» Recovery or Collapse? Bet on Collapse
The US financial system and, probably, the financial system of Europe, like the police, no longer serves a useful social purpose.
In the US the police have proven themselves to be a greater threat to public safety than private sector criminals. I just googled “police brutality” and up came 183,000,000 results. (Here are two recent brutal assaults, one deadly, by police on hapless individuals: http://latimesblogs.latimes.com/lanow/2012/05/kelly-thomas-video-dad-they-are-killing-me-.html and http://www.informationclearinghouse.info/article31364.htm )
The cost to society of the private financial system is even higher. Writing in CounterPunch (May 18), Rob Urie reports that two years ago Andrew Haldane, executive Director for Financial Stability at the Bank of England (the UK’s version of the Federal Reserve) said that the financial crisis, now four years old, will in the end cost the world economy between $60 trillion and $200 trillion in lost GDP. If Urie’s report is correct, this is an astonishing admission from a member of the ruling elite. http://www.counterpunch.org/2012/05/18/the-true-costs-of-bank-crises/print
Try to get your mind around these figures. The US GDP, the largest in the world, is about 15 trillion. What Haldane is telling us is that the financial crisis will end up costing the world lost real income between 4 and 13 times the size of the current Gross Domestic Product of the United States. This could turn out to be an optimistic forecast.
In the end, the financial crisis could destroy Western civilization.
Even if Urie’s report, or Haldane’s calculation, is incorrect, the obvious large economic loss from the financial crisis is still unprecedented. The enormous cost of the financial crisis has one single source–financial deregulation. Financial deregulation is likely to prove to be the mistake that destroys Western civilization. While we quake in our boots from fear of “Muslim terrorists,” it is financial deregulation that is destroying us, with help from jobs offshoring. Keep in mind that Haldane is a member of the ruling elite, not a critic of the system like myself, Gerald Celente, Michael Hudson, Pam Martins, and Nomi Prins. (This is not meant to be an exhaustive list of critics.)
Financial deregulation has had dangerous and adverse consequences. Deregulation permitted financial concentration that produced “banks too big to fail,” thus requiring the general public to absorb the costs of the banks’ mistakes and reckless gambling.
Deregulation permitted banks to leverage a small amount of capital with enormous debt in order to maximize return on equity, thereby maximizing the instability of the financial system and the cost to society of the banks’ bad bets.
Deregulation allowed financial institutions to sweep aside the position limits on speculators and to dominate commodity markets, turning them into a gambling casino and driving up the prices of energy and food.
Deregulation permits financial institutions to sell naked shorts, which means to sell a company’s stock or gold and silver bullion that the seller does not possess into the market in order to drive down the price. http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515
The informed reader can add more items to this list.
The dollar in its role as world reserve currency is the source of Washington’s power. It allows Washington to control the international payments system and to exclude from the financial system those countries that do not do Washington’s bidding. It allows Washington to print money with which to pay its bills and to purchase the cooperation of foreign governments or to fund opposition within those countries whose governments Washington is unable to purchase, such as Iran, Russia, and China. If the dollar was not the world reserve currency and actually reflected its true depreciated value from the mounting US debt and running of the printing press, Washington’s power would be dramatically curtailed.
The US dollar has come close to its demise several times recently. In 2011 the dollar’s value fell as low as 72 Swiss cents. Investors seeking safety for the value of their money flooded into Swiss francs, pushing the value of the franc so high that Switzerland’s exports began to suffer. The Swiss government responded to the inflow of dollars and euros seeking refuge in the franc by declaring that it would in the future print new francs to offset the inflows of foreign currency in order to prevent the rise in the value of the franc. In other words, currency flight from the US and Europe forced the Swiss to inflate in order to prevent the continuous rise in the exchange value of the Swiss currency.
