Posts filed under 'RESOURCE WARS'
October 8th, 2007
By Mathew Maavak of Panoptic World
This is a planet in denial. While the existential question gets a red hot “apocalypse now” for an answer, our stock markets seem to have regained paradise lost.
We are witnessing nothing less than history’s first confluence of unsustainable “peaks.”
Perhaps, we are incapable of piecing them all, for when crude oil reached an all-time intra-day high of $84.10 per barrel on Sept 20, its entitlement to a front pager screamer was conceded to the tale of a few thousand empty — or emptying — American homes.
It was like the Butterfly Effect, with a twist. The flapping rooftops of confiscated homes were now whipping up an economic tsunami worldwide.
Here is how it works.
US mortgage lenders, voracious as ever for “more,” had extended loans to the default-income group, who, were in turn hit by bad economic management. Credit card issuers followed suit to bloat consumer fantasies, and banks tightened the noose with additional loans for cars, tuition and businesses.
In the world of finance, debt is ironically regarded as an “asset.” Think of the rock-solid house that can be repossessed in the event of a default.
Debts, with the outward promise of a steady cash flow, are regularly pooled, “securitized” and converted into a bewildering array of financial products along an upward chain, where, they are hawked off by fund managers to the global market
This money buys up commodities, stocks, and yes, more “securities and derivatives,” along with junk bonds and blue chips.
It was easy come, easy go, wherever the money takes you…a 24/7 electronic casino…a Las Vegas without borders.
London bankers were toasting to the dawn of “the haves and the have yachts” at cocktail parties where sauvé qui peut was the vintage.
One of the greatest scams in recent memory was unfolding, exposing a pyramid scheme of epic proportions.
When this reached the point of metastasis, stock markets began to collapse.
The bottom feeders could not pay up anymore. Even the middle class were finding it difficult to pass the buck upwards.
This is called a liquidity crisis, and it happens when the laws of gravity finally exert a pull on the cash flow.
Still the champagne flowed. Lip-smacking advertorials continued to gush over “securities,” “derivatives,” and “comprehensive financial suites,” set in a Jacuzzi lilting to Ponzi’s version of “money for nothing and chicks for free.”
The pyramids may come crashing down, but the missing capstones are free to roam, investing in gold here, financial products there and junk bonds everywhere.
To avert a panic run though, central banks worldwide pumped $400 billion to maintain liquidity’s equilibrium.
Stock markets were no longer in the bearish or bullish mode; rather they were cancroidal, allowing fund managers to sidewheel from one market to another in search of profits, suckers, and a subtle pullout before the big bang.
It was the dawn of the crab, of cancer in stock market terminology, if one was needed. Suspicions were mounting. European banks were facing insolvency.
For three days beginning Sept. 14, savers across the United Kingdom removed £2 billion ($4 billion) from Northern Rock, Britain’s fifth largest lender. The Bank of England had to step in to guarantee all deposits in all banks – a move with little or no precedence.
However, the banks were not convinced either. Inter-bank lending, which profitably cycled cash from one bank to another as demand dictated, was now deemed an inter-bank debt trap. Available cash was hoarded up.
The Bank of England’s cash auction of £10bn — at a rate of 6.75% over three-months — has been shunned for the third consecutive week.
Either the “have yachts” have sailed away, or banks may actually find it difficult to repay the Bank of England.
Worldwide, the full weight of the “asset-backed” collateralized debt obligations (CDOs) and structured investment vehicles (SIVs) may run into more than the $400 billion which central banks coughed up to keep the system afloat.
CDOs and SIVs are the sleek-sounding trillion-dollar apexes built on loans taken from simple homeowners.
Banks are still tallying what is real and redeemable, and what was created and whirling in thin air. Their best bet now is for a deux ex machina.
Bull in the China Shop
The biggest economic success story of our times was the product of Western consumerism. It created a real supply and demand situation, which forced the relocation of factories to the Third World of cheap labor.
China was the champion recipient. Demand for toys, screws, machinery, computers and cellphones could never ebb, whether it came leaded or unleaded. Beijing’s policymakers decided that the perennial flow of greenbacks demanded a domestic infrastructural revolution dictated by the export market — a first in history if there was one.
Factories, coal-fired plants, superhighways, skyscrapers were springing up at breakneck speed to fulfill the export craze. Excessive pollution and the plight of “unregistered” migrant workers from rural China mattered little.
What mattered were prestige, kickbacks and $1.2tr in hard currency-based reserves. It did not matter that China’s domestic consumption vis a vis its GDP was actually decreasing; it was more a matter of consumer opiates, of who was boss in the center of the universe.
It did not matter that Chinese cities were shrouded in toxic gray, where “only 1 percent of the country’s 560 million city dwellers breathe air considered safe by the European Union.” [1]
The Chinese may cough but the ‘days when the world caught a cold whenever Uncle Sam sneezed was over.” Or so it seemed.
Uncle Sam sneezed.
Global finance began hemorrhaging, and it had to be resuscitated through an intravenous flow of taxpayer money.
Western consumers finally realized that girths had to be tightened, and what to better way than to curb spending, and let a market correction take place in the import sector.
An entire supply chain leading to China’s factories are in danger of folding up. Mineral resources from Africa, semiconductor plants in Malaysia, raw textile products elsewhere, now face acute market uncertainty.
China is in a bad fix. However, this is not deterring factories from coming online next year to meet the projected “global demand.” If Western consumers are scaling down their purchases, Africans are not in a position to be the replacement buyers, and without a market, they will not be able to sell their raw products either.
In such circumstances, moods can shift. When “Beijing rolled out the red carpet for more than 40 African heads of state last November, billboards depicting Africans clad in leopard skin underwear, and an indigenous man from Papua New Guinea, plastered the city.” [2] It is no wonder that China’s list of “allies” is getting shorter by the day.
Events in Myanmar are not proving helpful. China enjoys a near monopoly over Myanmar’s estimated 2.46 trillion cubic meters of gas and 3.2 billion barrels of crude oil. Beijing had plans to develop two parallel oil and gas pipelines stretching 2,380-km to link the deepwater port of Sittwe to Kunming, in the Chinese province of Yunnan. Upon completion, a good portion of Middle Eastern oil and gas is expected to bypass the Straits of Malacca.
The quid pro quo was arms supply and support at the UN for Myanmar’s military junta. Any new government now might negate all existing deals, and pull Yangon into the US orbit. This is a timely revolution from Washington’s perspective.
North Korea too is seeking rapprochement. There is enough operational space now to tackle Tehran, Damascus and the Hezbollah.
China can of course play the spoiler by providing arms to these regimes via a proxy. It is still a bad idea as the Israelis are just itching for war.
The IAF recently destroyed a Syrian installation that was purportedly an embryonic nuclear facility, but may well turn out to be a Kolchuga-type passive radar system, ideal for downing B2 stealth bombers. Coincidentally, the Russians have pledged to upgrade Syrian radar defenses after the attack.
If a wider conflagration breaks out in the Middle East, there will be no oil flowing from the Straits of Hormuz to China, either through Sitte, or through the Straits of Malacca.
The best option for Beijing will be to lock its oil and gas grid to the Russian Far East at a breakneck speed, and clean up some level of air pollution in time for the 2008 Olympics.
If an all-out war in the Middle East is our worst nightmare, think of the following unfolding crises…
The Peak Crises and its plural
Peak Oil: Fossil fuels, compressed and formed over aeons in subterranean geological layers are now releasing the telltale sibilant whispers of a punctured gas tank –- low as it was on petrol in the first place. With crude oil hovering above $80 per barrel, the various subsidies built into national economies are bound to burst at the seams, and precipitate price increases for basic necessities.
There is however a unique solution — falling consumer demand worldwide. That would crimp industrial demand for fossil fuel. It is no wonder oil majors were reluctant to build new refineries when profits seemed guaranteed in the era of “peak oil.” This day would surely come!
Peak oil is also tied to the current dollar crises. With the US dollar dipping against other major currencies, crude oil should come cheaper for Washington.
Oil and other commodities are traded in dollars, and dollar-denominated assets outnumber assets weighed in other currencies. Beijing can dump its hundreds of billions in dollar reserves for euros, only to trade them back into dollars to buy crude oil, gold and other assets.
The dollar blackmail will not work, especially with the US Army entrenched in the oil-rich Middle East.
Doomsday theorists are however predicting another Great Depression ahead, where the value of the dollar may mean little in the event of a global financial meltdown.
If this occurs, a global depression will have to deal with the following phenomena that was absent in the 30s.
Peak Urbanization: More than half of the world’s population will live in urban areas in just… a few months, according to a United Nations Population Fund report. That translates to 3.3 billion people in an urban concentration camp of shantytowns and high-rise pigeonholes.
Children are growing up in a peculiarly boxed-in environment, removed from the soil that births their identity. They do not wake up to the sound of a crowing rooster, which is nature’s way of sowing repentance and a turning of mindsets outside the conventional thinking box.
