LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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Archive of "Empire" Category
David Tice On King World News: Trouble Ahead….
David Tice on Eric King’s King World News, December 23, 2009
- This is not another inventory recession; this is unprecedented
- There’s trouble all over the globe - Europe, China, Japan..
- Hunker down, cut back expenditures, get out of stocks, own gold
- Look for deflation followed by competitive currency devaluation, then inflation.
Bill Anderson On The New KKK: Kleptocrats, Kartels, and Kon Men
“As I see it, the bankers are not clueless at all. They understand the game, they understand that the government is going to clean up the mess that they and their friends in Congress and the Bush and Obama administrations have created, and they understand that their antics are going to give them what they always have wanted: a nice, cozy, financial cartel which will provide sweet political contributions for the political classes, bonuses and high pay for themselves, and very little for everyone else.
US Military to Coordinate Haiti Earthquake Relief
Update: Thanks to reader Jeff for this video of an outfit helping with Haiti’s water needs. It might be a better place for donations than any government relief effort.
Original Post:
I haven’t commented on the Haiti earthquake, mainly because I haven’t been on top of the details. Besides, there’s so much coverage in the MSM about it. My beat here remains the untold story.
But one angle does trouble me. The intervention of the military. I can’t bring myself to say they shouldn’t be involved, which would be the principled thing to say, but it bothers me a lot:
“Sometimes it takes a catastrophe to demonstrate just how much more the U.S. military is able to do than simply kill the enemy. Only the U.S. can initially control flights into and out of the Port-au-Prince airport from aboard a nearby Coast Guard cutter, while waiting for an Air Force special-ops team to set up shop at the airport and step up operations to 24/7. Only U.S. warships have the capability to generate up to 400,000 gallons of fresh water a day from seawater. Only the U.S. military can send a spy drone from California to fly lazy orbits over Port-au-Prince snapping close to 1,000 pictures a day, which when compared with similar ones shot last summer, create a map of the hardest hit areas that can be instantly relayed to those working on the ground.
Only the U.S. military has enough aluminum matting to boost the runway capacity of Port-au-Prince airport. Only the U.S. military has the surveillance capability to quickly assess additional Haitian airfields and seaports for use in rescue relief operations. Only the U.S. military has the wide variety of vessels and aircraft to utilize those fields and ports, including air-cushioned vehicles capable of ferrying 60 tons of supplies from ship to shore at 40 knots. (See TIME’s exclusive photos of the aftermath of the earthquake.)
But the limits of U.S. capability can also be seen: The Pentagon diverted an unmanned Global Hawk drone bound for Afghanistan to Haiti instead, to photograph the damage there. “We were about to send that Global Hawk over to the war” until the earthquake, explained Air Force Col. Bradley Butz. “It will stay here until the President says it’s time to send it forward.”
While the drone had no comment about its sudden change of mission, some of those bound for Haiti welcomed the new assignment after more than eight years of war. “Marines are definitely warriors first,” Captain Clark Carpenter said Friday as his unit prepared to ship out to Haiti from North Carolina. “But we are equally as compassionate when we need to be, and this is a role that we like to show - a compassionate warrior that can reach out that helping hand to those who need it.”
Read more at Time for the corporate media’s view of the intervention.
And read Michel Chossudovsky, for the deep structure of the intervention, recent US interventions in Haiti, and the extent and implications of a US military presence there (he argues that it’s to monitor and intervene in Cuba and Venezuela).
I recall the tsunami relief effort in 2004 and the intrusion of military vessels and spy satellites into Indonesia and other regions in Asia. Humanitarian interventions are a prime locus for state meddling, because most people will feel reluctant to second-guess what’s happening. They don’t want come off as hard-hearted carping critics, with nothing positive to offer.
A life saved in Haiti is good PR for a life or two killed elsewhere. If such calculations are mathematical (and with the state they always have to be), then we are indeed better off with the US military, many would say.
Meanwhile, JP Morgan, I see, is donating a million to the relief effort.
And Goldman Sachs, Morgan Stanley, and Bank of America are giving a million apiece too. That will be millions taken from the tax-payer and rival banks long defunct. But from wherever it comes, lives will be saved, right?
Thus do they wash their hands clean of guilt.
Who knows.
Maybe Lloyd Blankfein IS doing god’s work.
Or, at least, he’s Dean of the Jeffrey Levitt School of Philanthropy.
[For those with short memories, Levitt stole some $15 million in the 1980s, in the biggest white-collar crime in Maryland history, and almost single-handedly brought down the savings and loan business in the state. One reason he was able to get away with his thieving for so long was that he was careful to make judicious and well-publicized charitable donations].
Lanka Needs Soros Like A Hole In The Head
“In 1992, Soros earned the epithet “the man who broke the Bank of England” by demanding the Bank to raise its interest rates or to float the currency (so that he could make more money). The Bank did neither. He retaliated by selling “short” more than $10 billion worth of pound sterling, forcing the Bank of England to depreciate the pound: Soros amassed an estimated US$ 1.1 billion in the process.
Kingsford Capital And The Captured Media
Mark Mitchell at Deep Capture has some interesting details about the extensive influence of hedge-funds, specifically Kingsford Capital, on the reporting of stories in the financial press:
“Another focus of my investigation at CJR was the appalling bear raid on a collectibles company called Escala. Not only was Escala the victim of massive amounts of illegal naked short selling, but a hedge fund convinced the Spanish government that Escala’s parent company, based in Madrid, was fleecing investors in philatelic collectibles.
The Machinery of Habit
A piece I wrote four years ago, The Burgh: Downsizing,” examines the nature of change and habit in relation to urban economies transformed by globalization and war.
“The boys come in and the beer flows. Ricardo tells us about training. Four-mile runs, 200 push-ups every morning, wall-climbing. “They break you, man,” he shakes his head. “They make you tough.
“I said I hoped so, considering where he was going. But Melanie, who studies the theology of the medieval anchoress Juliana of Norwich and sells papers on a corner in Oakland for the Socialist Worker, is more worried about his getting into what she calls killing mode. I ask her if a mode is the same as a habit. It takes time after all to form a habit. A mode on the other hand sounds like a gearshift on an Audi. And if you can shift into a gear, you can shift out. Maybe it’s really a question of what sort of habits. Learning, retraining, moving need effort. They don’t come easily. But war is a machinery that moves on its own and blood-lust, like a winter flu, might be easy to pick up and impossible to get rid of.
War and demolition come too easily to human nature. And take away too much. Anything worth pursuing, on the other hand, needs to be stalked through the years with the patience and vigilance of a hunter, cultivated through seasons of scarcity and remembered in times of forgetting. In our sophistication we laugh at those who buy dear and hold dearer. Who stay when they should have left. Bag holders. Fools. Who step into the river and expect the waters to stay the same. The immobilized in our mobile society. What is the value of an abandoned church, an obsolete mill, an aging worker? Flux, we shrug, is the only certainty. Change is the first law of nature.
“People talk about joining but they don’t,” says Ricardo, “I’m the only one who did.” He sounds proud.
“I ask him if he thinks good health insurance and tuition money are worth risking his life for. He laughs.
“Look — I ain’t gonna die. Most of the guys who teach me, they’ve been there. They got through. More chances I’d get shot in a ghetto. So some guy’s lost an arm…or a leg. So what? All this new technology now, reconstruction…they can make you another leg; it’s really no big deal.”At 26, you can think of that as a good trade. An amputation of the body or the mind is all it takes to keep up with change. Like those translucent lizards which shed their tails seasonally as they wait immobile and vigilant for flies on dusty window sills, we might grow new limbs just as good. New memories to replace old ones. Here in the hills, at the confluence of three rivers, we have learned not to resist the laws of nature.
“But perhaps we don’t live by nature alone. Perhaps, as Juliana of Norwich said, we also need mercy and grace.”
“The need to change and the machinery of habit that makes it difficult - a theme I find myself returning to , over and over, especially when I’m confronted with the depressing spectacle of people going back to the same propaganda, the same bogus assertions that caused this global catastrophe in the first place.
Going back, like dogs to vomit.
I’m sorry if that sounds ugly, but what’s happening now in DC is ugly….and very very dangerous.
Why We Believe Propaganda
From a piece I wrote in 2005, “America´s Downing Syndrome,” about why the airwar in Iraq was never represented in media coverage:
“And how does the public conscience square with all this? Simple. The civilians who are fair game are not American civilians. The skies that are threatened are not American skies. It may take a village to raise a child, but given enough air power, we now know also that it only takes a child to raze a village. Our children, their villages. And in return for our invulnerability, we make cultural icons out of bomber pilots, turning a blind eye to their ravages abroad. While the grunt that kills and is killed on the scorched ground bears the burden of public backlash against any horrors of war making that might elude censorship, his mates in the clouds are untouchable. Atrocities are always only committed on earth. So a Lieutenant Calley is court-martialed over My Lai and a Charles Graner is imprisoned for Abu Ghraib, but the bombers who wreak havoc on a magnitude far grander not only walk free, but are feted by a society in which for many reasons the air force is substantially white and the officer corps even whiter.
But there’s more. Strategic bombing directed broadly against a country´s will or morale rather than military targets has nearly always been associated with civilian not military control. Pen-pushers in think tanks and journals, couch-crusaders on Wall Street and Main Street are the most hysterical groupies for total war from the skies. (9) Remote from actual bloodletting, they’re still the quickest to tote up grand calculations of its necessity in bringing about their favorite utopia. It was Lyndon Johnson, not the generals, who first ratcheted up the air war against North Vietnam to genocidal proportions.
And because the civilian leadership unlike the military is always indebted to public opinion for its existence, it´s ultimately public approval rather than military need that drives air war against civilians, which is why the corporate media obligingly does its bit to keep that approval going.
Media and government duplicity, widespread intoxication with technological wizardry, a deadly sense of impunity combined with a deadlier sense of omnipotence, cultural myth making, and socio-economic class are the causes of America’s fundamentally diseased relationship with air power and thus with the raw foundation of imperial might. It is the cognitive disease which periodically manifests itself in redundant “smoking-guns” and “exposes” about memos whose sole purpose apparently is to maintain our illusion of ourselves as eternal naifs duped by an endless procession of charlatans in government.
Clearly, it’s not merely war propaganda so much as the public´s receptivity to war propaganda that’s the problem. The addiction to war-as-Grand Theft Auto reveals an insatiable craving in the bowels of the military-industrial leviathan for physical violence. Air war feeds that craving while disarming us with its technical virtuosity and its remote-controlled, surreal impersonality.
Air war works because it displays naked aggression masked as defense, hard core furtively masquerading as family viewing in the American living room. It’s the secret fix that lets us look like good guys but act like bad guys; it’s the other face of the double-eagle, the predator behind the mask of the protector.
Air war is the white noise of a consumer society so narcotized that only violence makes us feel alive. If we no longer see it, hear it, or talk about it in the heart of empire, it’s ultimately only because for more than fifty years now, we’ve never really done without it.”
Doug Valentine On The Empire of The Lie
Douglas Valentine, author of several masterful books on national security and the CIA, talks to Susan Mazur about Tim Weiner´s new book on the CIA (”Legacy of Ashes”), the nexus of finance and espionage, and the propaganda campaign that lets Americans think the CIA is a force for good.
Here´s a snippet:
“Most of what Weiner writes about the CIA is already known. It’s a history book with a bias, not an expose, at least not for the Vietnam generation. He doesn’t even really get into the current Bush administration. He gives us a predictable treatment of William Casey and the Contras, when there was an incredible revival of the CIA under Casey.”
And that´s precisely what I´d say about exposes that appear in establishment outlets, even if they seem to be literary and anti-establishment (Vanity Fair, New York Times, even, perhaps Rolling Stone, although much less so). They are less about exposing as about controlling the terms of the discourse, that is, the boundaries within which discussion can take place.
Another insight from Valentine:
“Angleton thought William Colby might be a mole. Angleton exposed the divisions within the CIA after 1966, the Colby vs. Helms factions. He also represented the literary sensibility the CIA once had, where finding secrets was like teasing the meaning out of a poem. Now we have sledgehammer spies.”
