EZ READING MONEY MATTERS

Iceland's Financial State In Full Meltdown Mode

March 31,2008

Elaine Meinel Supkis

Iceland is falling down the old rabbit hole. They were tempted to go to infinity and now the system is resetting to zero! I remember some of the online pundits who are more popular than I, touting the krona of Iceland as a great currency. Selling Iceland as a great place to park money to protect it from the ravages of the US empire's financial collapse. But...as I keep on pointing out, THERE IS NO SAFE HARBOR WHEN A GREAT EMPIRE COLLAPSES! We must instead, build our communities and our families so they are strong enough to withstand the coming storm. Or we can listen to History who tells us happily, how revolutions, wars and other things naturally spring from similar circumstances.

Iceland's Biggest Banks Targeted by `Unscrupulous' Speculators

Iceland's lenders are under attack from what its central bank called ``unscrupulous dealers'' amid concern reliance on foreign funding may undermine their operations.

The cost to protect the country's biggest lenders from default is the highest of 81 banks worldwide with credit-default swaps listed on Bloomberg. The country's benchmark index of stocks has shed 20 percent this year, while the krona has lost almost a quarter of its value against the euro.

``The longer this goes on, the worse it gets,'' said Olivia Frieser, a London-based bank analyst at BNP Paribas SA, France's biggest lender. ``It is a question of confidence.''

Iceland's banks have expanded outside of the $16 billion island economy by taking on more borrowing. They account for about 80 percent of the country's gross external debt, which is five times gross domestic product.

``Iceland has been likened to a hedge fund because the banks borrowed to invest in equity,'' Paul Rawkins, a senior director at Fitch Ratings in London, said in an interview. ``It was a punt on getting higher returns to pay off the debt. They are exposed now, and sentiment has shifted against them.''

All the world's tiny kingdoms, republics and dependencies have sought to turn themselves into pirate coves and tax havens. They found the Golden Goose and hoped to haul in much of the planet's wealth and like the huge investment banks, skim this for money to keep for themselves. This game has utterly and totally warped the globe's financial flows and as each year passed and more and more tiny entities played this destructive game, the more many bigger and bigger ones tried to join in the game. So miniscule postage-stamp sized detritus of the great European Empires thrived the last 20 years under the generous umbrella of the US naval empire.

This cute little game of intercepting wealth and parking it well outside of the larger nations and in particular, the huge, expensive American Empire, is directly responsible for a good portion of the present banking system collapse. Of course, the financiers and powerhouses of the US are directly responsible for this situation because they are the ones who persuaded most of these postage stamp entities, they would be most useful if they become a tax haven! The super-rich wanted these tiny tot sovereign nations as pirate coves and home bases for hiding their wealth. Once these places were set up, the rich poured in much of their wealth and thus, sent all the larger nations spiraling into deeper and deeper debts or higher and higher taxes. Due to bizarre notions about sovereignty and alliance, the rich who control the US government have managed to keep their private pirate coves free and clear of any interference, large or small.

The methodologies of the wealthy tax cheats in the US and Europe had a huge impact on these formerly very poor micro-countries. Many of them subsisted on fishing and some grazing animals. The Falkland Islands, Shetland, Jersey Islands, the Isle of Man, just for example, were of this sort. These backwaters became the Fountain of Wealth overnight. It is no surprise to me to see Iceland and Ireland do the same.

As the bag men for the very rich showed up at everyone's lonely shores, armed with great plans for setting up this marvelous alternative banking system, how could these poor fishers and herders say no? Of course not. They all jumped in with both feet.

Part of the dynamics of the total collapse of the financial systems of the West is due directly to this diversion of money flow. Instead of enriching the base of finance, it was undermined as money was diverted into the wrong places and in the wrong amounts. The flow started as a mere trickle post-Bretton Woods II. But as they discovered that the US government and certainly, Britain's government was easily corrupted, bribed or manipulated, the activity steadily grew. What was a small nuisance in 1985 grew into the present monster we see today. The previous postage stamp kingdoms like Monaco that subsisted on gambling turned into huge financial trafficking points. Once computers were fully installed within the world bankings system, funneling funny money became very simple. It didn't take much staff or facilities to do this. So some of the biggest modern banking destinations or centers are tiny islands with small offices and only a few computers and a handful of staff.

This strange, insecure, unregulated, ill-conceived system is now the biggest force in world banking outside of a very, very few central banks in Asia. This system is so poorly articulated, mere clerks working overtime in cubicles can warp billions of dollars of world trade values or the profits of many banks just by monkeying around with their computers in creative ways! This is sort of like running global finances using an army of monkeys randomly typing in numbers! 294733900128753.....on and on the numbers tally up. None of this is controlled by anyone sane. The bankers playing this game, unsupervised like naughty boys turned loose to play hookey in a thunderstorm, have happily splashed around, throwing frogs in the air while blowing them up with firecrackers.

Now the system is breaking down due to the numbers taking off and heading rapidly towards infinity. Iceland seems to be one of the first of these entities to go under. Let's visit Iceland to see why it is melting:

Some of Iceland's past economic history:

Iceland remained under Norwegian kingship until 1380, when the Royal House of Norway died out. Iceland and Norway came under the control of the Danish Crown. Unlike Norway, Denmark did not need Iceland's fish and homespun wool. This created a dramatic deficit in Iceland's trade, and as a result, no new ships for continental trading were built. The small Greenland colony, established in the late 10th century, died out completely before 1500, perhaps due to a lack of resources that were normally provided by Iceland.

With the introduction of absolute monarchy in Denmark in 1660, the Icelanders relinquished their autonomy to the crown, including the right to initiate and consent to legislation. Denmark, however, did not provide much protection for the Icelandic islands which were raided in 1627 by an Ottoman pirate fleet, which abducted almost 300 Icelanders into slavery (The Turkish abductions).
*snip*
In 1602 Iceland was forbidden to trade with other countries than Denmark, by order of the Danish Government. The Danish trade monopoly would remain in effect until 1854.

In the 18th century, climatic conditions in Iceland reached an all-time low since the original settlement. On top of this, the Laki volcano in Iceland erupted in 1783, spitting out three cubic miles (12.5 km³) of lava. Floods, ash, and fumes wiped out 9,000 people and 80 percent of the livestock. The ensuing starvation killed a quarter of Iceland's population.[1] This period is known as the Mist Hardship (Icelandic: Móðuharðindin).

Note how the King of Denmark locked Iceland into trade! All the empires in Europe did this. This fueled many wars. The point was to take a land captive and then force them to buy things at a great disadvantage. This way, the Kings of even very small empires could live outrageous lives in huge, fancy palaces and do as they pleased. The lack of interest in the lives and deaths of their victims is notorious. People who gain an upper hand over others tend to try for this blessed state of tyranny. Under this despotic rule, a great catastrophe happened which killed over 1/3rd of the people. This is not unusual at all, it is unfortunately, quite common. Note the disinterest of the British Crown or Parliament when the Irish suffered similar decimation under a similar ecological/natural disaster.

Certainly, not very many if any ships sailed from Denmark to Iceland to help. Indeed, all of Europe saw huge crop failures and various crop diseases during this time due to the volcanic activity in Iceland.

The German occupation of Denmark on April 9, 1940, severed communications between Iceland and Denmark. As a result, on April 10, the Parliament of Iceland, Alþingi, elected to take control of foreign affairs, electing a provisional governor, Sveinn Björnsson, who later became the republic's first president. During the first year of World War II, Iceland strictly enforced a position of neutrality, taking action against both British and German forces violating the laws of neutrality. On May 10, 1940, Operation Fork was launched and British military forces began an invasion of Iceland by sailing into Reykjavík harbour. The government of Iceland issued a protest against what it called a "flagrant violation" of Icelandic neutrality. On the day of the invasion, prime minister Hermann Jónasson read a radio announcement telling Icelanders to treat the British troops with the politeness due to guests. The Allied occupation of Iceland would last throughout the war.

At the peak of their occupation of Iceland, the British had around 25,000 troops stationed in Iceland, all but eliminating unemployment in the Reykjavík area and other strategically important places. In July 1941, responsibility for Iceland's defence passed to the United States under a U.S.-Icelandic defence agreement. The British needed all the forces they could muster closer to home and, thus, coerced the Alþingi into agreeing to an American occupation force. Up to 40,000 soldiers were stationed on the island, outnumbering all grown Icelandic men. (At the time, Iceland had a population of around 120,000.)

Following a referendum, Iceland formally became an independent republic on June 17, 1944. Since Denmark was still occupied by Nazi Germany, many[attribution needed] Danes felt offended that the step should have been taken at this time. Despite this, the Danish king, Christian X, sent a message of congratulations to the Icelandic people.

Naturally, the King wanted possession of that which his household had a poor history of stewardship! Also note how the US and England seized Iceland for war purposes! The history of doing this is obvious: no island nation can unilaterally destroy another nation's finances or commerce and not expect military retaliation. This is supposedly why we have our navy, for example. But as I keep pointing out, these tiny principalities are all being used by our own rulers who use them to evade paying their fair share in taxes or being regulated by our own just laws! Naturally, the last thing they want is for us to demand these wonderful pirate coves be closed down!

Iceland isn't a pirate cove, they are their own pirates! They discovered the wonderful utility of being a national bank and exploited this generously. This allowed them to create funny money to infinity. Of course, they tried to keep from that. But every year, the temptation to head off into infinity was an alluring prospect. Impossible to resist forever. So each year, the economic base of their banking system shrank more and more compared to the loans they were creating for themselves so they could go on a buying spree.

Iceland had prospered during the course of the war, amassing considerable currency reserves in foreign banks. The government, led by an unlikely three-party majority cabinet made up of conservatives (Sjálfstæðisflokkurinn), social democrats (Alþýðuflokkurinn) and socialists (Sósíalistaflokkurinn), decided to put the funds into a general renovation of the fishing fleet, the building of fish processing facilities, and a general modernization of agriculture. These actions were aimed at keeping Icelanders' standard of living as high as it had become during the prosperous war years.
The government's fiscal policies were strictly Keynesian, and their aim was to create the necessary industrial infrastructure for a prosperous industrialized country. It was considered essential to keep unemployment down to an absolute minimum and to protect the export industry, i.e. the fishing industry, by manipulation of the currency and other means. Due to the country's dependence both on unreliable fish catches and foreign demand for fish products, Iceland's economy remained very unstable well into the 1990s, when the country's economy was greatly diversified.