They wake up to beastly clangor instead. It is either the alarm clock or the barking dog, installed as “pets” to yelp any perceived intruder during the morning rush hour. The urban jungle is an industrialized Ziggurat, which pecks out a hierarchy from childhood. The ones right at the bottom will be the ones shouldering more concrete, or the biggest debt burden.
Close human proximity also leads to petty competitiveness and conflict. That is why “civilization” is held at gunpoint; by the police, by the army and by “treaties.”
The urban life is delicate and vulnerable to all sorts of hazards, from plagues to a breakdown in the utilities, communications and transportation services. And political upheavals. A disaster will grind down traffic to a gridlock, far from the escapist countryside.
What if an energy warfare broke out? What if a global depression hits us? Can three billion people grow a patch of greens on their balconies?
When it comes to greens, the outlook is not at all verdant…
Peak Grain: Global grain stockpiles are down to their tightest levels in three decades after two years of unusual weather patterns. Heatwaves have wilted crops in the granaries of the world while floods and other environmental scourges have devastated some of the poorer “self-sustaining” regions.
Global wheat stockpiles will fall to a 34-year low by June 2008, according to the International Grains Council. U.S. stockpiles will fall to lowest level since 1951-52. Wheat futures in Chicago reached $9.3925 a bushel late September when major supplier Ukraine slashed exports.
The price of a bushel has more than doubled in the past year.
The bushel of woes includes rice, barley, soybeans, sorghum, oats and lentils as well, and they are all sagging under record prices. The grapes of wrath have gone on to stalk eggs, cheese, milk, meat and the a la carte menu.
There may come a point when the industrial food chain has little choice but to pass the rising costs to consumers in a dramatic fashion.
Creeping upticks in the price of milk and bread are turning Europeans livid. Milk is now dubbed as the “new white gold.”
It is not just bad weather to blame. Rising demand from China is pushing up prices, despite the fact that only half of its urban population has basic health insurance. Tragically, processed food re-exported through Beijing’s food chain is causing a global health nightmare.
But why pick on China? The current biodiesel craze is inducing farms to purpose-plant their crops for the profitable bioenergy industry, according to the Hamburg-based Oil World.
“It is high time to realise that the world community is approaching a food crisis in 2008 unless usage of agricultural products for biofuels is curbed or ideal weather conditions and sharply higher crop yields are achieved in 2008,” it added
Bad news gets worse.
Peak Water: There is not enough freshwater around to sustain the planet’s inland ecosystem and its human population. Rivers that help supply drinking water are laden with toxic industrial wastes. Population growth is already straining the capacities of water treatment plants worldwide while desalination plants remain the prerogative of wealthy nations. According to the Pacific Institute: “Over 1 billion people don’t have access to clean drinking water; more than 2 billion lack access to adequate sanitation; and millions die every year due to preventable water-related diseases. Water resources around the globe are threatened by climate change, misuse, and pollution.” It estimates that “over 34 million people might perish in the next 20 years from water-related disease — even if the United Nations ‘Millennium Development Goals,’ which aim to cut the proportion of those without safe access by half, are met.” [3]
Lots of water will be diverted to industries and agriculture, or the highest bidder as privatization of water supply gains currency. In some regions, the situation is so acute that water diversion in one country may precipitate conflict with a neighbor. As early as 1974, Iraq reportedly mobilized its army to target Syria’s al-Thawra dam on the Euphrates. Israel has cast its own eyes on Lebanon’s Litani River.
According to Former UN Secretary General Boutros Boutros-Ghali, “The next war in the Near (Middle) East will not be about politics, but over water.”
If this watery grave is not enough, think of the next one…
Peak Fish: There is some fishy business going on in our oceans. Like oil and water, we are trawling deeper and deeper for our fish supplies. Such piscatorial adventures have led to a global decline in fish stocks. “Ecologists worry that entire fisheries will collapse as… ‘junk fish’ are used up.” Aquaculture, which substitutes marine catches to an extent, comes with its own environmental problems. [4]
The Times of London paints a similar gloomy scenario. According to some experts, 90% of fish around British waters “will disappear within 20 years” in the absence of an immediate intervention.
With 75% of fish stocks fully exploited, declining numbers across species worldwide hint at a collapse point by 2048, beyond which replenishment is not possible.
Peak Fish “comes at a time when their nutritional value is recognized more than ever.”
“World Health Organisation officials recommend a weekly intake of 200 to 300 grams of fish each week but today’s catches can only just meet this target. Since the 1950s an estimated 60 per cent of stocks in British waters have collapsed…”
The Times invokes the paradox that “measures proposed to limit fishing to a sustainable level will only place a cap on the nutritional flow for the coming decades.” [5]
The full circle
What began as sub-prime woes in the US housing sector may ripple into something we cannot yet imagine. Will there be a severe global recession, or worse? If wars are yet contained, bidding wars will yet emerge over wheat, water, fish, medicines and oil. What will the future hold in this ecology of crises?
Here is a refrain from the book of Hosea (4:3):
Because of this the land mourns,
and all who live in it waste away;
the beasts of the field and the birds of the air
and the fish of the sea are dying.
Kuala Lumpur, Oct 9, 2007
Copyright 2007 Maavak
Reference:
[1] As China Roars, Pollution Reaches Deadly Extremes, NYT, Aug 26, 2007
[2] Beijing police round up and beat African expats Guardian, September 26, 2007
[3] Global Water Crisis Pacific Institute.
[4] Water shortages will leave world in dire straits USA Today, 26th Jan 2003
[5] Fish will vanish from British waters in 20 years, says author Times Online, Sept 15, 2007
Most of Mathew Maavak’s commentaries can be read here or visit the Panoptic World homepage.
October 4th, 2007
By Rowan Wolf
The current protests in Burma are attributed to a 500% increase in fuel prices which crippled an already struggling population’s ability to survive (BBC). The people of Burma have been descending into deeper and deeper poverty over the last decade. According to Jonathan Head, author of the BBC article, the people of Burma spend an average of 70% of their income on food. The dramatic increase in fuel prices on August 15, 2007 was too much to bear.
It appears that the government of Burma (Myanmar) were reacting to a “suggestion” by the International Monetary Fund, that they needed to phase out the state subsidizing of oil prices. Myanmar is a member nation of the IMF. This makes one wonder at the seeming naivity of this statement by Head:
Like so many decisions made by the reclusive generals, the sudden hike in fuel prices is hard to fathom.
The IMF had advised weaning the population off subsidised fuel, because with rising world oil prices it was becoming an unsustainable burden for Burma, which although rich in natural gas, relies on imports for almost all of its refined petrol and diesel.
But it is unlikely the IMF would have supported such a dramatic, and unannounced price rise.
The IMF indicated in 1998 that Myanmar was an HIPC (Heavily Indebted Poor Country). That debt was to the World Bank. The current information on Myanmar at the World Bank site states:
The World Bank has approved no new lending for Myanmar since 1987, and has no plans to resume its program. The country is currently in arrears to the World Bank, and has failed to enact economic and other reforms.
Myanmar remains a member of the World Bank. The World Bank continues to track data about the country and also remains in contact with the United Nations and other development partners regarding Myanmar. And the Bank also accompanies officials from the International Monetary Fund on their annual visits to assess the country’s economic situation.
In 1998, then Junta Finance Minister for Myanmar reported to the IMF on the governments efforts to apparently meet the demands of structural adjustment reforms to acquire aid from both the IMF and the World Bank:
Let me now touch on some features of Myanmar’s economic development. Since the latter part of 1988, streamlining of foreign trade procedures and liberalization of both internal and external trade had been introduced. Foreign investors are allowed to invest in Myanmar and foreign bankers are permitted to open their representative offices. Myanmar has been participating in regional cooperation programmes and cooperating with both developed and developing countries for its technological advancement. Rural and border areas development activities are being implemented to alleviate poverty and also to reduce gaps in differences between rural and urban populations.
…
Myanmar is the land with rich natural resources to be tapped for development purposes. Unfortunately, multilateral financial assistance to Myanmar have been unfairly suspended since 1988. Myanmar has been a legitimate member of the Bank and the Fund since 1952. As a legitimate member, Myanmar is fully eligible for the Bank’s development assistance. However, the Bank has neglected Myanmar’s development efforts and it has failed to assist Myanmar for the past eleven years. However, we have cooperated with the Bank and the Fund and we have been servicing our outstanding payments to the Bank regularly, up to the end of 1997.
In 2003, further economic sanctions were placed on the country, and were protested by Major General Hla Tun - Governor for the Bank of Myanmar. Each year, Mayanmar has reported to the IMF its step by step progress towards the “adjustments” apparently being demanded by the World Bank and the IMF, and has made a plea for economic support. Since the same plea is repeated year after yer (up through 2006), The IMF and World Bank have refused to raise restrictions on lending, or easing the debt burden of Burma.
