Posts Tagged ‘fiduciary duty’

And That’s How You Do It…

October 1, 2012

That’s how you start righting the ship…

http://www.businessinsider.com/iceland-has-hired-an-ex-cop-bounty-hunter-to-go-after-the-bankers-that-wrecked-its-economy-2012-7

LeMonde reporter Charlotte Chabas has a profile of Ólafur Þór Hauksson, a former local police lieutenant whom the Iceland government appointed to track down individuals likely to have helped sink the country’s banking sector during the credit crunch.

Hat tip to Siempre33 on the Voy forum

Thought provoking…

June 6, 2011

Michael Hudson’s “Europe’s new road to serfdom” – self explanatory title and far more eloquent than I can ever hope to be. Some cogent excerpts:

In May 2010, French President Nicolas Sarkozy took the lead in rounding up €120bn ($180 billion) from European governments to subsidize Greece’s unprogressive tax system that had led its government into debt – which Wall Street banks had helped conceal with Enron-style accounting. The tax system operated as a siphon collecting revenue to pay the German and French banks that were buying government bonds (at rising interest-risk premiums). The bankers are now moving to make this role formal, an official condition for rolling over Greek bonds as they come due, and extend maturities on the short-term financial string that Greece is now operating under. Existing bondholders are to reap a windfall if this plan succeeds. […] Finance is a form of warfare. Like military conquest, its aim is to gain control of land, public infrastructure, and to impose tribute. This involves dictating laws to its subjects, and concentrating social as well as economic planning in centralized hands. This is what now is being done by financial means, without the cost to the aggressor of fielding an army. But the economies under attacked may be devastated as deeply by financial stringency as by military attack when it comes to demographic shrinkage, shortened life spans, emigration and capital flight. ”

The emphasis has been added of course but that’s really all you need to know.

You probably don’t remember the name Bernard Von NotHaus, do you. Thankfully if uncharacteristically for the main stream press, the New York Sun does and offers this thought provoking editorial: “Von NotHaus’ Question” – cogent excerpts are too many to report without copying and pasting the entire article so whilst I hope you’ll give it a read here is a teaser:

[…] it is hard to think of a more basic question than that being raised by Von NotHaus in respect of whether the government has the power to outlaw private coinage of money. The issue was raised by Von NotHaus’ conviction in March of two counts related to his issuing of silver medallions called Liberty Dollars. There were no complaints from the persons who bought Liberty Dollars or took them in exchange for goods. The fact is that Liberty Dollars have held their value even while the value of the fiat dollars issued by the Federal Reserve has plunged, to barely a fifth the value of what they were worth at the start of, say, the Bush administration. This is not lost on anyone looking at the case. One can imagine that this humiliation was keenly felt by the federal government that brought charges against Von NotHaus.

The Von NotHaus question is not dissimilar to the question raised by Ashcroft vs. Arar as well as a host of other recent rulings that have all but suspended (trampled?) the constitution of the United States of America not to mention plain old decency.

But how can the government of a Western country presumably steeped in democratic principles and boasting a transparent and open society be allowed to deliberately and freely chip away at those very principles that make it the presumed envy of developing societies the world over? Why, you terrorize your own people and then you tell them they need protecting from evil forces that resent them for their way of life.

http://www.zerohedge.com/article/guest-post-agent-king-every-home

During the years leading up to the American Revolution, the British attempted to stifle the growing independent nature of the colonies by issuing laws such as the ‘Writs of Assistance’, bypassing rights to privacy and allowing officials to search homes and businesses at will without probable cause, supposedly in the name of “capturing smugglers”. Not fully satisfied with this intrusion on the lives of the colonists, King George and his cronies issued the ‘Quartering Acts’, which required all colonists to welcome soldiers sent to subjugate them into their homes and to their dinner tables. According to law, early Americans were not only forced to allow warrant-less searches of their homes, they also had to show hospitality to the goons sent to dirty their doorsteps!

