EZ READING MONEY MATTERS

Martin Jr And The Destruction Of Gold Peg

June 30, 2008

Elaine Meinel Supkis

To be frank, going back into old Fed Reserve speeches, one is struck by both how similar today's problems are to past difficulties as well as how openly earlier Fed chiefs used to try to talk to Congress and the public. People thought Greenspan was very smart and clever because he talked in circles and made little rational sense. This supposedly made his many mysterious policies look difficult and thus, we had to trust him because he knew more than us little people. Well, that was a false front. Today, we go back to when I was born to see what Mc Chesney Martin Jr thought about Fed policies after WWII and during the Korean War. He is the Fed chief who shoved things to the bitter destruction of the gold standard and the devaluing of silver coinage.

First, let us introduce the longest-serving Fed Chief, a man born with a silver spoon in his mouth. The destroyer of the silver/gold basis of our currency was done by the hands of the son of one of the founders of the Federal Reserve at Jekkyl Island, Georgia, in 1913.

William McChesney Martin, Jr.

William McChesney Martin, Jr. (born December 17, 1906, St. Louis, Missouri – died July 28, 1998, Washington, D.C.) was the ninth and longest-serving Chairman of the United States Federal Reserve, serving from April 2, 1951 to January 31, 1970 under five Presidents. William McChesney Martin, Jr. was born to William McChesney Martin and Rebecca Woods. Martin's connection to the Federal Reserve was forged through his family heritage. In 1913, Martin's father was summoned by President Woodrow Wilson and Senator Carter Glass to help design the Federal Reserve Act that would establish the Federal Reserve System on December 23 that same year. His father later served as governor and then president of the Federal Reserve Bank of St. Louis.

Martin was a graduate of Yale University, where his formal education was in English and Latin rather than economics.

Ah, a family affair! The protean forces unleashed by daddy were completed by the son. McChesney Martin Jr. presided over the launching of the Cold War which was a perpetual war and coming in on the wings of the needs of Truman for waging the wasteful and dangerous Korean War, the need for more and more money on top of the huge debts generated by WWII....Martin Jr. had to fix this so the government could wage war while tricking the populace into thinking there was no wars. Thus, no war taxes, no more rations, no more sacrifices. From the ascension of the son onto the saddle of the War Horse, McChesney Martin Jr. was able to carry out his mission!

For the American people were slowly but surely lured into believing there was no war even as wars raged all around them. As nuclear bombs were blasting away in the Pacific, in America itself, as we expanded our military bases in every country we could, as outright confrontations blew up into full scale military wars, during all of this there was NO rationing, NO war bonds being sold, NO measures to control costs. Everything was free and easy and the basis of the New World Order whereby the great wealth of the US was to be eaten away by debts began. Let's look at the conflict between the Fed and Truman that got Martin Jr. into office:

1951 Accord

The 1951 Accord, also known simply as the Accord, was an agreement between the U.S. Department of the Treasury and the Federal Reserve that restored independence to the Fed.

During World War II, the Fed pledged to keep the interest rate on Treasury bills fixed at 0.375 percent. It continued to support government borrowing after the war ended, despite the fact that the Consumer Price Index rose 14% in 1947 and 8% in 1948, and the economy was in recession. President Harry S. Truman in 1948 replaced then Chairman of the Federal Reserve Marriner Eccles with Thomas B. McCabe for opposing this policy, although Eccles's term on the board would continue for three more years. The reluctance of the Fed to continue monetizing the deficit became so great that in 1951, President Truman invited the entire Federal Open Market Committee to the White House to resolve their differences. William McChesney Martin, then Assistant Secretary of the Treasury, was the principal mediator. Three weeks later, he was named Chairman of the Fed, replacing Eccles.

HAH! Fake interest rates so the government could wage war! Sounds familiar! Indeed, this is THE MODUS OPERANDI since WWI. The whole reason the Fed was created was for this purpose. Note how this created inflation, raging inflation right after the WWII ended. Also note how this 0.3% rate is very Japanese. The government LOVES these rates! All governments on earth would dearly love to imitate Japan and have perpetual cheap rates! Alas, the US, like today, had raging real inflation. Hell, Japan has that today yet they ignore this successfully. They even say, they want this super-sub 1% rate to run forever! This is what Truman wanted.

But like a similar man, Henry II of England, he put his buddy and good friend into Canterbury only to see him take on the mitre and crown and turn on his master and demand his own due and office. Interest rates rose. The Korean War ended. Eisenhower rose in power and took over the Presidency.

More of Martin Jr's biography:

His most famous quote about his central banking philosophy was that the job of the Federal Reserve is "to take away the punch bowl just as the party gets going,"[1] referring to the need to raise interest rates when the economy is at its most active.

He was selected as the administrator-designate of the Emergency Stabilization Agency; part of a secret group created by President Dwight D. Eisenhower in 1958 that would serve in the event of a national emergency that became known as the Eisenhower Ten.[2]

Ah, the Eisenhower Ten! That does ring some bells in my own childhood! What were they for?

When nuclear war kills most Americans, these were the Ten who would come out of their government-paid caves to run the country! WWIII would put them in total control. These people became my enemies as i ground my baby teeth in fury over the idea that they would protect themselves while the rest of us burn in the Apocalypse. The fact that this group of conspirators were allowed to be secret is a clue as to the viciousness of this whole thing. Is this democracy? Of course not. Martin Jr. wanted desperately to have the media tell the US public that his job was to prevent us from enjoying life too much. He was going to be the Guardian at the Gates of Wealth and the Cave of Death. As one of the Ten who would control us if most of us died, this was rather a dark joke, no? This is all quite literal.

Americans were told to party! The punch bowl was always out. Even as there were hints in the news that perhaps smart people would take care to have some sort of system to either escape from the cities very, very fast and have a good hiding hole safe in the mountains, the general feeling was 'feel good' not 'oh my god, we are all going to die and the Ten will take over!' By the time I was ten years old, I practiced running barefoot in the desert just in case of nuclear war and I was caught without shoes. Survival time!

I decided it was time to go to the dawn of Martin Jr.'s rule of the Fed to see if we can trace the evolution of his leadership there and how it ended with the Fed utterly destroying the silver coinage and the gold/dollar peg. For he set everything on a crazy course downwards and this is very much part of the 'Fabulous Fifties' culture, the 'Happy Days' which was the false front on a house of mirrors that was slipping down the mountainside. I, personally, have very bad memories of the 1950's but then, I saw the Dark Side of that era from close up. Very close up for a mere child. I truly expected WWIII.

This first speech was given when I was still nursing at my mother's breasts:

OUR FEDERAL RESERVE SYSTEM

Remarks of Wm. McC. Martin, Jr., Chairman, Board of Governors of the Federal Reserve System, before the 77th Annual Convention of the American Bankers Association, Chicago, Illinois,

October 2, l95l.

We are all painfully aware today of the manifold and overpowering complexities of our modern life. As bankers, dealing in media of exchange, we understand more clearly than ever before the ramifications inherent in our daily operations, which, like the proverbial pebbles tossed into the pool, set in motion forces with far-reaching repercussions. It was this realization that led originally to the creation of the Federal Reserve System.

Out of the increasingly unwieldy gyrations, the Frankenstein mechanics of an uncontrolled supply of money, the need for a strong central bank has been found to be essential to our economic stability. The banks, the people, and the Government realized that panics and crises, caused by periodic irregularities in the flow of our money supply, must no longer be permitted to rock our country back and forth every few years. The Central Bank was designed to minimize these convulsions, create more stable values, and thus make possible the smooth functioning of monetary machinery so necessary to promote the growth of the country and to improve standards of living. This was the purpose and this is the ideal.

Pray tell, what were these mysterious 'irregularities' in money flows? Panics usually are very closely associated with wars and the sudden lurches in monetary output and policies associated with wars. The Great Depression's panic was special. It was not due directly to wars. But thanks to the huge overhang of financing created by the Federal Reserve for England and France to fight WWI, the flow of all this Funny Money™ overseas took a few years for this tsunami to come back home. Then it wiped out our economy! The heavy weight of this massive global debt was dealt with by Germany ripping it all up and refusing to pay it and forcing England and France to do the same. Then the US fell apart since this is like seeing all the Alt A loans in the universe vanish at once. A huge change in the status of the money supply!

The Fed dearly would love us to believe that they had NOTHING to do with all this! All they did was supply credit to the allies in WWI. They didn't plow the fields for the Great Depression. Now, after WWII and a huge overhang of even more debt looming, with the Korean War causing wild gyrations in spending and credit, Martin Jr. had to reassure everyone, the Fed had a handle on things...HAHAHA. Like earlier. His speeches, by the way, are often very defensive because there were many a Congress person and media reporter who remembered very vividly, the founding of the Fed and the subsequent problems this caused. There was a lot more skepticism back then!

Martin Jr's 1951 first Fed speech:

Central banking in the United States has been adapted to the requirements of a free people with a minimum of Government interference. The genius of the framers of the Federal Reserve Act lies in the creation of regional banks, knit together by a national governing body in Washington rather than in the establishment of a central institution with authoritarian powers.

Each Federal Reserve Bank and each branch office is a regional and local institution as well as part of a nation-wide system. Through their boards of directors, the banks are in a position to represent the views and interests of the particular region to which they belong and, at the same time, they are the administrators of nation-wide banking and credit policies.

Instead of functioning from the center outward, we function through an interdependence of all our parts. The life blood of the Federal Reserve System is in its members. The health of each member affects the whole and it is only through the work, and the conviction, and the determination of the members that the whole has life. No dictatorial powers were accorded it when it was set up. No dictatorial powers should it usurp. Within the framework carefully outlined by law, the Federal Reserve Board is charged with the responsibility for formulating national credit policies and supervising their execution.

HAHAHA. I love it when people lie like this. No power was usurped by the Jekkyl Island conspirators! Perish the thought! Daddy must have beamed when Junior told this outrageous lie. Of course, Fed chiefs don't do as they please, they do....as they please! Wait! Who controls them? Do we get to vote for them? Do they run for office? Congress gets to question them but not order them around. They do whatever they want and keep whatever secrets they want. I am glad they are releasing some information they kept secret for so long. But this doesn't change their character as despots who get to do whatever they wish behind closed doors like, say, suddenly hand Bear Stearns to JP Morgan, one of the founding entities of the Federal Reserve.

Martin Jr. in 1951L

These are challenging times. These are times when strange voices would lead us down roads alien to the concepts of our founders. If our institutions do not serve us well, let us revamp them. On the other hand, if, given the imperfections of all things human, they are the best servants of the common good which we can fashion, and if they can adapt themselves to the changing needs of the people they serve, let us see to it that they are preserved. I call upon you as bankers, and as leaders in your community, to ever be conscious of the measure of freedom we have enjoyed in every sphere of our life, to be concerned with any attempt to deprive us of this freedom and to be vociferous in preserving those rights which we have obtained. Whatever changes we make, let us not betray the foresight of those who have struggled so valiantly to maintain our self-government and the security of our democracy.

In the next few years the bankers of America will be called upon to meet severe tests. They are already meeting successfully, in the Voluntary Credit Restraint Program in which they are so actively participating, one of the demands placed upon them. In this program, they have organized the managerial resources of the banking community in an educational program of benefit to borrower and lender alike. This has confounded the cynics and those who sneer at self-regulation. It will require real courage, vision, toughness, and stamina to continue this laudatory fight against inflation.

This plan was to ration credit! The government was demanding more and more credit for the possibility of WWIII. Rationing was very unpopular in 1951. People were sick and tired of wars. The drumming for wars was incessant but the consumers wanted to have fun, not fight forever. So this new fake system was set into motion: the bankers would conspire with the Fed to not take advantage of super-cheap interest rates and lend to Americans. See? They would VOLUNTARILY refuse to pass on this cheap credit to the parents of the baby boom which was just starting. I was in the earliest ranks of the BB.

Most Americans didn't understand that credit was being rationed. All sorts of excuses were made concerning credit and why people couldn't get it. The VA housing bill for GIs who were starting families was a problem. This annoyed the Fed, by the way. Here is a speech a year later:

Statement of Chairman Martin before the Mortgage Financing Conference of the Senate Banking and Currency Committee

February 6, 1952.

During 1952 the defense effort will generate a heavy demand for financing on the part of the Federal Government and on the part of private borrowers. Continued maintenance of economic stability will depend on whether total demands on the credit and capital market can be substantially limited to the supply of genuine savings.

In 1951, the economy's aggregate savings were at a very high level. This entire amount of savings was absorbed in financing private and State and local government capital expansion, including inventory accumulations, plant and equipment outlays, and residential and commercial construction. Even so, total credit and capital demands were so great that the savings supply was supplemented by an expansion of bank credit large enough to threaten resumption of inflationary trends. This situation obtained, moreover, with a Federal cash surplus of about 1 billion dollars.

Oops! The attempt at rationing credit failed! Too much savings pushed into being too much expansion of finances. Only the government was allowed to pour money out like crazy. Inflation was growing! In an earlier story today, I noted the business about Burns, the next Fed chief, talking about how inflation took off during and right after the Korean war. He correctly correlated war spending with inflation.

Martin Jr. 1952:

One important new factor in the market which is very disturbing to us at the Federal Reserve is the tax-exempt bonds which are being issued to finance public housing. Some $328,000,000 of such issues were floated in the last half of 1951--together with $45,000,000 of six-months' notes — and the market anticipates total issues for 1952 in the neighborhood of $750,000,000. Not only do such issues absorb some of the funds that would otherwise supply a market for Government bonds or for mortgages generated by new private construction, but they afford an opportunity for wealthy individuals and corporations to reduce legally their income tax payments in a period when it is essential that tax revenues be as large as possible. The issuance of these bonds at this time has been of special concern to the Federal Reserve since the Voluntary Credit Restraint Program Committee, organized under the Defense Production Act, has been exerting strenuous efforts to keep down the volume of such tax exempt securities otherwise originated.

There was a massive housing shortage thanks to the baby boom and the troops moving into cities to take advantage of the fact that the US was the only major industrial nation left standing intact after WWII. Note that the Fed is worried that money from savings won't flow to the Government bonds! Which supports the Cold War spending. Which was all about preparing for WWIII. Which would destroy all this lovely housing that annoyed this member of the Ten. Let's move forwards to 1957. This is when I saw at the Chicago Airport a newspaper with the headlines, 'Cold War Heats Up' which made such an impression on my young mind:

Opening Statement of William McChesney Martin, Jr. Chairman, Board of Governors of the Federal Reserve System at Panel Discussion on "Current Problems of Monetary and Fiscal Policy" Twelfth Annual Meeting International Bank for Reconstruction and Development and International Monetary Fund

Wednesday, September 25, 1957

That world today is characterized generally on the one hand by great prosperity, great activity, and great vitality, and on the other by pervasive inflationary pressures.

There are some who say that these two aspects of the current scene are not only related to each other, but are indissolubly linked — that we cannot enjoy the blessings of vital and active economic progress without incurring in some degree the ravages of inflation, that a progressive erosion of the value of our savings is a necessary price, and a not unreasonable one that must be paid for economic progress.

I wish to enter a firm dissent. I do not believe that either the jobs or the internal growth and development purchased by inflation afford a firm basis for either sustained employment or development. I refuse to adopt the defeatist position that inflation is the alternative to unemployment or to take refuge in the cynical rationalization that the pursuit of sound fiscal and monetary policies is impossible in a democracy.

There are others who point out that there are many novel features in today's generalized inflationary pressures. Most of us are now experiencing pressures that stem from unduly heavy defense expenditures, from growth in population, from demands for higher wages, from widespread resort to so-called escalator clauses in collective bargaining contracts, and from the prevalence in the modern world of cost-plus contracts which act to accelerate operations of the inflationary spiral.
*snip*
It is fundamental that growth must be financed out of saving.

It is very funny that Martin Jr. is an anti-Kenysian. Yet he is big on pushing for government spending for WWIII. Figure that out! He probably would have put us all on a war diet if he could. But Eisenhower knew that would not play well in America that was getting rather fed up about wars if they interfered with raising a pack of Baby Boomer Brats. And we wanted to have fun in the sun and grow up to be hippies! Heh. Already, the idea that unions were making inflation worse by asking for pay hikes was becoming a major point of irritation for the central bankers. The historic tension between 'inflation versus jobs' was the focus here. A false focus, I might add.

The US was running out of patience with war spending. Kennedy offered tax cuts. Nixon lost because of this. Nixon and the entire GOP swore they would never make that mistake again. After 1968, all GOP elections were all about tax cuts and the US budget deficit began to grow insidiously until modern times when it is now utterly out of control.

Now here are two conflicting tales about the 1960's both of which are totally wrong. First, the conspiracy theory:

President John F.Kennedy,
The Federal Reserve
And Executive Order 11110

On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.

With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificats were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything. Executive Order 11110 could have prevented the national debt from reaching its current level, because it would have given the gevernment the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver.

Now here is the official response from the US Senate:

BY: Edward Flaherty, Ph.D. Department of Economics College of Charleston, S.C.

E.O. 11,110 did not create authority to issue new silver certificates, it only affected who could give the order. The purpose of the order was to facilitate the reduction of certificates in circulation, not to increase them. In October 1964 the Treasury ceased issuing them entirely. The Coinage Act of 1965 (PL 89-81) ended the practice of using silver in most U.S. coins, and in 1968 Congress ended the redeemability of silver certificates (PL 90-29). E.O. 11,110 was never reversed by President Johnson and remained on the books until 1987 when there was a general cleaning-up of executive orders (E.O. 12,608, 9/9/87). However, by this time the remaining legislative authority behind E.O. 11,110 had been repealed by Congress with PL 97-258 in 1982.2

In summary, E.O. 11,110 did not create new authority to issue additional silver certificates. In fact, its intention was to ease the process for their removal so that small denomination Federal Reserve Notes could replace them in accordance with a law Kennedy himself signed. If Kennedy had really sought to reduce Federal Reserve power, then why did he sign a bill that gave the Fed still more power?

Marrs also makes some other factual errors in his conspiracy tale that suggest he is not very familiar with the Federal Reserve or the financial system. He writes that a source of tension between the Federal Reserve and the Kennedy Administration was the Treasury's desire to allow banks to underwrite state and local government bonds, thereby weakening the "dominant" Federal Reserve banks. However, such a move, which was later permitted by Congress, would not have affected the Federal Reserve system because it had never been involved in underwriting bond issues. Marrs also claims that Kennedy signed a bill that changed the backing of small denomination currency from silver to gold to "add strength to the weakened U.S. currency." This is completely false. U.S. currency has not been on the gold standard since 1934, and silver certificates, as their name suggests, had never been redeemable in anything but silver. In addition, U.S. currency was not "weak" during Kennedy's time: There had not been any significant inflation since the late forties, and the exchange rate value of the dollar was fixed according to the Bretton Woods agreement.

This deserves more time. What we do know for a fact is, soon after Kennedy was gunned down, LBJ took over. We immediately plunged into yet another hot war on top of the Cold War and military spending went through the roof yet again. And unlike in the Fifties, suddenly Martin Jr. opened the Fed barn doors wide and let all the horses out and silver coins were rapidly debased and are still being debased rapidly today. Gold began to flow out of Fort Knox like a river of gold, so to speak. The dollar/gold peg was being rapidly destroyed. This guns and butter business greased the tracks for the downward race of the dollar which collapsed in value vis a vis Germany and Japan! Of all things, eh? Our nation fought these two empires and now our dollars were worth pennies to them both? Gads.

Finally, the son of the founders of the Fed left office right before the whole thing collapsed and the new Floating Currency Regime was launched. This launched the US trade and budget deficits that plague us so hideously today. We learned nothing from all this. The present Fed chief glosses over all this history and thinks the only history that matters is from 1929-1933. He should look closer to home. Like, in his own bespotted lifetime!

Email this post

Culture of Life News Main Page

Friedman Wants US Economy Magically Fixed

June 29, 2008

Elaine Meinel Supkis

Good old boy Flat Earth We Shall Win In Two Months Friedman of the NYT is concerned about...global inflation! Wow! He also notices the US is deep in the red thanks to the flat earth free trade he promotes and pushes! Will he commit suicide like a good Japanese Samurai who screws up so badly? Nope! He wants us to shift gears and do alternative energy! Buy solar panels and wind mills from China, I suppose? Or Japan? Or how about Europe? They have them! And again, we look at charts that clearly show how demented prognosticators for peering into the future really are. Demented, to say the least. And the NYT frets about nations hoarding food and fuel when there is raging inflation. Duh. And the rich guy who owns Pimco sent a letter to Obama warning him to not spend too much money. Too bad Gross didn't send Bush a warning, too, 7 years ago.

