Russia's Resistance

The Occult World of Commerce

US sanctions on Iran meant to gain Washington global rule

The World War on Democracy

19 January 2012

by John Pilger

Lisette Talate died the other day.  I remember a wiry, fiercely intelligent woman who masked her grief with a determination that was a presence. She was the embodiment of people's resistance to the war on democracy. I first glimpsed her in a 1950s Colonial Office film about the Chagos islanders, a tiny creole nation living midway between Africa and Asia in the Indian Ocean. The camera panned across thriving villages, a church, a school, a hospital, set in a phenomenon of natural beauty and peace. Lisette remembers the producer saying to her and her teenage friends, "Keep smiling girls!"
Sitting in her kitchen in Mauritius many years later, she said, "I didn't have to be told to smile. I was a happy child, because my roots were deep in the islands, my paradise.  My great-grandmother was born there; I made six children there. That's why they couldn't legally throw us out of our own homes; they had to terrify us into leaving or force us out. At first, they tried to starve us. The food ships stopped arriving [then] they spread rumours we would be bombed, then they turned on our dogs."
In the early 1960s, the Labour government of Harold Wilson secretly agreed to a demand from Washington that the Chagos archipelago, a British colony, be "swept" and "sanitised" of its 2,500 inhabitants so that a military base could be built on the principal island, Diego Garcia.  "They knew we were inseparable from our pets," said Lizette, "When the American soldiers arrived to build the base, they backed their big trucks against the brick shed where we prepared the coconuts; hundreds of our dogs had been rounded up and imprisoned there.  Then they gassed them through tubes from the trucks' exhausts. You could hear them crying."
Lisette and her family and hundreds of islanders were forced on to a rusting steamer bound for Mauritius, a distance of 2,500 miles. They were made to sleep in the hold on a cargo of fertiliser: bird shit.  The weather was rough; everyone was ill; two women miscarried. Dumped on the docks at Port Louis, Lizette's youngest children, Jollice, and Regis, died within a week of each other. "They died of sadness," she said. "They had heard all the talk and seen the horror of what had happened to the dogs. They knew they were leaving their home forever. The doctor in Mauritius said he could not treat sadness."
This act of mass kidnapping was carried out in high secrecy. In one official file, under the heading, "Maintaining the fiction", the Foreign Office legal adviser exhorts his colleagues to cover their actions by "re-classifying" the population as "floating" and to "make up the rules as we go along". Article 7 of the statute of the International Criminal Court says the "deportation or forcible transfer of population" is a crime against humanity. That Britain had committed such a crime -- in exchange for a $14million discount off an American Polaris nuclear submarine - was not on the agenda of a group of British "defence" correspondents flown to the Chagos by the Ministry of Defence when the US base was completed. "There is nothing in our files," said a ministry official, "about inhabitants or an evacuation."
Today, Diego Garcia is crucial to America's and Britain's war on democracy. The heaviest bombing of Iraq and Afghanistan was launched from its vast airstrips, beyond which the islanders' abandoned cemetery and church stand like archaeological ruins. The terraced garden where Lisette laughed for the camera is now a fortress housing the "bunker-busting" bombs carried by bat-shaped B-2 aircraft to targets in two continents; an attack on Iran will start here. As if to complete the emblem of rampant, criminal power, the CIA added a Guantanamo-style prison for its "rendition" victims and called it Camp Justice. 
What was done to Lisette's paradise has an urgent and universal meaning, for it represents the violent, ruthless nature of a whole system behind its democratic facade, and the scale of our own indoctrination to its messianic assumptions, described by Harold Pinter as a "brilliant, even witty, highly successful act of hypnosis." Longer and bloodier than any war since 1945, waged with demonic weapons and a gangsterism dressed as economic policy and sometimes known as globalisation, the war on democracy is unmentionable in western elite circles. As Pinter wrote, "it never happened even while it was happening". Last July, American historian William Blum published his "updated summary of the record of US foreign policy". Since the Second World War, the US has:
- Attempted to overthrow more than 50 governments, most of them democratically-elected.
- Attempted to suppress a populist or national movement in 20 countries.
- Grossly interfered in democratic elections in at least 30 countries.
- Dropped bombs on the people of more than 30 countries.
- Attempted to assassinate more than 50 foreign leaders.
In total, the United States has carried out one or more of these actions in 69 countries. In almost all cases, Britain has been a collaborator. The "enemy" changes in name - from communism to Islamism -- but mostly it is the rise of democracy independent of western power or a society occupying strategically useful territory, deemed expendable, like the Chagos Islands.
The sheer scale of suffering, let alone criminality, is little known in the west, despite the presence of the world's most advanced communications, nominally freest journalism and most admired academy.  That the most numerous victims of terrorism - western terrorism - are Muslims is unsayable, if it is known. That half a million Iraqi infants died in the 1990s as a result of the embargo imposed by Britain and America is of no interest. That extreme jihadism, which led to 9/11, was nurtured as a weapon of western policy ("Operation Cyclone") is known to specialists but otherwise suppressed.
While popular culture in Britain and America immerses the Second World War in an ethical bath for the victors, the holocausts arising from Anglo-American dominance of resource-rich regions are consigned to oblivion. Under the Indonesian tyrant Suharto, anointed "our man" by Thatcher, more than a million people were slaughtered. Described by the CIA as "the worst mass murder of the second half of the 20th century", the estimate does not include a third of the population of East Timor who were starved or murdered with western connivance, British fighter-bombers and machine guns.
These true stories are told in declassified files in the Public Record Office, yet represent an entire dimension of politics and the exercise of power excluded from public consideration. This has been achieved by a regime of un-coercive information control, from the evangelical mantra of consumer advertising to sound-bites on BBC news and now the ephemera of social media.
It is as if writers as watchdogs are extinct, or in thrall to a sociopathic zeitgeist, convinced they are too clever to be duped. Witness the stampede of sycophants eager to deify Christopher Hitchens, a war lover who longed to be allowed to justify the crimes of rapacious power. "For almost the first time in two centuries", wrote Terry Eagleton, "there is no eminent British poet, playwright or novelist prepared to question the foundations of the western way of life". No Orwell warns that we do not need to live in a totalitarian society to be corrupted by totalitarianism. No Shelley speaks for the poor, no Blake proffers a vision, no Wilde reminds us that "disobedience, in the eyes of anyone who has read history, is man's original virtue". And grievously no Pinter rages at the war machine, as in American Football:

Hallelujah.
Praise the Lord for all good things...
We blew their balls into shards of dust,
Into shards of fucking dust... 

