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Fiscal Crises Threaten Europe’s Generous Benefits

Posted by Admin on May 26, 2010

Fiscal crises threaten Europe’s generous benefits

LONDON — Six weeks of vacation a year. Retirement at 60. Thousands of euros for having a baby. A good university education for less than the cost of a laptop.

The system known as the European welfare state was built after World War II as the keystone of a shared prosperity meant to prevent future conflict. Generous lifelong benefits have since become a defining feature of modern Europe.

Now the welfare state — cherished by many Europeans as an alternative to what they see as dog-eat-dog American capitalism — is coming under its most serious threat in decades: Europe’s sovereign debt crisis.

Deep budget cuts are under way across Europe. Although the first round is focused mostly on government payrolls — the least politically explosive target — welfare benefits are looking increasingly vulnerable.

“The current welfare state is unaffordable,” said Uri Dadush, director of the Carnegie Endowment’s International Economics Program. “The crisis has made the day of reckoning closer by several years in virtually all the industrial countries.”

Germany will decide next month just how to cut at least 3 billion euros ($3.75 billion) from the budget. The government is suggesting for the first time that it could make fresh cuts to unemployment benefits that include giving Germans under 50 about 60 percent of their last salary before taxes for up to a year. That benefit itself emerged after cuts to an even more generous package about five years ago.

“We have to adjust our social security systems in a way that they motivate people to accept regular work and do not give counterproductive incentives,” German Finance Minister Wolfgang Schaeuble told news weekly Frankfurter Allgemeine Sonntagszeitung on Saturday.

The uncertainty over the future of the welfare state is undermining the continent’s self-image at a time when other key elements of post-war European identity are fraying.

Large-scale immigration from outside Europe is challenging the continent’s assumptions about its dedication to tolerance and liberty as countries move to control individual clothing — the Islamic veil — in the name of freedom and equality.

Deeply wary of military conflict, many nations now find themselves nonetheless mired in Afghanistan on behalf of what was supposed to be a North Atlantic alliance, shying away from wholesale pullout while doing their utmost to keep troops from actual combat.

Demographers and economists began warning decades ago that social welfare was doomed by the aging of Europe’s baby boomers. Some governments had been trimming and reforming, but now almost all are scrambling to close deficits in order to prevent a wider collapse of confidence in the euro.

“We need to change, to adapt … for the sake of the protection of our social model,” European Union Commissioner Joaquin Almunia of Spain told reporters in Stockholm Thursday.

The move is risky: experts warn the cuts could undermine the growth needed to pull budgets back on a sustainable path.

On Monday, Britain unveils 6 billion pounds ($8.6 billion) in cuts — mostly to government payrolls and expenses. The government has promised to raise the age at which citizens receive a state pension — up from 60 to 65 for women, and from 65 to 66 for men. It also plans to toughen the welfare regime, requiring the unemployed to try to find jobs in order to collect benefits.

Britain says it will limit child tax credits and scrap a 250-pound ($360) payment to the families of every newborn. Ministers are reviewing the long-term affordability of the country’s generous public sector pensions.

Funding for Britain’s nationalized health care service will be protected under the new government, however, and should rise each year to 2015.

France’s conservative government is focusing on raising the retirement age. Many workers can now retire at 60 with 50 percent of their average salary. Extra funds are available for retired civil servants, those with three or more children, military veterans and others.

A parliamentary debate is planned for September. Unions in France are organizing a national day of protest marches and strikes on Thursday to demand protection of wages and the retirement age.

In Spain, billions in cuts to state salaries go into effect next month, and the Socialist government has frozen increases in pensions meant to compensate for inflation for at least two years.

“They’ve hit us really hard,” said Federico Carbonero, 92, a retired soldier. He said he was unlikely to live long enough to see the worst of the pension freeze, but had no doubts he would have to start relying on savings to maintain his lifestyle.

Spain is cutting assistance payments for disabled people by 300 million euros ($375 million) and did away with a three-year-old bonus of 2,500 euros ($3,124.25) per new baby. It also has proposed hiking the retirement age for men from 65 to 67.

Countries in northern Europe have done a far better of reforming social welfare and have unemployment systems that focus on re-employing people instead of making their unemployment comfortable, said Gayle Allard, a professor of economic environment and country analysis at the Instituto de Empresa in Madrid.

Denmark and other Nordic countries are known for the world’s highest taxes and most generous cradle-to-grave benefits. Denmark has implemented a system known broadly as “flexicurity,” which combines flexibility for employers to hire and fire workers with financial security and training to prepare for new jobs.

Denmark had a 7.5 percent unemployment rate in the first quarter of this year, well below the EU average of 9.6 percent. Swedish and Finnish unemployment stood at 8.9 percent. Norway, with some of the world’s most generous unemployment benefits fully funded by oil for the forseeable future, has Europe’s lowest jobless rate, just 3 percent in April.

Southern European countries that have not moved toward reforming welfare in the same ways are paying a steep price.

After sharp cutbacks imposed as the condition of an international bailout this month, Greeks must now contribute to pension funds for 40 instead of 37 years before retiring, and the age of early retirement is set to 60 at the earliest.

Civil servants with monthly salaries of above 3,000 euros ($3,750) will lose two extra months of salary — one paid at Christmas, the other split between Easter and summer vacation.

In Portugal, seen as another potential candidate for bailout, the government is focusing on hikes in income, corporate and sales taxes and has avoided drastic changes to welfare entitlements. Unemployment benefits will be cut somewhat and the out-of-work will have to accept any job paying more than 10 percent more than what they would receive in unemployment benefits.

The government is also stepping up checks on welfare claims, freezing public sector pay and slicing public investment.

“There’s been a lack of willingness to shift away from welfare as purely social protection towards an approach which has been in much of northern Europe in recent years, which is welfare as social investment,” said Iain Begg, a professor at the London School of Economics and Political Science’s European Institute.

Otto Fricke, a budget expert for the Free Democrats, the coalition partner of German Chancellor Angela Merkel’s Christian Democratic Union, told The Associated Press that no decisions on cuts have been made, but everything is on the table except education, pension funds and financial aid to developing countries. At least one high-ranking CDU member has called for the idea of protecting education to be re-examined, however.

German public education, which was virtually free until 2005, when some of Germany’s 16 states started charging tuition fees of 1000 euros ($1,250) a year.

Virtually all Germany’s students pay that much or less to attend state-funded universities, including elite institutions. Education isn’t as cheap elsewhere in Europe but the 3,290 pounds ($4,720) per year paid by British students at Cambridge is still far less than Americans pay at comparable schools like Harvard, where annual tuition comes in just shy of $35,000.

The idea of cutting education is proving hard to swallow in the face of Germany’s promise to contribute up to 147.6 billion euros ($184.5 billion) in loan guarantees to protect Greece and other countries that use the euro from bankruptcy.

