The Decline and Fall of the American State; Enjoy It

Karen Kwiatkowski
ICH

The headlines at Drudge are an excellent barometer of what's up with government and culture. Glancing over cops being killed by the other side of law enforcement (the people), Hillary's new Whitewater files (this time electronic), Army and Secret Service partying, drug use, and sex rings, the predictable result of partial "legalization" of pot (neighborhood informers), we find a report that, "Confidence in government is lower than ever!"

Whaaa? The poll, taken in 2014, looked at consumer and investor faith in the "product", i.e. the president, judiciary, legislative as well as mainstream media, banks, big business, organized labor, organized religion, education, medicine and the scientific community.

We are government consumers and investors in these products, although we have little choice. The massive unitary state, this lock-stepping, integrated, wealth-consuming, constantly expanding Rube Goldberg machine is what we the people have bought, and we feed it daily. We are afraid not to, lest it fall down in a million pieces and smash us.

The poll designers were either extremely naive or extremely perspicacious. They have cogently asked how we like our fascism, sunny side up or easy over? Not surprising, the people indicated they'd prefer to skip breakfast, due to a growing queasiness in the pit of their stomachs, and a sense that something is going to fall on our heads.

The poll indicates that we are disgusted by government media, government legislation and 15 straight years of diktatcracy. We have no faith in the justice system and organized religion, and our discontent with the corporate state of big business, big medicine, big education, and big science is seething. All good signs of course, that change is coming. Our identity as "US Citizen" is becoming something we'd rather not talk about. This is how all empires collapse, and the one led by Washington, D.C. is not special. Unlike all the children in Lake Wobegone, we are beginning to recognize our child in D.C. is not above average or exceptional; rather he is a pretty nasty devil who is never going to make something of himself.

Maybe it's the weather, or Snowden, or independent media, or our empty bank accounts. At some point, hard facts around us inspire calls from the crowd of "Why, the emperor isn't wearing anything? He's buck naked! And butt-ugly, too! Hahahahahahahahaha!"

Read more

Tuesday, July 26, 2011 Federal Reserve Attorneys Admit that Federal Reserve Banks Are PRIVATE Corporations With Private Boards of Directors

George Washington's Blog

I noted yesterday that the Federal Reserve has admitted that its 12 member banks are private - not governmental - entities.

Reader Siesta00000 sent me the following post with links to C-Span video of two of the Federal Reserve's senior counsel stating in court that this is true [I've edited for readability]:

During the second circuit court of appeals case for FOX News & Bloomberg v. Board of Governors lawyers in defense of the Fed make some revealing statements during the arguments. At about 13:45, the Fed lawyer stated:

"We do not believe the Federal Reserve Board is an agency, the Board of Governors, . . . the Federal Reserve Bank excuse me." (He made the mistake of saying the Federal Reserve Board when he meant the Federal Reserve Bank.)

***

He admitted the Federal Reserve Banks were not Federal Agencies in a court of law. Watch the lawyer's statement: here [video will play automatically once you click, but may take awhile to load. The videos are pre-set to play the relevant section, so you need not keep track of the times noted below.]

Another Federal Reserve lawyer goes further at 44:22 to state:

[The Federal Reserve Banks are] independent corporations [which carry on the day-to-day operations. But emergency lending must be approved by the Federal Reserve's Board of Governors.]

Watch the lawyer's statement: here.

At 46:23, the lawyer ... stated:

[The Federal Reserve Banks are] not agencies [and they have] private board of directors.

The most [interesting] evidence is in this clip: here.

 

Banks to Pay $25 Billion Bribe For Immunity

reuters.com

State attorneys general are negotiating to give major banks wide immunity over irregularities in handling foreclosures, even as evidence has emerged that banks are continuing to file questionable documents.

A coalition of all 50 states' attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks.

State and federal officials declined to say if any form of immunity from criminal prosecution also is under discussion. The banks involved in the talks are Bank of America, Wells Fargo, CitiGroup, JPMorgan Chase and Ally Financial. [...]

Audit: Fed gave $16 trillion in emergency loans

$16 trillion...This is an unimaginable sum. How much is one trillion dollars? Go HERE. This will give you some idea just how criminally insane all this really is. Most, if not all of the world's problems such as poverty, health care and debt could be solved over night. (Of course, there are other social factors to consider but the principle stands.)

----------------

rawstory.com

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank.

Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.

Of the $16.1 trillion loaned out, $3.08 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office's (GAO) analysis shows.

Additionally, asset swap arrangements were opened with banks in the U.K., Canada, Brazil, Japan, South Korea, Norway, Mexico, Singapore and Switzerland. Twelve of those arrangements are still ongoing, having been extended through August 2012.

Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion. 

The audit also found that the Fed mostly outsourced its lending operations to the very financial institutions which sparked the crisis to begin with, and that they delegated contracts largely on a no-bid basis. The GAO report recommends new policies that would eliminate such conflicts of interest, and suggests that in the future the Fed should keep better records of their emergency decision-making process.