Up until the 1990's, Iceland was a working island. People built boats, went fishing, fought over fishing rights, they herded sheep and tapped into the energy of their volcanic forces. They diversified and exploited the education of their people and went heavily into biological sciences, for example. All of this was very good. But as I noted, the temptation to become super-rich playing sovereign wealth games using their hard-earned cash to create infinite loans was their downfall. A small population to keep happy enabled this. Low social overhead, little supervision, many people happy over the thought of all this easy money: temptation personified.

The Cod Wars were a series of conflicts between Iceland and the United Kingdom from the late 1950's to the mid-1970's. The first Cod War took place in 1958 when Britain was unable to prevent Iceland from extending its fishing limits from 4 to 12 miles (7 to 22 km) off the coast of Iceland. The second Cod War lasted from 1972 to 1973, when Iceland extended the limit to 50 miles (93 km). The third Cod War began in November 1975, when Iceland extended its zone of control over fishing from 50 miles to 200 miles (370 km). Great Britain did not recognize Iceland's authority in the matter and continued to fish inside the disputed area, marking the third time that Iceland and Great Britain had clashed over fishing rights. Iceland deployed a total of eight ships: six Coast Guard vessels and two Polish-built stern trawlers, to enforce her control over fishing rights. In response, Great Britain deployed a total of twenty-two frigates, seven supply ships, nine tug-boats and three auxiliary ships to protect its 40 fishing trawlers. While few shots were fired during the seven-month conflict, several ships were rammed on both sides, causing damage to the vessels and a few injuries to the crews.[1]

Events took a more serious turn occurred when Iceland threatened closure of the U.S.-manned NATO base at Keflavík, which, in the military perception of the time, would have severely impaired NATO's ability to defend the Atlantic Ocean from the Soviet Union. As a result, the British government agreed to have its fishermen stay outside of Iceland's 200 mile (370 km) exclusion zone without a specific agreement.[

Iceland was so poor, they were willing to take on the musty, bedraggled British Empire and go to blows over possession of some fish! Of course, one of the biggest entities playing this infinite money game is the moth-eaten Lion of England. Both Iceland and England's currencies shot up in value. Real estate shot up in value. Wealth poured into their coffers and more loans were made based on this surge in wealth! And endless loop around the planet ends with money flowing into these island coffers. And seemingly impossible to stop or change.

Click here for information about global fishing: Regulating the Global Commons – Part I

To stop the oceans from being fished out, sovereignty must be reigned in

Just as there are a finite number of fishes in the sea, there is a finite level for money creation. When this is violated, instead of there being more fishies or more money each year, suddenly, the spawning of money ceases and the fishes vanish, too! Overfishing like over-lending is hazardous. All the tax haven islands and principalities are in heavy competition with each other to grant favors and allow dangerous money making for the pirates and rulers. In other words, everyone is forced to bid against each other to attract people seeking to channel wealth away from the world's democracies and empires and into hiding places. As these places proliferate, the schemes proliferated. Since a devilish system of money governance that is all about anarchy and evasion as well as fraud can't last long, we are seeing it die a swift death after less than 30 years of growth.

There is a side issue concerning the blow up of volcano Laki:

An Explosive History

Most notably, Iceland is the site of the largest lava flow in recorded global history. In 1783, an eruption at a mountain called Laki tore a chain of giant craters in the earth. Besides releasing 2.9 cubic miles of lava and inundating 218 square miles of land, the craters also belched a haze of toxic particles into the air, which was reported as far away as Syria. The poisoned air devastated Iceland's livestock and farmland, contributing to a famine that killed about a quarter of the island's residents.

My very favorite American, Ben Franklin, was in Paris negotiating with the French Crown during this time.

Super-eruptions: global effects and future threats

Report of a Geological Society Working Group

"There seems to be a region higher in the air over all countries, where it is always winter, where frost exists continually, since, in the midst of summer on the surface of the earth, ice falls of ten from above in the form of hail... During several of the summer months of the year 1783, when the effect of the sun’s rays to heat the earth in these northern regions should have been greatest, there existed a constant fog overall all Europe and great part of North America. This fog was of a permanent nature; it was dry, and the rays of the sun seemed to have little effect towards dissipating it, as they easily do a moist fog, arising from water..."The cause of this universal fog is not yet ascertained,…: or whether it was the vast quantity of smoke, long continuing to issue during the summer from Hecla in Iceland, or that other volcano…..”

Extracts from Meterological Imaginations and Conjectures, by Benjamin Franklin, LL.D., Fellow R. Soc., and Acad. Reg. Sci. Paris Soc. etc., Communicated by Dr. Percival Read December 22, 1784, to the Manchester and Liverpool Philosophical Society. Franklin was in Paris, France, in the summer of 1783 as U.S. Ambassador to France.

One impact of the Laki gas and aerosols over the U.K. during 1783 was to increase deaths, possibly due to respiratory disorders, as shown by map of distribution of English parishes experiencing “Crisis Mortality”, much-above-average numbers of deaths per month, during the Laki fissure eruption.

The resulting famines, poisoning of farm animals, cold winters and wet summers led directly to the French Revolution. The fatal combination of heavy debts, agricultural collapse and revolutionary thought from the Americans doomed the French aristocrats.

Today, we are watching with fascination as the whirlwind of banking collapse collides with other important historical forces to change the history of humanity. Now, let's visit the central banks of the Great Nations, the G7's top powers:

Here are the actual Fed Reserve numbers:

Note that the 'non-borrowed' numbers went from positive to negative. Note also how the negative numbers rise and rise. And then jump over the moon! And see the Term Auction Credit, the magic window for the bankrupt financiers to use to prop up their failed banks! It not only has lots of billions of dollars pouring out, it too, is going up and up each week. The banking crisis is accelerating, not ending!

The simplistic joy on Wall Street today over the infantile notion that the crisis is over now that the Fed is trying to pass a coup through Congress is pathetic, to put it mildly. This is exactly 100 years after the Fed was created in a conspiracy of the top bankers and financial owners of huge hunks of the American economy. They didn't want to compete, they wanted to CONSPIRE. And now they are CONSPIRING yet again to take even more of our economy and control it FOR THEMSELVES! They have been an abject failure at helping our nation in the past. Now they are openly looting it ruthlessly. Let's visit one of my favorite fellow bloggers:

The Financial Ninja:

With the credit crisis entering its ninth month, Bank of England Governor Mervyn King and European Central Bank President Jean-Claude Trichet are on the verge of new steps to spur lending and increase liquidity, say economists at Lloyds TSB Group Plc and Royal Bank of Scotland Group Plc. Interest-rate cuts may be next if the crisis persists.”

Oh dear god! THE GREAT GLOBAL MONETARY EASING is yet to come? I thought we just came off ‘the great global monetary easing’ and that THAT is exactly what got us into this mess in the first place! Correct me if I’m wrong, but wasn’t it absurdly low REAL rates that literally forced the entire financial system to REACH FOR YIELD? That is to say to leverage up using derivatives in a vain attempt to turn something yielding 2% or 6% into something closer to 9%? Wasn’t it the super cheap and EASY access to credit by both individuals and corporations that lead to runaway SPECULATION in hard assets such as REAL ESTATE?

Instead of allowing for an orderly and DESERVED unwinding, de-leveraging and general deflation of this mania, the major Central Banks of the world propose to co-ordinate a new round of monetary EASING? Brilliant. Just brilliant.

“The Fed chairman needs all the help he can get. In addition to lowering interest rates at the fastest pace in two decades, Bernanke has committed as much as 60 percent of the $700 billion in Treasury securities on his balance sheet to expand lending. The Fed has also offered a $29 billion loan against illiquid securities to assist the buyout of failing securities firm.”

HAHAHA. Correct! I bet the Financial Ninja hangs under the rafters, watching these shoguns count their loot. He waits and then springs....

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Reviving the R.T.C.; The next Big Plan from the Bernanke Politburo

March 31, 2008

by Mike Whitney

[Elaine: my commentary is in italics]

"Instead of just propping up bankrupt banks, the governments should be democratising them - mobilising their assets to stimulate the productive economy, repairing infrastructure, researching and developing new markets, and refitting western economies to combat climate change." Iain MacWhirter, "The Red Menace"

The Federal Reserve is presently considering an emergency operation that is so risky it could send the dollar slip-sliding over the cliff. The story appeared in the Financial Times earlier this week and claimed that the Fed was examining the feasibility of buying back hundreds of billions of dollars of mortgage-backed securities (MBS) with public money to restore investor confidence and clear the struggling banks' balance sheets. The Fed, of course, denied the allegations, but the rumors abound. Currently the banking system is so clogged with exotic investments, for which there is no market, they can't perform their main task of providing credit to businesses and consumers. Bernanke's job is to clear the credit logjam so the broader economy can begin to grow again. So far, he has failed to achieve his objectives.

[ELAINE: I'm sorry, but the busy beavers in the Federal Reserve LLP CREATED this logjam in the first place. They did this because they wanted to make their buddies in the banking/investment world very rich. And this was done to create support for bizarre, stupid wars in the Middle East. And the oil con men in places like Texas dearly wanted these wars so they could raise the price of oil globally and make a killing. And so all these guys destroyed the dollar and our economy as well as wrecked our military. Indeed, this logjam is on a river of red ink. That is still flowing even as it is like the ancient maps showing ships sliding off the side of the flat earth. And is it no wonder that the buddies of Bernanke and Greenspan, like Friedman, love to talk about the 'Flat Earth'? HAHAHA. Flat as the World Trade Center.]

Since September, Bernanke has slashed interest rates by 3 percent and opened various auction facilities (Term Securities Lending Facility, the Term Auction Facility, the Primary Dealer Credit Facility, and the new Term Securities Lending Facility) which have made $400 billion available in low-interest loans to banks and non banks. He has also accepted a “wide range” of collateral for Fed repos including mortgage-backed securities and collateralized debt obligations (CDOs) which are worth considerably less than what the Fed is offering in exchange. But the Fed's injections of liquidity have not solved the basic problem which is the fall in housing prices and the persistent downgrading of mortgage-backed assets that investors refuse to buy at any price. In fact, the troubles are gradually getting worse and spreading to areas of the financial markets that were previously thought to be risk-free. The credit slowdown has also put additional pressure on hedge funds and other financial institutions forcing them to quickly deleverage to meet margin calls by dumping illiquid assets into a saturated market at fire-sale prices. This process has been dubbed the “great unwind”.