The purpose of these actions by governments is to assert their control over a population. THAT – IS – ALL. Rationalizations are always made; usually in the name of “protecting the public from harm”, but the real name of the game is imperialism, and fear. When the establishment violates the line of citizen privacy, and gives its agents the legal free reign to enter your home at will, the message they are trying to send is: “Your property is our property. Your life is our business. The law does not protect you. The law is our weapon.” In other words: Resistance is futile.

Is a world war impossible?

May 28, 2011

Of course it is not. Sticklers for semantics might opine that it is not impossible but rather it is improbable.

How do you explain the following then.

Is it not curious how in the past ten years and particularly in the past five Western governments have gradually enacted legislation that could make a total war possible? Starting with broadening the definition of “terrorist”  to encompass actions that till recently had been an integral part of democratic expression thereby turning most law abiding citizens in potential terrorists if, for example, they dissent from the political line imposed by decree by government.

http://www.atlantaprogressivenews.com/interspire/news/2011/05/07/former-cia-mcgovern-speaks-in-atlanta-on-osama-clinton-and-erosion-of-rights.html

McGovern recalled how five years ago, when he challenged Rumsfeld, he did not get beat up by police, and was at least given the opportunity to interact with Rumsfeld.  By contrast, when McGovern disrupted a speech by Secretary of State Hillary Clinton, on February 15, 2011, he was arrested.  All he did was turn his back on Clinton at a speech at Georgia Washington University (You Tube video). After turning his back on Clinton, McGovern was dragged out of the room, and left with blood dripping down his pants.  This seems unbelievable, as McGovern poses no threat, is a 71 year-old calm gentleman, and a respected former CIA official.

Is it not curious that the Lisbon Treaty should have given rise to a political body that despite not being elected has broad executive powers?

And then there is the pesky provision of “Worldwide War” embedded in the National Defense Authorization Act: http://www.infowars.com/obamas-promise-to-veto-worldwide-war-bill-rings-hollow/

And then there is that troubling attitude  that till recently was the almost exclusive domain of tin pot dictators in fringe countries like Tunisia, Syria North Korea or Libya for example and that is becoming ever more prevalent amongst “enlightened” Western politicians.

http://www.infowars.com/government-orders-you-tube-to-censor-protest-videos/

A worldwide war impossible? At this rate, hardly.

PS: By the way. I forgot this little gem from some months back:

https://guidoromero.wordpress.com/2010/11/19/nato-must-prepare-to-launch-military-operations-outside-its-border-after-afghanistan/

So now NATO MUST, in the words of its chief, be prepared for perpetual war; must!

Must??!! Has anyone bothered to ask why we should prepare to launch foreign wars?

Social unrest a precursor to total war.. tic-toc… tic-toc…

May 25, 2011

Things are coming together nicely. What we are missing is for these localized national movements to coalesce across borders and Bob will be your proverbial uncle… our leaders will precipitate a conflict requiring drafting millions into the war effort…

Of course, the alternatives are only two. Let things develop and do nothing. The sequence of events would go something like this:

– mobs start roaming the streets looking for some politicians and bankers to lynch

– governments are taken down wholesale

– political and social strife for control

– likely rise of an extremist government

Second alternative, would be to come clean, let the banks fail, abolish central banks, repudiate debt based fiat money, place monetary policy within the democratic framework and prosecute all fraud dating back to, say, the past 10 years.

So, what are you going to do?… To answer this question it helps to know that similar junctures in history have resulted in global conflicts. Global conflicts typically preserve banking and, to a certain extent, political interests.

http://www.democraciarealya.es/?page_id=814

Some of us consider ourselves progressive, others conservative. Some of us are believers, some not. Some of us have clearly defined ideologies, others are apolitical, but we are all concerned and angry about the political, economic, and social outlook which we see around us: corruption among politicians, businessmen, bankers, leaving us helpless, without a voice.

Rural migration (tic-toc… tic-toc)

May 16, 2011

It’s been some time since I wrote one of my “tic-toc” posts and although till then what I was writing about could have been considered speculation, this Guardian article bears out some of the logical outcomes I was pointing out.