The Fed agreed to "strongly consider" the recommendations, but as it is not a government-run institution it cannot be forced to do so by lawmakers. The seven-member board of governors and the Fed chairman are, however, appointed by the President of the United States and confirmed by the Senate. 

The audit was conducted on a one-time basis, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed last year. Fed officials had strongly discouraged lawmakers from ordering the audit, claiming it may serve to undermine confidence in the monetary system.

The full GAO audit results follow, below.

####

GAO Fed Investigation

Dennis Kucinich "War Takes Money From The American People & Gives It To War Profiteers!"

MOXNEWSd0tCOM

Obama Is A Bankster Puppet “Who Brought On The Depression That The Republicans Never Could Have Gotten Away With”

ampedstatus.org

 In a recent interview with Guns and Butter, Michael Hudson summed up the financial war against the American people, with a focus on the key role President Obama is playing:

“He’s going to go down as the man who brought on the depression that the Republicans never could have gotten away with. Only a Democrat posing as a left-winger could support the anti-labor, anti-wage, pro-Wall Street policies that his advisors have been pressing….

The economy’s going under because Wall Street and investors realize that it’s a done deal. That Mr. Obama is going to succeed in pushing the economy much further into a depression. We need the depression in order to cut living standards and labor by 30 percent. We need a depression in order just to lower the wages of America and to have an excuse – of course, a depression is going to make the budget deficit even larger and the solution to the depression has already been written up, just like the invasion of Iraq was all written up before 9/11, the solution is going to be that the government is going to sell off its land, whatever is in the public domain.

The American government is going to look just like Greece and just like Ireland. They’re going to be told, ‘The states can’t pay, there’s no federal revenue to share with Minnesota or Wisconsin or the city of Chicago. They’re going to have to sell off their roads, sell off their streets, sell off their infrastructure, sell off their public utilities, sell off their business. The government will sell whatever it has, the Postal Service, to essentially buyers who will now borrow the money from the banks making a huge new market for banks and investment bankers, in privatizing and cutting up what used to be the public domain and turning it over to the wealthiest 10 percent of the economy. So people realize yes, the class war’s back in business. We’re going into a depression. We’ll buy back all these stocks after they go but meanwhile, the game’s over. Let’s grab what we can and just bail out. And that’s what’s happening now.”

Full Audio Interview:

“Guns, Finance and Butter – Finance Is the New Mode of Warfare” with Dr. Michael Hudson. The jobless recovery; the debt ceiling and default; China; Greece; banks, not countries, receive the bailouts; financial warfare; IMF and EU; European Central Bank; US credit default swaps; US agricultural exports create food dependency; currency devaluation devalues the price of labor; class war of banks against the rest of society.
Listen to interview here (((mp3 audio)))

How Big Multinational Corporations Hire the CIA and NSA To Kill People and Nations

alexanderhiggins.com

A former NSA agent reveals how big multinational corporations hired the CIA and the NSA to murder people and nations during the course of his career.

A few of the best read I had a few years ago were books by John Perkins, Confessions of an Economic Hit Man, The Secret History of the American Empire: The Truth About Economic Hit Men, Jackals, and How to Change the World, and recently also his newest book Hoodwinked: An Economic Hit Man Reveals Why the World Financial Markets Imploded–and What We Need to Do to Remake Them. His first book (Confessions of an EHM) was the reason why I became interested in what they call “conspiracy theories” which I don’t believe are only “theories”. Theories don’t kill. Theories don’t leave nations in bondage of debt, while a few families in the whole world grow ultra wealthy. To me, as it is also to John Perkins, they are conspiracy facts.

John Perkins was initially recruited by the National Security Agency when he was still in business school in Boston. He had to undergo a very long set of interviews with lie detector tests and personality tests. In the interview they were able to draw the conclusion that he would make a good economic hit man which is basically a con-artist. Apparently the NSA found the three most common weaknesses in human beings which would be the best doors for them to enter and hook him up to do dirty jobs for them. These weaknesses are sex, power and money. Perkins was tested and interviewed and it came out that he had all the three weaknesses in him. That was how they got to him and hired him to do the dirty jobs for them.

During the years of working for them, Perkins was close and well-known to organizations such as the CIA, National Security Agency, the World Bank and USAID. All the EHMs were well known to them but not to the general public. Perkins tells Lew Rockwell in a recent interview that the primary job of both the CIA and the National Security Agency is to serve multinational corporate interests for giant corporations that are not even US based anymore such as Halliburton. However the CIA and the NSA devoted tremendous amount of effort, money and energy to doing things that would help corporate interests abroad. These include making sure that the right countries have the resources that the corporations want, bribing them, making sure that they’re staying in position, and even arranging for them to be killed if they stand up against the corporations.

In his mind, John Perkins sees the world currently in a time where it is completely controlled by corporations. He envisions huge clouds drifting around the planet and these clouds are the big corporations. They don’t know national borders. They don’t follow any specific set of laws. They form partnerships with the Chinese, but at the same time with the Taiwanese. Or with the Israelis and at the same time with the Arab countries. Whoever has the resources they need, they are willing to partner with them.