In the last six years, the mortgage-backed securities market has ballooned to a $4.5 trillion dollar industry. The investment banks are presently holding about $600 billion of these complex debt instruments. So far, the banks have written-down $125 billion in losses, but there's a lot more carnage to come. Goldman Sachs estimates that banks, brokerages and hedge funds will eventually sustain $460 billion in losses, three times greater than today. Even so, those figures are bound to increase as the housing market continues to deteriorate and capital is drained from the system.

The Fed has neither the resources nor the inclination to scoop up all the junk bonds the banks have on their books. Bernanke has already exposed about half of the Central Bank's balance sheet to credit risk. ($400 billion) But what is the alternative? If the Fed doesn't intervene, then many of country's largest investment banks will wind up like Bear Stearns; DOA. After all, Bear is not an isolated case; most of the banks are similarly leveraged at 25 or 35 to 1. They are also losing more and more capital each month from downgrades, and their main streams of revenue have been cut off. In fact, many of Wall Street's financial titans are technically insolvent already. The generosity of the Fed is the only thing that keeps them from bankruptcy.

[ELAINE: Some of these 'banks' have been around since the Gilded Era when corruption and power politics destroyed US democracy. Why on earth should we save J.P. Morgan's outfit? It is one of the FOUNDERS, nay, the CHIEF INSTIGATOR of the Federal Reserve's creation. Old J.Pirate Morgan owned Jekyll Island where the coup was plotted. If that pernicious organization were to fall, it would be like seeing the Mafia defeated. About time! But since J.P. owns the Fed, this Mafia group will use it to save THEMSELVES while dumping the rest of us overboard. One trick is for the Fed to seize all the savings in America via instituting 1% lending again which means no one saves money if they put their savings in any banks! They will be forced to hand it over the the J.PIRATES who will then make it 'grow' by using it to invest after taking their 20% profit off the top. I.e.: this is bankrobbery and the robbers are the BANKERS.]

It's generally accepted that the market for MBS will not improve until housing prices stabilize, but that's a long way off. Mortgages are the cornerstone upon which the multi-trillion dollar structured investment market rests, and that cornerstone is crumbling. If housing prices continue to fall, the MBS market will remain frozen and banks will fail; it is as simple as that. No one is going to purchase derivatives when the underlying asset is losing value. The Bush administration is pushing for a “rate freeze” and other clever ways to keep homeowners from defaulting on their mortgages, but its a hopeless cause. The clerical work needed to change these complex mortgages is already proving to be a daunting task. Plus, since 60 percent of these mortgages were securitized, it is nearly impossible to change the terms of the contracts without first getting investor approval; another fly in the ointment.

Also, the tentative plans to expand Fannie Mae and Freddie Mac, so they can absorb larger mortgages (up to $729,000 jumbo loans) is putting an enormous strain on the already-overextended GSE's. By attempting to reflate the housing bubble, the administration will only increase the rate of foreclosures and put the two mortgage behemoths at risk of default without any clear sign that it will help.

[ELAINE: but the savior will be the Fed. They will become the owner/landlords of most American homes. Isn't that SWEET? My ancestors ruled their baronies in Europe quite contentedly. Oppressing the peasants, making extractions, meddling in their housing affairs, kicking them out again if we decided to use the land for grazing sheep rather than raising wheat, etc. This is called 'feudalism' and if Americans are stupid, they will fall for these schemes being cooked up to 'save' them from things the Fed created in the first place.]

Yesterday's release of the Case/Schiller Index of the 20 largest cities in the country, shows that housing prices have slipped 10.7 percent in the last year while sales were down 23 percent year over year. That means that retail equity of US homes just took a $2 trillion haircut. Still, prices have a long way to go before they catch up to the 50 percent decline in sales from the peak in 2005. From this point on, prices should fall and fall fast; following a trajectory as steep as sales. Many economist expect housing prices to drop at least 30% (Paul Krugman and G-Sax) which means that $6 trillion will be shaved from aggregate home equity. In a slumping market, many homeowners will be better off just “walking away” from their mortgage instead of making payments on an asset of steadily decreasing value. Who wants to make monthly payments on a $500,000 mortgage when the current value of the house is $350,000? It's easier to pack the kids and vamoose then waste a lifetime as a mortgage slave. Besides, the Bush administration has no interest in helping the little guy stay out of foreclosure. Its a joke. All of the rescue plans are designed with just one purpose in mind; to save Wall Street and the banking establishment. Period.

There is a widespread belief that Bernanke has been proactive in addressing the turmoil in the credit markets. But it's not true. The Fed chairman has simply responded to events as they unfold. The collapse of Bears Stearns came just weeks after the SEC had checked the bank's reserves and decided that they had sufficient capital to weather the storm ahead. But they were wrong. The bank's capital ($17 billion) vanished in a matter of days after word got out that Bear was in trouble. The sudden run on the bank created a risk to other banks and brokerages that held derivatives contracts with Bear. Something had to be done; Rome was burning and Bernanke was the only man with a hose.

[ELAINE: Wrong instrument! Bernanke was holding the VIOLIN. And sawing away like mad. The smell of Bears Stearn's goose being cooked attracted the three headed hell hounds and the pirates who founded the Fed and who basically run it. So it took a mere phone call to arrange the dining room and to get the chef, Bernanke, to cook and carve up the Bear. The media wants us to think this is the other way around. It is NOT.]

According to the UK Telegraph: “Bear Stearns had total (derivatives) positions of $13.4 trillion. This is greater than the US national income, or equal to a quarter of world GDP - at least in "notional" terms. The contracts were described as "swaps", "swaptions", "caps", "collars" and "floors". This heady edifice of new-fangled instruments was built on an asset base of $80bn at best.

On the other side of these contracts are banks, brokers, and hedge funds, linked in destiny by a nexus of interlocking claims. This is counterparty spaghetti. To make matters worse, Lehman Brothers, UBS, and Citigroup were all wobbling on the back foot as the hurricane hit.

"Twenty years ago the Fed would have let Bear Stearns go bust," said Willem Sels, a credit specialist at Dresdner Kleinwort. "Now it is too interlinked to fail." (Ambrose Evans-Pritchard, UK Telegraph)

[ELAINE: And this is the fearsome Derivatives Beast who lives in the Cave of Death. Slaying it is a no-no. The dwarves have to first find some Siegfried to do the dirty work. When he kills the Dragon, it will tell him the truth and he will go out and seek to kill Wotan, the dwarves and everyone in his path. This is called 'World War III.']

Bernanke felt he had no choice but to step in and try to minimize the damage, but the outcome was disappointing. Bernanke and Secretary of the Treasury Henry Paulson worked out a deal with JP Morgan that committed $30 billion of taxpayer money, without congressional authority, to buy toxic mortgage-backed securities from a privately-owned business that was failing because of its own speculative bets on dodgy investments. Wow. The transaction turned out to be bad for shareholders, bad for employees and bad for taxpayers. It made the Federal Reserve look like the unelected and unaccountable oligarchy of bankster sharpies they really are. The only people who made out were the investors who were holding derivatives contracts that would have been worthless if Bear went toes up.

[ELAINE: HAHAHA. Bernanke had no choice? This creep knows just as well as I, what the hell is going on. But he has to enrich and protect the CRIMINALS who are wrecking America. This is because he is a TRAITOR. And should be arrested. Along with Greenspan. The $30 billion is a raid on the Treasury arranged by Paulson who happens to be a PIRATE, himself. And should be treated like pirates: captured and hung. And duh! The other people in this deal were all destroyed. But not the TOP GUYS who OKed this deal. They, being pirates, were happy to abscond with their multimillions. They sold out long before this.]

Still,the prospect of a system-wide derivatives meltdown left Bernanke with few good options, notwithstanding the moral hazard of bailing out a maxed-out, capital impaired investment bank that should have been fed to the wolves.

It is worth noting that derivatives contracts are a fairly recent addition to US financial markets. In 2000, derivatives trading accounted for less than $1 trillion. By 2006 that figure had mushroomed to over $500 trillion. And it all can be traced back to legislation that was passed during the Clinton administration.

“A milestone in the deregulation effort came in the fall of 2000, when a lame-duck session of Congress passed a little-noticed piece of legislation called the Commodity Futures Modernization Act. The bill effectively kept much of the market for derivatives and other exotic instruments off-limits to agencies that regulate more conventional assets like stocks, bonds and futures contracts.

Supported by Phil Gramm, then a Republican senator from Texas and chairman of the Senate Banking Committee, the legislation was a 262-page amendment to a far larger appropriations bill. It was signed into law by President Bill Clinton that December.” (“What Created this Monster” Nelson Schwartz, New York Times)

[ELAINE: Clinton was paid back quite handsomely. Note how his dear wife is being rewarded.]

Now the investment giants are lashed together by trillions of dollars of unregulated counterparty swaps. If one bank fails, it could domino through the whole system. Bernanke now finds himself in the unenviable position of having to make sure that all the equity bubbles are properly inflated so the banking system doesn't suddenly come crashing to earth. Meanwhile, the tumbling housing market has paralyzed the corporate bond and structured investment markets which means that Bernanke's job will get much harder, if not impossible.

[ELAINE: Bernanke's job is lookout man and get away car driver. He probably has to use Mapquest to plot his elaborate run from the cops. The cops being probably the Chinese and maybe even the Canadians! Only Canada has, as the guy in charge of their own banking system, a pirate from Goldman Sachs. So they can also kiss their assets goodbye.]

The Fed chief is now facing a number of brushfires that will have to be put out immediately. The first of these is short term lending rates, which have stubbornly ignored Bernanke's massive liquidity injections and continued to rise. The banks are increasingly afraid to lend to each other because they don't really know how much exposure the other banks have to risky MBS. This distrust has sent interbank lending rates soaring above the Fed funds rate to more than double in the past month alone. So far, the Fed's TAF hasn't helped to lower rates, which means that Bernanke will have to take more extreme measures to rev up bank lending again. That's why many Fed-watchers believe that Bernanke will ultimately coordinate a $500 billion to $1 trillion taxpayer-funded bailout to buy up all the MBSs from the banks so they can resume normal operations. Of course, any Fed-generated scheme will have to be dolled up with populous rhetoric so that welfare for banking tycoons looks like a selfless act of compassion for struggling homeowners. That shouldn't be a problem for the Bush public relations team.

[ELAINE: Oh, they trust each other! They conspire with each other. Oops, they backstab each other, too! Never mind. One thing is certain: they can't 'lend' to each other for the simple reason: THEY ARE FUCKING BANKRUPT!!!!! There is no money there.]