Anxious in America By THOMAS L. FRIEDMAN

My fellow Americans: We are a country in debt and in decline — not terminal, not irreversible, but in decline. Our political system seems incapable of producing long-range answers to big problems or big opportunities. We are the ones who need a better-functioning democracy — more than the Iraqis and Afghans. We are the ones in need of nation-building. It is our political system that is not working.

I continue to be appalled at the gap between what is clearly going to be the next great global industry — renewable energy and clean power — and the inability of Congress and the administration to put in place the bold policies we need to ensure that America leads that industry.

“America and its political leaders, after two decades of failing to come together to solve big problems, seem to have lost faith in their ability to do so,” Wall Street Journal columnist Gerald Seib noted last week. “A political system that expects failure doesn’t try very hard to produce anything else.”

So many people trust this con artist. Why are we 'a country in debt and in decline' in the first place? Before 'free trade' took over, we had no trade deficit. As I showed clearly in this week's articles detailing past Federal Reserve speeches, the US decided to cope with suppressing inflation by the neat trick of devaluing the currency abroad while simultaneously opening up the US to 'foreign competition' that was designed to force prices downwards via dropping union wages. To clinch the deal, the US media had to herd the voters into backing anti-unionist Ronald Reagan who cheerfully destroyed the right to strike. Now, strike breakers can replace striking workers permanently so no one dares to really strike anymore. Unions have had severely declining membership since Ronald Reagan's rule and now are utterly vanishing as the Old Guard are bought out with bribes and replaced with non-unionized, weaker workers who have far less pricing power and much, much lower wages and virtually no benefits.

Namely, the workers ate inflation. Free trade benefited Asia and Europe. Both saw huge trade surpluses with the US. Both saw their important industries grow massively. Both saw their sovereign wealth increase. Meanwhile, the US had little inflation but rising debts, loss of good industrial jobs, and the de-industrialization of this nation. If WWII were looming, we would have to surrender to Japan since we can't manufacture much of anything to keep ourselves going. We can make weapons but what if we have virtually no steel mills? Most of our ball bearings, fasteners and other vital things are made in Japan, China and Germany! The materials that make the wings of our fancy jets so fancy are made in Japan, not the US.

Friedman encouraged and enabled all this. For years and years, this Zionist who dreams of making Israel super-strong made America super-weak. We have to talk about this business because when we see treason, we have to answer the question, 'Which nation does this guy really work for, anyway?' Suspicions have to be aired. Of course, if anyone does this, they get censored or shoved aside in the US. We are not supposed to ask this vital question. When writers consistently push for things that destroy America, we must explore the question, 'Why?' Some time ago, I showed that Israel, Friedman's home away from home, has enjoyed an international trade surplus. This is due nearly entirely because the US has a huge trade deficit with Israel. On top of paying for Israel's military, all peace initiatives and other hand outs. Israel is by far and away, the #1 recipient of US public largess. Friedman never complains about all this. He is very jolly well overjoyed about this. This is for him, good news, not bad news.

Lehman's Damocles index points to trouble for Israel

Lehman Brothers' Damocles is an external-crisis measure that looks at ten monthly indicators that are often recognized as possible predictors of external financial crises. The investment bank gives Israel a positive Damocles score of 28, the first time in five years that the country's is positive. Generally, a higher figure implies a higher risk of "external financial crisis".

Lehman Brothers notes that Israel's current account is still in surplus but looks set to move into the red by next year if not earlier. Foreign direct investment flows have slowed compared with last year but the basic balance is still relatively strong. However, the strength of domestic demand is reflected in the ever widening trade deficit that is gradually eroding Israel’s current account surplus. The key risk to the balance of payments is a prolonged and broader weakness in US growth, continued strength of domestic demand given the buoyant labor market and the sharp appreciation of the shekel. The rate differential versus the US has been a key driver of the shekel, so Fed policy in the second half of the year will be crucial for shekel-dollar exchange rate.

As the US dies, the wellspring of free and easy money, easy trade terms that help Israel and harm the US, are in jeopardy. The Jewish bankers in Israel will ask for a favor of their fellow clan members in the US to weaken the shekel so they can undermine US industries further. Since this makes the importation of energy, etc, more expensive, they will probably ask Congress to take care of this detail, too. AIPAC will happily twist arms and pass out bribes to insure this works out. Israel isn't the only nation playing this game. They are just the most blatant and the most occult, being protected by the US media that never, ever discusses all of this. The paper running the above story is from overseas, not the US, just for example. The NYT won't mention this. Nor will Friedman. And both are extremely aware of this business. This isn't due to disinterest or lack of knowledge. This is a conspiracy.

There are a number of leftist web sites that mock Friedman. But none question his patriotism. Or discuss his divided loyalties. But since we see our nation going under due to 'free trade' that is literally eating up our basic infrastructure, society and domestic security, these issues can't be ignored much longer. The longer Friedman gets to play his game whereby he can blow cold on 'free trade' while not mentioning free trade just so he can revert to supporting it later, is a problem for us. He is spread across the nation while people examining his dishonesty are not all over the place. He can lie to his heart's content and no major media will call him on the carpet since most of them are also motivated by treason to ignore important forces destroying America.

This is a problem with all immigrant communities! Germany's rulers tried to appeal to Germans in the US to betray the US and support Germany in WWI and WWII. England did the same! Japan and Russia have done this. They wish to have their 'people' in the US support them in wars that the US gets involved in. The US has to resist this. We didn't enter WWI or WWII immediately due to anger over the idea that people on all sides were eager to exploit us so they could fight wars with each other. This irritation was eliminated in WWII and ever since, we have been at the beck and call of all sorts of minority groups, tribal organizations and religions to intervene and fight physically or to destroy our industries so rival industries in other nations could flourish. We became the all-round sacrificial cow. This is now bankrupting us since we gain nothing from all these battles and alarms. We gain nothing as a nation if we have free trade that runs deep in the red.

Hoarding Nations Drive Food Costs Ever Higher

At least 29 countries have sharply curbed food exports in recent months, to ensure that their own people have enough to eat, at affordable prices.
*snip*
“It’s obvious that these export restrictions fuel the fire of price increases,” said Pascal Lamy, the director general of the World Trade Organization. And by increasing perceptions of shortages, the restrictions have led to hoarding around the world, by farmers, traders and consumers.
*snip*
The Japanese protect their rice industry by making it nearly impossible for imported rice to compete. The European Union severely limits beef and poultry imports, and Poland goes further, barring soybean imports as well.

Negotiators have been working for years to free trade in farm goods, but today’s crisis actually makes that more difficult for them. Food protests in places like Haiti and Indonesia that rely heavily on imported food have convinced many nations that it is more important than ever that they grow, and keep, the food their citizens need.

Everyone else protects MANY of their industries, their food, their water, everything. This MAKES PERFECT SENSE! This is sanity! The US which protects virtually nothing, is not sane. We are chumps. And of course, whenever there is inflation, everyone hoards. This is because what you hold today is cheaper than buying tomorrow when the dollar declines further! Since the dollar is the main currency in world trade, its continuing decline since 1969 is a serious cause of global inflation. And it is declining due to war overspending coupled with a huge, huge trade deficit.

Obama May Produce $1 Trillion Deficit, Gross Says

Higher taxes for hedge-fund managers and oil companies will not cover anticipated Obama tax cuts for the poor and middle- class, universal health care and aid to the depressed residential real estate market, said Gross, a long-time Republican.

``This economy will need a jolt of $500 billion or so of government spending real quick,'' Gross, co-chief investment officer of Newport Beach, California-based Pimco, said in an open letter to Obama, the likely Democratic presidential nominee, published on the company's Web site today.

The US economy gets a nice $500+ billion 'jolt' every year. Mr. Gross knows this perfectly well. About $5+ billion of this is a nice jolt for Israel's economy. I suggest all money flowing to Israel be cut. That is a first move in the right direction! Then we cut the future trillions from the occupation of Iraq funds. And then we cut the funds used to patrol Europe, put in missiles there, etc. And ditto, Japan and South Korea. We withdraw our empire to protect our borders which are exposed to alien break ins that are destabilizing our cities. Then we balance our budget and rebuild our industrial base! Wow! Isn't that revolutionary? Will Gross or Friedman exhort their tribal members to support this? I love it when people suggest we cut things for Americans but then disappear when we ask them to fight to cut things going to Israel, for example.

Israel isn't a basket case that needs help! They have surpluses, not deficits! The standard of living for the Jews there is very high! Yet they get the lion's share of US aid and sweetheart contracts and deals that help their own industries before our own industries. And none of the hot shots who talk about cutting money in the US ever mention any of this. Note also that Gross is a Republican supporter who was very involved in creating the fix we are in today. He didn't yell about the Bush tax cuts for the rich. Shame on him. And all who are working in concert with him. He has betrayed America.

U.S. Won't Let Iran Shut Strait of Hormuz, Fleet Says

(Bloomberg) -- The U.S. won't allow Iran to shut the Strait of Hormuz, through which the bulk of Middle East oil is shipped, a spokesman for the Fifth Fleet said.

``They will not close it,'' Lieutenant Nate Christensen said in a telephone interview today from Bahrain, where the fleet is based. ``The Strait of Hormuz is vital international waters.'' Vice Admiral Kevin Cosgriff, Fifth Fleet commander, made similar remarks to reporters in Bahrain today, Christensen said.

The push for a war with Iran continues and gets worse and worse. The US navy can't keep the Straits open no matter what we do. The very fragile, very flammable tankers won't be sailing merrily about the Persian bathtub the minute bombs begin flying. The US and Israel plot to do a preemptive strike. This is not only illegal and amoral but will drive the cost of oil through the roof. This lie was told only so the US public will sleepwalk into this war. 'Yup, there will be no stopping them thar oil tankers, Martha. The guys who lost the Vietnam War and are losing the Afghan and Iraq wars tell me this!' Indeed, the chances of ANY tankers sailing ANYWHERE is near zero if a war breaks out. The US hopes to neutralize and destroy all of Iran's defenses in a flash and fury. Probably using nuclear bombs. After all, we used illegal phosphorus bombs on Fallujah and not one General nor was Bush hung after trials at the Hague. After all, these guys are protected by the US media that wants these wars. This is why we have seen a semi-anti-war Obama mutate into a 'obliterate them all' clone of Hillary Clinton, a qhoulish morphing if there ever was one.

G5 Monetary Policy Prescription: Talk Tough But Act Gently

Michael Gregory, CFA, Senior Economist

During the past several weeks, some of these central banks have grabbed the policy gear shift again, largely in response to the upside inflation risks posed by rising commodity prices. Stoking market speculation of renewed tightening campaigns, policy rate hikes are proliferating among other countries (Chart 2). However, it’s important to keep in mind that the credit squeeze was not a major blow to economic momentum in these other nations. And, for many developing economies, inflation is a more serious problem owing to higher CPI food and energy weights (Chart 3).

Nevertheless, all central bankers share the same concern that rising commodity prices will pump broader price pressures as firms pass on their higher costs and workers demand higher wages to compensate. As such, damping inflation expectations and ensuring some inflation-absorbing slack in the economy are becoming policy priorities.

The G5 are the beating heart of the G# system. They have to perform cardiac surgery on the US to keep the US heart beating even as they artfully work to keep the US from fixing the trade imbalance. They would far rather have the US not spend money on Americans and thus, like Clinton, balance the budget. Under Clinton, our debt ratios got much, much worse. The US consumer and workers went steeply into debt. Under Bush, this was twice as bad. Now, if Obama takes over, these aliens are very anxious to make this infinitely worse. They do not want the trade imbalance fixed. OK: for propaganda reasons, they will allow us to shrink it from $750 billion a year to a mere $550 billion a year. But this fixes nothing! This is fatal for the US. This is BAD. But they won't admit this because they benefit from this.

This chart is full of dangerous goodies. Note the projections! The yen gets really weak, you see! And the US trade deficit shrinks????? HAHAHA. How is that? The yuan gets stronger while the yen gets weaker? HAHAHA. Right! In your dreams! l also highlighted the three quarters the US is supposed to shrink in 2008-2009. Then the GDP goes up nearly 5% in one quarter? HAHAHA. Pray, how? Look at the trade deficits! In the entire year of 2009, they are worse than -$500 billion! Nearly -$600 billion! Which is nearly as bad as this year's projections! And we run a -$613 billion deficit with a recession? Note also how this chart hopes that we have a +3% year by December, 2009. I presume this demented graph is assuming there is no massive war in the middle of the Persian Gulf region.

The main thing is, the trade deficits only shrink a fraction but still continue to rack up trillion dollar losses less than every two years. This is ridiculous and no one should put such a futurist chart forwards with a straight face. Either they issue dire warnings that this is an impossible system that is heading straight off a fiscal cliff or they laugh and say, 'Who cares? We can flee the flaming wreck! Ta-ta!' Note the projections here that the dollar will decline to be worth only half a dollar to the euro. I suppose this is the 'fix' that will allow us to export to Europe. Only Europe won't allow this. Germany didn't mind a strong euro while running record export profits. But if there is any hint of negative numbers, they will move swiftly to dump everything onto the US ledgers again. Everyone does this all the time, after all.

What we can do in this dangerous moment
By Lawrence Summers

First, the much debated housing bill should be passed immediately by Congress and signed into law.
*snip*
Second, Congress should move promptly to pass further fiscal measures to respond to our economic difficulties. The economy would be in a far worse state if fiscal stimulus had not come on line two months ago.*snip* Fiscal stimulus measures must be coupled to budget process reform that provides reassurance that, once the crisis passes, the fiscal policy discipline of the 1990s will be re-established.
*snip*
Third, policymakers need to make a clear commitment to addressing the non-monetary factors causing inflation concerns.*snip* Major importance should be attached to encouraging the reduction or elimination of energy subsidies in the developing world.
*snip*
Fourth, it needs to be recognised that in the months ahead there is the real possibility that significant financial institutions will encounter not just liquidity but solvency problems as the economy deteriorates and further writedowns prove necessary. *snip* It was fortunate that a natural merger partner was available when Bear Stearns failed – we may not be so lucky next time.

This poorly thought out Financial Times article refuses to examine why we have global inflation, nor does it mention the trade deficit. The focus is on using some sort of halter and whip method to goad the dying horse that draws the US economy along to take some more steps up the economic mountain of ice. Eventually, the horse will fall to the ground and die. But right now, the financiers want it to go...go...and go some more or else. Some sort of goad, some sort of money can be pumped into the economy that will allow us to stumble along with $500+ billion trade deficits as far as the eye can see. They need this to get rich, themselves. This is a fearful situation. They would all dearly love to simply shower even more Funny Money™ on us so we can spend, spend, spend. And send, send, send more money overseas and give, give, give more market share to all our allies who are our dire trade rivals.

Email this post

Culture of Life News Main Page

The Truth About Inflation Eludes US Public

June 30, 2008

Elaine Meinel Supkis

Three headlines from Bloomberg News, the ONLY news service today that tells the economic truths, illustrate clearly that we are in the exact same matrix as we were in during the end of the Vietnam war and the beginning of the oil wars in the Middle East. On all fronts, the news is nearly exactly identical to that key time period we called 'Stagflation'. Once again, we go to old Federal Reserve speeches to see clearly how we are in the exact same traps we fell into back then. And the solutions are still exactly the same and these solutions destroyed our industrial base as well as the financial health of the working class in America.

Commodities Signal Bubble Bursting as First-Half Ends

(Bloomberg) -- Commodities are heading for their best first half in 35 years. The next six months may not be as rewarding because record prices for oil, copper and a dozen other raw materials may crimp consumption and encourage growth in supply.

The 19 commodities in the Reuters/Jefferies CRB Index jumped 29 percent this year, the most since 1973 and more than any second-half gain in at least five decades, data compiled by Bloomberg show.

Back to the future! I have said for several years now, we are repeating nearly exactly all the stupid things we did back then. Except for one thing: we couldn't cut the dollar/gold peg because we never restored it after the crisis of 1969-1973 forced Nixon and Burns to do what both said repeatedly, they would not even think of doing. Back then, both men who had criminal minds, told the world, this severing of a historic peg that has existed since the first banks opened their doors, all this was temporary. Then instituted, via the Bretton Woods II Accords, a 'floating currency' regime that was TEMPORARY. Until the dollar 'found its natural bottom'. Well, this temporary business opened some very interesting doors to the Outer Darkness that let a flood of easy Funny Money™ to flow into the world's monetary system. This, in turn, caused tremendous global inflation.

Which never stopped. Prices of commodities shot up. But were tamed by raising interest rates to ridiculous heights. Then the other system was launched: to kill worker's wages so they can't fight inflation EVEN AS THE FUNNY MONEY™ CONTINUED TO POUR INTO THE SYSTEM! Equities and assets began their many amazing bubbles. My parent's mansion that went for only $46,000 in 1960 would end up going for many millions today. This is pure, unadulterated inflation.

Oil Rises to Record on Concern Iran Supplies May Be Disrupted

(Bloomberg) -- Crude oil rose to a record above $143 a barrel on speculation the dispute over Iran's nuclear program may disrupt supply from OPEC's second-largest producer.

Pressure on Iran to end its uranium enrichment program and the falling value of the U.S. dollar may drive prices to $170 a barrel, OPEC President Chakib Khelil said on June 28. Oil is headed for its biggest six-month gain since 1999 as investors shun equities for commodities, looking for a hedge against a weaker dollar and quickening inflation. (Bloomberg) -- European government bonds fell, sending the German two-year note to its biggest drop in three weeks, after inflation accelerated more than forecast in June, bolstering the case for policy makers to increase interest rates.

The decline pushed the yield on the two-year note up by the most since June 5, with the price poised for its biggest quarterly slide in at least 17 years. A government report showed the inflation rate in the 15-nation euro region rose to 4 percent from 3.7 percent in May. Economists had forecast a 3.9 percent rate, according to the median of 38 estimates in a Bloomberg survey.

The dam will now break! The US media owners who are nearly uniformly Zionists seeking to mislead the US public, finally one of the Jewish media has broken the conspiracy of silence and told the truth! WOW. In Israel, people openly debate things we are forbidden to notice or mention in the US. This is why my news service has lost many readers and is not cited by other economic bloggers. For example, Calculated Risk is a Jewish man. And so he never talks about these things. The huge, gaping black hole in news analysis in the US is entirely in this area: anything Israel wants that is terrible for us is never mentioned!

Well, the US has used up ALL our diplomatic capital going from capital to capital in the West to get everyone to join in destroying Iran's oil sales and we are succeeding wonderfully and this, like the 1973 oil crisis due to Western support of Israel will cause world inflation that will be worse than back then! And the Muslims know this! And they know that they bankrupted Russia. And they intend to bankrupt us. They will lie to us so we continue down this destructive path. But the intention is there: they hope to bankrupt the G7 so they can then bankrupt Israel which leeches off the US in a very outrageous way.

US people are angry and have no clue why things are this way thanks to the lying media. But now this news will travel far and wide. Via the internet. Readers here know I use Bloomberg News a lot. This is due to the truthfulness of their news which has few ideological tags and word uses and often reveals what really is going on. Now, the pent up rage in the US public might find a focus. Time is rapidly running out as the corrupt, craven tools in Congress and the White House conspire to drive us into a very dangerous and stupid war.

European Bonds Decline After Inflation Is Higher Than Forecast

(Bloomberg) -- European government bonds fell, sending the German two-year note to its biggest drop in three weeks, after inflation accelerated more than forecast in June, bolstering the case for policy makers to increase interest rates.

The decline pushed the yield on the two-year note up by the most since June 5, with the price poised for its biggest quarterly slide in at least 17 years. A government report showed the inflation rate in the 15-nation euro region rose to 4 percent from 3.7 percent in May. Economists had forecast a 3.9 percent rate, according to the median of 38 estimates in a Bloomberg survey.