There are also other aspects of this article that are interesting from my point of view. I am going to post the entire article and intersperse my comments throughout.

http://www.guardian.co.uk/world/2011/may/13/greek-crisis-athens-rural-migration

Debt, unemployment and poverty is causing mass unrest and thousands to seek a cheaper lifestyle outside the capital

High in the hills of Arcadia, in a big stone house on the edge of this village overlooking verdant pastures and a valley beyond, a group of young Athenians are busy rebuilding their lives.

Until recently Andritsaina was not much of a prospect for urban Greeks. “But that,” said Yiannis Dikiakos, “was before Athens turned into the explosive cauldron that it has become. We woke up one day and thought we’ve had enough. We want to live the real Greece and we want to live it somewhere else.”

Piling his possessions into a Land Rover and trailer, the businessman made the 170-mile journey to Andritsaina last month. As he drove past villages full of derelict buildings and empty homes, along roads that wound their way around rivers and ravines, he did not look back.

“Athens has failed its young people. It has nothing to offer them any more. Our politicians are idiots … they have disappointed us greatly,” said Dikiakos, who will soon be joined by 10 friends who have also decided to escape the capital.

They are part of an internal migration, thousands of Greeks seeking solace in rural areas as the debt-stricken country grapples with its gravest economic crisis since the second world war.

“It’s a big decision but people are making it,” said Giorgos Galos, a teacher in Proti Serron on the great plains of Macedonia, in northern Greece. “We’ve had two couples come here and I know lots in Thessaloniki [Greece’s second biggest city] who want to go back to their villages. The crisis is eating away at them and they’re finding it hard to cope. If they had just a little bit of support, a little bit of official encouragement, the stream would turn into a wave because everything is just so much cheaper here.”

GR: Mr. Galos is oblivious to what exactly has caused this crisis which is in fact government intervention. Seeing the devastation wreaked on his nation, Mr. Galos calls for more of what has caused the crisis in the first place in the form of “official encouragement” in order to nudge those that are sitting on the fence to make the move because, as he says, “… everything is just so much cheaper here”.  But that’s exactly the problem and Mr. Galos does not see it. As is always the case, things are “cheap” till government encourages people to make use of something. The moment government encourages some entities to do something, prices will automatically rise not least because when economic actors perceive that there are funds to be had from the government they will feel no compunction at all to take advantage of the perceived free money… because it is government money… and government money is not perceived to be any natural person’s money… but, of course, it is and sooner or later it has to come out of our taxes or increased cost of living somewhere. Similarly, politicians are naturally inclined to give away funds as a way to garner votes from interest groups. Crucially, debt based fiat money allows politicians to be profligate because unlike value based money fiat money is perceived to be cost free. All that is needed, it is thought, is to expand the debt. And, anyway, in an electoral democratic system, a politician is never around to see the extent of the ramifications his/her policies engender.

The trickle into Proti Serron might have gone unnoticed had the village not also been the birthplace of the late Konstantinos Karamanlis who oversaw the nation’s entry into the then European Economic Community in 1981. An alabaster white statue of the statesman in the village square is adorned with the words: “I believe that Greece can change shape and its people their fate.”

Nearly sixty years after they were uttered, a growing number of Greeks, at least, are beginning to wonder whether the old man was right. The drift towards the bright lights of the big cities were by Karamanlis’ own admission one of the great barometers of the country’s transition from a primarily agricultural society into an advanced western economy.This week, as the IMF and EU debated ways of trying to re-rescue Greece and observers openly wondered whether the country would have to leave the euro, Greece appeared more adrift than ever, tossed on a high sea of mounting anger and civil disobedience from people who have lost trust in their politicians, and at the mercy of markets that refuse to believe it can pull itself back from the brink of bankruptcy. “The reality is that these people, they are in deep shit,” the managing director of the IMF, Dominique Strauss-Kahn said recently. “If we had not come they would have fallen into the abyss. Two weeks later the government would not have been able to pay civil servants’ wages.”