The probable solution to the MBS mess is the restoration of the Resolution Trust Corp., which was created in 1989 to dispose of assets of insolvent savings and loan banks. The RTC would create a government-owned management company that would buy distressed MBS from banks and liquidate them via auction. The state would pay less than full-value for the bonds (The Fed currently pays 85% face-value on MBS) and then take a loss on their liquidation. “According to Joseph Stiglitz in his book, Towards a New Paradigm in Monetary Economics, the real reason behind the need of this company was to allow the US government to subsidize the banking sector in a way that wasn't very transparent and therefore avoid the possible resistance.”
The same strategy will be used again. Now that Bernanke's liquidity operations have flopped, we can expect that some RTC-type agency will be promoted as a prudent way to fix the mortgage securities market. The banks will get their bailout and the taxpayer will foot the bill.

[ELAINE: They can't have a Resolution anything due to the hard fact, they have to first declare bankruptcy. This is why they are scheming like mad to create a new system that lets them float over this fact. They need to tap into the public purse to bankroll their reserves!]

The problem, however, is that the dollar is already falling against every other currency. (On Wednesday, the dollar plunged to $1.58 per euro, a new record) If Bernanke throws his support behind an RTC-type plan; it will be seen by foreign investors as a hyper-inflationary government bailout, which could precipitate a global sell-off of US debt and trigger a dollar crisis.

Reuters James Saft puts it like this:

“It is also hugely risky in terms of the Fed's obligation to maintain stable prices.... it could stoke inflation to levels intolerable to foreign creditors, provoking a sharp fall in the dollar as they sought safety elsewhere.” (Reuters)

Saft is right; foreign creditors will see it as an indication that the Fed has abandoned standard operating procedures so it can inflate its way out of a jam. According to Saft, the estimated price for this folly could be as high as $1 trillion dollars. Foreign investors would have no choice except to withdraw their funds from US markets and move them overseas. In fact, that appears to be happening already. According to the Wall Street Journal:

"While cash continues to pour into the U.S. from abroad, this flow has been slowing. In 2007, foreigners' net acquisition of long-term bonds and stocks in the U.S. was $596 billion, down from $722 billion in 2006, according to Treasury Department data. From July to December as jitters about securities linked to US subprime mortgages spread, net purchases were just $121 billion, a 65% decrease from the same period a year earlier. Americans, meanwhile, are investing more of their own money abroad.” ("A US Debt Reckoning" Wall Street Journal)

$121 billion does not even put a dent the $700 billion the US needs to pay its current account deficit. When foreign investment drops off, the currency weakens. Its no wonder the dollar is falling like a stone.

Bernanke should seriously consider the consequences of his next move before he acts. Once the dollar starts to free-fall, there's no telling where it will land.

[ELAINE: The elimination of the dollar is obvious. What on earth is the Amero, anyway? Our main trading partners all put tons of dollars in their FOREX reserves and now we will destroy these reserves by forcing them to turn over the money and have it revalued in the new, lesser currency. Back when Germany and Japan revalued their currencies with the dollar, each time, the dollar cutting its value by 50%, they had few dollars held in government accounts. Today, their central banks hold trillions of dollars along with China, all the oil selling nations and quite a few others. So forcing them to turn over the dollars with a 50% or greater haircut, is a VERY REAL possibility. Indeed, this is in lieu of another Bretton Woods Accord!

The only thing keeping this from happening is our need to not stab both Mexico and Canada in the back. So the Amero is the solution. Both of these nations will get a 1:1 exchange of their banking holdings of dollars or they will turn off the oil taps. This program has many dangerous side issues. One is, we still consume way too much oil and Mexico and Canada can't supply it all. And China might make a deal with the other oil pumping nations locking us out! Thus, the military option rears its ugly horned head.

The temptation to launch WWIII will be very strong for the US. The US is between a rock and a frying pan. Or rather, we will be a rock in a fire. The Amero solution is still very, very iffy. I would surmise that the northern half of the US might be sorely tempted to join with Canada and shove off from the strange political practices of the southern half of the country. I know that I would probably vote for something like this if the south keeps voting into office jerks like the Bushes. But then, voting for war mongers who pay no attention to the finances is a plague on all of our states at this point. It is just a lot of work, moving further north. Heh.

In economic chaos, countries do change their borders, sometimes, very rapidly.]

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Loans For College Collapse And Vanish

March 31, 2008

Elaine Meinel Supkis

Banks have ceased to lend money to students. Even with government guarantees. This will have a very vile ripple effect. Many colleges will go bankrupt this year if their incoming student body vanishes. Meanwhile, Congress will debate yet another $100 billion emergency spending bill for the hyper-expensive war in Iraq that is costing us trillions of dollars. Congress also must debate the 200 page reoranization bill handed over by the right wing neo cons who plan to destroy America. Anyone who OKs anything this gang does is insane or a traitor. Arrest the neo cons for wrecking our nation. Treason can be the charge.

US credit crunch hits education as banks abandon student loans

One of America’s leading banking associations has given warning that the United States faces a growing educational apartheid as some lenders withdraw from student loans amid new evidence that the credit crisis has spread across all types of borrowing.

In the past fortnight, some banks, including HSBC, have pulled out of the $85 billion (£42 billion) a year US student loans market, fuelling anxiety that the turmoil that hit debt markets on Wall Street last summer is spilling over into the wider economy and making credit more difficult to secure for ordinary American households.

In the US, many undergraduates take out a federal guaranteed loan and top up their financial needs with a private loan from lenders such as Bank of America, JPMorgan Chase and Citi-group. In the academic year 2005-06, $17 billion in private student loans was used to finance higher education.

Banks have become reluctant to offer private student loans because worsening credit conditions have meant that they cannot package up the loans and sell them on.

All over the mainstream media, I read stories about the hopes of the investment community that the collapse of the US banking/economic system is finished and life will return to 'normal'. 'Normal' being 'continuous financial overruns, oceans of red ink' status quo normalcy. When any great economic system finally collapses, there is this raging desire to regain the worse aspects of the previous system. This desire is tremendously strong in empires. Since they are accustomed to ignoring reality, they figure, why not ignore it forever? In normal downturns, the investing classes constantly chatter about how things are turning around rapidly. When it takes longer than a year, they grow glum and then angry. But the first year of any collapse, they love to pretend this time will be short and the pain, a mere pin prick.

History, on the other hand, views this with her usual grim amusement and the picks up her bloody pen to scratch more painful news into the unscrolling parchment of Reality Biting. The news at the top of the story today infuriates me [how UNUSUAL!!! HEH.] Here we are, Congress is going to begin 'debating' the latest spending bill for IRAQ. The bill for this misbegotten, miserable war, is heading towards the trillions of dollars. The price of oil before this invasion was less than $50 a barrel. The collapse of our 'in the red' economy has gone off the cliff thanks to the high cost of oil and war spending. Every time Congress has to consider shutting the public purse to this wild, useless spending, they do the opposite.

They are afraid of being called 'traitors'. Well, I have something to say about that: they are ALL TRAITORS if they stupidly vote to keep on this useless, wild spending! Instead of educating our youth, we are spending hideous sums to kill Iraqis. Public education post high-school is now going to collapse due to the inability to spend public money on important things like the education of our youth. My own family is being hammered by this. The availability of government loans to students has collapsed in the last 7 years. As inflation has eaten away at these funds ability to cover 4 years of college, students had to go to banks for supplementary loans. Now, these are vanishing! Poof!

This directly hits my own children. Now, colleges will see registrations vanish next fall as even more students cannot get loans. This collapse is EASY TO FIX. All we have to do is have Congress decide to vote for the AMERICAN PEOPLE and FUND the education of OUR CHILDREN. And they can easily do this by cutting totally, every penny going to the misbegotten Iraq war! Sadr just called a ceasefire which was brokered by Iran. Iran has won this war. Iran can do what Iranians love to do: make fun of us as they chase us out of Shi'a lands. But what else do we expect? We want the Chinese chased out of Tibet, after all!

So we can go! Goodbye! The Shi'ites are perfectly capable of running their own affairs. Perhaps, if our collective brains kick in, we can realize doing business with the Persians has an upside: both we and they will do much better. Eh?

Instead, our educational system will now collapse. The loss of these loans will HAMMER our educational system ferociously. The wave of cut backs in colleges will be disastrous and deep. And what was all that garbage from those flat earth flat worms like Friedman and his six months, all will be well in Iraq?

Stomp on them! Feed them to robins. Robins came to my mountain looking for worms. I will send them to the New York Times to eat.

G7 to press big banks to reveal extent of credit crunch losses

The world’s big banks are to face stronger demands from finance ministers and central bankers of the Group of Seven (G7) leading economies to declare the full scale of their exposure to losses from the US housing market slump and the global credit crunch.

The G7 move comes after the Financial Stability Forum (FSF), the policy group of leading economies’ finance ministries, regulators and central banks, said at the weekend that lack of clarity over the extent of banks’ losses is worsening the credit crunch.
*snip*
The warning from G7 meanwhile came as the Basle-based FSF finalised a report to G7 finance ministers on responding to the credit crisis, including recommendations for toughening regulation and scrutiny of financial institutions and markets.

The banking collapse continues. This isn't due to some small problem. It is a systematic failure that can't be fixed by some simple jiggering of interest rates. Since the ultimate reason is a lack of savings coupled with wild spending and irresponsible debt creation in order to fund imperial adventures, fixing this collapse is no easy thing. When banks issue too many debts to kings and emperors, when those guys default and they always do, the banking system collapses. From the earliest days in history to modern times, these collapses are as inevitable as the sun rising or setting.

This 'lack of clarity' isn't a symptom. It is a cause. And the way to tackle this issue is easy: you arrest the people who devised financial systems and instruments that are concealing the truth. We call people who make such things 'con men' or 'rip off artists.' And the sole reason for making anything impossible to trace, explain or understand is simple: it is to hide frauds. In the case of the explosion in new instruments that were made of bad debts, the opacity was to hide the TRUTH about the quality of these underlying loans. And the people engineering this knew this perfectly well. They thought, no one would figure out that these tricks we are playing have diluted the true value of these things we are selling.

Note that Goldman Sachs even boasted about betting that these instruments would fail even as they sold them to outsiders who had no idea that a ton of pure junk, utter garbage, had been parked inside of AAA rated instruments! So I say, arrest these guys. The top ones have many millions in profits from this fraud. Governments can use these profits to fund education for our youth.