Prior to the sovereign debt crisis in Europe, the dollar was also faced with a run-up in the value of the euro as foreign central banks and OPEC members shifted their reserves into euros from dollars. The euro was on its way to becoming an alternative reserve currency. However, Goldman Sachs, whose former employees dominate the US Treasury and financial regulatory agencies and also the European Central Bank and governments of Italy and, indirectly, Greece, helped the Greek government to disguise its true deficit, thus deceiving the private European banks who were purchasing the bonds of the Greek government. Once the European sovereign debt crisis was launched, Washington had an interest in keeping it going, as it sends holders of euros fleeing into “safe” dollars, thus boosting the exchange value of the dollar, despite the enormous rise in Washington’s own debt and the doubling of the US money supply.
Last year gold and silver were rapidly rising in price (measured in US dollars), with gold hitting $1,900 an ounce and on its way to $2,000 when suddenly short sales began dominating the bullion markets. The naked shorts of gold and silver bullion succeeded in driving the price of gold down $350 per ounce from its peak. Many informed observers believe that the reason Washington has not prosecuted the banksters for their known financial crimes is that the banksters serve as an auxiliary to Washington by protecting the value of the dollar by shorting bullion and rival currencies.
What happens if Greece exits the EU on its own or by the German boot? What happens if the other EU members reject German Chancellor Merkel’s austerity, as the new president of France promised to do? If Europe breaks apart, do more investors flee to the doomed US dollar?
Will a dollar bubble become the largest bubble in economic history?
When the dollar goes, interest rates will escalate, and bond prices will collapse. Everyone who sought safety in US Treasuries will be wiped out.
We should all be aware that such outcomes are not part of the public debate.
Recently Bill Moyers interviewed Simon Johnson, formerly chief economist of the International Monetary Fund and currently professor at MIT. It turns out that deregulation, which abolished the separation of investment banks from commercial banks, permitted Jamie Dimon’s JPMorganChase to gamble with federally insured deposits. http://www.informationclearinghouse.info/article31356.htm Despite this, Moyers reports that Republicans remain determined to kill the weak Dodd-Frank law and restore full deregulation.
Simon Johnson says: “I think it [deregulation] is a recipe for disaster.” The problem is, Johnson says, that correct economic policy is blocked by the enormous donations banks make to political campaigns. This means Wall Street’s attitudes and faulty risk models will result in an even bigger financial crisis than the one from which we are still suffering. And it will happen prior to recovery from the current crisis.
Johnson warns that the Republicans will distract everyone from the real crisis by concocting another “crisis” over the debt ceiling.
Johnson says that “a few people, particularly in and around the financial system, have become too powerful. They were allowed to take a lot of risk, and they did massive damage to the economy — more than eight million jobs lost. We’re still struggling to get back anywhere close to employment levels where we were before 2008. And they’ve done massive damage to the budget. This damage to the budget is long lasting; it undermines the budget when we need it to be stronger because the society is aging. We need to support Social Security and support Medicare on a fair basis. We need to restore and rebuild revenue, revenue that was absolutely devastated by the financial crisis. People need to understand the link between what the banks did and the budget. And too many people fail to do that.”
Consequently, Johnson says, the banksters continue to receive mega-benefits while imposing enormous social costs on society.
Few Americans and no Washington policymakers understand the dire situation. They are too busy hyping a non-existent recovery and the next war. Statistician John Williams reports that when correctly measured as a cost of living indicator, which the CPI no longer is, the current inflation rate in the US is 5 to 7 percentage points higher than the officially reported rate, as every consumer knows. The unemployment rate falls because, and only because, people unable to find jobs drop out of the labor force and are no longer counted as unemployed. Every informed person knows that the official inflation and unemployment rates are fictions; yet, the presstitute media continue to report the rates with a straight face as fact.
The way the government has rigged the measure of unemployment, it is possible for the US to have a zero rate of unemployment and not a single person employed or in the work force.
The way the government has the measure of inflation rigged, it is possible for your living standing to fall while the government reports that you are better off.