“I am worried that this crisis will also affect me on a personal level, for example, that universities in Germany will raise the tuition in order to pay the loan they give to Greece,” said Karoline Daederich, a 22-year-old university student from Berlin.

Associated Press writers Juergen Baetz and Kirsten Grieshaber in Berlin, Malin Rising and Karl Ritter in Stockholm, David Stringer in London, Veronika Oleksyn in Vienna, Harold Heckle in Madrid, Elaine Ganley in Paris, Elena Becatoros in Athens and Barry Hatton in Lisbon contributed to this report.

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Goldman Sachs FRAUD Charges Filed By SEC Over Subprime Mortgage Securities

Posted by Admin on April 21, 2010

Huffington Post

Goldman Sucks

Goldman Sucks

April 16, 2010

http://www.huffingtonpost.com/2010/04/16/sec-goldman-sachs-charged_n_540377.html

The government has accused Goldman Sachs of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was faltering.

The Securities and Exchange Commission announced Friday civil fraud charges against the Wall Street powerhouse and one of its executives. The agency alleges Goldman failed to disclose that one of its clients helped create — and then bet against — subprime mortgage securities that Goldman sold to investors. In essence, Goldman is accused of pushing a mortgage investment that was secretly devised to fail.

Investors in the mortgage securities are alleged to have lost more than $1 billion, the SEC noted.

The SEC claims Goldman Sachs and one of its top officers misled investors by not disclosing that hedge fund manager John Paulson, who made billions betting against the housing market, selected the assets that went into a complex security called “Abacaus.”

Paulson & Co. is one of the world’s largest hedge funds, and paid Goldman roughly $15 million for structuring these deals in 2007.

“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” finance expert Sylvain R. Raynes told the New York Times about such deals. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”

Goldman Sachs shares fell more than 10 percent after the SEC announcement.

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Debt Dynamite Dominoes: The Coming Financial Catastrophe

Posted by Admin on March 4, 2010

Debt Dynamite Dominoes: The Coming Financial Catastrophe
Assessing the Illusion of Recovery
Global Research, February 22, 2010
– 2010-02-21

Understanding the Nature of the Global Economic Crisis

The people have been lulled into a false sense of safety under the ruse of a perceived “economic recovery.” Unfortunately, what the majority of people think does not make it so, especially when the people making the key decisions think and act to the contrary. The sovereign debt crises that have been unfolding in the past couple years and more recently in Greece, are canaries in the coal mine for the rest of Western “civilization.” The crisis threatens to spread to Spain, Portugal and Ireland; like dominoes, one country after another will collapse into a debt and currency crisis, all the way to America.

In October 2008, the mainstream media and politicians of the Western world were warning of an impending depression if actions were not taken to quickly prevent this. The problem was that this crisis had been a long-time coming, and what’s worse, is that the actions governments took did not address any of the core, systemic issues and problems with the global economy; they merely set out to save the banking industry from collapse. To do this, governments around the world implemented massive “stimulus” and “bailout” packages, plunging their countries deeper into debt to save the banks from themselves, while charging it to people of the world.

Then an uproar of stock market speculation followed, as money was pumped into the stocks, but not the real economy. This recovery has been nothing but a complete and utter illusion, and within the next two years, the illusion will likely come to a complete collapse.

The governments gave the banks a blank check, charged it to the public, and now it’s time to pay; through drastic tax increases, social spending cuts, privatization of state industries and services, dismantling of any protective tariffs and trade regulations, and raising interest rates. The effect that this will have is to rapidly accelerate, both in the speed and volume, the unemployment rate, globally. The stock market would crash to record lows, where governments would be forced to freeze them altogether.

When the crisis is over, the middle classes of the western world will have been liquidated of their economic, political and social status. The global economy will have gone through the greatest consolidation of industry and banking in world history leading to a system in which only a few corporations and banks control the global economy and its resources; governments will have lost that right. The people of the western world will be treated by the financial oligarchs as they have treated the ‘global South’ and in particular, Africa; they will remove our social structures and foundations so that we become entirely subservient to their dominance over the economic and political structures of our society.

This is where we stand today, and is the road on which we travel.

The western world has been plundered into poverty, a process long underway, but with the unfolding of the crisis, will be rapidly accelerated. As our societies collapse in on themselves, the governments will protect the banks and multinationals. When the people go out into the streets, as they invariably do and will, the government will not come to their aid, but will come with police and military forces to crush the protests and oppress the people. The social foundations will collapse with the economy, and the state will clamp down to prevent the people from constructing a new one.

The road to recovery is far from here. When the crisis has come to an end, the world we know will have changed dramatically. No one ever grows up in the world they were born into; everything is always changing. Now is no exception. The only difference is, that we are about to go through the most rapid changes the world has seen thus far.

Assessing the Illusion of Recovery

In August of 2009, I wrote an article, Entering the Greatest Depression in History, in which I analyzed how there is a deep systemic crisis in the Capitalist system in which we have gone through merely one burst bubble thus far, the housing bubble, but there remains a great many others.

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Dismantling America’s Financial-Military Empire

Posted by Admin on February 18, 2010

De-Dollarization:

Dismantling America’s Financial-Military Empire


The Yekaterinburg Turning Point

By Prof. Michael Hudson

Global Research,

June 13, 2009

The city of Yakaterinburg, Russia’s largest east of the Urals, may become known not only as the death place of the tsars but of American hegemony too – and not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.

Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).

The attendees have assured American diplomats that dismantling the US financial and military empire is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the United States, NATO or the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. That is what a multipolar world means, after all. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.

Yet the meeting has elicited only a collective yawn from the US and even European press despite its agenda is to replace the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry,1 suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”) built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a common ground when it comes to finding an alternative to the dollar and hence to the US ability to run balance-of-payments deficits ad infinitum.

What may prove to be the last rites of American hegemony began already in April at the G-20 conference, and became even more explicit at the St. Petersburg International Economic Forum on June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar world order.” What this means in plain English is: We have reached our limit in subsidizing the United States’ military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate in exchange for paper money of questionable worth.
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Are Major Countries Preparing to Financially Dismantle the United States and its Empire?

Posted by Admin on February 18, 2010

Are Major Countries Preparing to Financially Dismantle the United States and its Empire?

By Richard Clark (about the author)

For OpEdNews: Richard Clark – Writer

Here are the main points of an important answer to that question by economist and former Wall Street honcho, Michael Hudson:

The six-nation Shanghai Cooperation Organization (SCO) is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It was joined recently by Brazil, for trade discussions among the BRIC nations (Brazil, Russia, India and China), all of which seek a multi-polar world.

If it’s not a move to make US hegemony obsolete, then what’s the purpose of this new organization? US diplomats may well wonder. After all, this is exactly what a multi-polar world means: no hegemony by any one country. Another clue as to what’s about to happen: in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia.