(Colby, by the way, died in a ‘boating accident’ in Maryland, on the day that a prosecutor got permission to set up a grand jury to probe the death of Frank Olson, who was involved in chemical warfare research and had been one of the subjects of the CIA´s mind control experiments. The CIA claimed Olson jumped to his death from a hotel window, although his injuries, according to the autopsy, could as well have been inflicted by a blunt instrument. I should note that at the time of his death in 1996 Colby´s name was being used on the letter head of Strategic Investments, a publication of Agora Inc. (co-owned by my co-author), according to several reports, although I can´t confirm to my satisfaction the exact status of that association. Several unconfirmed reports also link Colby to knowledge about the death (or killing, according to some) of White House deputy counsel, Vincent Foster, a preoccupation at the time, of Agora co-founder James Davidson)
More from Douglas Valentine:
“The CIA gets oodles of money from the arms business. Most of their income comes from criminal activity.
The Russian Mafia operates with a sort of impunity. And so does the Israeli Mafia. And one of the reasons they have this sort of impunity is that they’re sharing their profits with the CIA.
And I think a lot of CIA money is capital investments. They’re like movie producers. They want to overthrow the Iraqi government, they go to companies like Halliburton and others who are going to profit from the overthrow of Iraq. And like the executive producers of some movie, they get them to ante-up some cash. Telling them, don’t worry about it, the government contracts you get in return will cover your investment. Plus they have the old boy network – which now is so far flung.
Suzan Mazur: Plus some of the military contractors are organized crime and have had contracts since the 50s.
Doug Valentine: Exactly. Which bring us back to Barry Seal (Iran-Contra). Because in 1972, Barry Seal was to fly some arms and some explosives into Mexico. What the Brooklyn Drug Task Force found out is that this guy named Murray Kessler, who was involved with the Gambino family in Brooklyn, had an arms manufacturing company in New Jersey where the guns and the bombs came from.
Suzan Mazur: And some of these arms merchants also had security clearance during the McNamara and Clifford years of heading the Defense Department. They make weapons for the US government and some for whoever they feel like.
Doug Valentine: From my perspective, the spy industry and especially the arms industry, is the foundation on which the American empire is built. The United States has a military budget of I think $300 billion dollars and the CIA budget is like $50 billion – that’s a year. Together that’s bigger than the gross national product of any country in the world. And in the meantime we’re worried about 20 guys in Al-Qaeda.
[Lila: This statement is inaccurate, as both GDP and GNP in most developed countries were near or over a trillion in 2007. See current figures here. I think the author might have been misquoted on this and might have meant “many countries,” for example, in the developing world. However, projections for 2010 place US military spending in excess of 1 trillion, if all military-related expenditures are included).
Continuing with the interview:
“Suzan Mazur: Which exploits of the agency do you consider the most diabolical – aside from the fact that one of its founding fathers molested two of his own children – and a reason why the CIA should have been dismantled years ago?
Doug Valentine: Your readers don’t want to know that answer. The most dastardly thing that the CIA has done is to wage this campaign of psychological warfare against the American people. Where the American people don’t see the CIA for a bunch of basically American KGB agents who are conducting criminal activities around the world. There’s a movie called The Usual Suspects with a much feared criminal named Keyser Soze. And Keyser is talking to a cop and he says the greatest trick that the Devil ever pulled was convincing the world that he doesn’t exist.
And this is what people like Weiner are doing with books about the CIA that don’t explain it for what it really is. They’re part of a propaganda machine that’s making the American people see the CIA in mythological terms as good guys, crusaders, as Lawrence of Arabia – when, in fact, they’re criminals. They’re part of THE GRAND LIE.”
My Comment
The piece is long and, for an intelligence aficionado, packed with illuminating detail. Among other things, Valentine touches on James Jesus Angleton, the most compelling of the spy masters (since he was chief of counter intelligence, I should call him chief spy hunter), the extensive role of private intelligence (which I touched on in my Abu Ghraib book), as well as the manipulation of Wikipedia, which Valentine regards as considerably influenced by the CIA. This confirms my own long-standing observations about Wikipedia. On crucial topics, it stays within the bounds of debate allowed by Western establishment interests and is very far from being an objective or quasi-scholarly affair. (I use the term Western because despite a substantial component of foreigners, the predominant interests served are the interests of the state and the military-industrial and financial industries), the most influential and powerful of which are Western. I do not use the terms capitalist, because I see the establishment as essentially a technocrat or money-managing class, working against capital formation in many respects.
And a final word, from the lips of Bill Colby himself:
“The CIA owns everyone of any significance in the major media.”
Was this tongue-in-cheek, or meant to be taken literally? You decide..
Secy of IMF - Siddharth Tiwari
On November 21 an Indian was named Secretary of the IMF, according to Press Trust of India:
“With a proven track record in managing complex work programmes, Indian economist Siddharth Tiwari has been named as the Secretary of the IMF by its Managing Director Dominique Strauss-Kahn.
Tiwari, currently Director of the Office of Budget and Planning, is set to assume the position, which was held by Shailendra Anjaria before his retirement from the IMF earlier this year.
“Mr Tiwari has the experience and skills” to promote consensus building, which is a critical goal of the IMF Board and Management, Strauss-Kahn said in a statement.”
IMF Sells Gold to India (Updated)
Update 2 (Nov 3): The only other explanation I can think of is that the Indian government is privy to information indicating that the demise of the dollar is much closer at hand than is being given out..
Update 1:
OK. As you know, I’ve found this Indian purchase a bit puzzling. I have a bunch of questions:
*Why didn’t the Indian government make a big purchase earlier this year, at $900, rather than now, at the top?
*What, if any, is the connection between this and the Fisk report a few weeks ago about the Gulf Arabs moving out of the dollar, which a lot of people found odd, despite the reputation of the reporter? The report bumped up the price of gold.
Now, here’s Chuck Butler of Everbank, via The Daily Reckoning:
“I told you yesterday that I thought it would be a “wash” for the dollar and the gold price… But that was before I learned that the Reserve Bank of India paid for their $6.7 billion dollars worth of gold with… SDRs.”
(Note:Reuters reports that the sale was in dollars - which would be dollar negative).
What does this mean? That, over the whole past 15 -20 years of “globalization” while the US Govt. inflated its money and sold its treasuries and fake derivatives all over the world in return for real work and real savings, who were the buyers?
Countries like India, where large parts of the middle-class stored its savings in dollars. Now those dollars are seen as so unsound that the IMF (which is the new locus of Anglo-European global domination) won’t accept them for payment of gold.
That means the Indian government has to give up its SDRs (Special Drawing Rights) in exchange.
Now the resurgent IMF is where the globalists are exerting their power and not in the G20 (which was supposed to augment the power of developing nations when it was established in 1999).
As I blogged earlier, the Financial Stability Board is the new regulatory agency that will coordinate with the IMF, but it includes the G20 and also Spain and the European Commission and is headed by ex-Goldmanite, Mario Draghi and it’s housed at the Bank for International Settlements in Basel. So that is a double hit to any representation India will have in the forum.
India sold gold at the bottom in the 1990s; and is now buying it at the top nearly 20 years later - thus selling part of the gains of these past years. At least, so it seems to me. To me this smacks of neocolonialism.
And now, it becomes easier to understand why the center-liberal establishment media is interested in co-opting the anger against Goldman and channeling it into various subplots of the financial crisis (naked short selling, the bail-outs etc.etc).
I see this as an elaborate feint to divert world attention from the reprise of Anglo American and European colonization over the last two decades - accomplished, with a “black” president in charge.
Here’s a piece on IMF sales of gold in 1999. http://www.independent.co.uk/news/business/imf-sells-gold-to-hep-debt-of-poorest-nations-1090154.html
Notice how similar the language is - they’re doing it to increase funding to the poorest countries, etc. etc.
In the news, Bloomberg reports:
“The International Monetary Fund sold 200 metric tons of gold to the Reserve Bank of India for about $6.7 billion, its first such sale in nine years.
The transaction, equivalent to 8 percent of global annual mine production, involved daily sales from Oct. 19-30 at market prices and is in the process of being settled, the IMF said in a statement yesterday. The average price to India, the biggest consumer, was about $1,045 an ounce, an IMF official said on a conference call. Gold for immediate delivery gained 0.2 percent.”
My Comment:
Interesting. The Indian government doesn’t buy gold at the bottom (2000) but now, when it’s at all time highs (shades of the British government selling gold at the bottom).
Now, the Indian central bank is reputed to be very savvy, as are Indian gold buyers. Most commentators expect gold to consolidate, if not correct, before pushing on. It would make sense for the Indian government to wait and buy it on dips.This is a good move for the IMF. But for the Indian government, which managed to steer the banking system past the whirlpool of unwinding derivatives, I wonder if this move is astute.
Look at the peculiar facts, as reported in the New York TimesWall Street Journal)
“In the last one year, China has increased its gold holdings, by weight, by 75.69%, Russia by 18.78%, the Philippines by 18.50% and Mexico by 108.91%.
Compared with this, India’s central bank did not add anything to its gold reserves in the last one year, according to Bloomberg data.(Lila: Why not? Why buy gold at record prices when the government was unwilling to buy when it was trading much lower, only this year?)
In fact, the share of gold in India’s total reserves has dwindled over the decade.
In March 1994, the share of gold in the total reserves of the country was 20.86%; by the end of June 2009, gold constituted only 3.7% of the total reserves.”
Even the IMF expressed surprise, as Breitbart.com notes:
“A senior IMF official said that the IMF was “lucky” in selling the 200 tonnes to India for roughly 1,045 dollars an ounce, compared with 850 dollars an ounce in April 2008.”
(Lila: In other words, over the whole period of globalization, India sold it’s gold and bought US treasury…dollars…just what the US government was desperate to get rid off, so it wouldn’t drive inflation at home…)
Again, India sold gold cheap and bought it back at its height. Does that sound like savvy behavior from a country renowned for well trained economists and smart gold buyers?
A former governor of the Indian central bank (Reserve Bank of India), Bimal Jalan, said it was to help the IMF meet its funding needs for loans to the poorest countries, for which it had looked to India and China.
As an aside, in an earlier post, I speculated that the report (by Robert Fisk, a very respected source) about Gulf Arabs moving out of the petrodollar - which was promptly denied - might have been a rumor circulated to bump up the price of gold to help IMF gold sales….maybe, I wasn’t so far off, after all.
I went back to an earlier post this year, in February, which quotes from a list in Richard Russell’s letter:
Note: The list looks inaccurate. I’ll go back and find why Russell’s numbers are so different from the World Gold Council figures below them). (Note: Russell is referring to tonnes of gold; the WGC figures are for dollar amounts. So the discrepancies we refer to at in the percentages).The US has 8,135 tonnes….64.4% of reserves
Germany — 3,412… …64.4% of reserves
IMF — 3,217… … …(1)
France — 2,508… … …58.7%
Italy — 2,451… … …61.9%
Switzerland — 1,040… …23.8%
Japan — 765.2… …1.9% …(a potential gold-buyer)
China — 600.0… …0.9% …(should be a big buyer)*A reader notes that this number is too low. I assume it’s a number from before China started buying off market. Compare with list below.
Russia — 495. 9… …2.2% …(is a buyer)
Taiwan — 422.2… …3.6% …(should be a buyer)
India — 357.7… …3.0% …(should be a buyer)
UK — 310.3… … …14.5% …(sold most of its gold at the low price)
Saudi Arabia — 143.0… …11.4% (should buy gold)
South Africa — 124.4… …9.0%
Australia — 79.8… … …6.3%So there you have it. Among countries, Italy, France, Germany, and the US have the most gold. Switzerland has a third of what they have. The UK, South Africa, Australia, and Saudi Arabia are next with about 1/5th - 1/10th as much. Russia and Japan have only a small percent in gold. China and India have even less. What do most Asians have? Debt (treasuries and dollars) from the US. Neo-colonialism anyone?
Correction:
CNBC has the following completely different list of top gold holding countries compiled by tradermark via Seeking Alpha, posted October 13, 2009.