GR: Mr. Strauss-Kahn is a product of his environment and cannot therefore admit the perversity of his statement. The IMF rides ostensibly to the help of countries distressed by debt by offering… more debt… Of course, if you understand the nature of debt based fiat money, then you also understand that supranational entities such as the IMF exist precisely to prop up the monetary construct. Debt based fiat money can only exist in an environment of expanding credit regardless of the natural characteristic of debt to conform to the law of diminishing marginal utility. Had the IMF not offered assistance, Greece wouldn’t be any worse off. Look to Iceland for a glimpse of what can be achieved if only politicians had the balls to stand up to banking interests. But of course. A politician is by definition someone that lives by expedients so that biting the hand of the entity that finances your politically expedient programs is not done.

Ironically, it is the medicine doled out under last year’s draconian EU-IMF €110bn (£96bn) rescue programme, implemented to modernise a sclerotic economy, that has made their lot worse. Twelve months of sweeping public sector pay and pension cuts, massive job losses, tax increases and galloping inflation have begun to have a brutal effect. GDP is predicted to contract by 3% this year – making Greece’s the deepest recession in Europe.

GR: The author of the article at once identifies the problem and then negates it. GDP is contracting simply because it had been artificially inflated for so many years prior. If anything, GDP is reverting to its true intrinsic value. The public sector in Greece like in the rest of Europe but, particularly in Latin Europe, is bloated because it is politically expedient to just hire people in order to garner votes from unions and interest groups. One of the most glaring examples of political expediency of the past 3o years was the Italian airline Alitalia where over staffing and staggering losses reached biblical proportions over the years.

In Athens, home to almost half of Greece’s 11 million-strong population, the signs of austerity – and poverty – are everywhere: in the homeless and hungry who forage through municipal rubbish bins late at night; in the cash-strapped pensioners who pick up rejects at the street markets that sell fruit and vegetables; in the shops now boarded and closed and in the thousands of ordinary Greeks who can no longer afford to take family outings or regularly eat meat.

“We’ve had to give up tavernas, give up buying new clothes and give up eating meat more than once a week,” said Vasso Vitalis, a mother-of-two who struggles with her civil servant husband to make ends meet on a joint monthly income of €2,000.

GR: Not to detract from the real drama Ms. Vitalis is experiencing but one of the less intuitively related advantages of decreased consumption is a decrease in the rate of depletion of food stocks, a diminished carbon foot print and the concomitant beneficial effects that counter the devastation of the environment that has, in large part, been brought about by aberrant inflationary monetary policies over many decades. Greens the world over should embrace this crisis. Reduced consumption of animal protein could allow the replenishment of fish stocks that have been decimated over the years as well as the re-stocking of staples that no longer need to be used to rear live stock. Prices drop, the environment is saved and food stocks get replenished. Everyone’s a winner.

“With all the cuts we estimate we’ve lost around €450 a month. We’re down to the last cent and, still, we’re lucky. We’ve both got jobs. I know people who are unemployed and are going hungry. They ask family and friends for food,” she sighed. “What makes us mad is that everybody knew the state was a mess but none of our politicians had the guts to mend it. It was like a ship heading for the rocks and now the rocks are very near.”

GR: Bingo! Except that we are already on the rocks. And, yes, it has been clear for many decades that the system is mathematically not viable… but politics being the expedient animal it is… what is happening was a foregone conclusion… and we are no where near the end of it all...

Greeks also know that with their economy needing another financial lifeline, and few willing to lend to a country in such a parlous state, it will also get much worse before it gets better.

GR: Once again. The author of the article fails to recognize the problem of insolvency brought about by too much debt. Particularly when every single country in the world is afflicted by the same problem. You see, in a global economy, for as long as only one or two countries are afflicted by too much debt as, for example, Japan was in 1989, increasing the debt burden appears to help because a country could still sell goods and services to other countries. But, as time goes by and each country feels the necessity to expand their credit market in order to stimulate the national economy, the diminishing marginal utility of debt ensures that at some point all countries will be buried in debt simultaneously. At that point, more debt no longer helps. And this is the point we are at today.

“In the past, the future always implied hope for Greeks but now it implies fear,” said Nikos Filis, editor of the leftwing Avgi newspaper. “Until this week people thought that with all the measures the crisis would be over in a year or two. Now with the prospect of yet more austerity for more aid, they can’t see an end in sight.”

