police officers tear-gassing protesters at the Occupy movement in Oakland. The surprising nighttime invasion of Zuccotti Park in Lower Manhattan, carried out with D-Day-like secrecy by officers deploying klieg lights and a military-style sound machine. And campus police officers in helmets and face shields dousing demonstrators at the University of California, Davis with pepper spray. Is this the militarization of the American police?

Police forces undeniably share a soldier’s ethos, no matter the size of the city, town or jurisdiction: officers carry deadly weapons and wear uniforms with patches denoting rank. They salute one another and pay homage to a “Yes, sir,” “No, sir,” hierarchical culture.

But beyond such symbolic and formal similarities, American law and tradition have tried to draw a clear line between police and military forces. To cast the roles of the two too closely, those in and out of law enforcement say, is to mistake the mission of each. Soldiers, after all, go to war to destroy, and kill the enemy. The police, who are supposed to maintain the peace, “are the citizens, and the citizens are the police,” according to Chief Walter A. McNeil of Quincy, Fla., the president of the International Association of Chiefs of Police, citing the words of Sir Robert Peel, the father of modern-day policing.

Yet lately images from Occupy protests streamed on the Internet — often in real time — show just how readily police officers can adopt military-style tactics and equipment, and come off more like soldiers as they face down citizens. Some say this adds up to the emergence of a new, more militaristic breed of civilian police officer. Others disagree.

What seems clear is that the terrorist attacks of Sept. 11, and the federal Homeland Security dollars that flowed to police forces in response to them, have further encouraged police forces to embrace paramilitary tactics like those that first emerged in the decades-long “war on drugs.” Both wars — first on drugs, then terror — have lent police forces across the country justification to acquire the latest technology, equipment and tactical training for newly created specialized units.

“There is behind this, also, I think, a kind of status competition or imitation, that there is positive status in having a sort of ‘big department muscle,’ in smaller departments,” said Franklin E. Zimring, a professor of law at the University of California, Berkeley. “And then the problem is, if you have those kinds of specialized units, that you hunt for appropriate settings to use them and, in some of the smaller police departments, notions of the appropriate settings to use them are questionable.”

Radley Balko, a journalist who has studied the issue, told a House subcommittee on crime in 2007 that one criminologist found a 1,500 percent increase in the use of SWAT (special weapons and tactics) teams in the United States in roughly the last two decades.

The Posse Comitatus Act of 1878 generally bars the military from law enforcement activities within the United States. But today, some local and city police forces have rendered the law rather moot. They have tanks — yes, tanks, often from military surplus, for use in hostage situations or drug raids — not to mention the sort of equipment and training one would need to deter a Mumbai-style guerrilla assault.

Such tactics are used in New York City, where Police Commissioner Raymond W. Kelly (whose department has had armored vehicles for decades) has invoked both the 19th-century military strategist Carl von Clausewitz and the television series “24” in talking about the myriad threats his city faces — both conventional and terrorist. After the would-be Times Square bomber Faisal Shahzad was arrested aboard a plane at Kennedy Airport in 2010, Mr. Kelly calculated the plot-to-capture time: Slightly more than 53 hours.

“Jack Bauer may have caught him in 24,” said Mr. Kelly, who served as a Marine commander in Vietnam. “But in the real world, 53’s not bad.”

IN truth, a vast majority of Mr. Kelly’s 35,000-member force are not specialized troops, but rank-and-file beat cops. But that did not stop Mayor Michael R. Bloomberg from sounding like Patton at the Massachusetts Institute of Technology last week, when he boasted, “I have my own army in the N.Y.P.D.,” suggesting his reasons for preferring City Hall to the White House. More disturbing than riot gear or heavy-duty weapons slung across the backs of American police officers is a “militaristic mind-set” creeping into officers’ approach to their jobs, said Timothy Lynch, director of the criminal justice project at the Cato Institute, a libertarian think tank. “It is in the way they search and raid homes and the way they deal with the public,” he said.

The more the police fail to defuse confrontations but instead help create them — be it with their equipment, tactics or demeanor — the more ties with community members are burned, he said. The effect is a loss of civility, and an erosion of constitutional rights, rather than a building of good will. “What is most worrisome to us is that the line that has traditionally separated the military from civilian policing is fading away,” Mr. Lynch said. “We see it as one of the most disturbing trends in the criminal justice area — the militarization of police tactics.”

Police officials insist they are not becoming more militarized — in their thinking or actions — but merely improving themselves professionally against evolving threats. This is the way to protect citizens and send officers home alive at the end of shifts in an increasingly dangerous world, they say. Of course, in the event of a terrorist attack, they have to fill the breach until federal or National Guard troops can rush in.

“If we had to take on a terrorist group, we could do that,” said William Lansdowne, the police chief in San Diego and a member of the board of the Major Cities Chiefs Association. Though his force used federal grants to buy one of those fancy armored vehicles — complete with automatic-gun portals — he said the apparatus was more useful for traditional crime-busting than counter-terrorism. “We are seeing suspects better armed than ever before,” Chief Lansdowne said.

Now the Occupy movement and highly publicized official responses to it are forcing the public to confront what its police forces have become. But analysts say that even here the picture of policing is mixed. While scenes from Oakland were ugly, the police in Los Angeles and Philadelphia last week evacuated Occupy encampments relatively peacefully; Los Angeles officers used a cherry picker to pluck protesters from trees.

Police officers are not at war, said Chuck Wexler, the executive director of the Police Executive Research Forum, and cannot imagine themselves as occupying armies. Rather, they must approach any continuing Occupy protests, now or in the spring, with a respect for the First Amendment and a realization that protesters are not enemies but people the police need to engage with up the road.

“You can have all the sophisticated equipment in the world, but it does not replace common sense and discretion and finding ways to defuse situations,” Mr. Wexler said. “You can’t be talking about community policing one day and the next day have an action that is so uncharacteristic to the values of your department.”

Source: http://www.nytimes.com/2011/12/04/sunday-review/have-american-police-become-militarized.html

NYPD Confirms CIA Officer Works at Department

New York's police commissioner confirmed Thursday that a CIA officer is working out of police headquarters there, after an Associated Press investigation revealed an unusual partnership with the CIA that has blurred the line between foreign and domestic spying. But he and the CIA said the spy agency's role at the department is an advisory one.

Speaking to reporters in New York, commissioner Raymond Kelly acknowledged that the CIA trains NYPD officers on "trade craft issues," meaning espionage techniques, and advises police about events happening overseas. Kelly also said he was unaware of any other U.S. police department with a similar relationship with the CIA. "They are involved in providing us with information, usually coming from perhaps overseas and providing it to us for, you know, just for our purposes," Kelly said.

CIA spokeswoman Jennifer Youngblood said the agency does not spy inside the United States and also described the relationship with the NYPD as collaborative. "Our cooperation, in coordination with the Federal Bureau of Investigation, is exactly what the American people deserve and have come to expect following 9/11," she said.

A months-long investigation by the AP, published Wednesday, revealed that the NYPD has dispatched teams of undercover officers, known as "rakers," into minority neighborhoods as part of a human mapping program, according to officials directly involved in the program. They've monitored daily life in bookstores, bars, cafes and nightclubs. Police have also used informants, known as "mosque crawlers," to monitor sermons, even when there's no evidence of wrongdoing. NYPD officials have scrutinized imams and gathered intelligence on cab drivers and food cart vendors, jobs often done by Muslims.

Many of the operations were built with help from the CIA, which is prohibited from spying on Americans but was instrumental in transforming the NYPD's intelligence unit after the Sept. 11, 2001, terror attacks. The NYPD denied that it trolls ethnic neighborhoods and said it only follows leads. The mayor on Thursday defended the police department's efforts.

"In the end the NYPD's first job is prevention, and I think they've done a very good job of that," New York Mayor Michael Bloomberg said when asked about the police practices. "The law is pretty clear about what's the requirement, and I think they've followed the law."

Also Thursday, New York City Councilman Brad Lander said the city council should conduct an oversight hearing on the NYPD's programs, but Lander is not in a leadership position to enforce that such hearings take place. "We must be sure that the NYPD's intelligence gathering does not violate civil liberties, target and profile our city's diverse ethnic and religious communities," Lander said.

City Councilman Peter Vallone, chairman of the panel that oversees the police department, said the council already had scheduled two NYPD oversight hearings during which these issues could be raised. The disclosures about the NYPD's activities provoked exasperation in the city's Muslim neighborhoods, where government officials have sought to build relationships in Muslim communities and pledged to ensure that Muslims aren't targeted for discrimination.

Source: http://abcnews.go.com/Politics/wireStory?id=14379253

AP Exclusive: CIA following Twitter, Facebook

In an anonymous industrial park in Virginia, in an unassuming brick building, the CIA is following tweets — up to 5 million a day. At the agency's Open Source Center, a team known affectionately as the "vengeful librarians" also pores over Facebook, newspapers, TV news channels, local radio stations, Internet chat rooms — anything overseas that anyone can access and contribute to openly.

From Arabic to Mandarin Chinese, from an angry tweet to a thoughtful blog, the analysts gather the information, often in native tongue. They cross-reference it with the local newspaper or a clandestinely intercepted phone conversation. From there, they build a picture sought by the highest levels at the White House, giving a real-time peek, for example, at the mood of a region after the Navy SEAL raid that killed Osama bin Laden or perhaps a prediction of which Mideast nation seems ripe for revolt.

Yes, they saw the uprising in Egypt coming; they just didn't know exactly when revolution might hit, said the center's director, Doug Naquin. The center already had "predicted that social media in places like Egypt could be a game-changer and a threat to the regime," he said in a recent interview with The Associated Press at the center. CIA officials said it was the first such visit by a reporter the agency has ever granted.

The CIA facility was set up in response to a recommendation by the 9/11 Commission, with its first priority to focus on counterterrorism and counterproliferation. But its several hundred analysts — the actual number is classified — track a broad range, from Chinese Internet access to the mood on the street in Pakistan. While most are based in Virginia, the analysts also are scattered throughout U.S. embassies worldwide to get a step closer to the pulse of their subjects.

The most successful analysts, Naquin said, are something like the heroine of the crime novel "The Girl With the Dragon Tattoo," a quirky, irreverent computer hacker who "knows how to find stuff other people don't know exists." Those with a masters' degree in library science and multiple languages, especially those who grew up speaking another language, "make a powerful open source officer," Naquin said.

The center had started focusing on social media after watching the Twitter-sphere rock the Iranian regime during the Green Revolution of 2009, when thousands protested the results of the elections that put Iranian President Mahmoud Ahmadinejad back in power. "Farsi was the third largest presence in social media blogs at the time on the Web," Naquin said. The center's analysis ends up in President Barack Obama's daily intelligence briefing in one form or another, almost every day.

After bin Laden was killed in Pakistan in May, the CIA followed Twitter to give the White House a snapshot of world public opinion. Since tweets can't necessarily be pegged to a geographic location, the analysts broke down reaction by languages. The result: The majority of Urdu tweets, the language of Pakistan, and Chinese tweets, were negative. China is a close ally of Pakistan's. Pakistani officials protested the raid as an affront to their nation's sovereignty, a sore point that continues to complicate U.S.-Pakistani relations.

When the president gave his speech addressing Mideast issues a few weeks after the raid, the tweet response over the next 24 hours came in negative from Turkey, Egypt, Yemen, Algeria, the Persian Gulf and Israel, too, with speakers of Arabic and Turkic tweets charging that Obama favored Israel, and Hebrew tweets denouncing the speech as pro-Arab. In the next few days, major news media came to the same conclusion, as did analysis by the covert side of U.S. intelligence based on intercepts and human intelligence gathered in the region. The center is also in the process of comparing its social media results with the track record of polling organizations, trying to see which produces more accurate results, Naquin said.

"We do what we can to caveat that we may be getting an overrepresentation of the urban elite," said Naquin, acknowledging that only a small slice of the population in many areas they are monitoring has access to computers and Internet. But he points out that access to social media sites via cellphones is growing in areas like Africa, meaning a "wider portion of the population than you might expect is sounding off and holding forth than it might appear if you count the Internet hookups in a given country."

Sites like Facebook and Twitter also have become a key resource for following a fast-moving crisis such as the riots that raged across Bangkok in April and May of last year, the center's deputy director said. The Associated Press agreed not to identify him because he sometimes still works undercover in foreign countries.

As director, Naquin is identified publicly by the agency although the location of the center is kept secret to deter attacks, whether physical or electronic. The deputy director was one of a skeleton crew of 20 U.S. government employees who kept the U.S. Embassy in Bangkok running throughout the rioting as protesters surged through the streets, swarming the embassy neighborhood and trapping U.S. diplomats and Thais alike in their homes. The army moved in, and traditional media reporting slowed to a trickle as local reporters were either trapped or cowed by government forces.

"But within an hour, it was all surging out on Twitter and Facebook," the deputy director said. The CIA homed in on 12 to 15 users who tweeted situation reports and cellphone photos of demonstrations. The CIA staff cross-referenced the tweeters with the limited news reports to figure out who among them was providing reliable information. Tweeters also policed themselves, pointing out when someone else had filed an inaccurate account. "That helped us narrow down to those dozen we could count on," he said.

Ultimately, some two-thirds of the reports coming out of the embassy being sent back to all branches of government in Washington came from the CIA's open source analysis throughout the crisis.

Source: http://news.yahoo.com/ap-exclusive-cia-following-twitter-facebook-081055316.html

Militia Charged With Plotting to Murder Officers

David B. Stone Sr. and his wife, Tina, made no secret about the fact that they were part of a militia, neighbors say. The couple frequently let visitors in military fatigues erect tents in front of their trailer home at the intersection of rural dirt roads, and the sound of gunfire was routine. “In Michigan, I don’t think it’s that big of a deal to be in a militia,” said Tom McDormett, a neighbor. He added: “They would practice shooting, but that’s not a big deal. People do that all the time out here.”

But last Saturday night, Mr. McDormett watched through binoculars as the police raided the Stones’ home, tearing off plywood from the base of their two connected single-wide trailers to search under the floors. By Monday, the Stones were in green prison garb in a federal courthouse in Detroit, two of nine defendants facing sedition and weapons charges in connection with what Attorney General Eric H. Holder Jr. called an “insidious plan.”

In an indictment against the nine unsealed on Monday, the Justice Department said they were part of a group of apocalyptic Christian militants who were plotting to kill law enforcement officers in hopes of inciting an antigovernment uprising, the latest in a recent surge in right-wing militia activity. The court filing said the group, which called itself the Hutaree, planned to kill an unidentified law enforcement officer and then bomb the funeral caravan using improvised explosive devices based on designs used against American troops by insurgents in Iraq.

“This is an example of radical and extremist fringe groups which can be found throughout our society,” Andrew Arena, the F.B.I. special agent in charge in Detroit, said in a statement. “The F.B.I. takes such extremist groups seriously, especially those who would target innocent citizens and the law enforcement officers who protect the citizens of the United States.”

The Hutaree — a word Mr. Stone apparently made up to mean Christian warriors — saw the local police as “foot soldiers” for the federal government, which the group viewed as its enemy, along with other participants in what the group’s members deemed to be a “New World Order” working on behalf of the Antichrist, the indictment said.

Eight defendants were arrested over the weekend in raids in Michigan, Ohio and Indiana, the Justice Department said. The authorities arrested the Stones’ eldest son, Joshua M. Stone, 21, shortly before 9 p.m. Monday in Pittsford, Mich., about 20 miles west of his family’s home, an F.B.I. spokeswoman, Sandra Berchtold, said. A grand jury had secretly returned the indictments against the nine last Tuesday.

A law enforcement official said the plot appeared to be unconnected to recent threats against Democratic lawmakers who voted for legislation overhauling the nation’s health care system. According to the indictment, the group — apparently centered in Lenawee County, about 70 miles southwest of Detroit — has been meeting regularly since at least August 2008.

The group’s Web site suggested that it was motivated by apocalyptic religious scenarios more than any secular political fears. A rare mention of earthly politics on the site is a page devoted to discussion of efforts to unite Europe, with a suggestion that one high-ranking European official, Javier Solana, might be the Antichrist.

Chip Berlet, a senior analyst at Political Research Associates, a liberal-leaning nonprofit group that tracks far-right networks, said the Hutaree’s philosophy was drawn from a populist strand that fuses fear of a conspiracy to create a one-world government with a belief that a war is imminent between Christians and the Antichrist, as described in the Bible’s Book of Revelation.

In April 2009, the Department of Homeland Security produced a report warning of a rising threat of right-wing terrorism, citing factors like economic troubles, the election of a black president and perceived threats to United States sovereignty.

Mark Potok, who leads a program that tracks right-wing groups for the Southern Poverty Law Center, said it first took note of the Hutaree last year amid a surge in new “Patriot” movement groups, race-based hate groups, extremist anti-immigrant groups, Christian militants and other variations. “We’re seeing all kinds of radical right-wing groups grow very rapidly, especially in the militia world,” Mr. Potok said.

The indictment said the Hutaree, in anticipation of a war against its enemies, had been engaging in “military-style training,” from weapons proficiency drills to “close quarter battle drills” and the use of “ambush kill zones.” The small group had acquired guns, ammunition, medical supplies, uniforms, communications equipment and “explosives and other components for destructive devices,” it said.

After attacking the police, the members planned to retreat to several planned “rally points” and wait for the authorities to come after them. They were preparing fighting positions as well as “trip-wired and command-detonated” bombs, it said. “It is believed by the Hutaree that this engagement would then serve as a catalyst for a more widespread uprising against the government,” the indictment said. In addition, Mr. Stone had announced “a covert reconnaissance exercise” in April, during which “anyone who happened upon the exercise who did not acquiesce to Hutaree demands could be killed,” the indictment said.

The United States attorney for the Eastern District of Michigan, Barbara McQuade, said the government raided the group this past weekend because that exercise would have “had the potential of placing an unsuspecting member of the public at risk.” The Hutaree Web site features the motto “Preparing for the end time battles to keep the testimony of Jesus Christ alive” and a video showing rifle-toting men in camouflage running through woods and firing weapons.

“Jesus wanted us to be ready to defend ourselves using the sword and stay alive using equipment,” the Web site says, adding, “The Hutaree will one day see its enemy and meet him on the battlefield if so God wills it.”

By Monday, the Stones’ house stood empty, its front door ajar and two dogs still tied up in the muddy yard, which was littered with dilapidated furniture, a washing machine and tires. The Stones’ two sons were among those arrested. Joshua, the eldest, left the local school system after the fifth grade in 1999 to be home-schooled, and the younger son, David B. Stone Jr., 19, had never been enrolled, an official said.