Into shards of fucking dust go all the lives blown there by Barack Obama, the Hopey Changey of western violence. Whenever one of Obama's drones wipes out an entire family in a faraway tribal region of Pakistan, or Somalia, or Yemen, the American controllers in front of their computer-game screens type in "Bugsplat". Obama likes drones and has joked about them with journalists. One of his first actions as president was to order a wave of Predator drone attacks on Pakistan that killed 74 people. He has since killed thousands, mostly civilians; drones fire Hellfire missiles that suck the air out of the lungs of children and leave body parts festooned across scrubland.
Remember the tear-stained headlines when Brand Obama was elected: "momentous, spine-tingling": the Guardian. "The American future," wrote Simon Schama, "is all vision, numinous, unformed, light-headed ..."  The San Francisco Chronicle's columnist saw a spiritual "lightworker [who can] usher in a new way of being on the planet". Beyond the drivel, as the great whistleblower Daniel Ellsberg had predicted, a military coup was taking place in Washington, and Obama was their man. Having seduced the anti-war movement into virtual silence, he has given America's corrupt military officer class unprecedented powers of state and engagement. These include the prospect of wars in Africa and opportunities for provocations against China, America's largest creditor and new "enemy" in Asia.  Under Obama, the old source of official paranoia Russia, has been encircled with ballistic missiles and the Russian opposition infiltrated. Military and CIA assassination teams have been assigned to 120 countries; long planned attacks on Syria and Iran beckon a world war. Israel, the exemplar of US violence and lawlessness by proxy, has just received its annual pocket money of $3bn together with Obama's permission to steal more Palestinian land.
Obama's most "historic" achievement is to bring the war on democracy home to America. On New Year's Eve, he signed the National Defense Authorization Act (NDAA), a law that grants the Pentagon the legal right to kidnap both foreigners and US citizens and indefinitely detain, interrogate and torture, or even kill them. They need only "associate" with those "belligerent" to the United States.  There will be no protection of law, no trial, no legal representation. This is the first explicit legislation to abolish habeus corpus (the right to due process of law) and effectively repeal the Bill of Rights of 1789. 
On 5 January, in an extraordinary speech at the Pentagon, Obama said the military would not only be ready to "secure territory and populations" overseas but to fight in the "homeland" and provide "support to the civil authorities". In other words, US troops will be deployed on the streets of American cities when the inevitable civil unrest takes hold. 
America is now a land of epidemic poverty and barbaric prisons: the consequence of a "market" extremism which, under Obama, has prompted the transfer of $14 trillion in public money to criminal enterprises in Wall Street. The victims are mostly young jobless, homeless, incarcerated African-Americans, betrayed by the first black president. The historic corollary of a perpetual war state, this is not fascism, not yet, but neither is it democracy in any recognisable form, regardless of the placebo politics that will consume the news until November. The presidential campaign, says the Washington Post, will "feature a clash of philosophies rooted in distinctly different views of the economy". This is patently false. The circumscribed task of journalism on both sides of the Atlantic is to create the pretence of political choice where there is none.
The same shadow is across Britain and much of Europe where  social democracy, an article of faith two generations ago, has fallen to the central bank dictators. In David Cameron's "big society", the theft of 84bn pounds in jobs and services even exceeds the amount of tax "legally" avoid by piratical corporations. Blame rests not with the far right, but a cowardly liberal political culture that has allowed this to happen, which, wrote Hywel Williams in the wake of the attacks on 9/11, "can itself be a form of self righteous fanaticism". Tony Blair is one such fanatic. In its managerial indifference to the freedoms that it claims to hold dear, bourgeois Blairite Britain has created a surveillance state with 3,000 new criminal offences and laws: more than for the whole of the previous century. The police clearly believe they have an impunity to kill.  At the demand of the CIA, cases like that of Binyam Mohamed, an innocent British resident tortured and then held for five years in Guantanamo Bay, will be dealt with in secret courts in Britain "in order to protect the intelligence agencies" - the torturers.
This invisible state allowed the Blair government to fight the Chagos islanders as they rose from their despair in exile and demanded justice in the streets of Port Louis and London.  "Only when you take direct action, face to face, even break laws, are you ever noticed," said Lisette. "And the smaller you are, the greater your example to others." Such an eloquent answer to those who still ask, "What can I do?"
I last saw Lisette's tiny figure standing in driving rain alongside her comrades outside the Houses of Parliament. What struck me was the enduring courage of their resistance. It is this refusal to give up that rotten power fears, above all, knowing it is the seed beneath the snow.

Profit Driven Prison Industrial Complex: The Economics of Incarceration in the USA