With unemployment officially nudging 790,000 – although believed to be far bigger with the closure of some 150,000 small and medium-sized businesses over the past year – there are fears that Greece, the country at the centre of Europe’s worst financial debacle in decades, is slipping inexorably into political and social crisis, too. Rising racist tensions and lawlessness on the streets this week spurred the softly spoken mayor of Athens, Giorgos Kaminis, to describe the city as “beginning to resemble Beirut”.

GR: Greece is not at the center of Europe’s crisis. Greece was merely the first in Europe to succumb to the debt crisis. Others have followed Greece since and still more will follow in months to come or till politicians will grow a pair and we let global banks fail.

Yannis Caloghirou, an economics professor at the National Technical University of Athens, said: “Greece has become a battleground, at the EU level where policymakers have made the crisis worse with their lack of strategy and piecemeal approach, and among its own people who no longer have trust in institutions and the ability of the political system to solve the situation. My concern is that the country is slipping into ungovernability, that ultra-right groups and others will grab the moment.”

GR: As a person Mr. Caloghirou is entitled to his opinion. As an economics professor Mr. Caloghirou fails to grasp the dynamic that is afflicting Greece. A debt crisis is not due to lack of strategy and piecemeal approach. It is due to too much debt that has been piled on by deliberate political decree. So, the strategy was not so much lacking as it was aberrant.

Nineteen months into office the ruling socialists, riven by dissent and increasingly disgust over policies that ideologically many oppose, are likewise beginning to show the strain of containing the crisis, with the prime minister, George Papandreou, being forced publicly to whip truculent ministers into line.

A mass exodus of the nation’s brightest and best has added to fears that in addition to failing one or perhaps two generations, near-bankrupt Greece stands as never before to lose its intellectual class. “Nobody is speaking openly about this but the prospects for the Greek economy are going to get much worse as the brain drain accelerates and the country loses its best minds,” said Professor Lois Lambrianidis, who teaches regional economics at the University of Macedonia.

“Around 135,000, or 9% of tertiary educated Greeks, were living abroad and that was before the crisis began. They simply cannot find jobs in a service-oriented economy that depends on low-paid cheap labour.”

GR: Other than to say that exodus of  people whether bright or not is not a big deal, Mr. Lambrianidis hits the nail on the head although I suspect he does so unwittingly. Namely, Mr. Lambrianides identifies the problems of a service based economy but, from what we are given to understand from this limited quote, fails to realize that a service based economy is the inevitable consequence of debt based fiat money.

Just as in Arcadia where the young are choosing to start anew, Greece, he says, needs to rebuild itself if it is to survive its worst crisis in modern times.

A good catch by Karl Denninger… (Timo Soini and the Wall Street Journal)

May 11, 2011
In the eternal ebb and flow of the battle between the natural absolutist inclination of government and the rights of the people, the internet is clearly affording the people an edge that was recently lost as the press and the media in general have almost entirely been absorbed by those entities that enjoy the favors of the state and therefore gravitate around it.
WSJ Caught BLATANTLY Scrubbing…..

http://www.market-ticker.org/akcs-www?post=185817

… the words of Timo Soini after the fact and after they printed it unedited online yesterday.

Here is what was originally published at this link, with the omitted parts that they scrubbed bolded:

Why I Won’t Support More Bailouts

When I had the honor of leading the True Finn Party to electoral victory in April, we made a solemn promise to oppose the so-called bailouts of euro-zone member states. These bailouts are patently bad for Europe, bad for Finland and bad for the countries that have been forced to accept them.  Europe is suffering from the economic gangrene of insolvency—both public and private. And unless we amputate that which cannot be saved, we risk poisoning the whole body.

The official wisdom is that Greece, Ireland and Portugal have been hit by a liquidity crisis, so they needed a momentary infusion of capital, after which everything would return to normal. But this official version is a lie, one that takes the ordinary people of Europe for idiots. They deserve better from politics and their leaders.