(Note: Data is based on the World Gold Council’s September 2009 report and is converted to US short tons at a rate of 1 T = 1.102311 US tons. All monetary estimates are calculated at the rate of 1oz gold = $1042 US).
United States $298.4 N/A
Germany $125.0 69.2%
International Monetary Fund $118.0 N/A
Italy $89.9 66.6%
France $89.7 70.6%
China $38.7 1.9%
Switzerland $38.2 29.1%
Japan $28.1 2.3%
Netherlands $22.5 59.6%
Russia $20.9 4.3%
European Central Bank $18.4 18.8%
Taiwan $15.5 3.9%
Portugal $14.0 90.9%
India $13.1 4.0%
Venezuela $13.1 36.1%Ron Paul: Fractional Banking Finances War…
*”Paul makes it clear that the Fed isn’t the whole problem. It’s just one part of a system that first went wrong with the introduction of fractional reserve banking centuries ago (banks used to be warehouses, storing depositors’ money for a fee), followed by the spread of European central banks (really just scams to allow a few elite bankers and politicians to expand their own power at the expense of everyone else) and then, finally, the introduction of fiat currency, which freed governments to expand spending and borrowing without regard to, well, anything. The problem, in short, is the whole of modern banking and finance.
*The middle part of the book features transcripts of Congressman Paul grilling Fed chairmen Greenspan and Bernanke. Some of these transcripts date back to the early Reagan era, which means that for going on three decades Paul has been fighting this fight, and slamming into the same brick wall. The Chairmen feel no need to explain themselves to a lowly congressman, and respond with a mixture of lies and obfuscation that apparently fooled most of Washington. The generally-respectful Paul even refers to Greenspan as “pathetic” after one especially dishonest piece of testimony. Less charitable readers will, by the end of this section, want to take a congressional microphone and beat Greenspan and Bernanke senseless.
*Fractional reserve banking and fiat currency make war easier. Back when a ruler needed actual gold to field an army, invading a neighbor required some serious forethought. But once a dictator (or the world’s policeman) could just print a few billion pieces of paper and order some new tanks, “defending the national interest” got a whole lot easier. Hence the bloodbath of the 20th century, and perhaps the mess of the coming decade.
*Paul knows all the major sound money/Austrian economics classics, and he cites them liberally. The “recommended reading” list contains a year’s worth of serious research.
*Though he continues to fight, he’s not optimistic about averting the coming train wreck, which he refers to as the “BIG ONE”.
Obama Heads UN Security Council..
“Barack Obama will cement the new co-operative relationship between the US and the United Nations this month when he becomes the first American president to chair its 15-member Security Council.
The topic for the summit-level session of the council on September 24 is nuclear non-proliferation and nuclear disarmament – one of several global challenges that the US now wants to see addressed at a multinational level.
“The council has a very important role to play in preventing the spread and use of nuclear weapons, and it’s the world’s principal body for dealing with global security cooperation,” Susan Rice, US envoy to the UN, said last week.
Her remarks were the latest by the Obama administration to emphasise a shift from the strategy of the previous Bush administration, sometimes criticised by its UN partners for seeking to use the world body principally to endorse its own unilateral policies. The US currently holds the month-long rotating presidency of the Security Council…”
More at the Financial Times.
My Comment:
Did I read that right? The way to shift away from the Bush administration’s tendency to use the UN to endorse its own unilateral policies is to put Obama at the head of the UN Security Council??
Am I missing something here? How does this represent a shift away? Isn’t it more like coming out of the closet on it?India’s Man at the IMF: Arvind Virmani
The global crisis has had the effect of making over the IMF and giving it renewed power.
Until recently, the Fund had lost its international reputation for what was seen as mishandling of the debt crises in Argentina, Asia, and Russia in the 1990s.
Now, however, with a universal cry of “do something” going up, it’s the IMF to the rescue. The Fund has had its monies tripled, and is at the center of a new global regulatory regime, ostensibly working with the G20 (the Group of Twenty, a forum that includes the twenty countries with the greatest GDPs).
The idea is that the G20, which has room for countries like Argentina, Brazil, China, India, and Indonesia, among others, will be more inclusive than forums limited to the developed nations. To check if this is actually the case, I’ve been looking at the structure and organization of the IMF and its affiliated groups, and will be posting what I find as I go along.
Exhibit A is India’s representative to the IMF. That’s Arvind Virmani, Chief Economic Advisor in the Ministry of Finance. Virmani, according to this article in the Indian Express, was educated at Harvard (PhD in Economics), was the Principal Adviser to the Planning Commission, and was also a contender for Vice President of the Reserve Bank of India. Before joining the government, he was a Senior Economist at the World Bank research department.
It’s always the case. The people who end up representing countries like India are all trained in the elite schools in the West, where the faculties are drawn from the US government, as well as the very corporations and international institutions that the representatives will interact with, and often be responsible for monitoring or regulating.
How independent can they be? And even if they’re personally ethical people, how easy will it be for them to even think outside the parameters set by the institutions in which they’ve trained and operated all their lives? Not easy at all. In fact, impossible.
Let’s see if we can trace some of the connections:
Virmani is an alum of Harvard.
It so happens that Larry Summers, current head economic adviser of President Obama, was the 27th President of Harvard (2001-2006).
Summers is said to have been behind Harvard’s investment in interest rate swaps that eventually lost the university over a billion dollars.
Before that, Summers was Chief Economist of the World Bank (1991-1993) - where Virmani worked before 1987- and then Undersecretary and Deputy Secretary of the US Treasury, before becoming Secretary in 1999..
Summers’ long-time mentor is Robert Rubin, whom he succeeded at Treasury Secretary.
In the 1990s Summers was a leading advocate of the Washington consensus–the proposition that free financial markets, “free” trade and fiscal discipline would bring prosperity to the world.
I put “free” in quotes because what it really amounted to was managed trade, manipulated by the US government with carrots and sticks of sorts…from nuclear weaponry to aid to penalties to sabre rattling
While Summers was pushing the Washington Consensus, his mentor Robert Rubin, a former Goldman co-chair, was US Treasury Secretary, where he was instrumental in blocking legislation to regulative the derivative market.
Rubin also pushed through the repeal of the 1933 Glass-Steagall Act (keeping apart merchant banking and commercial banking), which enabled the consolidation of the banking industry.
Then, Rubin became the director of Citigroup, one of the banks whose consolidation was made possible by that repeal. Citi shareholders have filed a lawsuit against Citi executives including Rubin charging that they sold shares at inflated prices, hiding the risks. Shareholders are said to have suffered losses over 70% since Rubin joined Citi.
Meanwhile, Rubin also has a Harvard connection, being a member of the executive governing board of the university, a position he landed a year after getting an honorary doctorate from Harvard.
Importantly, Virmani also shares his Harvard ties with current World Bank president, Robert Zoellick. Zoellick is also an alum of Goldman Sachs, a former US State and Treasury official, a Presidential assistant and US Trade Representative, and a double graduate of Harvard (JD and MPP).
Finally, the IMF position is known to be a sinecure for retiring Indian government economists, who can earn some hard currency for their retirement.
Question: Even if Virmani were scrupulously honest himself (and he might be), how easy would it be for him to be able to stand up to policies carrying the imprimatur of some one like Rubin or Summers or Zoellick? Not easy at all. In fact, impossible…
China’s Gold Rush..
From Adrian Ash at Bullion Vault, via goldseek:
“The International Monetary Fund confirmed on Friday that it will sell 403 tonnes from its hoard to finance development projects in poorer countries, offering gold to central banks before considering steady, pre-announced open-market sales.
“China has no need at all to Buy Gold from the international markets,” counters Lila Lu, chief precious metals trader at Minsheng Bank Corp. in Beijing, speaking to Reuters.
“Because China is a large gold producer, it can source gold directly from its domestic makers, most of which are state-run enterprises.”
Off-market purchases direct from domestic Gold Mining firms enabled South Africa – then the world’s No.1 producer – to double its gold reserves during the late 1960s.
“Why should we use US Dollars to Buy Gold?” Lu added today. “We can use Yuan instead to purchase gold from domestic producers.”
Early Tuesday the state-owned China Investment Corp. announced taking a 15% stake in Singapore-listed commodities trading house Noble Group at a cost of $850 million.
Physical gold demand from private Chinese households rose 9% in the first half of this year, trade marketing-group the World Gold Council said today, announcing an “unprecedented” sales push across rural China.”My Comment
There are several terribly important things going on in the capital markets and in international politics.
I’ll start with what most investors are probably watching anxiously - the teetering of the dollar at the lower end of the long term band of support (76-80), below which it plunged only a year ago. After showing some strength yesterday, the dollar is down again and gold is back up strongly over 1010. The reason seems to be the whispering in the markets that China will be buying IMF gold to supplement what are said to be meager reserves.
Rumors like these could be seen as a threat by the Chinese, for they expose China’s weakness in relation to other countries, especially those that possess better gold reserves. I suspect the comments by Lu are intended to diffuse that threat.
Another reason for dollar weakness is that the relative strengths of currencies are on the table at the G20 meeting, which is scheduled to take place in Thursday in Pittburgh, Pennsylvania and trade deficits are going to be considered - which is likely to be dollar negative.
The IMF sales are pretty interesting, although it’s hard to tell exactly what’s involved. It seems the gold will be sold to central banks (which ones?) and the proceeds will go to supplement and improve the financing now available to low-income countries (how?).
Question: Why should these professed good intentions be taken at face value, given all we know about the IMF?
At present, the IMF also allocates SDRs (or Special Drawing Rights) to each member country based on its contribution to the IMF (this is supposed to be a way to improve members’ liquidity in the international markets).
The SDR’s are based on a basket of currencies - currently, the US dollar, the euro, the sterling, and the yen - that can be traded for other currencies or used directly.
The IMF will use the gold sale proceeds to invest in other things. The interest from those investments will then benefit low-income countries. At least, that’s what I took away from my reading.
It all sounds suspiciously convoluted and opaque. My fear is that this is all an elaborate charade to leave some countries/institutions holding the “paper” bag, while real value is siphoned off by other countries/institutions.
I’ll leave you to decide who the winners and the losers will be….
Meanwhile, this is only my suspicion. I’ll need to go and do some more digging. But I’m putting my suspicions out here to fuel some leg work in the blogosphere.
Here’s a link to some relevant information on gold market manipulation at the website of the Gold Anti-Trust Action Committee (GATA), the leading activist group on gold price manipulation.
Especially read through the events surrounding the sale of Britain’s gold by then Chancellor of the Exchequer, Gordon Brown. Unlike other countries, UK gold sales are under the authority of the politicians. Brown sold British gold at a price lower than the market price at the time. The timing was extremely suspicious and followed on Robert Rubin’s unsuccessful attempts to get the IMF to sell its gold. The ostensible reason was to “help poor countries” - the same reason being given now. But the actual reason was a simpler one and one I’ve discussed a number of times. It was to keep the gold price low to support the dollar, disguise the rate of monetary debasement, and pump up the stock market. That in turn helped the derivative market, which Rubin and Greenspan had also helped to keep out of regulation. This was in the late 1990s….
Now, a decade later, the IMF hasn’t been weakened by the revelations of its sins. Instead, it’s been strengthened. And now, again, the IMF is selling gold - and again, the excuse is “helping the poor.”
Vulture Funds Prey on Third World Debt..
Johann Hari has a critical piece on “vulture funds” at The Independent that is sure to be polarising:
“Would you ever march up to a destitute African who is shivering with Aids and demand he “pay back” tens of thousands of pounds he didn’t borrow – with interest? I only ask because this is in effect happening, here, in British and American courts, time after time. Some of the richest people in the world are making profit margins of 500 per cent by shaking money out of the poorest people in the world – for debt they did not incur.
Here’s how it works. In the mid-1990s, a Republican businessman called Paul Singer invented a new type of hedge fund, quickly dubbed a “vulture fund.” They buy debts racked up years ago by the poorest countries on earth, almost always when they were run by kleptocratic dictators, before most of the current population was born. They buy it for small sums – as little as 10 per cent of its paper value – from the original holder and then take the poor country to court in Britain or the US to demand 100 per cent of the debt is repaid immediately, plus interest built up over years, and court costs.”