For anyone paying attention, there is no shortage of issues that fundamentally challenge the underpinning moral infrastructure of American society and the values it claims to uphold. Under the conceptual illusion of liberty, few things are more sobering than the amount of Americans who will spend the rest of their lives in an isolated correctional facility – ostensibly, being corrected. The United States of America has long held the highest incarceration rate in the world, far surpassing any other nation. For every 100,000 Americans, 743 citizens sit behind bars. Presently, the prison population in America consists of more than six million people, a number exceeding the amount of prisoners held in the gulags of the former Soviet Union at any point in its history.
While miserable statistics illustrate some measure of the ongoing ethical calamity occurring in the detainment centers inside the land of the free, only a partial picture of the broader situation is painted. While the country faces an unprecedented economic and financial crisis, business is booming in other fields – namely, the private prison industry. Like any other business, these institutions are run for the purpose of turning a profit. State and federal prisons are contracted out to private companies who are paid a fixed amount to house each prisoner per day. Their profits result from spending the minimum amount of state or federal funds on each inmate, only to pocket the remaining capital. For the corrections conglomerates of America, prosperity depends on housing the maximum numbers of inmates for the longest potential time – as inexpensively as possible.
By allowing a profit-driven capitalist-enterprise model to operate over institutions that should rightfully be focused on rehabilitation, America has enthusiastically embraced a prison industrial complex. Under the promise of maintaining correctional facilities at a lower cost due to market competition, state and federal governments contract privately run companies to manage and staff prisons, even allowing the groups to design and construct facilities. The private prison industry is primarily led by two morally deficient entities, the Corrections Corporation of America (CCA) and the GEO Group (formerly Wackenhut Corrections Corporation).  These companies amassed a combined revenue of over $2.9 billion in 2010, not without situating themselves in the center of political influence.
The number of people imprisoned under state and federal custody increased 772% percent between 1970 and 2009, largely due to the incredible influence private corporations wield against the American legal system. Because judicial leniency and sentencing reductions threaten the very business models of these private corporations, millions have been spent lobbying state officials and political candidates in an effort to influence harsher “zero tolerance” legislation and mandatory sentencing for many non-violent offenses. Political action committees assembled by private correctional corporations have lobbied over 3.3 million dollars to the political establishment since 2001. An annual report released by the CCA in 2010 reiterates the importance of influencing legislation:
“The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them. Legislation has been proposed in numerous jurisdictions that could lower minimum sentences for some non-violent crimes and make more inmates eligible for early release based on good behavior. Also, sentencing alternatives under consideration could put some offenders on probation with electronic monitoring who would otherwise be incarcerated. Similarly, reductions in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities.”
Considering today’s private prison population is over 17 times larger than the figure two decades earlier, the malleability of the judicial system under corporate influence is clear. The Corrections Corporation of America is the first and largest private prison company in the US, cofounded in 1983 by Tom Beasley, former Chairman of the Tennessee Republican Party. The CCA entered the market and overtly exploited Beasley’s political connections in an attempt to exert control over the entire prison system of Tennessee. Today, the company operates over sixty-five facilities and owns contracts with the US Marshal Service, Immigration and Customs Enforcement (ICE) and the Bureau of Prisons. The GEO Group operates 118 detention centers throughout the United States, South Africa, UK, Australia and elsewhere. Under its original name, the Wackenhut Corrections Corporation was synonymous for the sadistic abuse of prisoners in its facilities, resulting in the termination of several contracts in 1999.
The political action committees assembled by private prison enterprises have also wielded incredible influence with respect to administering harsher immigration legislation. The number of illegal immigrants being incarcerated inside the United States is rising exponentially under Immigration and Customs Enforcement (ICE), an agency responsible for annually overseeing the imprisonment of 400,000 foreign nationals at the cost of over $1.9 billion on custody-related operations. The agency has come under heavy criticism for seeking to contract a 1,250-bed immigration detention facility in Essex County, New Jersey to a private company that shares intimate ties to New Jersey’s Governor, Chris Christie. Given the private prison industry’s dependence on immigration-detention contracts, the huge contributions of the prison lobby towards drafting Arizona’s recrementitious immigration law SB 1070 are all but unexpected. While the administration of Arizona’s Governor Jan Brewer is lined with former private prison lobbyists, its Department of Corrections budget has been raised by $10 million, while all other Arizona state agencies are subject to budget cuts in 2012’s fiscal year.
Perhaps the most disturbing aspect of this obstinate moral predicament presents itself in the private contracting of prisoners and their role in assembling vast quantities of military and commercial equipment. While the United States plunges itself into each new manufactured conflict under a wide range of fraudulent pretenses, it is interesting to note that all military helmets, ammunition belts, bulletproof vests, ID tags, uniforms, tents, bags and other equipment used by military occupation forces are produced by inmates in federal prisons across the US. Giant multinational conglomerates and weapons manufacturers such as Lockheed Martin and Raytheon Corporation employ federal prison labor to cheaply assemble weapons components, only to sell them to the Pentagon at premium prices. At the lowest, Prisoners earn 17 cents an hour to assemble high-tech electronic components for guided missile systems needed to produce Patriot Advanced Capability 3 missiles and anti-tank projectiles.
In the past, political mouthpieces of the United States have criticized countries such as China and North Korea for their role in exploiting prisoner labor to create commodity products such as women’s bras and artificial flowers for export. Evidently, outsourcing the construction of the military equipment responsible for innumerable civilian causalities to the prisons of America warrants no such criticism from the military industrial establishment. In utter derision toward the integrity of the common worker, prison inmates are exposed to toxic spent ammunition, depleted uranium dust and other chemicals when contracted to clean and reassemble tanks and military vehicles returned from combat. Prison laborers receive no union protection, benefits or health and safety protection when made to work in electronic recycling factories where inmates are regularly exposed to lead, cadmium, mercury and arsenic.
In addition to performing tasks that can result in detrimental illnesses, prison labor produces other military utilities such as night-vision goggles, body armor, radio and communication devices, components for battleship anti-aircraft guns, land mine sweepers and electro-optical equipment. While this abundant source of low-cost manpower fosters greater incentives for corporate stockholders to impose draconian legislation on the majority of Americans who commit nonviolent offenses, it’s hard to imagine such an innately colossal contradiction to the nation’s official rhetoric, i.e. American values. Furthermore, prison labor is employed not only in the assembly of complex components used in F-15 fighter jets and Cobra helicopters, it also supplies 98% of the entire market for equipment assembly services, with similar statistics in regard to products such as paints, stoves, office furniture, headphones, and speakers.
It is some twisted irony that large sections of the workforce in America’s alleged free-market are shackled in chains. Weapons manufactured in the isolation of America’s prisons are the source of an exploitative cycle, which leaves allied NATO member countries indebted to a multibillion-dollar weapons industry at the behest of the U.S. State Department and the Pentagon. Complete with its own trade exhibitions, mail-order catalogs and investment houses on Wall Street, the eminence of the private prison industry solidifies the ongoing corrosion of American principles – principles that seem more abstract now, than the day they were written.
Predictably, the potential profit of the prison labor boom has encouraged the foundations of US corporate society to move their production forces into American prisons. Conglomerates such as IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Victoria’s Secret, and Target have all begun mounting production operations in US prisons. Many of these Fortune 500 conglomerates are corporate members of civil society groups such as the Council on Foreign Relations (CFR) and the National Endowment for Democracy (NED). These think tanks are critical toward influencing American foreign policy. Under the guise of democracy promotion, these civil societies fund opposition movements and train dissent groups in countries around the world in the interest of pro-US regime change. With naked insincerity, the same companies that outsource the production of their products to American prisons simultaneously sponsor civil societies that demanded the release of Myanmar’s Aung San Suu Kyi from house arrest – an overly political effort in the on-going attempts to install a compliant regime in that country.
The concept of privatizing prisons to reduce expenses comes at great cost to the inmates detained, who are subjected to living in increasingly squalid conditions in jail cells across America. In 2007, the Texas Youth Commission (TYC) was sent to a West Texas juvenile prison run by GEO Group for the purpose of monitoring its quality standards. The monitors sent by the TYC were subsequently fired for failing to report the sordid conditions they witnessed in the facility while they awarded the GEO Group with an overall compliance score of nearly 100%. Independent auditors later visited the facility and discovered that inmates were forced to urinate or defecate in small containers due to a lack of toilets in some of the cells. The independent commission also noted in their list of reported findings that the facility racially segregated prisoners and disciplined Hispanics for speaking Spanish by denying their access to layers and medical treatment. It was later discovered that the TYC monitors were employed by the GEO Group. Troublingly, the Walnut Grove Youth Correctional Facility (WGYCF) operated by the GEO Group in Mississippi has been subject to a class-action lawsuit after reports that staff members were complicit in the beating and stabbing of a prisoner who consequently incurred permanent brain damage. The official compliant authored by the ACLU and Southern Poverty Law Center also highlights cases where the administration turned a blind eye to brutal cases of rape and torture within the facility.
The first private prison models were introduced following the abolishment of slavery after the American Civil War from 1861 to 1865, which saw expansive prison farms replace slave plantations. Prisons of the day contracted groups of predominately African-American inmates to pick cotton and construct railroads principally in southern states such as Alabama, Georgia and Mississippi. In 2012, there are more African-Americans engrossed in thecriminal-justice system than any point during slavery. Throughout its history, the American prison system has shared little with the concept of rehabilitation. Like the post-Civil War prison farms, today’s system functions to purport required labor, largely on a racially specific basis. African-Americans consist of 40% of the prison population and are incarcerated seven times more often than whites, despite the fact that African-Americansmake up only 12% of the national population. Once released, former inmates are barred from voting in elections, denied educational opportunities and are legally discriminated against in their efforts to find employment and housing. Few can deny the targeting of underprivileged urban communities of color in America’s failed War on Drugs. This phenomenon can largely be contributed to the stipulations of its anti-drug legislation, which commanded maximum sentencing for possession of minute amounts of rock cocaine, a substance that floods poor inner-city black communities.
Unbeknown to the vast majority of Americans, the US government has been actively taking steps to modify the legal infrastructure of the country to allow for a dramatic expansion of the domestic prison system at the expense of civil rights. On December 31st, 2011, Barack Obama signed into law the National Defense Authorization Act (NDAA) H.R. 1540. Emulating the rouge military dictatorships the US Government has long condemned in its rhetoric, the NDAA introduces a vaguely worded legislation that allows for US citizens to be arbitrarily detained in military detention without due process – might they be predictably be deemed radical, conspiratorial or suspected of terrorism. In a climate of rising public discontent, the establishment media has steadfastly worked to blur the line between public activism and domestic extremism.  In addition to the world’s largest network of prison facilities,over 800 located detainment camps exist in all regions of the United States with varying maximum capacities.
Facing economic stagnation, many Americans have been detained in responder camps as a consequence of publically demonstrating in accordance with the Occupy Wall Street movement launched in New York City. Under the guise of protecting Americans from a largely contrived and abstract threat of fundamentalist violence, citizens have been denied the right of peaceful assembly and placed in detainment apparatuses, managed by the Federal Emergency Management Agency (FEMA). Documents have been released by the American Civil Liberties Union detailing the Pentagon’s widespread monitoring of public demonstrations and the targeting of individual activists under threat of national security. Co-authored by Senator Joe Lieberman, the Enemy Expatriation Act (HR 3166) gives the US government the power to detain nationals and revoke their American citizenship under suspicion of behavior perceived as terrorism.
This legislation becomes increasingly more dangerous as citizens can be labeled domestic extremists based on their constitutionally protected activism or personal political leanings. In January 2006, a contract to construct detention facilities for the Department of Homeland Security worth a maximum of $385 million was awarded to KBR, a subsidiary of Haliburton. Following the signing of NDAA earlier in 2012, leaked documents reveal that KBR is now seeking to staff its detention centers and award contracts for services such as catering, temporary fencing and barricades, laundry and medical services, power generation, and refuse collection. It would be reasonable to assume that these facilities could be managed in partnership with private corporations such as the GEO Group or the CCA, as many federal and state penitentiaries privatize sections of their facilities to privately owned companies. Declassified US Army documents originally drafted in 1997 divulge the existence of inmate labor camps inside US military installations. It is all but unexpected that the relationship between the upper echelons of government and the private prison enterprise will grow increasingly more intimate in the current climate of prison industrial legislation.
The partnership between the United States government and its corporate associates spans various industries however, they all seek the common pursuit of profit irrespective of the moral and ethical consequence – the human consequence. The increasing influence of the Prison Industrial Complex towards official legislation and economic undertakings signifies a reprehensible threat to basic human rights. Perhaps the issuance of government legislation that leads offenders into detainment for the benefit of private shareholders is the purest embodiment of fascism, as cited in Mussolini’s vision of a Corporate State. Perhaps we all (this author included) fail to grasp the seriousness of these legislations and their implications on our lives.