To understand the real nature and purpose of the bailouts, we first have to understand who really benefits from them. Let’s follow the money.

At the risk of being accused of populism, we’ll begin with the obvious: It is not the little guy that benefits. He is being milked and lied to in order to keep the insolvent system running. He is paid less and taxed more to provide the money needed to keep this Ponzi scheme going. Meanwhile, a kind of deadly symbiosis has developed between politicians and banks: Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever-more money back to our governments, keeping the scheme afloat.

In a true market economy, bad choices get penalized. Not here. When the inevitable failure of overindebted euro-zone countries came to light, a secret pact was made. Instead of accepting losses on unsound investments—which would have led to the probable collapse and national bailout of some banks—it was decided to transfer the losses to taxpayers via loans, guarantees and opaque constructs such as the European Financial Stability Fund, Ireland’s NAMA and a lineup of special-purpose vehicles that make Enron look simple. Some politicians understood this; others just panicked and did as they were told.

The money did not go to help indebted economies. It flowed through the European Central Bank and recipient states to the coffers of big banks and investment funds.

Further contrary to the official wisdom, the recipient states did not want such “help,” not this way. The natural option for them was to admit insolvency and let failed private lenders, wherever they were based, eat their losses.

That was not to be. As former Finance Minister Brian Lenihan recently revealed, Ireland was forced to take the money. The same happened to Portug-al-uese Prime Minister José Sócrates, although he may be less forthcoming than Mr. Lenihan about admitting it.

Why did the Brussels-Frankfurt extortion racket force these countries to accept the money along with “recovery” plans that would inevitably fail? Because they needed to please the tax-guzzling banks, which might otherwise refuse to turn up at the next Spanish, Belgian, Italian, or even French bond-auction.

Unfortunately for this financial and political cartel, their plan isn’t working. Already under this scheme, Greece, Ireland and Portugal are ruined. They will never be able to save and grow fast enough to pay back the debts with which Brussels has saddled them in the name of saving them.

And so, unpurged, the gangrene spreads. The Spanish property sector is much bigger and more uncharted than that of Ireland. It is not just the cajas that are in trouble. There are major Spanish banks where what lies beneath the surface of the balance sheet may be a zombie, just as happened in Ireland for a while. The clock is ticking, and the problem is not going away.

Setting up the European Stability Mechanism is no solution. It would institutionalize the system of wealth transfers from private citizens to compromised politicians and otherwise failed bankers, creating a huge moral hazard and destroying what remains of Europe’s competitive banking landscape.

Some defend the ESM, saying its use would always require unanimity. But the current mess with Portugal shows that the elite in Brussels will seek to enforce unanimity through pressure when it cannot be obtained by persuasion. Abolishing unanimity is only a matter of time. After that we have a full-fledged fiscal transfer union that is obviously in hock to Brussels’ anti-growth corporatism.

Fortunately, it is not too late to stop the rot. For the banks, we need honest, serious stress tests. Stop the current politically inspired farce. Instead, have parallel assessments done by regulators and independent groups including stakeholders and academics. Trust, but verify.

Insolvent banks and financial institutions must be shut down, purging insolvency from the system. We must restore the market principle of freedom to fail.

If some banks are recapitalized with taxpayer money, taxpayers should get ownership stakes in return, and the entire board should be kicked out. But before any such taxpayer participation can be contemplated, it is essential to first apply big haircuts to bondholders.

For sovereign debt, the freedom to fail is again key. Significant restructuring is needed for genuine recovery. Yes, markets will punish defaulting states, but they are also quick to forgive. Current plans are destroying the real economies of Europe through elevated taxes and transfers of wealth from ordinary families to the coffers of insolvent states and banks. A restructuring that left a country’s debt burden at a manageable level and encouraged a return to growth-oriented policies could lead to a swift return to international debt markets.

This is not just about economics. People feel betrayed. In Ireland, the incoming parties to the new government promised to hold senior bondholders responsible, but under pressure, they succumbed, leaving their voters with a sense of democratic disenfranchisement. The elites in Brussels have said that Finland must honor its commitments to its European partners, but Brussels is silent on whether national politicians should honor their commitments to their own voters.In a democracy, where we govern under the consent of the people, power is on loan. We do what we promise, even if it costs a dinner in Brussels, a “negative” media profile, or a seat in the cabinet.