Financial deregulation raises the returns from speculative schemes above the returns from productive activity. The highly leveraged debt and derivatives that gave us the financial crisis have nothing to do with financing businesses. The banks are not only risking their customers’ deposits on gambling bets but also jeopardizing the country’s financial stability and economic future.
With an eye on the approaching dollar crisis, which will wreck the international financial system, the presidents of China, Russia, Brazil, South Africa, and the prime minister of India met last month to discuss forming a new bank that would shield their economies and commerce from mistakes made by Washington and the European Union. The five countries, known as the BRICS, intend to settle their trade with one another in their own currencies and cease relying on the dollar. The fact that Russia, the two Asian giants, and the largest economies in Africa and South America are leaving the dollar’s orbit sends a powerful message of lack of confidence in Washington’s handling of financial matters.
It is ironic that the outcome of financial deregulation in the US is the opposite of what its free market advocates promised. In place of highly competitive financial firms that live or die by their wits alone without government intervention, we have unprecedented financial concentration. Massive banks, “too big to fail,” now send their multi-trillion dollar losses to Washington to be paid by heavily indebted US taxpayers whose real incomes have not risen in 20 years. The banksters take home fortunes in annual bonuses for their success in socializing the “free market” banks’ losses and privatizing profits to the point of not even paying income taxes.
In the US free market economists unleashed avarice and permitted it to run amuck. Will the disastrous consequences discredit capitalism to the extent that the Soviet collapse discredited socialism?
Will Western civilization itself survive the financial tsunami that deregulated Wall Street has produced?
Ironic, isn’t it, that the United States, the home of the “indispensable people,” stands before us as the likely candidate whose government will be responsible for the collapse of the West.
Are Americans Catching On, Waking Up, Unplugging?
In response to the question in the title I can report that most of my readers are. Almost everyone got the point of the last column. They see the absurdity of the government’s claim that the identity of the tough, macho Navy Seals, who allegedly murdered Osama bin Laden, has to be kept secret in order to protect our fierce warriors from reprisals from Muslim terrorists, while those government officials responsible for the torture and deaths of large numbers of Muslims can walk around, identity known, unprotected and safe.
A few members of Congress are also awake, but not very many. Indeed, we are losing two of the most aware–Dennis Kucinich and Ron Paul. Kucinich was redistricted in order to get rid of his independent voice. He carried 75% of the votes from that part of his old district that was included in his new one, but the new voters lacked the intelligence to vote for him. Ron Paul, in our time of tribulation, tried for the Republican presidential nomination on a platform of saving the US Constitution, but those who voted in Republican primaries weren’t interested in saving the US Constitution.
Now we are down to US Rep. Walter Jones. Initially, Jones was a member of the warmonger crowd. He was angered when the French government cast doubt on the George W. Bush regime’s reasons for the need for war in Afghanistan and Iraq. Jones said at that time that he was renaming French Fries “Freedom Fries.”
Jones unplugged from the Matrix and has been sentient for some time. Recently the tyrant Obama and the government operative Panetta, a political whore who has been in a variety of government positions and is currently Secretary of Warmongering, announced publicly that, the US Constitution notwithstanding, the executive branch no longer needed the authority of Congress to go to war. In our globalist existence, the authority for the US to initiate hostilities against another country comes from the UN, declared Obama and Panetta. If the executive branch can persuade or bribe the UN to give a war OK, Congress is no longer relevant.
This was too much for the awakened US Rep. Walter Jones. He has introduced House Congressional Resolution 107, which clearly states that the president’s use of US military in an act of aggression without the consent of Congress is an impeachable offense.
There is absolutely no question whatsoever that Rep. Jones is correct. However, you can bet that the Obama regime already has a John Yoo-type hireling busy at work in the Department of Justice (sic) writing a legal memo that the US Constitution gives no authority to Congress to declare war.
A person would think that members of Congress would flock to Rep. Jones’ resolution.