Source.

Eco-Science, Genocide and Oligarchy

The Afghanistan Report the Pentagon Doesn't Want You to Read

Washington’s Insouciance Has No Rival

paulcraigroberts.org
Is Obama a hypocrite or merely insouciant? Or is he an idiot?

According to news reports Obama’s White House meeting on Valentine’s day with China’s Vice President, Xi Jinping, provided an opportunity for Obama to raise “a sensitive human rights issue with the Chinese leader-in-waiting.” The brave and forthright Obama didn’t let etiquette or decorum get in his way. Afterwards, Obama declared that Washington would “continue to emphasize what we believe is the importance of realizing the aspirations and rights of all people.”
Think about that for a minute. Washington is now in the second decade of murdering Muslim men, women, and children in six countries. Washington is so concerned with human rights that it drops bombs on schools, hospitals, weddings and funerals, all in order to uphold the human rights of Muslim people. You see, bombing liberates Muslim women from having to wear the burka and from male domination.

Read more

Iran Deploys 15,000 Troops To Syria

The online edition of Haaretz Newspaper in Israel is reporting that a deployment of 15,000 elite Iranian soldiers trained in unconventional warfare have just recently arrived in Syria to help the Assad regime crush the violent uprising.
The news comes as Russia and China vetoed a U.N. security council resolution to condemn Assad’s tactics in crushing the rebellion. Non-stop video footage of the tactics shown repeatedly on western media outlets has showed repeated mortar assaults on what appears to be civilian housing. Those media reports came along with a disclaimer that the authenticity or claims in the video can not be verified because media outlets are banned from entering Syria.
Another interesting story here is for Iranian troops to have just entered Syria, almost at the same time of the U.N. resolution vote, Iran must have deployed their troops some time ago. Clearly, the U.S. and their allies would have known of about the movement of Iranian troops.
Had the U.N. resolution passed, Iran would have inadvertently acted in violation the U.N. resolution, possible giving the west an excuse to launch attacks against Iran. Perhaps this is part of the reason China and Russia vetoed the resolution.
From Peak Oil’s Public Policy section:

Report: Top Iran military official aiding Assad’s crackdown on Syria opposition

Prominent Syrian lawmaker says the commander of the Iranian Revolutionary Guard’s elite Quds Force has recently arrived in the country to help manage Assad’s regime brutal suppression of a 11-month-long popular unrest.

A top Iranian military official is actively aiding the regime of Syrian President Bashar Assad in suppressing popular unrest throughout the country, a top member of the National Syrian Council said on Monday.
According to the Syrian official, Kassam Salimani, commander of the Quds Force, the Iranian Revolutionary Guard special forces unit, has arrived in Syria recently and has taken up a spot in the war room which manages army maneuvers against opposition forces.
The war room is also reportedly populated by Assad himself, as well as his brother Maher, brother-in-law Assaf Shaukat and cousin Rami Makhlouf, with the Syrian chief of staff’s authority reportedly restricted and divided up between other military commanders.
The Quds Force includes 15,000 elite soldiers who operated, among other locations, in Iraq during the war, and the specialty of which is engaging in unconventional warfare on foreign soil. Among other duties, the Quds Force is in charge of traning and funding Hezbollah.
Salimani’s presence in Syria serves as an indication of the kind of battle that Assad is planning against opposition forces, with the Syrian army reportedly planning to wage all out war against the rebel city of Homs.
According to the report, the Syrian president’s goal is to gain ground ahead of a planned visit by Russian Foreign Minister Sergey Lavrov, who will be arriving in the country along with a military delegation which includes the head of Russian intelligence.
Assad’s aim, sources say, is to display his control of the situation and his ability to suppress the unrest, with the determining battles to be staged in Homs and in the reoccupation of the town of Zabadani, which fell to Free Syria Army forces.
An Al-Arabiya report indicated that the battle over Zabadani has already begun, with Syrian soldiers defecting to the opposition along with eight tanks, and that Homs has been placed under a siege which has included the cutting of electricity and water supplies.
The report also claimed that the Syrian army for the first time has been using rockets in order to target houses as well as mortars to hit populated areas. So far, 60 people were reportedly killed and hundreds wounded in this battle, as well as reports of the demolition of seven houses, residents and all.
Syrian opposition organizations that are active internationally are currently trying to gain a political front bypassing the UN Security Council, where a resolution underwritten by the Arab League failed due to Russian and Chinese vetoes on Saturday.
At this stage, opposition leaders are trying to find a way forward, as it is clear that Turkey and the Arab states oppose military action against the Assad regime, and the imposing of economic sanctions will not stop Assad.
Facing Russia and Chinese opposition, and the Iranian threat to open a new front, there is doubt whether a western coalition will agree to act directly against Syria. The question is whether the Free Syrian Army will be able to get additional military assistance, and to arm itself with heavy artillery, tanks and shells so that it will be able to pose a real challenge to the Syrian army, and change the civilian resistance into a real military struggle, much like the rebel forces in Libya.
Along with the Syria Free Army’s attempts to increase the number of defectors from the Syrian military, the opposition is also considering offering the minority Alawite elite guarantees of their safety in exchange for ordering Alawites to leave the regime and join the civilian resistance.
Along with the Syria Free Army’s attempts to increase the number of defectors from the Syrian military, the opposition is also considering offering the minority Alawite elite guarantees of their safety in exchange for ordering Alawites to leave the regime and join the civilian resistance.
Parallel to these efforts, however, the opposition seems to be facing a new and violent civilian group that is comprised mainly of Syria’s Kurdish minority. This group is working as strongmen for the regime, both in Damascus and in Kurdish population centers.

Source.

Diminishment of Sovereignty and More Fed Manipulation

The International Forecaster

An excerpt from Bob Chapman's weekly publication. 

 

February 1 2012: Davos pact diminishes sovereignty of european nations, deflation and inflation, employment not improving for election, more money managers bullish on gold, money chaos cover up is political, gold rush in China as the year of the dragon starts, Fed bolsters commodities despite economic decline.

 