It seems that the US has inadvertently driven Russia, China and their neighbors to find common ground by developing an alternative to the dollar as a dominant or reserve currency, and hence an end to the US ability to run balance-of-payments deficits ad infinitum.

Mr. Medvedev called for China, Russia and India to “build an increasingly multi-polar world order.” What this means in plain English is: We have reached our limit in subsidizing the United States’ military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate — in exchange for paper money of questionable long-term worth!

“The artificially maintained unipolar system,” Mr. Medvedev says, is based on “one big center of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks.” At the root of the global financial crisis, he concluded, is simply that the United States manufactures too little and spends too much. Especially upsetting to Russia is U.S. military spending, such as the stepped-up US military aid to Georgia, the NATO missile shield in Eastern Europe and, to all the other BRIC and SCO members as well, the huge US military and commercial buildup in the oil-rich Middle East and Central Asia.

The main worry of all these countries is America’s ability to print unlimited amounts of dollars. Overspending by US consumers on imports (way in excess of US exports), US buy-outs of foreign companies and real estate, and the many billions of dollars that the Pentagon spends abroad . . all end up in foreign central banks. These central banks then face a hard choice: either recycle these dollars back to the United States by purchasing US Treasury bills, or to let the “free market” force up their currency relative to the dollar thereby pricing their exports out of world markets and hence creating domestic unemployment and business insolvency.

So, when China and other countries recycle their dollar inflows by buying US Treasury bills to “invest” in the United States, this buildup is not really voluntary. It does not reflect faith in the U.S. economy enriching foreign central banks for their savings, or any calculated investment preference, but simply a lack of alternatives. “Free markets,” US-style, has maneuvered many countries into a system that forces them to accept dollars without limit. But now they want out.

Central banks now hold $4 trillion of U.S. bonds in their international reserves and these huge loans to the U.S. have financed most of the US Government’s domestic budget deficits for over three decades! Consider that about half of US Government discretionary spending is for military operations including the operation of more than 750 foreign military bases as well as increasingly expensive operations in the oil-producing and oil-transporting countries.

The international financial system is organized in a way that finances the Pentagon, along with US buyouts of foreign assets expected to yield much more than the Treasury bonds that foreign central banks hold. Therefore, the main political issue confronting the world’s central banks is this: How to avoid adding yet more dollars to their reserves and thereby financing ever more US deficit spending including military spending on their borders.

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Why the Central Bankers Are Meeting In Secret

Posted by Admin on February 14, 2010

Why the Central Bankers Are Meeting In Secret

Many of the world’s central bankers are meeting in Sydney today, at a secret location, to coordinate their drive to force draconian austerity measures on nations, in order to prop up their failed monetary system.

That’s why they are meeting in secret—if the people understood that the central bankers are working out how many people they’ll need to kill to save the banking system, the people might object to them being here.

Consider the chronology of how the world got to this point:

  • In July 2007, after a decade of warnings by American physical economist Lyndon LaRouche that the world financial system would disintegrate, the U.S. sub-prime crisis triggered the global financial collapse (Bear Sterns), which by September 2008 turned into a full-blown meltdown of the $1.4 quadrillion global derivatives bubble (Lehman Brothers, AIG).
  • In August 2007, LaRouche proposed the Homeowners and Bank Protection Act: to keep people in their homes; to preserve the functionality of the banking system by putting it into bankruptcy protection, to write off their unpayable derivatives and bad debts; and to return the system to Glass-Steagall regulations.
  • LaRouche’s solution was rejected, and instead in October 2008, the very central banks which created the crisis, led by the U.S. Federal Reserve, the Bank of England, and the European Central Bank, dictated a $24 trillion global bail-out of the system by national governments. In Australia, Kevin Rudd implemented the bank guarantee, stimulus spending and the first homebuyers grant, and the Future Fund was put at the disposal of the banks to prop them up.
  • By July 2009, it was obvious the bail-out had transferred the bankruptcy of the banking system onto the governments which were propping it up. LaRouche forecast that by October the bankruptcy of national governments would trigger the final meltdown.
  • In October 2009, Dubai defaulted on debts of US$59 billion; it was bailed out by Abu Dhabi, but 13 other default risks quickly emerged, including the PIGS in Europe—Portugal, Ireland, Greece and Spain—Great Britain, and the biggest danger of all, the U.S.
  • 2010: on 17th January, Sunday Telegraph economics writer Ambrose Evans-Pritchard revealed advanced plans by the European Central Bank (ECB) to enforce draconian austerity measures on the PIGS, dictating massive cuts to wages, pensions and social services so those nations avoided debt default to save the euro. The ECB intoned sovereignty is a “largely obsolete concept” as it declared it would impose a “permanent limitation” on the PIGS. The chief economist of the IMF, Olivier Blanchard, has since called for the PIGS to impose wage cuts to save the euro. Vicious austerity is on the agenda in other places too: In Australia, Kevin Rudd is blaming the deficit on old people living too long, and in the U.S., Barack Obama is slashing Medicare for the elderly to rein in the U.S. deficit.

The world’s central bankers meeting in Sydney are unaccountable powerbrokers, disguised as “independent”, who have replaced accountable governments as managers of the economy, and globalised the financial system under private control. Through them, the financier oligarchs in the City of London, and its satellites in Wall Street, Amsterdam and Zürich etc., are in charge of the financial system—not elected governments.

Just like in the 1930s, the austerity measures planned by the central bankers cannot be implemented through democratic means, because people tend to object to being killed. To save their system in the Great Depression, the leading central bankers in the Bank of England and the Bank for International Settlements, backed the rise of Hitler and Europe’s other fascist régimes to impose their austerity program.

What is Sydney’s secret central bank gathering planning to do this time?

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AIG-Gate: The World’s Greatest Insurance Heist

Posted by Admin on February 13, 2010

AIG-Gate: The World’s Greatest Insurance Heist
//
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Global Research, February 6, 2010
Web of Debt – 2010-02-05

Rumor has it that Timothy Geithner is on his way out as Treasury Secretary, due to his involvement in the AIG scandal that is now unraveling in hearings before the House Oversight and Reform Committee. Bob Chapman writes in The International Forecaster:

Each day brings more revelations of efforts of the NY Fed and Goldman Sachs to hide the details of the criminal conspiracy of the AIG bailout. . . . This is a real crisis on the scale of Watergate. Corruption at its finest.

But unlike the perpetrators of the Watergate scandal, who wound up looking at jail time, Geithner evidently has a golden parachute waiting at Goldman Sachs, not coincidentally the largest recipient of the AIG bailout. At least that is the rumor sparked by an article by Caroline Baum on Bloomberg News, titled “Goldman Parachute Awaits Geithner to Ease Fall.” Hank Paulson, Geithner’s predecessor, was CEO of Goldman Sachs before coming to the Treasury. Geithner, who has come up through the ranks of government, could be walking through the revolving door in the other direction.