Also charged were Joshua J. Clough, 28, of Blissfield, Mich.; Michael D. Meeks, 40, of Manchester, Mich.; Thomas W. Piatek, 46, of Whiting, Ind.; Kristopher T. Sickles, 27, of Sandusky, Ohio; and Jacob Ward, 33, of Huron, Ohio. They could face a maximum penalty of life in prison if convicted of the most serious charge, attempted use of a weapon of mass destruction.

Source: http://www.nytimes.com/2010/03/30/us/30militia.html?pagewanted

Georgia Men Charged With Plotting to Make Ricin

Federal authorities on Tuesday arrested four Georgia men accused of plotting to buy explosives and produce a deadly biological toxin to attack fellow U.S. citizens and government officials. The Justice Department said the men were members of a fringe domestic militia group and had planned to manufacture ricin for use in their attacks.

The men attended meetings starting in March where they discussed carrying out crimes, including murder, in order to undermine federal and state government, prosecutors said. The targets included local police, federal government buildings and employees of agencies such as the Internal Revenue Service. The meetings were monitored by FBI agents with the assistance of a confidential informant, according to prosecutors. Two of the men also met with an undercover agent to discuss buying explosives and weapons parts, prosecutors said.

The men are Frederick Thomas, 73; Dan Roberts, 67; Ray H. Adams, 65; and Samuel J. Crump, 68. Thomas is from Cleveland, Georgia, and the other three men are from Toccoa. At a meeting at Thomas' house in March, Thomas said he had enough weapons to arm everyone at the table and that he had compiled a "Bucket List" of government employees, politicians, corporate leaders and media members he felt needed to be "taken out" to "make the country right again," according to court documents. "There is no way for us, as militiamen, to save this country, to save Georgia, without doing something that's highly, highly illegal. Murder," Thomas said during the meeting, court records show.

During a meeting in September, Crump said he wanted to make 10 pounds of ricin and disperse it in various U.S. cities, according to prosecutors. Authorities said he described one scenario in which the toxin would be blown from a car traveling on Atlanta highways. Last month, Adams allegedly gave Crump a sample of the beans used to produce ricin, prosecutors said. Ricin can cause death from exposure to as little as a pinhead amount. Most victims die between 36 hours and 72 hours after exposure, and there is no known antidote.

The most famous case of ricin poisoning was in 1978 when dissident Bulgarian writer Georgi Markov was killed when an assassin in London jabbed him with an umbrella that injected a tiny ricin-filled pellet. "These defendants, who are alleged to be part of a fringe militia group, are charged with planning attacks against their own fellow citizens and government," Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia, said in a statement.

"While many are focused on the threat posed by international violent extremists, this case demonstrates that we must also remain vigilant in protecting our country from citizens within our own borders who threaten our safety and security," she said.

Source: http://news.yahoo.com/georgia-men-charged-plotting-ricin-012138938.html

The Cost of Empire - July, 2011

2011-07-28T09:01:00.001-07:00

The cost of empire: just the financial cost for keeping American troops cool in Iraq and Afghanistan is many times more than the defense budgets of most nations on earth today. When it comes to social welfare or education, however, the US government has no money. When it comes to waging wars around the world, it somehow is able to allocate trillions of dollars. Yet, there are over one hundred thousand homeless and jobless war veterans in the world's wealthiest and most powerful empire. As America's national and social infrastructure continues to fall apart, special interests such as the military industrial complex and the oil/gas industry in the United States are making record profits. How long can all this be sustained?

Arevordi
July, 2011

***

Why Wounded Warriors Sleep in Dumpsters

A group of desperate homeless veterans became plaintiffs yesterday in a suit, Valentini v. Shinseki, filed in U.S. district court against the federal officials responsible for their plight. There are roughly 107,000 homeless veterans in America. Many of them are chronically condemned to wander our streets because the trauma they suffered serving our country has left them profoundly brain-damaged or disabled with terrible psychiatric conditions like post-traumatic stress disorder and paranoid schizophrenia. These wounds of war are physically invisible, but they are no less life-threatening.

When military service renders our returning soldiers unable to resume their civilian lives—by holding down jobs, continuing their education, or sustaining family relationships—our duty is to come to their aid. The Rehabilitation Act of 1973 requires us to provide those veterans with therapeutic, supportive housing. Study after study shows that without secure housing, these vets simply cannot benefit from the psychiatric and other medical services to which our laws entitle them. Instead, they live and die in dumpsters or under freeway overpasses.

Facilities for housing these profoundly wounded vets are often readily available. For example, in Los Angeles—a place some call the nation's "capital of veteran homelessness"—there is a 387-acre parcel of land, the West Los Angeles VA Campus. That property is not just theoretically suited to therapeutic housing: It was donated to the government in 1888 by a U.S. senator and a private benefactor for the specific purpose of permanently maintaining a soldiers' home. For 80 years, it operated as such. But during the Vietnam War, when some Americans turned their backs on our soldiers, the government put buildings and land formerly dedicated to veterans' therapeutic housing to other, more lucrative uses.

Today, where the disabled homeless vets of Los Angeles should find a home, they'll instead find a car-rental business, a private swimming pool, a dog run, an oil well, an 18-hole golf course, and a unit that launders linen for nearby luxury hotels. Valentini v. Shinseki, which we helped these disabled veterans file, asks only that the government keep the solemn promise it made when it accepted the land as a charitable gift: provide the housing. Among the plaintiffs in this lawsuit is Greg Valentini. A private in the 101st Airborne, he took part in the initial invasion of Afghanistan. There, he participated in the assault on Tora Bora that sought Osama bin Laden. He was redeployed to Iraq, where he again experienced heavy combat. He received six decorations for his service.

After his honorable discharge, Mr. Valentini attended college, planning to become a police officer. But his combat experience made it difficult for him to control his emotions. He grew paranoid about his surroundings, experienced harrowing nightmares, and repeatedly considered suicide. He left college and soon found himself sleeping on the streets.

Mr. Valentini is one of some 8,200 homeless veterans in Los Angeles. Another, who wishes to be identified only as Jane Doe, had been raped repeatedly by her fellow soldiers during her service as an Army military radio operator. A third, Adrian Moraru, is a Marine who took part in the initial ground invasion of Iraq and ended up with violent seizures, spending his days and nights pacing Wilshire Boulevard. A fourth, Chris Romine, served twice in Iraq where his unit was responsible for "cleaning up" the body parts that remained after roadside bomb attacks on American forces.

These veterans, like many others, all suffer from severe cases of post-traumatic stress disorder. It is difficult to help a veteran cope with severe mental illness incurred on the battlefield even under the best of conditions; it is impossible to do so while the veteran is sleeping on the streets. By failing to provide safe and stable living conditions that are within its power to provide, the government denies veterans with mental disabilities meaningful access to its medical programs.

Unfortunately, efforts to rectify this outrageous treatment outside of court have been unsuccessful. We have therefore joined forces with the Southern California ACLU, and with several law firms acting pro bono. On behalf of this group of wounded veterans, we are asking the government to reveal its deals with the commercial users of the campus land; to use the profits of those deals to assist homeless veterans in obtaining the housing they need; and, above all, to fulfill the original purpose of the West Los Angeles Campus by dedicating it to the disabled veterans who could be helped by finding supportive housing there.

President Obama said in March 2009 that our veterans "have a home. It's the country they served, the United States of America, and until we reach a day when not a single veteran sleeps on our nation's streets, our work remains unfinished." Many soldiers who have returned from war have since died. If the Department of Veterans Affairs simply keeps the pledge made in 1888 when it accepted the gift of land, it will have taken a modest first step in turning the president's dream of securing every veteran a home into reality.

Source: http://online.wsj.com/article/SB10001424052702304432304576371591562510516.html

U.S. military spends a cool $20billion on air conditioning annually in Iraq and Afghanistan

The U.S. military forks out a whopping $20.2billion a year on keeping troops in Iraq and Afghanistan cool, it has emerged. The alarming figure is more than Nasa's entire annual budget and trumps the amount the G-8 has pledged to aid Egypt and Tunisia. It's even more than the clean up cost of BPs Gulf oil spill. Why?

An air conditioning unit at a remote Afghanistan outpost takes a gallon of fuel, which soon goes in the searing 125degree heat. This has to be shipped into Karachi, then driven 800 miles over 18 days to the war-torn country on atrociously bad roads. 'And you've got risks that are associated with moving the fuel almost every mile of the way,' Steven Anderson, a retired brigadier general who served as General David Patreaus' chief logistician in Iraq, told National Public Radio (NPR). Fuel convoys remain key targets for attack, and according to Anderson, more than 1,000 troops have died while delivering vital supplies.

For Anderson the military would save money by going green. He claims experiments with polyurethane foam insulation tents in Iraq cut energy use by a staggering 92 per cent, taking 11,000 fuel convoys off the road. But getting the top commanders to embrace change has been hard. 'People look at it and say "It's not my lane. We don't need to tie the operational commanders' hands" - things like this,' he said. 'A simple policy signed by the secretary of defence - a one or two-page memo, saying we will no longer build anything other than energy-efficient structures in Iraq and Afghanistan would have a profound impact.'

It was thought President Obama's decision to bring 30,000 American troops home soon would act as a relief on the coffers. But according to experts the savings made by the withdrawal do not equal the $30billion cost of putting the soilders there in the first place. What history has told us is that you don't see a proportional decrease in spending based on the number of troops when you draw them down,' Chris Hellman, a senior research analyst at the National Priorities Project, said.

'In Afghanistan that's going to be particularly true because it's a very difficult and austere environment in which to operate.' The infrastructure being built in Iraq is the main expense, according to American University professor Gordon Adams. 'We're building big bases,' the costs of which are 'sunk' costs, he said.

Source: http://www.dailymail.co.uk/news/article-2008422/U-S-military-spends-cool-20billion-air-conditioning-annually-Iraq-Afghanistan.html

The $1 Trillion Fighter-Jet Fleet

A new Pentagon forecast showing the total cost of owning and operating a fleet of F-35 Joint Strike Fighters topping $1 trillion over more than 50 years has caused a case of sticker shock in Washington. And that price tag doesn't even include the $385 billion the Defense Department will spend to purchase 2,500 of the stealthy planes through 2035. During a Senate hearing this month, Sen. John McCain (R., Ariz.) called the $1 trillion figure "jaw-dropping," particularly when compared with the costs of operating other aircraft. "I appreciate this estimate is still early and subject to change, but we need to know that the program is going to bring that number down," he said.Tom Burbage, who leads the program for manufacturer Lockheed Martin Corp., acknowledged that the 't' word "causes a lot of the sensational reaction to it, because no one's ever dealt with 't's before in a program." The long-range estimate is, by its nature, imprecise because it attempts to forecast factors including inflation and fuel costs decades into the future. And the Pentagon says it will be adjusted as the planes enter operation. But the figure is bringing new scrutiny to what is already the Pentagon's largest-ever weapon-buying project as its budget comes under pressure. Already, Lockheed Martin has said it was looking for ways to bring down the long-term cost.

Apollo Moon Landings: $164 billion over 10 years. (Source: NASA)

Christine Fox, head of the Pentagon's cost-assessment office, said in Senate testimony that the F-35 would likely cost about 33% more per flight hour to operate than two of the aircraft it will replace, the F-16 and F-18. But the new aircraft will be much more sophisticated, will be far less visible to enemy radar and will have sensors that allow a single jet to take on missions that now require several aircraft. The Marine Corps version of the F-35 will be able to hover and land vertically. The Navy model will operate from aircraft carriers, while the Air Force version will be based on land. Developmental aircraft are flying, and the first F-35s—which cost about $113 million each—are slated to enter service later in the decade. The Pentagon's forecast includes all the possible costs the military might incur over the lifetime of the program, including everything from housing the aircraft to installing replacement parts. Add all those together, and factor in inflation, Mr. Burbage said, and "you trip the trillion-dollar mark."

Reconstruction of Afghanistan: $62 billion over 10 years. (Source: Special Inspector General for Afghanistan Reconstruction)

But, he said, "The question to ask is, is that a relevant number?" Retired Marine Corps Lt. Gen. Emerson Gardner, who previously oversaw cost assessment at the Pentagon, said it wasn't "good analysis" to put that round dollar figure out without a point of comparison—for instance, the cost of sustaining the less-capable aircraft the new plane would replace. "You can scare the children with lots of things by projecting out to what it's going to cost in 2065," he said. "It's more useful to us if it's [forecast] five to 10 years."

A more near-term analysis, Gen. Gardner said, might add to a constructive debate about realistic costs and alternatives. It is normal for sustainment costs to outstrip the basic drive-away cost of a piece of military hardware. But Pentagon procurement chief Ashton Carter said in a recent Senate hearing that the Joint Strike Fighter's projected sustainment bill was on top of an "unacceptably large" bill for procurement. Still, he said, the Pentagon sees no "better alternative" to the F-35. "Sustainment seems like years away, but now is the time to face that bill and begin to get that under control," he said.

Construction of Interstate Highway System: $213 billion over 40 years. (Source: Department of Transportation)

The Joint Strike Fighter has long been a troubled program, with cost overruns, military management shake-ups and heightened political scrutiny, but Lockheed says the aircraft is now ahead of schedule on its test flights. Speaking to reporters Tuesday, Lockheed Chairman and Chief Executive Robert Stevens said the trillion-dollar figure was derived from a new Pentagon "selected acquisition report" that wasn't developed by the company, and said the company would work to find ways to bring down the aircraft's long-term production and sustainment costs. "As big as that number is, there are sufficiently large opportunities to reduce that number by making streamlining decisions along the way," he said.

Source: http://online.wsj.com/article/SB10001424052702303654804576345590857818106.html#printMode

360,000 veterans may have brain injuries

Pentagon officials estimated for the first time Wednesday that up to 360,000 Iraq and Afghanistan veterans may have suffered brain injuries. Among them are 45,000 to 90,000 veterans whose symptoms persist and warrant specialized care. Army Brig. Gen. Loree Sutton provided the estimate during a news conference about March as Brain Injury Awareness Month. She heads the Pentagon's Centers of Excellence for Psychological Health and Traumatic Brain Injury.

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Pentagon officials have been reluctant to estimate the number of potential brain-injury casualties among the 1.8 million troops who have served in Iraq and Afghanistan. Sutton based her estimate upon military health-screening programs showing that 10% to 20% of returning troops have suffered at least a mild concussion. Among them are 3% to 5% with persistent symptoms that require specialists such as an ophthalmologist to deal with vision problems. Sutton's estimate is similar to a RAND Corp. study last year that said 320,000 may have suffered a brain injury.

Following direction from Congress, the U.S. military began to screen all troops returning from the war zones for brain injury last year. Persistent symptoms can range from headaches and sleep disorders to memory, balance and vision difficulties, said Lt. Col. Lynne Lowe, the Army's program manager for traumatic brain injury. Research suggests the vast majority of these troops recover, said James Kelly, director of the National Intrepid Center of Excellence, a Pentagon treatment center for traumatic brain injury and psychological health. Kelly said scientists are trying to understand the severity and extent of brain injury caused by exposure to a blast. Many of the wounded in Iraq and Afghanistan were hurt by roadside bombs.

The science is so new that it remains unclear whether symptoms attributed to brain injury are actually the result of post-traumatic stress disorder caused by the same combat incident — a roadside bomb blast, for example — that caused the brain injury, Lowe said. The Pentagon's official figure for U.S. military war casualties of all kinds in Iraq and Afghanistan is about 33,000. Sutton said at least 9,100 troops have been diagnosed with brain injuries since the war began.

The Department of Veterans Affairs reports that it has treated about 8,000 former service members for brain injury after their return from Iraq and Afghanistan. The rest of those who may require care have problems that can be treated by a family physician — issues such as headaches and sleep disorders, Kelly said. "It's not unusually complicated care." Hotline phone numbers available for troops concerned about symptoms that might be related to a brain injury are, at the Centers of Excellence, 866-966-1020; and at the Defense and Veterans Brain Injury Center, 800-870-9244.

Source: http://www.usatoday.com/news/military/2009-03-04-braininjuries_N.htm

BRICS Wants to Get Rid of Dollar - May, 2011

2011-05-14T16:28:00.000-07:00

Figuring out how to divorce the US dollar without nasty repercussions is fast becoming a popular sport in the world; as well as the main hope for the new century. BRICS: Brazil, Russia, India, China and now South Africa, recently again announced that they are planning to rid their financial systems of the US dollar. It won't be an easy task because all roads in the past one hundred years has led to Washington. Naturally, this freedom agenda of BRICS will be implemented gradually, in stages. Nevertheless, it is a clear sign of the decline of the West and rise of the rest. Simply put, the world community has had enough of the US dollar's absolute hegemony.

Although still in its infancy, BRICS countries are essentially laying the very foundation of a multi-polar in the 21th century. As a result, the Anglo-American-Zionist alliance, the corrosive/destructive global financial/political order that has ruled the globe for the past one hundred years will be left with two potions in the future: rollover and die or strike back with a vengeance.

Wanting to divorce the US dollar would have been unthinkable just ten years ago. The mere mention of breaking away from Washington's financial death grip on the "free world" could trigger a nasty response. For many stuck in its trap, it was simply unthinkable. As we are currently seeing, not any more. In these times of great economic tension, emerging nations are now publicly discussing the prospects of dumping the US dollar as the global reserve currency. The only way the Western alliance could continue maintaining its iron grip on global commerce is by imposing the US dollar's supremacy by the use of force. Therefore, observing modus operandi of the aforementioned global alliance, I will be embracing myself for a major future wars.

Nonetheless, BRICS may just prove to be the antidote the global community needs against the Western alliance's neo-Bolshevism, popularly known as Globalism. And in a clear sign that the economic union is becoming a political one as well, BRICS nations took the recent opportunity at a meeting to speak strongly against Western aggression against Libya.

Is the neo-imperialistic war currently being waged against Libya by the Western alliance a long-term measure to protect the primacy of the US dollar? According to experts interviewed by Russia's RT, in addition to stealing Libya's large money reserves and natural wealth, dollar imperialism may indeed be one of the underlying reasons for the Western aggression against Libya. Nothing new here in Western global affairs because protecting the US dollar was also one of the strategic reasons why the Western alliance and friends destroyed Iraq. See the below posted article for more information.

Anyway, leave it up to RT to discuss such matters. Although it does not have the audience of BBC or the bells-and-whistles of CNN, Russia's RT is becoming perhaps the most important English language news agency in the world today - at least for those who don't enjoy having their intelligence constantly insulted. The following interviews and analysis are crucially important perspectives on current global affairs, a different perspective the American public is intentionally being deprived of by the government censored mainstream news media.