This is not to excuse the brutality and repression of the Junta government of Burma. However, it is important to acknowledge that the economic situation in Burma is not due simply to the “chronic mismanagement” of the government which is one of the primary issues pointed to by Jonathan Head.
There is of course another aspect of the story. In the process of its structural adjustment, a few in the Junta have pocketed significant amounts of money. The business deals and corruption have siphoned off significant amounts of the wealth of Burma. The elite lives in opulence; the government sequestered itself deep in the forests establishing a new capital. The details of corporations involved are discussed in a report by Human Rights Watch (HRW) titled “Burma: Foreign Investment Finances Regime.”
According to HRW, the State Peace and Development Council (SPDC), allocates only a fraction of the available resources to social programs (for example health and education). This is consistent with the typical structural adjustment program regime which requires significant decreases in spending on social infrastructure - though HRW does not discuss this. Also typical of structural adjustment, massive amounts of the economic resources have been redirected to the military. It is estimated that 50% of the Burma’s funds are designated for the military.
Burma has significant natural gas reserves which have created strong trade relations with both India and China, and there are significant hardwood exports to China as well. This gives China and India (among others) some degree of influence with the Junta. However, it is also likely that the Junta elite are directly beneffiting from these relationships. Whether China and India would do more than “request” the Junta back away from its brutal repression is questionable. After all, their agreements are with the current government. It is not surprising given the dramatically increasing demand for natural gas to fuel the growth in China and India, they (and Russia) have been very active in helping finance the development of Burma’s natural gas reserves. Also involved have been major petrochemical companies. According to HRW:
At present the SPDC receives the bulk of its gas money from the onshore “Yadana” and “Yetagun” gas fields. The Yadana consortium is led by Total of France and includes UNOCAL (now Chevron) of the United States and Thailand’s state-controlled PTT Exploration and Production Co Ltd (PTTEP). The Yetagun consortium, led by Malaysia’s state-owned Petronas, includes Japan’s Nippon Oil as well as PTTEP. PTTEP, a subsidiary of the largely state-owned PTT Public Co Ltd (PTT) of Thailand, buys the gas for export to Thailand.
Major offshore natural gas projects are under development. A consortium of South Korean and Indian firms, in partnership with the Myanmar Oil and Gas Enterprise, has made a large gas find off the coast of Arakan State in western Burma. Known as the “Shwe” gas project, it is expected to produce massive revenues once it is in production. Estimates of the gas yield of the Shwe deposits range between US$37 to US$52 billion, and could lead to a total gain in revenues to the junta or future Burmese governments of US$12 to US$17 billion over 20 years.
The Shwe gas consortium is composed of the South Korean company Daewoo International, state-owned companies from India and South Korea, and the Myanmar Oil and Gas Enterprise. Some of the foreign partners also have separate deals with the Burmese government entity for other concessions.
On September 24, for example, India’s state-controlled Oil and Natural Gas Co (ONGC), whose subsidiary ONGC Videsh is a partner in the Shwe consortium, signed a deal with Myanmar Oil and Gas Enterprise to explore for gas in three more offshore blocks. Under the deal, Oil and Natural Gas Co pledged to invest US$150 million through ONGC Videsh.
India’s Office of the President holds nearly 75 percent of the shares in Oil and Natural Gas Co. India’s minister for oil, Murli Deora, traveled to the Burmese capital last week to sign the agreement as thousands of protesters in Burma took to the streets to call for political freedom, an end to the SPDC’s abuses, and economic improvements.
India, China and Russia have also provided military support to the Junta according to a separate report from HRW.
The money gathering in the pockets of the Burma elite are certainly being kept outside of Burma. Tom Malinowski of HRW testified before the Senate Foreign Relations Committee on October 3, 2007. The transcript is not yet available though the hearing was broadcast on C-Span. Malinowski testified that the strongest international bank relations of the Burma elite has been with Singapore, though certainly they have other international finance connections. He recommended that targeted sanctions freezing the international accounts of the Junta and others might be most effective in pressuring the government to release the political prisoners and relax their response to the protests. This seems like a most reasonable response as broader sanctions against the country would only cause more damage to the population. The Burmese military is a huge organization - second only to China in number of forces. Given the record of the ruling Junta, they would not hesitate to further mobilize against the population.
But there is perhaps a deeper and darker link to U.S. interests in Burma, and why for 40 years the U.S. has shown little concern for the people of Burma. That goes to the Vietnam war. Burma is part of the “Golden Triangle” - the rich opium producing region of Asia. In fact, until recently, Burma was second only Afghanistan in opium production. The French utilized the opium production and support of war lords to finance their covert networks, and when the U.S. stepped into France’s shoes they inherited that lucrative network (Alfred McCoy). The CIA utilized the opium trade, and the network connected to it, in the Golden Triangle to finance covert operations in Laos and Cambodia (the secret wars). They also used it to help fund anti-communitist armies of people such as the Hmong (Djedje and Korff).
Of course that is ancient history (perhaps).
Part of the Burma Junta’s efforts with the IMF and World Bank has recently been anti-drug activities including the elimination of opium production. If a March 7, 2006 Reuters report - War on opium gives Golden Triangle a different hue - is accurate, that war on opium has been largely successful. Of course, that success might be part of the deteriorating economic situation of the people of Burma. Much of the population of Burma lives by agriculture, and there is no more lucrative crop than opium. Look to Afghanistan as a companion example.
It seems odd that the U.S. is taking official attention to the most recent protests and Junta response in Burma. For 40 years the U.S. has largely looked the other way. Similarly, the U.S. continued to work with the Taleban government of Afghanistan despite its repression and abuses - until they also successfully drastically reduced opium production. Perhaps it is just coincidence, and of course both situations are more complex than this.
Regardless, it is well past time to ease the conditions of the people of Burma. It is well past time for us to speak out to end the repression and the resulting displacement of millions of Burmese. It is also time to demand debt relief for Burma. Like all such burdens, it benefits interests outside of Burma while crushing the people of Burma.
Information and Support Efforts
Free Burma!
Global Voices
Witness (Real Media video from Witness)
Of Related Interest
Christopher Wren. 5/11/98. NY Times. Road to Riches Starts In the Golden Triangle
Kieran Cooke. BBC. 12/06/2003. Drug tourism in the Golden Triangle.
CNN. 9/30/07. A look at Myanmar’s insular military leadership.
CNN. 10/04/07. Myanmar troops launch nighttime roundups to intimidate activists.
September 30th, 2007
By Dale Allen Pfeiffer of The Mountain Sentinel
Since Bernanke cut interest rates last Tuesday (Sept. 25th), the already weak dollar has gone into a tail spin. Bernanke’s banker friends complained that they did not have enough money to cover their obligations and Bernanke responded by revving up the presses and printing up a slew of fresh funny money. In doing this he ignored the rest of the world, which was hoping that he would show some backbone and stand firm in support of the dollar. So now, everywhere you look, the dollar is losing its value against other currencies.
The Saudi’s unpegged their currency from the dollar for the first time since the oil dollar was established. They had no choice; it would have been suicide for them to follow Bernanke’s move. And elsewhere, other countries will have to follow suit or the US will drag them down. Japan is scrambling for shore.
Not long after the cut in interest rates, the dollar passed a key point against the Euro when it surpassed 1.41 dollars to one Euro. Since then the value of the dollar has continued to drop. The US dollar has been dropping against the Euro since January 2003. It now worth less than 59% of the value it had four years ago. At this point a dollar crash is nearly inevitable. US dollars may soon have as little value as confederate dollars.
For many years we have depended on foreign investors to support our economy by stockpiling our currency. These foreign investors cannot hold onto their dollars for much longer. Already they have lost over 40% of their investment. They will have to cut their losses and divest. This has already started to happen, and as the sell-off accelerates the dollar will find itself in a freefall which will quickly leave it a worthless currency. A massive sell-out could see the dollar losing as much as 90% of its value within days.
Snake Oil
You would not know any of this from the major news networks. They are trying to tell us that the drop in the dollar is actually a good thing. They reason that foreign consumers will flock to the US to buy devalued goods. This is a load of crap, and they know it.
US goods will not devalue. There are very few goods that are wholly US-made today. Most are at least partially manufactured offshore. Because of that, US goods will not devalue, they will simply go up in price. Soon, US consumers will find that their dollars can only purchase half of what they currently buy. And this ratio will worsen as the dollar continues to plunge. Once this crash is complete, US consumers will learn that they have lost everything. They will find that their salaries, their pensions, their health insurance coverage, everything is worthless.
So why is the media trying to sell us this lie? Simply to keep up consumer confidence. If US consumers understood what was really happening, there would be a panic. The truth could cause a run on the banks. Along with foreign investment, consumer spending is the only other pillar supporting the US economy. Consumer spending has already become sluggish. If the reality of our situation were understood, US consumer spending would quickly crumble.