My Comment
I’ve been interested in these lucrative public-private philanthropic ventures for some time. “Doing good” has become the avenue for “doing well.” This is touted by some people as the “markets working for people.” But the markets work for…and against..people all on their own. They don’t need the bells and whistles of public philanthropy added.
And when philanthropy been added, as my earlier post on Jeffrey Levitt indicates, it’s usually been added for an ulterior motive. Thus Hari’s activism against vulture funds.
Having made that point, I have a few problems of my own with Hari’s post that I’ll come back later.
First, here’s a response from the object of Hari’s criticism - one Michael Sheehan, the founder of Debt Advisory International (DAI) (which manages several vulture funds) and a Republican donor to George Bush’s campaigns. Sheehan’s letter is cited by Felix Salmon at his Reuter’s blog. The crux is at the end:
“At the end of the day, then, the anti-vulture legislation will accomplish exactly the opposite of what it set out to do. It will have increased the debt burden of all HIPC countries, increased the cost of credit for all HIPC countries, increased the barriers to foreign direct investment for all HIPC countries and increased the amount that will be demanded from the OECD countries in support of aid budgets for all HIPC countries. There won’t be any savings. The costs will be in the billions and will be annual costs you won’t get rid of.
You will, of course, in the process have increased the power and leverage of the development set, but then that was the intention all along, wasn’t it.”There’s more on Sheehan and the creator of the concept - Paul Singer - in this piece, which also sheds some light on just how influential vulture funds are:
“Debt Advisory International are very generous to their lobbyists in Washington. They have been paying $240,000 a year to the lobby firm Greenberg Traurig - although recently they jumped ship to another firm after Greenberg Traurig’s top lobbyist was put in jail.
Paul Singer has more direct political connections. He was the biggest donor to George Bush and the Republican cause in New York City - giving $1.7m since Bush started his first presidential campaign.”
Many of the debt purchases are also corrupt, as this BBC piece indicates:
“The Zambian deal with Donegal for instance involved an official in former President Frederick Chiluba’s administration who was later found - along with the president - to have stolen £23m from Zambia.”
From Third World Traveler come further details:
“The debt, originally owed to Romania for agricultural machinery and services, was accrued during the cold war. The amount claimed by Donegal was far more than Zambia is due to receive this year in debt relief - as agreed at the G8 meeting in Gleneagles in 2005. It is equivalent to more than six months of Zambia’s health budget.
Since qualifying for debt relief, Zambia has introduced free primary rural healthcare and announced plans to employ 4,500 teachers and hundreds of nurses. But one in three children in Zambia still does not go to primary school, nearly 80% do not receive secondary education and the average income is barely $1 a day. Donegal International’s claim threatens to undermine Zambia’s plans for poverty reduction.”
My Comment:
The vulture funds are, of course, behaving unconscionably. But moral outrage after the fact is less effective in stopping such things as not providing the incentives that entice unscrupulous people in the first place.
And these incentives are usually put in place by the state…in this case, by the global financial organizations, the IMF and World Bank, which were behind the economic policies that turned the once relatively prosperous country of Zambia into a basket-case, where half the population is malnourished.
So yes, the vulture funds are predators - but their predation is secondary and far smaller than the predation of the scavengers of the first order - the global managers whose “aid” has a strange way of devastating its recipients...
Economic Freedom in US in Decline..
An interactive map of world economic freedom at the Cato Institute (2007)
Cato also has the 2009 Economic Freedom of the World Annual Report which shows the US number 6 in the world, much lower than the number 2 spot it held in 2000.
The Renegade Economist on Gordon Brown’s Lies
The Renegade Economist takes apart Gordon Brown’s inane attempts to pretend he had no hand in the global financial collapse.
Milton Nascimento Sings the Jet Samba
Brazil’s Milton Nascimento sings Anton Carlos Jobim’s musical celebration of Rio de Janeiro, Samba do Avaio (The Jet Samba) . The lyrics reference the statue of Christ the Redeemer that towers over the city and the Guanabara.
Minha alma canta
(My soul sings)
Vejo o Rio de Janeiro
(Seeing Rio de Janeiro)…..Cristo Redentor
Braços abertos sobre a Guanabara…Why More Swine Flu Deaths in Bangalore?
From Sify.com:
“State health commissioner P.N. Sreenivasachari told IANS: ‘It’s difficult to say why Karnataka, more precisely Bangalore, which is endowed with adequate healthcare facilities, is witnessing large number of swine flu deaths. We too are puzzled.
‘We can say the virus is already in the air and it’s time people became more aware and cautious to stop the spread of the virus. However, from the point of view of the administration, we have provided adequate healthcare facilities to treat swine flu patients,’ added Sreenivasachari.
Principal secretary (Health) I.R. Perumal said people should not get panicky.
‘People with swine flu like symptoms should immediately get themselves checked, as the city is well equipped to deal with the pandemic,’ added Perumal.
On Friday, two deaths were reported from Bangalore, one came from Bijapur.
My Comment
Why? I have no idea. More international travelers is one reason and a plausible one. But I confess I couldn’t help thinking about this piece I wrote in 2005, “Terror Hits Bangalore.”
One result of swine flu scare-mongering will be a shift of money to influenza research - hitherto absent in India. That means funding for drug trials. I wonder who the lucky drug companies are that will benefit?
The two states hit hardest are Karnataka (where Bangalore is) and Maharashtra (where Bombay is). Those are also the states that are the destinations of most foreign travelers and where India’s IT business and stock market are located. Bangalore is the home of a booming biotech business. And a locus of the anti-globalization movement as well. Just thinking out a loud…
Deaths so far are a hundred or less. That’s in a country of roughly a billion and a quarter where tens of thousands die from traffic accidents (300 a day or around 100,000 a year) and from water-borne diseases like diarrhea, typhoid, and jaundice. Hundred of farmers are committing suicide. None of that has qualified for the term pandemic….OR for the accompanying switch in research funding..
Here’s some information on malaria in India in 2008:
“While the official figures state that in 2008 India had 1.5 million malaria cases, resulting in 924 deaths, the real number of deaths is higher by several orders of magnitude.
“These numbers are a joke,” said Sunil Kaul, a doctor who works for a volunteer organization called the Ant that treats villagers. “In Assam alone we had at least 1,500 deaths last year.”
The real number of malaria-related deaths in India was closer to 40,000 in 2008, according to various non-governmental sources and some government officials who didn’t want to be named.”
Under-reporting and lack of knowledge about the disease are two of the main obstacles in retarding the spread of malaria. But interestingly, it’s also international organizations like WHO that obstruct progress in many ways:
“These problems are further complicated by foreign agencies such as the World Health Organization (WHO), which — under the influence of global lending agencies like the World Bank and big pharmaceutical companies — have pushed India to adopt prevention methods that don’t suit the local conditions and to initiate huge, ill-considered projects rather than targeted ones. ….”
More here at The Global Post.
What Barack Obama Left Out of His Foreign Policy Speeches
From Bill Blum’s Anti-Empire Report:
I’ve compiled a list of CIA assassination attempts, successful and unsuccessful, against prominent foreign political figures, from 1949 through 2003, which, depending on how you count it, can run into the hundreds (targeting Fidel Castro alone totals 634 according to Cuban intelligence)2; the list can be updated by adding the allegedly al Qaeda leaders among the drone attack victims of recent years. Assassination and torture are the two things governments are most loath to admit to, and try their best to cover up. It’s thus rare to find a government document or recorded statement mentioning a particular plan to assassinate someone. There is, however, an abundance of compelling circumstantial evidence to work with. The list can be found here.
For those of you who collect lists about splendid US foreign policy post-World War II, here are a few more that, lacking anything better to do, I’ve put together: Attempts to overthrow more than 50 foreign governments, most of which had been democratically-elected.
After his June 4 Cairo speech, President Obama was much praised for mentioning the 1953 CIA overthrow of Iranian prime minister Mohammed Mossadegh. But in his talk in Ghana on July 11 he failed to mention the CIA coup that ousted Ghanian president Kwame Nkrumah in 19663, referring to him only as a “giant” among African leaders. The Mossadegh coup is one of the most well-known CIA covert actions. Obama could not easily get away without mentioning it in a talk in the Middle East looking to mend fences. But the Nkrumah ouster is one of the least known; indeed, not a single print or broadcast news report in the American mainstream media saw fit to mention it at the time of the president’s talk. Like it never happened.
And the next time you hear that Africa can’t produce good leaders, people who are committed to the welfare of the masses of their people, think of Nkrumah and his fate. And think of Patrice Lumumba, overthrown in the Congo 1960-61 with the help of the United States; Agostinho Neto of Angola, against whom Washington waged war in the 1970s, making it impossible for him to institute progressive changes; Samora Machel of Mozambique against whom the CIA supported a counter-revolution in the 1970s-80s period; and Nelson Mandela of South Africa (now married to Machel’s widow), who spent 28 years in prison thanks to the CIA.4
- Gross interference in democratic elections in at least 30 countries5
- Waging war/military action, either directly or in conjunction with a proxy army, in some 30 countries
- Dropping bombs on the people of more than 30 countries
- Attempts to suppress dozens of populist/nationalist movements in every corner of the world6″
My Comment:
The issue here isn’t whether you or I approve of everyone of these leaders…or not (I don’t).
The issue isn’t whether some other country might not have done even worse if it had the power the US had (they might have).
The issue is - is it the business of the US government to interfere in the rule of other countries, foment coups and revolutions, police, bomb, and spy on millions of people?
And how does any of that make us safer, richer, or freer?
Gore Vidal On the Bridge to Fascism
Gore Vidal on a bridge to somewhere bad :
“I went back to the lecture hall at Duke where I’d been speaking, and I chatted about the woods, about the bridge. Nobody seemed to have noticed it. I asked a politically minded professor, and he said, “Well, it’s a problem.” He said, “The government’s getting ready for something; we don’t know what it is, but something’s obviously on their minds that’s disturbing them.” And I said, “Revolution?” “Oh,” he laughed, “this is North Carolina, don’t bother about that, but whatever it is, they’re putting a lot of money into this bridge.”
A year or two later, I took the same walk again. There was a very large bridge of solid cement, and it looked entirely finished. I found another gentleman of the forest, and I said, “Well, can you find much use for this huge and expensive bridge?” He said, “It certainly was expensive, I can tell you that.” He had the happy look of someone who had benefited from the expense. We chatted about the government and what they were up to, and a certain wariness could be heard in our dialogue. We were puzzled; something unexpected had happened, something really unimaginable—a vast work had been constructed for imminent horrors, it would have seemed. I did ask here and there about it, but I was given no answer….”
Time to Run
My latest piece, “Time to Run”, at Lew Rockwell:
“Is it time to run?
That’s what I’ve been asking myself for three years now.
Before that, I thought it was simply a matter of finding a better place to live. A place that was quieter and cheaper. Where flippers and developers hadn’t taken over the neighborhood. Somewhere safe I could park my car on the street and not worry about it.
But by the time I found it, I also found that the thieves were inside the house, not on the street. There’s really no hiding from them. And no hiding from what they can do.
Our mene, mene, tekel upharsin is on the wall.It’s time to run, not hide.
I mean that. We’re in the throes of an economic collapse of a kind last seen in the 1930s. The government is intent on grabbing control of whatever it can. American firms are dropping like flies. Unemployment is soaring. Debt is soaring. The money supply is soaring. Our foreign policy is a wreck – we have more enemies than we can count. We have a drug war on the borders, we have gang war in the ghettos, we have culture wars in the academy and media.We have criminals in government.
The future isn’t any brighter. Subprime is only the first leg down. We still have a second wave of housing trouble in store, centering around commercial real estate and option ARM loans.Gerald Celente, the CEO of Trends Research, wrote a piece last year predicting that by 2012 there would be food riots, tax rebellion, and revolution across the country. Celente has a good track record in the forecasting business.