Perkins mentions the USAID to Lew Rockwell being one of the organizations that knew what the EHMs were doing. He clarifies that the most common opinion of the general public regarding the USAID being a charity organization is totally erroneous. He said, “To think of the USAID as a charity board organization is totally erroneous. For the most part US foreign aid in most countries are really out there to serve the interest of big corporations. There are really only a few US aid organizations out there that are helping in catastrophes such as tsunami’s or something like that. The USAID that we are sending to other countries like that are really there to serve our big corporations. That’s just the job that the USAID, the Export-Import Bank, the World Bank and other organizations is assigned to do.” [...]

Listen to the whole interview of John Perkins on Lew Rockwell show.

It's Going to Be 2008 on Steroids

 zerohedge

The 2008 Crisis occurred when private US banks became so distrustful of one another’s balance sheet risk that interbank liquidity dried up triggering a systemic implosion in the unregulated derivatives market, particularly in Credit Default Swaps (which was a $50-60 trillion market at the time).

The Federal Reserve dealt with this situation by suspending accounting policies (permitting banks to lie about their true balance sheet risk), offering to backstop those banks with the greatest derivative exposure (JP Morgan, Bank of America, Goldman Sachs, and Citigroup), shifting trillions of dollars’ worth of toxic debt to the US balance sheet and then funneling trillions of new dollars into the banks most at risk of a derivative collapse (the banks I listed before).

In simple terms, the Fed attempted to paper over the problems of insolvency that were plaguing the large financial institutions. This scheme could have worked if the Fed had demanded that the large banks decrease their leverage, cease making the deals that created these problems and began regulating the derivatives market.

However, the Fed is run by spineless academics not financial professionals or real businesspeople. So the Fed did not implement any meaningful reform. All it did was temporarily slow the pace of systemic implosion and give Wall Street a “get out of jail free” pass.

From a philosophical perspective, the Fed removed the notion of “risk of failure” from Wall Street’s collective mind. As anyone who’s studied human behavior can tell you, without consequence for one’s actions most people will take their bad behaviors to the limit (I am not saying that there is no such thing as a principled person or one who lives a moral life… but generally speaking, most people, especially those who work on Wall Street where every move in focused on making more money, will take things to the max).

As a result of this, Wall Street went back to doing what caused the Financial Crisis in the first place: increasing leverage, fleecing clients, and paying its employees’ excessive salaries.

As a result of this, the financial system is once again overleveraged. Meanwhile, the large banks continue to be insolvent due to their gargantuan derivative exposure. Put another way, the financial system is primed for another 2008 episode. The very same issues that caused 2008 remain in place. Leverage is far too high. And the unregulated derivatives market remains a multi-hundred trillion dollar problem.

So this time around it will sovereign nations collapsing instead of just US banks. Yes, entire countries will default whether it be Greece, Italy, Spain, OR the US. There is no way we’ll be paying our debts off.

This in turn will kick off another 2008 episode as all the over-leveraged players (read: EVERYONE) will have to sell positions to meet margin/ redemption calls. However, this time around we’ll also see civil unrest as people lose their social safety nets (unemployment, social security, etc).

What will follow will be the equivalent of 2008 all over again, along with food shortages, civil unrest, outbreaks in crime, bank holidays, and the like. It will, in short, be like what’s going on in the Middle East today (though NATO won’t be bombing us). [...]

The Great Global Debt Depression: It’s All Greek To Me

andrewgavinmarshall.com

In late June of 2011, the Greek government passed another round of austerity measures, ostensibly aimed at getting Greece “back on track” to economic progress, but in reality, implementing a systematic program of ‘social genocide’ in the name of servicing an endless and illegitimate debt to foreign banks. Right on cue, protests and riots broke out in Athens against the draconian measures, and the state moved in to do what states do best: oppress the people with riot police, tear gas and bashing batons, leaving roughly 300 people injured.

Is Greece simply a case of a country full of lazy people who spent beyond their means and are now paying for their own decadence? Or, is there something much larger at stake – and at play – here? Greece is, in fact, a microcosm of the global economy: mired in excessive debt, economically ruined, increasingly politically repressive and socially explosive. This report takes a look at the case of the Greek debt crisis specifically, and places it within a wider global context. The conclusion is clear: what happens in Greece will happen here.

This report examines the Greek crisis, as well as the larger global economic crisis, including the origins of the housing bubble, the bailouts, the banks, and the major actors and institutions which will come to dominate the stage over the next decade in what will play out as ‘The Great Global Debt Depression.’ [...]

More Wall Street Bailouts to Come – Why We Must Break Up the “Too Big to Fail” Banks Now

Washington’s Blog

The biggest banks are insolvent. By failing to break up them up, the government will keep taking emergency measures to try to cover up their insolvency – further draining the life blood out of the real economy.