Arevordi
May, 2011

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CrossTalk: BRICS-by-Brick: http://www.youtube.com/watch?v=J7K5BVYzZvQ

Rise of the BRICS: 'Asian DAVOS' steps through the ropes: http://www.youtube.com/watch?v=o5xnyCtfuy8

Gaddafi gold-for-oil, dollar-doom plans behind Libya 'mission'?: http://www.youtube.com/user/RussiaToday#p/search/15/GuqZfaj34nc

'Arab Spring false flag from start, Libya ultimate goal all along': http://www.youtube.com/user/RussiaToday#p/u/3/3T8_cH2n9CI

'Libya & Syria steps in West's way to challenge China': http://www.youtube.com/user/RussiaToday#p/u/21/PEV5r7hAzx4

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BRICS Wants to Get Rid of Dollar

Vladimir Osakovsky, chief economist of UniCredit Bank, Russia:

Obviously, the main goal of this decision (reforming of international monetary and financial system by the BRICS countries) is to boost the international importance of the national currencies of the BRICS countries, but basically the greater usage of the national currencies in international settlement and international transactions will clearly increase the demand for these currencies and, possibly, at the expense of the global reserve currency which is the USD. So I guess one of the targets of this decision is to replace dollar as a settlement currency between these countries. This idea is not new I would say we had similar initiatives on bilateral basis between Russia and China for example or China and other countries.

This decision is a continuation of earlier efforts. Why not? I don’t see any reasons why it shouldn’t be successful, for example the yuan and Russian ruble is already actively used for the international trade between these two countries, Russia and China, and respective currencies of other BRICS can be used in international settlements between other countries as well. One of the constraining reasons could be that the trade flows between BRICS countries, that happen between China and Brazil or Brazil and India something like that, are not that significant at the moment. I think this decision might, actually, support the extension of international trade between these countries.To find out more on the issue, listen to our In Focus program from April 14, 2011 in Radio section.

Source: http://english.ruvr.ru/2011/04/14/48945115.html

BRICS Rails at Financial Status Quo

President Dmitry Medvedev and other BRICS leaders called for sweeping reforms of international financial mechanisms, hinted at displacing the U.S. dollar as the world's major trade currency and condemned the NATO bombing of Libya at a summit of leading emerging economies in China on Thursday, but there were few actions to match the words. Speaking at the summit of Brazil, Russia, India, China and South Africa in Sanya, China, Medvedev said he and his Chinese counterpart Hu Jintao had "agreed to intensify work on the eastern and western gas supply routes before the end of the year" during a bilateral meeting earlier in the day.

"We are talking about this year, I mean the basic conditions for approval. Naturally, the deliveries will begin later," he told reporters, adding that, although each side would push its own business interests in price negotiations, positions had generally moved closer. China is a growing foreign policy priority for Russia. It is the world's biggest energy consumer and became Russia's main trading partner last year. Medvedev promised during a visit to Beijing in September to supply China with all the gas it needs for economic development.

In 2009, China extended a $25 billion preferential-rate loan to Rosneft and Transneft in exchange for a 20-year oil supply contract. Medvedev will go on an extended visit to China, following the BRICS meeting, with an appearance at China's Boao Forum and a visit to Hong Kong on Saturday. Although the BRICS forum had criticized the world's reliance on the U.S. dollar, Medvedev played down speculation that the five countries might adopt the Chinese yuan as a trade currency.

"Of course, the Chinese economy is huge, and in this sense the role of the yuan is growing, but we haven't made any special decisions regarding the yuan, nor are they being discussed," he told reporters.

Earlier Thursday, the five countries signed a memorandum on cooperation among their national financial development institutions that paves the way for the countries to grant one another loans in their national currencies. Vladimir Dmitriyev, head of Vneshekonombank, told Interfax that the document marked "the first practical step toward using national currencies in economic cooperation between these countries." China Development Bank was the first institution to take advantage of the new measures, saying it was ready to extend 10 billion yuan in loans to Brazil, Russia, India and South Africa.

The loans are expected to focus on large oil and natural gas projects. China Development Bank chief Chen Yuan cited deepening cooperation with Brazil's Petro Bas when asked for specifics, Reuters reported. No specific deals relating to Russian companies have emerged so far. Medvedev also held bilateral meetings with Hu, Brazilian President Dilma Rousseff, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma during the meeting. Thursday's was the first summit since South Africa joined the club of emerging economies, prompting Medvedev to make a flat joke.

"I don't know who came up with the BRIC abbreviation … but we've come up with a different acronym, and it has already become quite popular." "After the accession of South Africa, the Russian abbreviation BRYuKI emerged," Medvedev told reporters in Sanya, China. Bryuki means "pants" in Russian.

It may have been a weak joke, but he was right to say the group has changed. BRIC — Brazil, Russia, India and China — was born as an acronym thought up by Goldman Sachs economist Jim O'Neill as shorthand for the world's leading emerging markets. But it has become a club for countries — including now South Africa — with a common interest in turning their growing economic strength into political clout on the world stage. All five are currently members of the UN Security Council.

In this spirit, the five issued a joint statement calling for an overhaul of the international financial system and reform of the International Monetary Fund, criticizing dependence on traditional reserve currencies like the U.S. dollar and condemning NATO-led air strikes against Libya.

"This is not a format where countries decide things; it is much more about showing the emergence of new structures as opposed to old organizations," said Fyodor Lukyanov, editor-in-chief of Russia in Global Affairs. Nonetheless, there are differences in the group. In the March 17 Security Council vote authorizing military action in Libya, Brazil, Russia, India and China abstained. South Africa voted in favor, along with other African Union countries.

Source: http://www.themoscowtimes.com/news/article/brics-rails-at-financial-status-quo/435083.html

BRICS Growing in Stature

A couple of years ago, when we offered a BRIC MarketSafe CD… I would talk to groups of people, and warn them that the BRICs not only hold the reserves of the world, but have a large percentage of the world’s population, and they would love nothing more than to be looked at as the “leaders of the world”… OK… There’s a BRIC Conference going on, so let’s see what’s on their minds… But first, let’s look at the markets – specifically those of currencies and metals… Well, that bias to sell dollars that I talked about yesterday didn’t last too long into the morning, and by noon, the currencies were weaker. Gold and silver remained bid, but not well bid, as they had been in the early morning. In the overnight markets, the currencies have been all over the place… The trading ranges have been blown out, and one minute you see the currencies rally, and the next you see them sell off… It’s been pretty amazing watching this since I arrived here and climbed into the saddle this morning.

And… We got to see the color of the president’s plan to cut the deficit… The president unveiled a framework Wednesday to reduce borrowing over the next 12 years by $4 trillion – a goal that falls short of targets set by his deficit commission and House Republicans – and called for a new congressional commission to help develop a plan to get there. In his most ambitious effort to claim the mantle of deficit cutter, Obama proposed sharp new cuts to domestic and military spending, and an overhaul of the tax code that would raise fresh revenue. But he steered clear of fundamental changes to Medicare, Medicaid and Social Security – the primary drivers of future spending.

So… We get another “commission” to develop the plan.. What happened to the previous commission? Hey, as I shrug my shoulders, at least someone in Washington DC is looking at this ever exploding deficit, and thinking that something should be done about it… And the overhaul of the tax code? Oh brother! Did he really say that “we all have a secret desire to pay more taxes”? Can I answer that one? NOT! In the case of the deficit, personally, I believe it needs to start at the annual budget… When you can tame that monster, then it will flow to the national deficit… But that’s just me thinking logically…because… If you don’t tame the monster at the budget level, you won’t make the necessary cuts on the national debt level… It’s that simple… Or at least that’s how I see it…

OK… Let’s get to the BRICs, and see what’s up with these wild and crazy guys! Well… First of all, the BRIC countries (Brazil, Russia, India and China) have added a new member, and now they are the BRICS with a capital “S” representing South Africa… And they are pounding their chests with new data that shows that the BRICS’ combined economies will eclipse the US economy in 2014, and by 2016, they will be putting 100 miles of desert between their economies and that of the US ($21 trillion versus $18.8 trillion)… Of course those are projected numbers, so there could be some changes…

But nonetheless, these countries are the straws that stir the global growth drink… Their problem, though, is how they act as a group, when they have very different political systems and economies? But for now the BRICS are feeling strong, and making statements like: The BRICS want to put an end to the dominance of the Western economies… And “the BRICS oppose use of force in Libya.” This just shows me that they are feeling like they are strong enough now to direct things… I don’t think that the time is here… The most important thing about the strength of the BRICS is that they will have a lot of pull in the future, to demand what currency is considered the reserve currency of the world… Think about that for a minute, folks… I don’t know about you, but it puts shivers down my spine!

OK… Let’s talk about something else besides BRICS! Let’s see… Oh! Here we go… You’re going to like this one, kids… European Central Bank (ECB) Board member Bini Smaghi was talking last night and said that further ECB rate hikes would depend on “the economy and inflation.” He went on to note that, in trade-weighted terms, the euro (EUR) is roughly in line with its level in 2005 and in real effective terms is still 10% below the level at that time. Personally, I think that we’re hearing central bank parlance from this ECB member that the euro doesn’t enter into the decision for rate moves. That’s a good thing to know up front, because with the euro above 1.40 (currently 1.44), it’s above the ECB’s comfort level for the currency, but that did not enter into the discussion of the recent rate hike… I like knowing that, for when we get to June or July, and the ECB is greasing the tracks of another rate hike, if the euro is stronger than it is now, we don’t have to worry about that getting in the way!

And, there was an interesting thing that happened overnight in Asia… The Monetary Authority of Singapore (MAS) announced that they would re-center the currency band, and allow faster appreciation of the Singapore dollar (SGD), to help combat inflation. This was in reaction to the news that the Singapore economy grew at an annualized rate of +23.5%, more than double the forecasts for +11.4% growth! WOW! The Sing dollar rallied on the announcements. For some time now, I’ve stated at this time and place, with the Chinese renminbi (CNY) still manipulated every day and traded on a non-deliverable forward, that I prefer the Sing dollar as a proxy for Chinese renminbi appreciation… These Asian countries will all keep their currencies going in the same direction, as they are all in competition for exports… And the MAS does something that most countries don’t have a clue about, and that is… Using the Sing dollar’s strength to help offset inflation.

I also saw a blurb go across the screens yesterday regarding Indian investors and silver… According to the FT, Indian investors, long known for their enthusiasm for gold, are switching to silver bullion, as they expect it to generate higher returns… I wonder if they read that in the Pfennig, or the NewsMax story that I appeared in, claiming that silver was the new gold? HA! This morning, the US data cupboard will print March PPI, which is expected to continue to show increases in wholesale inflation… Yesterday, the data cupboard printed March retail sales, which were less than forecast at 0.4%, less autos they were 0.8%… A major contributor to the sales were gas receipts… Which is not a good thing for our economy, as we’re spending our disposable income on gas, which lasts about a week in the gas tank, and then is gone, used up… And all the other things that consumers would normally be spending their hard earned cash on, get passed by, because there’s nothing left for them…

Speaking of gas… Have you heard of the new “gas coupon”… You probably already have a few of them in your pocket, and didn’t realize that they were “gas coupons”… Look again, they have President Lincoln on the face… OOPS! Those are $5 bills! HA! There will be some Fed Heads on the speaking circuit today… They are all hawks, so look for more talk about ending QE2 early… It’s not going to happen, but they can talk about it to make themselves feel good… Sort of like buying a HYBRID SUV… HA! Then there was this… From The Telegraph, as quoted by Bill Bonner in his essay “Government Spending and the Path to Money Printing” in yesterday’s Daily Reckoning…

The Centre for Economics and Business Research (CEBR) said soaring inflation coupled with low pay rises means household peacetime disposable income is at its lowest since 1921. Rising food, clothing and energy prices mean the average British family will have £910 less to spend this year than they did in 2009. The CEBR calculates that household disposable income will fall by 2pc this year, more than double last year’s fall of 0.8pc and the biggest drop since the savage 1919 to 1921 post-First World War recession. It forecasts inflation will average 3.9pc in 2011, its highest since 1992, as January’s increase in VAT from 17.5pc to 20pc and the rising cost of oil and other commodities continue to drive up prices. At the same time, salaries will rise just 1.9pc as unemployment remains high and the public sector makes cutbacks.

Geez, Louise… This is not getting any better is it? To recap… The bias to sell dollars was taken off the table yesterday mid-morning. I think it’s more of a reaction to the fact that the currencies moved too far, too fast, and needed to retrace some steps… The president announced a plan to reduce the deficit by $4 trillion over 12 years… UGH! The BRIC countries added an “S” to make BRICS, with the “S” representing South Africa. The BRICS just concluded a meeting of the countries, and they are feeling their oats a bit, making statements about the West, etc. Indians are opting for silver this year, instead of gold, and the MAS will allow faster appreciation of the Singapore dollar after Singapore’s economy grew +23%!

Source: http://www.csmonitor.com/Business/The-Daily-Reckoning/2011/0415/BRICS-growing-in-stature

Leaders at BRICS Summit speak out against airstrikes in Libya

A leadership summit of five emerging economic powers took a decidedly political turn on Thursday, going beyond customary economic issues with a joint declaration against Western-led airstrikes in Libya and urging a peaceful solution to the conflict. "We share the principle that the use of force should be avoided," the heads of state of Brazil, Russia, India, China and South Africa declared in the Sanya Declaration, which was issued at the conclusion of the annual BRICS Summit in this southern China resort city.

Earlier this year, Brazil, Russia, India and China abstained from voting on a United Nations Security Council resolution that authorized a no-fly zone over Libya. By contrast, South Africa had voted in favor of the resolution. This is the third annual BRICS Summit, which adopted a new acronym after South Africa joined Brazil, Russia, India and China for the first time. Chinese President Hu Jintao chaired the one-day meeting, which was also attended by South African President Jacob Zuma, Russian President Dmitry Medvedev, Brazilian President Dilma Rousseff, Indian Prime Minister Manmohan Singh and a host of cabinet-level representatives.

This year, the BRICS countries angled for greater collective influence in political affairs. Hu, China's president, called for cooperation to increase the influence of emerging economies in international institutions such as the United Nations and the World Bank. In the joint declaration, the five countries specifically called for reform and diversification of the UN Security Council by adding more emerging economies so "it can deal with today's global challenges more successfully."

"We underscore our support for multilateralism and the UN system but also agree on the need for the UN, including the UN Security Council, to make it more representative and effective," said South African President Jacob Zuma. Indian Minister of Commerce Anand Sharma agreed. "This platform as such can make a significant and defining contribution to the global architecture as the world is seeing a major shift," Sharma told CNN. The BRICS countries also agreed to use their own currencies in place of the U.S. dollar when issuing credit or grants to one another. The declaration, which called for a broad-based international reserve currency system, asserted that such a move would provide more stability and certainty for emerging economies.

While the summit focused on major areas of agreement between the five countries, it was apparent that the meeting purposefully steered clear of controversial topics that still plague this diverse group of nations. Controversial issues directly related to trade, including currency valuation, were pointedly avoided on Thursday. "As of now, there has been no debate on this issue," Yu Ping, Vice Chairman of the China Council for the Promotion of International Trade, told CNN on Thursday. Brazil, which has been sharply critical of the way China values its currency, avoided direct comment.

"Brazil has to do what Brazil has to do," said Luciano Coutinho, President of the Brazilian National Development Bank. "We cannot expect others to take care of our problems." Together, the BRICS countries account for 40% of the world's population, and their combined economic output neared one-fifth of global GDP in 2010. The BRICS countries are expected to pass the G-7's output by 2035, according to official statistics published by the summit. Next year's BRICS Summit will be hosted in India.

Source: http://edition.cnn.com/2011/WORLD/asiapcf/04/14/china.brics.summit/index.html?hpt=T2

Re-denominating Iraqi oil in U. S. dollars, instead of the euro

What prompted the U.S. attack on Iraq, a country under sanctions for 12 years (1991-2003), struggling to obtain clean water and basic medicines? A little discussed factor responsible for the invasion was the desire to preserve "dollar imperialism" as this hegemony began to be challenged by the euro. After World War II, most of Europe and Japan lay economically prostrate, their industries in shambles and production, in general, at a minimum level. The U.S. was the only major power to escape the destruction of war, its industries thriving with a high level of productivity. In addition, prior to and during WWII, due to extreme political and economic upheaval, a considerable amount of gold from European countries was transferred to the U.S. Thus, after WWII the U.S. had accumulated 80 percent of the world's gold and 40 percent of the world's production. At the founding of the World Bank (WB) and the International Monetary Fund (IMF) in 1944-45, U.S. predominance was absolute. A fixed exchange currency was established based on gold, the gold-dollar standard, wherein the value of the dollar was pegged to the price of gold-U.S. $35 per ounce of gold. Because gold was combined with U.S. bank notes, the dollar note and gold became equivalent, which then became the international reserve currency.

Initially, the U.S. had $30 billion in gold reserves. But the United States spent more than $500 billion on the Vietnam War alone, from 1967-1972. During these years, the U.S. had over 110 military bases across the globe, each costing hundreds of millions of dollars a year. These expenses were paid in paper dollars and the total number given out far exceeded the gold reserve of the U.S treasury. By then (1971-72), the U.S. Treasury was running out of gold and had only $10 billion in gold left. On August 17, 1971, Nixon suspended the U.S. dollar conversion into gold. Thus, the dollar was "floated" in the international monetary market. Also in the early 1970s, U.S. oil production peaked and its energy resources began to deplete. Its own oil production could not keep pace with growing home consumption. Since then, U.S. demand for oil continually increased, and by 2002-2003 the U.S. imported approximately 60 percent of its oil-OPEC (primarily Saudi Arabia) being the main exporter. The U.S. sought to protect its dollar strength and hegemony by ensuring that Saudi Arabia price its oil only in dollars. To achieve this, the U.S. made a deal, some say a secret one, that it would protect the Saudi regime in exchange for their selling oil only in dollars.

Throughout the late 1950s and 1960s the Arab world was in ferment over an emerging Nasser brand of Arab nationalism and the Saudi monarchy began to fear for its own stability. In Iraq, the revolutionary officers corps had taken power with a socialist program. In Libya, military officers with an Islamic socialist ideology took power in 1969 and closed the U.S. Wheelus Air base; in 1971, Libya nationalized the holdings of British Petroleum. There were proposals for uniting several Arab states-Syria, Egypt, and Libya. During 1963-1967, a civil war developed in Yemen between Republicans (anti-monarchy) and Royalist forces along almost the entire southern border of Saudi Arabia. Egyptian forces entered Yemen in support of republican forces, while the Saudis supported the royalist forces to shield its own monarchy. Eventually, the Saudi government-a medieval, Islamic fundamentalist, dynastic monarchy with absolute power-survived the nationalistic upheavals. Saudi Arabia, the largest oil producer with the largest known oil reserves, is the leader of OPEC. It is the only member of the OPEC cartel that does not have an allotted production quota. It is the "swing producer," i.e., it can increase or decrease oil production to bring oil draught or glut in the world market. This enables it more or less to determine prices.