On Friday from the Bilderberg conclave at Davos,       appointed European Central Bank President, Mario Draghi proclaimed that Europe had averted financial disaster and cited the improvement in euro zone markets in recent weeks. He said it was the ECB’s duty to guard against deflation as well as inflation. The fact of the matter is that he and his friends at the Fed arranged a currency swap of $1 trillion of which the ECB dispersed $660 billion to 523 EU banks, at 1% interest for three years. He also cut interest rates twice and extended loans for 1 to 3 years. Mr. Draghi could be expected to take the easy Anglo-American way out. He is fully Illuminati trained and that is where his orders emanate from.
He continued about how the conclusion of a fiscal pact, the ESM, the European Stabilization Mechanism, where budgets and fiscal spending policies would be determined by unelected, Treasury appointees, who have been officially immunized by the EU government. Mr. Draghi makes no note of these qualifications and forgets to let us know that in this new ESM pact all the nations lose their sovereignty.
As yet, after a month, there is no evidence that the funds had reached the real economy. The banks that just received the funds at 1% interest have been depositing them at ¼% interest with the ECB. They have not lent to each other because bankers say they do not trust each other. What a sad state of affairs. In addition to the above the ECB now accepts loan collateral of much lower quality than previously was approved. As you can see there were a lot of facts Mr. Draghi deliberately left out.
Now the banks have to use these funds to refund old and new debt and lend to keep the economies afloat. They also have to play their parts in keeping the six problem nations afloat.
Concerning the subject of Greece we were told last Friday a deal would be announced but nothing has happened as yet. The outlook is grim and the fundamentals are terrible. We won’t rehash Greece, because we have been over it so many times. We will wait to see what this week brings.
The Portuguese economy is falling deeper into austerity. Bank lending has fallen by the most on record. It fell $6.5 in December the biggest monthly decline since December 197, when the ECB began collecting data. Portugal, if they’ like to recover, should be using the LTRO funds to make loans to small and medium sized companies.
The Kiel Institute for the World Economy says Portugal would have to have a budget surplus of 11% of GDP annually. If they had 2% growth, which is a tall order, it would need a 56% haircut on its debt to get back on a sustainable path to recovery.
Gold finally out of that early on mess, finally had a good month, up just under 10%. That is the best January since 1980. We remember January 1980 well – it was the final month of the gold rally. Oddly enough the shares topped out in June with gold trading at $680 to $720. We would like to say that the 3 gold and silver suppressions of this past 2011 and 2012 has pointed out in stark relief that the US government has been very actively manipulating gold and silver prices, legally, since 1980. We mention this because short-term charts are terribly distorted and for us you cannot use them. The advocates are out again with their charts and believe we hope they are right. As usual as they have been, they will be wrong. They’ll soon call for reversal and as they do gold and silver will go higher.
After having loaned the ECB $1 trillion they now tell us we’ll receive QE 3. In fractional banking that could be $10 to $20 trillion. Any substantial part of those funds are used and monetized you’ll see some stunning inflation.
Election is in view and employment is not improving. The Fed has pledged that it is prepared to provide for further monetary accommodation. Inflation is headed higher, not lower. All that money and credit will influence inflation. Yes, the EU, US and UK economies will be flat this year and probably slightly higher. What we are doing with QE 3 and other types of stimulus is just extending the game.
If everything is fine why did the US Mint sell 114,500 ounces of American Gold Eagles with still two days left in January to accommodate buyers? Maybe the total will be 145,000, the largest sale in 1-1/2 years. It’s because people do not trust their economies and their governments that is why and they are buying gold and silver coins to protect themselves.  They only have to look at the Republican Presidential primaries where votes are stolen by computer, dead people vote and Ron Paul doesn’t get a chance to state his case.   Our government is a criminal syndicate. All those American gold and silver buyers know this, and that is why they want gold and silver coins, not fiat dollars.
Finally we are starting to see money managers, hedge funds, and others getting more bullish on gold. This should lead to short covering in gold and silver and the shares.
Here we have QE 3 in the works as we predicted months ago. We said it would consist of the Fed buying the banks garbage so they have cash to follow the Fed’s orders. Those orders will be to buy Treasuries, Agencies and to make loans to small and medium companies. Before the Fed bought $1.4 trillion of this paper, mostly MBS and CDO’s. We never found out what the Fed paid for previous purchases and we won’t this time either. This is another gift the Fed, or should we say taxpayer gives the to the banks. What we are seeing in Europe and again shortly here is another stuffing of the system with money and credit. The Fed is headed down the road of no return and they know exactly what they are doing. That is playing money and credit creation to the bitter end. Historically no central bank has had the power to do this. If played out to the end we have to expect hyperinflationary depression, which will end in a deflationary depressionary collapse. This will destroy the value of the US dollar and its purchasing power. The entire system will probably collapse to a great extent including perhaps 60% of commerce, 40% to 50% unemployment, and the end of the financial system and resorting to bartering, the social support system and government. They will all collapse, so you had better prepare for it. All this will be expedited if Ron Paul is not elected our next president. If he were to be elected he could short-circuit many programs and policies that are destroying our nation.
The moves by the elitist Fed via the ECB to cover-up the monetary and financial chaos in Europe and in the US via QE 3 is in part political. Political in France and toward the next elections. France is a nightmare for the elitists and obviously those in power want Obama returned. He having done everything asked of him.
Bob Chapman - Discount Gold & Silver Trading - 27 Jan 2012
http://www.youtube.com/watch?v=bMHIq0KIq4A&feature=email
Interview 457 – The International Forecaster with Bob Chapman
http://www.corbettreport.com/interview-457-the-international-forecaster-with-bob-chapman/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CorbettReportRSS+%28The+Corbett+Report%29
Bob Chapman - Financial Survival - January 30, 2012
http://www.youtube.com/watch?v=UCy_OUyd5Ts&feature=email
Bob Chapman - Oracle Broadcasting - Jan. 28, 2012
http://www.youtube.com/watch?v=1QgKm67sjt0&feature=email
Bob Chapman - USAprepares Radio Show - Jan. 31, 2012 – Vincent Finelli
http://www.youtube.com/watch?v=nAL4u0o5xCk&feature=email
As we predicted last fall that QE 3 will come in the form of another bank bailout. This time it will be the clearing of toxic bonds from the banks’ books, which was done by buying $1.4 trillion in these bonds previously. We expect $800 billion to $1.3 trillion this time around. The disbursement of these funds should last 12 to 18 months. These moves were in part responsible for our change in GDP for the US this year from minus 1-1/2% to 2% to plus 1-1/2% to 2%.
In the latest out of Europe, Germany is pushing Greece to relinquish control over its budget policies to a euro zone “budget commissioner,” who would be able to veto domestic fiscal decisions, similar to the powers they want to grant to the ESM.
German logic is if further funds are not dispersed, Greece cannot threaten its members with default, but will have to accept outside fiscal control with funs. The game being paid by Germany is dangerous and could lead to immediate default. In addition any deal made in February by the PASOK government is subject to change in two months by a new election victor and party in charge. The German position is dumb and ultimately won’t work.
The Greeks are not going to like or accept the German demands. There will be demonstrations and the new policies may go nowhere. From the Greek side, when you have lost almost everything there is little more to lose. Unfortunately, we predicted all this but few were listening.
After putting the present regime in power 25 years ago in Iran the US has had nothing but problems, the latest and most important has been the sale of oil in currencies other than the US dollar. Asked many times, Iran refuses to comply. This is the main reason the US and Europe are so aggressive in pursuing Iran. Underneath it all it is all about petrodollars. This is why Iraq was destroyed and Libya as well. The US could not tolerate Iraq selling oil in euros. Anyone who steps out of line gets zapped, no matter who it is. At the IMF a year ago director Dominique Strauss-Kahn called for a different currency to, a new world currency, to end the dominance of the dollar. As a result he was set up in a hotel in NYC for rape. We immediately pointed out this was a bag job and so it was, but it got him out of his IMF job, he couldn’t run for the French presidency and they destroyed his reputation. This shows you how far and even further the US Illuminists will go to protect their oil monopoly and fixed oil payments in US dollars only. Strauss-Kahn is a top Illuminist and they still destroyed him. If the dollar becomes only one of many currencies in which oil is sold, the dollar will then collapse. For the US, the barn door has closed, but the farm animals are already loose.
At Davos this past week the US Secretary of the Treasury, Timothy Geithner, urged the euro zone to boost its cache of bailout cash and protect Italy and Spain against the threat of a market rout. At the same time the new IMF leader Christine Lagarde urged Greece and its creditors to agree on cutting debt burdens.
What we see here is a request for more funds. The Fed just did a swap, a loan, for $1 trillion for the ECB in behalf of 523 EU banks. Obviously it wasn’t enough and obviously they would rather borrow from the ECB and the Fed rather than go the fractional route. We will see more money spilled but never really enough.
While these events ran paramount on Friday night, while most everybody was enjoying themselves, Fitch cut Italy’s rating 2 notches to A minus. Joining the group n being downgraded we saw the same medicine applied to Spain, Belgium, Slovenia and Cyprus.
Last week the Dow fell 0.5%, S&P was little changed, the Russell 2000 gained 1.8% and the Nasdaq 100 rose 1.0%. Cyclicals rose 0.8%; utilities were unchanged; transports gained 1.2%; consumers fell 0.4%; banks fell 1.4% and broker/dealers fell 3.0%; high tech rose 0.3%; semis fell 0.2%; Internets fell 0.3% and biotechs rose 5.4%. Gold bullion rose $72.00, the HUI Gold Index rose 9.4% and the USDX fell 1.6%.
Two-year T-bills fell 3 bps to 0.21%, as 10-year notes fell 13 bps to 1.89%. German 10-year bunds rose again.
The Freddie Mac 30-year fixed rate mortgage rates rose 10 bps to 3.98%; the 15’s rose 7 bps to 3.24%. The one-year ARM’s were unchanged at 2.74% and 30-year fixed rate jumbos were down 4 bps to 4.46%.
Fed credit expanded $1.5 billion to $2,905 trillion, which is up 20.1% yoy. Fed foreign holdings at Treasuries and Agencies rose $14.4 billion to $3.406 trillion. Custody holdings for foreign central banks rose $55 billion yoy, or 1.6%.
M2, narrow, money supply rose $8.0 billion to a record $9.763 trillion. That is up 10.2% yoy.
Total money market fund assets fell $14.7 billion to $2.679 trillion.
Commercial paper rose $3.4 billion to $971 billion. That is down $17 billion from a year ago, or 1.7%.