Trichet, King May Support Fed as Ammunition Runs Low

Federal Reserve Chairman Ben S. Bernanke has so far shouldered most of the burden of saving the global economy and financial markets. He may be about to get more help.

With the credit crisis entering its ninth month, Bank of England Governor Mervyn King and European Central Bank President Jean-Claude Trichet are on the verge of new steps to spur lending and increase liquidity, say economists at Lloyds TSB Group Plc and Royal Bank of Scotland Group Plc. Interest-rate cuts may be next if the crisis persists.

``We're inching closer to the great global monetary easing,'' says Joachim Fels, co-chief economist at Morgan Stanley in London.

Lloyds predicts King's next step will be to accept more types of collateral for loans. Trichet will pump more money into banks, RBS forecasts. Such measures would take Europe's two biggest central banks further down the path laid out by Bernanke this month.

To save this corrupt banking/investing system set into motion by con artists, the central banks will now drop interest rates to 0%. But they will not be funding student's loans at that rate! Which is why I am calling for no loans but rather, GRANTS to our young people. Education is supposed to pull us out of our post-industrial wasteland and into intellectual pursuits. And note how this article talks about BERNANKE 'shouldering the burden.' This idiot isn't shouldering anything. He is imitating the Bank of Japan. Super-cheap loans to governments and exporters, no money for the working classes. Note that this hasn't helped the lower classes of Japan! And in the US, wages are dropping, access to higher education is being strangled, we have no idea how to deal with all this!

One thing is certain: imitating Japan will put the entire planet into a depression. As I often point out. Japan has the 0% regime, super-low import regime down pat. If everyone locks out the import of high-value materials like Japan has, we will have no world trade except in commodities. If that! But the G7 nations focus only on China with fatal results to world trade. Europe and Japan wanted the US to drop interest rates so America can buy more of their exports. The US can't afford to do this. In Japan, I read yesterday that a Japanese airline is going to start buying only planes from Mitsubishi who is going back into the business. Japan bought American and European planes for many years as a counterbalance to the car trade which is totally one way from Japan to the outside world.

Now that they rule the roost internationally, they are now going to rebuild their aviation industry. They US trade statistics with Japan would be near $0 going to Japan while Japan exports $30 billion to the US. We have to deal with this one-way trade just as we have to cease our imperial overreach and wasteful wars. Our G7 buddies want us to continue all this. They are our TRADE RIVALS and they are BEATING US UP.

Stock Markets Call Bluff of Asian `Decoupling': Andy Mukherjee

The four best-performing Asian markets have been Taiwan, Pakistan, Thailand and Sri Lanka, posting modest gains of between 2 percent and 8 percent in U.S. dollar terms.

Is this the Asian ``decoupling'' that global investors had so fondly hoped for? Weren't the larger and faster-growing economies of China and India supposed to shield investors from the mortgage- and credit-related financial crisis in the U.S.?
*snip*
The winners' story is much more remarkable, especially when you consider that the quarter began with a heightening of political risk in two out of these four markets and -- at least at the time -- a far-from-certain process of reduction of the same risk in the two remaining ones.

In other words, the biggest investing houses that fueled our financial collapse are STILL running after Miz Risky! Countries that are politically unstable, outright insurrections, even, are the 'best bets.' This is due to the higher interest rates for loans in these unstable places. So money is flowing there. Is this a good idea? Or total insanity? Obviously, anyone who screams, they want safety only to take the government-sponsored loans from the Fed Reserve window and then rush off to the most dangerous parts of the planet to watch it 'grow' is...insane.

Weird interest rates

Continuing the discussion about the weird (and worrying) state of the financial markets, here’s a picture showing just how strange things are. Normally, we just say that the Fed sets “short-term interest rates,” because all very short rates are about the same. Below is the Fed funds target rate and the one-month Treasury bill rate; they’ve always been right on top of each other.

Always, that is, until now. Treasury rates have plunged close to zero, even though Fed funds is still 2.25%. Since open-market operations take place in Treasuries, I take this to mean that the Fed may not actually be able to reduce short-term rates much from current levels — which means, in turn, that conventional monetary policy has been taken off the table. As Brad says, be afraid — be somewhat afraid.

All the charts and graphs show the same thing: off the cliff. This is scary. Because this is a sign we are going into a depression. Commodities shot up right before the Great Depression and the previous Long Depression. This is a symptom of an impending depression. Once the higher commodities eat up domestic budgets and industry struggles to pay for higher material costs by CUTTING LABOR just like they just did in Japan for 15 years, we get a dead market due to workers unable to buy anything but the barest necessities. Depressions are all about necessities. And as commerce ceases, the prices of commodities falls, of course.

As we are beginning to see, barely. The instability in the commodities markets is proof that the buying ability of billions of workers is now beginning to be sopped up and will end up eating up all the incomes of the mass of humanity. Then, money becomes precious since workers will be cut out of the money stream. money is wealth ONLY if it moves. This includes gold. If it sits in a vault or underground or in a deep cave under some Dragon, it is no longer wealth. It is a dead horde, a grave.

This process of defunding workers has been going on for a while. Workers in Asia have, outside of Japan, seen their finances going up and up. But now, all nations will see their workers lose ground. And the more they lose purchasing power, the more the depression will hammer world economies. 0% interest rates won't increase the buying power of workers seeing their wages collapse and jobs vanishing.

Long Fight Ahead for Treasury Blueprint

Lawmakers and regulators said yesterday that an ambitious plan by the Treasury Department to revamp the nation's decades-old financial regulatory structure could require congressional action stretching over several years and would not help the economy out of its current credit crisis.

Battle lines are already forming over Treasury's major proposals even though top officials have just begun to digest the 200-page regulatory blueprint, which was released to them late Friday night.

Some Democrats and consumer groups criticized the plan for serving the needs of financial markets but not consumers. Former and current regulators hinted at a likely fight over proposals to strip authority from agencies such as the Securities and Exchange Commission, and the head of another imperiled body, the Office of Thrift Supervision, was dismissive of the Treasury blueprint in an e-mail Friday to his employees. Other officials worried whether the effort to streamline financial oversight would lead to a massive disruption and elimination of positions across the federal government.

The bulls and bears in Congress will tussle over this. It won't pass, of course. First of all, the power structure is in flux there. And we may have a new President soon, I hope. Clinton's candidacy is now fading fast. People realize, she can't win through hook or crook. And the flurry of negative news about Obama's pastor is fading fast, too, as the economic whirlwind rapidly destroys more sectors of our economy. People are increasingly focused on the economy. And McCain's hope to bomb, bomb, bomb, bomb Iran and Iraq is going to be shoved aside in favor of 'hell, we have to save ourselves!' just as the Vietnam war abruptly ended not due to student uprisings or our inner cities burning but due to bankruptcy. Our economy was collapsing and we had to save ourselves. Our puppets in Vietnam had to fend for themselves.

If Obama is being advised by Volker, there is some hope we will avoid the 0% deflationary trap. One can only hope.

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Kent's Sugar House, Berlin, New York

Kent's Sugar House, Berlin, New York

March 30, 2008

Elaine Meinel Supkis

Instead of worrying about the world, I went off this lovely Sunday to visit one of my neighbor's businesses. Kent's Sugar House produces all the maple syrup we use at home. We love this product and are always fascinated to visit the Kent family as they manufacture their syrup the old fashioned way. They also are a part of Americana that we all adore: hard working people who make wonderful things, often, by themselves. So sit back and enjoy one of the most wonderful things in spring in the Northeast. Mud season is bearable if we can have maple syrup the rest of the year.

Note: click on all images to enlarge.

Our road up the mountain turns to mud. Mud as bad as that which bogged down Napoleon and Hitler's armies in Russia. When the snow melts and runs into the ground, it turns to mud. Mud deeper than the axels of our one ton truck. But when we look out at all this mud which covers our boots and the paws of the dogs and which discourage the cats who look in disgust at the mess, we see the first signs of spring. The trees 'thicken'. Instead of thin, delicate branches waving in the howling winds, covered with snow or black against the snow, the filigree of the forest blushes pink and the trees look fatter. For the sap is rising!

Being smarter than humans, the trees know to retreat in winter. They shed their leaves swiftly after a lovely display of amazing colors which are all the colors of the rainbow, they then hunker down for winter. The sap leaves the branches and travels down into the roots which dig deep under the rocks left behind by glaciers. There, under the earth and snow, the sap sits and waits and waits. While it waits, it gets concentrated. Unlike in summer, when it rushes to the outermost leaves to feed the chlorophyll in the leaves, it is very thin. But the concentrate that flows in the spring is rich!

This sweet sap is sweetest in the sugar maples. These splendid forest dyrads put on the prettiest dresses in fall and turn brilliant red and orange. Or gold. In spring, this sap flows fastest and hardest with these trees. And the people of the Northeast figured out hundreds of years ago, how to capture some of this sap by tapping the trees. And if this sap is boiled down, it makes the sweetest yet most subtle of sugars! A complex bouquet of taste and scent, a memory of the entire spring, summer and fall, like a fine perfume.

My neighbors who run a sugar house have built a fine business over the years and I have watched them at work as they figure out how to do business. And it pays to look at people at the lower levels of our economy to see how enterprise, hard work and faith can create and grow a business without any tricky things that are not healthy or good. The Kents are rock-ribbed Yanks who embody all the virtues of these people.

The sugar house is on a steep mountainside about a mile from my own hillside farm. It is right next to Plank Road. This road is one of the first toll roads built in America. It connects Troy, New York, to Williamstown, Mass. The road runs right past my own farm and up into the mountains where it has now dwindled into a track. Abandoned since the 1940's, for a while, a hermit lived up there with 'No Tresspasin'' signs.

The Kents have lived here for generations. They owned various farms about this region. My own ancestors lived out here, too, in the 1600's. People seldom hold the same farms, though. Only a very few have had the same land for 10 generations. Most moved about the region, buying and selling or being tenants on various plots of land, large or small. Many made money over the centuries doing various seasonal things. And rendering down maple syrup has a very long history here. It is a good money maker just like making

The person in charge of changing Kent's Sugar House into its present incarnation is a dynamic and intelligent man. He loves the woods, he loves nature. He also loves this region. The changing seasons bring pleasure and makes one energetic. He wishes to stay here and he has worked hard to find ways to increase his profits as he does his seasonal work that his family has done for hundreds of years. He has been open to new ideas for marketing his produce and making maximum value from his labor.