The smart money is already fleeing the US market. It is diversifying into precious metals and a host of other currencies. It is quietly moving outside of the US. This migration has been going on for years, but now it is beginning to speed up. Yet, while this flight is going on, they want the general public to remain unalarmed. The smart money is trying to make its exit before a stampede blocks the fire doors. There were only so many lifeboats on the Titanic and the first class passengers were evacuated before anyone else was allowed out of steerage.
Black Monday and Bloody Tuesday
Monday, October 1st is the day of fiscal reckoning. October 1st is New Year’s Day for businesses, and on that day all the banks are required to open their books and honestly assess their current standing. The fear for the last couple months is that more than a few banks may close their doors. On Monday, we will find out for sure.
For several years now, the banks have been playing wide and loose with loans and investments. Spurred by low interest rates, they lured in consumers and home owners into mortgages and loans that they simply could not afford. It used to be that a bank would underwrite and fund every loan it made. But in the past decade, banks have developed the practice of making loans, storing them on their balance sheets for a short period of time and then packaging them into derivatives called collateralized debt obligations (CDOs). These CDOs were then sold off to investors expecting a high rate of return on the investment. Through this mechanism, the banks did not tie up their own collateral with the loans they issued, so they could issue more and more loans.
CDOs were bought up by insurance companies, hedge fund managers, pension funds and even other banks throughout the world. Due to low interest rates, these managers even purchased CDOs with borrowed money. The CDOs themselves became collateral for more borrowing.
There are hundreds of billions of CDOs out there, and until now it has been mostly speculation as to what percentage is junk. Monday, October 1st the banks will have to fess up, and we will know once and for all whether or not they are capable of covering their losses. The losses in CDOs will be amplified and complicated by the problem of commercial paper.
“Commercial paper is highly-rated short-term notes that offer investors a safe haven investment with a yield slightly above certificates of deposit or government debt. Banks use the money to purchase longer-term investments such as corporate receivables, auto loans, credit card debt, or mortgagees.” (Wall Street Journal 9-5-07)
There is $2.2 trillion in commercial paper in the US. Much of this commercial paper is currently worthless because it is tied to toxic CDOs. Yet the banks are obligated to cover this commercial paper and refinance it regularly. Right now nobody will touch anything connected to CDOs, so the banks are sitting on whatever commercial paper they have in their possession and will have to cover its finances and make up for its losses on their own.
And here is the problem. The banks do not have the collateral to cover hundreds of billions in commercial paper and failing CDOs. So they have turned to the Fed, and their friend Bernanke has tried to come to their rescue by making billions in emergency bank loans and by lowering the interest rate. This lowering of the interest rate will not be used to lure in more shady mortgages. Nobody is offering mortgages right now. The funny money the Fed is currently printing up is supposed to help cover the banks’ losses.
Unfortunately, it is too little too late. Nor would it solve the problem anyway. The toxic CDOs are still there, as is the commercial paper. At best, the lowering of interest rates will simply buy a little time, while making the crash worse when it does come. That is all Bernanke was hoping to achieve when he lowered rates last week. And he did this as a wager that the weak dollar would not unravel as a result.
That is precisely what is happening. The dollar is unraveling, and on Monday, October 1st, we will find out just how much help Bernanke provided to his banker friends. If the banking news is as grim as many analysts believe it will be, then we will hear of banks defaulting and closing their doors. Thousands of small businesses and millions of regular customers will find that they cannot access their accounts. Where they can do so, there may be runs on the banks until they do close their doors.
A Black Monday will likely be followed by a bloody Tuesday as the banking news leads to a route on the stock market. In this climate, the dollar is likely to plummet even farther as foreign investors hurry to divest themselves of their shrinking dollars. It could all be over for the US economy before the week is out. And we may well see our once vain public standing in soup lines by the beginning of November.
Police States & the North American Union
Yes, we already live in a police state. But after the economy crashes, they will act to consolidate this police state and bring it to a new level of repression. Protests will be dealt with severely and encampments of the homeless will be aggressively policed.
It is possible that they will ram through new debt regulation that could turn the US into a nation of debt-servitude. The power-players may walk away from their financial obligations, but they will not want the general public to do so. If you can declare Chapter 7 bankruptcy, do so right now. Otherwise, try to discharge all of your debts while the dollar still has some value.
Eventually the government will announce that it is abandoning the dollar and creating a new regional currency: the Amero. This new currency will coincide with plans for consolidating the US with Mexico and Canada. It will be announced as our answer to the European Union, and will be touted as the road to future prosperity.
It probably will bring some prosperity to large corporations. But for the rest of us, it will mean lower wages, environmental destruction, a strengthening of the police state and the further encroachment of fascism. The North American Union is just more snake oil to benefit the rich and oppress the rest of us.
Stock Up and Drop Out
What can be done to prepare for the worst? The best thing you can do right now is to stock up on essential goods before the dollar collapses and prices go up. Purchase dried goods such as beans, grains, flour, dehydrated milk and dried fruit. It would be wise to stock enough of these durables to last your family for a month. Keep them someplace dry and air tight.
You might also invest in other items such as soap, razor blades, batteries, gardening seeds, socks, and other small but important items. A good supply of fishing gear could come in handy. Bicycles, spare tires and bicycle trailers would also be good items to have around.
These are goods that you will find useful. They are also goods that will have a high barter value if the dollar becomes worthless. If you think about it for a while, you can probably come up with a long list of such items. Things such as deodorant, spices, solar stoves, water purification kits and/or tablets, antibiotics, vitamins and other first aid supplies could also be worth a premium.
After stocking up, it is time to wash your hands of the system which has brought us 9-11, the “War on Terror,” global warming, energy and resource depletion, environmental destruction and increased economic disparity. George Bush told us how to do this when he told us that it was our patriotic duty to consume.
Stop consuming. Find some like-minded people and work on disconnecting yourself from the system. Default on your debts if you can and pay them off if you cannot. Leave your job and find a way to support yourself outside of the system. Stop going along with business as usual and build that sustainable lifestyle that we all know is the only sane alternative. Don’t put it off any longer. Start right now while there is still a chance. Or you will find yourself slaving away in a collapsing police state in short order.
September 21st, 2007
By: Phil Rockstroh
One would think that from the cries of (feigned) indignation and calls for repentance arising from conservatives regarding Move-On.org’s ad in the N.Y. Times that the liberal-leaning group had not simply questioned the insights and intentions of a public servant, promoting, in a public forum, the policy of an illegal and immoral occupation of a sovereign nation; rather, the folks of Move-On.org had committed blasphemy against the holy name of some revered saint — General Mary Petreus, Mother of God.
The false outrage of perpetually offended conservatives serves as cover for the true outrages of our era, including: truncated civil liberties, rising levels of social and economic inequality and injustice, and foreign wars of aggression waged by an insular and secretive executive branch and fought by a permanent underclass. The outrages keep arriving, because the collective imagination of the citizen/consumers of the US, arbitrated by a careerist media elite, has been, for decades, in the thrall of false narratives that serve the interests of the elite of the corporate/militarist classes.
Concurrently, a sense of unease and despair, due to a sense of personal and collective powerlessness before exploitive power, has created the tone and tenor of the times, and begot the phenomenon of supine liberalism and Viagra conservatism. (In this way, liberals stand fecklessly by, as the public is, time and time again, screwed by the decrepit schemes of the right.)
In this way, liberal paternalism is insufferable; worse, it is dangerous. This has been the right’s craftiest accomplishment: inducing “reasonable” liberals and “sensible” centrists to enable their crimes, from stolen elections to their present preparation for a massive bombing campaign of Iran, by intimidating them with the fear that any protest on their part will cast them among the ranks of America-hating, lefty moonbats, who wish to see the terrorist win, dumpsters piled high with discarded fetuses and metro-sexuality made the official state religion.
Moreover, these assaults upon both reason and the republic (what’s left of it) will persist until progressives begin to effectively counter the narratives of the predatory right. Some call it shameful demagoguery; although, conservatives call it career advancement. This is not a novel situation. Throughout history, these kinds of pernicious mindsets have always been with us; it is our tragedy that they have been allowed to prevail.
Conservatives are eager to embrace false narratives: The surge is working; the terrorists hate us for our freedom; Fred Thompson is Ronald Reagan incarnate, but with a touch of Jed Clampett “folksiness.” Accordingly, when the times are roiled with uncertainty, when thoughts of the future are tinged with dread, conservatives, like a character in Southern Gothic literature, will fall into a swoon, longing for the return of an imagined, purer past that never was. One can picture these rightwing sorts wandering the streets, wearing a faded prom dress and a broken, prom queen tiara, twittering and cooing, while repeating over and over again, “the surge is working; Anbar Province is now a beacon of freedom unto the world…”) in an imaginary dialog with the ghost of their long lost beau, Ronald Reagan.
Ronald Reagan, an ungifted actor, by means of playing the role of a “resolute” Cold Warrior, was able to gain the approbation and wealth that had alluded him as a contract player in Hollywood. In truth, Reagan’s greatest accomplishment was convincing himself of his own sincerity.