Europe writhes under the whip of inflation even though they have the higher interest rates and the world's strongest currency. The krona of Iceland used to be strong but now has collapsed as other small nations see the same due to raging inflation and the world flow of monetary monkey business has changed radically since 7/17/7. Now, let's go back to the Fed in 1970 and see how this foolish business unwound back then:

The Triumph of Free Enterprise
Address by Arthur F. Burns, Chairman, Board of Governors of the Federal Reserve System

Tokyo, Japan
July 2, 1970

This is a particularly interesting time for an economist to visit Japan. As I am sure all of you recall, fiscal year 1970 was designated as a target year in the economic plan unveiled by Prime Minister Ikeda in 1961. In what many people then thought was a fantastically ambitious design for the future, he calmly announced that Japan planned to double her gross national product between the years 1960 and 1970. It is therefore fitting, as we are gathered here today, to note of how the actual achievement of Japan compares with Mr Ikeda's bold projection of a decade ago. While his plan called for a national output that in this fiscal year would be twice that of 1960, it now appears that your national product will in fact be at least 180 per cent above I960.

The Ikeda plan projected exports reaching $9.3 billion this year, while imports would rise to $9.9 billion. It is now believed that exports will come to nearly $20 billion and imports to nearly $19 billion. The Ikeda plain foresaw Japanese steel consumption rising to $| million tons this year. It will actually be around 80 million tons. According to the Ikeda plan, a big expansion was to occur in automobile production. But while it was then thought that the output of passenger car, trucks, and buses would amount to about 2.2 million units, it now appears that well over 4 million vehicles will be produced this year.

Thanks to the Cold War and the fear of the Soviet Union and Mao of China, the US encouraged both Germany and Japan to rapidly rebuild and refurbish and modernize their massive industrial bases. Both cheerfully did this. This speech is typical of American officials in Japan: clueless about history, unable to see the irony in what is going on and an inability to project into the future and figure out the obvious. Blinded by ideology, Burns simply wanted Japan to be stronger than both the Soviet Union and China. No matter what! Ditto, Germany!

When he made this speech, Japan wasn't exporting all that much compared to today. Japan still had a slight trade deficit with the world due to building up the nation after everything was destroyed in WWII. But notice how Japan overshot the government's own targets! The Japanese government knew that they were closing the trade gap which was, by 1970, only $600,000,000. Indeed, 1972 was the year they began to run their continuous surpluses as they finally began to export to the US these same cars and trucks which doubled and doubled again in Japan! The US trade deficit began during this time period and it only got worse as the years rolled by.

The four speeches I am examining are shown in relation to the trade deficit. It is very clear to me that the collapse in US accounts in trade are 100% due to the Federal Reserve's and US government's actions concerning killing the gold/dollar relationship and the resulting surge in inflation which they consciously decided to kill via killing the US unionized workforce's ability to get pay raises. The main tools here were the Free Trade tools and of course, passing laws making it impossible to have a real strike anymore by legalizing strike breakers crossing lines with impunity.

Burns continues to praise the Japanese who have dark thoughts of revenge in their hearts:

The economic contest between the U.S.S.R. and the United States enters the year 1970 with the United States holding a commanding lead. In 1969, total output per person in the United States was nearly $4,600. This was two-and-a-half times the corresponding Soviet figure. Measured in real terms, the gap between the per capita GNP of the United States and the Soviet Union was more than 25 per cent higher in 1969 than in 1960.
*snip*
In a free economy, the relative strength of the demand for goods and services determines the allocation of productive resources. In the Soviet system, on the other hand, the path that production takes is basically shaped by the decisions of economic planners in Moscow.

He goes on and on about Russia and China's failures. At no point does he examine the evolving relationship with Japan and the danger of Japan's massively growing auto production and what this means for the US. He is genuinely overjoyed that the Japanese who churned out battleships and other things from 1880-1945 are now doing it again! Ditto, Germany! We thought we were proving communism a failure by the fact that two nations that rapidly industrialized from 1860-1945 and who launched several massive, massive wars, was due to capitalism being a wonderful thing and not due to governments desiring and encouraging this build up of hard-core industrial output!

The wonderful book, 'The Rise and Fall of the Great Powers' by Professor Kennedy talks about all this. He figured out that nations that had huge build ups in industrial base hard core stuff like automobiles and ships, steel making and other things, were the ones who won wars. The US swung both WWI and WWII to the British and French sides because we had one of the world's biggest industrial bases! But curiously, from 1950 to today, the US considers it a wonderful thing that our ALLIES are reaming out our entire industrial base! This blind spot is ideological. We think, as Europe consolidates itself into a massive Empire, this isn't a rival for power! We think that as Japan builds the world's biggest industrial export power at our expense, this strengthens America! This bizarre and backwards thinking infested all our leaders back in 1970 and still does to this day. All our allies take cynical advantage of this blindness.

Burns in Tokyo, 1970:

It is significant, therefore, that the countries in Asia that have achieved high rates of overall economic growth have also done very well in expanding their exports. The whole world knows what an outstanding record Japan has piled up in export markets, In the period 1958-68, Japanese exports expanded at an average annual rate of 16 per cent a year. It is perhaps less well known that the Republic of Korea, Nationalist China, and Hong Kong have also expanded their exports at phenomenal rates,

And where did these exports flow? To the US! I remember buying many such items back then. Much of the early flow was handmade stuff like paper umbrellas which I loved to use because I like the sound of rain on the paper surface and because it has no metal and therefore was not a perfect lightning rod. I bought bamboo fencing which was great in cutting down on the dust storms causing harm to my gardens and yard in Tucson. I bought lots of such things. Then, in 1972, my brother bought a Toyota truck. This was the opening shot in the hard goods/high value-added exports to the US. The glee which Burns takes in all this is so touching. Alas, even after the US leaders began to scold Germany and Japan for exporting cars, trucks and other high value items to the US, they did NOTHING real to stop it. Instead, they passed laws that made it worse and worse.

Burns in Tokyo, 1970:

While the process of getting inflation under control in the United States has been difficult, there have been scattered signs recently of moderation in the rate of advance in some major categories of prices, and also of some improvement in the trend of productivity in the manufacturing sector of our economy. I believe we will be able to extend the progress that is beginning to emerge in these areas, by pursuing stabilization policies that prevent the reemergence of excess demand later this year or in 1971. However, we must also be careful to ensure that the economic slowdown which began last fall does not become more pervasive or continue much longer. On this score, I think there is room for optimism too. Both monetary and fiscal policies have become less restrictive in recent months, and I believe we may look forward with reasonable confidence to a resumption of sustainable economic growth in the near future, as well as to a gradual dimunition in the rate of advance in prices.

This was pure delusion. Inflation in 1970 had barely begun. The gold/dollar peg still held, barely. Bretton Woods II was still in the future. The US demented wars in the Southeast Asia were still expanding and getting much more expensive. The Nixon visit to Mao was in the future, too. Sales of wheat to Russia was also in the future. Inflation barely had begun to stir in 1970. But when the Arab/Israeli war broke out and world oil prices shot upwards, the dragon that was already afoot woke up totally and began to systematically destroy the US empire's financial powers. Now we go to 1973 to see how Burns dealt with all this:

The Outlook for the Dollar
Remarks by Arthur F. Burns Chairman, Board of Governors of the Federal Reserve System

The Business Council
Hot Springs, Virginia
October 13, 1973

Any evaluation of the international outlook for the dollar can best begin with an assessment of the inflationary problem here at home. As a result of the massive exchange rate adjustments that have taken place over the past several years, the international competitive position of the dollar has been much improved. But that gain will be in danger of erosion if we do not achieve effective control over the inflation that has been plaguing our economy. In a world of freely changing ex- change rates, such as we have recently had, a failure to exercise reasonable discipline over the internal behavior of our economy is quickly and decisively communicated to foreign exichange markets.

So far this year, as we all know, our country has suffered an extraordinary upsurge in the price level -- the sharpest, by far, since the Korean War. This galloping inflation reflects a variety of special influences. There has been a worldwide economic boom superimposed on the boom in the United States. We have encountered critical shortages of basic materials. The needed expansion in industrial capacity Jiad not been put in place because of the abnormally low level of profits between I966 and 1971 and also because of numerous impediments to new investment on ecological grounds. Farm product prices escalated sharply as a result of crop failures in many countries last year. Fuel prices spurted upward, reflecting the developing shortages in the energy field. And the depreciation of the dollar in foreign exchange markets has served to boost prices of imported goods and to add to the demands pressing on our productive resources.

HAHAHA. He inadvertently mentions the true cause of our inflation! He said it was highest SINCE THE KOREAN WAR! Yet this lying bastard then goes on to ignore all this and blames everything else. A shortage of materials, for example. Well, what do wars use? Lots of materials! Which is BLOWN UP! Inflation during wars takes off the worst as the wars wind down. The destruction begins to flag and thus, things are not being destroyed fast enough. Cities, bombs, planes, humans, etc, begin to use money which was restricted due to the simple act of rationing goods and food! Once a war ends, the flood of Funny Money ™ used to fight suddenly appears locally and all things suddenly find that there is a lot of paper which people can use to buy stuff. So we get 'inflation' which is really the degradation of the currency to pay for war costs.

This is VERBOTEN INFORMATION. No one in our government ever, ever, EVER mentions this truth. Now, they censor themselves very closely so they don't point out the obvious. Recently, the Washington Post's lying bastards who tell readers what the latest propaganda is rebutted a reader's contention that the wars in the Middle East are causing inflation here at home. He went out of his way to deny this. He used the wrong statistics deliberately. By using GDP numbers, he said direct military spending was only 3% of this wonderful number. But our GDP is SHRINKING. So we have raging inflation coupled with a SHRINKING GDP which is stagflation and which is the result of war spending not keeping up with government debt increases which means the Fed has more Treasuries with which to fuel inflation by encouraging wild lending.

Back to Burns: as he made this speech in 1973, the US rulers thought they killed their war inflation via the Bretton Woods II devaluation of the dollar and the ending of the gold peg. Instead, these moves opened Pandora's Box when the oil boycott hit. The US then went into hyper-inflation as all things connected to energy systems or energy costs shot upwards as frantic businesses struggled to close the bottom line and make a profit. Thanks to strong unions from WWII, workers kept abreast of inflation, at least, at the top. All the rest of the workforce fell into a pit of hell.

Burns in 1973:

The problem of bringing inflation under control is worldwide. Other countries have been experiencing price rises and cost pressures as large or larger than ours. This worldwide inflation is most unfortunate^ and it will require strong remedial action everywhere. But one fortuitous result of the fact that recent inflation rates abroad have tended to exceed our own is that we have not lost ground competitively, as we did during the late 1960rs.

Moreover, the ability of American businessmen and farmers to compete against foreign producers has been vastly altered by the changes in exchange rate relationships that have taken place over the past few years. The two formal devaluations of the dollar, revaluation by some of our major competitors, and the floating of currencies that has been the general regime since March, have increased the average dollar price of the major foreign currencies by over 25 per cent since May 1970.

The world's biggest economic power and empire had to devalue the currency by 25% in one year! WOW. Boy, do I remember this year. Banking overseas became very difficult. I was lucky to be in Germany in 1968 for I would not have survived it all in 1973 thanks to the dying dollar! My 24,000 DM would have been 12,000 DM. A significant financial loss. Burns is lying in this speech, of course. He wasn't totally stupid. He knew that the US, being the world's #1 economy, was flooding the world with dollars from HIS bank vaults! We flooded Asia with dollars, for example. Thanks to our wars there which were STILL raging in 1973, from the air, a very expensive war. Since the US was flooding the world with Funny Money™, inflation was now global.

He is also very smug about the US not losing ground in world trade. This was because it was just beginning as we see in the FRED chart above. After this speech, it began to significantly worsen. Once the new Free Trade regime was imposed under Reagan, our trade deficit simply got totally out of control. Let's look at how the Fed worked with the government to create this destructive mess:

The Real Issues of Inflation and Unemployment

Address by Arthur F, Burns Chairman, Board of Governors of the Federal Reserve System

at the Blue Key Honor Society Annual Awards Dinner
The University of Georgia
Athens, Georgia
September 19, 1975

The basic cause of the recession was our nation's failure to deal effectively with the inflation that got under way in the mid-sixties and soon became a dominant feature of our economic life. As wage and price increases quickened, seeds of trouble were sown across the economy. With abundant credit readily available, the construction of new homes, condominiums, and office buildings proceeded on a scale that exceeded the underlying demand. Rapidly rising prices eroded the purchasing power of workers incomes and savings. Managerial practices of business enterprises became lax and productivity languished, while corporate profits -- properly reckoned — kept falling. Inventories of raw materials and other supplies piled up as businessmen reacted to fears of shortages and still higher prices. Credit demands, both public and private, soared and interest rates rose to unprecedented heights. The banking system became overextended, the quality of loans tended to deteriorate, and, the capital position of many banks was weakened.

A housing bubble caused the mess! Too many loans caused the mess! Business was lax and caused the mess! NOT WAR SPENDING AND THE FED! The new ideology was in place. By focusing on the EFFECTS of government/central banking creating too much money for wars, the Fed was on the charge to delude everyone about the true nature of inflation and the destruction of the currency. All previous bubbles in tulips, South Sea Bubbles, Mississippi Shares, Railroad stocks, etc, etc are ultimately connected to Princes and Kings and others seeking war money. Each time, they empower a central banker to raise funds in various funny ways. The Catholic Church did this by selling prayers and forgiveness at the end of the Middle Ages so they could wage wars against the Holy Roman Emperors, the Kings of France and the people of Rome itself. The Pope needed Swiss mercenaries.

The ultimate grace to create a bubble is always granted by war lords seeking easy ways of raising funds! Always! If we ignore this connection, we can't stop this process. The US is preparing for another war with Iran Kitty. Iran knows all about the war/inflation connection and knows the US cannot create more bubbles since the entire planet absolutely writhes under the whip of massive inflation. The US tries to inflate its way to victory with Iran: this will fail! Iran knows this. They are under siege.

Like all siege warfare, the attackers besieging someone are in equal or even greater danger. From epidemics, from inflation. From loss of economic power as everything stops. The bet is, the storming of the city will come before the troops starve or sicken to death.

Back to 1973: the really bad days of hyper-inflation was just beginning! Note that ALL the 'symptoms' are IDENTICAL to today! Note also, the Fed Chief who created this situation notes that 'the quality of loans tended to deteriorate' just as we saw this last three years! Note also that 'the capital position of many banks was weakened.' WOW. IDENTICAL!!!! This speech should be examined by all parties today. Instead, they pretend this is a NEW situation and not a total reproduction of the past. Yet most of the people alive then are alive now. Many of them were out of college by then, just like me! And so the bulk of the people who are destroying America today were around back then and could hear these speeches, read the news and therefore, know very well WE ARE REPEATING HISTORY HERE.

Burns in 1973:

If we in the United States wish to enjoy the fruits of a prosperous economy and to preserve our democratic institutions, we must come to grips squarely with the inflation that has been troubling pur nation throughout much of the postwar period and most grievously during the past decade.

A first step in this process is to recognize the true character of the problem. Our long-run problem of inflation lies its roots in the structure of our economic institutions and in the financial policies of our government. All too frequently, this basic fact is clouded by external events that influence the rate of inflation -- such as a crop shortfall that results in higher farm prices, or the action of a foreign cartel that raises oil prices. The truth is that, for many years now, the economies of the United States and many other countries have developed a serious underlying bias toward inflation. This tendency has simply been magnified by the special influences that occasionally arise.

See how this con artist operates! He correctly notes that inflation is due to the financial policies of the government! But then goes on to blame foreigners selling us stuff we want or farmers and the variations in the weather, etc, etc. He does NOT mention war! Period. I know from my involvement with my own family back then, the entire government decided in 1972 to never, ever mention war costs and war spending when talking about war inflation. It caused considerable rage on my part. Just as our government reflexively lies about nuclear warfare, this lying is continuous now.

All nations had a 'bias' towards inflation because the US was flooding world markets with cheap dollars! During this year, there was a serious move afoot to pretend inflation was EMOTIONAL. People wanted or planned for inflation and thus, created it. All the Fed had to do was change people's EMOTIONS and inflation would end! Seriously, this is STILL the ideology: inflation is caused by expectations, not by the central bankers working with empires to flood the world with fake money.

Burns in 1973:

A major cause of this inflationary bias is the relative success that modern industrial nations have had in moderating the swings of the business cycle. Before World War II, cyclical declines of business activity in our country were typically longer and more severe than they have been during the past thirty years.

In the environment then prevailing, the price level typically declined in the course of a business recession, and many months or years elapsed before prices returned to their previous peak. In recent decades, a new pattern of wage and price behavior has emerged. Prices of many individual commodities still demonstrate a tendency to decline when demand weakens.

The average level of prices, however, hardly ever declines. Wage rates have become even more inflexible. Wage reductions are nowadays rare even in severely depressed industries and the average level of wage rates continues to rise inexorably in the face of widespread unemployment.

Workers struggling to keep up with inflation could win their battles by going on strike. So prices refused to fall when commodity prices fell. The new ideology was, commodity price hikes caused inflation, NOT war spending. So the next step is to kill unions so they can't move faster than government-created inflation. Note also how the Fed blames inflation on their prevention of cyclic declines! Bernanke claims that all depressions can be fixed via inflating the currency! But then, he refuses to understand why depressions happen.

They happen because government spending on wars suddenly declines when a war ends! After a huge surge of inflation due to the Funny Money™ seeking new places to go, there is a collapse of the economy into a depression as government spending ceases. After WWII, the US fixed this with the Cold War. Military spending merrily continued. Taxes to pay for this continued and were very unpopular. So the US fixed this by not paying the bills but moving the day due into the future. The US budget deficit began its great growth.

Burns in 1973:

National economies around the world are now more closely interrelated, so that inflationary developments in one country are quickly communicated to others and become mutually reinforcing. Moreover, the adoption of a flexible exchange rate system — though beneficial in dealing with large-scale adjustments of international payments, such as those arising from the sharp rise in oil prices -- may have made the Western world more prone to inflation by weakening the discipline of the balance of payments.

HAHAHA. Burns notes that inflationary developments in America are quickly communicated to our allies! He does accurately note that the 'discipline of the balance of payments' is WEAKENING. But the truth is, it weakened only in one place: the US! All our allies saw great improvement in their balance of payments! Good grief! This was because all of this global inflation was being generated by the US itself.

The present Japanese carry trade which is now dying yet again due to the yen rising in value, is a process of translating US finances into LOANS held by Japan and this, in turn is being used for speculation and was poured into US housing markets and other equity systems like the stock markets. This was how Japan and incidentally, China and the OPEC nations, have been dealing with US inflation. They export it back to the US in the form of loans which is why US debt, as we inflated everything to pay for our wars today, this is why inflation first raged in our stock markets via the take-over mania as well as housing EXACTLY LIKE IN 1973! And once these no longer could soak up the vast inflation caused by US government overspending and over importing, this inflation now is, EXACTLY LIKE IN 1973, now raging in commodities.

This, too, will end and the US, when it goes bankrupt, will cease to flood the world with fake dollars. Already, everyone is moving into the euro realm to avoid this obvious collapse. Understanding how and why this collapse is happening is extremely important. We can see from these two articles from yesterday and today how the Federal Reserve's top people lied about inflation and then decided stupidly that Free Trade would fix inflation by destroying the power of workers in America to outrun inflation. This was like stabbing ourselves in the belly to fix a stomach ache caused by eating too much candy.

Email this post

Culture of Life News Main Page

Old Federal Reserve Speeches

July 29, 2008

Elaine Meinel Supkis

The Federal Reserve is releasing a lot of data and old speeches and meeting minutes. Going through this is very instructive. We are going to have two stories about a series of speeches concerning Free Trade and Inflation. Speeches made from 1969 to 1981 are very, very illuminating because they show with fierce clarity, the 'solutions' the Fed chiefs wanted are DIRECTLY responsible for the huge mess we are in today with a giant trade deficit, giant government overspending, wild military adventures, off shoring, outsourcing and the weak dollar. What these guys wanted, they got. This is due to them blaming inflation on workers, not war mongers or crazed bankers. Namely, themselves.

The U.S. Dollar at Home and Abroad

Remarks of Wm. McC. Martin, Jr., Chairman, Board of Governors of the Federal Reserve System, before the 77th General Meeting of the American Iron and Steel Institute

The Waldorf-Astoria,

New York City

May 22, 1969

Countries, like individuals, need "rainy day" balances— that is, funds on which they can draw at times when their receipts from abroad may fall short of their payments. Such reserves presently can take only three forms: gold, a foreign currency, or a reserve position in the International Monetary Fund. Soon an additional reserve asset—Special Drawing Rights—will be available, as a supplement to other reserves. At the end of 1963, the official reserves of all countries together—amounting in total to more than $75 billion— consisted of 51 per cent in gold, 40 per cent in foreign exchange and 9 per cent in reserve positions in the IMF. And a large proportion of foreign exchange—that is, national currencies held by other countries as reserves—is in the form of dollars.