            A "gold rush" swept through China during the week-long Lunar New Year holiday this year, with demand for precious metals and jewelry surging since the Year of the Dragon began.
            Sales of gold, silver and jewelry rose 57.6 percent during the week-long holiday at Caibai, one of Beijing's best-known gold retailers, according to data released by the Ministry of Commerce (MOC) on Saturday.
            Other jewelry stores across the country also saw sales boom during the period, with customers favoring New Year-themed gold bars, gold ingots and other types of Dragon-themed jewelries.
            "Long treasured by Chinese, gold is no longer owned only by a privileged few, but has become a new investment channel open to all," said Guan Qiang, assistant manager at Caibai.
            The Spring Festival gives people a chance to preserve and present gold as gifts, offering hopes that it will increase in value and not be impacted by inflation, Guan said.
            During the week-long holiday, which lasted from January 22 to 28, the sales volume in Caibai and Guohua, another of Beijing's top gold retailers, reached about 600 million yuan ($95.28 million).
            The figure showed a 49.7-percent increase over that of last year's Spring Festival, said a report released by the Beijing Municipal Commission of Commerce.
Caibai began selling gold bars as investment items during the 2008 Beijing Olympic Games, but the trend of buying gold or silver bars during the Spring Festival has really taken off in the past two years, Guan said.
            For Guan and his colleagues, the Spring Festival rush was an exciting but exhausting experience, as customers flooded the store and surprised clerks with their purchasing enthusiasm.
            "With customers crowding and rushing in, we did not even have time to eat and drink," said a sales clerk at the gold bar counter surnamed Li.
            She said each shop assistant had received hundreds of customers per day and wrote several times more orders than on ordinary days.
            "You can hardly even see the gold bars, necklaces and pendants in the display case. People seem crazy about gold, snatching it up more like a 'cheap cabbage' than such a precious metal," said Beijing resident Miao Miao.
            "You have to quickly decide whether to make a purchase, or it will be taken away by others."
            Miao was shopping for a pair of gold bracelets to give to her granddaughter as a gift for the New Year.
            "When my daughter was born in 1984, we had no means or savings to buy her one as a keepsake. We can finally realize this dream by sending it to her daughter," Miao said.
            However, Chinese do not value gold only in only sentimental terms. The precious metal is also expected to maintain or increase its value, as evidenced by the surging investment demand seen around the country, insiders have said.
            "To most Chinese, gold is more convenient to cash in than other investment instruments. Despite common investment risks, the price of gold is clear and easy to judge," said Guan.
            Compared to unpredictable investments, such as those in the stock market or housing sector, gold is cherished more by Chinese for its increasing value as an asset as well as the unlikelihood that it will be affected by inflation, Guan said.
            China is expected to overtake India as the world's top gold consumer in the next few years. Strong demand for investments in gold and jewelry will have driven China's total gold demand to 750 metric tons in 2011, according to the World Gold Council.
            Despite the record-high price of gold, the demand for investments in gold and jewelry has continued to soar, with the market expected to reach about 955.2 metric tons by 2020, thanks to a growing middle class and a more affluent society, said Binghai, director of the Shanghai Gold & Jewelry Trade Association.

The NY Fed’s Index of Coincident Economic Indicators shows how putrid the economic ‘bounce’ is for New Jersey. NYC, due to the trillions poured into Wall Street bounced well but is now rolling over. The bounce of NYC obviously helped NY State, but that bounce was modest and is also rolling over.
US Q4 GDP increased 0.7%, 2.8% annualized; 3% was expected. However, consumption increased only 2%. Inventory growth contributed 2 percent points to the 2.8% growth! Real final sales rose 0.8%.
The Commerce Department greatly boosted GDP by lowering the GDP deflator to only 0.39% from Q3’s 2.56%. This created 2.16% more GDP q/q…Using CPI to deflate GDP would have produced negative GDP.
The absurdly low GDP Deflator also greatly overstates income, which increased only 0.8%...Government spending declined 4.6% in Q4 and 2.1% for 2011 due to massive defense cuts. This is the biggest decline since 1971…Part of the surge in inventory could be inflation.

Consumer Metric Institute: If the highly positive swing in the inventory number is real, it is certainly not sustainable and when combined with actual consumer spending the numbers themselves would be prima facie evidence that manufacturers over-corrected in anticipation of huge holiday spending. Such an over-correction should lead to reversals in the coming quarters. On the other hand, if the swing is an artifact of firming commodity prices it is just a further indication that the headline number is hopelessly noisy subject to erratic phantom movements as the BEA's "deflaters" struggle to track pricing changes.
And lastly, the volatility of the inventory parts of the BEA's equation continue to distort the headline number enough to render it useless as a source of genuine economic information. In the best of times the inventory data provided by the BEA is late and incomplete, but it is necessitated by the need within the BEA's equations to reconcile the production based manufacturing portions of their equation to the consumption based consumer portions. Because of that it is both partly plugged (at least in the monthly and quarterly updates) and highly susceptible to fluctuations in pricing levels.
In short, this report is disturbing because of how the headline number masks real and troubling weakness in the more substantive details

The PCE number was the most-understated and worthless, regularly-followed inflation number the Fed could come up with, shy of the “core” PCE deflator, net of food and energy, which Mr. Bernanke traditionally has been fond of touting.
GDP for 2011 increased only 1.7%. US Debt increased almost 9% in 2011; the Fed’s balance sheet increased over 20%. $1.22 Trillion of US Treasury debt and QE2.0 and Operation Twist II produced about $260B of GDP.
How many times can this occur before an implosion occurs?
Employment in Alabama has surged since July 2011; however this has caused great controversy.
Alabama's unemployment rate has dropped more than any of its bordering states according to the U.S. Bureau of Labor Statistics. According to the data, Alabama's unemployment has dropped by 1.9% since July 2011 when the rate reached its high for the year at 10% unemployment…
The legislature passed a handful of measures that were touted as ways to recruit industry to Alabama.
They included tax incentives for companies to relocate to Alabama and a law aimed at cracking down on illegal immigration which was sold as an economic development bill… [Bill passed in June]

[Fed officials and other solons are complicit]
The amount of money the federal government hands out in direct payments to individuals steadily increased over the past four decades, but shot up under Obama, climbing by almost $600 billion a 32% increase in his first three years…
According to the Census Bureau 49% now live in homes where at least one person gets a federal benefit — Social Security, workers comp, unemployment, subsidized housing, and the like. That's up from 44% the year before Obama took office, and way up from 1983, when fewer than a third were government beneficiaries…
This year, more than 46 million (15% of all Americans) will get food stamps. That's 45% higher than when Obama took office, and twice as high as the average for the previous 40 years…
The number of people on Social Security disability has steadily climbed since the 1970s, thanks mainly to easier eligibility rules. But their numbers jumped 10% in Obama's first two years in office, according to the Social Security Administration. That sharp rise was due largely to meager job prospects since the recession ended in 2009…
The government's role in health care has grown over the past decades, with 45% of all health spending now coming from the federal government, up from 32% in 1990…
In just nine years, entitlement spending is on track to eat up 61% of the federal budget, according to the CBO. And unless these programs are cut back, they will soon consume all federal taxes, one CBO budget scenario predicts…

Due to the Fed, several commodities are surging despite universal forecasts of global economic decline.
Cattle prices are at an all-time high due to the lowest herd count in 50 years (due to grain prices last year).
Orange juice hit an all-time high (Looking good, Billy Ray!)…Cash corn is trading at premium in January for the first time since 1975 (due to tight supplies)…Gasoline futures hit an all-time high for January.
As we keep asserting, if the Fed were to implement QE 3.0, the inflation surge could be much worse than the inflation surge that accompanied QE 2.0, which killed economic growth and fomented global revolt.