Oil can be bought from OPEC only if you have dollars. Non-oil producing countries, such as most underdeveloped countries and Japan, first have to sell their goods to earn dollars with which they can purchase oil. If they cannot earn enough dollars, then they have to borrow dollars from the WB/IMF, which have to be paid back, with interest, in dollars. This creates a great demand for dollars outside the U.S. In contrast, the U.S. only has to print dollar bills in exchange for goods. Even for its own oil imports, the U.S. can print dollar bills without exporting or selling its goods. For instance, in 2003 the current U.S. account deficit and external debt has been running at more than $500 billion. Put in simple terms, the U.S. will receive $500 billion more in goods and services from other countries than it will provide them. The imported goods are paid by printing dollar bills, i.e., "fiat" dollars.

Fiat money or currency (usually paper money) is a type of currency whose only value is that a government made a "fiat" (decree) that the money is a legal method of exchange. Unlike commodity money, or representative money, it is not based in any other commodity such as gold or silver and is not covered by a special reserve. Fiat money is a promise to pay by the usurer and does not necessarily have any intrinsic value. Its value lies in the issuer's financial means and creditworthiness. Such fiat dollars are invested or deposited in U.S. banks or the U.S. Treasury by most non-oil producing, underdeveloped countries to protect their currencies and generate oil credit. Today foreigners hold 48 percent of the U.S. Treasury bond market and own 24 percent of the U.S. corporate bond market and 20 percent of all U.S. corporations. In total, foreigners hold $8 trillion of U.S. assets. Nevertheless, the foreign deposited dollars strengthen the U.S. dollar and give the United States enormous power to manipulate the world economy, set rules, and prevail in the international market.

Thus, the U. S. effectively controls the world oil-market as the dollar has become the "fiat" international trading currency. Today U.S. currency accounts for approximately two-thirds of all official exchange reserves. More than four-fifths of all foreign exchange transactions and half of all the world exports are denominated in dollars and U.S. currency accounts for about two-thirds of all official exchange reserves. The fact that billions of dollars worth of oil is priced in dollars ensures the world domination of the dollar. It allows the U.S. to act as the world's central bank, printing currency acceptable everywhere. The dollar has become an oil-backed, not gold-backed, currency. If OPEC oil could be sold in other currencies, e.g. the euro, then U.S. economic dominance-dollar imperialism or hegemony-would be seriously challenged. More and more oil importing countries would acquire the euro as their "reserve," its value would increase, and a larger amount of trade would be transacted and denominated in euros. In such circumstances, the value of the dollar would most likely go down, some speculate between 20-40 percent.

In November 2000, Iraq began selling its oil in euros. Iraq's oil for food account at the UN was also in euros and Iraq later converted its $10 billion reserve fund at the UN to euros. Several other oil producing countries have also agreed to sell oil in euros-Iran, Libya, Venezuela, Russia, Indonesia, and Malaysia (soon to join this group). In July 2003, China announced that it would switch part of its dollar reserves into the world's emerging "reserve currency" (the euro). On January 1, 1999, when 11 European countries formed a monetary union around this currency, Britain and Norway, the major oil producers, were absent. As the U.S. economy began to slow down during mid-2000, Western stock markets began to yield lower dividends. Investors from Gulf Cooperation Council nations lost over $800 million in the stock plunge. As investors sold U.S. assets and reinvested in Europe, which seemed to be better shielded from a recession, the euro began to gain ground against the dollar .

After September 11, 2001, Islamic financiers began to repatriate their dollar investments-amounting to billions of dollars-to Arab banks, as they were worried about the possible seizure of their assets under the USA PATRIOT Act. Also, they feared their accounts might be frozen on the suspicion that such accounts fund Islamic terrorists. Iranian sources stated that their banking colleagues felt particularly hassled as Washington heated up its war of words and threats of military intervention. This encouraged Tehran to abandon the dollar payment for oil sales and switch to the euro. Iran also moved the majority of its reserve fund to the euro. (Iran is the latest target of the U.S., which has interfered by stirring up opposition forces, and making covert threats.)

OPEC member countries and the euro-zone have strong trade links, with more than 45 percent of total merchandize imports of OPEC member countries coming from the countries of the euro-zone, while OPEC members are the main suppliers of oil and crude oil products to Europe. The EU has a bigger share of global trade than the U.S. and, while the U.S. has a huge current account deficit, the EU has a more balanced external accounts position. The EU plans to enlarge in May 2004 with ten new members. It will have a population of 450 million; it will have an oil consuming-purchasing population 33 percent larger than the U.S., and over half of OPEC crude oil will be sold to the EU as of mid-2004. In order to reduce currency risks, Europeans will pressure OPEC to trade oil in euros. Countries such as Algeria, Iran, Iraq, and Russia-which export oil and natural gas to European countries and in turn import goods and services from them-will have an interest in reducing their currency risk and hence, pricing oil and gas in euros. Thus momentum is building toward at least the dual use of euro and dollar pricing.

The unprovoked "shock and awe" attack on Iraq was to serve several economic purposes:

(1) Safeguard the U.S. economy by re-denominating Iraqi oil in U.S. dollars, instead of the euro, to try to lock the world back into dollar oil trading so the U.S. would remain the dominant world power-militarily and economically. (2) Send a clear message to other oil producers as to what will happen to them if they abandon the dollar matrix. (3) Place the second largest oil reserve under direct U.S. control. (4) Create a subject state where the U.S. can maintain a huge force to dominate the Middle East and its oil. (5) Create a severe setback to the European Union and its euro, the only trading block and currency strong enough to attack U.S. dominance of the world through trade. (6) Free its forces (ultimately) so that it can begin operations against those countries that are trying to disengage themselves from U.S. dollar imperialism-such as Venezuela, where the U.S. has supported the attempted overthrow of a democratic government by a junta more friendly to U. S. business/oil interests.

The U.S. also wants to create a new oil cartel in the Middle East and Africa to replace OPEC. To this end the U.S. has been pressuring Nigeria to withdraw from OPEC and its strict production quotas by dangling the prospects of generous U.S. aid. Instead the U.S. seeks to promote a "U.S.-Nigeria Alignment," which would place Nigeria as the primary oil exporter to the U.S. Another move by the U.S. is to promote oil production in other African countries-Algeria, Libya, Egypt, and Angola, from where the U.S. imports a significant amount of oil-so that the oil control of OPEC is loosened, if not broken. Furthermore, the U.S. is pressuring non-OPEC producers to flood the oil market and retain denomination in dollars in an effort to weaken OPEC's market control and challenge the leadership of any country switching oil denomination from the dollar to the euro.

To break up OPEC and control the world's oil supply, it is also helpful to control Middle East and central Asiatic oil producing countries through which oil pipelines traverse. The first attack and occupation was of Afghanistan, October 2001, in itself a gas producing country, but primarily a country through which Central Asia and the Caspian Sea oil and gas will be shipped (piped) to energy-starved Pakistan and India. Afghanistan also provided an alternative to previously existing Russian pipelines. Simultaneously, the U.S. acquired military bases-19 of them-in the Central Asian countries of Uzbekistan, Tajikistan, Kyrgyzstan, and Turkmenistan in the Caspian Basin, all of which are potential oil producers. After the invasion and occupation of Afghanistan and Iraq, the U.S. controlled the natural resources of these two countries and, once again, Iraq's oil began to be traded in U.S. dollars. The UN's oil for food production program was scrapped and the U.S. Iaunched its Iraqi Assistance Fund in U.S. dollars. In December 2003, the U.S. (Pentagon) announced that it had barred French, German, and Russian oil and other companies from bidding on Iraq's reconstruction.

How would a shift to the euro affect underdeveloped countries, most of which are either non-oil producing or do not produce enough for their home consumption and development? These countries have to import oil. One of the advantages that may accrue to them is that they are likely to earn more euros than dollars since much of their trade is with the European countries. On the other hand, a shift to euro will pose a similar dilemma for them as dollars. They will have to pay for oil in euros, have enough euros deposited-invested in EU treasuries, and borrow euros if they do not have enough for their oil purchases. If, as is projected, the dollar and euro are in a price band (that is, prices will stay within an agreed upon range), they may not have much of a bargaining position.

Oil for euros would be far more helpful if oil-importing underdeveloped countries could develop some form of barter arrangement for their goods to obtain oil from OPEC. Venezuela (Chavez) has presented a successful working model of this. Following Venezuela's lead, several underdeveloped countries began bartering their undervalued commodities directly with each other in computerized swaps and counter trade deals, and commodities are now traded among these countries in exchange for Venezuela's oil. President Chavez has linked 13 such barter deals on its oil; e.g., with Cuba in exchange for Cuban doctors and paramedics who are setting up clinics in shanty towns and rural areas. Such arrangements help underdeveloped countries save their hard currencies, lessening indebtedness to international bankers, the World Bank, and IMF, so that money thus saved can be used for internal development.

Source: http://www.thirdworldtraveler.com/Iraq/Iraq_dollar_vs_euro.html

Death Tax, Neglected Nation, Shrinking Middle Class - March, 2011

2011-03-04T19:06:00.001-08:00

Americans are fast becoming one of the most taxed peoples on earth. According to some, America may also be gradually reverting back to a slavery of sorts (although this time whites aren't going to be exempt). Over taxed, over regulated and underemployed, the quality of life in America is slowly but surely declining, and so is its backbone - the middle class. It is a commonly held belief in America that Europeans pay higher taxes. In final tally, I'm not too sure if Europeans do indeed pay much higher taxes than Americans. However, what's important to realize here is that when Germans, Swedes, French, Danes or even America's northern neighbors, the Canadians pay higher taxes, they at the very least realize that a significant portion of their tax money comes back to fund their excellent education system, their excellent social benefits, their excellent national infrastructure and their excellent universal medical coverage. Moreover, and more importantly, unlike the typical American, the typical European actually gets to enjoy his or her one time on earth.

Tax burdened Americans, however, are slavishly working to keep tyrannical dictators in power. Americans are working to pay for more-and-more of Washington's weapons of mass destruction. Americans are working to pay for the protection of the Zionist state of Israel. Americans are working to pay for the maintenance of a thousand military installations around the world. Americans are working to pay for Washington's wars of plunder around the world. Americans are working to pay for millions of single mothers to have children out of wedlock. All this, while America's infrastructure is slowly crumbling and its industry gradually relocating to China and Mexico. American's immense national wealth is gradually being plundered by a handful of unimaginably powerful oligarchic entities. Increasingly, Americans are finding themselves to be under-payed and overworked slaves of mega-corporations and government agencies. As the nation's top layer (the top 10% of society that controls 90% of the wealth in the country) gets wealthier, most Americans today continue living from paycheck to paycheck and in fear of the future.

Being that the United states is by far the wealthiest and the most powerful nation/empire on earth - there is absolutely NO excuse for this.

The cost of merely one of the pentagon's many weapons system currently being procured can cure many of America's problems. As tens of millions of Americans continue living in poverty, a handful of companies representing the military industrial complex continue making billions of dollars. As the nation's infrastructure rots, billions of dollars are spent on doomsday weapons. As tens of millions of Americans go without medical insurance, the nation's oil giants continue are making record profits. There was a time, not too long ago as a matter of fact, when a simple blue-collar worker in America could provide his family with a good life. There was a time when the "American dream" was possible for most if not all layers of American society. There was a time in America when all one needed to start a good business was to have a good idea and a good work ethic. Not anymore. The American dream has been turned into an American nightmare for tens of millions. For a vast majority of Americans today, a single income family is a relic of the distant past. For the new generation of Americans reaching adulthood, owning a home is merely a dream. And starting a business today is simply unimaginable even for those that want to.

An overabundance of electronic gadgetry, a subpar national education system, a controlled mainstream news media and the ubiquitousness of mindless entertainment in the United States has all but decimated the public's intellect and has severely dulled its senses. Consequently, what we have in America today is a stunned and stupefied population struggling to pay its ever-growing number of bills. Slowly but surely, the federal government's ever-growing tentacles are reaching deeper and deeper into every sector of American society. Even in death Americans are no longer able to free themselves from the fed's reach. Ever heard of the death tax? Many living Americans haven't, actually. If any one of you Americans think that you may die at some point in your lives, please make sure to figure out how to protect your money and your real-estate from the taxman's claws. What you think may belong to you and your family and what the federal government thinks belongs to you and your family - are two vastly different things. The following information about the dreaded "death tax" proves beyond any doubt that officials in Washington enjoy participating in necrophilia.

Today's American society is overly taxed and overly regulated. If this situation continues for much longer, the system of government here will undoubtedly collapse before the end of this century.

Arevordi
March, 2011

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Death Tax Ambush

Great 21 century war looming, Egypt & Libya just brush fires (RT video): http://www.youtube.com/user/RussiaToday#p/u/31/-SiSlzYhiFU

Max Keiser on Revolts: Americans Joining Middle East Uprising Trend: http://www.youtube.com/user/RussiaToday#p/u/4/R7Usl1v7u40

Here's some free financial advice: Don't die in New Jersey any time soon. If you have more than $675,000 to your name and you die in the Garden State, about 54% may go to the IRS and the tax collectors in Trenton. Better not take your last breath in Maryland either. The tax penalty for dying there is half of a lifetime's savings. That's the combined tab from the new federal estate tax rate of 35% and Maryland's inheritance and death taxes. Maybe they should rename it the Not-So-Free State.

This perverse confiscation also applies to some 20 other states, thanks to a quirk in December's GOP-White House tax compromise. The new law applies a top federal death tax rate of 35% with a $5 million exemption for 2011 and 2012. But it also changed a federal credit for state death tax rates into a federal deduction. The credit allowed a dollar-for-dollar reduction in federal taxes for state levies as high as 16%. This meant that every dime from state tax collections came from Uncle Sam. It was essentially a free tax for states.

By contrast, the deduction merely reduces the amount of federal taxable income and thus sharply reduces the amount of state tax that can be written off federal taxes. Many states have estate taxes at the old 16% threshold which now means an effective 10 percentage point or more surcharge above the 35% federal rate. This surcharge is even higher in states that also have an inheritance tax, which is levied on the value of specific property bequeathed to heirs, in addition to the estate tax (which is levied on the value of the entire estate).

Our friends at the American Family Business Foundation have done the math on the interaction between the new federal rates and these state taxes, and you can consult the nearby chart to see your state's fee for the privilege of dying. No wonder the battle over death taxes has suddenly moved to state capitals, with Indiana, Nebraska, Ohio, Pennsylvania and even Rhode Island looking to repeal their state levies this year. These state taxes also generally hit estates starting at as little as $1 million. Family business owners, ranchers, farmers and wealthy retirees can avoid that tax by relocating to Arizona, Florida, Georgia, Idaho, South Carolina and other states that don't impose inheritance taxes. There are plenty of attractive places to go.

New research indicates that high state death taxes may be financially self-defeating. A 2011 study by the Ocean State Policy Research Institute, a think tank in Rhode Island, examined Census Bureau migration data and discovered that "from 1995 to 2007 Rhode Island collected $341.3 million from the estate tax while it lost $540 million in other taxes due to out-migration."

Not all of those people left because of taxes, but the study found evidence that "the most significant driver of out-migration is the estate tax." After Florida eliminated its estate tax in 2004, there was a significant acceleration of exiles from Rhode Island to Florida. Connecticut has come to the same conclusion. A 2008 study by the Connecticut Department of Revenue Services found that the 26 states without an estate tax produced twice as many jobs from 2004-07 and had a growth rate 50% faster than those with estate taxes. The study found that the average estate of those leaving Connecticut was $7.5 million and their average taxable income was $446,000. With wealth like this chased out year after year, is it any wonder so many Northeastern states can't balance their budgets?

Proponents argue that the death tax has minimal incentive effects because people can't change their behavior after they die. But every day people make decisions to minimize their tax bills before they die. In other words, estate taxes don't redistribute income among taxpayers. They redistribute income among states. The federal death tax will revert with a vengeance to 55% in 2013 unless Congress acts in the next two years. But in the meantime, states like Indiana and Ohio, and especially New Jersey, can help their economic recovery by eliminating their death taxes and inviting lost wealth to return.

Source: http://online.wsj.com/article/SB10001424052748703960804576120050963075390.html?mod=googlenews_wsj

The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America. The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Here are the statistics to prove it:

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don't contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.

Giant Sucking Sound

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay. What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs. But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart. The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.

Source: http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here%27s-the-stats-to-prove-it-520657.html?tickers=^DJI,^GSPC,SPY,MCD,WMT,XRT,DIA

When Democracy Weakens

As the throngs celebrated in Cairo, I couldn’t help wondering about what is happening to democracy here in the United States. I think it’s on the ropes. We’re in serious danger of becoming a democracy in name only. While millions of ordinary Americans are struggling with unemployment and declining standards of living, the levers of real power have been all but completely commandeered by the financial and corporate elite. It doesn’t really matter what ordinary people want. The wealthy call the tune, and the politicians dance.

So what we get in this democracy of ours are astounding and increasingly obscene tax breaks and other windfall benefits for the wealthiest, while the bought-and-paid-for politicians hack away at essential public services and the social safety net, saying we can’t afford them. One state after another is reporting that it cannot pay its bills. Public employees across the country are walking the plank by the tens of thousands. Camden, N.J., a stricken city with a serious crime problem, laid off nearly half of its police force. Medicaid, the program that provides health benefits to the poor, is under savage assault from nearly all quarters. The poor, who are suffering from an all-out depression, are never heard from. In terms of their clout, they might as well not exist. The Obama forces reportedly want to raise a billion dollars or more for the president’s re-election bid. Politicians in search of that kind of cash won’t be talking much about the wants and needs of the poor. They’ll be genuflecting before the very rich.

In an Op-Ed article in The Times at the end of January, Senator John Kerry said that the Egyptian people “have made clear they will settle for nothing less than greater democracy and more economic opportunities.” Americans are being asked to swallow exactly the opposite. In the mad rush to privatization over the past few decades, democracy itself was put up for sale, and the rich were the only ones who could afford it. The corporate and financial elites threw astounding sums of money into campaign contributions and high-priced lobbyists and think tanks and media buys and anything else they could think of. They wined and dined powerful leaders of both parties. They flew them on private jets and wooed them with golf outings and lavish vacations and gave them high-paying jobs as lobbyists the moment they left the government. All that money was well spent. The investments paid off big time.

As Jacob Hacker and Paul Pierson wrote in their book, “Winner-Take-All Politics”: “Step by step and debate by debate, America’s public officials have rewritten the rules of American politics and the American economy in ways that have benefited the few at the expense of the many.”