The fact that the U. S. dollar is the principal vehicle and reserve currency is not a matter of coincidence or accident. Dollars became useful and convenient to hold because they could buy attractive goods; because large and efficient financial markets are available for investing dollars and earning interest on them; because the United States stands ready to convert dollars into gold and gold into dollars for foreign governments and central banks, and the United States has by far the largest gold reserve in the world; and, as a further point, because there have been relatively few periods of doubt about the dollar price of gold.

Since the national currency of the United States is used in this way as money—in fact, serving both the major functions of money—the United States is in effect a bank to the rest of the world. And it behooves us, for that and other reasons, to take whatever steps are needed to assure one and all that our credit — our money—is good.

Let's go back in time here: in 1969, I just got back from Europe. During the previous 6 years, I was very aware of the degrading of the silver coins we used for spare change. I started working for money in a serious way since 1962 by farming myself out as a domestic when 12 years old. Since I bought much of the things I used or needed or wanted, I was very aware of 'inflation' and since I was paid below the minimum wage, I got paid with a lot of spare change. So a lot of coins went through my hands. I began to hoard the coins that were made before the Vietnam War. These were real silver and obviously had more value than the faker, newer coins. I used these pure silver coins in Europe. Europeans were ecstatic to get real silver. Unlike in America where it was illegal to melt down silver coins, in Europe, they had no restrictions on what they chose to do with the silver content.

This meant, when I took out my silver hoard and began bargaining for stuff in the back country markets, the fact that my coins were real mattered a great deal. It helped close more than one deal for me that was advantageous. So I came home to a world that was, in my eyes, obviously teetering on the edge of destruction. When Burns made this speech, he was desperately 'talking up' the dollar. He wanted the world to know that the US was never ever even going to CONSIDER severing the gold/dollar connection.

One thing we must remember when we read old speeches or hear new ones is, the Federal Reserve bank officials are all LYING BASTARDS. Really, honestly. They lie while keeping a straight face. They set out to deceive other nations, the American people and each other. People sometimes ask me why we should bother tracking all the various secret enclaves and covens run by these people. They attend these things and keep us locked out for a simple reason: they can tell each other the truth behind closed doors! So here we are: we know that Burns was a lying bastard when he gave this public speech. He spoke very plainly unlike the gnome-super bastard, Greenspan. Greenspan speaks in gobbely gook when he talked as a Fed chief. Now that he is outside, he sometimes blurts out the truth and then gets hammered by outraged people who suddenly realized he is a creepy bastard who lied to everyone in the past.

A number of writers who host 'buy gold NOW' web sites often are rather disingenuous about the history of gold and the dollar. The US did NOT drop the dollar/gold peg in 1933. They re-engineered it making the dollar worth less gold than before it was rejiggered suddenly. The sale of gold OUTSIDE of the Fort Knox system was forbidden. This made gold really cheap against the inflated dollar by 1969. I used to buy gold sheets and use them for artwork! It was laughably cheap compared to say, the price of eggs I sold from my collection of hens. From 1964-1970, 70% of the gold hoard at Fort Knox was redeemed by foreign powers who besieged it for gold. The great cave filled with gold was emptying fast when Burns lied about the US never breaking the dollar/gold peg.

Burns in 1969:

Today it is clear — as clear as at any time in our history— that we cannot retain confidence in the dollar among either Americans or foreigners unless we conduct our economic and financial affairs in such a way as to merit confidence. That we do so, now and henceforth, is all the more essential because we have faltered for more than 3 years—the period since the sharp step-up of our commitments to the Vietnam War—with the result that our economy has become overheated, our manpower resources have been strained, and our costs and prices have moved up with dismaying rapidity.

It would be idle to dwell again on the mistakes of these recent years. The adoption in mid-1968 of fiscal measures to raise taxes and restrain government expenditures was perhaps 2 years late, with the result that the budget deficit reached the staggering total of $25 billion in fiscal year 1968 at the very time when inflationary pressures were cumulating. Nor would I wish to overlook the error of an over-hasty—although only temporary—relaxation of monetary restraint by the Federal Reserve last summer.

Wow. $25 billion over budget! Today, this doesn't even cause Congress or the Fed to blink an eyelash. This was during a very hot war, too! Now we shrug as we rack up $500 billion overdrafts. When this speech was made, our government was about $300 billion in the red. In 10 years, it would be a whole trillion dollars in the red! And Reagan exclaimed, if we laid the dollars end to end, they would go to the moon! Then the US government cut taxes and increased spending so we now can make them line up all the way to Mars.

One thing about this speech: this was before the iron wall separating all talk about inflation from talk about wars was yet to be enforced. Back in 1969, Burns could openly say, 'Oops! We went to war and forgot that wars cause inflation!' Being a serial liar, he couldn't trumpet this connection or expand on it but at least mention of this slipped through his lips! But alas, this was probably the last time any Fed chief drew the connection between warmongering and rampant inflation.

Burns in 1969:

I have recited these facts out of realism—but certainly not despair. Much of our heritage of errors has already been corrected in recent months. Monetary and fiscal policy are now working in the same direction and reinforcing each other. I believe that we are, at long last, making some headway in dealing with inflation, in advancing toward what I have described as the goal of "disinflating without deflation." Progress has been slow, but that should be understandable after so much inflationary momentum has been generated by delay in getting the nation's finances in order. From here on, patience, perserverance and persistence will be necessary-- and considerable fortitude as well — to pursue steadfastly economic stabilization policies that bring inflation under control, and to continue those policies as long as needed to ensure that a resurgence of excess demand and upward cost and price pressures does not recur to plague us again.

Far from fixing this pesky inflation problem whilst not creating a depression, inflation accelerated. This was due to the War in Vietnam: it EXPANDED GREATLY after 1969! Nixon involved Cambodia, Laos and other neighboring nations in that grinding war. The secret war raged and this was a very expensive secret war. For the US, back then, began the stupid process of using very expensive planes and very expensive aircraft carriers to drop tremendously expensive bombs and missiles onto rice paddies, dirt trails, peasant huts made of palm fronds, etc. Billion dollar bombing raids that wrecked mud and twigs and destroyed some of the poorest people on earth. I used to joke in 1969 saying, 'Why don't we drop refrigerators, cooking stoves and lots and lots of free food on them? They will happily stop fighting and it will be CHEAPER for us!'

No one listens to a 19 year old. Few people listen to me today [shrugging shoulders]. Since Nixon was determined to have 'Peace with honor,' the war in Asia raged onwards unrelentingly. Even as troops on the ground were withdrawn, the most expensive part of the war expanded, not contracted. Meanwhile, our cities began to burn. The Martin Luther King assassination riots, for example, were fierce. The US needed desperately to spend money on social affairs. But this didn't stop the stupid war. Since the government knew the Vietnam war was VERY unpopular and we students reminded Nixon about this regularly, taxes to pay for this boneheaded war were not levied. Instead, paying for it was pushed into the future and the government and the Federal Reserve conspired to destroy the value of the dollar by making Funny Money™ loans to the government and the Fed began to collect Treasuries which were really war bonds based on future tax collections!

Of course, Burns was a warmonger so he didn't mention all this in his speech. The steel worker's union and the owners of the steel mills all LOVED the Vietnam War! This was making all this Funny Money™ flow into their pockets! They were fiercely pro-war. They hoped this war would rage forever. So long as their sons got good jobs at the mill and were not drafted.

Burns 1969:

We cannot afford to be priced out of the market by the wage-price spiral: in our private enterprise, employers must remember they are competing with other employers over the world for sales and profits, and employees must remember they are competing with other workers over the world for jobs as well as wages.

Neither can we afford to be priced out of the market by currency inflation: as I have said, in our governmental processes we must be doubly sure that budgetary and monetary operations reinforce rather than undermine the value of our currency, and thus reinforce rather than undermine our international competitive position. To take an opposite course, and attempt to protect ourselves by barriers against competitive products from abroad would be self-defeating in two ways: it would invite similar action by other countries and it would dampen the spur provided by foreign competition to better quality, higher productivity and lower prices for American products.

At this point, the steel workers who were union representatives should have raged up out of their seats and attacked Burns. But they didn't see their dim, pathetic future. They thought this was all a joke. No one was going to undermine THEM! They were patriots who supported the GOP President's wild warmongering! But note how Burns tells them that no barriers will be put up to protect them from cheaper cost steel from the countries we conquered in WWII: Germany and Japan. Both of which were 'peaceful' and working like crazy to dominate world steel markets again. I saw this in the Ruhr when I toured a number of mills on behalf of my father.

The concept of 'free trade' is very obvious: it suppresses WAGES. It destroys UNIONS. It also eats war-created inflation. In speech after speech, we see this same siren song: free trade will drop PRICES and also prevent labor from feeding inflation by running ahead of government-induced war inflation! Period. All the stories about how great free trade is and how it helps America are pure hogwash. Since it is political suicide to raise taxes for warmongering, this alternative method is used with efficient ruthlessness. One way or another, the workers MUST eat all inflation. Not the bankers, not the super-rich, not the patrons of the military/industrial complex.

Burns in 1969:

With the establishment of the two-tier system, and improvement in the U.S.

3. reserve position, talk about the official price of gold has subsided greatly. This is a healthy sign. I want to reassert what I said in a talk some 15 months ago—that an increase in the official price of gold is neither necessary nor desirable as a means of improving the workings of the international monetary system. It is unnecessary because Special Drawing Rights can provide for growth in world reserves in an equitable, systematic, and noninflationary manner. It is undesirable for many reasons, not the least of which is that it would turn back the clock of monetary history. I have no doubt that the present era in international monetary affairs will be viewed by historians as one in which individual nations managed to reconcile their sovereignty with their obvious interdependence by unprecedented progress in international cooperation. Such monetary cooperation takes place in many forums — the International Monetary Fund, the Organization for Economic Cooperation and Development, the Bank for International Settlements and numerous other bodies where groups of country representatives consult.

The silence before the storm! All talk...IN PUBLIC....died down. Everyone was told, the dollar was not going to be revalued vis a vis the value of gold which was artificially set at the same price it was set at in 1933. But of course, inflation already ravaged the value of the dollar and strong arming allies to not raid Fort Knox was faltering. DeGaulle, for example, was itching to get back all the lost gold from WWII. The US was hoping the 'drawing rights' at the IMF would paper over the collapsing dollar. When our allies came knocking at Fort Knox, we would tell them to please get drawing rights instead. Now, DeGaulle went through WWII and he was no fool. He refused to be palmed off. He wanted his gold back. Now. Burns is talking about the New World Order when he mentions 'sovereignty' and 'consultations'. These people talk and talk but they do the obvious: cheat workers, cheat nations, betray trust, lie to their own people, make back room deals that are bad for sovereignty, enable wars and destruction while evading popular support! Now, in contrast, from the end of this super-inflationary cycle, a speech from Volcker:

DEALING WITH INFLATION; OBSTACLES AND OPPORTUNITIES

Remarks by Paul A, Volcker, Chairman, Board of Governors of the Federal Reserve System

Alfred M. Landon Lecture Series on Public Issues
Kansas State University
Manhattan, Kansas

April 15, 1981

[Al Landon's quote:] "I said inflation was like a whirlpool, it kept growing bigger and bigger all the time. No one benefitted except the nimble speculators, and that's still an issue today." Well, what was still an issue in 1972, when that remark was made, has becoxne the issue in economic policy
today. '

My thesis today can be summed up in a few sentences. We need to bring down inflation and restore price stability, not just for its ' own sake but because lack of confidence in our currency' is incompatible with a productive growing economy. Monetary policy and the Federal Reserve have an indispensable role to play in restoring price stability by slowing growth in money and credit. In the near-term, that process can be painful, given the momentum of inflation and the pressures on financial markets resulting from the inflationary process. The period of transition to more stable prices and sustained growth will be greatly speeded and eased to the extent other policies, public and privatef are brought to bear on the same objectives.

Wars in the Far East were finished. The US had to flee with tail behind our legs. Nixon went to China and literally kissed Mao so we could pull out of Vietnam. The Soviet Union was ascendent. The US fell into this 'whirlpool' of inflation after suddenly cutting off the gold/dollar peg. This was done so the US government could force the people of America to eat inflation. How did this nasty game work?

SIMPLE! All Congress and the Presidents had to do was NEVER INDEX TAXES TO INFLATION. To this day, this is not done! Instead, they 'cut' taxes. THIS IS FAKE. It is a convenient lie. It gives the politicians a free ride, an easy 'goodie' to feed to the masses. The more they go to war and create inflation, the more they can 'cut taxes' because the tax collections go UP due to people demanding more pay to make up for inflation. Government revenues rise and so they can cut taxes and then become very popular. Back in 1974-1980, I used to give speeches about this. 'We should keep Congress and the other people in government NO INFLATION PAY HIKES. This way, they get to suffer along with us! And this will goad them into not creating constant inflation.' Well, they always vote pay hikes for themselves. While they conspire to insure we can't escape inflation.

Volcker in 1981:

The case for "free trade" depends not just on abstract propositions of comparative advantage and long-run increases in national income/ but on the advantages, here and now, reinforcing pressures toward price stability.
*snip*
And most important, we, in the Federal Reserve, need to be convincing in our commitment to monetary and credit restraint. We need to build on the consensus that inflation is at the core of our economic problems — that it is public enemy number one. We need to resist temptations to stimulate the economy through money creation, recognizing that, in the end, faster growth of money and credit will impair performance, not improve it.
*snip*
We have set our course to restrain growth in money and credit. We mean to stick with it.

He certainly did this. The only realistic tool the Fed has to control inflation is to raise interest rates. This forces the government to pay more for debt and encourages them to not vote over the budget. This tool works, as the Chinese can assure us today, only if all the other banks are also raising interest rates, too. For example, in 1981, Japan and Germany both had fairly high interest rates, too. For as today, inflation in the US quickly became a global headache. This is because we are the world's #1 economic force even if it is negative today. Volcker, like Burns and like Greenspan and Bernanke, wanted 'Free Trade' because it made the job of enforcing the erasure of inflation squarely on top of the working class. The workers get cheaper foreign goods but also get pay CUTS. This cuts consumption. Only no one wanted the US worker to stop buying stuff! So a new scheme was cooked up: cheap credit to US workers so they could go deeper and deeper into debt while wages stagnated. The pay off was supposedly the end of inflation. Right!

Only inflation never stopped. It certainly slowed down. But US government overspending never stopped. It accelerated. And something else took off: when we look at any graphs of US trade, the deficits begin when Nixon cut the dollar peg from gold. Then, when the ruling elites convinced everyone that Free Trade would drop prices and fix inflation, it really took off...in 1982. By 1994, when Japan began the Carry Trade nonsense with the near-free money to US speculators and banks, our trade deficit shot upwards catastrophically.

No one who pushed this mess into our laps have been honest about their responsibility for creating this mess! They never will take credit, either. They are all liars. Note that Volcker never mentions going back to the gold standard. Note how Burns lied about the need for the gold standard. Both tried to assure us that the gold standard was old and no good. After all, the US violated it in 1964 when we went to war and refused to pay taxes for this war! Why not just continue doing this? Forever!

This is why the conversation today at most web pages are 'how do I evade this inflation?' The various schemes are put forwards but ALL of them are vulnerable to government fiat and banker manipulations set up to force us to eat the poison of inflation the hard way: by getting much poorer. Either our wages go down. Or our equity vanishes. Or our assets die. Or gold is confiscated or rendered inoperative via high interest rates. One way or another, all avenues of escape will be systematically blocked off as we are herded forwards. It is the only way they can 'fix' inflation. Either that, or they tax us very harshly! See?

They can tax anything at all. Including gold or oil speculators! They will restore balance ruthlessly. But only after securing their political base. The day they can utterly confound voters and detach them from their 'representatives' is when they can do all of this with impunity.

Which takes me to the Supreme Court: they affirmed our right to be ARMED. This was put in the Constitution so the revolutionaries could fight off tyranny. When we lose our other rights including the right to have a voice in Congress, we still have this other right: power, as Mao observed, grows out of the barrel of the gun.

Email this post

Culture of Life News Main Page

Financial Black Holes

June 29th, 2008

Elaine Meinel Supkis

The most interesting thing about this epic meltdown of the US/UK New World Order's empire is how this collapse is exposing so many of the financial and social systems. We get to see the innermost workings of the normally hidden parts of 'capitalism'. Just like the communist push to take over the capitalist systems exposes the gears that make this system operate. Something very bad happened 35 years ago. The US/UK system collapsed and was replaced with the Floating Currency regime. It took a third of a century for all the weaknesses of this system to come to fruition. Today, we visit the older empire: England---to see how this works.

Will Hutton of the Guardian: As we suffer, City speculators are moving in for the kill

A spotlight has been shone on some very murky corners of the financial markets. There practices occur that challenge the very conception of what we consider a company to be, and the accompanying obligations of ownership. A multi-billion pound business has emerged in which shareholders lend their shares to hedge funds to be played with. For a tiny fee, a hedge fund will arrange to borrow shares from a great insurance company or pension fund which it proceeds to sell. Share-loans are believed to exceed a stunning £7.5 trillion.

What then happens is the opposite of a bubble, a kind of financial black hole. The hedge funds sell the shares simultaneously, and the downward movement becomes self-reinforcing, with companies raising money during a rights issue particularly vulnerable. This is why the government forced disclosure. The hedgies reacted as if they were in Stalin's Russia; their freedom to kill a company stone dead was being challenged. Let's not mince words, that is the aim, and it gets ugly and personal. A senior official told me that in one case some hedge funds had allegedly warned the banks underwriting one rights issue to abandon it or face speculative attack - mafia practice.

There have been a series of very good articles in the press which seek to understand these 'dark pools' and other piratical matters in the financial markets. All of these wonderful articles inadvertently use the correct words to describe these things! This both amuses and amazes me. But these articles never go all the way and connect these things to what they really are.

This article is a fine example of the nature of opposites and how money is made from 'darkness' and how very, very tiny things can swell suddenly to very, very giant things when people 'open a portal to the Cave of Wealth and Death.' Let's look at this story through the prism of the Dream World: Why do shareholders lend their shares in the first place? These 'swaps' are now set in stone all over the financial landscape. Whether it be in commodities like gold and oil or in shares or ownership of properties, whatever, this 'game' of swapping stuff so one can own something but not own it at the same time is a great way to open a door to the Cave of Wealth. Namely, when we 'own' something, we are responsible for it from top to bottom. We must care for the things we own. We must protect and treasure what we own.

But we can't always make money off of owning things! Owning things often requires making SACRIFICES to keep owning things! There are LOSSES involved. But for a wise owner, these losses are offset by the ultimate gains of owning properties or slaves or whatever one owns. I would suggest that the history of capitalist banking is all about the transfer of the losses and headaches of ownership from the buyer to the banker who then exploits this to drain the property of all potential value. This is why modern capitalist banking systems create increasing DEBT and not increasing wealth!

By the 19th century, many smart people figured this out. They set out to begin building banking rules and regulations that would hinder this draining of all systems of value via bank lending. These barriers to the total drainage of all wealth via lending were set fairly high. Before 1850, the system set up was called 'debtor's prison.' People went to jail if they were enticed into going too far into debt. Before that, the system was even stranger: no one was allowed to bank at all and only infidels like the Jews could lend money to Christians. The Christians then corrected the system every time all the wealth drained from property and or wages or future tax revenues by the simple expedient of killing and looting the bankers.

England, for example, did this so totally, they expelled all the Jews, even the non-banking Jews. This was a catastrophe since English then had to go to Amsterdam to get loans from the expelled Jews! So bit by bit, the Jewish bankers were let in again.

The English article about this latest scam for making money is a classic. The hedge fund hell hounds came to the insurance company or pension fund [which are basically banks] and claimed that for tiny amount of money paid to these hellish creatures, the doors to infinite wealth would suddenly magically open wide! And through this opening, easy money with no labor would pour into the pockets of the fund managers and the insurers would make money and not worry about paying out damages.

Who can resist this offer? No one works and money is magically pouring in! So of course, they too the bait. How do traps work? They use BAIT. Con jobs are the same: they use this exact same sort of bait. Bait is TINY. It is much smaller than the thing the hunters wish to catch and kill. Bait conceals a HOOK. The hook is the painful part you can't get rid of. The more the victim struggles, the deeper the hook embeds itself.