In Honolulu… there’s a four-bedroom home priced at $785,000 that has views of the sun setting over the Pacific Ocean. The beaches of Waikiki are 15 minutes away.   Starting this month, the property is available to buyers with a subprime credit score, limited cash reserves and a 3.5% down payment using a loan backed by the Federal Housing Administration. Without the agency, a buyer would need a 20% down payment and an unblemished financial history for a jumbo mortgage…  The agency increased the size of mortgages it’s willing to insure to as high as $793,750 in Hawaii and $729,750 in the costly real estate markets of states including California, Florida, and Virginia.

Freddie Mac Bets Against American Homeowners.
But the trades, uncovered for the first time in an investigation by ProPublica and NPR, give Freddie a powerful incentive to do the opposite, highlighting a conflict of interest at the heart of the company. In addition to being an instrument of government policy dedicated to making home loans more accessible, Freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance.
“We were actually shocked they did this,” says Scott Simon…the head of the giant bond fund PIMCO’s mortgage-backed securities team…“It seemed so out of line with their mission.The trades put them squarely against the homeowner, he says.

CBO has released a study comparing the wages and benefits of private sector and federal non-military workers. The study uses statistical techniques to make comparisons with adjustments for education level, experience, and other factors.
Here are the overall results:
- The wages of federal workers are 2 percent higher than similar private-sector workers, on average.
- The benefits of federal workers are 48 percent higher than similar private-sector workers, on average.
- The total compensation (wages plus benefits) of federal workers is 16 percent higher than similar private-sector workers, on average…

The percentage of safe assets to total assets in the US economy has been roughly the same since 1952, at about 33 per cent…The stability of demand for safe assets has held during a time in which the assets of the financial sector as a percentage of all assets in the economy have climbed from 25 to 40 per cent, with most of the growth in total assets being financed through debt rather than equity…
Since the relevant topic is how to prevent a run in the shadow banking system, we’re primarily talking about debt here specifically, the debt eligible to be used as collateral in repo and short-term secured lending markets…
Gorton and Metrick have previously argued that the panic wasn’t caused directly by the revelation that subprime-related ABS values were plummeting; this had already happened earlier than 2007. The problem was that the lack of transparency in repo markets meant that investors had no way of distinguishing between repo borrowers whose collateral was subprime-related and those whose collateral was relatively safer. So they started raising haircuts, from zero in most cases, indiscriminately across all
repo counterparties. The run was on and so was the credit crunch…
The core problem is that there is no such thing as a safe asset, as the world has so painfully learned.
”Safe asset” is just a phrase that describes assets perceived to be safe enough. But we can never completely eliminate the possibility that an asset will go from safe enough to not safe enough.

US personal income increased 0.5% in December; but 23% of income growth was due to personal transfer payments. Spending was flat. Savings surged 4% - in December!!! This does not compute!
Illinois’ unpaid bills may more than triple to $34.8 billion by 2017 unless lawmakers and Democratic.
Governor Pat Quinn immediately bring Medicaid and pension spending under control, said a research group. The “potentially paralyzing” backlog, projected to reach $9.2 billion when this fiscal year ends June 30, would be fueled by an “unsustainable” increase in Medicaid spending, according to the Civic Federation, which calls itself a nonpartisan government research organization
House Republicans are proposing to spend about $260 billion over the next 4 1/2 years on transportation programs, as well as substantially increase the size of trucks permitted on highways, according to a draft bill being introduced this week… [Bribing the constituents with more goodies from borrowed money]
Residential real estate prices fell more than forecast in November, showing distressed properties are hampering improvement in the U.S. housing market.
The S&P/Case-Shiller index of property values in 20 cities declined 3.7 percent from November 2010 after decreasing 3.4 percent in the year ended in October, the group said today in New York. Economists projected a 3.3 percent drop, according to the median estimate in a Bloomberg News survey.
Another wave of foreclosures threatens to keep the pressure on prices and delay recovery in the industry that precipitated the last recession, underscoring the Federal Reserve’s view that housing “remains depressed.” More stability in real-estate values may be needed to persuade Americans to take advantage of record-low mortgage rates.
“We’ve seen home prices take a turn for the worse after showing some signs of a bottom, and we do think that there is more downside from here,” said Ellen Zentner, a senior economist at Nomura Securities International Inc. in New York, who correctly forecast the price decline. “If you get stronger jobs and wage growth, it’ll go far in alleviating some of the pipeline foreclosures that have yet to happen.
Consumer confidence unexpectedly dropped in January and a gauge of business activity fell, underscoring forecasts that the U.S. economy will cool after expanding at the fastest pace since the second quarter 2010.
The New York-based Conference Board’s confidence index decreased to 61.1, lower than the most pessimistic forecast in a Bloomberg News survey of economists, from a revised 64.8 reading the prior month. The Institute for Supply Management-Chicago Inc. said its business barometer declined to 60.2 from 62.2 in December. Readings above 50 signal growth.
Employers aren’t hiring fast enough to drive bigger gains in wages and consumer spending, while higher gasoline prices are cutting into household budgets. Another report today showed home prices fell more than forecast in November, eroding the wealth of families as they seek to rebuild savings.
“This quarter will be a bit slower,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who had the lowest sentiment estimate. “Consumer confidence appears to have leveled off, as job growth isn’t quite as good and gasoline prices have moved back up.”
Business activity in the U.S. cooled in January as orders and employment slowed, indicating last quarter’s pickup in growth will not be sustained into 2012.
The Institute for Supply Management-Chicago Inc. said today its business barometer declined to 60.2 from 62.2 in December. Readings above 50 signal growth. Economists forecast the gauge would rise to 63, according to the median of 57 estimates in a Bloomberg survey.
Three consecutive readings exceeding 60 are still the strongest since early 2011, signaling manufacturing remains a mainstay of the expansion even as the world’s largest economy decelerates. Nonetheless, the risk of a recession in Europe prompted by its debt crisis and slower growth in some emerging markets pose a risk to export growth.
Business activity in the U.S. Midwest grew more slowly than expected in January, according to the Institute for Supply Management-Chicago's index of Midwest business activity.
"January's Chicago PMI reading of 60.2 compares to 62.2 in December and a market consensus of 63.0, but remains quite healthy," said David Sloan, an economist with IFR Economics.
"Firmer data from other surveys appear to be catching up with the Chicago PMI," he added. "Internals were generally somewhat softer with the exception of a rise in delivery times."
Maurice “Hank” Greenberg, the former CEO of American International Group Inc. (AIG), and the company he runs, Starr International Co. (Starr), have sued the U.S. Government for the alleged unconstitutional federal takeover of AIG in 2008, according to Reuters.
The lawsuit seeks $25 billion in damages and alleges violations of the Fifth Amendment, which says private property can’t be taken for “public use, without just compensation.”  Moreover, Starr accuses the U.S. Treasury Department and Federal Reserve Bank of New York of wrongly seizing control of AIG and using it as a vehicle to funnel tens of billions of dollars to AIG’s trading partners, and also alleges that the AIG bailout was done as “a vehicle to covertly funnel billions of dollars to other preferred financial institutions including Goldman Sachs.”
“The government’s actions were ostensibly designed to protect the United States economy and rescue the country’s financial system,” the complaint asserts.
The complaint adds that, “[a]lthough this might be a laudable goal, as a matter of basic law, the ends could not and did not justify the unlawful means employed. The government is not empowered to trample shareholder and property rights even in the midst of a financial emergency.”
The $25 billion estimate reflects what Starr calls the value of the government’s stake on January 14, 2011, when it swapped AIG preferred stock for 562.9 million common shares.  AIG was once the world’s largest insurer by market value.
The federal claims case is Starr International Co. v. United States, No. 11-779(Fed. Cl. filed Nov. 21, 2011). The Federal Reserve case is Starr International Co. v. Federal Reserve Bank of New York, No. 11-8422 (S.D.N.Y. filed Nov. 21, 2011)