As if the corporate stranglehold on American democracy were not tight enough, the Supreme Court strengthened it immeasurably with its Citizens United decision, which greatly enhanced the already overwhelming power of corporate money in politics. Ordinary Americans have no real access to the corridors of power, but you can bet your last Lotto ticket that your elected officials are listening when the corporate money speaks.

When the game is rigged in your favor, you win. So despite the worst economic downturn since the Depression, the big corporations are sitting on mountains of cash, the stock markets are up and all is well among the plutocrats. The endlessly egregious Koch brothers, David and Charles, are worth an estimated $35 billion. Yet they seem to feel as though society has treated them unfairly.

As Jane Mayer pointed out in her celebrated New Yorker article, “The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry — especially environmental regulation.” (A good hard look at their air-pollution record would make you sick.)

It’s a perversion of democracy, indeed, when individuals like the Kochs have so much clout while the many millions of ordinary Americans have so little. What the Kochs want is coming to pass. Extend the tax cuts for the rich? No problem. Cut services to the poor, the sick, the young and the disabled? Check. Can we get you anything else, gentlemen?

The Egyptians want to establish a viable democracy, and that’s a long, hard road. Americans are in the mind-bogglingly self-destructive process of letting a real democracy slip away. I had lunch with the historian Howard Zinn just a few weeks before he died in January 2010. He was chagrined about the state of affairs in the U.S. but not at all daunted. “If there is going to be change,” he said, “real change, it will have to work its way from the bottom up, from the people themselves.” I thought of that as I watched the coverage of the ecstatic celebrations in the streets of Cairo.

Source: http://www.nytimes.com/2011/02/12/opinion/12herbert.html?partner=rss&emc=rss

My Polluted Kentucky Home

LAST weekend I joined 19 other Kentuckians in a sit-in at the office of Gov. Steve Beshear. We were there to protest his support of mountaintop removal, a technique used by coal-mining companies that, as its name implies, involves blasting away the tops of mountains and hills to get at the coal seams beneath them. Since it was first used in 1970, mountaintop removal has destroyed some 500 mountains and poisoned at least 1,200 miles of rivers and streams across the Appalachian coal-mining region. Yet Governor Beshear is so committed to the practice that he recently allied with the Kentucky Coal Association in a suit against the Environmental Protection Agency to block more stringent regulations of it. In court his administration’s lawyers referred to public opposition as simply “an unwarranted burden.”

The news media and the rest of the country typically think of mountaintop removal as an environmental problem. But it’s a human crisis as well, scraping away not just coal but also the freedoms of Appalachian residents, people who have always been told they are of less value than the resources they live above. Over the past six years I’ve visited dozens of people who live at the edge of mountaintop removal sites. They bathe their children in water that has arsenic levels as high as 130 times what the E.P.A. deems safe to drink. Their roads are routinely destroyed by overloaded trucks; their air is clouded with pollutants. Their schools sit below ponds holding billions of gallons of sludge. Their children lose sleep worrying that the sludge dams will break, releasing the sludge down upon them. It happened 40 years ago at Buffalo Creek, W.Va., killing 125 people, and it could happen again today.

It’s a horrible way to live. And yet, as it does in many other impoverished quarters of America, the news too often avoids covering Appalachia as if it were a no man’s land. When a 3-year-old Virginia boy was crushed to death in his crib after a half-ton boulder was accidentally (and illegally) dislodged by a mining company, it barely made the national news. Many people around here believe the omission reflected that the child lived in a trailer home in the heart of coal country. In 2000, 306 million gallons of sludge — 30 times more than the volume of oil spilled by the Exxon Valdez — buried parts of Martin County, Ky., as deep as 5 feet. Yet hardly anyone outside the region remembers the disaster, if they ever heard about it.

More recently, my friend Judy’s grandson was playing in a creek when he was suddenly surrounded by dozens of dead fish. Tests later proved that a coal company was releasing polyacrylamide — a cancer-causing agent used to prepare coal for burning — into the creek. When Judy complained to the state, no one replied. She recently died of brain cancer. I’ve heard dozens of stories like these, but they rarely make it beyond the mountains. Is it any wonder then that Appalachian residents feel invisible?

In fact, invisible is how we’ve been taught to think of ourselves since coal was first discovered here. When I was little, teachers would stand over my desk and tell me that I had to change my accent if I wanted to get ahead in the world. Never mind that I had nearly perfect grammar and spelling. We were also told the success of the mines mattered above all else, that if we complained about the dust, noise and disrespect pumped out by the mine in our community, people would lose jobs.

The coal companies, the news media and even our own government have all been complicit in valuing Appalachian lives less than those of other Americans. Otherwise, it might be harder for them to get that coal out as quickly and inexpensively as they do. Those of us who protest mountaintop removal do it for the environment, but we’re also fighting to prove we are not unwarranted burdens. Our water and air are being poisoned, but the most dangerous toxin is the message that people don’t matter. As a child I once stood on a cedar-pocked ridge with my father, looking down on a strip mine near the place that had been our family cemetery. My great-aunt’s grave had been “accidentally” buried under about 50 feet of unwanted topsoil and low-grade coal; “overburden,” the industry calls it. My father took a long, deep breath. I feel that I’ve been holding it ever since.

Source: http://www.nytimes.com/2011/02/20/opinion/20House.html?_r=1&scp=7&sq=coal&st=cse

Generation 'Y Me?'

Demographic changes here and abroad mean young Americans face a bleaker investment future than their parents did.

Times are hard for those of us in Generation Y. After voting two to one for Barack Obama in the heady days of November 2008, the realization that we'll end up working harder than previous generations—and with less to show for it—is descending like a bad hangover. According to the Pew Research Center, roughly two-fifths of Generation Y (broadly defined as those born in the 1980s and '90s) remain unemployed. Studies by Yale economist Lisa Kahn indicate that those who begin their careers in a recession face diminished lifetime earnings. Moreover, as the national debt and unfunded liabilities grow and future tax burdens reach crippling proportions, the prospects for intergenerational mobility are fading fast.

While policy makers have touched on these issues, they've ignored one key aspect—gloomy long-term financial returns. The conventional wisdom bequeathed to our generation was simple: Buy stocks and hold them for the long run. With the S&P 500 returning nominal compound annual growth rates of 10%-12%, individual retirement accounts (IRAs) and 401(k) plans were thought to offer a sure-fire means to generate wealth over a lifetime. Investment advisers were quick to ignore those ominous lines enclosed with every investment prospectus: "Past performance is not indicative of future results."Rather than viewing those lines as a legal disclaimer, Generation Y should treat them as a statement of fact.

However, the structure of the global economy and financial markets are changing before our eyes, and three developments portend diminished returns for Generation Y. First, traditional stock valuation is anachronistic. Stock prices often no longer represent the present value of future dividends. Even if they did, the record levels of cash on corporate balance sheets imply a paucity of investment opportunities, meaning reduced future dividends and lower stock prices.

With the proliferation of "dark pools" and algorithmic traders—a recent study by the TABB Group revealed that the latter account for 56% of all U.S. equity trades—fundamentals no longer matter as much as they once did. Gone are the days of equity markets serving as a source of investment for capital formation; stock investors now buy volatility. Second, in addition to burdening us with onerous Social Security and Medicare payments, baby boomers will deplete Generation Y's wealth through the dynamics of portfolio management. Typically, as investors age, they shift from variable-income securities to fixed-income securities—from stocks to bonds.

As the nearly 80 million baby boomers make this shift, demand for stocks will decrease, implying depressed equity values. As demand and trading volume decrease, existing investors may be exposed to bouts of extreme volatility, as the prices of thinly traded assets fluctuate erratically.

Finally, the cold, hard reality is that the U.S. no longer occupies the privileged position it assumed after World War II. As the nucleus of the Bretton Woods system, the U.S. controlled the world's reserve currency, underwrote global security and economic growth, and served as the consumer of last resort. The easy prosperity attendant with abundant capital inflows, unconstrained monetary expansion, and steadily appreciating asset values is over. Generation Y will need to search elsewhere for yield.

The most promising opportunities will be in emerging markets like Brazil, India and China. Goldman Sachs already estimates that more than half of the global assets under management are outside of the U.S. Savvy young investors likely will allocate greater portions of their portfolios to the stocks of foreign companies and the bonds of foreign governments that are investing in economic growth rather than spending on entitlements. Perversely, U.S. investors will finance the growth of foreign companies instead of American ones—contributing further to American economic decline and reducing U.S. equity returns.

The trends are discouraging, but policy makers can make a difference. Rather than printing money to stimulate consumption and inflate asset values, they should abandon their quixotic attempt to return us to a higher level of comfort on the same downward economic trajectory. Rather than saddling us with more debt to finance entitlements, policy makers should invest in physical and communications infrastructure, adopt competitive tax policies, and offer incentives for foreign investment into the U.S.

Improving the U.S. investment climate will ease America's short-run economic challenges and make us more globally competitive over the long run. Given the dissolution of private pensions and the ballooning tax burden of Social Security and Medicare, attracting investment is the best hope for Generation Y to build wealth and pursue the American Dream.

Source: http://online.wsj.com/article/SB10001424052748703989304575504262997083390.html?mod=googlenews_wsj

Related news from the not too distant past:

Rahm Emanuel Doesn’t Pay Taxes, So Why Should You?

Of course, if you don’t pay taxes to the government, chances are you will be arrested and thrown in the clinker. Not so in the case of Rahm Emanuel, Obama’s Chief of Staff. Emanuel’s brazen tax evasion is nothing new, although the corporate media does not bother to cover it. However, as we close in on tax day, the story is worth revisiting.

Millionaire Rahm created a handy-dandy charity in order to avoid paying property taxes on his Chicago residence. “According to the Cook County Assessor’s website, the Chicago home of four-term Democrat Congressman and likely new White House Chief of Staff, Rahm Emanuel, doesn’t exist. While the address of 4228 North Hermitage is listed as Emanuel’s residence on the Illinois State Board of Elections’ website, there seems to be no public record of Emanuel ever paying property taxes on this home,” Right Soup reported last November, shortly after the election.

It isn’t a real charity, though — or at least not a serious one. “The Rahm Emanuel and Amy Rule Charitable Trust was formed in 2002, when the Chicago lawmaker was first elected. The former Clinton White House aide and his wife, Amy Rule, are its only donors.”

Democrats are fond of this scam, as USA Today noted on January 7, 2007. “Rep. Rahm Emanuel made millions as an investment banker. Sen. Evan Bayh had leftover cash after two successful campaigns for Indiana governor. House Speaker Nancy Pelosi’s husband, Paul, became wealthy investing in real estate and technology firms… Emanuel, Bayh and Nancy Pelosi are officers of the foundations that carry their names but failed to disclose the fact on their annual financial disclosure reports filed with Congress.”

Don’t try this at home unless you want heavily armed sheriffs to show up.

“The Cook County Assessor’s and Cook County Treasurer’s online records indicate Emanuel’s Chicago neighbors pay between $3,500 and $7,000 annually,” explains the No Compromise When it Comes to Being Right! blog. “However, Illinois Review has been unable to locate any evidence that the former Clinton advisor and investment banker is paying his fair share of Cook County’s notoriously high tax burden.”

In addition to not paying property taxes in Illinois, Emanuel has a nifty deal in the district of criminals. “White House chief of staff Rahm Emanuel’s Washington lodging arrangements, a rent-free basement room in a Capitol Hill home owned by Rep. Rosa DeLauro (D-Conn) and her pollster husband, have inspired debate among tax experts and in Republican-leaning parts of the blogosphere,” the Chicago Tribune reported recently. “One issue is whether Emanuel, who served in the House with DeLauro until early January, should have listed the room either as a gift or as income on his congressional financial disclosure forms. Emanuel’s disclosure filings contain no mention of his use of the room.”

Emanuel and other bureaucrats apparently don’t have the time or desire to fill out and file the sort of paperwork you and I take for granted — that is not unless you relish the idea of the IRS on your back. Earlier this month, the media covered the “tax problems” of yet another Obama appointee, Labor Secretary-designate Hilda L. Solis. Solis followed Treasury Secretary Thomas F. Geithner, Services Secretary-designate Thomas A. Daschle and Nancy Killefer, Obama’s choice to be the first “performance chief officer,” all with similar “tax problems.”

Solis’ tax evasion, however, is no big deal for the Democrats — on Tuesday, the Democrat-dominated Senate voted to confirm Rep. Hilda Solis as labor secretary, despite her husband paying overdue state taxes only after she was nominated by Obama more than two months ago. “The Senate voted 80 to 17 to confirm Solis, drawing praise from her allies in organized labor and the Latino community. Her nomination was held up when it was learned that her husband, Sam Sayyad, had recently paid about $6,400 in back state taxes he owed from his auto repair business in California,” the New York Daily News reports.

Rahm Emanuel and Obama’s appointees are excused from paying taxes. Meanwhile, speaking from the rostrum in the rogue’s gallery that is the House chamber, Obama said last night that more money will be needed to fritter away on the so-called banker bailout, actually a banker giveaway. Obama said trillions more will have to be “set aside” for the bankers. In other words, your children and grandchildren will pay confiscatory taxes well into the future.

Don’t expect Rahm Emanuel, Nancy Pelosi, Tim Geithner, Evan Bayh, and other minions of the elite to pay their “fair share.” After all, taxes are for the little people.

Source: http://www.infowars.com/rahm-emanuel-doesnt-pay-taxes-so-why-should-you/

What Ike Got Right - February, 2011

2011-02-24T18:56:00.001-08:00

Discussions about the current financial/political woes in America would not be complete without taking into account one of the most powerful special interests groups that has been indirectly running Washington for a long time. That government within a government is none other than - America's military industrial complex and its front office in Virginia called the Pentagon. It is no secret, nor is it a surprise, that the military industrial complex specializes in war. For it, the formula is simple - war makes money, and lots of it. In fact, military industrial complex lives and prospers as a result of killing and destroying. And its longevity is intimately connected with creating enemies around the world. As America's infrastructure crumbles and its middle class shrinks, the arms industry in the United States is continuing to make record profits.

Pentagon waste (a palatable word for grand theft and embezzlement in the Pentagon) is legendary and biblical in proportions. From the "$600 toilet seat covers" of the Reagan era to trillions of dollars "unaccounted" for during the Bush era, the warmongering arms industry of the United States has been raping and pillaging the American people for decades. Here is one of Washington's war criminals, Donald Rumsfeld, reporting 2.3 trillion dollars "missing" from the pentagon's budget in 2001: http://www.youtube.com/watch?v=3kpWqdPMjmo

Had this money been missing in a place like Moscow, Tehran, Beijing or Yerevan, it would have been immediately labeled - "people's money stolen by corrupt officials". Since the astronomical amount of money in question stolen was by Washingtonian officials in-tandem with their overlords in the Pentagon and the arms industry, the stolen money was conveniently labeled as - "missing" (as in, yet to be found). And luck would continue to shine on them because on September 11, 2001, merely a day after the announcement was made by Rumsfeld, the Pentagon just happened to get blown up by unknown assailants. Thereafter, the "missing money" more-or-less went missing from American memory.

During the height of the Cold War, during the time when America's military industrial complex was fear-mongering about the spread of Communism (simply to spread its iron web over nations of the "free" world), one of America's most popular wartime presidents, Dwight D. Eisenhower (affectionately known as Ike), warned the American public about these bloodthirsty warmongers.

As the American public slept comfortably, the reigns of power in Washington were taken over by several special interest groups. The parasites that more-or-less hijacked the political system in the United States were and continue being - the Zionist lobby, the oil lobby, Wall Street/international bankers, the pharmaceuticals industry, internationally owned mega-corporations and last but not least - the military industrial complex. These are closed-circuit entities that maintain high level connections with each other. These entities collaborate and conspire. Their endgame is profit, lots of it and at our expense. And they have managed to remake America in their image.

Their collective tentacles reach so deep into America's political and financial system today, that the nation's politicians no longer serve the people. America's president's today, whether they may be Democrat or Republican, are the representatives/spokesmen of the nation's special interests. American presidents are simply tasked with selling to the American public what the special interests have decided for the nation. Without getting into a further political tirade at this time, I'll allow one of America's greatest wartime generals/presidents speak in my stead.

Arevordi
February, 2011

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What Ike Got Right

Pentagon Almighty: Defense Budget Fat, Sick Economy Starving (RT video): http://www.youtube.com/user/RussiaToday#p/u/6/D09ZcspZVLw

The Military-Industrial Complex (website): http://www.militaryindustrialcomplex.com/

LAST week the National Archives released a trove of drafts and notes that shed new light on President Dwight D. Eisenhower’s farewell address, in which he warned America about the “military-industrial complex.” The release comes just in time for the speech’s 50th anniversary next month. And so while scholars and historians use these documents to scrutinize the evolution of the speech’s famous phrase, it’s worth asking a broader question: does America still have a military-industrial complex, and should we be as worried about it as Eisenhower was? By one measure, the answer to the first question is yes. Over the past 50 years there have been very few years in which the United States has spent less on the military than it did the year before. This has remained true whether the country is actively fighting a war, whether it has an obvious and well-armed enemy or whether Democrats or Republicans run the White House and Congress.

Despite regular expectations that the United States will enjoy a peace dividend, we continue to spend more on the military than the countries with the next 15 largest military budgets combined. Such perpetual growth seems to confirm Eisenhower’s concern about the size and influence of the military. It used to be, he said, that armies should grow and shrink as needed; in the Biblical metaphor of the speech, he observed that “American makers of plowshares could, with time and as required, make swords as well.”

But World War II and the early cold war changed that dynamic, creating what Eisenhower called “a permanent armaments industry of vast proportions.” It is not a stretch to believe that this armaments industry — which profits not only from domestic sales but also from tens of billions of dollars in annual exports — manipulates public policy to perpetuate itself. But Eisenhower was concerned about more than just the military’s size; he also worried about its relationship to the American economy and society, and that the economy risked becoming a subsidiary of the military. His alarm was understandable: at the time the military represented over half of all government spending and more than 10 percent of America’s gross domestic product. Today those figures are not quite as troubling.

While military spending as a percentage of gross domestic product has been going up as a result of 9/11 and the wars in Iraq and Afghanistan, the overall trend since 1961 is substantially down, thanks to the tremendous growth in America’s nonmilitary economy and the shift in government spending to nonmilitary expenditures. Yet spending numbers do not tell the whole story. Eisenhower warned that the influence of the military-industrial complex was “economic, political, even spiritual” and that it was “felt in every city, every statehouse, every office of the federal government.”