After all, it is Congress’ own power that is on the line. Normally, organizations defend their own power. Strangely, the US Congress has not defended its power since Roosevelt’s “New Deal” in the 1930s. Because of the crisis of the Great Depression, Congress gave up its law-making powers to the executive agencies created by Roosevelt to run the country. Congress pretends to still be in control by having “oversight” over the ruling executive cabinet departments and agencies. Cabinet secretaries, assistant sectaries, and CIA directors have to go testify and be questioned before congressional committees and all that, like the Federal Reserve chairman who has unaccountable power over interest rates and inflation, but the laws are made by the executive branch. Ever since the 1930s, when Congress passes a law it is merely an authorization for some executive branch agency to define the law by writing the regulations. As the executive agency also enforces the regulations, we have the beginnings of tyranny as the same agency both makes the law and enforces it. (See, for example, Paul Craig Roberts and Lawrence M. Stratton, The Tyranny of Good Intentions, Ch. 11, “Abdicating Legislative Power.”)
The roots of tyranny in America go back to the 1930s and even further back to President Lincoln. The decline of Congress, which was created by the Founding Fathers to be a powerful political institution, has been a long term process. However, in recent years the decline of Congress’ power and relevance has accelerated. The Democrats are as responsible for this as Republicans. If US law had been enforced, and Democrats could have enforced the law, George W. Bush and essentially the entirety of his appointees would be in federal prison.
But the Democrats sacrificed the people’s power over government in order that the executive branch could protect us from a terrorism for which no evidence exists. No terrorist events have occurred since September 11, 2001, except for FBI orchestrated plots that “never endangered the public.” As for the government’s 9/11 story, thousands of experts have their doubts.
So, the US Constitution has simply been discarded on the basis of fear. First, the fear of the Great Depression, and secondly, the fear of Muslim Terrorism.
The United States of America is the Constitution. If the Constitution no longer exists as an enforceable document taken seriously by political elites, the United States no longer exists. Some other entity has taken its place.
Think about that. Describe to yourself the characteristics of this new entity. This will be easier for older people than for the young, who have been born into the new tyranny.
For the young, tyranny is all they know. For the young, tyranny is normal.
How old does a person have to be to remember when you boarded an airliner without any security? In previous columns I have pointed out the tiny, essentially insignificant infractions, that led to the resignation of President Richard Nixon in order to avoid impeachment. Compared to Bush or Obama, Nixon was flawless in his observation of US law and the US Constitution. No one of my generation can possibly imagine Nixon saying that the UN could replace Congress’ authority to initiate war, or that he could strip US citizens of their liberty and lives on suspicion alone without evidence or due process of law, simply on the basis of executive decree. All Nixon did was to lie about when he learned of a burglary of which he had no prior knowledge and no involvement.
The loss of our liberty is where we are today. Rep. Jones wants to retrieve Congress’ war-making power. He says that those Americans who wish to support this goal should inform their Senators and Representative and local newspaper of this fact. He provides the telephone number of the congressional switchboard which can connect you to the three offices that, allegedly, represent you. The number is 202 224-3121.
As you know, I keep trying, and so must we all. If we don’t keep trying, it means we accept our loss of our liberty and accountable government. If we give in now, what was the point of resisting the Soviet threat, other than profits and power for the military/security complex?
The US government and its media whores, presstitutes as Gerald Celente calls them, show increasing contempt for the intelligence, or lack thereof, of the American public. Even Americans spaced out on alcohol, drugs, junk food, television and sports events remember the name Osama bin Laden. This person, formerly an operative of the US government against the Soviet Union, was, we were told, the embodiment of total evil. He was responsible for 9/11.
President George W. Bush declared that Afghanistan’s refusal (apparently another Bush regime lie) to deliver Osama, the alleged (no proof) perpetrator of 9/11, to US authorities was the justification for attacking Afghanistan, a country at that time, as now, with two separate governments at war with one another. Shortly thereafter, Osama became, magically, the reason to invade Iraq, an old US ally who had attacked the government of the Iranian Revolution at Washington’s behest.