Experts predict a 100% rise in prices across the board. In the best-case scenario, it will happen over ten years. In the worst case, it might happen within months….”Read the rest at Lew Rockwell
Government Posts Highly Confidential Civilian Nuke Info on Internet
Oh dear. The blunderbuss in Washington strikes again. AP reports:
“WASHINGTON – The government accidentally posted on the Internet a list of government and civilian nuclear facilities and their activities in the United States, but U.S. officials said Wednesday the posting included no information that compromised national security.
However, Energy Secretary Steven Chu, questioned about the disclosure at a House hearing, expressed concern with respect to a uranium storage facility at the department’s Y-12 facility in Oak Ridge, Tenn. The facility holds large quantities of highly enriched uranium, which if obtained can be used to fashion a nuclear weapon.
“That’s of great concern,” said Chu, referring to the Y-12 site. “We will be looking hard and making sure physical security of those sites (at Y-12) is sufficient to prevent eco-terrorists and others getting hold of that material.”
But later Chu told reporters that while the disclosure may be embarrassing “there’s no secret classified information that’s been compromised (and) the sites and everything are public knowledge” already available elsewhere.”
My Comment
The rest of the article, which refers to the material as “sensitive” and “highly confidential” and unavailable in one place anywhere else, seems to contradict the phlegmatic Mr. Chu.
But this is bureaucracy in action. Listen up, people. This is the lot that’s scaring you into thinking your safety is their number one priority. Right. That’s why Congress has its underground bunker all fitted out and ready to go in case of some endgame fireworks.
And you have…what? A house. Oh yes. That paper-mache prefab box on which you’re upside down anyway…
That should be a real haven in case of a thermo-nuclear accident in the vicinity.
And I suppose you also have a great permanent job with fantastic medical coverage for you and all your little tots too, in case…just supposing, I mean…that said nuclear incident might have a teeny-weeny negative effect on your health.
Award Winning Research Proves that Fed Fiddled Us Into Disaster
A Distinguished Academic Research Award went to researchers who showed that Bernanke’s tinkering with the interest rate converted a minor recession in 2004 into a full-fledged implosion of the credit markets in 2008:
“In a correlative movement with the rise in the price of oil, the Federal Reserve moved from a low accommodative interest rate policy to one of a steady and consistent increase in interest rates between 2004 and 2007. The switch in policy, to higher interest rates, combined with the financially corrosive effects of low initial variable interest rates, between 2001 to 2004, converting to much higher indexed variable interest rates, between 2005-2008, became a prime cause of the financial services mortgage crisis of 2008. The study suggests that the Federal Reserve’s sustained manipulation of interest rates between 2000-2008 had a deleterious effect on financial lenders and individual borrowers.”
– “Federal Reserve Interest Rate Manipulation between 2000-2007 and the Housing Mortgage Crisis of 2008,” by Dr, Fred M. Carr and Dr. Jane A. Beese, August 8, 2008, of the University of Akron’s .K. Barker Center for Economic Education.
My Comment
(later)
Bail-Out for Insurers
In the news:
“The Hartford Financial Services Group Inc. was the first to disclose Thursday that it had been notified by the Treasury Department that it was eligible for $3.4 billion from the Troubled Asset Relief Program, or TARP. Lincoln National Corp., which commonly goes by the name Lincoln Financial Group, said it has been initially approved for a $2.5 billion injection from TARP’s Capital Purchase Program.
Allstate Corp., Ameriprise Financial Inc., Principal Financial Group Inc. and Prudential Financial Inc. also are among insurers receiving preliminary investment approval, Treasury spokesman Andrew Williams confirmed. He declined to disclose the amount of investment each company will receive.
The total capital injection into the six companies will be less than $22 billion, The Wall Street Journal reported, citing a person familiar with the situation…”
My Comment
22 billion might not seem like a lot, but insurers’ holdings have taken a big hit in recent months, it seems, and a cut in their ratings would have been likely once their assets fell below a certain level.
So you have government ownership of large parts of the housing market (which itself covers, in all its aspects some 30% of the economy), extensive government intervention in banking and insurance, government run trade, government run schools and colleges, government run social security and medicaid and medicare, and what does the left think the problem is? The free market!
Insiders Selling the Rally
Insiders are selling this rally like crazy, so says The Pragmatic Capitalist:
“I recently wrote about reports that insider selling was at record highs and buying was practically non-existent. The selling has become even more alarming in the last week and the buying has slowed to an absolute trickle. Below you’ll find the list of latest insider buys and sells. The sells are staggering with the amounts ranging from $3MM to $63MM (and I was only able to copy one page). The buys, on the other hand, are meager and range from $100K to $635K (the $800K purchase is a few months old and shouldn’t be in the data). You’ll also notice that the screen came up with just 18 total purchases vs 170 total sales (the lowest of sell screen data were sales of over $400K which is not shown here due to the large size of the results…”
My Comment
Wall Street, as well as the administration, both want to boost the market for reasons that partially overlap. The administration wants to be able to justify the bail-outs and retain some of the shine of of the pre-election rhetoric of “change”. But too much optimism will work against legislation/reforms that need a certain amount of panic to be passed.
Wall Street, on the other hand, doesn’t want panic at any price. It wants stability and optimism. And is eager to jump at any positive news it gets.
Mike Martin at MartinKronicle has a long and interesting interview with Victor Sperandeo (of “Trader Vic”), who calls it - as most informed commentators do - a bear market rally. Sperandeo’s voice is a bit hard to follow but Martin’s questions are searching and cover a lot of ground.
Two points:
Sperandeo (like nearly everyone else) thinks currency depreciation is inevitable and massive inflation around the corner.
He’s pessimistic about the Middle East situation and anticipates more friction with Iran.
Bernanke and Paulson Pressured BOA-Merrill Merger
More evidence of behind-the-scenes string-pulling in the banking crisis:
NEW YORK (Reuters) -
Bank of America Corp CEO Kenneth Lewis testified under oath that Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson pressured him to keep quiet about losses at Merrill Lynch & Co, which the bank was buying, the Wall Street Journal reported.
Testifying before New York Attorney General Andrew Cuomo in February, Lewis said “it wasn’t up to me” to reveal Merrill’s fourth-quarter losses as they were becoming apparent in December, the newspaper said, citing a deposition transcript.
Shareholders of Merrill and Bank of America voted to approve the merger on December 5, and the transaction closed on January 1. Bank of America subsequently reported that Merrill lost $15.84 billion in the fourth quarter.
At Bank of America’s April 29 annual meeting, shareholders will vote on whether to force Lewis to step down as chairman of the largest U.S. bank or leave its board, because of Merrill and a falling share price…”
Read more at Reuters
My Comment
Why do people think nationalization will improve matters?
We’ve nationalized already…. unofficially.
Making it official won’t improve anything. It will just get people to accept what’s going on and legitimize the swindle.
We’re like bystanders at a mugging fighting over who ought to get the money the mugger left behind when he fled.
No. See mugging, call cops.
That’s how it’s supposed to go.
India’s Illegal Rendition?
Just saw this really interesting piece of news from early March 2009 on what looks like an illegal rendition (ala the CIA and Mossad) of an accused terrorist associated with the Bangalore blasts [July 2008]:
“In a top secret mission, a team of the Research and Analysis Wing tracked down an absconding accused in the Bangalore serial blasts case in Muscat, and sneaked him out of Oman, since India doesn’t have an extradition treaty with that
country .Sarfaraz Nawaz, 32, who allegedly played a major role in
financing the Bangalore blasts, had sought refuge in Muscat.Investigating officials told rediff.com that a RAW team managed to track down Nawaz in Muscat. They added that Nawaz was ’smuggled into’ Bangalore on a chartered aircraft.
The entire operation was so secretive that even the Air Traffic Control was taken aback when they received a message to help the chartered aircraft land at the Bengaluru [Images] International Airport.
After landing at the airport, officials of the RAW and the Intelligence Bureau called top Central Industrial
Security Force officials and directed them to escort the passengers in the aircraft.The officials handed over Nawaz to the Bangalore police, who are currently questioning him.
Abdul Sattar, the prime accused in the case, had revealed Nawaz’s role in the serial blasts during his interrogation.
Nawaz was reportedly close to Riyaz Bhatkal, a key Lashkar-e-Tayiba [Images] operative, who later took over the charge of the Indian Mujahideen [Images].
With Nawaz’s arrest, the Bangalore police are hopeful of tracking down the remaining suspects, who might have fled the country after the Bangalore blasts.”
More here at Rediff.com
My Comment:
Here’s a piece I did a few years ago on jihad in India, specifically, in Bangalore, Jihad and Cyberworld.
And here’s a perspective from the Indian left, by Pankaj Mishra.
I’m generally sympathetic to the view presented by Mishra’s pieces, but there are some angles that strike me as off-base.
What I agree with
As I wrote in another piece on the subject (”Operation Romeo: Lessons On Terror Laws In Indian Country”), terror laws in India haven’t worked very well. It’s unlikely that adopting CIA/Mossad-type renditions (what next? assassinations?) will do better. Whatever immediate successes Indians might hope to gain from them will be marginal and fleeting next to the precedent renditions set for more secrecy, coverts ops and violation of international and national laws. There’s just too much scope for abuse of power.
What I disagree with is a passage like this one
Mishra:
“Apparently, no inconvenient truths are allowed to mar what Foreign Affairs, the foreign policy journal of America’s elite, has declared a “roaring capitalist success story”. Add Bollywood’s singing and dancing stars, beauty queens and Booker prize-winning writers to the Tatas, the Mittals and the IT tycoons, and the picture of Indian confidence, vigour and felicity is complete.
The passive consumer of this image, already puzzled by recurring reports of explosions in Indian cities, may be startled to learn from the National Counterterrorism Centre (NCTC) in Washington that the death toll from terrorist attacks in India between January 2004 and March 2007 was 3,674, second only to that in Iraq. (In the same period, 1,000 died as a result of such attacks in Pakistan, the “most dangerous place on earth” according to the Economist, Newsweek and other vendors of geopolitical insight.)”
Here’s my caveat:
Comparing India’s death toll from terrorism between 2004-2007 (3,674) to the death toll from terrorists in Pakistan (1000) and in Iraq is disingenuous, given the vast difference in the population and size of the three countries.
Per wiki:
India: Area 3,287,240 sq. k. Population 1,147,995,904 (2008 estimate)
Pakistan: Area 803,940 sq. k. Population 165,900,000 (2008 estimate)
Even if Mishra’s death numbers are right, India is only about four times the size of Pakistan, but it’s roughly seven times as populous. Indian deaths from terrorism, however, are only about four times as many as Pakistani deaths. That is, the number of deaths from terrorism is a bit over half of what it is in Pakistan.
That’s quite a bit of a difference. India’s far from being free of terrorist violence as “India Shining” advocates would have you believe.
But it’s also not as riven with violence as Pakistan. And, for whatever reasons, terrorists do in fact find safe harbor and training grounds in Pakistan.
Greenwald Calls Out Right-Wing Amnesiacs
From Salon, the tireless Glenn Greenwald calls out the amnesiacs on the right for double standards:
“Conservatives have responded to this disclosure as though they’re on the train to FEMA camps. The Right’s leading political philosopher and intellectual historian, Jonah Goldberg, invokes fellow right-wing giant Ronald Reagan and says: ”Here we go Again,” protesting that “this seems so nakedly ideological.” Michelle Malkin, who spent the last eight years cheering on every domestic surveillance and police state program she could find, announces that it’s “Confirmed: The Obama DHS hit job on conservatives is real!” Lead-War-on-Terror-cheerleader Glenn Reynolds warns that DHS – as a result of this report (but not, apparently, anything that happened over the last eight years) – now considers the Constitution to be a “subversive manifesto.” Super Tough Guy Civilization-Warrior Mark Steyn has already concocted an elaborate, detailed martyr fantasy in which his house is surrounded by Obama-dispatched, bomb-wielding federal agents. Malkin’s Hot Air stomps its feet about all “the smears listed in the new DHS warning about ‘right-wing extremism.’”