Geithner has been under the House microscope for the decision of the New York Fed, made while he headed it, to buy out about $30 billion in credit default swaps (over-the-counter derivative insurance contracts) that AIG sold on toxic debt securities. The chief recipients of this payout were Goldman Sachs, Merrill Lynch, Societe Generale and Deutsche Bank. Goldman got $13 billion, roughly equivalent to its bonus pool for the first 9 months of 2009. Critics are calling the New York Fed’s decision a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been put through bankruptcy proceedings in the ordinary way. In a Bloomberg article provocatively titled “Secret Banking Cabal Emerges from AIG Shadows,” David Reilly writes:

[T]he New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve. This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.

The beneficiaries of the New York Fed’s largesse got paid in full although they had agreed to take much less. In a November 2009 article titled “It’s Time to Fire Tim Geithner,” Dylan Ratigan wrote:

[L]ast November . . . New York Federal Reserve Governor Tim Geithner decided to deliver 100 cents on the dollar, in secret no less, to pay off the counter parties to the world’s largest (and still un-investigated) insurance fraud — AIG. This full payoff with taxpayer dollars was carried out by Geithner after AIG’s bank customers, such as Goldman Sachs, Deutsche Bank and Societe Generale, had already previously agreed to taking as little as 40 cents on the dollar. Even after the GM autoworkers, bondholders and vendors all received a government-enforced haircut on their contracts, he still had the audacity to claim the “sanctity of contracts” in the dealings with these companies like AIG.

Geithner testified that the Fed’s hands were tied and that the bank could not “selectively default on contractual obligations without courting collapse.” But if it was all on the up and up, why all the secrecy? The contention that the Fed had no choice is also belied by a recent holding in the Lehman Brothers bankruptcy, in which New York Bankruptcy Judge James Peck set aside the same type of investment contracts that Secretaries Paulson and Geithner repeatedly swore under oath had to be paid in full in the case of AIG. The judge declared that clauses in those contracts subordinating other claims to the holders’ claims were null and void in bankruptcy.

“And notice,” comments bank analyst Chris Whalen, “that the world has not ended when the holders of [derivative] contracts are treated like everyone else.” He calls the AIG bailout “a hideous political contrivance that ranks with the great acts of political corruption and thievery in the history of the United States.”

If you tell a lie big enough and keep repeating it, said Joseph Goebbels, people will eventually come to believe it. The bailout of Wall Street initiated in September 2008 was premised on the dire prediction that if major counterparties in the massive edifice of derivative contracts were allowed to fall, the whole interlocking house of cards would collapse and take the economy with it. A hijacked Congress dutifully protected the derivatives game with taxpayer money while the real economy proceeded to collapse, the financial sector choosing to put their money into this protected form of speculative betting rather than into the more mundane and risky business of making loans to struggling businesses and homeowners. In the end, $170 billion of federal funds went to AIG and the banks feeding at its trough. Meanwhile, a survey of state finances by the Center on Budget and Policy Priorities think tank found that state governments face a collective $168 billion budget shortfall for fiscal 2010. If the money used to bail out AIG and the banks had been used to bail out the states instead, the states would not be facing insolvency today.

There is no law against gambling, but there is a law against fraud. In Watergate, a special prosecutor was appointed to bring criminal charges; but times seem to have changed.

Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com, www.ellenbrown.com, and www.public-banking.com.

Ellen Brown is a frequent contributor to Global Research. Global Research Articles by Ellen Brown

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The Money Assassins

Posted by Admin on February 8, 2010

http://battleofearth.files.wordpress.com/2010/02/wallstreet020710.jpg

Stocks and Shares

The Money Assassins

Excerpt from “The Armageddon Conspiracy Website
Published here:  Sunday, February 7, 2010 at 2:38 PM

In Zeitgeist Addendum, “Economic Hitman” John Perkins said:

“We economic hit men really have been the ones responsible for creating this first truly global empire and we work in many different ways. But perhaps the most common is that we will identify a country that has resources our corporations covet, like oil, and then arrange a huge loan to that country from the World Bank or one of it’s sister organizations. But the money never actually goes to the country. Instead it goes to our big corporations to build infrastructure projects in that country. Power plants, industrial parks, ports…things that benefit a few rich people in that country in addition to our corporations, but really don’t help a majority of the people at all. However, the whole country is left holding a huge debt.”

It’s such a big debt they can’t repay it, and that’s part of the plan, that they can’t repay it. And so at some point we economic hit men go back to them and say ‘Listen, you owe us a lot of money. You can’t pay your debts, so sell your oil real cheap to our oil companies, allow us to build a military base in your country, or send troops in support of ours to someplace in the world like Iraq, or vote with us on the next U.N. vote.’ They have to have their electric utility company privatized and their water and sewage system privatized and sold to US corporations or other multinational corporations.

“So there was a whole mushrooming thing, and it’s so typical of the way the IMF and the World Bank work. They put a country in debt, and it’s such a big debt it can’t pay it, and then you offer to refinance the debt and get it to pay even more interest. And you demand this quid pro quo which you call ‘conditionality’ or ‘good governance’ which means basically that they’ve got to sell off their resources, including many of their social services, their utility companies, their school systems sometimes, their penal systems, their insurance systems, to foreign corporations. So it’s a double, triple, quadruple whammie!”

But the economic hitmen aren’t just taking contracts out on nations, they have us in their sights too. Just as they give big loans to countries to saddle them with debts, they give big loans to ordinary men and women too. They give them massive mortgages to pay off, and cards loaded with credit (aka debt). Soon enough, you’re a slave of the system, with no prospect of escape. You have to keep on the treadmill, you have to scamper forwards with the other rats in the rat race, you have to keep your nose clean, or rather extremely dirty with all that brown-nosing you’re having to do. You can’t afford to aggravate your employer. You’re locked into the system. You’re terrified of losing your job because then you won’t be able to pay your debts. The economic hitman’s silencer is pointing at you right between the eyes.

The Old World Order use the use the same tactics on the big and the small scale: whether it’s a nation or an individual, get them into debt and then you own them.

You’re not free, You’re not human. You’re a performing monkey, a rat with no option but to stay in the race. You’re a slave, completely under their control, which was their goal right from the start.

But if you buy property at the right time, you can be a partial winner. House prices might shoot up, and you will have a valuable asset. But what of others who didn’t get on the property ladder at the right time? They might now be priced out of the market. Ownership of houses generates winners and losers. There’s no skill involved, just luck. Did you get your timing right or not? By chance, some do, and others don’t. That chance could shape your future. You might rise up the pecking order, or fall down. You might have an asset that your children will inherit and then they will have an advantage over less fortunate children who have nothing to inherit from their parents.
Why should home ownership dictate your wealth and status, your prospects in life, and even that of your children? It shouldn’t, but it does. It has nothing at all to do with merit.