I warned last year:

Anyone who thinks that Congress will use the current financial regulation – Dodd-Frank – to break up banks in the middle of an even bigger crisis is dreaming. If the giant banks aren’t broken up now - when they are threatening to take down the world economy – they won’t be broken up next time they become insolvent either. In other words, there is no better time than today to break them up.

Standard and Poors is providing evidence for this assertion.

As the Financial Times notes today:

Officials fighting the next financial crisis may again bail out banks using the public purse, S&P has said, in an opinion that casts doubt on one of the fundamental tenets of US financial reform. The rating agency said on Wednesday that the US Treasury, Federal Reserve and Congress might rescue a large financial group rather than allow it to fail like Lehman Brothers. Dodd-Frank, the legislation signed into law a year ago next week, was supposed to prevent bail-outs by allowing the government to seize and wind down safely an ailing “systemically important financial institution”, or Sifi.
But in a research note, S&P said: “We believe the government may try to avoid contagion and a domino effect if a Sifi finds itself in a financially weakened position in a future crisis.”
The agencies’ views are crucial to the fight over whether the phenomenon of “too big to fail” has been ended. If not, the largest banks will continue to enjoy a funding advantage over their smaller rivals.

And see this (written after the passage of Dodd-Frank).

Why Break Up the Giant Banks?

Virtually all independent economists and financial experts say that the giant banks are too big, and that their very size is hurting the economy:

• Nobel prize-winning economist, Joseph Stiglitz

• Nobel prize-winning economist, Ed Prescott

• Nobel prize-winning economist, Paul Krugman

• Former chairman of the Federal Reserve, Alan Greenspan

• Former chairman of the Federal Reserve, Paul Volcker

• Former Secretary of Labor Robert Reich

• Dean and professor of finance and economics at Columbia Business School, and chairman of the Council of Economic Advisers under President George W. Bush, R. Glenn Hubbard

• Former Director of the National Economic Council Larry Summers

• Former chief IMF economist and economics professor Simon Johnson (and see this)

• President of the Federal Reserve Bank of Kansas City, Thomas Hoenig (and see this)

• President of the Federal Reserve Bank of Dallas, Richard Fisher (and see this)

• President of the Federal Reserve Bank of St. Louis, Thomas Bullard

• Deputy Treasury Secretary, Neal S. Wolin

• The President of the Independent Community Bankers of America, a Washington-based trade group with about 5,000 members, Camden R. Fine

• The Congressional panel overseeing the bailout (and see this)

• The head of the FDIC, Sheila Bair

• Former Tarp overseer and creator of the Consumer Financial Protection Bureau, Elizabeth Warren

• The head of the Bank of England, Mervyn King

• The leading monetary economist and co-author with Milton Friedman of the leading treatise on the Great Depression, Anna Schwartz

• Economics professor and creator of the “efficient market hypothesis”, Eugene Fama

• Economics professor and senior regulator during the S & L crisis, William K. Black

• Economics professor, Nouriel Roubini

• Economics professor, James Galbraith

• Economist, Marc Faber

• Professor of entrepreneurship and finance at the Chicago Booth School of Business, Luigi Zingales

• Economics professor, Thomas F. Cooley

• Economist Dean Baker

• Economist Arnold Kling

• Former investment banker, Philip Augar

• Chairman of the Commons Treasury, John McFall

• Leading bank analyst, Chris Whalen

Why do these experts say the giant banks need to be broken up?

Well, small banks have been lending much more than the big boys. The giant banks which received taxpayer bailouts have been harming the economy by slashing lending, giving higher bonuses, and operating at higher costs than banks which didn’t get bailed out.

As Fortune pointed out, the only reason that smaller banks haven’t been able to expand and thrive is that the too-big-to-fails have decreased competition:

Growth for the nation’s smaller banks represents a reversal of trends from the last twenty years, when the biggest banks got much bigger and many of the smallest players were gobbled up or driven under…
As big banks struggle to find a way forward and rising loan losses threaten to punish poorly run banks of all sizes, smaller but well capitalized institutions have a long-awaited chance to expand.

Read more at: http://www.huffingtonpost.com/2009/05/11/justice-department-plans-_n_201409.html

So the very size of the giants squashes competition, and prevents the small and medium size banks to start lending to Main Street again.

And as I noted in December 2008, the big banks are the major reason why sovereign debt has become a crisis:

The Bank for International Settlements (BIS) is often called the “central banks’ central bank”, as it coordinates transactions between central banks.
BIS points out in a new report that the bank rescue packages have transferred significant risks onto government balance sheets, which is reflected in the corresponding widening of sovereign credit default swaps:

The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets. This was particularly apparent in the market for CDS referencing sovereigns involved either in large individual bank rescues or in broad-based support packages for the financial sector, including the United States. While such CDS were thinly traded prior to the announced rescue packages, spreads widened suddenly on increased demand for credit protection, while corresponding financial sector spreads tightened.

In other words, by assuming huge portions of the risk from banks trading in toxic derivatives, and by spending trillions that they don’t have, central banks have put their countries at risk from default.