Amazing chutzpah. Malkin’s, especially, considering that her magnum opus was a celebration of the internment of Japanese citizens during World War II, precisely the kind of violation of liberties she’s exercised about now.
No. Libertarians have to wash their hands off the two-party system entirely and admit that both parties are too compromised by their records to pose as civil libertarians and constitutionalists at this hour. Give the mic to the people whose record holds up, please.
Or to anyone else but these folks.
The Shill World Order
From a face-book link, The Shill World Order: Pushers of the False Left-Right Paradigm
“Now with the election of Obama, we see the friends that joined us under Bush, retreat to their liberal corner and take on the role the neo-cons did, in order to shield Obama from criticism. Therefore under Obama, government dissent equates to fascist extremist who hate blacks. This is the standard program that the corporate left uses in order to quell government dissent by hyping militia groups and racists. Just think back to all the subterfuge associated with groups on the right, who were against government corruption under Clinton. An unbiased look at the political environment back in the 90’s would show that they were not all extremist, and the events hyped up in the media had the fingerprints of COINTELPRO all over it.
Just recently in Philadelphia, 2 undercover officers organized a KKK rally and they were the only ones who showed up. Several people showed up to protest these racist who were actually cops. The anti-racist activists smashed the car of the posing skinheads, after they antagonized the protesters. An excerpt of witness testimony to the court is below.”
My Comment
Well, this has been my experience too. When you step outside the box and tell it like it is (and since I am a true outsider it’s been easier for me to do), you’ll get trouble.
First, you’ll be ignored.
This will be enough to get most novice writers to shut up and move to some safer ground. Maybe give up writing anything except what fits the mold of the alternative press (they have a mold too).
If by chance you survive that and still manage to get heard, you won’t get attributed. You may be read, but you’ll be subtly tarnished as a possible kook, racist (it doesn’t matter that you’ve never written anything remotely racist) or whack-job. Expect to be called a “wing-nut” if you’re anything other than a socialist. Criticize any of the following: Israel, the Israeli lobby, the media, the financial industry, the banksters. the Federal Reserve, drug and money laundering through the stock market, and also be a believing Christian or sympathetic to Christians and you can expect to be called anti-Semitic. (And if you’re also an immigrant from a developing/third-world/less developed (take your pick of the label, I can’t keep track) country, you’re obviously even less welcome as a critic - I mean, don’t you have enough to criticize in your own country?)
Expect everyone to nonetheless take your work and leads and run right on ahead without a blush of shame. They will, because they can. Those are the kind of people who are in charge. Shame isn’t in their vocabulary. They would have all resigned and taken up jobs in the post office if it was.
No matter what your credentials or your credibility, you will be ignored and tacitly coerced into shutting up and conforming.
If that also doesn’t work, expect other kinds of pressure…. to steer you in ways different from what you would want.
Next comes provocation. You’ll get blatantly racist or antisemitic emails that seem to contain news-worthy items. The idea is to bait you into replying so that it looks as if you’re in close contact with or pick up your ideas from unworthy material or sources.
Then come attacks. Emails calling you various nasty epithets from mild (moron) to severe (crack-pot bitch) will land up in your mailbox. Your mail will vanish or get deleted or moved around in your mailbox. Blog posts will show up on forums. Old articles go missing or get subtly vandalized.
(Correction: I’m now told that wordpress blogs aren’t easy to hack at all. So I might be okay there …)
You may get death threats - real or simply malicious foolery (last week’s episode).
I don’t expect any sympathy for this. Journalists have had their heads blown off for doing nothing much different. I only mention it to keep people’s eyes focused where they should be - on the government, not on all the divisions - class, race, color, religion - that the media keeps bringing up…
The Verdict Is In….
“In Lafayette Park, Washington D.C., of all places to protest, the plan was to dump one million tea bags in the park, but the brave dissidents never did it because they forgot to get the proper permits. Are you kidding me? What is civil disobedience without civil disobedience? They even went so far as to say that they were willing to put down plastic tarps and clean up after themselves.
That’s like saying we don’t agree with your oppressive, unconstitutional despotism of our nation and to show our ire in no uncertain terms we’re going to break public law and disrupt the peace so take that, nah- nah-ne-boo-boo. But don’t worry because we’ll put everything back when we’re done as if nothing happened cuz we don’t want any trouble!
Videos on the Internet of Lafayette Park show people standing around in their trendy turtlenecks and Tommy Hilfiger and North Face jackets, chatting, socializing, drinking coffee and talking on their cell phones. Some dressed in colonial garb (how cute) and waving flags. Others even break into a rendition of the Star Spangled Banner followed by a chant of “USA, USA, USA.” What a terrific show of meaningless symbolism….”
My Comment
My fear is that it’s not meaningless symbolism. It’s meaningful…but in the wrong way.
It’s meaningful because it focuses energy away from action that works to dressing up, going out, socializing, talking, waving flags etc. etc.
Which is why, with all due respect, I sat it out…..
Goldman Games: Massaging the Numbers
In the news:
“Goldman Sachs, the most profitable Wall Street firm before it converted to a bank last year and posted its first quarterly loss since going public in 1999, said yesterday it earned $3.39 a share, in the first quarter. A surge in trading revenue outweighed asset writedowns, and the result beat the $1.64 estimate of 16 analysts surveyed by Bloomberg.”
More here at Bloomberg.
My Comment
“Beating expectations” has turned into a short-sighted game of bluff. Companies deliberately underestimate earnings so they can beat analyst estimates. That gives them a temporary boost for the quarter that’s entirely misleading.
The point of all this tarting up on the part of the firm was to boost it enough to raise capital to repay some ($10 billion) of its TARP debt. Why? Because GS doesn’t want to abide by TARP limits on compensation.
But even so, debt with FDIC backing is more “attractive,” according to CFO David Viniar. You see, the FDIC backing won’t require caps on compensation.
In other words, TARP or no, as far as the public recouping anything for taking the risk, it’s heads we win, tails you lose.
Meanwhile the share price on the new capital fell by 12% on anxiety that the first quarter results weren’t sustainable.
What’s also interesting is that Goldman also changed its financial calendar to include December in the results of the previous quarter….
Hmm. Can YOU do that with the IRS?
March Madness in 2009….and in 1939
From a recent piece at Lew Rockwell, Nightmare on Wall Street
March Madness
Insurance giant AIG, already rescued by the public, comes back for more. The bill now totals almost $200 billion, nearly half of which goes to foreign banks, including the very banks that shaped government policy on the bank bail-out, a criminal conflict of interest.
- China and the US face off over US surveillance in Chinese waters, as well as over Chinese currency pegging
- The Bernie Madoff investigation reveals that family and friends of the ex-Nasdaq chief connived in his fraud, which prosecutors charge, has been going on since the 1980s. Money-laundering through an English bank is part of it.
- After three rescues, Citigroup ends up trading at around $1 and needing another round of government aid. That brings the government’s total commitment to Citi to over $300 billion.
- Net capital flows to the US turn negative, auto sales fall sharply, and pension-funding shortfalls are destroying company balance sheets.
- The Fed Reserve commits to buy $300 billion in Treasuries (creating $1 trillion in new money). The bond market reacts positively. But, in what seems like a warning from the other side of the Atlantic, when the Bank of England tries to auction British bonds, it fails to find enough buyers for the first time in seven years. The market is signaling its belief that the UK government is effectively bankrupt.
- Upward pressure on LIBOR, the London interbank offer rate, continues relentlessly. This is a measure of the willingness of banks to lend to each other and it’s showing severe credit market stress…..
*******
and,
“As reports about the AIG deal circulate and stir up public anger, the USNS Impeccable, a survey ship (read, spy-ship) faces off with Chinese ships in what the US claims are international waters off Hainan island. But the encounter is also within 200 miles of the Chinese coast, a zone China considers its exclusive economic zone. Hainan is also a key strategic base in the South China Sea and the location of China’s biggest submarine base. This comes just days after US military talks with China resume.
The US claims it’s a Chinese provocation, although it’s hard to believe that a Chinese spy ship snooping around Americans coasts would be greeted with brotherly love. It seems more likely to be a US provocation.
Notice that the incident reinforces Barack Obama’s provocative warnings to the Chinese about currency manipulation during the presidential campaign. Obama was apparently playing to the part of his base that is China-hawkish and protectionist. Notice that this is also a neo-conservative position, as human rights interventionists (let’s call them liberventionists) would like to see a tougher US posture in places like China and Darfur.
In short, the big government wing in both parties likes the “Chinese currency manipulation” motif……”
And in a recent piece at Lew Rockwell and Human Events, Pat Buchanan writes:
“Made a fool of by Hitler, baited by his backbenchers, goaded by Lord Halifax, facing a vote of no confidence, on March 31, 1939, Chamberlain made the greatest blunder in British diplomatic history. He handed an unsolicited war guarantee to the Polish colonels who had just bitten off a chunk of Czechoslovakia. Lunacy, raged Lloyd George, who was echoed by British leaders and almost every historian since.
With the British Empire behind it, Warsaw now refused even to discuss a return of Danzig, the Baltic town, 95 percent German, which even Chamberlain thought should be returned.
Hitler did not want a war with Poland. Had he wanted war, he would have demanded the return of the entire Polish Corridor taken from Germany in 1919. He wanted Danzig back and Poland as an ally in his anti-Comintern Pact. Nor did he want war with a Britain he admired and always saw as a natural ally.
Nor did he want war with France, or he would have demanded the return of Alsace.
But Hitler was out on a limb with Danzig and could not crawl back.
Repeatedly, Hitler tried to negotiate Danzig. Repeatedly, the Poles rebuffed him. Seeing the Allies courting Josef Stalin, Hitler decided to cut his own deal with the detested Bolsheviks and settle the Polish issue by force.
Though Britain had no plans to aid Poland, no intention of aiding Poland and would do nothing to aid Poland – Churchill would cede half that nation to Stalin and the other half to Stalin’s stooges – Britain declared war for Poland.
The most awful war in all of history followed, which would bankrupt Britain, bring down her empire and bring Stalin’s Red Army into Prague, Berlin and Vienna. But Hitler was dead and Germany in ashes….”
My Comment
In an earlier piece, Nationalization In a Time of Monopoly, I noted the ominous end game in which we’re finding ourselves:
“First, it [the state] creates debt everywhere until the capital base of the economy is destroyed and production is in tatters. Banks become bankrupt, except for those that have government connections and can consolidate. The monopolies have nothing to restrain their anti-market behavior and push their own agendas in concert with the state. With no limit to cheap credit, the money supply swells. Workers can no longer keep up with inflation. The lopsided development of the state sector crushes savings and production in the remainder of the economy. Jobs dwindle.
To supplement them, the corporate-state creates make-work programs on the domestic front. When bad times and discontent persist, it looks abroad.
Then comes war.
That is where nationalization in a time of monopoly will take us.” (Lew Rockwell, March, 2009)
*******
That warning cannot be emphasize enough. We meddle further at our own peril.
Beware any further ceding of power to the government.Before any more doing - undo, undo, undo.
Or , as Buchanan shows in his gripping time-line, when this end game rolls out, we will find that even countries that do not want war with us now, will be forced into it.
Kevin Duffy On The Wall Street Shuffle, March 23
Kevin Duffy of Bearing Asset Mgt., a contributor to Lew Rockwell, and a non-interventionist on the bail-out will be a guest this afternoon on “The Wall Street Shuffle,” hosted by Dan Kofal and Ed Butowski, from 5:30-5:58 pm EST. The show is anti-bailout so they should be open to a non-interventionist view of the financial crisis.
www.thewallstreetshuffle.com. Click on “Listen Live.” It may work on Firefox, but it definitely works on Explorer.