Constantin Stanislavsky, who is considered the father of modern acting technique, is reputed to have said that when an actor starts to believe he is the character he’s portraying it is time to escort him from the theatre. Withal, Fred, Rudy, Rush, Hannity, O’Reilly, et al., can you find the exits on your own or will you need to be medicated, strapped to a gurney, and wheeled from the public arena? Rather than being candidates for President of the United States, most of the Republican field seems to be vying for the title of National Crazy Uncle — the kind of guy who corners you at a family gathering and rants that the PTA is a terrorist front group and gangs of illegal aliens are engaged in a vast conspiracy to steal single socks from his washer-dryer.
The Republican candidates for president and their fantasy-prone constituents wish to set the Way Back Machine to the golden days of the 1980s when Ronald Reagan was impersonating a man just arrived via the 1940s. This phenomenon is known as the Law of Republican Special Relativity, which states: When events begin to accelerate forward, the conservative mind will be cast, at an equal rate of speed, backwards in time. But the paradox is: they arrive in a parallel universe, an alternative past that never existed on this earth — a low probability dimension, comprised of platitudes and false pieties, where white male privilege is sacrosanct, only for the reason (according to their reality-proof perspective) that it serves to provide all mankind with all things good and holy.
This law can be tested by performing the following simple exercise: Engage a conservative true believer in a dialog regarding the manner by which “state’s rights” was misused in the Jim Crowe dominated Deep South of the pre-Civil Rights Era in order to propagate and maintain segregation, and your conservative-minded test subject will respond as if those realities transpired long ago and far away on a planet that he has never visited.
Yet, paradoxically, rightists have manage to create a Time Retrieval Device, a device that has summoned from the past wonders, such as the following: a reversal of many of the rights of working people; the return of unsafe and unsanitary practices in the food industry; widening gaps of wealth, health and privilege between social, racial and economic classes; in short, many the excesses of plutocratic rule inherent to unfettered capitalism.
As a result, a generation has inherited power who are devoid of the concept of causation and consequence. Ergo, we have developed a political class who rule by narratives of denial and shallow self-justification. An example of this is the blaming of the people of Iraq for the blood-drenched debacle that has resulted from the illegal and immoral invasion of their nation. As well as, an enabling cadre of media elitists who served as cheerleaders for the invasion, because they deemed it to be good for business, and, to this day, are unwilling to admit their complicity.
All of the above leads to the question: What are present day conservatives striving to conserve? Historically, conservatives gave their utmost to conserve institutions such as slavery, Jim Crowe, child labor — and, of course, the use of leeches for medical purposes. (Perhaps, they simply couldn’t stand the thought of a fellow blood-sucker being deemed dangerous, and they feared the start of a trend.) At present, the central paradox of contemporary conservatism is this: How does one practice conservatism within an all-encompassing economy based on disposability? This is analogous to establishing a brothel devoted to the goal of abstinence.
When engaged in a dialog with many conservatives, the question becomes: Are their reactions and responses evoked therein simply borne of plain ignorance, willful ignorance, or outright lying? Or are their responses the result of a group hallucination? All progressives have experienced the following nonsensical encounter of the conservative kind. Present a reasoned argument to a conservative — and, all at once, completely ignoring the tenet, tone and thrust of the point, they begin hallucinating a creature, only known to exist in the rightwing bestiary, known as a “moonbat” — a mythological beast that, ironically, seems to appear when a conservative is confronted with reality.
Accordingly, the time has come for a study of political zoology and to posit who are the true moonbats now making their habitat in the United States. Case study: Unregulated, wish-fulfillment-based conservative economic policy has created those suburban arrays of mold-incubating petri dishes known as products of the housing boom. Moreover, the bursting of the whole bubble-prone Ponzi scheme has sent shock waves throughout international economies and is surging the economy of the US towards recession. Furthermore, conservative anti-regulatory policies have rendered us babes in a cheap, plastic Toyland.
What has an era of conservatism wrought? Answer: a culture that has all the value, integrity, sustainability and safety as a toy manufactured in China. Apropos, contemporary life, as conceived and manufactured by conservative “values”, is shoddily made, toxic and not a lot of fun.
In addition, it has spawned a culture ridden with public relations fabulists and media-savvy confidence artists who tell us that the taste of corporate ass-suck is the ambrosia of the gods. The locked-down, stultifying mindset and ideological barbarianism of present day conservatism is directly linked to the steep decline of the quality of life in the United States.
The recent revelations regarding the I’m-not-gay-I-simply-engage-in-same-sex-encounters-in-puplic-restrooms” wing of the Republican Party are instructive in understanding the rightist’s worldview and its effect on our times. Covert sex in a public bathroom stall is an apt metaphor for how contemporary conservatism limits and restricts the possibilities of human life. In the same way that a closet-case gay conservative stunts the possibilities of his love life, the conservative mindset limits the scope of a culture’s possibilities. Accordingly, economic life must be ruled by ruthless, unregulated competition, and the nation’s meaning can only be found in war. Hence, under the Bush Junta, we are told, as far as international relations go, that the nation has few options other than its present policy of predatory capitalism and “wide-stance” militarism.
Regarding perma-fools such as these, Ernest Becker wrote: “Once you base your whole life striving on a desperate lie, and try to implement that lie, you instrument your own undoing.” Accordingly, the republic is dead; it’s ghost howls online only in pixelated protests such as this one. This grim reality will remain, until we rise up and repudiate the false narratives that have created and continue to comprise these tragic times.
Phil Rockstroh, a self-described auto-didactic, gasbag monologist, is a poet, lyricist and philosopher bard living in New York City. He may be contacted at .
September 18th, 2007
By: Greg Palast of GregPalast.com
A special investigative report from inside Iraq
Did you see George all choked up? In his surreal TV talk on Thursday, he got all emotional over the killing by Al Qaeda of Sheik Abu Risha, the leader of the new Sunni alliance with the US against the insurgents in Anbar Province, Iraq.
Bush shook Abu Risha’s hand two weeks ago for the cameras. Bush can shake his hand again, but not the rest of him: Abu Risha was blown away just hours before Bush was to go on the air to praise his new friend.
Here’s what you need to know that NPR won’t tell you.
1. Sheik Abu Risha wasn’t a sheik.
2. He wasn’t killed by Al Qaeda.
3. The new alliance with former insurgents in Anbar is as fake as the sheik - and a murderous deceit.
How do I know this? You can see the film - of “Sheik” Abu Risha, of the guys who likely whacked him and of their other victims.
Just in case you think I’ve lost my mind and put my butt in insane danger to get this footage, don’t worry. I was safe and dry in Budapest. It was my brilliant new cameraman, Rick Rowley, who went to Iraq to get the story on his own.
Rick’s “the future of TV news,” says BBC. He’s also completely out of control. Despite our pleas, Rick and his partner Dave Enders went to Anbar and filmed where no cameraman had dared tread.
Why was “sheik” Abu Risha so important? As the New York Times put it this morning, “Abu Risha had become a charismatic symbol of the security gains in Sunni areas that have become a cornerstone of American plans to keep large numbers of troops in Iraq though much of next year.”
In other words, Abu Risha was the PR hook used to sell the “success” of the surge.
The sheik wasn’t a sheik. He was a fake. While proclaiming to Rick that he was “the leader of all the Iraqi tribes,” Abu lead no one. But for a reported sum in the millions in cash for so-called, “reconstruction contracts,” Abu Risha was willing to say he was Napoleon and Julius Caesar and do the hand-shakie thing with Bush on camera.
Notably, Rowley and his camera caught up with Abu Risha on his way to a “business trip” to Dubai, money laundering capital of the Middle East.
There are some real sheiks in Anbar, like Ali Hathem of the dominant Dulaimi tribe, who told Rick Abu Risha was a con man. Where was his tribe, this tribal leader? “The Americans like to create characters like Disney cartoon heros.” Then Ali Hathem added, “Abu Risha is no longer welcome” in Anbar.
“Not welcome” from a sheik in Anbar is roughly the same as a kiss on both cheeks from the capo di capi. Within days, when Abu Risha returned from Dubai to Dulaimi turf in Ramadi, Bush’s hand-sheik was whacked.
On Thursday, Bush said Abu Risha was killed, “fighting Al Qaeda” - and the White House issued a statement that the sheik was “killed by al Qaeda.”
Bullshit.
There ain’t no Easter Bunny and “Al Qaeda” ain’t in Iraq, Mr. Bush. It was very cute, on the week of the September 11 memorials, to tie the death of your Anbar toy-boy to bin Laden’s Saudi hijackers. But it’s a lie. Yes, there is a group of berserkers who call themselves “Al Qaeda in Mesopotamia.” But they have as much to do with the real Qaeda of bin Laden as a Rolling Stones “tribute” band has to do with Mick Jagger.