A study of 124 banking crises by the International Monetary Fund found that propping banks which are only pretending to be solvent hurts the economy:

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.
Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions’ liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery….
All too often, central banks privilege stability over cost in the heat of the containment phase: if so, they may too liberally extend loans to an illiquid bank which is almost certain to prove insolvent anyway. Also, closure of a nonviable bank is often delayed for too long, even when there are clear signs of insolvency (Lindgren, 2003). Since bank closures face many obstacles, there is a tendency to rely instead on blanket government guarantees which, if the government’s fiscal and political position makes them credible, can work albeit at the cost of placing the burden on the budget, typically squeezing future provision of needed public services.

Now, Greece, Ireland, Portugal, Spain, Italy and many other European countries – as well as the U.S. and Japan – are facing serious debt crises. We are no longer wealthy enough to keep bailing out the bloated banks.

Indeed, the top independent experts say that the biggest banks are insolvent (see this, for example), as they have been many times before. By failing to break up the giant banks, the government will keep taking emergency measures (see this and this) to try to cover up their insolvency. But those measures drain the life blood out of the real economy.

And by failing to break them up, the government is guaranteeing that they will take crazily risky bets again and again, and the government will wrack up more and more debt bailing them out in the future.

Moreover, Richard Alford – former New York Fed economist, trading floor economist and strategist – recently showed that banks that get too big benefit from “information asymmetry” which disrupts the free market.

Indeed, Nobel prize-winning economist Joseph Stiglitz has noted that giants like Goldman are using their size to manipulate the market:

“The main problem that Goldman raises is a question of size: ‘too big to fail.’ In some markets, they have a significant fraction of trades. Why is that important? They trade both on their proprietary desk and on behalf of customers. When you do that and you have a significant fraction of all trades, you have a lot of information.”
Further, he says, “That raises the potential of conflicts of interest, problems of front-running, using that inside information for your proprietary desk. And that’s why the Volcker report came out and said that we need to restrict the kinds of activity that these large institutions have. If you’re going to trade on behalf of others, if you’re going to be a commercial bank, you can’t engage in certain kinds of risk-taking behavior.”

The giants (especially Goldman Sachs) have also used high-frequency program trading which not only distorts the markets – making up more than 70% of stock trades – but which also lets the program trading giants take a sneak peak at what the real (that is, human) traders are buying and selling, and then trade on the insider information. See this, this, this, this and this. (This is frontrunning, which is illegal; but it is a lot bigger than garden variety frontrunning, because the program traders are not only trading based on inside knowledge of what their own clients are doing, they are also trading based on knowledge of what all other traders are doing). Goldman also admitted that its proprietary trading program can “manipulate the markets in unfair ways”.

Moreover, JP Morgan Chase, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley together hold 80% of the country’s derivatives risk, and 96% of the exposure to credit derivatives. Experts say that derivatives will never be reined in until the mega-banks are broken up – and see this – even though the lack of transparency in derivatives is one of the main risks to the economy.

The giant banks have also allegedly used their Counterparty Risk Management Policy Group (CRMPG) to exchange secret information and formulate coordinated mutually beneficial actions, all with the government’s blessings.

Again, size matters. If a bunch of small banks did this, manipulation by numerous small players would tend to cancel each other out. But with a handful of giants doing it, it can manipulate the entire economy in ways which are not good for the American citizen.

Further, fraud was one of the main causes of the Great Depression and the current financial crisis. The banks are so big that they are buying off politicians so that it has become official policy not to prosecute fraud. Indeed, everyone from Paul Krugman to Simon Johnson has said that the banks are so big and politically powerful that they have bought the politicians and captured the regulators. So their very size is allowing economy-killing corruption to flourish.

Moreover, the banks’ enormous size means that the executives make orders of magnitude more in bonuses and salary than the executives of small banks. They are so big that their executives are living like kings. This is making inequality worse … and rampant inequality was another primary cause of the Great Depression and the current financial crisis.

Indeed, failing to break up the big banks will result in the sale of national assets and the looting of national treasuries in order to pay off debts to the giant banks. This, in turn, will destroy the national sovereignty of virtually every country.

Leading independent bank analyst Christopher Whalen argues:

The fraud and obfuscation now underway in Washington to protect the TBTF [i.e. giant or "too big to fail"] banks … totals into the trillions of dollars and rises to the level of treason.

Just look at Greece. That is our future – and see this – unless we break up the “too big to fails”.