He and a number of farmers here in our valleys and mountains has figured out that many people want to be entertained while learning about food. So over the years, he has improved his sugar house and his systems so it attracts a big crowd. This operation is very genuine and straight forward. People can watch real people make real maple syrup and then can buy it literally hot off the presses. They learn about the many grades of maple syrup while watching it being made.

Greatgrandpa is pushing 90 years. I met a number of old men and women like him when I came to Berlin. They all had endless practical information to pass on. We learned many things from them. Such as how to run and train an ox team, for example. The Kents have oxen just as we did. These gentle giants are Brown Swiss.

These boys are babies compared to our oxen. They are only half the size our team reached when they both died of old age. Oxen have big, brown eyes. They are very patient and quite gentle. When one wishes to work with them, a kind voice and a good relationship can work wonders. 'Gee' and 'Haw' tells them which way to turn and a hearty, 'Come on UP, boys!' gets them to put their huge shoulders to work and heave-ho, they pull the sledge in the woods. For the best maple syrup comes from trees on mountains. The steeper, the better! And you can't tear up the roots with tires, either. But the oxen can pull a sledge deep into the woods, straight uphill!

When the trees are tapped, the flow of juices used to go into buckets but now they flow through tubes to big tanks on sledges. Here is an old poster at the Kent Sugar House showing how maple syrup is made:

The temperature and timing of all this is very important. Usually, the old men stand about and look at the snow, look at the sun, look at the streams to see how they are running. They sniff the air, look at the trees 'thickening' and then proclaim, 'Time to go sugering!' and off they go, into the woods. The ideal weather is very cold at night, the colder, the better, then warming in the sun to above freezing but not too warm. If it is over 40 degrees F in the shade, moulds and other things begin to grow in the holding tanks and the sap has to be dumped. So the people with the longest memories of weather are the experts here. They can tell, in their bones, when it is the best time to tap the trees.

One of the tragedies of modern life is the loss of this body of knowledge. We are happy some of our neighbors still can pass this lore on to the next generation. It is very valuable knowledge. In the future, perhaps life and death.

This last week has been perfect, by the way. Several snow storms blasted in with thaws in between. Most days, the temperature has risen above freezing but not above 40 F. So the maple syrup makers are happy. Signs went up around our village this week warning us, the Kents were going to be making syrup day and night and time to PARTY! And party is the correct word here. This would be mere hard work except the Kents invite everyone over. And they make money doing this as they ought.

The syrup has to be cooked for many hours. Reduced by 90%. Watched the whole time, like the hawk watches our chicken pen from high in the sky these days! Being practical New Englanders, the Kents use their oxen to haul in many cords of firewood. This has to be cut up, split and stacked. Hard work, yet Great-grandpa sets to work, doing all that. The cooker has a big iron door at the base. The wood is popped into the box and ignites. The temperature of the fire has to be carefully controlled. If it is too hot and the sugar burns, the syrup is ruined. Great-grandpa watches for this and he tastes the syrup to see if it is correct. The other family members check the gages and controls and adjust the cooking pans. The whole family does this with few words for everyone knows how the steps of this elaborate dance!

The grades of syrup are determined by taste and color. These jars are a guide and are set in the window to catch the sun. Samples from the cooking today are checked against these jars and put in the appropriate containers. I happen to love the super-dark flavors. The Kents are partial to this, too. But many people may find the flavor to be too powerful. So there are many permutations of flavor which the consumer can pick and choose. The Kents even have taste-tests for customers.

They even keep a chart tracking the business. The amount they can make varies greatly from year to year. The window of opportunity to tap trees varies greatly due to weather conditions. Warm springs are terrible. We had several years where spring was literally only a few days long, summer roaring in nearly instantly right after the snow melt! This is bad. Other winters ended with long, cold, slow springs. This drives people nuts but is a joy for all maple syrup makers. Because they can track production and see how much their average is, they can make forward financial plans. They understand the need to be realistic. They know that there will always be significant variations year to year and they plan for this. We hope other humans figure this obvious lesson out and cease desiring always to have a bumper crop, so to speak. Heh.

Hewitt's is one of the last of several local grocery stores we used to have. Berlin has lost a tremendous amount of commercial business over the last 100 years. It is on the verge of vanishing entirely. A terrific loss, I say. But Hewitt's hangs in there and like the Kents, the owners are locals who have been here a long time and love this place. They sell local produce and production. This is where we usually buy Kent's maple syrup. One hand helps the other. And this is what we call 'community' and it is the bedrock of any nation on earth: the daisy chain of villages and towns surrounding the larger industrial/commercial centers. Each supporting the other. And this is why I often talk about international trade and politics. Free trade has rapidly decimated Berlin, NY. Many industries that have been here for over 100 years, some of them very big, employing hundreds of people, have vanished in less than 20 years! The place is increasingly deserted. Abandoned houses dot the town's landscape and empty businesses are everywhere and closing, one by one.

The fact that a few hang on is a miracle and we can thank the hard working people who believe and love in our town, still keep on going. And may they go on for another 300 years!

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Ethnic Warfare Is A Dangerous Weapon

March 30, 2008

Elaine Meinel Supkis

Even as globalization and the imperial overreach of the US/NATO empire violently impose planetary rule, the US and Europe endorse, support and protect ethnic/religious cleansing and tribal warfare. They do this for very cynical reasons: divide and conquer. Controlling thousands of ethnic enclaves that hate each other but accept a tiny minority of ruling elites to run things, is the ideal situation as far as this reincarnation of earlier European empires is concerned. But this is also backfiring. The same forces being encouraged by the ruling elites to control the 'peasants' is catching fire at the very heart in this huge imperial conglomerate. This is all connected with the concept of 'free trade' and 'international banking'. There is a cultural war brewing. And it is very explosive.

Dalai Lama Says 'Demographic Aggression' Is Making Tibetans a Minority in Their Homeland

"There is evidence the Chinese people in Tibet are increasing month by month," the Tibetan spiritual leader told reporters in a Saturday news conference.

He says that in Lhasa, the region's ancient capital, there are now 100,000 Tibetans but twice as many outsiders. The vast majority of those are Han Chinese, the country's ethnic majority.

The Dalai Lama's comments come as diplomats were preparing to leave the Tibetan capital after a quick overnight visit, the latest move by China to show it is in control of the region after deadly anti-government protests more than two weeks ago.

At last, the Dalai Lama admits the riots were not about the Chinese government oppressing the Tibetans. It was all about ethnic cleansing. For many centuries, the Tibetan people lived in this backwater that was no longer part of world trade or commerce with other cultures. In 1200 AD, the Mongolian hordes swept into Tibet and killed virtually everyone. They then established headquarters there, they like isolated postings that are at the intersection of major trade routes. The Silk Road was very important back when sailing was dangerous and uncertain. The movement of silks and fine wares from China to Europe enriched the rulers of Tibet. But then it all fell totally apart, quite suddenly.

Once ships could sail around Africa, they established a direct route to the eastern shores of China which is where all the industry was. Within a few generations, the more expensive Silk Road commerce collapsed. The Han Chinese could do direct trade with their European customers. From 1500 AD onwards, Tibet fell into tremendous poverty. The only profits to be made, for the most part, was from exploiting the peasants and enslaving them. Vicious internecine religious battles raged. Time flew past Tibet that stayed frozen in the past. The kingdom turned violently inwards just like the Japanese did during the same time. Both ran cruel social systems that brutalized the peasants who lived in terrible poverty. These various 'hermit kingdoms' that were now cut out of world commerce, all stagnated. And then the doors were pried open by the European Powers.

Japan reacted the swiftest: embracing the entire system of technology, learning and combat, the Japanese surged forwards at astonishing speed. Tibet, on the other hand, continued the habit of driving out or killing any travelers who stumbled across their prison community.

Over the years, outsiders managed to come in. Sniffing around the edges, the players of the Great Game scoped out Tibet to see if it had any value. The Manchu rulers let the Europeans know that Tibet was part of the Chinese Empire. But the European powers were out to destroy the Chinese Empire so they nibbled at the edges as well as directly attacking the heart of the empire. After the looting of Beijing, they turned their energy towards finding some use for Tibet. The difficulties of transportation held this process back.

It wasn't until modern trucks could move things swiftly, that anyone could conquer Tibet. The Chinese learned difficult road building skills fighting the Japanese and each other during the first half of the 20th Century. Using this, they built roads into Tibet. My parents were operating often on the borders of Tibet during the 1950s and onwards. They talked about the dizzy switchback roads and driving in a jeep 'held together by bubble gum plugging leaks in the gas tank and chicken wire'. Communications systems were virtually nonexistent back then. They used short wave radios. And when they entered Sikkim, it was one of the first times Westerners were allowed as guests into the kingdom.

The terrible conditions they found in the Himalayans was stark. Simple first aid was virtually unknown. The rulers of these kingdoms lived in palaces with many slaves and servants but had virtually no social systems. And the length of life for the peasants was short and brutal.

Today, we see the media pushing this story about the monks of Tibet fighting for freedom. But they are no more fighting for freedom than the monks of Japan when they did suicide rushes at armies as they tried to stop political change there. Like in all religious dictatorships, they have their economic needs. Like the Vatican, once trying to rule all Christians, they use the sword to gain economic rights. The Chinese government, under Mao, did attack all religions just like in Russia, the communists tried to break the power of the Orthodox Church. But as time passed, the state recognized the utility of working with religious leaders.

There is a great deal of tension at the top of the communist hierarchy over the topic of religion. The Chinese have a longer tradition of religious liberalism and skepticism than the west. The leaders are nervous about religious divisions tearing apart the empire. So they vacillate between encouraging and suppressing religious leaders. The Dalai Lama was removed from Tibet when the Chinese invaded. My parents knew him since he was a young man, of course. Since he went into exile into northern India and Nepal, he brought with himself a large community which are, of course, colonialists. Who were protected instantly by the CIA. Ahem. And given funds and assistance from the CIA. The CIA loves to play religious/ethnic politics. They picked this up from the British.

So the Dalai Lama became a political tool of the West. The West wishes to take over Tibet and use it to control the raging warrior tribes to the west of Tibet and also constrain the Chinese Empire and threaten it by probably parking missiles and other military things deep inside Tibet. Of course, the Chinese cannot allow this. It would be insane. So the pretense that we are merely 'freeing' Tibet is cover for the long-running CIA game of MILITARIZING Tibet.