Who got Abu Risha? Nothing - NOTHING - moves in Ramadi without the approval of the REAL tribal sheiks. They were none-too-happy, as Hathem, noted, about the millions the US handed to Risha. The sheiks either ordered the hit - or simply gave the bomber free passage to do the deed.
So who are these guys, the sheiks who lead the Sunni tribes of Anbar - the potentates of the Tamimi, Fallaji, Obeidi, Zobal and Jumaili tribes? Think of them as the Sopranos of Arabia. They are also members of the so-called “Awakening Council” - getting their slice of the millions handed out - which they had no interest in sharing with Risha.
But creepy and deadly or not, these capi of the desert were effective in eliminating “Al Qaeda in Mesopotamia.” Indeed, as US military so proudly pointed out to Rick, the moment the sheiks declared their opposition to Al Qaeda - i.e. got the payments from the US taxpayers - Al Qaeda instantly diappeared.
This miraculous military change, where the enemy just evaporates, has one explanation: the sheiks ARE al Qaeda in Mesopotamia. Just like the Sopranos extract “protection” payments from New Jersey businesses, the mobsters of Anbar joined our side when we laid down the loot.
What’s wrong with that? After all, I’d rather send a check than send our kids from Columbus to fight them.
But there’s something deeply, horribly wrong with dealing with these killers. They still kill. With new US protection, weapons and cash, they have turned on the Shia of Anbar. Fifteen thousand Shia families from a single district were forced at gunpoint to leave Anbar. Those moving too slowly were shot. Kids and moms too.
Do the Americans know about the ethnic cleansing of Anbar by our erstwhile “allies”? Rick’s film shows US commanders placing their headquarters in the homes abandoned by terrorized Shia.
Rick’s craziest move was to go and find these Shia refugees from Anbar. They were dumped, over a hundred thousand of them, in a cinder block slum with no running water in Baghdad. They are under the “protection” of the Mahdi Army, another group of cutthroats. But at least these are Shia cutthroats.
So the great “success” of the surge is our arming and providing cover for ethnic cleansing in Anbar. Nice, Mr. Bush. And with the US press “embedded,” we won’t get the real story. Even Democrats are buying into the Anbar “awakening” fairy tale.
An Iraqi government official frets that giving guns and cover to the Anbar gang is like adopting a baby crocodile. “A crocodile is not a pet,” he told Rick. It will soon grow to devour you. But what could the puppet do but complain about his strings?
This Iraqi got it right: the surge is a crock.
********
Greg Palast is the author of “Armed Madhouse: from Baghdad to New Orleans - Sordid Secrets and Strange Tales of a White House Gone Wild.” See Palast’s reports for BBC Television’s Newsnight, now filmed by Rick Rowley and partners, at www.GregPalast.com
On his departure from Iraq, Al Jazeera’s English language network agreed to broadcast the Rowley/Enders film. I urge you to see it:
Part 1 of People and Power - al-Anbar progress? 09 Sept 07 at this .
(11:55)
Part 2 - People and Power - al-Anbar progress? - 09 Sept 07 at this .
(10:24)
September 16th, 2007
By Rowan Wolf
Many people have been saying that the invasion (and occupation) of Iraq is about oil. I believe that there is more than oil involved, but certainly oil was a driving motivator. Now we can add Alan Greenspan to the list of those who reinforce that claim. Greenspan writes in his new book :
‘I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.’
Yes, it is sad indeed, “politically inconvenient” or not, that we invaded, decimated, and continue to occupy a nation to control its oil reserves. Or to perhaps be a bit more specific, to turn over control of that oil to private oil corporations.
How much is it costing? Well there are the measurable costs, such as $10 Billion a month, or the almost 3,800 U.S. troops that have given their lives, or the almost 38,000 U.S. troops who are casualties, or the 144 who have taken their own lives. But all of that pales in magnitude to the estimated 1.2 million Iraqi’s who have died as a result of the U.S. invasion and the dominoes that has set falling.
According to a recent poll by Opinion Research Business (ORB), it is estimated that 1,220,580 Iraqi’s have lost their lives as a direct consequence of the conflict since 2003. Almost 50% of the households in Baghdad have lost at least one family member.
ORB notes that the murder rate in Iraq now exceeds the genocide in Rwanda in 1994. The poll also revealed the displacement of Iraqi’s. While roughly 52% are displaced within Iraq, 48% have crossed into Syria or Jordan with the majority going to Syria.
Oil has often been a bloody business, and it continues to get more so as the resource becomes scarcer. Now we have word from the horse’s mouth that peak oil is on the way. Lord Oxburgh, former CEO of Shell oil predicts oil prices at $150 a barrel with production peaking within the next 20 years. Oxburgh was interviewed by the Independent. He is scheduled to address the Association for the Study of Peak Oil (ASPO) meeting in Ireland this week. In the Independent interview he stated:
“We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware.”
The argument against oil being the motivator for the invasion of Iraq has been that Iraqi oil production has shrunk dramatically since the invasion. And indeed this is true. However, there is as much (if not more) profit from restricting the flow of oil as there is in increasing the flow of oil. All one has to do is to look at the major oil company profits since the “instability” in Iraq has manifested itself in the market. Namely record profits one quarter after another. The continued U.S. armed presence in Iraq, has been linked to Iraq’s “government” making headway on Iraq’s oil. Namely, that it approves highly biased PSAs (Production Sharing Agreements) put in place by the U.S. Coalition Provisional Authority shortly after the collapse of Hussein’s government.
Recognizing the centrality of oil in the Iraq occupation, Oil Change International has started an fundraising campaign to Support Iraqi Resistance to the Oil Law. The also have a number of informational and local action links that I recommend. I highly applaud and support their efforts. They have a sad but true short video on the issue called Addicted to Oil.
Increasingly, the people of the United States are calling for a withdrawal of U.S. troops from Iraq. This weekend there was a march in Washington D.C. of almost 100,000 people calling for withdrawal and for the impeachment of George W. Bush. Approximately 200 protesters were arrested. Across the country there have been marches, demonstrations, and campaigns to inform our elected representatives. To date, those representatives have shown more talk than action on the issue. It is critically important - both for the people of Iraq as well as the people of the United States - to continue applying pressure to representatives and the White House. However, it is also critically important to recognize the driving forces in the current occupation - controlling increasingly scarce oil resources.
All to often, recognition of this central issue gets expressed as “ending our dependence on foreign oil. No. We need to end our dependence on oil. There are not adequate reserves in the United States to meet the continued U.S. levels of consumption. This was acknowledged by Shell President John Hofmeister. We need (and the world needs) to refoot our life styles and our expectations. The cost of the path we are on is simply too high.
September 13th, 2007
By Rowan Wolf
On September 11, 2001 a series of horrendous events happened. Planes brought down two buildings of the World trade Center complex in New York City; the Pentagon was hit; and another crashed in a Pennsylvania field. It was a shock to the systems and psyches of the people of the United States and the world. It has been repeated more times than I can count the “world changed forever.” Personally, I think that is a grandiose claim, but it set in motion a series of decisions and events that continue to the present.
Bush reportedly “joked” after 9/11 that he had “hit the trifecta.” His choices after that event have ruined the lives of millions, and drug the United States into the dubious honor of being a rogue nation.
Six years after the crimes of 9/11/2001, we still have more unanswered questions than those that have been answered. We have a Constitution in tatters and the government engaging in illegal surveillance and detention of U.S. citizens and others. The U.S. stands in violation of a laundry list of breaches of international treaties and agreements. We have two nations in shambles - “bombed back to the stone ages.” We have tens of thousands of civilians dead in Afghanistan and Iraq. We have millions displaced - almost five million in Iraq alone. We have 3,776 U.S. troops dead (by Pentagon count), and at least 27,186 U.S. casualties. At least 122 U.S. service people have committed suicide.
All of this death and destruction, and there is no end in sight. General Petraeus (purportedly speaking independent of the White House) spoke of slow progress, but gave an expected up-beat report. Crocker (U.S. Ambassador to Iraq) was equally positive. Unfortunately, what I heard from their testimony was that by next summer the U.S. should have achieved a return to the conditions of the summer of 2006, which was worse than 2005, which was worse than 2004. In other words, this is not significant “progress.”
To add to the debacle, the world is now facing the fall of Musharraf in Pakistan. This is big news that is not being adequately discussed in the U.S. Musharraf has been an “ally” in the “war of terror” in Afghanistan. His ouster there would be very bad news for the U.S.. Meanwhile, the Taliban is increasingly presenting as the (re)emerging power in Afghanistan. On the other hand we have Bush and the neo-cons trying to manufacture legitimacy for a preemptive invasion of Iran.
Given the current lack of “progress” in Iraq, one has to wonder what “progress” is being pursued.
Somehow it seems to have been forgotten what BushCo. was looking for in invading Iraq. The neo-cons saw Iraq as a potential tabula rasa for a test tube experiment in unfettered capitalism. The resources of Iraq were owned and controlled by Iraq. The utilities and infrastructure were public. One of the first actions after overthrowing Hussein was to start on an across the board privatization of Iraq. This was particularly true of the petroleum resources of the country.