One of the classic mantras of the Power Elite to maintain their rule is contained in the principle: divide and rule.

Look at how society is constructed. The basic unit is the family. Each family lives in its own small, square box (house), cut off from others. Each has one or more cars in which they can again cut themselves off from others. Each is determined to do the best for its own members, and to hell with everyone else.

A society based on the family is full of division, of narrow self-interest, of fear and distrust of others. Everywhere, there are barriers between people. No one is cooperating. We are in the most horrific zero-sum game where if one family wins another loses. Families rising up are invariably pushing other families down. Rich families send their children to private schools to ensure that they get a better education than those who can’t afford private school. Once you have gone to a private school, and then an elite college or university, you are eligible for the fine things in life: the best jobs, the best houses, the most attractive partners. You are part of a rigged system, a cartel which is designed to favour you and penalize those who don’t share your privileged background. In Britain, this is known as “the old school tie”. If you walk into a job interview and you have the right tie and the right accent, you will get the job. An equally or more meritorious candidate from a poorer background has no chance. This is how society works. This is the gospel of the family.

Anyone who does not come from a good, stable, prosperous family is in real trouble. They are likely to slip into the dreaded underclass where they will lead a life of grinding misery with little or no chance of improving themselves. They will resort to drugs and crime to get them through.

We have been divided into countless selfish, competing little units and we are being ruled by the elite, dynastic families at the top of the pyramid. We live in a disguised feudal system; the lords at the top and the serfs (us) effectively owned by them.

We are all cutting each other’s throats, desperately trying to climb the pyramid and drag down those above us and stand on those below us. No one is ever condemned for saying, “I’d do anything for my family” (this is the principle by which most parents operate), yet Christianity says “Love thy neighbour as thyself”; “Do unto others as you would have them do unto you.” No well-off family loves the underclass, no well-off family wants to be done to as they do unto the underclass. None of these families are Christians, even though they say they believe in Christ.

Capitalism is a cut-throat ideology, a robber’s creed. It’s all about how you can get one over your neighbours, how you can get more money, status and power than others. The “American Dream” is about a person or family rising from nowhere to the very top, above everyone else. It’s not about a whole nation rising.

Life is very simple in many respects. Would you rather have leaders who think that society is improved by raising up everyone, or by those who seek their own personal advantage at any cost, regardless of the impact on others. Do you think Wall Street operates in your interests or its own? And if it is not operating in the interests of all the people, why is it tolerated at all? “Greed is good,” said Gordon Gekko. Perhaps for the likes of him, but not for anyone else.

Why do we sign up for our own servitude? It doesn’t need to be like this.

A very simple moral test can be applied to every decision. Is it done to benefit you alone or to help you and everyone else? Wall Street’s morality is the former; Washington DC’s morality is the former; capitalism promotes the former; the family abides by the former.

The antidote to family is community. The antidote to capitalism is community. The antidote to narrow self-interest is community. The antidote to Wall Street and big business is community. “Christianity” is theoretically (but not in practice) about community. Illumination is about community.

And community is all about trying to create the environment for each and every person to achieve their maximum potential. An underclass would be unacceptable in a society based on community. Racism, sexism, discrimination, privilege would be unacceptable.

At the moment, a tiny elite live as gods while the vast majority of humanity live in grim conditions with only a few dollars a day to survive. Imagine a world where everyone is flourishing, achieving, contributing. What could humanity not achieve? This is the path of light, the way to the True God. What we have at the moment is rule by the Demiurge, based on division, conflict, self-interest, hatred, selfishness and greed. The institutions of the world serve his and their interests, not those of the people. His ideology has triumphed. The Power Elite, the Old World Order, are his Chosen Ones who have implemented his destructive, hateful will to the letter.
Do you think there is a single godly person in Wall Street? They are the high priests of the Demiurge, and their skyscraper offices are his synagogues. Their chosen task in life is to enrich themselves at everyone else’s expense.

To this day there are people working for the defunct organisation Lehman Brothers. Their task is to unravel all of the deals that Lehman was involved with before it collapsed. These people, who took huge bonuses while their bank was crashing, caused by their disastrous decisions, are still being given huge bonuses because otherwise they would leave and it would be impossible to clean up their mess. In other words, they were paid a fortune while they were destroying their bank with their recklessness and stupidity, and now they are being paid a fortune to clean up their own disaster. They win no matter the circumstances. That’s the way the OWO operates.

A bank robber goes into a bank and steals a million dollars – that’s a crime. A chief executive officer goes into a bank, nearly bankrupts it through his incompetence, then takes out a hundred million dollars in salary, share options, benefits in kind and finally an enormous payoff when he finally gets fired. That’s business. It’s entirely legitimate. But think about it – who’s the bigger criminal? Who has done the most damage to the bank? If you are “authorized”, you can do anything you like. You have a licence to help yourself to as much money as you like. No one will stop you.

Who are the authorities? Who appoints them? Who monitors and regulates them? Who is allowed to remove them from office? Do the people ever have any say?

At Davos, a luxury ski resort in Switzerland, world leaders gather annually to discuss the economic future of the world. Politicians, bankers, industrialists, media moguls…the entire ruling class, the Old World Order, come together to decide how to carve up the world pie. You have no say in any of it. No one consults you. Your opinions are ignored. This is the way the world works. Why do you tolerate it? Why does anyone put up with this?

It was these people, those fat cats who go to Davos, who wrecked the world’s economy, who caused millions to lose their jobs and homes. What makes them think they are experts, that they are “good” for the world, that the world would fall apart without them? The reverse is true. If they vanished, it would be the best thing for the world. As the old joke says, what do you call a thousand lawyers at the bottom of the sea? A good start. The same is true for all bankers, accountants, politicians, stock market traders, advertisers, celebrities.

We won’t be free until it’s no longer possible to point at someone and say, “There goes one of the Power Elite.” There should be no Power Elite, no one with vastly more money than others, no one with vastly more influence, no one who is treated as a king.

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The Battle of the Titans: JP Morgan Versus Goldman Sachs

Posted by Admin on February 8, 2010

The Battle of the Titans: JP Morgan Versus Goldman Sachs
Or Why the Market Was Down for 7 Days in a Row
Global Research, January 29, 2010
Web of Debt – 2010-01-28

We are witnessing an epic battle between two banking giants, JPMorgan Chase (Paul Volcker) and Goldman Sachs (Geithner/Summers/Rubin). Left strewn on the battleground could be your pension fund and 401K.

The late Libertarian economist Murray Rothbard wrote that U.S. politics since 1900, when William Jennings Bryan narrowly lost the presidency, has been a struggle between two competing banking giants, the Morgans and the Rockefellers. The parties would sometimes change hands, but the puppeteers pulling the strings were always one of these two big-money players. No popular third party candidate had a real chance at winning, because the bankers had the exclusive power to create the national money supply and therefore held the winning cards.