The insurance companies and pension funds are being drained of all wealth by the hedge funds. They are on the hook and can't get off without bleeding to death. The hedge fund pirates tell these victims that if they disengage this process, they will all die. Note how the drainage of wealth is around $13 trillion. Amazing! This 'market' is gigantic. And it is, lo and behold, part of the hideous Derivatives Beast I keep trying to describe. All the elements of this creature are set up in such a way that if the wealth is drained out of all systems, the Beast suddenly becomes terribly visible! It doesn't take all that much to drain all the wealth out of anything. Namely, all we have to do is put everything into hock.

Will Hutton:

That is probably over the top, but there is a truth there. The price of petrol and the toughness of the credit crunch are being increased by the operation of hedge funds, as is the weakening of your job prospects as companies are forced into ever harsher behaviour. It doesn't have to be like this; the necessary changes in the markets and corporate ownership are fairly easy to make. They would make it harder for some very rich people to get even richer, but in the US and mainland Europe politicians are ready to contemplate that, partly to defend the legitimacy of capitalism itself. Only in Britain is nothing said, a sign, I think, not of our economic maturity, but political emasculation.

See how these poor fish struggle to get off the hook? But they are forced into 'ever harsher behavior.' All systems are forced to fire people, merge with other systems, sell off vital parts, dismember their systems. All the temptations of easy money if only they play various dark and mysterious games end up being the gutting of the organization that foolishly gives up control to outsiders whose sole goal is to enrich themselves as much as possible. The entire concept of 'hedging' is from the betting world: so that one doesn't lose one's own money, one plays games that insures one always wins. Casinos hedge all their bets this way so that they make a profit all the time no matter how much money is won by some players.

Stopping hedge funds from doing all of this is very important and stopping them is the only way to save our banking system and capitalism itself. But there are no rules or regulations that will work and not be circumvented if the fundamental basis of all banking is based on a hedging fraud called 'Floating Currencies' that are semi-controlled by central bankers who play all sorts of games trying to create free Funny Money™.

At least this writer in Britain understands that the very concept of capitalism is at stake here. And he understands that this whole business was a fraud designed to steal wealth.

The Independent: Buyouts plunge by 82% in wake of crunch

Private equity deals have continued to dry up in the wake of the credit crunch, with the value of buyouts worldwide tumbling to a four-year low during the last quarter.

Global buyouts plunged to $62.1bn between April and June, down 83 per cent on the corresponding period in 2007, according to data provider Thomson Reuters. The decline marks the end of six years of growth.

Private equity groups thrived in the recent debt boom, buying companies and loading them up with debt to create instant returns. The British Venture Capital Association, the industry trade body, released a report yesterday that showed UK based private equity firms had invested £31.6bn last year, up from £21.9bn the previous year.

Here is yet another British article that sees the truth! The private equity groups boomed because they were frantically forcing every possible business on earth to load up with massive amounts of debt! This 'created instant returns'. Namely, the loans put on all businesses generated fat fees for the private equity groups. They, in turn, were in debt, too. In debt to the central bankers of Japan. As well as the sovereign wealth fund managers in the oil pumping nations. And those poor insurance and pension funds in the earlier story here.

Remember last summer? The Japanese carry trade collapsed suddenly. The US, EU and UK bankers went berserk. 'We need MORE LIQUIDITY', they yelled. The central banks worked hard to restart the wild build up of debt. Instead of seeing that we reached the point where debt could not suck out more wealth from systems, instead, the desire was for all of this to continue. The desire is for all systems to be over 100% in debt! The buyouts are still ridiculously high, by the way. Adding 'only' $62 billion a year is still unsupportable. This is going on only because there is still a few places on earth where all things are not totally, hopelessly deep in debt.

The Independent: UK savings rate sinks to 49-year low as growth falters

Britons are saving less money each month than at any time since 1959, the Office for National Statistics said yesterday, as it warned that economic growth was faltering.

The ONS said UK households saved just 1.1 per cent of their income during the first quarter of the year, the lowest figure since the end of 1959. The statistics suggest the fall-off in savings has been very rapid, with the ratio falling from 3 per cent in the final quarter of last year and 6.3 per cent in the summer of 2006.

Like the US, the UK is seeing a huge loss of future wealth. Savings is collapsing even as the economy is shrinking. Let's back up a tad and look at the entire excuse for the central bankers to set interest rates: they supposedly set rates to prevent bubbles which then burst and cause depressions, etc. One tool for doing this is to attract money away from SPECULATIVE ventures and into SAVINGS. Speculative ventures in tulips or railroads or canals or Mississippi shares in the past caused tremendous bubbles to pop and destroyed whole governments, nations and industries. To prevent this, the wise bankers were supposed to take note of manias and strange financial schemes that involved too many debts and too many shares being sold and stop this via the nifty tool of raising the interest rates of the central bank and thus, the central banks ATTRACTS all the money and it comes back to the bank to be isolated and controlled!

This never happened of course. The central bankers are under tremendous political pressure to encourage bubbles and keep them alive as long as humanly possible. Besides, the first central banks like the one in England and France were set up by the rulers to create more loans for WARS! Within a year of the US central bank being launched, it was used to fund the English side of WWI, just for example.

Washington Post: Even in a Weak Economy, Some Shoppers' Compulsive Habits Can Take Over Their Lives

Shannon Hassemer went on a shopping spree when she got her first credit card in college. Tired of owning just one pair of tennis shoes, she quickly filled her closet with luxury items from designers such as Gucci, Coach and Louis Vuitton.

"I wanted to fit in," she said. "I was tired of looking like a boy."

It was a boost to her self-esteem, which she describes as particularly low. Over the years, shopping became a source of comfort. It was a daily habit. When she had children, she started buying them expensive clothing. Now at 36, shopping has become a source of pain. She has enrolled in a debt-consolidation program to pay down the $35,000 she owes on her credit cards, and she is getting therapy once a week.

Nearly all the sob stories about people in debt feature reckless life choices. If the credit is offered, people grab the bait and bite the hook. The more they struggle, the worse it gets. We live in this huge propaganda system begging us to buy now, pay later. The Christmas shopping mania which was launched a mere 100 years ago is now totally out of control. The entire economic system is geared to shoving everyone into this mad buying spree for a one day birthday party of a human god that has become totally unreligious. Indeed, a number of Christian cults are beginning to demand this Xmas mania cease. They hope to cut back on the celebration of buying stuff. And for good reason. It is totally Unchristian.

On one's uppers! Down to her last £320m, a Palace official complains that the Queen has to 'patch and mend'

The Daily Mail: The Queen is said to be furious at being forced to live a 'patch and mend' existence as her palaces crumble around her.

Aides say the rising cost of living means she cannot pay for long-overdue redecorating and rewiring in the state rooms at Buckingham Palace and Windsor Castle.

They have not been painted since she came to the throne 56 years ago and the electrics at the palace are untouched since 1948.

The queen has an easy solution for all her palaces: move out. Obviously, she can't afford to live there. I once lived in a mansion. It was a huge headache! Too much work. Too much money spent on repairs and upgrades! The Queen doesn't have to live in a palace. She is a human just like us. She can live like us in a normal house. Or maybe a doublewide trailer.

The Telegraph: Taxpayers left with £40m bill to fund royals last year

The Queen's case for increased funding was partly undermined by some of the eye-catching travel expenses racked up by Prince Charles. Accounts show that the Caribbean cruise last year enjoyed by the Prince and the Duchess of Cornwall cost the taxpayer £275,000, of which £210,000 went on chartering a yacht. It cost taxpayers a further £18,916 for Prince Charles to visit the Black Swan Pub, in Cumbria, on a trip intended to highlight the importance of rural communities.

The total spent on royal travel rose to £6.2m up by £600,000 from last year. On the Queen's state visit to America last year to celebrate the 400th anniversary of the Jamestown settlement a plane was chartered at a cost of £381,813.

And it cost nearly £800,000 to send the Duke of York to several foreign destinations, including Rio de Janeiro, Miami, Tokyo and Kuala Lumpur, as the UK's Special Representative for International Trade and Investment.
*snip*
[examples]
£40,513

Cost of Prince Charles' use of the Royal Train on visit to Liverpool and Aberdeen on official engagements, April 22- 24, 2007

£700,000

Garden parties

This article shows that the Queen throws garden parties that are very expensive. When her trailer trash children lark about the place they travel very expensively. $70,000 to go to Liverpool? HAHAHA. Right! The Prince of Wails could go via coach by himself and carry his own luggage! US Presidents cost a pretty penny when they travel, too. They have to have snipers, soldiers, first class accommodations, an army of paper pushers, hanger-ons, servants and political advisors tagging along, too. This puts them in this bubble whereby they lose touch totally with real people and our real problems.

Alt-A Performance Gets Much Worse in May

The picture being painted for Alt-A is increasingly beginning to look a whole lot like subprime, as a result, even if peaking resets in the loan class aren’t expected until the middle of next year. In particular, loss severity continues to ratchet upward — a trend that portends some likely further reassessment of rating models at each of the major credit rating agencies, as they catch up with the data.

Loss severity — the average amount lost relative to unpaid principal balance — reached 41.4 percent for all Alt-A first liens in REO during the most recent rolling six month period through May, Clayton said; that was up from a 37.6 percent rolling average one month earlier, and compares to a similar 49 percent loss severity average for subprime first liens liquidated in REO through May.

Since all the value of housing has been leeched out of the real estate markets by the simple fact that most of it is now deep in debt, the wealth inherent within owning land has pretty much vanished. And now people must default. It is obvious from day one, this will only get worse and worse. For it began collapsing back when there was still pretty good employment. Now that we go into the inevitable recession, employment is suffering. Since debt is lodged not against the property but FUTURE EARNINGS, as people give up on their assets that backed these loans, job losses are making this infinitely worse. The cheapest interest rates on earth are meaningless if the loans can't be paid at all due to loss of employment. The only route out is for the unemployed to sell their homes. And this is hard to do in recessions!

So this system of paying in the future is collapsing. It will continue until enough debt has been retired via bankruptcy so the system can restart again.

China's forex reserves hit 1.8 trillion dollars

(AFP) - China's foreign exchange reserves, by far the largest in the world, hit 1.80 trillion dollars at the end of May, state media reported Friday.

The figure represents an increase of 40.3 billion dollars for the month, down from 74.5 billion dollars recorded in the previous month, the China Securities Journal reported.

China is holding more and more money for the West. The Chinese are trying to change the dynamics so they don't end up soaking up all the debts being generated by the West. The yen ceased getting weaker against the dollar and the euro. This might help. But I expect howls of rage in the West as the guys creating more and more debts are stopped due to lack of the carry trade business.

Email this post

Culture of Life News Main Page

There Are No Antiwar Candidates

6/28/2008

Elaine Meinel Supkis

Ron Paul gives a speech that nearly says all the dangerous things I harp on here at Culture of Life News. But as usual, Ron Paul stops short of doing the next step: resigning from the GOP and running an anti-war campaign for President! All the news in the world is about how both Russia and China are leaping forwards in their diplomatic and economic programs. OPEC refuses to bail us out of our own mess we created when Bush and the Europeans joined hands in menacing Iran and boycotting Iranian oil. So we pay through the nose for this. And Bin Laden's strategy of bankrupting the US continues and will totally succeed. And the Arabs know this and they are joining Russia and China in this enterprise.

Ron Paul in Congress on June 26, 2008, talking like we talk here!

Like Saunders of Vermont or Lieberman for that matter, Ron Paul should quit his party. He can vote with them whenever he wishes. His run for nomination in that party was an utter failure. He did bring in a host of new members to the Republicans who are not staying in the party. They joined only to support him. When he gave in to the media and the party leaders denying him and his supporters a voice or honest representation in the news, he should have packed his bags and departed. Instead, he remains but a gadfly that nips at the elephant who totally ignores him.

As a black sheep outsider, I found that being free of obligations to please people who are determined to go in the wrong direction is useful. One can tell the truth! Ron is trying to tell the truth. But it is worthless if it leads to no actions. In my case, my wings are very much clipped by the total 'Cone of Silence' that has fallen on me ever since Turner sold CNN. Bereft of even a small voice, I lurk online and pile up a historic record of what went wrong and why it went wrong. Ron Paul, on the other hand, built up a national movement that was about to take off when he strangled it in the crib so he could be buddies with a bunch of traitors!

I am willing to fight my own parents all the way down the line and Ron can't resist being the clown of the Republican Party? Good grief. He was handed this wonderful, historic moment to turn the conversation away from 'Bomb, bomb, bomb Iraq'. Obama would still be antiwar if Ron Paul were running. Since voters have zero choices now, Obama ran off to AIPAC to declare loyalty to the Jewish ethnic cleansing project even if this destroys America and re-enslaves all blacks here. For if ethnic cleansing is OK in the Holy Land and endorsed by 'God' then why not here?

So Obama betrayed his own race as well as America. McCain is a total traitor. Hillary's power base is 100% AIPAC. The last three choices become AIPAC #1, AIPAC #2 and AIPAC #3. If there were competition for the 65% of American voters who are sick and tired of spending trillions trying to militarily control the seething billions of angry Muslims, Obama would have the opportunity to be antiwar. But the mass of US voters now have absolutely no choices at all. All candidates are still trying to outgun each other's support of Israeli Jewish ethnic cleansing and nuclear domination of the Middle East. This is why Congress is silent about the connection of high oil prices to the Iran boycott.

Ron Paul isn't silent! But he doesn't go that one step further! I will write his next speech and ask this to be delivered to his Dream World: 'I cannot any longer tolerate the betrayal of the American People. Congress is working in tandem with the owners of the media most of whom are Zionists intent on sacrificing this great nation on the Altar of the Apocalypse. If oil goes up to $200 a barrel due to the misdirected Iran boycotts and the saber rattling aimed at Iran, the US economy will collapse along with world trade! This is an unacceptable price to pay! And with no debate!

Thanks to the media which supports Zionism before patriotism, this information is kept from the American People. This speech will not be in the news. At all costs, the news that Zionism is directly responsible for high oil prices, must be kept secret. But the people are being stripped of all savings and thrown into the streets to die! The American people will freeze to death this winter and have no idea, this is due to the Iran oil boycott imposed by the US at the behest of Israel's leaders!

I am dedicating my life to informing the US citizens of this fact! I have enough money from my campaign funds to tour the US and tell the truth! Even if the media refuses and my fellow Congress representatives refuse to let me be heard, I will still speak! I no longer fear death. I will tell the truth about the wars and how these wars are bankrupting us. And how the high oil prices from these wars are bankrupting us. And how Zionism has replaced patriotism in the Halls of Congress! For the US Congress no longer responds to the People's Will. Congress is owned by lobbyists of all types! Including a powerful lobby that has realigned the natural feelings of patriotism from focused on the US to focused on Israeli Jewish dreams of dominating the Middle East using military power.'

Then he tours the nation on a 'New Patriotism Platform' and this will explode in both Obama's and McCain's faces. It will FORCE THE ISSUES! But Ron, although bitter in this latest address to an empty House, is not ready to sacrifice himself for the truth. The pain is too great, he got right to the edge and then surrendered.

If I can live in a tent for ten years out of pure stubbornness, he can do the same! This is the difference between weakness and will power. Ron Paul has sparked a fire which he dampened himself because he was afraid. He is all hot and bothered about abortions?

Well, killing living babies is always far, far worse! Even the Bible recognizes this stark fact! Fetuses are not baptized. Infants are. Clinging to the GOP because of abortion issues is stupid when the GOP is preparing us to be destroyed economically and militarily. When the US goes bankrupt, we are naked to the world that hates us. Even our allies hate us. They want us close only because we protect them for free from neighbors who hate them even more thanks to WWI and WWII. They want us close only so they can destroy our industrial base and buy us up and make us economic slaves. They don't want to FIX America! They want to CONTINUE THE BROKEN AMERICA! And the Europeans and Japanese love the fact that they get all the benefits if imperialism while not gaining all the HATE that comes from imperial progression.

So Ron Paul drops the sword and fades into the past. Unable to face the truth about where we are heading, even though he can plainly see it, he thinks his wretched family will do what in the future? Cower in a cave? Hide in a hole in the ground? Learn Spanish? Flee? This is the choice! The future is worse than his fears of losing friends today!

Opec shuns calls to produce more

Opec president Chakib Khelil has said the cartel of oil producing nations is pumping enough output, and that high prices are down to other factors.
He put the current price rises down to other factors outside Opec control, such as US pressure on Iran and the weak US dollar.

The Chinese, Russians and Muslim overlords all have one goal: to suck out all the wealth of the US and drive us into bankruptcy! Period. This is about as obvious as anything on earth which is why the media never talks about it. To sucker the US into Zionist support, the media lies about this just like they lie about economics or history! When at war and we are very much at war with the Muslims world wide, we have to understand the STRATEGY of our opponents. Just as trade is war, we must understand what the leaders of Japan and Germany really think about WWII. The Japanese, by visiting the War Shrine openly, slapped us in the face and told us very clearly, they still remember and want revenge. The Chinese slapped them down for this and note how they are energetically working with the Chinese now to define their relationships and borders! The Japanese are still slapping the Americans in the face over WWII. For example, they are suing us in court over Hiroshima but won't pay a penny to the civilians and soldiers they enslaved during WWII.

The strategy of the Muslims is obvious because Bin Laden thoughtfully made a video about all this and explained how 9/11 was conceived as a means to lure the US into Afghanistan where we would go bankrupt. Bin Laden's revolution, far from ending, is actually morphing and expanding. It is sucking in the rich rulers of the Middle East. His strategy is now their strategy. They whipsaw the West with promises of more oil then yank this away and watch the hysteria and despair. When the US demands Iran's oil be cut out of world markets, they joyously agree. They want no war, they want BOYCOTTS. They have enough wealth accumulated, they can even be the source of an oil boycott.

Think this will never happen? HA! It can and is frankly, inevitable. This is why, despite high prices, the US military and government are both hoarding oil like mad! The US public will eat dirt, of course. And the US government has refused to retrofit us with alternative energy for when this next obvious event happens. We have known this since 1974. And refused to change course. Now, it is truly very late in the game. The US is more, not less, dependent upon the Saudi Kings not boycotting us over the issue of the Threshing Floor in Jerusalem where King David stopped the Angel of Death! He wants this thing in his own hands. He has to want it or he loses legitimacy! So we have to take all of this very seriously. This week, the AIPAC addled candidates for President have endorsed total Jewish ownership of Jerusalem including this terrifying threshing floor! The push to destroy us economically has grown astronomically.

BBD: Russians and EU to seek new pact

Russia's President Dmitry Medvedev and top EU officials have announced the start of talks on a new strategic partnership agreement.

The start of negotiations has been long delayed, amid strained ties under Mr Medvedev's predecessor, Vladimir Putin. But, at a meeting with EU officials in the Siberian city of Khanty-Mansiysk, Mr Medvedev said he was looking for a "new impulse" to relations with the EU. The talks will formally begin on 4 July in Brussels, he said.

They will primarily focus on trade - Russia is the EU's third biggest trading partner and half of all Russian exports go to the EU.

Russia is very intent on controlling Europe. They must. If we go to You Tube and type in the names of great battles triggered by European invasions of Russia, we can clearly see why. France, Germany, England: the great empires all invade Russia in sneak attacks. Russia has suffered tremendously from this! When Russia invaded Europe in retaliation for Germany invading Russia, they were far, far kinder than the Europeans were when they invaded Russia! We forget this important fact. Russia has not forgotten.

Russia is letting Europe know that they have only two choices: they can cling to the dying American empire which depends on Middle Eastern oil flowing or they can choose Russia who has the oil and gas flowing to Europe already. The Europeans dearly would love to triangulate in this matter. But they are supporting Zionism very heavily! So each hour they do this, they are in the cross hairs of the Muslim strategy of bankrupting all nations who support Zionism. They know all this! But can't help themselves because it is illegal to write about it, read about it or talk about this in Europe! People are put in prison if they discuss this.

Russian FM: Russia's nuclear cooperation with Iran based on int'l laws

The Russian Foreign Ministry referring to the news on survey over a Bill on halting US-Russia peaceful nuclear cooperation at the US Congress due to Moscow's nuclear cooperation with Iran, argues that Washington's accusations against Russia are totally baseless.

Russian Federation's peaceful nuclear cooperation agreement with the United States is devised in a way to serve the interests of both countries, adding, "Neither side should therefore be seeking to punish the other side for any excuse, whatsoever."

Russia's nuclear cooperation agreement with United States that was signed in early May, 2008, was forwarded to the US Congress a few days later by the US President for confirmation.