Helicopter Ben Drops A Money Bomb
Peter Grant notes that the currency markets were taken by surprise and anticipates global debt monetization and currency depreciation (expected but not so soon and so fast):
“The Fed did indeed announce that it would seek to buy up to an additional $750 bln in MBS, bringing the total projected purchases of such assets up to $1.25 trl. They also announced that they would buy up to an additional $100 bln in agency debt, bringing that total up to $200 bln. On top of all that, the FOMC decided that late next week the Fed would begin purchasing up to $300 bln in longer-term Treasuries, with emphasis on the 2 to 10-year segment of the yield curve. Purchases will be conducted by primary dealers two to three times per week through competitive auctions….”
Karl Denninger warns that the bond market will sell into the purchase:
“The BOE executed their first “QE” operation today.The “bid to cover” was an astonishing 7.35 This means that for every bond purchased 7.35 were tendered, or made available by willing sellers……the BOE now has seen exactly what happens when you promise as a government to overpay for something - everyone hits your bid immediately!”
Meanwhile, Boris Schlossberg notes that the bond market here has so far accepted the stunning move with yields on the 10 year bond falling by 50 basis points in 24 hours, while the dollar collapsed across the board. He explains Bernanke’s decision as reflecting the fact that foreign capital flows are going to be hard to sustain (i.e. the Chinese aren’t going to be buying treasuries for much longer).
Greenspan Eggs On World War IV: China Versus US
Some more blows in the ongoing World War IV, known as the War on Terror to the masses. WW IV was always about the perception of the US (and the Anglosphere in general) that the growing economies of China, and to a lesser extent India, posed a threat to access to world resources. The War on Terror was simply a pretext to establish bases from which WW IV could proceed at a more comfortable pace.
Thus Alan Greenspan’s recent piece in the Wall Street Journal, blaming Asia, especially China, for the US housing bubble:
“The result was a surge in growth in China and a large number of other emerging market economies that led to an excess of global intended savings relative to intended capital investment. That ex ante excess of savings propelled global long-term interest rates progressively lower between early 2000 and 2005. That decline in long-term interest rates across a wide spectrum of countries statistically explains, and is the most likely major cause of, real-estate capitalization rates that declined and converged across the globe, resulting in the global housing price bubble…”
Read this along with remarks by Tim Geithner in the Obama administration that China was manipulating the yuan to help its exports ( a sentiment also voiced by Obama during the elections).
That’s the perspective from which the little fracas (actually it’s the biggest fracas between China and the US since 2001) in the South China Sea should be seen. The USNS Impeccable - a civilian ship under Navy control - was apparently conducting surveillance in what it claims was international waters (where US doctrine insists on international freedom to move) but within the 200 mile zone in which Chinese economic control obtains. Chinese vessels came within 25 feet of the US ship which sprayed them with water, and then left.
This week China will also be unveiling plans for an increase of 15% in its defense spending, including expansion of its naval capacity.
UK Banks Now Owned By Government
The public’s portfolio
What the taxpayer owns
Northern Rock – 100% state owned
Bradford & Bingley – mortgage book worth £50 billion
Royal Bank of Scotland – 75% of voting shares
Lloyds Banking Group (including HBOS)– up to 77% of voting shares
HSBC, Barclays, Abbey National and Nationwide are the main high street institutions still in private hands
How yesterday’s Lloyds deal hands us the keys to British business
Both Lloyds and HBOS have been very acquisitive in private equity investment over the past decade, entering into partnerships which mean they part-own – or rather, we do – a string of household names.
They include: House of Fraser, department stores McCarthy & Stone, housebuilder HSS Hire, tool hire chain Vue, cinema chain Crest Nicholson, housebuilder Alternative Hotel Group MacDonald Hotels David Lloyd Leisure, fitness clubs American Golf, sports goods St Tropez, beauty products Robinia, specialist care homes Leasedrive Velo, car fleet hire Kidsunlimited, day nurseries British Salt, salt products producer Snell & Wilcox, broadcasting technology GVA Grimley, property consultant
GenV Entrepreneurs Light Up Indian Village
“One of the biggest problems faced by Indian villages is scarce electricity to power light bulbs. Electricity is provided only for a very few hours and only during day time. Hence, children are unable to study at night and have to resort to using lanterns, which can contribute to pollution related ailments.
To provide a solution, we came up with an idea of using tractor batteries as an energy source to light 9-12W CFLs. At night, the tractors are not used and they can be used to light CFLs.
One-twelfth of the battery is consumed to use 1 CFL for 4 hours. The tractor’s battery then gets recharged during day time when it runs on the fields or is used for other agricultural purposes. Thus, the net is that we are not consuming any additional power to light up the CFLs on the days that the tractor is used.
We implemented this idea successfully in 17 homes in our village and this was of great help to the students. The whole setup cost was INR 135 (for wires, DC CFL and circuit board).
The advantages of this system are:
- Reduction of pollution by using CFLs instead of bulbs and lanterns: 240,000 liters of CO2 per month and 2,450,000 kJ of heat per month.
- Improvement in academic performance of students.
- Better health for users by reducing Asthma, ENT and Eye problems.
- Cost Savings for farmers and rural students, and for the Government.
- Increased lifespan of tractor battery.”
Shailesh Upadhyay and Ujala Shankar
More here at GenV Campaigns.Nationalization In a Time of Monopoly
My piece on nationalization was published on Lew Rockwell:
“The witchdoctors are rattling their bones and spitting into their potions. Frogs’ legs, squawks one. Eye of newt, cries another.
The right blames Fanny and Freddy for setting off the financial tsunami. Naomi Klein says it’s the Chicago boys and capitalism.
The left denounces private sector greed. The right, public sector do-gooding.
Overpaid CEOs, overdrawn borrowers, underestimated risk. There’s enough blame to go around.
The only problem is that a half-baked understanding of a problem leads to half-baked remedies. And half-baked remedies are worse than no remedy at all.
Nationalization is the cry now. Nobel winner Paul Krugman at the New York Times says it’s as American as apple pie. I daresay that’s the first time Krugman ever appealed to tradition to sell anything.
Even Fed Chairman Ben Bernanke floated it recently, and then backed off, when the market tanked in response. But by now we know that our rulers speak not just from both sides of their mouth, but out of both mouths of their two-faced tyranny…and from its derrière too. We can confidently predict that in the days ahead Republicans and Democrats, private and public sectors will join the breadline for nationalization
Now, in a different country, in a different context, nationalization might make sense. But trotting out Sweden’s history as a model for the U.S. is disingenuous. Sweden is about one-twentieth the size of the US and it has around one-thirtieth of the population. It’s not an empire with a vast portion of its economy dependent on its defense department. And it’s also one of the least corrupt and peaceable countries in the world, by standard measures.
Knowing exactly how corrupt this system is, how deceptive, and how out of control, we would be fools to place our faith in nationalization in America. Or in any other panacea pushed by the state. None of them stands any chance of being anything more than a change of label, a PR facelift. A jackass in a wig and stilettos can kick all it wants, it won’t turn into a chorus girl.
Only the Austrians so far seem to grasp this and only the Austrians seem to understand the underlying problem – which is money. Money backed by nothing tends toward nothing. But there is more to it. The cheapening of money, its lack of intrinsic worth is only an effect, not a cause. The cause lies deeper – in the unconstrained power of the government to print money. The source of corruption is this absolute power.
It’s because the US mint alone can print legal money that money has lost its link to real value and become rapidly cheapening paper. The monopoly of money, you could say, has given us toy dollars, monopoly money…….
Read the rest at Lew Rockwell.
March 2, 2009
Krugman Floats Capital Controls
Paul Krugman writes:
“Catching up on my Willem Buiter, I find this interesting piece on capital controls in the response to the European crisis, which begins:
When Iceland’s banking system and currency collapsed last September, a key component of the emergency package that was introduced under the auspices of the IMF were controls on capital outflows, implemented through rigorous foreign exchange controls.
I have a bit of personal history here — and it has some bearing on broader economic policy issues right now. Back in 1998, in the midst of the Asian financial crisis, I came out in favor of temporary capital controls; a bit about that here. At the time it was regarded as a horribly unorthodox and irresponsible suggestion — and I had a long, very unpleasant phone conversation with a Senior Administration Official who berated me for my anti-market ideas.
Today, that wild and crazy idea is so orthodox it’s part of standard IMF policy.
There are obvious parallels with the current debate over bank nationalization….”
Paul Krugman’s Conscience of a Liberal Blog, March 2, 2009
Comment:
Run for cover…here it comesObama: Yes to Banksters, No to Haitian Refugees
“BBC called the situation “eye-popping,” and the Miami Herald said it was “the worst humanitarian disaster (for) Haiti in 100 years” leaving:
– Gonaives, Haiti’s third largest city, uninhabitable;
– most of the nation’s livestock and food crops destroyed as well as farm tools and seeds for replanting;
– irrigation systems demolished;
– collapsed buildings throughout the country; 23,000 houses destroyed; another 85,000 damaged; 964 schools destroyed or damaged;
– conservatively about $1 billion in storm damage;
– the threat of famine, especially for children and the elderly;
– 2.3 million Haitians facing “food insecurity,” according to USAID, reeling under 40% higher prices than in January;
– inadequate sanitation and clean water;
– the widespread threat of disease; and
– overall millions lacking everything needed to survive who in normal times struggle to get by.
In December, Director Randy McGorty of Catholic Legal Services for the Archdiocese of Miami said:
“After dealing with this administration on Haitian issues for eight years, I’m forced to conclude that its policy toward Haiti is based on racism. It’s shocking. People (lack everything and) are starving. This callous disregard for human life is inexplicable. Many deported Haitians simply have no communities to return to. It is disappointing that the Bush administration would even consider sending people back to this incredibly fragile nation….(Haiti’s) humanitarian crisis….continues and worsens.”
(South) Florida Immigrant Advocacy Center’s (FIAC) executive director, Cheryl Little, said: “We are attempting to do whatever we can to convince government officials to change their minds on this. It’s an outrageously inhumane act.”
On January 26, FIAC urged new DHS Secretary Janet Napolitano to “immediately stay the inhumane deportations and to seriously consider granting Temporary Protected Status (TPS) for Haitians already in the United States.” On December 19, former DHS Secretary Michael Chertoff denied the Preval government’s TPS request. As a result, Haiti won’t cooperate, so ICE is making Haitians get their own travel documents (including passports) and assist in their own deportations.
Throughout 2008, around 1000 occurred in total. After a near-three month suspension (from September 19 - December 9), they resumed slowly, but picked up noticeably after Obama’s inauguration. According to FIAC, men like Louiness Petit-Frere are affected, deported on January 23: “Here ten years with no criminal record, he leaves his US-citizen wife behind along with his mother and four siblings, all (with) legal status….One of his brothers, US Marine Sgt Nikenson Peirreloui, served and was injured in Iraq.”
In 2008, Obama campaigned vigorously for South Florida’s Haitian vote. Now he’s betrayed it the way he’s abandoning millions of distressed households by providing little in real relief compared to trillions in handouts to Wall Street and the rich….”
More at Stephen Lendman
Comment:
Here’s a link to a report on Haiti’s hope for an Obama presidency
and an open letter from Haitians to Obama on the catastrophic conditions in their country.
The Financial-Academic-Media Complex
“Harvard Watch, in case you don’t know, is [was] a group of academics who were formed ostensibly to be the conscience of the ultra secretive Harvard Corporation, whose 7 members have included the likes of Lawrence Summers, Robert Rubin and Dyn Corp.’s Mr. Pug Winokur.
“>The Harvard Corporation administers the ‘not for profit’ [now] 28 billion dollar Harvard Endowment Fund. The largest such pool of capital this side of the Roman Catholic Church. This fund has been intimately linked to such financial fiascos as Bush/Harken Energy and Enron/California energy debacle.”“When the Harvard Watch did their own investigations back in 2003 / 2004, here are a few snippets of what they found. In addition to giving guidance, such as choosing outside money managers, to Harvard’s 21 billion [at the time] dollar Endowment fund, Pug Winokur was the Chairman of Enron’s audit committee.
At the same time one of the Endowment Fund’s biggest outside money managers was Highfields Capital. This is a hedge fund run by John Jacobson – a former member of the seven-man Harvard Corp. He left the Corp. in 1996 with 500 million of Harvard money to start his own financial advisory/absolute return fund.