He exhorted Americans to break away from our reliance on military might as a guarantor of liberty and “use our power in the interests of world peace and human betterment.” On this score, Eisenhower may well have seen today’s America as losing the battle against the darker aspects of the military-industrial complex. He was no pacifist, but he was a lifelong opponent of what he called a “garrison state,” in which policy and rights are defined by the shadowy needs of an all-powerful military elite.

The United States isn’t quite a garrison state today. But Eisenhower would likely have been deeply troubled, in the past decade, by the torture at Abu Ghraib, the use of martial authority to wiretap Americans without warrants and the multiyear detention of suspects at Guantánamo Bay without due process. Finally, even if the economy can bear the immediate costs of the military, Eisenhower would be shocked at its mounting long-term costs. Most of the Iraq war expenses were paid for by borrowing, and Americans will shoulder those costs, plus interest, for many years to come. A strong believer in a balanced budget, Eisenhower in his farewell address also told Americans to “avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow.”

Too many of today’s so-called fiscal conservatives conveniently overlook the budgetary consequences of military spending. Eisenhower’s worst fears have not yet come to pass. But his warning against the “unwarranted influence, whether sought or unsought, by the military-industrial complex” is as urgent today as ever.

Source: http://www.nytimes.com/2010/12/14/opinion/14ledbetter.html?scp=2&sq=ike&st=cse

What Eisenhower Got Wrong

Fifty years ago this Monday, President Dwight Eisenhower gave a farewell address in which he famously warned of the dangers of influence on our government by the "military industrial complex." Our current Secretary of War, Robert Gates, has proposed to retire this year and has recommended that his successors stop increasing the military budget. But Eisenhower didn't just bring this up on his way out the door. It was seven years earlier that he had remarked:

"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed 8,000 people."

But pulling these quotes out of context, as we like to do, misses the reprehensible context of the speeches in which they originated. It would be a similar act of distortion to quote President Barack Obama's Nobel Peace Prize acceptance speech and leave out everything but that peaceful opening line. "Your Majesties, Your Royal Highnesses, Distinguished Members of the Norwegian Nobel Committee, citizens of America, and citizens of the world:"

Obama went on to argue the necessity of war. And that is what Eisenhower did in his farewell address. He argued against unlimited militarization while arguing for something just short of it. He proposed disarmament while suggesting that we'd really better not do it. These lines are less well remembered: "We face a hostile ideology, global in scope, atheistic in character, ruthless in purpose, and insidious in method. Unhappily, the danger it poses promises to be of indefinite duration."

How does one dismantle the military industrial complex in the face of a ruthless, atheistic ideology? Of course, Eisenhower did not do so. He refrained from some of the excesses, in both war funding and war lying, of his successors. He dug our country into a pointless war on Vietnam, but not to the extent of his successors. And when his immediate successor resisted the military machine more than Eisenhower had, a single bullet struck him multiple times in Dallas. If we set aside for a moment the pressing question for all presidents of whether Eisenhower was a devil or a saint, we can appreciate the value of having a president say anything worthwhile. But a half century later, we should be able to bring ourselves to also recognize what ideally should have been said -- and was being said by others.

In the same speech in which Eisenhower spoke of the theft from those who hunger, he claimed eternal innocence for the United States in foreign affairs. The United States had never been an aggressor; that was the Soviet Union's role. The United States relied on "trust and mutual aid" while the USSR relied on "force: huge armies, subversion, rule of neighbor nations." Why did we have to steal from the hungry in order to build weapons? Eisenhower had the answer: "The amassing of Soviet power alerted free nations to a new danger of aggression. It compelled them in self-defense to spend unprecedented money and energy for armaments."

Eisenhower blamed the Soviet Union for "aggression in Korea and southeast Asia." We know that to have constituted a pair of super-destructive lies. The point is not that Eisenhower wasn't relatively responsible, when compared with his predecessors and successors. But he maintained the same set of lies that allowed for the military industrial complex to grow into something today that probably didn't penetrate his worst nightmares.

Fifty years later it has come to look likely that militarized global empire cannot be maintained at a limited level that permits democracy at home. This is an all or nothing endeavor that requires a radical solution. We cannot both live and breathe fear of the evil now-Muslim terrorist ideology and halt nuclear proliferation. We cannot pretend our wars have been defensive and humanitarian while at the same time shutting down bases around the globe. We cannot imagine foreigners to be subhuman beasts and simultaneously pursue disarmament. In 1959, A.J. Muste said:

"I am not impressed . . . with the struggle that goes on periodically between the White House and Congressional committees over whether a balanced budget or national security is of first importance. These are not struggles between pacifists and militarists, people who want or do not want 'genuine negotiation.' And however these controversies come out, the military budget will be of astronomical proportions for 'peacetime'."

Muste cited C. Wright Mills and George F. Kennan in arguing for unilateral disarmament and adoption of a very different approach to the world. A half century later, that idea has less respect than ever, but the dominant idea is taking us off a cliff. The war machine is stronger than ever, the war propaganda slicker, the dangers heightened. Continuing down this course is not survivable in terms of proliferation or blowback, environmental destruction or loss of democratic representation, or in simple economic terms. This week a congress member proposed a bill to allow his colleagues to come armed to work, on the grounds that they could not safely walk home on Capitol Hill.

Tinkering with a self-destructive system will not save us. We need what Martin Luther King, Jr., whose holiday is also celebrated on Monday, called a revaluation of values. We need to outgrow the idea that there can be a good or just war any more than there can be a good slavery or a just rape. We need to confront the root of the militaristic ideology that even Eisenhower pushed on us: the lies about World War II. Yes, Franklin Roosevelt campaigned for office promising to stay out of a war he was already working to maneuver the United States into, and for all the wrong reasons, and he lied about German attacks and plans for conquest, and he lied about Pearl Harbor.

For a truly painful experience, read what FDR and others knew. Then read the endless saga of investigations and coverups. That FDR pursued very good policies domestically is not altered by what he did abroad. If we are looking for people to model our lives after, they should not be elected officials. They should be people like Martin Luther King, Jr. Here is someone doing that.

Source: http://www.globalresearch.ca/index.php?context=va&aid=22776

Ike's warning resonates

Fifty years ago today, on Jan. 17, 1961, President Dwight D. Eisenhower issued his prophetic warning about the military-industrial complex, anticipating the increased political, economic, military and even cultural influence of the Pentagon and its allies. Several weeks earlier, he had privately told his senior advisers in the Oval Office of the White House, "God help this country when someone sits in this chair who doesn't know the military as well as I do." Several months after his inauguration in 1953, he warned against warfare that had "humanity hanging from a cross of iron."

Although the Cold War ended two decades ago with the collapse of the Soviet Union, recent presidents have found no way out of increased military deployments and expenditures. Nor have they challenged the national security influence of the military. No president since Eisenhower has genuinely understood the dangers of the Pentagon's increasing influence over our national security policy. Eisenhower made sure that he was never outmaneuvered by his military advisers, particularly on such key issues as the Bay of Pigs and Vietnam, which his immediate successors thoroughly bungled. President John F. Kennedy never understood that the Pentagon anticipated the failure of the CIA in Cuba in 1961 and hoped to use its air power to achieve success. President Lyndon B. Johnson failed to challenge pleas from the Pentagon for more force and additional troops in Vietnam until it was too late.

Unlike Kennedy and Johnson, Eisenhower ignored the hysteria of the bomber and missile gaps in the 1950s, as well as the heightened concerns about U.S. security in National Security Council Report 68 (NSC-68) in the late 1940s and the Gaither Report in the mid-1950s, which called for unnecessary increases in the strategic arsenal. Eisenhower ignored the many Democrats and Republicans who advocated for increased defense spending, and he even cut the military budget by 20 percent between 1953 and 1955 on the way to balancing the federal budget by 1956.

Eisenhower clashed with the military mindset from the very beginning of his presidency. He knew that his generals were wrong in proclaiming "political will" the major factor in military victory and would have shuddered when Gen. David Petraeus proclaimed recently that political will is the key factor for U.S. success in Afghanistan. Eisenhower knew that military demands for weaponry and resources were always based on inexplicable notions of "sufficiency," and he made sure that Pentagon briefings to Congress were countered by testimony from the intelligence community.

Henry A. Kissinger was one of the rare national security advisers and secretaries of state who understood Eisenhower's point of view. During the ratification process for the SALT I agreement in 1972, he countered conservative and military opposition to SALT and the Anti-Ballistic Missile Treaty with two questions the opponents of arms control could never answer: "What is strategic sufficiency? What would we do with strategic sufficiency if we had it?"

Eisenhower warned in his Farewell Address in 1961 that the United States should not become a "garrison state," but 50 years later we have developed a garrison mentality with unprecedented military spending; continuous military deployments; exaggerated fears with regard to "Islamo-terrorism" and now cyberwars; and exaggerated aspirations with regard to counterinsurgency and nation-building. Eisenhower understood that the military-industrial complex fostered an inordinate belief in the omnipotence of American military power.

Finally, Eisenhower understood the limits and constraints on the use of force and did not fall prey to the type of planning that led to Kennedy's Bay of Pigs, Johnson's Vietnam, Ronald Reagan's Grenada, George W. Bush's Iraq, and now Barack Obama's Afghanistan. He started no wars and wisely settled for a stalemate in Korea. He stood alone in heavily criticizing the British-French-Israeli invasion of Egypt in 1956, and he ignored criticism for not assisting the Hungarian uprising weeks later.

Unfortunately, with the possible exception of President Richard Nixon, we have not had a president who understood the military mindset and was willing to limit the influence of the military. Democrats such as Kennedy, Johnson and Bill Clinton, as well as Republicans such as Mr. Reagan and the two Presidents Bush, have deferred too readily to the military. They devoted too many resources to the military and often resorted to the use of power instead of diplomacy and statecraft.

The twin military setbacks in Iraq and Afghanistan, where failed counterinsurgency strategies have cost billions of dollars and thousands of lives, should lead to a serious national security debate to prevent the mistakes of the past two decades. But President Obama finds himself in a position where the military wields far too much influence on Capitol Hill and within the intelligence community; controls too much of the weak U.S. economy; and has the leading policy voice on security issues. Instead of catering to the military, Mr. Obama would do well to heed the philosophy and advice of Eisenhower, who stood alone in understanding America's infatuation with military power.

Source: http://www.baltimoresun.com/news/opinion/oped/bs-ed-ike-20110117,0,6323562.story

Russia and China Discuss Abandonment of the Dollar as Putin Visits Germany - December, 2010

2010-12-27T13:42:00.001-08:00

The overwhelming power and influence Washington has had over the financial, political and cultural life of the post-Soviet world is a bit difficult for the average human-being to grasp. But Washington's global supremacy is slowly coming to an end. The US is no longer the undisputed leader of the so-called free world nor it is the economic powerhouse it once was. And despite what some may want to believe, there is also no turning back for Washington. The geopolitical shifts currently occurring are irreversible. It will take some time before Washington's exhausts all efforts and hits rock bottom. Nonetheless, the US is definitely on its downward slide.

We are currently witnessing some of the separation anxieties and growing pains the global community is feeling as it finally attempts to create a true "multipolar" financial and political system by gradually abandoning the modern world's US dominated Anglo-American-Zionist global order.

As the superficially imposed Dollar commodity is gradually forced to relinquish its global clout, other currencies and traditional commodities such as gold and silver are making a strong come back. International calls to abandon the US Dollar continues unabated and the effort seems to be pulling together the top three Eurasian powers - Russia, China and Germany. Vladimir Putin spearheaded the move late last November when he met with German and Chinese leaders. Considering how deeply the Dollar is entrenched in global commerce, however, such highly volatile actions are easier said than done. Nevertheless, merely discussing the matter is in itself a very crucial and courageous first step. And many nations around the world have begun doing just that. Such a thing would have been unheard of just several years ago. The writing is now clearly on the wall and the Dollar's global death-grip may be finally coming to an end.

On a related note, some financial analysts argue that the recent weakening of the Euro via the financial debacle in Greece was orchestrated by Wall Street as a means to undermine the growing clout of the Euro. Although somewhat whitewashed, the New York Times article on this page discusses the matter, and Ron Paul, perhaps last of America's patriot-politicians, has again publicly criticized the Federal Reserve (see corresponding articles posted below).

Arevordi

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Putin ditches dollar, backs Euro on trip to Germany (RT video): http://www.youtube.com/watch?v=IvJEJEGzeU8

Max Keiser: Teutonic Genie out of bottle, America punches itself in face (RT video): http://www.youtube.com/watch?v=trmPJxk5954

Max Keiser: Dollar to be buried way before 2018: http://www.youtube.com/watch?v=D7dH4e8HYFA

US dollar to die out in oil deals? http://www.youtube.com/watch?v=mezD3f9QjD0

Robert Fisk on the Gulf 'ditching the dollar' in oil trade: http://www.youtube.com/watch?v=CBDPGkW6SCU&NR=1

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Sino-Russian Abandonment of the Dollar

December, 2010

China and Russia, who have been agitating internationally for several years now for alternatives to the U.S. dollar as the world’s reserve currency, have announced that they will no longer rely on the dollar in bilateral trade. Instead, the two Asian giants, whose respective economies have boomed in recent years and whose cross-border trade has swelled proportionately, will now use each another’s currencies for cross-border commerce. On November 23 in St. Petersburg, visiting Chinese premier Wen Jiabao and Russian Prime Minister Vladimir Putin announced the new measure. Prior to the global financial crisis, the Russians and the Chinese used dollars and sometimes other “hard” currencies to trade with each another, but with the looming global currency crisis — precipitated in no small measure by the inflationary policies of the Federal Reserve — the Chinese and Russians have decided to put their money where their mouth is. Rubles have begun trading against the yuan in Chinese money markets, and the Chinese currency is poised to do the same in Moscow.

Nor is the change in exchange currencies the only sign of the growing Sino-Russian friendship. The St. Petersburg summit produced 12 different agreements ranging from intellectual property protection to energy production. China has agreed to purchase two advanced nuclear reactors from Russia, while Russia is working to negotiate a price for sale of more natural gas to the Chinese. Wen expressed satisfaction with the outcome of the latest summit, which followed a September visit by Russian President Dmitri Medvedev to China. At the press conference, Wen praised the “unprecedented level” of Sino-Russian cooperation and promised that the two countries will “never become each other's enemy.” He also stated that “China will firmly follow the path of peaceful development and support the renaissance of Russia as a great power. The modernization of China will not affect other countries' interests, while a solid and strong Sino-Russian relationship is in line with the fundamental interests of both countries.”

While no one should begrudge the Chinese and Russians their mutual admiration society, the unspoken subtext of such announcements is the determination to diminish the influence of the United States in global affairs. For the nonce, China and Russia are content with newly-allied currencies. In the longer run, however, stronger military ties are a likelihood, given the military rivalry between both countries and the American superpower: Russia, over NATO’s eastward expansion, and China, over Taiwan, the Korean peninsula, and naval dominance in the Pacific region in general. For now, it is enough that the U.S. dollar is losing ground across the world, and that China and Russia in concert are the first major powers to openly repudiate it.

Source: http://www.thenewamerican.com/index.php/economy/commentary-mainmenu-43/5308-sino-russian-abandonment-of-the-dollar

China-Russia currency agreement further threatens U.S. dollar

China and Russia have agreed to allow their currencies to trade against each other in spot inter-bank markets. The motive is to "promote the bilateral trade between China and Russia, facilitate the cross-border trade settlement of [the yuan], and meet the needs of economic entities to reduce the conversion cost," according to Chinese officials. This latest move -- a continuation in a series of efforts by both countries to move away from U.S. dollar usage in international trade -- further threatens the dollar's reserve currency status. The dollar has this status because it is currently the currency of international trade.

For example, when Malaysia and Germany exchange goods, the transaction is often denominated in dollars. In particular, oil -- something that all modern economies need -- is denominated in U.S. dollars, so the currency is almost as indispensable as oil itself. The dollar reserve currency status allows the U.S. to run up high deficits and have its debt be denominated in the U.S. dollar, which in turn enables it to print unlimited dollars and inflate its way out of debt. America, understandably, wants to protect these privileges. In fact, some allege that the U.S. wants to protect this status so badly that it invaded Iraq because the country began selling oil in euros instead of dollars. Now, the U.S. is allegedly threatening Iran because of the country's desire to use euros or Russian rubles in oil transactions.

Meanwhile, China and Russia are gradually revolting against the U.S. dollar. This latest move to shift bilateral trade away from it is significant in itself because China-Russian trade -- previously denominated in dollars -- is currently around $40 billion per year. For Russia, trade with China is larger than trade with the U.S. Moreover, as this policy extends to Russian exports of oil and natural gas to China, it threatens the global "petro-currency" status of the U.S. dollar. According to the International Energy Agency, China is already the largest consumer of energy, although the U.S. is still the largest consumer of oil. However, China, now the largest automobile market in the world, is expected to rapidly increase oil consumption.

Russia is already the second biggest oil exporter and the biggest natural gas exporter in the world. In other words, the growing importance of Russia and China in the global energy picture -- and their phasing out of dollar usage for trading energy commodities -- would marginalize the status of the dollar. Russian ambitions against the dollar for energy exports go back to 2006. That year, former President Vladimir Putin made plans to set up a ruble-denominated oil and natural gas stock exchange in Russia. "The ruble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for with rubles…Our goods are traded on global markets. Why are they not traded in Russia," said Putin, according to RIA Novosti.

For China, it is promoting the use of yuan as a trade settlement currency in Asia. Recently, it allowed its currency to trade against the Malaysian ringgit. Just like the deal with Russia, the purpose of that agreement was to "promote bilateral trade between China and Malaysia and facilitate using the yuan to settle cross-border trade." Trade is the major reason for the demand of foreign currencies in the first place. So as countries like China and Russia phase out the usage of U.S. dollars for international trade -- including but not limited to oil trade -- its status as the world's reserve currency will continue to slide.

Source: http://www.ibtimes.com/articles/85424/20101124/china-russia-drop-dollar.htm

Putin: Russia Will Join The Euro One Day

Vladimir Putin said it is "quite possible" that Russia will one day join the eurozone and create a currency that would eclipse the US dollar as the global reserve standard. Speaking at a conference in Germany the Russian prime minister, who is in the country for talks with Chancellor Angela Merkel, said he was convinced the euro would stabilise and strengthen despite the current sovereign debt crisis. He said: "Yes, there are problems. But the economic policy of the European Central Bank and of the governments of leading European economies ... convinces me that the stability of the euro will be ensured." He added: "We know there are problems in Portugal, Greece, Ireland and the euro is wobbling a bit. On the whole it is a solid, good currency and it should take its place, its role as a reserve currency."