In 2000, the Rockefellers and the Morgans joined forces, when JPMorgan and Chase Manhattan merged to become JPMorgan Chase Co. Today the battling banking titans are JPMorgan Chase and Goldman Sachs, an investment bank that gained notoriety for its speculative practices in the 1920s. In 1928, it launched the Goldman Sachs Trading Corp., a closed-end fund similar to a Ponzi scheme. The fund failed in the stock market crash of 1929, marring the firm’s reputation for years afterwards. Former Treasury Secretaries Henry Paulson, Robert Rubin, and Larry Summers all came from Goldman, and current Treasury Secretary Timothy Geithner rose through the ranks of government as a Summers/Rubin protégé. One commentator called the U.S. Treasury “Goldman Sachs South.”

Goldman’s superpower status comes from something more than just access to the money spigots of the banking system. It actually has the ability to manipulate markets. Formerly just an investment bank, in 2008 Goldman magically transformed into a bank holding company. That gave it access to the Federal Reserve’s lending window; but at the same time it remained an investment bank, aggressively speculating in the markets.  The upshot was that it can now borrow massive amounts of money at virtually 0% interest, and it can use this money not only to speculate for its own account but to bend markets to its will.

But Goldman Sachs has been caught in this blatant market manipulation so often that the JPMorgan faction of the banking empire has finally had enough. The voters too have evidently had enough, as demonstrated in the recent upset in Massachusetts that threw the late Senator Ted Kennedy’s Democratic seat to a Republican. That pivotal loss gave Paul Volcker, chairman of President Obama’s newly formed Economic Recovery Advisory Board, an opportunity to step up to the plate with some proposals for serious banking reform. Unlike the string of Treasury Secretaries who came to the government through the revolving door of Goldman Sachs, former Federal Reserve Chairman Volcker came up through Chase Manhattan Bank, where he was vice president before joining the Treasury. On January 27, market commentator Bob Chapmanwrote in his weekly investment newsletter The International Forecaster:

“A split has occurred between the paper forces of Goldman Sachs and JP Morgan Chase. Mr. Volcker represents Morgan interests. Both sides are Illuminists, but the Morgan side is tired of Goldman’s greed and arrogance. . . . Not that JP Morgan Chase was blameless, they did their looting and damage to the system as well, but not in the high handed arrogant way the others did. The recall of Volcker is an attempt to reverse the damage as much as possible. That means the influence of Geithner, Summers, Rubin, et al will be put on the back shelf at least for now, as will be the Goldman influence. It will be slowly and subtly phased out. . . . Washington needs a new face on Wall Street, not that of a criminal syndicate.”

Goldman’s crimes, says Chapman, were that it “got caught stealing. First in naked shorts, then front-running the market, both of which they are still doing, as the SEC looks the other way, and then selling MBS-CDOs to their best clients and simultaneously shorting them.”

Volcker’s proposal would rein in these abuses, either by ending the risky “proprietary trading” (trading for their own accounts) engaged in by the too-big-to-fail banks, or by forcing them to downsize by selling off those portions of their businesses engaging in it. Until recently, President Obama has declined to support Volcker’s plan, but on January 21 he finally endorsed it.

The immediate reaction of the market was to drop – and drop, day after day. At least, that appeared to be the reaction of “the market.” Financial analyst Max Keiser suggests a more sinister possibility. Goldman, which has the power to manipulate markets with its high-speed program trades, may be engaging in a Mexican standoff. The veiled threat is, “Back off on the banking reforms, or stand by and watch us continue to crash your markets.” The same manipulations were evident in the bank bailout forced on Congress by Treasury Secretary Hank Paulson in September 2008.

In Keiser’s January 23 broadcast with co-host Stacy Herbert, he explains how Goldman’s manipulations are done. Keiser is a fast talker, so this transcription is not verbatim, but it is close. He says:

“High frequency trading accounts for 70% of trading on the New York Stock Exchange. Ordinarily, a buyer and a seller show up on the floor, and a specialist determines the price of a trade that would satisfy buyer and seller, and that’s the market price. If there are too many sellers and not enough buyers, the specialist lowers the price. High frequency trading as conducted by Goldman means that before the specialist buys and sells and makes that market, Goldman will electronically flood the specialist with thousands and thousands of trades to totally disrupt that process and essentially commandeer that process, for the benefit of siphoning off nickels and dimes for themselves. Not only are they siphoning cash from the New York Stock Exchange but they are also manipulating prices. What I see as a possibility is that next week, if the bankers on Wall Street decide they don’t want to be reformed in any way, they simply set the high frequency trading algorithm to sell, creating a huge negative bias for the direction of stocks. And they’ll basically crash the market, and it will be a standoff.  The market was down three days in a row, which it hasn’t been since last summer. It’s a game of chicken, till Obama says, ‘Okay, maybe we need to rethink this.’”

But the President hasn’t knuckled under yet. In his State of the Union address on January 27, he did not dwell long on the issue of bank reform, but he held to his position. He said:

“We can’t allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy. The House has already passed financial reform with many of these changes. And the lobbyists are already trying to kill it. Well, we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back.”

What this “real reform” would look like was left to conjecture, but Bob Chapman fills in some blanks and suggests what might be needed for an effective overhaul:

“The attempt will be to bring the financial system back to brass tacks. . . . That would include little or no MBS and CDOs, the regulation of derivatives and hedge funds and the end of massive market manipulation, both by Treasury, Fed and Wall Street players. Congress has to end the ‘President’s Working Group on Financial Markets,’ or at least limit its use to real emergencies. . . . The Glass-Steagall Act should be reintroduced into the system and lobbying and campaign contributions should end. . . . No more politics in lending and banks should be limited to a lending ratio of 10 to 1. . . . It is bad enough they have the leverage that they have. State banks such as North Dakota’s are a better idea.”

On January 28, the predictable reaction of “the market” was to fall for the seventh straight day. The battle of the Titans was on.

Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include Forbidden MedicineNature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.comwww.ellenbrown.com, and www.public-banking.com.

Ellen Brown is a frequent contributor to Global Research. Global Research Articles by Ellen Brown

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False Profits…

Posted by Admin on February 8, 2010

False Profits

Sunday 07 February 2010

by: Leslie Thatcher, t r u t h o u t | Book Review

photo

The Neo-Cons

False Profits: Recovering From the Bubble Economy

By Dean Baker

PoliPoint Press, 2010

He who feels punctured must once have been a bubble.

– Lao Tzu, Tao Te Ching, 6th century BCE

As the nation struggled to recover from the worst economic downturn since the Great Depression, the people who got us here are desperately working to rewrite history. The basic story of this economic collapse is very simple. The Federal Reserve Board, guided by its revered chairman, Alan Greenspan, allowed an $8 trillion housing bubble to grow unchecked.