These concepts have been known for hundreds of years:

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
- Napoleon Bonaparte
“There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”
- John Adams
“If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied”.
— Thomas Jefferson
“I believe that banking institutions are more dangerous to our liberties than standing armies…The issuing power should be taken from the banks and restored to the Government, to whom it properly belongs.”
- Thomas Jefferson

“[It was] the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War.”
- Benjamin Franklin

“The Founding Fathers of this great land had no difficulty whatsoever understanding the agenda of bankers, and they frequently referred to them and their kind as, quote, ‘friends of paper money. They hated the Bank of England, in particular, and felt that even were we successful in winning our independence from England and King George, we could never truly be a nation of freemen, unless we had an honest money system. ”
-Peter Kershaw, author of the 1994 booklet “Economic Solutions”

“[T]he creation and circulation of bills of credit by revolutionary assemblies…coming as they did upon the heels of the strenuous efforts made by the Crown to suppress paper money in America [were] acts of defiance so contemptuous and insulting to the Crown that forgiveness was thereafter impossible . . . [T]here was but one course for the crown to pursue and that was to suppress and punish these acts of rebellion…Thus the Bills of Credit of this era, which ignorance and prejudice have attempted to belittle into the mere instruments of a reckless financial policy were really the standards of the Revolution. they were more than this: they were the Revolution itself!”
- Historian Alexander Del Mar
“The British Parliament took away from America its representative money, forbade any further issue of bills of credit, these bills ceasing to be legal tender, and ordered that all taxes should be paid in coins … Ruin took place in these once flourishing Colonies . . . discontent became desperation, and reached a point . . . when human nature rises up and asserts itself.”
- British historian John Twells

Return of the Gold Standard as world order unravels

Telegraph

On one side of the Atlantic, the eurozone debt crisis has spread to the countries that may be too big to save - Spain and Italy - though RBS thinks a €3.5 trillion rescue fund would ensure survival of Europe's currency union.

On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between the Congress and the White House over the US debt ceiling has compelled Moody's to warn of a "very small but rising risk" that the world's paramount power may default within two weeks. "The unthinkable is now thinkable," said Ross Norman, director of thebulliondesk.com.

Fed chair Ben Bernanke confessed to Congress that growth has failed to gain traction. "Deflationary risks might re-emerge, implying a need for additional policy support," he said.

The bar to QE3 - yet more bond purchases - is even lower than markets had thought. The new intake of hard-money men on the voting committee has not shifted Fed thinking, despite global anger at dollar debasement under QE2.

Fuelling the blaze, the emerging powers of Asia are almost all running uber-loose monetary policies. Most have negative real interest rates that push citizens out of bank accounts and into gold, or property. China is an arch-inflater. Prices are rising at 6.4pc, yet the one-year deposit rate is just 3.5pc. India's central bank is far behind the curve.

"It is very scary: the flight to gold is accelerating at a faster and faster speed," said Peter Hambro, chairman of Britain's biggest pure gold listing Petropavlovsk.

"One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money." [...]

“For the revolution from Tunisia to Siberia!”

strategic-culture.org/

Though the globalization and the current financial and economic crisis look true-to life it is not ruled out that they were created artificially  and  that everything which is going on now is not without a purpose (no matter how indecent it is considered to speak about “global conspiracy”  in a decent society).

The current situation in the world is an intermediate stage of the project, the representatives of global elite started almost 50 years ago in order to create the global technotronic network society.

Back in 1996, almost 25 years after the globalization project was launched (around 1969-1971) and 15 years before the current financial economic crisis, which is now tearing the world into pieces, the editors of a trustworthy German weekly “Spiegel” H.P. Martin and H. Schumann published a study, in which they illustrated with the help of numerous empirical the negative sides of the “global restructuring”, which did not fit the rosy picture which flew out of the economic models. In other words, even back then the old economic paradigm produced false results and in the critical moments it cried for replacement.

The trends, defined in the study by Martin and Schumann, have fully developed in the modern globalized world. 

 Except for the first and the most important observation made by the German authors who said that the globalization leads to the change of the social system in compliance with “Pareto distribution”. On speaking with the fathers of globalization Spiegel’s editors stated that the current trend is not a coincidental but targeted and expected result.

The term “Pareto distribution” used in sociology and economics implies the situation when the changes accumulated in the system lead to the redistribution of resources between its components in a certain geometrical progression for example 20:80. Applied to the society this terms means the following - no matter how rich/poor the society gets, how its population grows or declines - 20 % of members always own 80% of the common wealth. The same applies to the distribution of power, passionarity, capacity and everything which relates to self-organization.

Knowing this it becomes clear why the public discussion of the globalization as a “20:80” project was tabooed. The unification of world into the single financial-economic system on the one hand has turned it into a closed system leaving no free niches for losers. Outsiders do not have any free areas they can move to and to start the life from scratch. 

On the other hand, in a “big economic game” the open principle has been preserved: the sources of its energy remained external (and at least on the current stage) inexhaustible. The final prize for the winners is total monopolization of all segments they control in social and economic life and laying hand on all the wealth on the planet. Of course, it is not reasonable to declare such things openly to those, who can stay without resources due to such a global swindle.

Those, who were pushed by the global swindle to the “backyards of the existence”, are described simply as “almost the whole human race”. Among the data, which leaked from the last year session of the Bilderberg club, was a statement that “according to their estimations’ the number of successful people in the world is about 150 million (with family members it is 250-280 millions), which is 4% of almost 7-billion population of Earth. What about the rest? They are automatically regarded as “defeated”, “spare”, “redundant” and are subject if not to direct reduction but at least to being pushed to the level of social degradation. The entire geographic regions are destined for desolation, and the institute of statehood as such is threatened, as it becomes unnecessary in the world, divided into the spheres of influence of global financial groups (GFG) and transnational companies (TNC).