Nepal crackdown on Tibet protests, 84 held

Most, if not all, of the protesters were ethnic Tibetans. More than 20,000 ethnic Tibetans live in Nepal, where many have sought refuge after fleeing their Himalayan homeland following a failed uprising against Chinese rule in 1959.

Nepal considers Tibet a part of China and does not allow exiled Tibetans to organise anti-China protests.

I will note here that the media has used pictures and films of Nepalese police actions and used them to show 'Chinese' suppressions. But the fact is, the Tibetans are destabilizing Nepal just as they claim the Han are destabilizing Tibet. They presume, like so many other ethnic cleansers, THEY may settle in the US, England or India or wherever they wish but NO ONE may do likewise in their own home base. This concept seems nearly universal with all ethnic cleansers. It is their hallmark, I might add. If the Dalai Lama wishes to have more Tibetans, he should encourage the exiles to return. Only they are quite comfortable where they now are. Indeed, the flow of people from China and Tibet is greater than the flow of Han into Tibet, I dare say. Being sensible, most people tend to want to go where there is economic opportunity. Within the Buddhist community, the leaders know where the gold is: in the West, not in Asia.

Curfew after deadly Nepal mosque bombing: official

Three blasts hit the mosque in Biratnagar, 220 kilometres (137 miles) south-east of Kathmandu, heightening tensions in the volatile region ahead of key elections next month.

"Three small bombs went off inside the mosque killing two people," senior police officer Bidhyananda Majhi told AFP by telephone.

"Muslim people started to come into the street and attacked vehicles so we have imposed a curfew to avoid communal violence," he added.
*snip*
At least 200 people have been killed in Nepal's southern plains in ethnic and communal unrest that began after the country's former rebel Maoists and government made a landmark peace deal in late 2006.

In February, political parties representing the residents of the southern region -- known as Mahadhesis -- imposed a crippling two-week general strike that saw the landlocked country's capital starved of essential supplies.

Residents of impoverished Nepal's southern belt say they have long been excluded from Kathmandu's corridors of power and want increased representation in the government and army.

Of course, the solution we always propose in these cases is break up of a nation. A minority is unhappy? Then they should disunite. The US fought its bloodiest war to prevent disunion. But we ignore this. Encouraged by US CIA support of all ethnic cleansing and breaking up of nations, many religious or tribal groups are pushing increasingly for just that. But this policy of ours has a bad side effect: the US itself sits on an ethnic/religious volcano! Many religions here hate each other and itch to tear this nation apart and have 'ethnics only' sub-empires. The collapse of liberal thought is part of this. The denunciation of people who support a-religious social systems continues here in America. People running for President must placate, help and justify various religious prejudices and powers.

As the Iraqi army's assault on Shia militias in the city falters, the government's strategy is looking to be a dangerous gamble

A US warplane strafed a house in Basra killing eight civilians, including two women and a child, Iraqi police said yesterday. The house was in the city's Hananiyah district, which is a stronghold of the Mehdi Army militia of the Shia cleric Muqtada al-Sadr.

British forces became directly involved in the battle yesterday after artillery in the British headquarters at Basra airport fired on a mortar crew in the city. Previously, the British Army had limited itself to providing logistical and air support for the assault on the militia.

Last night, an indefinite round-the-clock curfew was imposed by Baghdad's military command in response to the latest skirmishes. "To defeat the terrorist groups, the outlaws and the criminal gangs, and to preserve the souls of our citizens, we extended the curfew in Baghdad indefinitely for people, cars and motorcycles," said a statement from the Iraqi security forces.

The internal battles ripping up Iraq continue. The US encouraged this when Iraq was ruled by Saddam. Then, when we took over just like we intend to take over Tibet, we wanted it to stop. But just like in the Himalayan communities, they can't and won't stop. Just as the end of British rule of India led to the deaths of millions in religious/race/ethnic strife, so it is in the Middle East. The US is unable to be an disinterested cop patrolling hostile communities. We take sides. And then switch sides. And this whipsawing makes things worse.

Sadr's game here is an attempt at being both a nationalist as well as a religious leader. He is not being allowed the first role due to the US empire refusing to allow Iraq to be a nation and he is in conflict with other religious leaders who are cooperating with the US imperialists. This is very much like Tibet, incidentally. Only much more violently.

Sadr orders fighters to stand down

"We want the Iraqi people to stop this bloodshed and maintain Iraq's independence and stability," al-Sadr said in a statement released on Sunday.
"For that we have decided to withdraw [al-Sadr's Mahdi Army] from the streets of Basra and all other provinces."

At least 270 people have reportedly died since an Iraqi military crackdown in Basra sparked fighting across the country.
*snip*
In an exclusive interview with Al Jazeera on Saturday, al-Sadr called on the Arab League, the Organisation of the Islamic Conference and the United Nations to recognise "the Iraqi resistance".

"I appeal to these parties to add legitimacy to the resistance and to stand by, not against, the Iraqi people because the Iraqi people need Arabs as much as they need any other person," he said.

"The occupation is trying to divide Sunnis and Shias. It is trying to drive a wedge between Sadris and the Sunnis. I love the Sunnis. I am a Shia, but we are all Iraqis.

"Iraq is still under occupation and the United States' popularity is reducing every day and every minute in Iraq.

"I call, through Al Jazeera, for the departure of the occupying troops from Iraq as soon as possible."

His nationalist call for sovereignty will be ignored by the other players. They all want to see if they can manipulate the US into supporting a dictatorship just as England and the US supported previous dictators. Using the US troops as the boogey man is most useful, too. They can claim they are victims of the cruel invaders while at the same time, looting their own country which isn't a country at all. Various ethnic groups will vie for favors from the empire and consolidate power at the expense of the American invaders. Sadr's home-grown self support system is endangering this looting operation.

Al Jazeera:

Mr Sadr told al-Jazeera TV yesterday that Arab leaders meeting in Damascus should support the "resistance" to US occupation. The leader of the most powerful political movement in Iraq draws his support from the Shia poor, while his rival, the Supreme Islamic Iraqi Council (SIIC), is supported by Shia clerics, merchants and property owners. The Sadrists-SIIC rivalry is behind the timing of Mr Maliki's Basra assault. Though he said it was aimed at all militias and illegal armed movements, the attack has only been against the Mehdi Army and not against the Fadhila party and the SIIC, which both control parts of the city. The SIIC is now the main support behind Mr Maliki.

The timing of this week's attack may also be explained by the decision this month, at the prompting of US Vice-President Dick Cheney, on a visit to Baghdad, to hold provincial elections. The US aim was to allow the Sunnis, who boycotted the last polls in January 2005, to win control of their provinces. But elections also threatened the SIIC's grip on councils in southern Iraq because the party has become increasingly unpopular and the Sadrists were expected to win at the polls.

Sadr will be suppressed like all popular leaders in the Muslim world. The US supports the suppression of peasants all over the planet...except in China and Russia! There, they support popular uprisings. This pick and choose technique is classic imperialism and is taught in our highest universities where the people who intend to run this empire are educated. Oddly enough, China is the main supporter of state sovereignty. Or rather, this is the sane thing for them to do. The US supports dissolving states and replacing them with shattered, hostile enclaves that need US military power to communicate with the outside world.

The hermit kingdom of Saudi Arabia has withdrawn from interfacing with fellow Muslims at this summit that isn't a summit. They fear open borders and democracy. They are quite content living under the wing of the Empire which enforces and protects their tribal/ethnic cleansed kingdom. They are troubled by all the aliens they have brought in as semi-slaves or conduits with the outside world. But they can spend all their energy on controlling these people since the US empire protects THEM. They fear, above all, the peasants and other natives who teem below in the slums and streets of Arab nations. They do not want sovereignty, they want to rule as despots, not lead nations. In this, they have signed their death warrants. They will eventually be dragged down as soon as the US empire goes bankrupt.

I have no idea anymore, what the rulers of Saudi Arabia are thinking. If they think at all at this point! Certainly, by giving up leadership, they have simply put themselves into deeper jeopardy. For this is exactly what Osama Bin Laden predicted they would do! And as they withdraw, they lose legitimacy. Hamas has picked up the mantle of legitimacy and is gaining ground by the day just as Sadr's popularity is growing.

Israel splitting Palestinian territories into cantons: Abbas

"Israel is continuing its aggression, its occupation, the construction of settlements and the Judaisation of Jersualem," Abbas told the opening session of the Arab summit in Damascus.

"The solution which Israel is designing consists of a group of cantons on a land separated by settlements, the separation wall and roadblocks," he said.

"This type of solution only reinforces the occupation and colonisation and is aimed at preventing the creation of a independent Palestinian state," Abbas added.

The Zionists go to great lengths to insure gridlock. This is because gridlock gives them time to 'make facts on the ground' which is fancy talk for 'steal everything they want and then some.' The desire to do the sort of ethnic cleansing the Han are being accused of is very great. The Jews want to flood Palestine with Jews and thus, drive out the natives. Unfortunately, this scheme has a flaw: the Palestinians retaliated by having many children. The Irish did this to the British colonizers of Ireland, for example. They multiplied. The British fixed this by eliminating a third of the population by forcing them to emigrate or starve to death. And I know that the invaders of Palestine know their history very well. The Nazis had to be openly vicious about this sort of ethnic cleansing. But the British did it in a more passive way. When the potato harvest failed, they let everyone die. Simple as that.

Anyway, if there is some way of preventing the Palestinians getting anything, the Isreali Jewish negotiators will latch onto this. Note how the land seizures and barriers are being increased and strengthened. If any are reduced, they pop up double in number, elsewhere. This game looks cute to the negotiators who are not honest. But it is very bad for the Jewish people who are being viewed as cruel and manipulative. A stereotype of anti-semitism. But fixing this stereotype by acting exactly like it isn't going to end anti-semitism. And anyone talking about all this is instantly accused of anti-semitism! But I will say it anyway.

3 Interlocking Peace Negotiations Put Israel, Palestinians at Impasse

The first, U.S.-backed talks between Israel and the Palestinian Authority aimed at creating a Palestinian state, have been knocked off course by violence in Gaza City and mutual accusations of broken promises.

The second, negotiations mediated by Egypt between Israel and Hamas that are geared toward ending the Gaza attacks, began in earnest only this month but is already eliciting deep skepticism from both sides.

And the third, efforts to reconcile Hamas with the Fatah-dominated Palestinian Authority, could jeopardize the other two if they succeed, although that appears unlikely.
*snip*
The closest thing to progress in any of the talks came in the past week when representatives of Fatah and Hamas announced in the Yemeni capital, Sanaa, that they had negotiated terms for holding more negotiations. The next day, however, Palestinian Authority President Mahmoud Abbas disavowed the agreement, and his representative in Sanaa acknowledged that he had signed the deal by mistake.