The Bush administration has repeatedly conflated unfettered capitalism with democracy. They have hammered home a meme that pre-dated them, but Iraq was and is the test case. Capitalism is not democracy, and in fact the two are in direct opposition to each other. Under capitalism, the only ones with real voice are those who control enough capital to have a voice. In the U.S. we have seen that the price tag on voice has gotten increasingly dear.
Many in the U.S. are beyond frustration with the Democrats for not making significant progress to resolve the situation in Iraq and bring the troops home. However, the Democrats are using the same yard stick of “progress” that Bush and the Republicans are - namely the private control of Iraq’s oil resources. They are apparently as heavily invested in the privatization of Iraq as Bush has been. However, neither the Iraqi people - nor the Iraqi parliament - are willing to sign over the wealth of the nation. Therefore, no “political” progress. Apparently U.S. “interests” are not served by Iraq controlling its own resources (or infrastructure). Of course, this is a simplistic analysis. A lot of money is being made by some on both endless war and keeping Iraq’s oil off the market.
One might ask if we (or anyone else) is safer now than we were before. By all reports, we are not, and the world is not. Al Qaeda seems to have more diverse and active elements now than before September 11, 2001. There is now an Al Qaeda Iraq that was never there before, and which is enacting violence against both “coalition” and Iraqi civilians. Possible “terror cells” seem to be active in Europe. Turkey is threatening to launch strikes against Kurds in northern Iraq. This would be an attack against Iraq and draw U.S. forces into a conflict with an ally - Turkey. There are rumors of a permanent U.S. base on the border with Iran. That is sure to be a point of contention. Jordan and Syria don’t know what to do with the 2 million plus Iraqi refugees, and the U.S. doesn’t seem to be offering much of a solution to that.
In the U.S., we have had a dramatic restriction/erosion of both Constitutional protections and civil rights. Tests of weapons getting past airport screening systems show big weaknesses in even that basic system. The Coast Guard has spent millions on ships that won’t float and are being decommissioned. Disaster response still seems to be a shambles.
So what do we have for all the cost paid by U.S. citizens, troops and their families, and people around the world? We have a highly intrusive (though apparently not particularly effective) “intelligence” apparatus. We have constructed a private contractor infrastructure that is not only expensive, but economically invested in continuing active war - forever. It has been suggested by more than a few that the massive diversion of resources into private contractors for military and intelligence purposes actually threatens the long - and short - term security of the nation. For example, 70% of the U.S. intelligence budget is going to private contractors.
Six years after September 11, 2001, we have a nation still largely in grief. We have added millions more to the casualty total of grievers - many now also looking for revenge. Revenge not against whoever was behind the events of 9/11/01, but against the United States.
Six years after September 11, 2001 what we do have is what might be expected when revenge is pursued rather than justice. Pain, death, grief and anger. Fear, reactionary decisions, and rhetoric aimed at factionalizing a nation. Our elected representatives need to step back from political and corporate interest and work on sane actions; healing actions; actions which move us all to a better place.
August 13th, 2007
By Rowan Wolf
Last summer I was interviewed by Janaia Donaldson of Peak Moment TV. Peak Moment is a weekly community television program which explores the issues and solutions of a “changing energy future.” Janaia and Robyn took a tour last year to interview folks across the country or various aspects of peak oil and gas. I was honored to be one of the people they interviewed. The interview with me has now been released. The 28 minute interview is now available at . It will also be available from Free Speech TV and Global Public Media. You may also access other programs and specials from the Peak Moment TV, Free Speech TV or Global Public Media links.
In this interview, I discuss some of the social effects of peak oil - particularly in the context of social inequality on both a national and international level.
August 11th, 2007
By Rowan Wolf
As the sea ice melts in the Arctic, conflict heats up over who it belongs to. The Russians wasted no time at all in sending a submarine to to plant the flag on the ocean floor.
Expand | There are five nations with Arctic claims - Russia, Canada, United States, Denmark, and Norway. According to the Struck article, these nations had ten years (1982-1992) to agree on the boundaries. They have not, and Russia claims that it the Arctic is theirs.
Of course, Canada claims it is theirs. Further, that Russia is trying to claim territory beyond the 200 mile international limit. The Canadian response is to announce that they are building two military bases in the region.
Not to be outdone, Denmark is launching an expedition to see if they have a claim to some of the region.
Once again, we have the merging issue of hydrocarbons (oil and gas) and global warming. The Arctic ice is . This is making accessible portions of the ocean floor that have not been accessible for thousands of years. The decreasing global supplies of oil and gas raise the stakes on any of those resources that might be claimed.
The irony of the burning of hydrocarbons causing increased CO2 which is a major contributor to global warming is unavoidable. Using fossil fuels accelerates global warming which causes more ice melt exposing more of the Arctic for exploitation of potential oil and gas reserves. It is nuts, but it is a sure indicator that:
- there is no near term plan to move away from fossil fuels, and
- there is no serious commitment to addressing global warming.
Can there not be any place on the planet that belongs to everyone (or no one)?
Some might laugh at the “quaintness” of planting the Russian flag on the ocean floor. However, be assured that military conflict over who claims what in the Arctic is not a far fetched fantasy.
August 10th, 2007
By: Carolyn Baker of Speaking Truth To Power
A review of Financial Armageddon: Protecting Your Future From Four Impending Catastrophes, By Michael J. Panzner
Sooner or later, everyone sits down to a banquet of consequences. –Robert Louis Stevenson–
A few days ago a friend called me just after hearing Michael Panzner on the Thom Hartmann show on Air America. My friend wanted me to read Panzer’s book, Financial Armageddon and see what I thought. Apparently, Panzer’s radio interview remarks were filled with passion and a sense of urgency, and upon reading the book, I experienced the same intensity in the author’s writing which pleasantly surprised me. Here was a financial guru with 25 years’ experience in the stock, bond, and currency markets and a faculty member of the New York Institute of Finance, who unlike Ben Bernanke and the silver-lining pundits of the financial pages, was not telling us that everything is going to be fine or that things will “bounce back in 2010″.
Anyone familiar with my writings knows that I have never claimed to be a fiduciary wizard, but in recent years I have written more on topics related to economics than at any time in my life. I do not believe that all social issues can be resolved if only we change how money works in the United States or the world, but I am profoundly aware of the role of economic issues-perhaps more than militarism, healthcare, education, politics, or any other institution, in the dead-ahead demise of empire. I also notice that few in the left-liberal end of the political spectrum have a firm grasp on economic issues which I suspect comes from a fundamental polarization between activism and financial intelligence-a reality which motivated me a few years ago to write an article entitled “Activists And Accountants: Absolute Allies.”
Michael Panzner is definitely not from the left end of the political spectrum, which makes the contents of Financial Armageddon all the more fascinating and momentous. I came away from the book with both remarkable reinforcement of my position that the United States has entered economic collapse, but also perplexed regarding the myriad blind spots that the author seemed to have regarding the causes of the current economic meltdown. I am not aware of how Panzner may have altered his views since the publication of his book earlier this year, but at the time of writing, Panzner did not mention or was not aware of a number of glaring realities regarding the gluttonous greed-fest that has characterized the United States since the end of World War II. I will address those inconsistencies first, then highlight the places where I think Financial Armageddon is absolutely on-target.
What is most disturbing to me about the book is what appears to be a total lack of perception regarding the role of fraud, theft, and malicious intent in the American and global financial train wreck which has been exacerbating over recent decades. Panzner seems to conclude that all of this is just one huge accident attributable to incompetence or the American consumer being lulled by creature comforts. The book begins with a chapter on debt-personal and governmental-a factor so pivotal in economic catastrophe, but little attention is given to the intentional engineering, for example, of consumer debt by centralized financial systems and how monstrously profitable it is.
In the recent documentary “Maxed Out“, Harvard law professor and author of several books on consumer debt, Elizabeth Warren, states that the middle class is near extinction not only because of a lack of financial information, but specifically because debt is, in her words, “obscenely profitable” for lenders. Panzner says little about this in the book, but he does say that “Ever-growing investment returns, an endless housing boom, and the Federal Reserve had conditioned Americans to believe that, inevitable good fortune would eventually bail them out-should it even prove necessary.” (4) The current debt nightmare, however, is not merely about “conditioning” but is, in my opinion, based on hard evidence, calculated and contrived. Both “Maxed Out” and “In Debt We Trust” make this exceedingly clear. Furthermore, in examining the history of the financial train wreck now in the making, one must grasp the history of America’s aristocracy, not only in the days of the Robber Barons, but within the past thirty years. Catherine Austin Fitts’ website subtitled, “The Aristocracy Of Stock Profits” provides an excellent historical account of this.