The last session of the Bilderberg, which was held on June 9-12, 2011, in Saint Moritz in Switzerland besides the topics announced earlier (the Fukushima disaster, the shutdown of the nuclear plants in Germany, the Arab revolutions, cyberspace problems), also focused at the “liquidation of Europe”(as it was claimed by the General Director of Deutsche Bank J. Akkerman) and artificial prolongation of the global financial crisis in order to weaken the national economies and to create the transnational management system…

Indeed, Europe was in focus of the roaring spring of 2011. Europe’s main “fault” in terms of the global project, is an “extremely” high level of living of its 400-million population, protected by serious social guarantees. These social guarantees are financed from the profits TNC and GFG, (registered in Europe) made on the exports of technologies and saving money on cheap labor force in China and South Eastern Asia.

There are several sectors for the attacks in order to demolish the European stronghold: 1) financial-economic sector (undermining European countries’ economies), 2) political sector (the break up of the European Union), 3) social sector (the launch of the “manageable chaos” by exporting revolutions, migration of Muslim refugees and drug addiction).

The first sector does not imply only undermining of the Euro. The default should not concern only European countries. Default is the direct consequence of the financial crisis, which started four years ago, and to some extend it concerns all participants of the currency pyramid, created by the owners of such irresponsible private enterprise as the Federal Reserve System. At the same time, the producer of the main monetary chips on the planet has also reached the level when it can declare its non-creditworthiness. The collapse of the FRS which burden will lay on the shoulders of the US population, will be the logical ending of the 40 years-long global swindle, which was profitable for its organizers and burglarious for the rest.

Greece and other European outsiders have become “the scapegoats” only because they failed to withstand the competition when they lost their domestic resources in this global “casino” (“Pareto distribution”). It also turned out that political solidarity of the EU confederation does not ensure the integrity of the EU.

It is an “everyman for himself” situation when everyone prefers to die alone. If on the early stage of problems in Greece one could hear statements about the “domino effect” and that Greece’s withdrawal from the EU, would be a catastrophe, by the end of June the collapse of the single European economy became a short-term forecast and direct demands to expel the bankrupts from the European confederation were voiced.

The economy, which is sliding into poverty and leads to the disintegration of the EU, on the one hand and the scaling down of social programs and the wealth divide in European countries on the other hand create the first wave of the chaos, which is hanging over Europe.

The worsening of the global climate due to man-triggered disaster in the Atlantic, the oil crisis, caused by the “managed crisis” in the Arab world, the nuclear disaster in Japan, which undermined trust in nuclear energy and made hydrocarbon issues even tenser, the crowds of immigrants from North Africa - all these factors together mean a serious economic burden for European nations. As for the biological sabotage aimed at undermining the European agriculture its has an unprecedented character.  Whatever virulent strain of E Coli Bacteria is, it cannot develop into the epidemics and lead to numerous victims among the population. But it can cause panic, undermine the demand for agricultural products and lead to the devastation of the entire sector of the economy. This is what is really happening now.

Here is the second wave of the chaos Europeans are facing. The worse the economy is, the greater the number of people who are discontent with the scaling down of social programs, the higher people’s readiness to walk out with the slogans of social protests. So far there have been precedents only in Greece and Spain. But you know – it never rains but it pours. The mechanism of the revolution similar to the revolutions in the Arab world has been launched under the slogans “For real democracy!”, “For the revolution from Tunisia to Siberia!”

No doubts that the fuel of the revolutions will flame once the situation reaches a dangerous critical point and the young people and the Afro-Arab lumpen proletariat imported to Europe will contribute to the spreading of the fire all over the continent.

Here we have managed chaos, the reduction of population on Earth to the targeted hundreds of millions and the conditions to legalize the appropriation of national wealth. The summer and autumn of 2011 won’t be boring for Europe.

See also:

Is another European empire collapsing before our eyes? By Wayne Madsen

 

The “War On Terror” Is A $6 Trillion Racket, With $1 Trillion In Interest Alone, Exceeding The Total Cost Of World War II

ampedstatus.org

When Obama launched his re-election propaganda campaign to trick the American public into thinking that he intends to end the Af-Pak War, he said that the “War on Terror” has cost $1 trillion over the past decade. While that is a staggering amount of money, he was being deceitful once again. 
 

As you may have heard, a newly released study by the Eisenhower Research Project at Brown University revealed that the cost of the War on Terror is significantly greater than Obama has said. The little passing coverage the study received in the mainstream press cited $3.7 trillion as the total cost, which was the most conservative estimate. The moderate estimate, which the mainstream media ignored, was $4.4 trillion. In addition, interest payments on these costs will most likely exceed $1 trillion, which brings the total cost up to at least $5.4 trillion. The report also states that the following costs are not even included in this total:

“THESE TOTALS DO NOT INCLUDE: Medicare costs for injured veterans after age 65; Expenses for veterans paid for by state and local government budgets; Promised $5.3 billion reconstruction aid for Afghanistan; Additional macroeconomic consequences of war spending including infrastructure and jobs.”