Suddenly America’s Iraqi ally had nonexistent “weapons of mass destruction” that threatened American cities, in the words of Bush’s moronic National Security Advisor, with “mushroom clouds.”
How did all this absurdity occur? Yes, what Gerald Celente aptly designates as “the presstitute media” played a role. However, the whores were serving their customers, which are the government and private interests that benefit from war. The American public could have rejected the spin, but they put yellow ribbon decals on their SUVs and supported the troops.
If Americans were puzzled when the US government abandoned its position that Osama bin Laden was responsible for 9/11 and announced a new “mastermind,” Khalid Sheikh Mohammed, the presstitutes didn’t mention it. Khalid Sheikh Mohammed was designated the “mastermind of 9/11” because the US government had in custody this hapless individual, perhaps sold to them by warlords for the bounty paid for “terrorists.” There’s no good in having a mastermind of 9/11 whom you cannot catch. So Khalid Sheikh Mohammed became the Mastermind of 9/11.
Once designated the Mastermind, the CIA torturers went to work on him, illegally, of course, but who cares, here was the Mastermind of 9/11.
After Khalid Sheikh Mohammed was water-boarded 183 times with the only evidence against him being coerced self-incrimination, both the former chief US prosecutor at Guantanamo, Colonel Morris Davis, and Admiral Donald Guter, Judge Advocate General of the US Navy, dismissed the Guantanamo military tribunal trials as show trials or “circuses.”
Indeed, the American trials of alleged “terrorists” are even less lawful than Stalin’s show trials of the Bolsheviks, who created the Russian Revolution in 1917, and Hitler’s trials of the German military who attempted to assassinate him in order to save Germany from destruction.
When America’s own chief military prosecutors denounce trials of alleged “terrorists,” the media and the public should take notice. But not in America where the government believes its own lies as fervently as the brainwashed public believes the presstitute media.
Astonishingly, before a show trial could dispatch Khalid Sheikh Mohammed as the Mastermind of 9/11, the US government has produced a new culprit. It was not Osama bin Laden nor Sheikh Mohammed, but Iran that is responsible for 9/11. In a US federal court judgment issued in December 2011, Iran was found guilty of the 9/11 attacks (ref).
So who is responsible for 9/11? If not bin Laden, why did the Navy Seals allegedly murder him? If not Sheikh Mohammed, why is he being put on trial after being tortured for years?
The answer is that the criminals in Washington, who control our lives, no longer care about any of their previous propaganda. They now want to attack another country on totally false pretenses, as does the extreme right-wing Israeli government, the cancer of the Middle East.
Some of the Israeli military brass and much of the Israeli security/intelligence brass oppose an attack on Iran as an act of insanity. Yet, little, if any of the Israeli opposition to war has been reported in the US presstitute media. In order to negate internal opposition, the Israeli prime minister has formed a unity government with the main opposition party, as AIPAC stampedes the US Congress into voting for war with Iran (ref).
If the unaware American population can be programmed to believe that Iran is the 9/11 culprit, then Washington can initiate yet another war that enriches the military/security complex with money and power.
Will bin Laden’s family now sue Washington for blaming Osama for an offense which Washington now acknowledges he was not guilty? Will Sheikh Mohammed be found guiltless, because a US federal court now says it was Iran that was responsible for 9/11?
These would be the results if America had a justice system that was independent of the needs of the political elites and the private interests that they serve. But today in America the ruling interests produce by hook or crook justifications for war that serve the power and profit of the military/security complex. Whatever the mainstream media tells you serves this interest.
So, how do we rescue America from its government and from the corrupt media that serves as a Ministry of Truth for a corrupt government?
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Gary Brumback, PhD, is a retired psychologist and Fellow of both the American Psychological Association and the Association for Psychological Science. He is the author of The Devil’s Marriage: Break Up the Corpocracy or Leave Democracy in the Lurch. Gary can be reached at: democracypower@bellsouth.net.