– Dean Baker’s “False Profits”

The delicious double-entendre of Dean Baker’s most recent title is enhanced by the book’s cover photo of a trio of false prophets, Ben Bernanke, Alan Greenspan and Henry (Hank) Paulson, all of whom are thoroughly excoriated within the book’s pages for their responsibility in feeding, prolonging, misdiagnosing and incorrectly responding to the 2007-2009 financial meltdown and the associated economic collapse. However, the book also chronicles the loss of $8 trillion of housing “wealth,” $1.4 trillion in annual demand, whatever financial security the vast majority of baby-boomers ever had, “increases” in homeownership rates and any other widespread economic gains associated to the post-2000 period. Truthout has published Dean Baker’s columns about net job losses for 2000-2010, a decade that also saw a 26 percent drop in the stock market, the elimination of the $236 billion federal budget surplus President Bush inherited and its transformation into a record deficit and the overall deliquescence of any societal and most people’s personal economic “profits.”

While most of us find ourselves economically worse off after the last ten years, some have done extremely well and most of those who bear the burden of responsibility for the American economic catastrophe have suffered no consequences whatsoever: financial, social or professional. Writing about Bernanke specifically, Baker’s remarks are equally apposite to other titans of finance, central banking and the financial regulatory regimes:

It would difficult to imagine someone with a comparable record of disastrous failures being allowed to remain in most jobs. Would a nurse who routinely administers the wrong medicine and causes his patients to die be allowed to keep his job? Would a bank teller who leaves the cash drawer open remain in her position? How about the school bus driver who comes drunk to work?

In most lines of work, a certain level of competence is expected. Unfortunately, this is not the case for those who set US economic policy.

Baker places the burden of blame on regulators and the political establishment because they utterly perverted their mission:

Progressives do conservatives’ bidding when we denounce them as “market fundamentalists.” We should, instead, be exposing their use of government to set up structures that ensure the market works to benefit the wealthy. We could then bring our policies into focus as those designed to ensure that market outcomes will benefit the bulk of the population.

The market is just a tool, like a wheel or a hammer. It would be bad politics and bad policy for progressives to make a big scene attacking the wheel. It is similarly bad politics and bad policy to put these attacks on the market at the center of a political agenda.

Baker never attacks the wheel; instead he demonstrates how it was deliberately allowed to run wild. As Baker himself warned as early as summer 2002, all indicators pointed to the rise in housing prices as a classic bubble, divorced from any tether in reality, yet the regulators, media and most mainstream economists kept pumping hot air into that bubble. Further, Dean Baker exposes the pathetic excuses that the regulators did not have the necessary tools to put on the brakes for the self-serving and specious rationalizations they are. Ever debunking the myth that somehow it was the “free” market at work, he relentlessly exposes how regulation, regulatory bodies and the public officials charged with supervising the financial industry have used their power to favor a narrow swathe of private interests over the public good. And, as always, Baker highlights what alternatives were and are available to turn that equation around. Baker’s relentless exposé of what is actually subsidized and who profits from specific policies, how wealth is transferred and how all this activity is disguised fuels his narrative with “true prophet” power.

“False Profits” combines impeccable scholarship – assembling an array of relevant facts and data totally accessible to non-economists – with Baker’s acerbic, but unforced, wit and verve. His iconoclasm constantly renews its sources and consistently targets those “false prophets” in all sectors who contribute to misleading the American people. Baker is the journalists’ economist, the reality-based economist: whatever other case he may be making, he invariably demonstrates why correct and timely information and clear understanding are essential to economic problem-solving, as well as how “fudges” harm everyone.

The book’s structure begins by a backward look, an analysis of precisely how we reached the present situation and what our present situation actually is (in chapters, “Economic Collapse: It Is Their Fault,” “Surveying the Damage” and “The Terrible Tale of the TARP”), then pivots on an exposition of why correct diagnosis and analysis are so crucial (“Will They Ever Discover the Housing Bubble?”), develops the case he has presented with three chapters of prescription (“Stimulus: It Is Just Spending,” “Real Stimulus: Programs to Boost the Economy” and “Reforming the Financial System”) and concludes with a resounding final call for accountability (“Remember the Housing Bubble”).

Unfortunately, recent events – the absence of any effective policy to slow down foreclosures; the most probably ineffective and unquestionably inadequate stimulus measures in the just-presented budget; financial services regulatory proposals that do not address the causes for regulatory failure – suggest that the present administration is only slightly more willing to learn from Dean Baker’s acute analyses than was its predecessor. And Ben Bernanke’s reconfirmation as Fed chairman is just the most recent and flagrant sign that the administration has no intention of investigating, let alone punishing, the regulatory – and individual regulators’ – blunders that led to the present pass.

Economics is a science of human behavior. It rests on the observation that people respond to incentives. Consequently, Baker’s apparently political argument that there must be consequences for the failures of judgment and action that resulted in the economic meltdown is a quintessentially economic one. With no disincentives for failure and the ever-present incentives for complicity offered by the industry that has captured them, regulators will continue to fail the whipping boy who pays for their transgressions – us.

1. Dean Baker, “False Profits,” p.5.

2. OpCit. p.9.

3. Read the book for the argument, but the unequivocal conclusion is, “The regulators – first and foremost the Fed – had all the tools necessary to combat the bubble. They chose not to.” (p.153)

Creative Commons License
This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

Leslie Thatcher is Truthout’s French Language Editor and sometime book reviewer.

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Conclusions

Posted by Admin on February 5, 2010

Conclusions

Even though several years have passed, Dale Alfrey continues to try and recover his lost Tesla notes. He feels that somewhere there exists additional papers and notes, perhaps forgotten in someone’s basement or attic. Alfrey has spent a number of hours scouring the Internet seeking people who may have the information he is looking for. Unfortunately, nothing has been found.

It is certain that other missing Tesla documents are still “out there somewhere.” According to the book: Tesla – Man Out of Time, in 1928, Tesla’s friend, John O’Neill happened to see a legal advertisement in a New York newspaper announcing that six boxes placed in storage by Tesla would be sold by the storage warehouse for unpaid bills.

Feeling that such material should be preserved, O’Neill went to Tesla and asked permission to try and obtain funds to reclaim the material.

“Tesla hit the ceiling,” he recalled. “He assured me he was well able to take care of his own affairs. He forbid me to buy them or do anything in any way about them.”

Shortly after the inventor died, O’Neill got in touch with Sava Kosanovic, told him about the boxes, and urged him to protect them. He was never able to get a positive statement from Kosanovic that he had obtained the boxes and examined the contents.

“He gave evasive assurances that there was no reason for me to worry.”

Despite the incomplete notes that Tesla left behind, Alfrey thinks that he has been able to put together a rough idea of what Tesla was researching and why.