Russia is writing its own rules here. North Korea surrendered to CHINA over the nuclear matter when China decided to take things in hand. The end of the NK nuclear program is hailed in America as an American success. It was NOT. It was China showing real power. Japan knows this! In Japan, the end of NK menacing Japan was due to CHINA and the Japanese are rewarding China for this. The diplomatic relations between the two Asian giants has shot forwards. Increasingly, they will be in alliance. Japan can reject this and watch China ally itself with Russia! Or they can move closer to the Chinese. I am betting they are moving closer to China.

U.S. Settles Scientist's Lawsuit in Anthrax Scare for $5.85 Million

The Justice Department signed a $5.85 million settlement today with Steven J. Hatfill, the former Defense Department scientist who sued the government five years ago over the disclosure of his name in connection with a nationwide anthrax scare.

The agreement ends an arduous legal saga. It ensnared federal investigators and several news organizations which published Hatfill's name after then-Attorney General John D. Ashcroft labeled him a "person of interest" in the law enforcement investigation of mailed anthrax powder that killed five people shortly after the Sept. 11, 2001 terrorist attacks.
*snip*
Roehrkasse said the investigation into the anthrax mailings, which also sickened more than a dozen people, "remains among the department's highest law enforcement priorities."

The anthrax assassin is never mentioned in the news. The Cone of Silence over him is nearly as total as the one that covers me! I am amazed by this. But then, we are both creatures of the dark side of the CIA. The American people are supposed to forget this episode. To all the 'bombs in the WTC' people: NOTE THAT YOU ARE NOT WORRIED ABOUT THIS! The DARPA/CIA misinformation crew wants you guys to forget about this little matter! They tried to fake things and frame this poor man, Hatfill. So, shouldn't we all be immensely annoyed that professional assassins with access to the most restricted and may I add, ILLEGAL bio-weapons is STILL RUNNING LOOSE?????? Gads. He can kill whoever he wants! And for all we know, is hard at work today!

Scientists calculate the exact date of the Trojan horse using eclipse in Homer

Scientists have calculated that the horse was used in 1188 BC, ten years before Homer in his Odyssey describes the return of a warrior to his wife on the day the "sun is blotted out of the sky".
*snip*
Now Marcelo Magnasco, head of the Laboratory of Mathematical Physics at Rockefeller University, New York, and Constantino Baikouzis of the Proyecto Observatorio at the Observatorio Astronómico in La Plata, Argentina, report in the Proceedings of the National Academy of Sciences that they have traced the eclipse to April 16, 1178.

"Not only is this corroborative evidence that this date might be something important," Magnasco says, "but if we take it as a given that the death of the suitors happened on this particular eclipse date, then everything else described in The Odyssey happens exactly as is described."

An ancient war that troubled me in my youth. 'How could they fight for 9 years?' I asked. Then I learned of the 30 Years War and the 100 Years War and the Crusades. Oh! People can fight for decades without batting an eyelash! The Cold war was only 10 years old when I asked this vital question. Troy was the tail end of the Minoan civilization. The Minoans were an amazing pinnacle of civilization. The explosion of the island Thera and the following tsunamis destroyed not only the Minoan empire but many of the cities surrounding the Mediterranean Sea. The waves rushed all the way to Spain and back again! It was probably worse than the ones we saw a few years ago with the Boxing Day Quake.

This sentence got my eye:

However, findings rely on a major assumption: Although the association of planets with gods, such as Mercury, was a Babylonian invention that dates back to around 1000 BC, there's no evidence that those ideas had reached Greece by the time Homer was writing, several hundred years later.

The understanding of the Stars of the Zodiac as well as all the other constellations is tremendously ancient. These were launched during the Ice Ages! This information predates civilization by thousands of years! The Babylonians didn't 'invent' the business of gods being planets! Nor did they invent the Zodiac! The Zodiac was ancient when the first city-state, the first Pharaoh was born! The gods in Homer's epic are the gods of the Age of Aries. But the battle was from the end of the Age of Taurus. Minos was Taurian. Greece was the Sheep.

Which takes us to today: the Israeli tribal warfare took off when the tsunami destroyed the Caanan culture! Shepherds invaded the rich lands of the Holy Land. The battles of the gods mirrored the wrenching changes on earth! The seeds for today's mischief lies in this matter: the changing of the Zodiacal stars that rise in the East on the Vernal Equinox shifts and over time, the wrong stars rise. This always, always, always causes violent religious contentions! Which lie at the heart of the business today in the Middle East, the business that is bankrupting the US. And driving us into WWIII.

Email this post

Culture of Life News Main Page

Bernanke Wants Inflation

June 27, 2008

Elaine Meinel Supkis

People are buying gold again while the brutal bidding war for oil continues as saber rattling wrecks world oil markets. The Concert of Nations after WWII is collapsing rapidly. Our allies are increasingly fearful and agitated that the US will not only stop buying their manufactured goods but also maybe end up like the Soviet Union and leave Europe and Japan alone to face the full fury of Russia and China when we go bankrupt. 'Fix the DOLLAR!' the G7 dwarves shriek at old Grumpy. But he can't fix the dollar. For it is weak because our trade and budget deficits are immensely in the red. Libra is balancing Her scales in preparation for October, the month She usually delivers Very Bad News.

First, we go back in time to the end of August, 2007, a mere year ago:

The stock market hit a record that month. Then it began its wretched collapse. Wall Street was flipping out. Cramer, one of the stupidest pundits on TV for Wall Street's news stories was running about shrieking, 'There will be BLOOD in the streets!' and when the Fed began the hysterical rate drops, this old cartoon of mine expressed Wall Street's true feelings: bratty, nasty, greedy and stupid.

From 9/27/2009, I wrote this 'Super-rich Brats Complain About A Cheap Bernanke Santa:

After deliriously rising on the news that the big housing developers managed to sell new houses last month without inquiring as to how they did this deed, the markets are now in danger of fainting away due to the very bad news that existing housing is collapsing in value and sales. And the happiness in Japan will also vanish as they contemplate the possibility their number one chumps, the US, will go under. And everyone wonders if the magician, Bernanke, can pull a hell hound out of his hat instead of a skunk.

I'm angry that the goofs who run our media and our government both adamantly refuse to admit the big boom/bubble built by Greenspan in 2002 with his fake 1% interest rates has collapsed. It fell apart way back in late 2005, for crying out loud! The remaining sectors collapsed one by one over the last 2 years. As the Fed and the investing classes frantically built new financial structures or designed new hedges or new dikes and barriers, they all fell down. So now the bankers and the top officials running the world's economies...oh, leaving out China, of course....are all frantically trying to use backhoes and bulldozers pushing huge mountains, historically huge mountains of money in a frantic attempt to turn the tide.

Now there are stories of various kings and princes trying to order the tide to turn. Even small children know what happens next. Also, the Little Dutch Boy who stopped the ocean from topping the dykes in Holland probably drowned. As a preson who has done lots and lots of drainage work, the nature of bad floods is, they weaken the ground under the dams and then the dam collapses. So shoving more dirt on top does nothing if the rain is coming down harder and harder, the winds are blowing harder and harder and it is a full moon.

The collapse of the unnecessary and stupid Greenspan free money/no money down game is ENDING. Period. There is no trick that can bring this back. None. It is finished because the US no longer saves money and is deep in debt. Going deeper into debt will make things much, much worse. Like trading a Catagory 5 hurricane for a Catagory 9.5 earthquake! Or Yellowstone blowing up.

Back then, all our media and our political leaders except for Ron Paul and Kucinich, were all yelling that all was well. The summer's problems were limited to a handful of fretful home owners unable to pay their bills. No one mentioned the end of the Japanese carry trade. No one mentioned the host of serious imbalances that were now literally forcing their way to the head of the line. All the red ink that flowed over huge debts rang up by America began to clot like blood and the international banking system of the G7 nations EXCEPT for Japan had a collective heart attack.

My blog in 2007:

It is official. Our rulers want inflation. Lots of inflation so long as they get richer. They need inflation so we will get inflation. This is how all dead beats pay off their creditors and our creditors are in Asia and the biggest is this very angry dragon which is nearly totally fed up with us. Great. Also, inflation kills workers and the retirees. Just in time for us baby boomers! Whoopee. Since the Fed lies about inflation already, they will make the lies bigger and like Japan, pretend there is no inflation. This is going to be fun, no? One thing is certain. Our houses will no longer protect us from inflation. But our rulers don't care.

They can't feel OUR pain.

Europe is frantically trying to stop inflation. The US central bankers are focused entirely on creating maximum inflation which they hope will super-burn the world's excess dollars we sent out for so many years as US Treasuries and US trade deficits. This is why Bernanke is fiddling like Nero while Rome burns. This is deliberate and malicious. Congress isn't howling about inflation. They are one of the major causes! They just voted even more military spending, just for example. The purse is still very much wide open. They hope to spend like fiends as inflation burns up the currency. They don't care. The President just handed out $160 billion in 'stimulus' and this is money we don't have, it is new Funny Money™. The TV babblers and the mainstream writers all are saying this is a good thing and not a super-inflationary thing.

When Central Bankers Clash, Stock Markets Can Crash

Gary Dorsch

Hyper-inflation in the commodities markets is rivaling the US housing collapse and the global banking crisis as the biggest threat to the world economy. Finance ministers from the United States, Canada, Japan, France, Germany, Italy, Britain, and Russia, have expressed their alarm over the doubling of agricultural, energy, and key raw material prices from a year ago, which is pushing inflation rates around the world, to their highest in three decades.

Sort of like in the movie, Casa Blanca [White House---HAHAHA]: 'I'm SHOCKED, just shocked to find gambling going on in here!' Well, they are all saying, 'Oh my! Where did this inflation come from? Not I!' Each in turn, points to...CHINA! Yes, the darn Chinese, by consuming resources, working hard and manufacturing stuff, they are the cause. Not the guys producing the oceans of red ink. The bankers making money out of thin air are not the cause, there is a global savings GLUT! Yes! Right!

Har. These gnomes are shameless. Also, is Russia expressing alarm over the hikes in energy prices? Are we nuts? They love this! They can barely hide their glee. Germany and France want to kill inflation. But this means driving a golden stake through the hearts of the US Federal Reserve and the Bank of Japan. No one is going to even push a pin there, much less drive a stake. So this outrage is totally fake. And they know it. Look at their faces, listen to their voices. Are they alarmed? Are they threatening a trade war if the US or Japan won't change their banking policies? Do they even talk about these policies? No? NO!

Barclays warns of a financial storm as Federal Reserve's credibility crumbles

US central bank accused of unleashing an inflation shock that will rock financial markets, reports Ambrose Evans-Pritchard

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero".

The grim verdict on Ben Bernanke's Fed was underscored by the markets yesterday as the dollar fell against the euro following the bank's dovish policy statement on Wednesday.

Traders said the Fed seemed to be rowing back from rate rises. The effect was to propel oil to $138 a barrel, confirming its role as a sort of "anti-dollar" and as a market reproach to Washington's easy-money policies.

The Fed's stimulus is being transmitted to the 45-odd countries linked to the dollar around world. The result is surging commodity prices. Global inflation has jumped from 3.2pc to 5pc over the last year.

Europe and Japan don't want to kill the dollar. They want to prop up the dollar. The dollar MUST die because the US has too big a trade and budget deficit. It is that simple. And interest rates are much too low. Bad combo. Any other nation doing this would die instantly, long ago. But not the US. Everyone sells to us and intend to keep on selling to us. Eventually, as the US drought horse falls to its knees in the traces and collapses, all the dollars sent about the planet will be worthless. This is the plan, by the way. The fix is in: the dollar will be made worthless and our rulers who don't hold dollars, will have their offshore or Swiss bank accounts filled with paintings by dead masters or jewels or stocks and bonds of other nations as well as oil futures, etc. They will have their wealth and we will be left holding the bag.

Indeed, when I talked with officials about the Chinese plan to buy us out, the common response was, 'So what? We devalue the dollar and declare bankruptcy.' What a plan. It won't hurt them, it will destroy the US middle class, the working class and others, not the top 1%. So this plan is virtuous as far as they are concerned. This is probably why everyone holding US trade and debt dollars are buying up commodity resources across the planet.

The Shrinking Influence of the US Federal Reserve

By Gabor Steingart in Washington

The United States Federal Reserve Bank, or Fed, seems as much a part of America as Coca-Cola or Pizza Hut. But at least one difference has become apparent in recent days. While the pizza chain and soft-drink maker are likely to expand their scope of influence in the age of globalization, the US central bank is finding that its power is shrinking.

Nowadays purchasing power exceeds purchasing opportunity. Most of all, there is not enough oil, and too few raw materials and food products. These increasingly scarce resources are becoming the focus of disputes among many people and billions of dollars are at stake.
*snip*
As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.

Under its bylaws, the IMF is charged with the supervision of the international monetary system. Roughly two-thirds of IMF members -- but never the United States -- have already endured this painful procedure.
For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush's last year in office, but it may not be completed until he has left the White House. This is bad news for the Fed chairman.

The US is buying time. The IMF can't see the papers that clearly show we are bankrupt already. Anyone looking at the Federal Reserve FRED graphs can plainly see, we are up to our necks in deep doo-doo already. The IMF knows this. They also know that for years, while the US violated all the rules, the IMF ignored these infractions. While lecturing third world nations about inflation and going into debt and trade deficits, England and the US were allowed to do exactly that, 10X worse. All the bankers who aren't total idiots already know the deal is done. There is little they can do to stop this mess. And they can't admit they desperately want this mess to continue forever.

And so here we are: wanting infinity and unable to accept reality.

Dodd, Shelby Warn Fed, SEC on Rushing Securities Deal

(Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke and Securities and Exchange Commission Chairman Christopher Cox were ordered by two top senators not to proceed with a deal overseeing Wall Street until consulting with Congress.

``We ask that no action'' be taken before legislators can decide it's in the economy's ``best interests,'' Connecticut Democrat Christopher Dodd and Alabama Republican Richard Shelby, the Senate Banking Committee's top lawmakers, said in a letter to Bernanke, Cox and Treasury Secretary Henry Paulson.

Dear Mr. Corrupt Campaign Money Dodd: the economy has not been run in any 'best interest' most of my life. You, dear Herr Senator Dummkopf, are PART OF THE PROBLEM. You, mein Herr, voted again and again and again to run over the budget! You voted endless war money like there is no tomorrow. You didn't stop the Fed when Greenspan dropped rates to 1%. Indeed, in the Senate, some of you were weeping when that evil magician retired. 'We should make a cut out of you and prop it up in the Chairmanship of the Fed so the good times can keep on rolling,' someone sort of said. I can't quite remember. But everyone adored Greenspan except for a few of us outsiders and Ron Paul. You guys loved the cheap lending. Just loved it. In your case, you asked Mozila of Countrywide for a special, low interest deal!

LSE and Lehman start European dark pool platform

(Reuters) - The London Stock Exchange (LSE.L: Quote, Profile, Research, Stock Buzz) plans to set up a pan-European, off-bourse trading platform with Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz), the groups said, to fend off start-up rivals hurting LSE's business.

The joint venture called Baikal would offer access to securities across 14 European countries in a so-called dark liquidity trading pool that also offered algorithmic, or computer-driven, trading functions.

"Baikal aims to address the growing complexity of order execution (...) by allowing (...) participants to trade larger orders in a trusted environment, thereby minimizing market impact," the groups said on Thursday.
*snip*
The move comes a day after Project Turquoise, an alternative European cash equities trading platform established by a group of big investment banks, said it would go live on August 18.
*snip*
Rising dissatisfaction from hedge funds with traditional stock exchanges and the European Union's new MiFID market abuse regulation have sparked the birth of an entire generation of alternative trading venues.

Golly. Just what we need. A deep, dark pool of FUNNY MONEY™ that comes from...well, Tokyo. Let's be frank: there are no risky investors dying to dive into dark, uncontrolled pools that they can't see the bottom. So this money will be an effort to find 10% of real money and then go off to Japan for carry trade lending. As the regulators try to stop this terrible flood of lending to speculators, Japan merrily gives them more and more. As hedge funds, investment banks and others are scrutinized by the authorities, the Real Rulers move everything ever deeper into the Cave of Death. Hissing with fury, they fend of real accounting. Hell, they hate accountants! They want people to trust them while they never balance the books. Simply put, money will flow in and then flow into their pockets.

And getting rich by having computers exploit weaknesses inherent within the Floating Currency system? HAHAHA. This is the CAUSE of our banking collapse! Do we need more of this destabilizing magic number crunching done by robots? More sorcerer's apprentices making their brooms carry buckets of water?

Investor accuses hedge fund of siphoning off money

An investor has sued a Greenwich hedge fund management firm, accusing its operators of siphoning off money and enriching themselves at the expense of investors.

Westerly Capital sued Windmill Management LLC, manager of SageCrest hedge fund, and operators Alan and Philip Milton and Richard Weyand in Stamford Superior Court earlier this month.

It is demanding an accounting of money that has been lost and accuses the operators of Windmill of overvaluing fund assets "in furtherance of a scheme and/or course of conduct designed to personally enrich themselves even if this proved detrimental to the fund and its investors."

Everyone is going to be sued in the end. Most of these people are outright criminals. Arrest all of them including the corrupt Congress people who destroyed our budget, our President who misspent money on oil wars which caused oil to shoot up in price, arrest the central bankers for lying about inflation. Arrest everyone. We need to use half of Cuba for the prisoners. Aw, just hand them over to the Chinese communists and Castro.

Private Equity Can Save the Banks

Over the past 20 years, private equity firms have demonstrated the ability to shoulder risk and to improve the efficiency and profitability of the companies they invest in. They are exactly the kind of investors we should attract to the financial-services industry. Restrictions and disincentives, however, dramatically and unnecessarily reduce the pool of capital available to the industry. In addition to increasing the industry's cost of capital, these limitations increase the risk that taxpayers will ultimately be called on to assume some of these burdens.

Recapitalizing troubled financial institutions in times of stress is particularly difficult due to the lack of transparency available to traditional sources of capital – namely, public markets. The financial disclosure available to public investors, while perfectly adequate in normal times, is insufficient to comfort investors in times of stress and price volatility. Furthermore, the extent to which the industry overleveraged in the years leading to this bubble has made it susceptible to rapid and breathtaking deteriorations in value, as was recently the case with Bear Stearns.

This article is totally demented. It is so full of lies, it sank to the bottom of the toilet bowl and got flushed. These pirates and con artists are 'exactly the kind of investors we should attract'???? Like feeding cockroaches or vultures? The author of this mess does admit there is a slight problem about 'disclosures' which is all about deep, dark, dank pools connected to the Outer Darkness and the Cave of Death.

Fortis Scraps $2 Billion Payout, Sells Shares, Assets

(Bloomberg) -- Fortis, part of the group that bought ABN Amro Holding NV last year in the biggest banking takeover, scrapped a 1.3 billion-euro ($2 billion) cash dividend and will sell shares and assets as the earnings outlook deteriorates.

Fortis dropped as much as 19 percent today in Brussels trading, the most since the company was formed in a merger 18 years ago. The bank said it will raise 8 billion euros of new capital by selling stock and ``non-core'' assets such as real estate, and won't pay the interim dividend for the first time in four years.

All the machines run by these creepy people who use computer robots to run things are crashing faster and faster. I wonder why, snark. As the losses climb, we see more and more clearly the Derivatives Beast. We can't just sit here forever watching this mess unwind without the quadzillion dollar Beast appearing on the horizon and stomping on everything in sight. Godzilla, meet Quadzilla. A marriage made in hell.

Poll: 40% of business leaders say local economies struggling

THE ASAHI SHIMBUN

Amid soaring prices of crude oil and raw materials, nearly 40 percent of local business leaders believe their regional economies are slowing down or deteriorating, according to a recent Asahi Shimbun survey.

The combined figure of 38 percent--33 percent saying their local economies are moderately slowing and 5 percent saying they are deteriorating--was up by 32 percentage points from 6 percent in the previous survey conducted in November.

Japan's domestic economy will be ravaged as exports begin to fail. This takes us back to the goofy fake depression in Japan. It will become very real now. Not that Toyota cares. They want the status quo back. But the DOW dropped over 600 pts this week. It can't fall this much for more than 10 weeks which takes us to the Autumn Equinox, a time when Libra lifts Her scales and weighs everything in Her balance.