Asked about Russia's role in the eurozone in the future, Mr Putin said: "Can it be supposed that one day Russia will be in some joint currency zone with Europe? Yes, quite possible." Speaking at the same event, Josef Ackermann, chief executive of Deutsche Bank, echoed Mr Putin and said he could imagine Russia joining a common European currency. Mr Putin said that for the past decade there has been a reliance on the dollar that needs to be rebalanced as it makes the world economy vulnerable. "We should move away from the excessive monopoly of the dollar as the only global reserve currency," he said. But the Russian prime minister was critical of European laws intended to improve transparency in energy supply and distribution. He claimed the "Third Energy Package", aimed at liberalising the market, will hinder investment and amounts to uncivilised "robbery". Moscow claims that the measures devalue the European assets of Gazprom, the state-controlled gas giant.

Mr Putin said: "We often hear from our partners in Europe and North America: 'If you want to be members of a global family of civilised nations, you should behave in a civilised way.' What is this then? Have our colleagues forgotten the basic principles?" Meanwhile, Russia's finance minister, Alexei Kudrin, has said the country's banks may buy stakes in the UK's "large" financial companies. He claimed that VTB Group, Russia’s second-biggest lender, is among the banks interested in acquisitions in the UK. During Vince Cable's trade mission to Moscow, the Business Secretary said he would “welcome” Russian investors.

Source: http://www.telegraph.co.uk/finance/currency/8163347/Putin-Russia-will-join-the-euro-one-day.html

Putin in Germany to Talk Up Free Trade

Russian Prime Minister Vladimir Putin on Thursday arrived in Berlin for talks with German Chancellor Angela Merkel, floating a bold idea of a free-trade zone across the European continent. Ahead of his visit to Germany, Putin, who meets Merkel today, said Russia and Europe could work together to form a free-trade economic zone spanning the entire European continent "from Lisbon to Vladivostok." Merkel, who developed an agreeable working relationship with Putin, a KGB agent in former East Germany, poured cold water on Putin's idea, not least because of a plan championed by the Russian premier to create a joint customs bloc with ex-Soviet Belarus and Kazakhstan. "The steps Russia has taken recently do not point in that direction," Merkel said.

Putin also criticized the European Union for its efforts to liberalize the gas market and promote competition there. For all its good intentions, the plan "undermines a desire by investors to commit funds to new projects," Putin said. Putin and Merkel are expected to discuss the fate of E. ON Ruhrgas' $4.5-billion stake in Gazprom, the world's largest gas producer. A Russian newspaper said E. ON wanted to sell its 3.5 per cent stake in the gas giant to Vnesheconombank, the state economic development bank.

Source: http://www.calgaryherald.com/news/Putin+Germany+talk+free+trade/3887361/story.html#ixzz16Xhvx2uq

Germany attacks US economic policy

Germany has put itself on a collision course with the US over the global economy, after its finance minister launched an extraordinary attack on policies being pursued in Washington. Wolfgang Schäuble accused the US of undermining its policymaking credibility, increasing global economic uncertainty and of hypocrisy over exchange rates. The US economic growth model was in a "deep crisis," he also warned over the weekend. His comments set the stage for acrimonious talks at the G20 summit in Seoul starting on Thursday. Germany has been irritated at US proposals that it should make more effort to reduce its current account surplus. But Berlin policymakers were also alarmed by last week's US Federal Reserve decision to pump an extra $600bn into financial markets in an attempt to revive US economic prospects through "quantitative easing".

On Friday, Mr Schäuble described US policy as "clueless". In a Der Spiegel magazine interview, to be published on Monday, he expanded his criticism further, saying decisions taken by the Fed "increase the insecurity in the world economy". " They make a reasonable balance between industrial and developing countries more difficult and they undermine the credibility of the US in finance policymaking." Mr Schäuble added: "It is not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar exchange rate artificially lower with the help of their [central bank's] printing press." Germany's export success, he argued, was not based on "exchange rate tricks" but on increased competitiveness. "In contrast, the American growth model is in a deep crisis. The Americans have lived for too long on credit, overblown their financial sector and neglected their industrial base. There are lots of reasons for the US problems -- German export surpluses are not part of them."

There was also "considerable doubt" as to whether pumping endless money into markets made sense, Mr Schäuble argued. "The US economy is not lacking liquidity." On the future of the eurozone, Mr Schäuble confirmed in the same interview that Berlin will push for a greater private investor involvement in future bail-outs. To ensure German taxpayers faced the smallest possible burden it was important to have the possibility of an orderly debt restructuring with the participation of private creditors, he said. Germany's proposals for a planned new rescue mechanism have run into resistance from the European Central Bank, which fears they will add to investor uncertainty at a crucial time for Europe's 12-year old monetary union. Mr Schäuble said the new mechanism would apply only to new eurozone debt but argued the European Union "was not founded to enrich financial investors".

Mr Schäuble envisaged a two-stage process in a future crisis. The EU would put in place the same sort of saving and rescue programme as imposed this year on Greece. In a first stage, the term structure of government debt could be extended. If that did not work, then in a second stage, private creditors would have to take a discount on their holdings. In return, the value of the remainder would be guaranteed, Mr Schäuble said.

Source: http://edition.cnn.com/2010/BUSINESS/11/07/germany.us.economic.policy.ft/index.html?hpt=T2

Germany Criticizes Fed Move

German officials, concerned that Washington could be pushing the global economy into a downward spiral, have launched an unusually open critique of U.S. economic policy and vowed to make their frustration known at this week's Group of 20 summit. Leading the attack is Finance Minister Wolfgang Schäuble, who said the U.S. Federal Reserve's decision last week to pump an additional $600 billion into government securities won't help the U.S. economy or its global partners. The Fed's decisions are "undermining the credibility of U.S. financial policy," Mr. Schäuble said in an interview with Der Spiegel magazine published over the weekend, referring to the Fed's move, known as "quantitative easing" and designed to spur demand and keep interest rates low. "It doesn't add up when the Americans accuse the Chinese of currency manipulation and then, with the help of their central bank's printing presses, artificially lower the value of the dollar."

At an economics conference in Berlin Friday, Mr. Schäuble said the Fed's action shows U.S. policy makers are "at a loss about what to do." Berlin's eagerness to scold the U.S. appears driven in part by a desire for payback after suffering persistent criticism this year for the German economy's reliance on exports. German officials have been on the defensive since French Finance Minister Christine Lagarde suggested in March that German trade surpluses were hurting the competitiveness of weaker euro-zone members and contributing to the bloc's debt crisis. That argument was reinforced as German gross domestic product surged an annualized 9% in the second quarter on improved demand for its manufactured goods abroad. The government now believes the economy will grow 3.4% this year.

Mr. Schäuble hit back at critics in the Der Spiegel interview. "Germany's exporting success is based on the increased competitiveness of our companies, not on some sort of currency sleight-of-hand. The American growth model, by comparison, is stuck in a deep crisis," he said. "The USA lived off credit for too long, inflated its financial sector massively and neglected its industrial base. There are many reasons for America's problems—German export surpluses aren't one of them." Pressure continued at the G-20 finance ministers' meeting last month in Gyeongju, South Korea, where U.S. Treasury Secretary Timothy Geithner urged countries to commit to keeping their current-account imbalances below 4% of gross domestic product over the next few years.

The measure was aimed at China as part of U.S. attempts to nudge Beijing to let the yuan rise, but Germany, whose current-account surplus is about 6% of GDP according to the International Monetary Fund, also vehemently opposed the plan. The result was a general commitment among G-20 members to keep trade balances at "sustainable levels" and to avoid a cascade of competitive currency devaluations. "Germany's reliance on exports rather than domestic demand may be a successful short-run strategy, but it is very hard on its trading partners and shortsighted," said Christina Romer, a professor of economics at the University of California, Berkeley, and until recently the head of President Barack Obama's Council of Economic Advisers. "It is in Germany's interest for its neighbors to prosper because of the interconnectedness of their economies and, especially, their banks."

The Fed's most recent round of quantitative easing also offends German officials' commitment to sound public finances and low inflation. As the global recovery took hold this year, German Chancellor Angela Merkel introduced €80 billion in budget cuts and urged other major economies to undertake their own fiscal consolidation. Mr. Schäuble said last week that he doubted the U.S. would live up to a commitment world leaders made this summer at a G-20 summit in Toronto to halve government deficits by 2013. The aggressive monetary policy in the U.S. runs counter to the strategy of the European Central Bank, whose institutional thinking reflects a German abhorrence of high inflation that goes back to the country's financial ruin in the depression of the 1930s. The rancor from Berlin has left U.S. officials wondering whether the Germans are going to push their frustrations into the heart of the summit discussions in Seoul or whether their objections are largely posturing.

In Washington, the German rhetoric seems particularly shrill at a time when the euro is trading at a lower level against the dollar than it was a year ago—though the euro has risen in value in recent months. U.S. officials are expecting complaints from emerging markets, which are dealing with a flood of money from investors in the U.S. and Europe in search of higher yields. Interest rates in Europe and the U.S. are much lower than in emerging markets, which creates an incentive for investors in both Germany and the U.S. to turn their attention overseas.

Mr. Schäuble, who will accompany Ms. Merkel to the G-20 summit Thursday and Friday in Seoul, South Korea, may have his own motivations for making bold statements and policy proposals that will keep him in the spotlight. Confined to a wheelchair since he was shot in an assassination attempt 20 years ago, Mr. Schäuble, 68, has been in and out of hospital care this year after a routine operation in February related to his paralysis left him with a wound that failed to heal. He missed key meetings last spring as European governments fought to keep Greece out of insolvency, prompting persistent questions over whether he was wealthy enough to represent Germany at a crucial time.

After spending three weeks at a clinic for treatment. Mr. Schäuble made a cantankerous return to German public discourse late last month. In addition to spearheading the government's hard line against U.S. monetary policy, he publicly reprimanded a spokesman for fumbling the release of tax-revenue estimates to reporters—an episode that became a popular Internet video. In Berlin on Friday, Mr. Schäuble said his focus on his job had never flagged. "From a hospital, you can make telephone calls perfectly well," he said.

Source: http://online.wsj.com/article/SB10001424052748703665904575600682866545188.html

Wall St. Helped to Mask Debt Fueling Europe’s Crisis

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts. As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels. Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards. It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means. Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.

As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere. In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come. Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities. Some of the Greek deals were named after figures in Greek mythology. One of them, for instance, was called Aeolos, after the god of the winds.

The crisis in Greece poses the most significant challenge yet to Europe’s common currency, the euro, and the Continent’s goal of economic unity. The country is, in the argot of banking, too big to be allowed to fail. Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.

A spokeswoman for the Greek finance ministry said the government had met with many banks in recent months and had not committed to any bank’s offers. All debt financings “are conducted in an effort of transparency,” she said. Goldman and JPMorgan declined to comment. While Wall Street’s handiwork in Europe has received little attention on this side of the Atlantic, it has been sharply criticized in Greece and in magazines like Der Spiegel in Germany. “Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it,” said Gikas A. Hardouvelis, an economist and former government official who helped write a recent report on Greece’s accounting policies.

Wall Street did not create Europe’s debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt — the Wall Street term for loans to governments — is as unfettered as it is vast. “If a government wants to cheat, it can cheat,” said Garry Schinasi, a veteran of the International Monetary Fund’s capital markets surveillance unit, which monitors vulnerability in global capital markets. Banks eagerly exploited what was, for them, a highly lucrative symbiosis with free-spending governments. While Greece did not take advantage of Goldman’s proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.

Such derivatives, which are not openly documented or disclosed, add to the uncertainty over how deep the troubles go in Greece and which other governments might have used similar off-balance sheet accounting. The tide of fear is now washing over other economically troubled countries on the periphery of Europe, making it more expensive for Italy, Spain and Portugal to borrow. For all the benefits of uniting Europe with one currency, the birth of the euro came with an original sin: countries like Italy and Greece entered the monetary union with bigger deficits than the ones permitted under the treaty that created the currency. Rather than raise taxes or reduce spending, however, these governments artificially reduced their deficits with derivatives.

Derivatives do not have to be sinister. The 2001 transaction involved a type of derivative known as a swap. One such instrument, called an interest-rate swap, can help companies and countries cope with swings in their borrowing costs by exchanging fixed-rate payments for floating-rate ones, or vice versa. Another kind, a currency swap, can minimize the impact of volatile foreign exchange rates. But with the help of JPMorgan, Italy was able to do more than that. Despite persistently high deficits, a 1996 derivative helped bring Italy’s budget into line by swapping currency with JPMorgan at a favorable exchange rate, effectively putting more money in the government’s hands. In return, Italy committed to future payments that were not booked as liabilities. “Derivatives are a very useful instrument,” said Gustavo Piga, an economics professor who wrote a report for the Council on Foreign Relations on the Italian transaction. “They just become bad if they’re used to window-dress accounts.”

In Greece, the financial wizardry went even further. In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the country’s airports and highways to raise much-needed money. Aeolos, a legal entity created in 2001, helped Greece reduce the debt on its balance sheet that year. As part of the deal, Greece got cash upfront in return for pledging future landing fees at the country’s airports. A similar deal in 2000 called Ariadne devoured the revenue that the government collected from its national lottery. Greece, however, classified those transactions as sales, not loans, despite doubts by many critics. These kinds of deals have been controversial within government circles for years. As far back as 2000, European finance ministers fiercely debated whether derivative deals used for creative accounting should be disclosed. The answer was no. But in 2002, accounting disclosure was required for many entities like Aeolos and Ariadne that did not appear on nations’ balance sheets, prompting governments to restate such deals as loans rather than sales.

Still, as recently as 2008, Eurostat, the European Union’s statistics agency, reported that “in a number of instances, the observed securitization operations seem to have been purportedly designed to achieve a given accounting result, irrespective of the economic merit of the operation.” While such accounting gimmicks may be beneficial in the short run, over time they can prove disastrous. George Alogoskoufis, who became Greece’s finance minister in a political party shift after the Goldman deal, criticized the transaction in the Parliament in 2005. The deal, Mr. Alogoskoufis argued, would saddle the government with big payments to Goldman until 2019. Mr. Alogoskoufis, who stepped down a year ago, said in an e-mail message last week that Goldman later agreed to reconfigure the deal “to restore its good will with the republic.” He said the new design was better for Greece than the old one.

In 2005, Goldman sold the interest rate swap to the National Bank of Greece, the country’s largest bank, according to two people briefed on the transaction. In 2008, Goldman helped the bank put the swap into a legal entity called Titlos. But the bank retained the bonds that Titlos issued, according to Dealogic, a financial research firm, for use as collateral to borrow even more from the European Central Bank. Edward Manchester, a senior vice president at the Moody’s credit rating agency, said the deal would ultimately be a money-loser for Greece because of its long-term payment obligations. Referring to the Titlos swap with the government of Greece, he said: “This swap is always going to be unprofitable for the Greek government.”

Source: http://www.nytimes.com/2010/02/14/business/global/14debt.html?_r=1

The Fed? Ron Paul’s Not a Fan

Ben S. Bernanke, the chairman of the Federal Reserve, has been attacked for failing to foresee the financial crisis, for bailing out Wall Street, and, most recently, for injecting an additional $600 billion into the banking system to give the slow recovery a boost. But Mr. Bernanke will face even more scrutiny in the months to come. On Thursday, House Republican leaders announced that Representative Ron Paul of Texas, the outspoken Republican libertarian who ran for president in 2008, will become the chairman of the subcommittee that oversees the Fed. His position on the central bank is captured in the title of his 2009 book, “End the Fed” (Grand Central Publishing). Here’s some of what he wrote:

The Beginning of the End

“The day the Fed came into being in 1913 may have been the beginning of the end, but the powers it obtained and the mischief it caused took a long time to become a serious issue and a concern for average Americans.”

The Gold Standard

“Whenever I talk of a gold standard, there are always people ready to accuse me of having some obsession or fixation. Fetish is a word thrown around. In fact, I’m only observing reality: the idea of sound money in most of human history has been bound up with gold money.”

A Full-Time Counterfeiting Operation

On Mr. Bernanke: “There is something fishy about the head of the world’s most powerful government bureaucracy, one that is involved in a full-time counterfeiting operation to sustain monopolistic financial cartels, and the world’s most powerful central planner, who sets the price of money worldwide, proclaiming the glories of capitalism.”

New Money Out of Thin Air

“Only the Federal Reserve can inflate the currency, creating new money and credit out of thin air, in secrecy, without oversight or supervision. Inflation facilitates deficits, needless wars and excessive welfare spending.”

Fed Chairmen He Has Known

“Being in Congress in the late 1970s and early 1980s and serving on the House Banking Committee, I met and got to question several Federal Reserve chairmen: Arthur Burns, G. William Miller and Paul Volcker. Of the three, I had the most interaction with Volcker. He was more personable and smarter than the others, including the more recent board chairmen Alan Greenspan and Ben Bernanke.”

Low Interest Rates

“Artificially low interest rates are achieved by inflating the money supply, and they penalize the thrifty and cheat those who save. They promote consumption and borrowing over savings and investing. Manipulating interest rates is an immoral act. It’s economically destructive.”

The Bailouts

“Today, there is no principled opposition to the corporate bailouts and the Fed’s trillions of dollars of new credit and the takeover of insurance, mortgages, medical care, banks and the auto industry. The arguments have only been over amounts, financial vehicles, and which political group gets to wield the economic power. If there is no moral argument against the economic takeover of America, there will be no resistance to the dictator who rules over our lives with an iron fist.”

The Obama Legacy

“For the same reason a disease cannot be cured by more of the germ that caused it, the inflation and debt accumulation of the Obama years will not inflate our way out of it. This depression will likely last and last.”

Source: http://www.nytimes.com/2010/12/12/weekinreview/12chan.html?scp=2&sq=ron%20paul&st=cse

Related information from the recent past:

China Argues to Replace US Dollar

China's central bank has reiterated its call for a new reserve currency to replace the US dollar.

The report from the People's Bank of China (PBOC) said a "super-sovereign" currency should take its place. Central bank chief Zhou Xiaochuan has loudly led calls for the dollar to be replaced during the financial crisis. The bank report called for more regulation of the countries that issue currencies that underpin the global financial system. "An international monetary system dominated by a single sovereign currency has intensified the concentration of risk and the spread of the crisis," the Chinese central bank said. The dollar fell after the report was released. The US currency dropped 1% against the euro to $1.4088, and declined 0.8% versus the British pound to $1.6848.

SDRs

Mr Zhou caused a stir earlier this year when he said the dollar could eventually be replaced as the world's main reserve currency by the Special Drawing Right (SDR), which was created as a unit of account by the IMF in 1969.