Nowhere in the book does Panzner mention the $1.3 trillion missing from the Pentagon or the $59 billion missing from the Department Of Housing And Urban Development and a plethora of other instances where money is “missing” as documented, again, by Catherine Austin Fitts. Nowhere does he address the issue of fraudulent inducement, also noted by Fitts in her audio CD on the housing bubble, which simply means, enticing people to borrow when it is obvious that it will be impossible or near impossible for them to repay.
It is crucial to understand that the current economic meltdown is a transfer of wealth from the middle and lower classes to the ruling elite. Wealth transfers do not just happen, nor are they the products of incompetency. They are intentional and well-planned. Central to wealth transfer is corruption at the highest levels of the economic and political systems. In hindsight, we look back upon the Savings and Loan debacle of the 1980s, at that time, the largest theft in the history of the world, yet today, our minds cannot begin to wrap around the wealth that has been stolen from the American people, making the S&L scam look like piggy bank pilfering–and to my knowledge, Catherine Austin Fitts at her Solari and Dunwalke sites, is the only person to have documented this so impeccably.
In fact, I recently received an email notice from Fitts stating:
Recently, we have seen numerous press accounts of bank and hedge fund losses from sub-prime mortgages. Remarkably, these reports imply that the losses are the result of a market downturn or contracting credit cycle. But there has been no mention of the extraordinary profits that were generated or who reaped them. There is no mention of who is poised to make a fortune on the bubble collapse. Even the most sophisticated commentators of our day are describing this financial coup d’etat as the unintentional consequence of “market forces.”
Coup d’ etat? How’s that for blowing the “incompetency theory” out of the water? Panzner alludes to corruption in his book but overall tends to place it in the future. Locating it in the context of a chaotic society during and after collapse, he says that “Corruption will likely become endemic…”, but, I protest, corruption is now and has been and is the principal reason for our financial predicament. In fact, in the opening of the chapter “The Retirement System”, he states that it is the leaders of the public and private sectors who put off an accurate assessment of what the future held, “even though they knew a day of reckoning would come.” (15) Yes, they knew a day of reckoning would come, and their intention was to feed as voraciously as they could off their current situations and be long gone before the reckoning. Just as the culprits of the Savings and Loan caper profited on the way up, they also profited on the way down, as will a few predators in the current subprime catastrophe.
In fact, an article this week in Forbes Magazine, “Profiting From The Meltdown” opens with: “A consortium of the nation’s leading investment banks have quietly created an index that is not only protecting them against the recent market meltdown but also promising to make them bundles of money in the process.”
Panzner does not mention the role of the Federal Reserve in engineering Financial Armageddon and the fact that it is neither “federal” nor has any kind of reserve. No expose of the Fed’s money policy, fractional reserve banking, or printing money out of thin air backed by nothing is offered. Nor does he illumine the reader about the Fed’s ultimate ulterior game plan. It appears that he is unaware of the global ruling elite, sometimes are referred to as the New World Order, who have engineered Financial Armageddon and will be safely ensconsed in their solar-powered bunkers, calculating their profits while surrounded with an abundance of food, water, and private security forces when all hell breaks loose.
One cannot adequately comprehend the perfect economic storm that is brewing worldwide without understanding the role of the Fed as one of the pivotal entities necessary for the construction of what financial analyst, Bill Bonner, calls the “Empire of Debt.” Curiously, Panzner does not address the reality of empire nor its historical ascension to global economic superintendent a la the Federal Reserve.
Mike Whitney states in his most recent article “Stock Market Meltdown” that:
Economic policy is not ‘accidental.’ The Fed’s policies were designed to create a crisis, and that crisis was intended to coincide with the activation of a nationwide police state…. The Federal Reserve is a central player in a carefully considered plan to shift the nation’s wealth from one class to another. And they have succeeded. Nearly 4 million American jobs have been sent overseas, the country has increased the national debt by $3 trillion dollars, and foreign investors own $4.5 trillion in US dollar-backed assets. While the Fed has been carrying out its economic strategy; the Bush administration has deployed the military around the world to conduct a global resource war. These are two wheels on the same axel. The goal is to maintain control of the global economic system by seizing the remaining energy resources in Eurasia and the Middle East and by integrating potential rivals into the American-led economic model under the direction of the Central Bank. All of the leading candidates-Democrat and Republican—belong to secretive organizations which ascribe to the same basic principles of global rule (new world order) and permanent US hegemony. There’s no quantifiable difference between any of them.
Whitney, of course, is talking about organizations like the Council on Foreign Relations, the Trilateral Commission, and the Bilderberg Group. It is within these entities that the ruling elite have been planted and cultivated.
Additionally, Financial Armageddon does not mention energy depletion or climate change as precipitous factors converging with global economic meltdown, exacerbating it and creating what I have frequently referred to as the Terminal Triangle as we “cook on the road to collapse”. These are factors that will only intensify the grim post-collapse world that Panzner does acknowledge later in the book. However, to fail to mention the current and future juxtaposition of these three for the first time in human history is a glaring omission.
To his credit, however, Panzner does steer his writing into future scenarios which sound remarkably like those posited by Dmitry Orlov in his series on collapse entitled “Post-Soviet Lessons For A Post-American Century.” Echoing James Howard Kunstler’s adage that “suburbs are the slums of the future”, he states that “In the wake of the early 21st-century housing boom, the migratory landing points may well be the millions of condominiums and boarded-up new homes left empty or mired in foreclosure in what were once the hottest real estate markets.” (107) Reminiscent of Orlov he writes:
Meanwhile, newfound transparency in the wake of the unfolding financial crisis will expose a scale of fraud, corruption, and self-dealing that many will find almost impossible to comprehend. Day in and day out, reports will surface about hidden losses, false accounting, inflated appraisals, sizable off-balance-sheet obligations, valuation discrepancies, unregulated offshore entities, phantom, profits, insider trading, and businesses bled dry to enrich a few individuals at the expense of employees, investors, bankers, and bondholders.(116)
Sorry to say, but all of this sound a whole lot like the current moment, and certainly everything enumerated here will only worsen, and Panzner admits as much in the final chapters as he presents a world of chaos, lawlessness, hunger, thirst, homelessness, inveterate wandering, and people with nothing to lose doing whatever it takes, in order to survive.
I was getting worried early-on in the book that the author would not mention martial law and “vast detention camps”, but he does when explaining the extent of lawlessness, troublemakers, and immigrants “who will increasingly be seen as an unacceptable threat to national security.” (127) Additionally, “Americans will be confronted by an unfamiliar and frightening array of legal, financial, and security restrictions, including lockdowns, curfews, internments, capital and exchange controls, and even [oh yes especially] martial law.” (185) It will be a world where the dark and seamy side of life are apt to be predominant with addictions, vices, and suicide prevailing everywhere. There will be much thievery, scamming, and violent crime and as Panzner says, “People who underestimate the severity of the dangers ahead and fail to take the necessary steps at the outset risk being left penniless.” (142)
When all is said and done, Financial Armageddon offers some sound advice and strategies, which some readers may be aware of, for navigating the crumbling empire . The author insists that having access to information, especially alternative news, will be crucial. Not knowing or predicting how long the internet will exist or remain uncontrolled, he strongly recommends that people familiarize themselves now with alternative news sites and continue to do so as long as they can. In addition, he emphasizes hyperinflation and the risks it will entail in terms of using cash. Precious metals will be a strong hedge, and barter will become a basic, commonplace form of exchange. Practical knowledge of fundamental skills, healing with herbs and other alternative remedies, and personal disaster planning will be essential-as will be the ability to navigate a rotting infrastructure which, and I’m sure Panzner would concur, that in August, 2007, we are just beginning to witness the tragic consequences of.
Panzer also adds the spiritual factor in the equation:
Coping when many people are trapped beneath the rubble of an irresponsible or impetuous past will call for considerable courage, stamina, and resolve, which must come from within. Constant turmoil and heightened uncertainty about the future will require ‘what if?’ thinking and the ability to anticipate situations that used to be rare or non-existent. (143-144)
In addition, Panzner states unequivocally that:
For most Americans, the period ahead will be a time to scrimp and scrape and shy away from a natural sense of optimism that says tomorrow will be better than today. Instead of looking for handouts and loans, people will increasingly have to draw upon their own creative inner spirit to satisfy whatever needs they might have and uncover alternatives to spending money, without necessarily expending a great deal of valuable time and energy in the process. (179)
Gee, do I hear Panzner saying what I have been saying for years– that we must “kill hope and enliven options?” Yes, indeed I do, and I also hear in his chapter on Relationships, that brains, wit, physical fitness, and the best laid plans of mice and men without human connection and skills that enable people to sustain it, will come to nought.
I look forward to Panzner’s next book and trust that it will hit harder than Financial Armageddon. Nevertheless, I enthusiastically recommend this book as well as the Financial Armageddon website.
In summary, the joyride is over, and if you are reading these words, you are probably one of the few people in America or in the world who really understands what that means.
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