Email this post

Culture of Life News Main Page

Oil Over $142 A Barrel

June 27, 2008

Elaine Meinel Supkis

Both gold and oil are shooting up again. I suppose part of this is due to all those IOU 'free money' checks Uncle Sam is rapidly mailing out to US voters. Funny, how this causes inflation. Moscow is delighted with the high energy prices and plans to colonize the US oil industry. Like China is moving into Brazil, Peru and Venezuela's oil industries. Russia is also poised to start taking over Afghanistan, too. As well as other former Soviet satellite nations. The price of uranium is rising faster than gold. And we learn the hazards of drilling for energy deep in the earth.

OPEC has no influence on oil prices, according to Gazprom chief

Russia's biggest energy company has warned that oil prices will end at a 'radically' new level and that OPEC has little influence over the price of crude.

Alexey Miller, chief executive of Gazprom, said that the global economy is facing "a great surge in oil and gas prices" that will "end with prices at a radically new level."

His comments to the Financial Times came as oil surged to a new high of $141.98, leaving prices more than double where they were 12 months ago and casting a shadow over the prospects for the global economy this year and next.

Russia's leaders can hardly contain their glee. Their ability to buy up all systems right out from under Europeans and Americans is rapidly rising. The US can print up endless Funny Money™ which it loans to itself so it can run Iraq and Afghanistan and intimidate and control Pakistan and all the other Stans. But the Russians are far more familiar with the cultures and mindset of the Stans and knows how to throw real money around. Like gold. Gold is a great tool for bribing people since ancient times. Purchasing alliances with gold is very ancient and was used all the way up until the Cold War.

Russia joins the war in Afghanistan
By M K Bhadrakumar

Moscow is staging an extraordinary comeback on the Afghan chessboard after a gap of two decades following the Soviet Union's nine-year adventure that ended in the withdrawal of its last troops from Afghanistan 1989. In a curious reversal of history, this is possible only with the acquiescence of the United States. Moscow is taking advantage of the deterioration of the war in Afghanistan and the implications for regional security could be far-reaching.

A joint statement issued in Moscow over the weekend following the meeting of the United States-Russia Working Group on Counterterrorism (CTWG) revealed that the two sides had reached "agreement in principle over the supply of Russian weaponry to the Afghanistan National Army" in its fight against the Taliban insurgency. The 16th session of the CTWG held in Moscow on June 19-20 was co-chaired by Russian Deputy Foreign Minister Sergei Kislyak and US Under Secretary of State for Political Affairs William Burns.

The US wants control of the Stans and other places so we can exploit them for cheap energy. Russia, on the other hand, is on THEIR side of the business! Russia wants a good return on oil, not steal the oil. Russia wants oil to be high in price, not low! So there is a thing we call 'commonality.' They all have similar goals. Including the goal of destroying the US invaders! The Stans don't trust Russia, either. For obvious historical reasons. But they dearly would love to triangulate with Russia and the US. This is when one has maximum power over hostile armed foreign powers.

The Telegraph:

The Russian group is benefiting from high domestic prices he said, but also plans to expand into the Americas, Asia, Europe and Africa.

Mr Miller said: "We see North America as a region of our strategic interests", revealing that Gazprom is in the process of "creating a new configuration of gas supplies" to the US and Canada. The group hopes to break into the American market in 2014.

The Russsians are coming! The Russians are coming! This was a popular movie in the early 1960's. Well, all the oil pumping powers are coming here and they are buying us out whenever the Japanese and Chinese aren't buying everything in this international fire sale. 'Buy American! CHEAP!' is our motto. 'Bankruptcy Sales Galore! Place a bid!' Well, we go back to the paradox of who wins wars.

Who won WWII? Japan and Germany! Both can triangulate world powers and the need to strengthen and empower both Germany and Japan led the Great Empires to build both up and to make them one of the top 4 economic powers on earth! So they won. Russia and now the US were and are going bankrupt.

China is taking over Venezuelan oil fields one by one:

As described in this article published by BNAmericas, Venezuela's state oil company PDVSA (Petroleos de Venezuela S.A) and China's state oil company CNPC (China National Petroleum), have entered into a joint venture in which the two government owned oil conglomerates will work together in order to produce 8 new oil rigs by years end in Venezuela.

This adds to the two oil rigs delivered by CNPC in November 2007, and three more to come in 2009, bringing the total number of "made in China" oil rigs operating in Venezuela to 13. This will also allow Venezuela and allow PDVSA, for the first time in the country's history to construct their own oil rigs domestically... without North American or European assistance.

Who won the Cold War? Russia and China! They are getting richer, stronger and more powerful. Both are dominating world trade and making huge inroads in US power as well as taking over US finances and buying up US properties. They won that war after going bankrupt. The US refuses to go bankrupt even though this is the harsh thing one goes through to get over to the other side.

Refiner Insiders Buy Most Stock Since 2000 on Oil Bet

(Bloomberg) -- Refinery executives are buying more of their own stock than at any time since 2000, prompting investors to bet that a retreat in oil will boost profits and reverse the biggest share decline in a decade.

Executives at 10 refining companies snapped up $2 million of their shares last month, twice what they sold, according to data from the Washington Service, which analyzes insider patterns for 500 institutional clients. That helped raise the average level of purchases to the highest in eight years, data from Argus Research Co. compiled by Leuthold Group show. Before March, insiders dumped more shares than they bought every week since 2003.

As the price of oil shoots to $150 a barrel, perhaps the news media can lead a charge and demand the war talk aimed at Iran cease and talk about punishing Libya end. As well as all the other bully-boy American silliness. We have to eventually figure out that global oil inflation is due mostly to US actions. We decided to have cheap gasoline unlike all of the other major oil consuming nations in the West. We decided to buy a huge fleet of many millions of SUVs. We decided to go to war when oil prices were only $28 a barrel. We can't blame the Chinese for any of this. They gradually increased their oil consumption. We radically increased it both for domestic use and for our giant military adventures in the Middle East. Our military eats more oil than any single organization on earth.

Oil minister: Saudi willing to increase crude output

Saudi Arabia — the world's top crude exporter — called the gathering Sunday to send a message that it, too, is concerned by high oil prices inflicting economic pain worldwide.

Instead, the meeting highlighted the sharp disagreement between producers like Saudi Arabia and consuming countries like Britain and the United States over the core factors driving steep price hikes. Oil closed near $135 a barrel on Friday — almost double the price a year ago.

I include this old news because it shows how infantile we are. Saudi Arabia will endlessly promise more oil and we guzzle it all and they stopped increasing oil some time ago and won't increase it much at all after this. They are triangulating with Russia. And China. Eventually we will have to offer them something substantial like say, the West Bank. Right now, we are too focused on disarming Iran and the despotic kings ruling the Arabs don't want a revolutionary Iran running about, able to defy invaders from say, Iraq. The entire concept of a revolutionary power right next door frightens and irritates them. But they don't want a war because they rightfully fear an uprising at home as well as destruction as Iran turns and attacks them, not the US.

U.S. Economy: Consumer Spending Rose More Than Anticipated

(Bloomberg) -- U.S. consumer spending rose more than forecast in May as tax rebates drove the biggest gain in incomes in almost three years, enabling households to at least temporarily overcome soaring fuel bills.

The 0.8 percent rise in purchases was the biggest since November, the Commerce Department said today in Washington. Incomes grew 1.9 percent, the most since September 2005, and measures of inflation were lower than anticipated.

Wow! We goosed our economy and paid for all this expensive oil by putting more debt on the public ledger. If we want, we can run our economy openly this way! Every four months, the US government can mail all of us $600. Then, as the price of oil rushes to $200 a barrel, we just laugh. So what if our debt soars past $10 trillion and we add another trillion a year!

Will this stop inflation or make it worse? Heh. Obviously, the more money we get from the DC criminal class, the more inflation we get! This is not a sane fix. But people don't care. They clutch at this fake money and spread it across the planet. All our trade partners want to see us spend money, too, so they are silent about this scheme to pay for all the oil via fake money. The downside is, Saudi Arabia throws in the towel and refuses to sell us oil for dollars. This can and will happen if we go down this road much further.

Uranium to Fetch $90 as Indian Reactors Drive Demand

(Bloomberg) -- The uranium industry's worst year is about to collide with a nuclear construction program in India and China that rivals the ones undertaken during the oil crisis of the 1970s.

The result is likely to be a 58 percent rebound in uranium to $90 a pound from $57 now, according to Goldman Sachs JBWere Pty and Rio Tinto Group, the third-biggest mining company. Uranium plunged 57 percent in the past year as an earthquake damaged a Japanese nuclear plant that's the world's largest and faults shut down reactors in the U.K. and Germany.

All the speculators reading Bloomberg are in hysteria! Get me uranium! Lucky for us, we produce uranium. Maybe we can make this work out. The US has many wonderful resources. We just don't have endless CHEAP oil anymore. We didn't raise taxes on oil and cut down on gasoline use. So we now have a huge oil trade deficit. Well, this has to be fixed in the end. We must restructure our lives accordingly like everyone else on earth. Then we will be on top of things! We got STUFF here!

Geothermal probe sinks German city

Staufen, in the Black Forest, was proud of its innovative geothermal power plan that was supposed to provide environmentally-friendly heating.

But only two weeks after contractors drilled down 460ft to extract heat from below the earth, large cracks have appeared in buildings as the town centre subsided about a third of an inch (8mm).
*snip*
A similar experiment triggered a series of earthquakes near Basel in Switzerland last year.

I argue all the time with people who imagine we can just suck energy of various sorts out of the earth. The earth is very complex. There are many hidden things below thanks to tectonic plate movements. When we drill very, very deep, all sorts of unexpected things can happen. The Black Forest, for example, sits on top of very complex mountain building from back when Europe was crushed in the middle of Pangea. Now, Africa is shoving Europe hard to the south and there are hidden folds and strange left overs from 200 million years ago a mile down. As we try to solve our energy problems, we must take all this in account. There is no easy way out.

The earth has a lot of deep energy! We see this with massive earthquakes and volcanic events! The volcanos prove that the earth is very, very hot just below the surface and heat is energy. But tapping this must be done with greatest care and fear. It is not an easy answer.

Email this post

Culture of Life News Main Page

Economics Game Theory Is Worthless

June 27, 2008

Elaine Meinel Supkis

We all know that world stock markets are now falling like dominoes due to the sudden hike in oil prices thanks to US efforts to shove Muslim oil nations around. The common trick of the oil consuming super power which always drops the value of the dollar like a rock when oil goes up in price is causing the US itself to fall into the same stupid pit it fell into with each oil price hike due to wars in oil pumping areas. The US has raging inflation at home while international trade plummets. Today, we visit the BIS, Bank for International Settlements to see what is going on over there. The latest paper published by them concerns currency games. It is a weird study that has some unbelievable premises.

Speculative attacks, Private Signals and Intertemporal Trade-offs∗
Nikola A. Tarashev†
June 13, 2008

Confronted with a speculative attack on its currency peg, an authority weighs the short-term benefit of giving in and fine tuning the economy against the long-term benefit of credibility-enhancing resistance. In turn, speculators with heterogeneous beliefs face strategic uncertainty that peaks at the time of the attack, when the fate of the peg is unclear, and then declines, as the economy settles in a stable currency regime. In this environment, a less conservative authority — i.e. one that stabilises less the exchange rate once a peg is abandoned — may be more likely to withstand an attack on the peg. This result, which strengthens as speculators’ risk aversion declines, casts doubt on the conventional wisdom that greater conservatism enhances welfare.

When facing real life problems, the wisest path is to study all the factors and try to find a solution. There are many methods to this process. None of which are 'purely intellectual' due to the human brain desiring greatly to shoehorn information into positions whereby it 'works out'. In other words, we delude ourselves, ipso facto. Trying to see reality without delusions is impossible for humans due to the way our brains evolved and the way civilization has plastered on thousands of years of cultural training systems. On top of all this, deep inside the parts of the brain that operate unhindered at night while the conscious brain is snoozing, there is the modus operandi center of the Dream World. This is where religion, beliefs, propaganda, outside influences and demonic fears all reside. We imagine they are locked away. But even the most rational scientist is in the grip of this hidden, occult, dark part of the brain, the subconscious mind.

Queer things happen there. Up is down and in is out. It happens to be the Portal to the Outer Darkness I keep talking about here. The Outer Darkness is actually inside our brains and controls our emotional as well as rational response to information and incoming data from the real world we live in. My parents and grandparents were all top scientists and professors. Their collective dark Id world from this dream center were all totally messed up and nearly completely out of control due to them being rational intellectuals. This is why I am so aware of this part of the brain, I suppose. Here is today's article about this sort of thing:

The NYT: Your Brain Lies to You

FALSE beliefs are everywhere. Eighteen percent of Americans think the sun revolves around the earth, one poll has found. Thus it seems slightly less egregious that, according to another poll, 10 percent of us think that Senator Barack Obama, a Christian, is instead a Muslim. The Obama campaign has created a Web site to dispel misinformation. But this effort may be more difficult than it seems, thanks to the quirky way in which our brains store memories — and mislead us along the way.

Whole civilizations preen themselves on being 'rational' even as they go careening off into total insanity. The question people ask over and over again is, 'Why did the very cultivated, creative and technical Germans go totally nuts and become raving Nazi murderers?' Every step along that dire road was rational. Every step along the road leading the Jewish people to the Apocalypse in Jerusalem is equally rational. Humans do this because the religious impulse is uncontrollable by rational thinking. It is in this dark, nearly inaccessible part of the brain. Just as we try to remember dreams, they are warped by the memory since we edit them as we struggle to recall the complex, nasty parts of the dreamworld which includes hidden messages, strange shapes of ordinary things and the toxic mix of seething emotions. Especially things we try to rationally repress.

This is why odd, strange and bizarre things are believed in despite obvious flaws. Such as UFOs: we see lights in the sky. Since novelists and movie makers love to scare people with stories about aliens from outer space, people now think that any oddball light or thing they think they see in the night sky or at sunset is really aliens invading the earth! I used to lecture about this matter at SF conventions. This made me VERY unpopular. Far from collecting more and more 'believers' I encountered irrational rage. Even as I explain patiently, 'IF aliens are coming here to look at us, why would they flash lights so we can see them easily? It is totally illogical.'

All kinds of goofy replies are made but the illogic remains. Since I figured this out as a child, I marvel that adults get very angry when I explain this to them. This is because the belief that there has to be aliens out there has been planted in the deep, dreamworld of the brain by various media hammering into that part of the brain where the emotions reside. The irrational parts. Dr. Freud rooted around that part of the brain and discovered many odd and wonderful things. But all of his work has been tossed out in favor of rationalism which is the ruling ethos in science today. Even as it gets quite irrational and totally lost in thickets of misguided systematic studies. For example, the rise of 'Game Theory' which has displaced 'Freudianism'.

Game theory

Although some developments occurred before it, the field of game theory came into being with the 1944 book Theory of Games and Economic Behavior by John von Neumann and Oskar Morgenstern. This theory was developed extensively in the 1950s by many scholars. Game theory was later explicitly applied to biology in the 1970s, although similar developments go back at least as far as the 1930s. Game theory has been widely recognized as an important tool in many fields. Eight game theorists have won Nobel prizes in economics, and John Maynard Smith was awarded the Crafoord Prize for his application of game theory to biology.

Increasingly complex models of gaming have utterly taken over philosophy and economic studies. This is because it is nearly useless in the real world. Or worse, when applied to the real world, warps it hideously and sets off forces that cannot be controlled. This is due to the human mind wanting things in the Land of the Id that are very bad for the organism that the Id lives inside: the body of the human. Readers here know that I talk all the time about this dark realm which I and Tolkien both have called 'The Outer Darkness'. This entity is human-created and the door to it is in the center of the brain. I discovered this dread place quite accidentally: I was hit by a very powerful lightning bolt when I was 5 years old. Obviously, it disarranged my brain since both it and the brain are electrical in nature. Since I has whacked by this bolt, evidently the electrical connections of my frontal lobes were badly jarred in relation to this innermost part of the 'thinking' brain and since that day, I remember all my dreams.

We have many dreams all night long. Some people are happy if they remember periodic dreams. But trust me, we dream all night. When I was a child, I was so upset with remembering and understanding multiple dreams every night, I became an insomniac. Doctors could do nothing and did nothing so I grew up knowing totally and consciously, what was going on in my dream world. I write many of my stories here at night while asleep and then write them online later. The dream world is also outside normal time. This is why I thought up this article in my sleep and then found the stories in today's news by searching for them. This sort of 'time travel' is certainly odder than aliens from outer space flashing lights to scare humans and then darting off to the nether reaches of our souls.

Back to the subconscious mind: manipulators of humanity know that propaganda, which they work hard to perfect, can plant things in this subconscious part of the brain and thus manipulate masses of humans and thus, enslave them. Whenever outsiders manage to do this too, great wars are fought and the new propaganda brain system is installed and the rulers then settle down to the grim task of manipulating these new religions for their own benefits again. This is why the founders of the great recent religions were totally unable to enjoy the fruits of their labors. They died. But the followers of Mohammed, Jesus, Moses, Buddha, etc all got to live in palaces and be treated like Gods on Earth just as the first Pharaohs. To maintain power, they worked hard and even brutally violently, to keep the new belief system planted in the interior parts of the brain. Disbelievers were murdered or tortured.

In Academia, I could never get a degree in economics. Or philosophy. Or many other fields due to my total refusal to believe in the New World Order system of analysis. I analyze things by looking at the innermost part of the brain, the Dream World, and then seeing how it affects the Waking World. This also means looking at the Cave of Wealth and seeing how it is the mirror of the Cave of Death. This is due to the nature of the Waking/Dream world system which is a yin/yang set up and thus, mirror image. I bet the entire universe is a duality system that has a mirror anti-universe system that is exactly opposite. This can't be proven because when we are in one system, the other becomes totally invisible. Only in our imagination, can we figure out the opposite system. Or, we can be hit by a lightning bolt and suddenly discover the flash point between opposite poles.

To show how fruitless and useless the mania for 'Game Theory' has become and how it is actively destroying economists and their poor students, I want everyone to examine the very latest paper published by a very powerful New World Order organization that was set up to supervise the payments for WWI. This organization was a total failure since Hitler kicked the entire business to the curb only one year after the BIS was launched. And he did this to save Germany. Only he was totally insane and sent Germany straight into the hell of WWII. Ah, a mirror situation if there ever was one!

BIS paper on currency gaming:

The global games literature has shown that small departures from the representative- agent paradigm can alter drastically the link between economic fundamentals and market behavior.1 In a specific application of this insight, Morris and Shin (1998) were the first to introduce heterogeneous information in a standard second-generation model of currency crises2 in order to explain abrupt and intense speculative attacks as the unique outcome of deteriorating fundamentals. In studying the robustness of this equilibrium uniqueness result, Vives (2005), Hellwig et al (2006), Tarashev (2007) and others have found that it hinges on the presence of sufficient strategic uncertainty, defined as individual players’ uncertainty about aggregate behavior.3

Even when each player’s private information is extremely precise, strategic uncertainty can be high and preclude the market from coordinating on different equilibria for the same fundamentals. Building on these results, this paper analyzes the impact of time varying strategic uncertainty on the intertemporal problem of a central authority that governs an exchange-rate peg.4 Given that an attack on the peg is followed by a stable currency regime (whose type depends on the attack’s success) strategic uncertainty declines over time. A seemingly surprising result ensues: a less conservative authority — i.e. one that is less inclined to stabilize the exchange rate once the peg is abandoned — is more likely to withstand an attack on the peg. Furthermore, confronted by a lower probability of such an attack, a less conservative authority may deliver higher social welfare.

HAHAHA. Back to propaganda, culture and the brain: do players in the economic games have real information? Is it precise? Strategic? HAHAHA. NO!

And why is that? Obviously, the people who want to be Pharaohs don't want anyone but themselves to have ANY useful information if possible. The creation of newspapers was due to one guy in England: an ancestor of mine, Sir Richard Steele. Like me, he was a meddler who loved to poke around, collecting information and gossip and then publishing it in his 'Tattler'. An apt name. Heh. He was in the grip of the Dream World. He would write plays chastizing prostitutes but he got a lot of his information about money and power via visiting prostitutes. Since the money mad gnomes need to buy sex, anyone wishing to track them has to go to mistresses and whores and flatter them and promote their affairs while hiding all of this from their lovers and sex slaves. And of course, powerful gnomes who think they rule the world end up being slaves of sex goddesses. Thanks to the Id parts of the brain. But since this is also where money and power well up, it works, obviously.