Some of these notes were Tesla’s work in vertical take-off and landing (VTOL) aircraft, strange drawings of unusual vehicles, reactive jet dirigibles and hovercraft and also combination helicopter/airplanes that the inventor designed. Clearly, Tesla is one of the forefathers of both the Harrier jet, which can hover and take off vertically, and the Osprey helicopter-airplane.

After his initial Colorado Springs experiments in 1899, Tesla started experimenting with better radio transmitters and receivers in order to repeat his reception of the anomalous signals he picked up in Colorado. Tesla considered his methods of reception and transmission utilized not Hertzian waves, or what we now refer to as transverse electromagnetic waves (radio), but another type of signal transmission.

He described them as faster-than-light (FTL) longitudinal wave transmissions. Tesla may have been receiving on the ELF spectrum (Extremely Low Frequencies). The ELF spectrum is below the 10 KHz. boundary of internationally regulated frequencies. It is usually considered to be the spectrum of 3 Hz. to 30 Hz. (VLF-3 to 30 KHz.) (ULF-300 to 3000 Hz.) (ELF-3 to 300Hz.). The wavelengths in the ELF range are from 100,000 Km. to 1,000 Km., and the wavelength for the earth’s 40,000 Kms. circumference falls within that spread.

Tesla obviously succeeded to such a degree that he was soon receiving voice transmissions. These transmissions he speculated were originating from people on other worlds. Tesla gave a few public hints about these interplanetary transmissions, such as in 1937, he announced:

“I have devoted much of my time during the year past to the perfecting of a new small and compact apparatus by which energy in considerable amounts can now be flashed through interstellar space to any distance without the slightest dispersion.”

(New York Times, Sunday, 11 July 1937)

A degree of confirmation of Tesla’s interplanetary communications came from Arthur Mathews who claimed that Tesla had secretly developed the “Teslascope” for the purpose of communicating with Mars. Matthews’ father was a laboratory assistant to the noted physicist Lord Kelvin back in the 1890s. Tesla once came over to England to meet Kelvin to convince him that Alternating Current was more efficient than Direct. When Matthews was 16 his father arranged for him to apprentice under Tesla.

He eventually worked for him and continued this alliance until Tesla’s death in 1943.

“It’s not generally known, but Tesla actually had two huge magnifying transmitters built in Canada, and Matthews operated one of them. People mostly know about the Colorado Springs transmitters and the unfinished one on Long Island. I saw the two Canadian transmitters. All the evidence is there.

“The Teslascope is the thing Tesla invented to communicate with beings on other planets. In principle, it takes in cosmic ray signals and eventually the signals are stepped down to audio. Speak into one end, and the signal goes out the other end as a cosmic ray emitter.”

With the exception of Matthews statements, there has been no concrete evidence that Tesla managed to communicate with extraterrestrials or whoever was transmitting to Tesla’s ELF receiver. It seems that Tesla was on the receiving end only. Nevertheless, Tesla managed to glean a substantial amount of good information from these transmissions, enough to influence his research and inventions for the remaining forty three years of his life.

It was during this period that Tesla found himself ostracized by most of the scientific community. His efforts to interest others in such wild inventions as free-energy, beam weapons, wireless power transmissions, antigravity devices, anti-war shields, resonation and a plethora of others, no doubt led to him being considered a crackpot. Sadly, Tesla had become the apothem of a mad scientist.

Yet, it was obvious that his letters to the government and military had aroused some interest. A young American engineer engaged in war work consulted Tesla on a ballistics engineering problem because he could not get time on an overworked computer, and Tesla’s mind was known to offer the nearest thing to it. Soon he became fascinated with Tesla’s scientific papers and was allowed to take batches of them home to his hotel room where he and another American engineer pored over them each night. They were returned the next day, a procedure which continued for about two weeks prior to Tesla’s death.

Tesla had received offers to work for Germany and Russia. After the inventor died, both engineers became concerned that critical scientific information had fallen into foreign hands and alerted United States security agencies and high government officials.

Just how much of Tesla’s work remains hidden in the top secret bowels of the military is unknown. It can be deduced that Tesla’s theories of extraterrestrials and global warming were taken seriously by some in high-levels of authority, because it is now known that the United States government and military were the first to give credence that UFOs were spacecraft from other planets.

It is interesting to note that between 1945 and 1948 an exchange of letters and cables occurred among the Air Technical Service Command at Wright Field in Dayton, Ohio, Military Intelligence in Washington, and the Office of Alien Property.

The subject? Files of the late Nikola Tesla.

On September 5, 1945, Colonel Holliday of the Equipment Laboratory, Propulsion and Accessories Subdivision, wrote to Lloyd L. Shaulis of the OAP in Washington, confirming a conversation and asking for photostatic copies of the notes and papers of the late Tesla. It was stated that the material would be used “in connection with projects for national defense by this department.”

Shaulis made the material available to Air Technical Service Command, but there is no record of how many copies were sent. Nor was the material ever returned. These were full photostatic copies, not merely the abstracts. The Navy has no record of Tesla’s papers; no federal archives have records of them.

Four months after the photostats had been sent to Wright Field, Col. Ralph Doty, the chief of Military Intelligence in Washington wrote James Markham of Alien Property indicating that they had never been received:

“This office is in receipt of a communication from Headquarters, Air Technical Service Command, Wright Field, requesting that we ascertain the whereabouts of the files of the late scientist, Dr. Nikola Tesla, which may contain data of great value to the above Headquarters. It has been indicated that your office might have these files in custody.

If this is true, we would like to request your consent for a representative of the Air Technical Service Command to review them. In view of the extreme importance of these files to the above command, we would like to request that we be advised of any attempt by any other agency to obtain them.

“Because of the urgency of this matter, this communication will be delivered to you by a Liaison Officer of this office in the hope of expediting the solicited information.”

The “other” agency that had the files, or should have had them, was the Air Technical Service Command itself. On October 24, 1947, David L. Bazelon, assistant attorney general and director of the Office of alien Property, wrote to the commanding officer of the Air Technical Service Command regarding the Tesla photostats. They had not been returned and the OAP wanted them back.

Obviously at least one set of Tesla’s papers had reached Wright Field because on November 25, 1947, there was a response to the Office of Alien Property from Colonel Duffy, chief of the Electronic Plans Section, Electronic Subdivision, Engineering Division, Air Material Command, Wright Field.

He replied:

“These reports are now in the possession of the Electronic Subdivision and are being evaluated. This should be completed by January 1, 1948. At that time your office will be contacted with respect to final disposition of these papers.”

They were never returned or even acknowledged to have ever existed at all!

In response to a Freedom of Information Act request in 1980, Wright Patterson Air Force base stated:

“The organization (Equipment Laboratory) that performed the evaluation of Tesla’s papers was deactivated several years ago. After conducting an extensive search of lists of records retired by that organization, in which we found no mention of Tesla’s papers, we concluded the documents were destroyed at the time the laboratory was deactivated.”

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