CURRENCY RESERVES

Foreign currency held by a government or a central bank
Used to pay foreign debt obligations or influence exchange rates
The dollar is viewed as the world's reserve currency as the vast majority of reserves are held in the US currency
Smaller amounts are held in euros, pounds and yen

The PBOC said in the report that not only should the world adopt the SDR, but that the IMF should be entrusted with managing a portion of its member countries' foreign currency reserves. "To avoid intrinsic shortcomings in using a sovereign currency as a reserve currency, we need to create an international reserve currency that is divorced from sovereign states and can maintain a stable value over the long term," the PBOC report said. It also issued some veiled criticism of the US policies, saying that one of the major issues was that it was difficult to balance the needs of domestic politics with the requirements of being the world's reserve currency. "The economic development model of debt-based consumption is most difficult to sustain," the PBOC said. Russian President Dmitry Medvedev recently joined Mr Zhou in saying it was time to consider an alternative benchmark currency for international debt. But Russian finance minister Alexei Kudrin then said "it's too early to speak of an alternative".

Source: http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8120835.stm

The Demise of the Dollar

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East. China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency. The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018. The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets. "These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Source: http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

Report: Secret Plot Against Dollar

A report published Tuesday by a British newspaper sent shockwaves across the world. The Independent story, entitled "The demise of the dollar," claimed that several key governments around the world were conspiring in secret meetings to stop trading oil in U.S. federal reserve notes. Calling it a “graphic illustration of the new world order,” the paper reported that Arab governments, China, Russia and even France and Japan would drop the dollar and start pricing oil with a basket of currencies — the Japanese yen, Chinese yuan, the euro and a new currency being created for members of the Gulf Co-operation Council that includes Saudi Arabia, Kuwait, and Qatar. The report was mostly based on unnamed Arab and Chinese banking sources.

According to The Independent, the secret meetings between finance ministers and central bankers have already been held. The transition should be complete following a nine-year timeline, with a deadline of 2018. And American officials know of the plan and the meetings, though not the details, the paper reported. "These plans will change the face of international financial transactions," an anonymous Chinese banker told The Independent. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Immediately after the news broke, representatives from at least Kuwait and Saudi Arabia claimed that the report was inaccurate. "At our level, no," said Kuwait’s oil minister, Sheik Ahmed Al Abdullah Al Sabah, according to an Associated Press report entitled ‘Officials deny UK media report on move from dollar.’ "I didn't even dream about it." Gold hit a record high at over $1,040 an ounce amidst the news, while the dollar fell sharply against world currencies. A Reuters analysis of the report about the secret meetings claimed it was “a potentially major sign of the greenback's fading status.” The research director from Forex.com called it “another chapter in the plot against the dollar as the world’s most dominant reserve currency.”

This would certainly not be the first call to end the dominance of U.S. currency in world trade. The United Nations recently called for creating a new global monetary system, while Russia and China have both called for an end to dollar hegemony. Officials around the world have also expressed deep concern about the Federal Reserve’s inflationary policies and artificially low interest rates. The Independent article also highlighted an alleged potential for military and economic confrontations between the United States and China, citing statements made by government officials. "Bilateral quarrels and clashes are unavoidable," China’s former special envoy to the Middle East told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

Diversifying away from the dollar will be a tricky undertaking for countries like China, Japan, and the Gulf Arab states. They hold trillions of dollars in reserves, and if they started selling rapidly, the price would tank, eroding a significant part of the value of their reserves. But it is not impossible, or even unthinkable. If and when the world does ultimately abandon the dollar, it will be bad news for the American economy. Faced with the prospect of rising prices for imports and a manufacturing base that has been shipped abroad, consumers will find themselves increasingly strapped for purchasing power. But with the Federal Reserve printing debt-money like it’s going out of style, can anyone really blame other countries for wanting to get out?

Source: http://www.thenewamerican.com/index.php/economy/markets-mainmenu-45/2032-report-secret-plot-against-dollar

Moscow Says U.S. Leadership Era Is Ending

Perhaps inevitably for a country often lectured by the United States about its own economy, Russia is using the occasion of the American financial crisis to do some lecturing of its own. President Dmitri A. Medvedev has blamed what he called financial “egoism” for the crisis and said it should be taken as a sign that America’s global economic leadership was drawing to a close. Along with some European leaders, Mr. Medvedev has called for greater multilateralism in financial regulation, echoing a Russian position on international relations generally. “The times when one economy and one country dominated are gone for good,” he said Thursday at St. Petersburg State University during the eighth annual Petersburger Dialog, a forum devoted to developing relations with Germany. After the American banking collapses, he said, the world does not want America as a “megaregulator.”

Chancellor Angela Merkel of Germany, in Russia for the forum, said Germany, too, would “always support a multilateral approach” to market regulation. Along with the Germans and others, Russian leaders contend that poorly regulated American markets caused the current crisis. While it is hardly a new sentiment, in Russia there is a gloating quality, as the American crisis deepens. There has been a drumbeat of pronouncements in recent days on this theme. Prime Minister Vladimir V. Putin made a speech about what he called American financial “irresponsibility” on Wednesday, blaming non-Russian causes for Russia’s stock plunge of more than 50 percent. Of the financial crisis, he said, “This is not the irresponsibility of some people but the irresponsibility of the system, which as it is known, claimed to be the leader.” In contrast to the Europeans who have also criticized lax American regulation, however, Russians are facing a financial system that has been in such chaos that regulators suspended trading on the stock market three times last month. The global credit crisis could trim about 1 percent from Russian growth next year, said the finance minister, Aleksei L. Kudrin.

As in other emerging markets, investors are pulling money out of Russia and depositing it in United States Treasury securities because they are considered the safest place to park money. By the time Mr. Medvedev spoke on Thursday, investors had pulled about $52 billion in net private capital out of Russia since the second week of August, when the war in Georgia and political tension with the West heightened concern about political risk here. The criticism of American finance coincided with a rise in Russian military bluster that has been viewed by some in the West as a resurgence of the Kremlin’s cold-war mentality. On Thursday, Russian generals announced plans for the largest air force exercise since the collapse of the Soviet Union, called Stability 2008, to be held next week. Also on Thursday, the deputy commander of Russia’s navy said the country would build eight new nuclear submarines before 2015.

Source: http://www.nytimes.com/2008/10/03/wo...russia.html?em

After Financial Crisis, Uncertainty and Lectures From Abroad

As America’s financial crisis was gathering speed, Brazil’s president seemed dismissive, almost gleeful, about the troubles up north. “What crisis?” said the president, Luiz Inácio Lula da Silva, when asked last month about the financial maelstrom. “Go ask Bush about that.” Like a number of South American countries, Brazil had been flashing a newfound confidence, one born of a deliberate push to decrease political and economic reliance on the United States. But on Monday, shortly after Congress rejected a proposed $700 billion bailout package, Mr. da Silva struck a very different tone, saying in his weekly radio address that Brazil was not immune from the spreading woes after all. “A recessionary crisis in a country like the United States,” he explained to Brazilians, “can bring problems to all countries.” In only a few days, Latin American leaders have gone from schadenfreude to fear. Despite strong economic growth this decade and some aggressive efforts to break free of the American orbit, there is a growing nervousness that once again Latin America cannot escape the globalized connections in the financial sector that run through the United States. After seeming to revel in the collapse of Lehman Brothers, Hugo Chávez, Venezuela’s president, skipped the opening of the United Nations General Assembly last week to visit China instead, saying that Beijing was now much more relevant than New York.

But by Tuesday, after the American stock market plunged nearly 778 points, dragging down Latin American exchanges with it, New York, and Wall Street in particular, had suddenly become relevant once more, with Mr. Chávez saying at a summit meeting in Brazil that the financial crisis would have the force of “one hundred hurricanes.” A number of governments in the region have been working for the past decade to reduce their dependence on the American economy. They have diversified trade with the rest of the world, while also making efforts to save tens, and sometimes hundreds, of billions of dollars for times when international conditions turn sour. As their economies strengthened and their political cooperation took off, it seemed the United States was being rapidly pushed out of the picture. Latin American leaders were standing up to America with growing bravado. In the past month, both Venezuela and Bolivia expelled the American ambassadors to their countries. Not only did Brazil, thought to be among America’s strongest allies in the region, support the expulsion by Bolivia, a major source of natural gas, but Mr. da Silva also railed against an American naval presence in the region, warning that his nation needed to put its own warships on alert in response.

Such anti-American sentiment reflects a longstanding bitterness over Washington’s economic prescriptions for Latin America, policies that some countries in the region blame for undercutting them. As Wall Street itself started to unravel, some leaders seemed to feel vindicated by the collapse. “We are witnessing the First World, which at one point had been painted as a mecca we should strive to reach, popping like a bubble,” Cristina Fernández de Kirchner, Argentina’s president, said two weeks ago. But the financial crisis has exploded far beyond Wall Street. Whipsawing global markets are already having a ripple effect across Latin America. As nervous investors pulled money out of emerging markets, Brazil’s currency, the real, plunged 16 percent against the dollar last month, resulting in hundreds of millions of dollars in losses at large food and eucalyptus-pulp exporters that placed bad bets on the direction of the real. In Mexico, falling remittances from the United States are also raising concern, with Finance Minister Augustín Carstens warning that money sent home from across the border could decline by $2.8 billion, or 8 percent, this year. In Venezuela, a sharp drop in the value of the country’s bonds in the last two weeks reflects fears about plunging oil prices, especially since the United States remains by far the largest buyer of Venezuelan oil despite the deterioration of relations between the countries.

The issue, economists say, is largely about access to credit, which is needed to keep Latin America’s export-oriented economies humming along. “The credit crunch and the liquidity constraints we are seeing are going to affect everyone in the world,” said Alfredo Coutiño, a senior economist at Moody’s, the credit-rating agency. “That means that the cost for Latin American companies, particularly for those with the need for external funds, is going to be higher.” Plummeting commodity prices could also hamper growth in countries like Argentina and Ecuador, while the psychological effect of a crash in the United States is already reverberating through Latin American stock exchanges. That could lead to a reining in of household spending, which has driven much of the recent growth in Brazil’s economy, especially, economists said. Some governments are also directly tied to the American institutions they have derided, as in Venezuela, where the government has lost about $300 million in Lehman-related investments. Ricardo Sanguino, director of the finance committee in Venezuela’s National Assembly, said the losses were minor compared with the Central Bank’s reserves of more than $30 billion and previous decisions to shift some of those reserves into gold and out of American investment banks into Swiss banks. “The crisis affects us because we’re not a completely closed economy, but the impact won’t be disastrous,” Mr. Sanguino said.

With increased fiscal discipline, some countries have built up stabilization funds that should help them weather the fallout from the Wall Street mess, economists said. Brazil’s government has directed its national development bank, the BNDES, to extend $2.5 billion in credit to agricultural exporters for the next harvest to try to prevent a major slowdown. Other countries in the region may struggle more. Before the crisis, foreign investment had already dwindled in Bolivia and Ecuador, where governments flush with revenues before commodities prices began declining had nationalized foreign companies and clashed with multinationals. Argentina, still weighed down by debt, saved much less than Brazil or Chile during its economic expansion. Now it faces declining commodity prices, especially for soybeans, its main export, and will have less flexibility to infuse cash into its industries, analysts said. In recent weeks, the Argentine government, realizing it may face a fiscal shortfall, has been focused on international investors to gain new funds, and has leaned on Venezuela to refinance billions of dollars in debts. But with oil prices plummeting, Venezuela may impose harsher conditions on lending to Argentina. Even before the Wall Street meltdown, the region’s Achilles’ heel — high inflation — was rearing its head in several countries, notably in Venezuela, Bolivia and Argentina. Economists had been warning for months that Argentina could be headed toward a financial crisis of its own if it could not get rising inflation under control.

One silver lining for some countries could be China, which has become a strong export partner for South American soybeans, oil and other commodities. If China’s growth remains robust, the country will continue to lean on Brazil and Argentina for the crop. By traveling to China last month to sign a deal aimed at tripling oil exports to the country, Mr. Chávez may end up reducing his country’s dependence on the American market. “The world will never be the same after this crisis,” Mr. Chávez told reporters in Brazil. “A new world has to emerge, and it is a multipolar world. We are decoupling from the wagon of death.” Other leaders, like Mr. da Silva, have gone from being dismissive of the crisis to outright incensed at Wall Street and Washington for it. “We did what we were supposed to do to get our house in order,” an angry Mr. da Silva said Monday. “They spent years telling us what to do and they themselves didn’t do it.”

Source: http://www.nytimes.com/2008/10/03/wo...l?ref=business

Merkel Calls U.S. Irresponsible

The U.S. government was irresponsible in regard to world markets when it allowed its largest banks and financial institutions to operate without sufficient oversight, German Chancellor Angela Merkel said at a meeting of conservative leaders in Linz, Austria, the Associated Press reports. "Anyone who makes a real product knows how it is supposed to look and what standards are expected. In financial markets you also need to know what is being traded. Otherwise, things happen that we all end up paying for," Merkel said. Somewhat earlier, in an interview with German media, Merkel said that she sympathizes with people who wonder if the world economy is “fair.” Problems on the mortgage market and interbank crediting practically paralyzed the U.S. financial system earlier this year and caused a number of large companies to close. Federal authorities closed the IndyMac bank, with assets of $32 billion, in July. On September 15, Lehmann Brothers, one of the oldest American investment banks, filed for bankruptcy. The U.S. government nationalized major mortgage companies Fannie Mae and Freddie Mac to avoid the collapse of credit markets. Along with the bad news in the United States, a series of painful collapses began around the world. The Russian stock market was rescued from danger by massive financial support from the government and Central Bank.

Source: http://www.kommersant.com/p-13260/wo...onomic_crisis/

China, Russia Renounce the Dollar?

The recent meeting between Russian Prime Minister Vladimir Putin and his Chinese counterpart, Wen Jiabao, created a financial sensation. Wen said that the two nations could withstand the global financial crisis if they joined forces; Putin urged him to go farther and stop using U.S. dollars in Russian-Chinese settlements. This idea is nothing new. Russia and China reached a "framework" agreement in November 2007, which was followed by China's similar agreement with Belarus. Earlier this year, Iranian President Mahmoud Ahmadinejad and Venezuelan leader Hugo Chavez turned against the dollar as well when they asked their OPEC partners to stop using the dollar for oil settlements. They argued that the "green" currency was no longer reliable and it was high time they look for a more stable and predictable alternative. Curiously, unlike the Ahmadinejad and Chavez appeal, Putin's proposal came as the dollar was on the rebound and even began pushing the euro.

Economists even started talking in terms of a reversal of the global currency trends, rather than the temporary appreciation of the dollar. Analysts predict that the dollar will regain its value in the next few months. They do not see anything which could hinder its steady growth. Yet, Putin proposed that Russia and China stop using it as a settlement instrument. What is it - lack of confidence in the dollar's prospects or a political move? Experts differ on this count. Igor Nikolayev, chief strategic analyst at FBK private auditing firm, sounded skeptical: "I think it was a political statement rather than an economic decision. There is a dominant public sentiment that the United States is the source of all evil, so let's stop using the dollar," he explained. One has to bear in mind, though, that some other currency will need to be found to replace the dollar for international settlements. China is unlikely to use the ruble, and Russia would be equally reluctant to accept the yuan. "They could opt for the euro, but its future is uncertain, especially considering current developments on global financial markets. It is also unclear whether China would be happy to start using the euro while most of its international reserves are held in dollars," he added. There are more questions than answers here, Nikolayev concluded. To be objective, one has to admit that other analysts are not as skeptical about the possibility of using other currency units between Russian and Chinese companies. Andrei Marinchenko, director general of the Kalita-Finance company, said the idea was quite realistic. Moreover, he thinks that the ruble stands a good chance of being selected as a reserve currency, primarily because the Chinese are disappointed in the dollar but aren't yet accustomed to the euro.

Only time will show who is right. But to stop using the dollar in Russian-Chinese settlements is too important a decision to make for purely political reasons - that much is obvious. Suppose we do it; what will be the implications for Russian businesses, how will the new financial and political reality affect their incomes and savings? Marinchenko is convinced of a beneficial impact. According to Marinchenko, once the ruble is recognized as a settlement unit, it will enjoy growing demand with Chinese companies and individuals. The Russian currency will consequently grow stronger and more influential globally. Russia will also become immune to many shocks from stock market meltdowns and won't have to fear future devaluation or revaluation of the ruble. It will happen because the role of the U.S. dollar, which has earned a reputation as an unstable and unreliable currency lately, will be much less important.

Source: http://en.rian.ru/analysis/20081030/118047851.html

Russia Seeks to Trade Oil for Loans From China

As credit streams from troubled Western banks dry up in the financial crisis, Russian oil companies are negotiating multibillion-dollar loans from a more reliable source: the cash-rich Chinese government. Under a proposed loans-for-oil deal, reported by Reuters on Monday, Russian oil companies would borrow $20 billion to $30 billion from Beijing. In return, they would export about two billion barrels of oil to China over the next 20 years. The Chinese prime minister, Wen Jiabao, was in Moscow on Tuesday for talks with Prime Minister Vladimir V. Putin, but there was no indication that the deal had been signed. The agreement would commit Russian companies to redirect some of their energy exports to the East at a time when Russian and Chinese leaders have been saying they would like to see greater integration of their economies, and Russia’s relations with the West are at a low point. It would also offer a prime example of the way the financial crisis is realigning global commerce, directing it away from reliance on Wall Street lending and toward China and Japan, with their enormous cash reserves. It was unclear how close Russia and China were to an agreement.

A planned pipeline to China, a spur of a trans-Siberian pipeline that is under construction, would be capable of carrying about 300,000 barrels of oil a day. On Tuesday, the countries agreed only to build the spur, from the Russian town of Skovorodino to the Chinese border, at a cost of about $800 million. How much oil will flow through the pipeline, and at what cost per barrel, have been matters of contention for some time and have yet to be resolved. There is little doubt that the crushing cash needs of the Russian oil companies helped narrow the differences. Much of the companies’ revenue during the recent spike in oil prices went to taxes. As a result, the state oil company Rosneft owes about $21 billion to Western banks and has already been confronted with demands from creditors for early repayment. China, after years of piling up trade surpluses with the United States, is awash in cash, with currency reserves of $1.9 trillion, the largest in the world. The Russian government, which also has a healthy cash reserve, has pledged $9 billion in loans to its country’s oil companies, but that does not begin to cover their cash needs, which include the enormous sums needed to expand into the more expensive and remote fields in Siberia.

Mr. Wen and Mr. Putin also discussed relying on rubles and yuan in bilateral trade, rather than on dollars. Mr. Putin is an advocate of reducing the dollar’s role in international commerce. “At the moment the world, which is based on the dollar, is suffering serious problems,” he said.

Source: http://www.nytimes.com/2008/10/29/wo...=worldbusiness