David Callahan, reporting for The Policy Shop, summed up the report’s cost estimates:

“… the total direct and indirect costs of the wars in Iraq and Afghanistan may exceed $6 trillion…. That figure comes from combining congressional appropriations for the wars over the past decade ($1.3 trillion), additional spending by the Pentagon related to the wars ($326 – $652 billion), interest so far on Pentagon war appropriations, all of which was borrowed ($185 billion), immediate medical costs for veterans ($32 billion), war related foreign aid ($74 billion), homeland security spending ($401 billion), projected medical costs for veterans through 2051 ($589 – $934 billion), social costs to military families ($295 – $400 billion), projected Pentagon war spending and foreign aid as troops wind down in the two war zones ($453 billion); and interest payments on all this spending through 2020 ($1 trillion).”

Once you add up all these costs, and also consider the fact that these wars are not ending anytime soon, the War on Terror will easily cost us well over $6 trillion. To put the War on Terror’s cost in context, according to the Congressional Budget Office, the total cost of World War II, adjusted for inflation, was $4.1 trillion. [...]

Economy Faces a Jolt as Benefit Checks Run Out

More like countdown to civil unrest...

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New York Times

Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government. By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year.[...]

Europe considers Greek default, leaders to meet

Reuters

European Union leaders are poised to hold an emergency summit after finance ministers acknowledged for the first time that some form of Greek default may be needed to cut Athens' debts and to stop contagion spreading to Italy and Spain.

"There will be an extra summit this Friday," a senior euro zone diplomat told Reuters, suggesting policymakers have been seized with a new sense of urgency after markets started targeting Italian assets.

Worsening political tensions between Prime Minister Silvio Berlusconi and his Finance Minister Giulio Tremonti have caused markets to focus on Italy's shaky banks and chances its budget deal could stumble, and to look afresh at Spain, the euro zone's fourth largest economy.

Willem Buiter, chief economist at Citi and a former UK central banker, said there now was a clear danger of the debt crisis spreading beyond Greece, Ireland and Portugal, the three nations bailed out so far.

"We're talking a game changer here, a systemic crisis," he said. "This is existential for the euro area and the EU." [...]

Debt Ceiling Charade a Move to the Right

therealnews.com

Michael Hudson: Panic about debt ceiling used to attack social programs; no real need for more borrowing

French Banks Face Greatest Italian Risk

bloomberg.com

French banks, including BNP Paribas SA and Credit Agricole SA (ACA), have the most at risk from the euro- region’s debt crisis infecting Europe’s largest borrower, Italy.

At the end of 2010, French banks carried $392.6 billion in Italian government and private debt, according to data from Basel, Switzerland-based Bank for International Settlements. That’s the most for financial institutions from any foreign country and more than double held by German lenders.

“They’re on the frontline,” said Julian Chillingworth, who helps manage about 16 billion pounds ($25 billion) at Rathbone Brothers Plc in London. “French banks like BNP Paribas have taken substantial positions in Italy when the market opened up to foreign players and now they face the downside.”[...]

China's economy at the crossroads

usa.chinadaily.com

It seems more evident than ever that the Chinese economy is at a critical crossroads, with inflation soaring to the highest level in three years while other economic indicators point to a slowdown in growth.

The latest economic data has created a dilemma for policymakers. They have to maintain sustained growth while taming feverish domestic prices. Inflation, fueled by surging food prices, hit 6.4 percent in June and could run out of control if the central bank loosens its monetary-tightening stance. However, the risk of an economic "hard landing" leaves Beijing with limited room for further policy maneuvering.

Government measures to contain inflation are beginning to have an impact on the country's economy. Manufacturing activity, gauged by the Purchasing Managers' Index (PMI), fell to 50.9 in June, its lowest level for more than two years. The same month saw import growth also decline unexpectedly to 19.3 percent year-on-year from 28.4 percent in May. Both of these data snapshots signal a weakened domestic economy.

A series of increases in the required reserve ratio for banks to a record 21.5 percent, added to repeated interest rate hikes, have also put many of the country's private enterprises on the verge of bankruptcy.

What is even more troubling is the country's massive amount of local government debt and the rising level of non-performing loans in the banking system.

Previous reports by some foreign media outlets said local governments have borrowed as much as 14 trillion yuan ($2.16 trillion).

China's central bank denied that figure in a statement on its website on Monday night. The People's Bank of China said that analysts were incorrect in deriving that 14 trillion yuan figure from recent central bank remarks that less than 30 percent of outstanding loans in the country went to local governments at the end of 2010. The ratio of borrowing by local governments to bank lending varies, with the highest not more than 30 percent, the statement said. The overall scale of local debt is therefore much smaller than reported, it said. [...]