This long paper that takes the elemental struggle of power between workers, governments and bankers and turns it into a game runs into a problem right off the bat. Namely, the game is, by definition, unfair and unequal. The workers don't control information except their own information. Namely, they can gossip and organize but they can't access the information the bankers and the rulers have. They can only react, often in horror, to the impositions placed upon them by the other two players in this 'game'. Back to the news: once upon a time, the news was published by RADICALS and REVOLUTIONARIES. Like Ben Franklin and Tom Paine. Or much earlier, Sir Richard Steele. It is fascinating, reading 19th century newspaper articles. They are so full of facts, data and information! Takes the breath away!

Karl Marx started out as a newspaper reporter. He developed his narrative, 'Das Kapital' after writing news stories he covered in England and Germany during the boom/collapse/depression of the 1848 cycle. He was NOT an 'economist'. There were virtually no economists! It didn't exist. There were businesspeople and reporters. The Scots spawned a number of economics and history writers like Adam Smith, for example. These people were exactly like me: thinkers who were puzzled about things and curious about where they went. As the big Western empires build universities, they began to create 'Economics Departments' which were inspired by astronomers to set up systems that are mathematical and this, in turn, set them off on this merry ride off the cliff as they neglected the dark, dank, emotional, sexual part of wealth creation and destruction. Nearly every paper I read that is churned out and financed by the bankers and the rulers is full of magic formulas based on bizarre and unreal premises that don't work in the real world. Below is an example of a graph explaining how this 'game' is played as analyzed by the BIS paper:

I love to add information to graphs. Here are my additions:

I left out all the blood, the starvation of workers, the betrayals as the other parties conspire to move manufacturing to places where there are even crueler rulers. The manipulative games played by bankers and rulers working with or seeking to loot the manufacturers, whenever all of this crosses over into the labor side of the ledger, it becomes rapidly very ugly. The workers can fiercely fight back and wrest some power or control from the other three parties. But it is always a dangerous affair. And if the rulers and bankers and manufacturers win, we get Fortress Japan where they crush the workers totally and living activity slows down and eventually ceases entirely. Babies are not born or raised. People commit group suicide. The economic entity dies.

Or the workers fight back. Revolutions topple the rulers who are brutally killed. Wars rage as outside rulers try desperately to crush any worker rebellion. For they fear their own workers! This is why all the despotic Muslim rulers support each other's despotism. The Iranian revolution frightened them tremendously. It still menaces them. The Palestinian uprising scares them as well as the Jews. Both want to crush that spirit totally. For it is a flame that can set the entire Middle East on fire. In Europe, the workers were coddled but now are being told to eat the poison of inflation. US workers have been smashed to smithereens this last 25 years as the rulers ruthlessly move jobs to despotic, communist nations. Which struggle with a rising worker movement that threatens to overturn their ruthless rule. Workers and peasants in China or South Korea are extremely feisty and fight back at every opportunity. Totally in contrast with US or Japanese workers.

This study is, of course, pristine clean and pure and wishes to have a clean slate whereby theories can be tested. Yet the theories, by definition, are FAKE since the BALANCE OF POWER is assumed to be equal. But it is not. The powerful rulers seek to control the workers by lying to them or denying them vital information, just for example. Workers are manipulated by propaganda toys that are parked by devious, trained psychologists working for the rulers, these are put in the brain to distract and make the human target fearful. Like 'aliens from outer space' sort of things. I do believe the bizarre notion of 'bombs in the WTC' were parked in brains by DARPA agents using the internet to spread false rumors designed to distract and isolate anyone questioning the official story about 9/11 which was totally fake as well. Just like the lies about Saddam that were insidiously parked in unthinking minds. So predicting human reactions based on some sort of model of 'what is good for them' is false.

People do really stupid, destructive things if the rulers can manipulate or drive them to this.

Back to the BIS gaming report:

Henceforth, the value of the aggregate wage bill wt −1 will also be referred to as the intensity of workers’ attack on the currency. This intensity decreases in the fundamentals zt and the authority’s conservatism χA but increases in workers’ aggregate belief in the attack’s success π.

On the basis of equations(10), expression(5)implies two generic out comes for the authority’s period-t loss, while expression (7) implies two similar outcomes from a social point of view.

Note the business of 'the worker's attack on the currency'. HAHAHA. Since when? When the Black Plague swept away a third of Europe, the survivors discovered they had the power to demand higher wages, more freedoms and the right to build their own associations. The guilds and the ruling aristocracy joined forces to crush this. Harsh laws were passed. Peasants evaded this by fleeing estates and 'freeing' themselves from bondage. The knights killed them. The peasants banded together and had one revolution after another. Disorganized and uneducated, these rebels fell to the armored knights who viciously suppressed these uprisings. But out of the bloody soil arose a new society that rejected feudalism and this enabled capitalism to rise up again. For capitalism can't exist with feudalism. It is inherently revolutionary.

Here is an example of the dense layers of magic formulas the ernest PhD cogs who work for the New World Order came up with to describe their lovely little fake game system:

So scientific! So utterly nothing but total hogwash.

This property illustrates the strategic complementarity between the aggregate action of workers and the action of the authority. Namely, the more strongly do workers believe that there will be a devaluation (i.e. the higher is π), the higher is the aggregate wage bill and, thus, the stronger are the incentives of the authority to validate workers’ beliefs.

Workers who have their own news system like they had in the 19th century can counteract the bankers and the government conspiring to spring devaluations upon their heads! They did this BY FIGHTING LIKE DEMONS. They were shot, beaten and put in prison. The workers retaliated with riots, assassinations and outright revolutions. NEVER EVER do any of the 'authorities' validate ANY worker's beliefs! They would rather rip their own hearts out and feed them to the three headed hell hounds than do that! The authorities have no INCENTIVE to 'validate the worker's beliefs...' about inflation. Inflation is IMPOSED on workers in order to STEAL THEIR LABOR just as it is IMPOSED on the middle class to STEAL THEIR SAVINGS. Period.

Anyone going to a crummy top economics university like Harvard, Chicago or Yale, for example, and thinks this sort of stupid thing, is no economist. That 'scientist' is a FOOL. And a tool. This BIS study is total BS.

The BS BIS report:

Conclusion

This paper has developed new policy insights on the basis of a global games model of speculative attacks. The model features a central authority, which administers an exchange-rate peg and faces a short-term benefit of a devaluation and a long-term benefit of perpetuating the peg. Time-varying strategic uncertainty among private market players is at the root of a seemingly surprising result that the probability of a speculative currency attack decreases and social welfare may increase if the authority is less inclined to stabilize the exchange rate once the peg has been abandoned. This result is stronger, the smaller is workers’ aversion to downside wage risk.

And out of this mass of magic spells and magic incantations pops this egg! It makes no sense at all. Try as I might, it doesn't fit into the news stream nor explains reality. All rulers are stuck on the same Horns of Dilemma as the first Pharaohs: if you debase the currency and run in the red to pay for wars that fail or bring less loot than the cost of going to war, this causes the workers to notice they are being looted in various ways and makes them very, very irritable and might trigger an uprising. So there has to be some method to prevent this. The Romans came up with the 'Bread and Circuses' system which ended with 'Barbarians burning Rome and the Dark Ages.' Not a good plan.

Germany and Japan redirected worker's rage to looting expeditions against the Jews in Germany or the Chinese in the case of Japan. These turned into attempts at conquering the entire planet. Which ended in flames, by the way. This paper above claims the magic formulas say, a DESTABILIZED CURRENCY increases worker's welfare. HUH????? What the hell???? I'm sorry, this is so Outer Darkness! Up is down, in is out!

The first stages of inflation always flows into housing and other things and so the middle class is happy. Workers hate inflation. But if workers are in the middle class due to fighting hard for union powers, they enjoy the fruits of inflation flowing into housing since they become homeowners due to winning fights with the industrial powers and the government! But eventually the inflation ignites all the things workers need to stay alive. Then, wages fall further and further behind. If free funny money is poured into the system via cheap lending, the workers remain happy but are enslaved and become increasingly vulnerable. When the inflated, debased currency finally begins to eat up money via food and fuel, even the properties of the former middle class workers is confiscated by the banks and everything collapses.

Workers NEED currency stability. They NEED traditional banking. They NEED the golden goddess of Libra guarding the Cave of Wealth and Death. Even if they don't understand this. The rulers better understand this. The graves of many a civilization are warnings about this.

Email this post

Culture of Life News Main Page

Expensive War Robots Bankrupt USA

June 26, 2008

Elaine Meinel Supkis

The Pentagon is the military arm of the US and it a major motor in US industry. The military-industrial complex is slowly being turned into money machine that produces robots that can kill barely armed civilians resisting US occupation forces sent to crush them. Oh, how the Nazis would have loved having this ability! These robots are expensive and are bankrupting America. War talk about Iran grows louder and greater. So the world price of oil is nearly $150 a barrel this month. Another $10 to go. If it reaches $200 a barrel, the world's economy will collapse and Iran Kitty will win WWIII. So to speak. And rather bizarre news from Israel about the Sarkozy visit. Didn't make the news here, of course.

Boeing Future Combat Systems to Go to Army Infantry Units First

The U.S. Army, seeking to demonstrate the relevance of its top weapons program, Boeing Co.'s Future Combat Systems, switched plans and will deploy some of the new equipment first to infantry rather than armored units, according to a service document.

The armored units haven't been deployed in Iraq and Afghanistan as often as lighter infantry brigades. The Army is under pressure from Congress and the administration to show that the $159 billion system of radios, ground sensors, manned vehicles and missile launch systems can be effective in current conflicts.

Some Army combat infantry brigades will get the equipment starting in 2011 instead of 2014, according to the document sent to top Army officials. Heavy, mechanized units of M1A1 tanks and Bradley Fighting Vehicles originally scheduled to get the equipment in 2011, will now have to wait. The document didn't say how long.

Our rulers, as we go bankrupt, tell us we have no money for doctors then turn around and spend $159 billion, not million, billion on ROBOTS? That will tool about Muslim lands, murdering civilians while alien soldiers who don't speak the language or are in any way sympathetic with the civilians will be using video game systems to shower death and destruction from far away?

GADS. Good grief. And pray, who is the 'Evil Empire'? Isn't this pure Darth Vaderism? We don't use the Force, we use the Clone War Robots. But then, does this surprise anyone? Who makes a profit if a flesh and blood American is at war? No one! The soldier will demand pay, health care, help at home, pay raises! The soldier might need social care later. He or she has family. If killed, payments are made and not a penny of this flows into the coffin-shaped coffers of the super rich who own the military industries. No, they want to take direct profits.

So they build killing robots that are very expensive. When inevitably wrecked by Wookies and Skywalkers, new ones get build at tremendous profits for the Senators and their rich buddies. And sent into battle. The financial ratios of $159 billion robots versus a series of $200 IEDs is obvious. We hemorrhage wealth from the working class to the super rich while spending money on these projects. Just like using a $1.5 million dollar missile on a shepherd's tent to kill 'terrorists' benefits only the missile makers. It is utterly senseless from the point of view of real strategy.

From the Guardian in England [not US news, of course]:

At a desert test site in Texas, a street battle rages between US soldiers and local "insurgents". It's much like any other training exercise, except the soldiers are accompanied by a Mule (Multifunctional utility/Logistics & Equipment), an armed robot the size of a Humvee. The insurgents are positioned overlooking an intersection, a potential kill zone. The commander pulls out what looks like a PlayStation gamepad and the Mule is sent forward.

It presents a tougher challenge than the typical human soldier. The Mule can fire Javelin anti-tank missiles and has a turret-mounted machine gun, in addition to a digital "eyeball" with laser and heat-recognising target acquisition systems for aiming its weaponry. It is semi-autonomous, using GPS to navigate and localised perception to avoid trees and buildings. Its six wheels are on pneumatic legs, enabling it to climb over cars and barriers. Within minutes, the formerly deadly intersection is secure.

So, where are the enemy tanks in Afghanistan? Iraq? No? These are used to shoot taxis and cars driven by mothers taking their children to school. These are Stupid Machines run by Nasty Aliens. We see Americans worried about UFOs bringing aliens to the US skies. Well, we are the aliens and hated aliens who bring death and destruction from the skies as well as on land. Since our Predator robots can't control the ground and since the pesky civilians we are butchering elude us as we try to corral them, we need robots on the ground to do the job. Shameful, isn't it?

Antiwar.com:

A roadside bomb blast in Ninevah province killed three U.S. soldiers and their Iraqi interpreter last night. Not much information was released on the incident, but U.S. and Iraqi troops are in the process of weeding out al-Qaeda elements in the region. An already reported car bombing there yesterday left almost 100 casualties. Another American soldier was killed in the capital during an EFP explosion this morning. Altogether, eight U.S. servicemembers and two American employees have been killed over the last three days.

The cheap IEDs continue to do their work. Deaths of American invaders are rising again. In May, it dropped. But the US then tried to ram through a series of treaties that are not treaties which are designed to give us total power over the captives in Iraq so we can brutalize them with expensive robots. This empire of ours is so very doomed. Treasonous Iraqis who are desperate for money and willing to sell their souls are being killed rather rapidly. This is how all nations invaded by aliens react, by the way. This includes America that did the same during the revolution. I wish our nation could remember our own history.

Agence France Presse:

(AFP) - US military chief Admiral Michael Mullen was expected in Israel this week for discussions including Iran, the Pentagon said Wednesday, amid speculation Israel is seeking Washington's tacit approval to strike Tehran's nuclear program.

The press office of the US Joint Chiefs of Staff confirmed that Mullen left the United States on Tuesday "to go overseas to visit counterparts as well as combatant commands, and Israel is not his only stop."

Pentagon spokesman Geoff Morrell told reporters the trip had been on the schedule for "months."

"I believe this is a routine opportunity for Chairman Mullen to engage his counterpart in Israel on military-to-military matters, as he does in much of his travels around the world," Morrell said.

"I will say this, though: Obviously, when Chairman Mullen goes to Israel and speaks with the Israelis, they will no doubt discuss the threat posed by Iran, as we discuss it in this building, in other buildings in this town."

Oil shot up this last 24 hours. Libya is angry about a US court trying to steal their bank accounts. The US won't pay for all the people we kill but we want Libya and others to pay for terrorism. If the US were taken to court the same way, we would be bankrupt today rather than next year. Just the other day, a very stupid man was given room in the warmongering rag, the Washington Post to suggest we sue OPEC and force them to give us oil cheap.

Well, OPEC is going to cut out our sales if we keep on doing these things. The dollar is weaker, too. We spent our money unwisely, $160+ billion on suppressing the Iraqi people very violently, $160 billion on robots, $160 billion on freebie money handouts to all taxpayers as a gift from Uncle Santa Claus...this is already nearly $500 billion! Half a trillion! From a government that is almost half a trillion in the hole a year and has run up $10 trillion in debts since Ronnie Reagan began this madness.

(Reuters) - Bahrain's security would be threatened if international tensions over Iran flared into war and the kingdom wanted to be consulted so that could be prevented, a top official said on Wednesday.
*snip*
"The intention of the consultation is to ensure that war will not happen. The intention is to have peace. We are against war," said Zayani.

As the war talk heats up, the fear is growing in the Middle East that this might be The End. Israel has gone totally psychotic. The tensions there, the religious furies that have been unleashed since WWI, this is incredible. Not since the Middle Ages has the Middle East been so capable of blowing up in everyone's faces.

Iran War Resolution May Be Passed Next Week

Introduced less than a month ago, Resolution 362, also known as the Iran War Resolution, could be passed by the House as early as next week.

The bill is the chief legislative priority of AIPAC. On its Web site, AIPAC endorses the resolutions as a way to ”Stop Iran’s Nuclear Program” and tells readers to lobby Congress to pass the bill. In the Senate, a sister resolution, Resolution 580, has gained co-sponsors with similar speed. The Senate measure was introduced by Indiana Democrat Evan Bayh on June 2. It has since gained 19 co-sponsors.

And oil will be $200 a barrel...minimum. In the news today was the talk about how the world economy can't tolerate $200 a barrel oil. Well, if we insist on creating this war, we get total annihilation of the global economy. I know a number of crazy adults who think that driving us into WWIII is smart. Well, can they figure out that economic collapse has a downside? No? I doubt even this news will dissuade everyone. Because people willing to destroy everything so they can steal olive groves next to Jerusalem won't care if all this creates the Apocalypse.

MI5: revealing areas at mercy of collapsing dams is a terror threat

MI5 and flood risk experts are at odds over whether to publish inundation maps highlighting areas under threat if any of the country's dams were to collapse. The Security Service says that the information could show terrorists where an attack on a dam might have the most impact.

See how insane things have become? Psycholand! To protect the people of Britain from death, they will KILL everyone in a flood? WHAT THE HELL????? So, if Mother Nature destroys the dam and kills everyone, this is OK? But heaven help us if the terrorists figure out the obvious? The terrorists don't care if they kill 1,000 or 1,000,000. They will destroy the dam. Mother Nature is even worse. She actively does extinctions. She will merrily plonk an asteroid on top of a dam and make a hole bigger than half of England there. And kill nearly everything on earth. In an eye blink. Hiding vital survival information from the people is stupid.

During all the fifties and sixties, I battled my mom and dad to tell the truth to the American People. Whenever the top elites were put on high alert about the possibility of WWIII, we would run for our lives to secure places. While the media told the people to STAY PUT. And this refusal to tell the truth about the dams is the same thing: they don't want people to stop working just because they are in danger. Note how the media tried to make the Chinese look bad concerning the earthquakes! Yet they will turn around and shrug when our own leaders do the same.

They don't care if thousands of people in New Orleans drown.

Worst of times for Iran
By Spengler

Households in President Mahmud Ahmadinejad's Iran must suffer on a Dickensian scale, for they spend 10% more than their income, according to the country's central bank. Iran's data are more hilarious than reliable, to be sure, but they illustrate how ordinary Iranians are perishing in a sea of petrodollars.

The price of oil more than doubled since I warned last year (Why Iran will fight, not compromise Asia Times Online, May 30, 2007) that Iran's Islamic kleptocracy had reached the end of its rope. Despite the surge in oil revenues, conditions are worse than they were a year ago, as the price of necessities soars out of ordinary reach. Not only the theft of the oil windfall, but the manner of the heft, puts Adhmadinejad's political future in doubt, as Sami Moubayed reported on this site on June 21 ('President' Larijani: A star is born). Changing the man at the top, however, is no cure for fecklessness of Central African proportions. Underneath Iran's imperial ambitions and messianic pretensions suppurates a pre-modern patronage system that corrupts everyone who comes near it.

OH MY GOD. Iran is having problems thanks to the US/EU boycotts! Wow. And what are we? Are we not corrupt as hell? Do our rulers care if we drown? Are our finances fine? If Iranians are suffering, what sort of ugly Dickensian horrors are in store for us this cold, dark winter???? Eh????!!!!! Yes, they are suffering. But so are we! The more they suffer, the more we suffer. Until we all die. This is beyond stupid.

Y Net News: Soldier dies in Sarkozy farewell ceremony

A Border Guard officer tasked with a perimeter security assignement during the farewell ceremony for French President Nicolas Sarkozy at Ben-Gurion Airport was killed after apparently shooting himself. An ambulance was rushed to the scene to treat the soldier, but a short time later he was pronounced dead.Police officials estimated that the officer committed suicide.
*snip*
A member of Peres' entourage told Ynet, "There was no panic; a routine procedure was activated by the prime minister's and president's bodyguards. The incident is behind us and the French president is on his way back home."

After the gunshot was heard, security forces began searching for the shooter, who was found lying on the ground. A security officer who witnessed the shooting recounted the incident to the police.

Officer's family: He didn’t commit suicide
The dead Border Guard officer was identified as Raid Asaad Ghanan, 32, of the Druze village of Beit Jan. his family members refused to believe that he had committed suicide.

"We scornfully reject the claims that our son took his own life," a family member said. "He was a kindhearted and happy person. He had a family and there was no reason for him to do such a horrible thing."

This didn't make the news in the West. The Cone of Silence fell with a clang and nothing appeared in media here that is run by Jewish owners. The condition of the Druse Christians in the Jewish dictatorship state that is out to crush all other religions is growing worse and worse. We don't know what really happened there and will probably never find out. The corruption charges against Olmert: Oh, the Iranians are naughty! Wow.

Yes, the media is a wonder and thanks to the internet, we can get real news even if it is bizarre or stupid. Tomorrow will see blood in the streets on Wall Street and other 'We hate Iran!' nations. They will bleed and bleed and snarl and snap and the poor masses will be left to drown as the rulers lunge for the Golden Ring of Power.

Email this post

Culture of Life News Main Page