The very fact that Abbas and his allies are considering a compromise with Hamas reflects their disenchantment with the offers they are getting from Israel, according to Menachem Klein, a political science professor at Israel's Bar-Ilan University.
*snip*
As part of the peace process, Israel was supposed to take down the obstructions, eliminate illegal settler outposts and stop construction of new settlements. None of that has happened, a fact that rankles Palestinian Authority officials who are looking for goodwill gestures that will help convince a disenchanted Palestinian public that talk -- not violence -- pays off.

"The model in the West Bank is not working. If it is, somebody please tell me, because I need to tell the people," Salam Fayyad, the Palestinian Authority prime minister, said in an interview in his Ramallah office. "It's critical that there's progress to take us out of the corner we're in."

Abbas is already viewed as a clown. Signing a contract and then disavowing it probably brought many a bitter snark in Palestine today. The fact that he has gained virtually nothing in all the time he has ruled Palestine [except for Gaza] as a dictator placed there by the US and Israel cements his place in history next to Quisling. In Arab lands, I'm sure that people doing this sort of betrayal will be called 'Abbas'. Fayyad is a failure. The Palestinian people know that there is no other road but violence. They are at war. Just as the Tibetans feel they are at war and violence is the only answer. The West agrees! Natives being invaded by alien colonialists have a right to revolt! And we should boycott nations supporting the invasion of native lands...hahaha. And of course, the good old business of total hypocrisy raises its ugly horned head. The PLO is in a corner. Not Hamas. Hamas ranges about in the streets. As the Israeli Jews try to kill them off, their ranks swell and their strength grows. For they are warriors doing battle, not Quislings destroying their own people. They, like the Sadrists in Iraq, offer sovereignty and hope, not slavery and poverty.

I put up this comment at the Washington Post web page:

The US should NEVER endorse ethnic/religious cleansing. The fact that all our major politicians support this on behalf of the Jewish voters here is most dangerous. For there are many people in America who seek ethnic and religious cleansing here!

The entire idea of 'one religion/one state' is tremendously destructive. Yet the US has many military units set up to support the Saudi religious dictatorship as well as monetarily and diplomatically supporting ethnic cleansing in the Middle East by Zionists.

And we now are supporting ethnic cleansing in Tibet. The Tibet riots are actually race riots aimed at eliminating the Han who now live there. We support colonialists entering Palestine and pushing out the natives but we are outraged by Chinese Han moving into Tibet which is part of China!

This craziness is totally counter to the foundation of the USA: we are the MELTING POT. Not the 'do not enter' land.

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Culture of Life News Main Page

The Fed Coup: Destroy The SEC!!!!

Kennedy's funeral, 1963

March 29, 2008

Elaine Meinel Supkis

The unfolding crisis in our banking system caused BY THE BANKERS THEMSELVES...continues to not only unfold but is being used as cover for a COUP. The private entities which we should call 'The Real Rulers' are using their own crimes as an excuse to destroy even more parts of our democracy and our Constitution. They hate the Constitution and some of these parties were against the Constitution from Day One. The 'reforms' proposed by the pirate who runs the Treasury that has no treasures left and the Federal Reserve that has no reserves is no reforms but a serious grab for more power. They want to kill the Security and Exchange Commission! My god, one of the few functional Federal agencies left! Time to talk about the Dr. Jekyll and Mr. Hydes pulling this coup.

Treasury Dept. Plan Would Give Fed Wide New Power

The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.

Like 9/11: they let operatives terrorize the nation [Atta and his buddies were all enabled by the CIA and Mossad] then they slap a huge pile of papers on the desks of a frightened Congress and tell them to sign away gigantic hunks of our civil rights, past legal customs and the Constitution. In this case, the very same people who created this banking mess are slapping down an equally huge pile of papers that sign away the last of US government authority over our financial systems! This is a COUP. Damn it. The destruction of our democracy is continuing and speeding up. Is the media alert to this?

NO! They make this all sound like the pirates and hell hounds who are doing this are saving us! If we trust them, they will protect us and not loot us???? I am speechless with fury but luckily, my fingers can still type. GAAAHHHHH!!!! Damn. I am pissed.

What is this stupid SWAT team going to do? Taser Bernanke? Taser Paulson? Or will it smash down the doors of UBS offices or J.P. Morgan Chase? HAHAHA. Right. Of course not. This SWAT team really means, 'Swat away anyone trying to stop the looting as if they are flies' sort of swat teaming. The three monkeys that can't see, hear or speak SWAT team.

Of course, the criminals destroying our nation want 'stability'. And what is this fabled 'stability'? HUGE DEBTS that go on and on and on! They want us in debt! And debt=death and debt=slavery. And debt=war! And we can die in looting wars overseas for these cowards.

The New York Times, owned by one of the Ruling Elites, continues to cheerfully tell us all about how we will be ruled:

According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms.

While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation.

The plan would not rein in practices that have been linked to the housing and mortgage crisis, like packaging risky subprime mortgages into securities carrying the highest ratings.

The plan would give the Fed some authority over Wall Street firms, but only when an investment bank’s practices threatened the entire financial system.

The Federal Reserve will control Wall Street? But only lightly, of course! All those alphabet soup organizations that struggle to control the greed and wild risks and temptations to criminality will be superseded by Santa Claus who coddles the banks and Wall Street! YES, that will fix it, all right! FOR THE CRIMINALS! And papa Bernanke won't interfere unless it threatens the ENTIRE financial system?

HAHAHA. He will helicopter in the Fed SWAT team that will do what? Pour money all over the mess and give them an open window with cheap loans so they can continue no matter what???? GADS. Talk about insane.

The Times continues:

And the plan does not recommend tighter rules over the vast and largely unregulated markets for risk sharing and hedging, like credit default swaps, which are supposed to insure lenders against loss but became a speculative instrument themselves and gave many institutions a false sense of security.

Parts of the plan could reduce the power of the Securities and Exchange Commission, which is charged with maintaining orderly stock and bond markets and protecting investors. The plan would merge the S.E.C. with the Commodity Futures Trading Commission, which regulates exchange-traded futures for oil, grains, currencies and the like.

The blueprint also suggests several areas where the S.E.C. should take a lighter approach to its oversight. Among them are allowing stock exchanges greater leeway to regulate themselves and streamlining the approval of new products, even allowing automatic approval of securities products that are being traded in foreign markets.

That's the game: kill the SEC, one of the few functional arms of the government. One of the few organizations that actually muscles these con artists and puts them in PRISON. As well as levying fines in the multi-millions or even billions of dollars. Muzzled and distracted as well as cut out of the process, the SEC will join all the other laws, regulations and rules that have been killed since Reagan. Everything and I do mean EVERYTHING put in place after the Great Depression has been eliminated or circumvented. They work day and night to kill Social Security. They killed the unions. They won't be happy until we are reduced to total servitude.

Let's see how the other media are handling this hideous news:

Keeping U.S. Financial Markets Competitve

The plan to overhaul the regulation of U.S. financial markets that Treasury Secretary Henry Paulson will announce on Monday morning is as broad and sweeping as it is overdue.

It has been in the works for a year, and predates the present crisis in credit and mortgage markets that started last August. That, though, has given urgency and focus to the work as well as providing an unwanted dress rehearsal for the envisioned expanded role of the Federal Reserve as the primary regulator of market stability.

It will take far longer than a year for the Paulson blueprint to become reality, or at least to become a reality in full--and it does present both "short- " and "intermediate-term" recommendations, as well as an "optimal" regulatory regime.

America's financial system of financial regulation has developed piecemeal, usually in response to episodic financial instability. Some of it dates back to aftermath of the Great Crash of 1929; the Fed itself was set up in 1913; national bank charters date to 1863.

It is also divided between state and federal governments. The result has been a warren of vested interests, both in the financial services industry and Congress, that has proved resistant to change.

But no longer are all these important rules, regulations and organizations, no longer will any of them be allowed to stand in the path of the pirates! The resistance to elimination of ALL barriers, controls and systems set up to thwart the looting of America will now FALL. And will a corrupt Congress try to stop this?

Or will they hail this as our salvation?

Of course! They will stuff their pockets with the lobbyists' loot and ride along with the pirates and the demons and others who are dying with anxiety now that the Derivatives Beast is stirring in the Cave of Death! They will all rush there to assure it, no one will stop if from becoming INFINITE! And this is the plan: to keep this creature growing until it isn't merely $500 trillion in size but $500 quadtrillion or whatever number astronomers assign to the number of light years the entire universe is plus all the atoms and all photon units and everything in all creation is the same size!

And this insane, stupid thing is IMPOSSIBLE. And Paulson should be arrested. Bush, impeached. Congress, driven out with whips! What the hell is going on here?

Who owns the Fed, not who works for but who OWNS the Fed?

The banks listed below have significant control over the New York FED District, which controls the other 11 FED Districts. These banks also are partly foreign owned and control the New York FED District Bank: First National Bank of New York, James Stillman National City Bank, New York, Mary W. Harnman, National Bank of Commerce, New York, A.D. Jiullard Hanover, National Bank, New York, Jacob Schiff, Chase National Bank, New York, Thomas F. Ryan, Paul Warburg, William Rockefeller, Levi P. Morton, M.T. Pyne, George F. Baker, Percy Pyne, Mrs. G.F. St. George, J.W. Sterling, Katherine St. George, H.P. Davidson, J.P. Morgan (Equitable Life/Mutual Life), Edith Brevour, T. Baker.

Here is another web page trying to list the owners of the Federal Reserve:

a) Rothschild Banks of London and Berlin;

b) Lazard Brothers Bank of Paris;

c) Israel Moses Seif Banks of Italy;

d) Warburg Bank of Hamburg and Amsterdam;

e) Lehman Brothers Bank of New York;

f) Kuhn, Loeb Bank of New York;

g) Chase Manhattan Bank of New York;

h) Goldman Sachs Bank of New York;

i) Approximately three hundred people, known to each other and/or relations of the "owners," who hold stock in the Federal Reserve System. They comprise an interlocking, International Banking Cartel of wealth beyond comprehension.

Is there a list of everyone who owns the Fed? NO. Ask Ron Paul! Even he, a big snoop, can't find this list. This list is secret because it happens to be the list of the Real Rulers! And the real