According to Harvard University 1999 tax returns Highfields topped the pay list of advisories at 30 million in management fees for the year. In fact Highfields did so well making money for Harvard, the Harvard Magazine was crowing about the job they did and they were reportedly awarded additional billions of Harvard money to manage.
Now, I’ll bet none of you will ever guess how Highfields made their astonishing returns for Harvard in 1999? This long/short fund only had 3 equity shorts (put options). Enron just happened to be the biggest – and the Enron short was 47 times the size of the next biggest short.
Of course, no guilt was ever found implicating Mr. Winokur or Highfields – because the SEC was on the job!! Highfields’ 5000 foot grand salami of a homerun simply got chalked up to “pure brilliance”.
Now, for those of you who are not aware; Enron funded research centers at Harvard. This allegedly objective research – incubated at Harvard - was instrumental in legitimizing energy deregulation in California and defending energy industry monoliths against assertions of price manipulation. Nothing stinky here, eh?
Well, apparently something didn’t exactly smell quite right; because it was soon after these facts came to light that Mr. Winokur had sufficiently spread an aroma of his doings about Harvard that his presence was no longer required and he resigned his post to make room for none other than Mr. Robert Rubin. Here’s a snippet of the statement the Harvard Watch published at the time regarding the changing of the guard.
“Winokur’s departure from the Corporation, however, represents only a first step in cutting Harvard’s ties to Enron. There remain multiple Harvard research initiatives funded by and effectively functioning for Enron and its executives. Notable examples include the Harvard Electric Policy Group, the Belfer Center, and the Winokur Public Policy Fund. Moreover, the Harvard Corporation’s remaining members include several Enron insiders. D. Ronald Daniel, for instance, was Jeffrey Skilling’s boss at McKinsey during the 1980s, when Skilling consulted with Enron to design the energy giant’s unsustainable business model. Because of the work of Daniel and Skilling, McKinsey is now a defendant in the largest suit against Enron. Moreover, it is remarkably telling that just as the university prepares to bid farewell to one of the Enron club, it has already announced the entry of another one. Robert Rubin, the Corporation’s latest addition, is a director of Citigroup, Enron’s largest creditor. Rubin attempted to obtain a Federal bailout for Enron as it approached collapse-while its top executives cashed in on Enron’s falling stock and drained the pension funds of thousands of their employees”:
Admittedly, the Enron / Gibson’s Paradox Harvard guffaws occurred before Niall Ferguson’s tenure at Harvard [began in 2004]; but with him being such a sharp economic historian – he probably knew all this stuff anyway….”– Ronald Kirby
The Monopoly of Money and the Money of Monopolies
The Fed’s monopoly of money has meant not only monopoly (i.e “play” money that lacks fixed value, in contrast to gold), but also actual monopolies in every industry across the board. The reason is that bigger organizations can and do borrow more, paying back only in “cheapened” money. That lets them outlast their smaller competitors and lets them grow bigger and bigger….
The Fed’s monopoly of money also makes possible the rise of “pirate” states which can shift the tax inherent in rapidly cheapening money onto others:
1) internally, onto the backs of its savers
2) externally, onto the backs of other countries which have to use the monopoly currency. (e.g. emerging markets have to use the US$).
Here’s an excellent comment on that:
“Anyway, the appalling truth, which explains what’s happened in our own era, is that when Roosevelt managed to make the dollar the world’s currency, and the Federal Reserve began to be able to tax the rest of the world simply by expanding the money supply, what happened is that the whole American economy quietly started to shift from production-and-taxation mode, into “pirate” mode, “without anyone noticing!”
The global consequences have been enormous. It’s enabled American power (and the amount of military spending possible) to expand enormously, beyond what was sensible in the long term. It’s made foreign war seem cost-free to the American public, which in turn has caused a whole string of foreign lobbyists to try to buy American support and intervention in every corner of the world. It’s also made the American economic and political system very unstable in the long term, I suspect, because it’s now “addicted” to getting things cheap. Pirate economies (unlike the old boring taxation ones) tend to collapse, when they can no longer expand, or at least can no longer tap the outside world any more. It’s also gutted American industry and production, because once you could pay for things in paper dollars, it became cheaper to outsource everything possible and buy things from the third world. It’s had a very oligarchic effect on government and big business, since their access to easy credit enabled big organisations to buy up smaller ones on an unprecedented scale; and, finally, it’s been very corrupting, to get something for nothing in this way, for so long. It’s the true background reason for the predicament you’re in today.
And as I said, it’s created a world were “everything” is rigged against traditional conservatism. Currencies that are purely creations of government not only give unprecedented power “to” governments to interfere in all of our lives, but their inherently inflationary nature has created a world that rewards borrowers at the expense of savers. That is historically unprecedented, and an extraordinary thing to build a civilisation on. Should one be surprised that the culture associated with this civilisation should be one of personal self-indulgence, rather than one of self-restraint? That is the world that Roosevelt (and, later, Nixon) gave us…”
Comment by ‘Alexander’ on Rod Dreher’s Crunchy Con
Gold: Who’s Got It; Who Hasn’t
The US has 8,135 tonnes….64.4% of reserves
Germany — 3,412… …64.4% of reserves
IMF — 3,217… … …(1)
France — 2,508… … …58.7%
Italy — 2,451… … …61.9%
Switzerland — 1,040… …23.8%
Japan — 765.2… …1.9% …(a potential gold-buyer)
China — 600.0… …0.9% …(should be a big buyer)
Russia — 495. 9… …2.2% …(is a buyer)
Taiwan — 422.2… …3.6% …(should be a buyer)
India — 357.7… …3.0% …(should be a buyer)
UK — 310.3… … …14.5% …(sold most of its gold at the low price)
Saudi Arabia — 143.0… …11.4% (should buy gold)
South Africa — 124.4… …9.0%
Australia — 79.8… … …6.3%From Richard Russell, The Dow Theory Letters.
So there you have it. Among countries, Italy, France, Germany, and the US have the most gold. Switzerland has a third of what they have.
The UK, South Africa, Australia, and Saudi Arabia are next with about 1/5th - 1/10th as much.
Russia and Japan have only a small percent in gold.
China and India have even less.
What do most Asians have?
Debt (treasuries and dollars) from the US.
Neo-colonialism anyone?
“Meltdown” by Thomas Woods
“The media tells us that “deregulation” and “unfettered free markets” have wrecked our economy and will continue to make things worse without a heavy dose of federal regulation. But the real blame lies elsewhere. In Meltdown, bestselling author Thomas E. Woods Jr. unearths the real causes behind the collapse of housing values and the stock market – and it turns out the culprits reside more in Washington than on Wall Street.
And the trillions of dollars in federal bailouts? Our politicians’ ham-handed attempts to fix the problems they themselves created will only make things much worse. Woods, a senior fellow at the Ludwig von Mises Institute and winner of the 2006 Templeton Enterprise Award, busts the media myths and government spin. He explains how government intervention in the economy – from the Democratic hobbyhorse called Fannie Mae to affirmative action programs like the Community Redevelopment Act – actually caused the housing bubble.
Most important, Woods, author of the New York Times bestseller The Politically Incorrect Guide to American History, traces this most recent boom-and-bust – and all such booms and busts of the past century – back to one of the most revered government institutions of all: the Federal Reserve System, which allows busy-body bureaucrats and ambitious politicians to pull the strings of our financial sector and manipulate the value of the very money we use…”
Comment:
That’s the blurb to Thomas Woods’ new book, “Meltdown,” which gives a classic Austrian rebuttal of the notion that lack of regulation of the economy is the sole reason for the current economic crisis, rather than the corrupt nexus between government and business in a managed economy. According to his blurb, Wood correctly assesses the current problem as a problem of cheap money, induced by Federal Reserve policies.
I have Woods’ previous book on the US constitution on my desk since I intend to review it. I thought it was both mostly right at one level and partly wrong at another.* I wonder if that will be the case with this book too. Still, as a contrarian and critic of establishment propaganda, I have to pull for any book brave enough to fly in the face of academic orthodoxy. (Judging by Woods’ popularity, though - a Google search of his name turns up millions of hits - he has a legion in tow to keep up his courage: here’s a link to his impassioned speech at the Ron Paul Rally for the Republic (September 2008) on The Stupid Party versus the Evil Party)
“IF YOU WANT TO STOP THE WAR MACHINE, YOU HAVE TO GO AFTER THE MONEY MACHINE.”
**********
*In that respect, let me link a piece by Cathy Young of Reason magazine. Young’s conclusions strike me as owing more to ad hominem than logic, but they aren’t without merit if you consider the moral issues at stake. On that, more at another time…Paul Street On “Status Quo-Bama”
“CHANGE WE CAN BELIEVE IN” FROM STATUS QuOBAMA?
Will the “deeply conservative” Obama break from deepening authoritarian capitalism in regard to the current economic crisis? The signals he has sent so far are less than encouraging. Late last summer, candidate Obama joined John McCain in supporting the original George W. Bush-Hank Paulson bailout plan, replete with its dictatorial demand (explicitly laid out in a hastily constructed three-page bill) that Congress supply the banks with hundreds of billions of taxpayer dollars without any public oversight, hearings and investigation ever. When public outrage forced Congress to reject rejected Bush and Paulson’s (and Obama and McCain’s) Czarist proposal, Obama gave his “progressive” imprimatur to a subsequently passed version that cloaked the authoritarian bailout deal in oversight measures loaded with loopholes leaving big banking capital free to do pretty much whatever it wished with its new taxpayer injections.
This move apparently came without remorse. As veteran liberal-progressive Washington- and Obama-watcher David Sirota recently noted, Obama’s “first exercise of presidential power was, right before he came into office, he threatened to veto any bill that Congress passed rejecting or limiting more bailout funds from going to Wall Street.”
Obama’s economic appointments do not bode well. His top economic advisor, former chief World Bank economist and Harvard University president Lawrence Summers and his Treasury Secretary Timothy Geithner are both veteran implementers of the basic “neoliberal” tenet: state protection and subsidy for the Few and market discipline for the Many. Working in the Clinton administration under Treasury Secretary (and Goldman Sachs CEO) Robert Rubin (Geithner’s mentor), Summers helped develop and advance the very financial -de-regulation that was a major contributor to the current crisis. Geithner shares with Summers a history of responding to economic crisis by bailing out large financial institutions with no serious questions asked, something that helps explain the popularity of his appointment on Wall
Obama’s Inaugural Address absurdly claimed that the economic crisis was partly the consequence of the “collective failure” of the American people “to make hard choices and prepare the nation for a new age.” This ignored the fact that, as Krugman notes, “this is first and foremost a crisis brought on by a runaway financial industry. And if we failed to rein in that industry, it was wasn’t because Americans ‘collectively’ refused to make hard choices; the American public had no idea what was going on, and the people who did know what was going on mostly thought deregulation was a good idea.”
Wired And Watched In America
“When asked the scope of the information collected on Americans by the NSA, he said “the parameters that were set for how to filter it … were things like … if a terrorist would normally only make a phone call for 1 or 2 minutes, then you look for communications that are only 1 or 2 minutes long. Now that could also be someone ordering a pizza, and asking their significant other what sort of toppings they wanted on their pizza.”
When asked how the NSA would handle questions asked by congressional committees, Tice claimed: “the NSA would tailor some of their briefings to try to be deceptive, for whether it be a congressional committee or someone they really didn’t want to know exactly what was going on. There would be a lot of bells and whistles in a briefing and quite often the meat of the briefing was deceptive.”
When asked in a second interview by MSNBC if the information collected stopped at phone and email info, Tice responded: “as far as the wiretap information that made it to NSA, there was also data mining involved. At some point information from credit card records and financial records was married in with that information.”
As a result of the NSA program, uncounted thousands of Americans may have had their privacy compromised and are thus victims of an illegal spying regime. Says Tice: “the lucky U.S. citizens, tens of thousands of whom, that are now on digital databases at NSA that have no idea of this, also have that information included on those digital files that have been warehoused.”
More at Wired.
Comment:
The US Government spied on everyone
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