            JPMorgan Chase & Co. was sued by Germany’s largest cooperative lender for allegedly making false and misleading statements in connection with the sale of residential mortgage-backed securities.
            DZ Bank AG sued yesterday in New York State Supreme Courtin Manhattan, saying it bought about $85 million of the securities from JPMorgan based on offering materials that misrepresented the underwriting standards used to issue the underlying loans.
            "Plaintiff did not know the true facts regarding defendants’ misrepresentations and omissions in the offering materials, and justifiably relied on those misrepresentations and omissions," Frankfurt-based DZ Bank said in the complaint. The German lender is seeking $85 million in damages.
            Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.
            Tasha Pelio, a spokeswoman for New York-based JPMorgan, declined to immediately comment on the lawsuit.
            The case is Deutsche Zentral-Genossenschaftsbank AG v. JPMorgan Chase & Co, 650293/2012, New York State Supreme Court(Manhattan).

NATO Compared to Nazis by former member of the Russian Joint Chiefs of Staff

Keiser Report: It's All Legal, Folks!

LaRouche Emergency Webcast: The Great Threat We Must Prevent

The threat of Nuclear World War III has arrived on the stage of world history. Tune in to LaRouchePAC.com at 7pm Eastern, tonight, and watch Lyndon LaRouche deliver the stark reality of where we stand today.
Nobody Will Survive This War

Tarpley: Report from Iran. Under the Shadow of War

Why the British Monarchy Must Have World War Now

/larouchepac.com
A senior U.S. intelligence official has warned that the Inter Alpha Group-centered European private banking system is going to need an estimated 5 trillion euro in zero-interest loans this year, to avert a total crash. The source commented on Friday on the fact that European banks have already told the European Central Bank that they will need one trillion euro in discount borrowing before the end of February. In effect, with illegal secret backing from the U.S. Fed, the ECB is running a European carry trade, issuing near zero-interest loans to banks so they can turn around and buy up European sovereign debt, at 5-7 percent yields or more. The "profits" are booked by the banks to cover for the fact that they are hopelessly bankrupt. The source further explained that much of the sovereign debt that the banks are buying cannot be paid. Portugal, Spain, Italy and Ireland are in the same boat as Greece. It is estimated that Portugese debt will ultimately be redeemed at most at 30 percent value, Spanish debt at 40 percent value. Italian debt is totally unpredictable.
The source emphasized that the one billion euro being demanded this month is but a fraction of what the banks will need over the coming months, and that we have reached a point of "hyperinflationary explosion" that cannot be postponed for much longer. The threshold for an explosion was reached a year ago, the source concluded, and it is only a matter of weeks or months, at the most, before the whole system detonates. Despite Angela Merkel's claim that Greece is a "unique case," and that the haircut being negotiated between the Greek government and private bondholders will not be repeated elsewhere in euroland, the fact is that the Greek deal—if it is ever finalized—will set the framework for Portugal, Ireland, Spain and Italy.
Commenting on this report on Friday evening, Lyndon LaRouche emphasized that this is why the British Monarchy cannot delay any longer the plans for a thermonuclear war, involving the United States, Russia and China. Already, he noted, their timetable has been thrown way off, due to war-avoidance efforts led by the U.S. Joint Chiefs of Staff, Russia, China and others. Now, the European and trans-Atlantic financial system is at a break point, and the British Monarchy has so far been unable to yet trigger the global thermonuclear conflagration that they desperately seek, to save their dying Fourth Roman Empire system.

Shocking Collapse Of World Economy Warned Is Underway

A grim report just issued by the Finance Ministry that is circulating in the Kremlin today says the United States Clearing House Interbank Payments System (CHIPS) has ground to a virtual halt signaling that a major global economic collapse is currently underway and could very well likely enter into the dreaded “freefall zone.”
Virtually unknown to all but the global financial elite, CHIPS is the main privately held clearing house for large-value transactions in the United States, settling well over $1 trillion a day in around 250,000 interbank payments that together with the Fedwire Funds Service, which is operated by the Federal Reserve Banks, forms the primary US network for large-value domestic and international US dollar payments where it has a market share of around 96%.
The cause underlying the collapse of CHIPS, this report says, is due to the “unprecedented” demand for immediate liquidity relief being sought by the largest banks in the US and EU that are being crushed under of the combined debt of both the United States and Europe said to total near $39 trillion.
Important to note is that what is currently happening is a virtual repeat of the 2008 Financial Crisis that the United States Senate’s Levin–Coburn Report found “was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”
Grimly echoing this Ministry report is the latest data [see chart 2^nd photo left, or click on link] from The Baltic Dry Index (BDI) that is a number issued daily by the London-based Baltic Exchange and shows it in freefall dropping 65% in the past 30 days alone, a terrifying amount of loss not seen since the dark days of late 2008.
Not restricted to Baltic Sea countries, the BDI tracks worldwide international shipping prices of various dry bulk cargoes that has collapsed so severely global shipping has all but ceased thus leaving our world’s largest transport ships anchored and empty off the coast of Singapore in what is described as“the biggest and most secretive gathering of ships in maritime history whose numbers are equivalent to the entire British and American navies combined.”
During the 2008 Financial Crisis an outright global economic catastrophe was only averted after the US Federal Reserve secretly gave out to US banks and corporations, and foreign banks everywhere from France to Scotland, over $16 trillion that was only discovered due to an amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act passed by the American Congress that called for their being audited for the first time in their 99-year history.
Note: To place that $16 trillion into perspective, remember that the Gross Domestic Product (GDP) of the United States is only $14.12 trillion, and the entire national debt of theUnited States government spanning its 200+ year history is “only” $14.5 trillion.
Curiously, the aforementioned amendment to the Dodd-Frank law only called only for a one-time audit of any emergency lending facility established by the Federal Reserve since 1 December 2007 and ending with the date of enactment of the law when it was signed by President Obama on 21 July 2010 thus keeping hidden from the American people who is getting their money.
To if anyone in the world, even the powerful US Federal Reserve, has the power to avert this coming catastrophe, this Ministry report warns, it is unlikely due to the cascading collapse of the global derivative market due to the mounting gridlock in liquidity that US billionaire and Obama confidant Warren Buffet warned back in 2003 were “financial weapons of mass destruction.”
Though the word “derivatives” sounds complicated and technical, understanding them is really not that hard.  A derivative is essentially a fancy way of saying that a bet has been made.  Originally, these bets were designed to hedge risk, but today the derivatives market has mushroomed into a mountain of speculation unlike anything the world has ever seen before.  Estimates of the notional value of the worldwide derivatives market go from $600 trillion all the way up to $1.4 quadrillion.
$1.4 Quadrillion is roughly: -40 TIMES THE WORLD’S STOCK MARKET. -10 TIMES the value of EVERY STOCK & EVERY BOND ON THE PLANET. -23 TIMES WORLD GDP.
Failing to be noticed by the Western peoples about this global economic collapse is that it has been, in all probability, a “planned event” due to occur so as to initiate a New World Order that has long been sought after by the elites, but was condemned by the ancients who warned that the uniting of our world as an economic dictatorship would lead to every human being having to obtain the Mark of The Beast thus bringing this present age to its end.
In a Western world devoid of morality, and lacking the knowledge of the ancients, it is beyond doubt that this coming economic collapse will take them by complete surprise (as the last one did) as they have been trained like dutiful slaves to only adhere to those voices leading them to their doom.
But for those who know the truth, the time is nearing an end for preparing… it will come much sooner than anyone will believe.

February 1, 2012 © EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com.