When in Europe’s long night of 1939-45, war came to Finland with the winter blizzards, my mother was one of eight siblings being raised on a small farm in central Finland where my grandparents eked out a frugal living.

My two young uncles rushed to the front and were both wounded in action during Finland’s chapter of Europe’s most terrible bloodshed. I was raised to know that genocidal war must never again be visited on our continent and I came to understand the values and principles that originally motivated the establishment of what became the European Union.

This Europe, this vision, was one that offered the people of Finland and all of Europe the gift of peace founded on democracy, freedom, justice and subsidiarity. This is a Europe worth having, so it is with great distress that I see this project being put in jeopardy by a political elite who would sacrifice the interests of Europe’s ordinary people in order to protect certain corporate interests.

Europe may still recover from this potentially terminal disease and decline. Insolvency must be purged from the system and it must be done openly and honestly. That path is not easy, but it is always the right path—for Finland, and for Europe.

Mr. Soini is the chairman of the True Finns Party in Finland.

That reads a bit differently, doesn’t it?

Among other things there is a clear statement that Ireland was intentionally screwed.  This also falls into what I reported earlier – that it was Tim Geithner who “forced” the Irish to not haircut bondholders.  Never mind that the same problem exists right here in America – pretending that our problems were “liquidity.”  They weren’t there and they’re not here. Period.

You don’t think that chain of responsibility being documented by the head of a political party might have resulted in a few phone calls from Treasury back to The Journal “asking nicely” to have all reference to this blatantly improper arm-twisting removed, do you?

By the way, wouldn’t such an act by a foreign government be considered an act of economic war?

I read – and reported on – this editorial as originally penned.  When I was directed back to the article by astute readers I discovered the changes.  Unfortunately for The Journal and others who would intentionally distort the record, the original was picked up and reprinted in its entirety in enough places on The Internet to be able to find what had been done, and reproduce it so you, the reader, can see exactly what sort of “sanitizing” of the truth our corporate media engages in.

You can find one of many copies of the original here, on a site hosted in Finland.  I have reprinted the original article for the express purpose of outlining the sort of outrageous revisionism that our corporate-owned media expects us to put up with and the rampant dishonesty that is found in those so-called “Newsrooms.”

PS: Yeah, I have it as originally presented on the web page as an image file.  Nice try jackals.  Now how about admitting who yanked your chain and “convinced” you to strip the rest out – especially if that pressure came from Treasury, as I suspect it did.

Timo Soini – another good egg

May 9, 2011

Along Vaclav Klaus, Ron Paul and Olafur Ragnar Grimsson, add Timo Soini to the politicians I would support.

http://online.wsj.com/article/SB10001424052748703864204576310851503980120.html

When I had the honor of leading the True Finn Party to electoral victory in April, we made a solemn promise to oppose the so-called bailouts of euro-zone member states. These bailouts are patently bad for Europe, bad for Finland and bad for the countries that have been forced to accept them. Europe is suffering from the economic gangrene of insolvency—both public and private. And unless we amputate that which cannot be saved, we risk poisoning the whole body.

Just what it is

April 15, 2011

Because it bears repeating till people finally realize the absurdity of it all. The use of debt based fiat money can only result in selective justice because the system is inherently limited mathematically. The lack of prosecution of those elements that are the linchpins of the monetary construct is as deliberate as it sadly is perceived to be necessary policy.

http://www.salon.com/news/opinion/glenn_greenwald/2011/04/14/justice/index.html

Glenn Greenwald at Salon.com:

Of all the topics on which I’ve focused, I’ve likely written most about America’s two-tiered justice system — the way in which political and financial elites now enjoy virtually full-scale legal immunity for even the most egregious lawbreaking, while ordinary Americans, especially the poor and racial and ethnic minorities, are subjected to exactly the opposite treatment: the world’s largest prison state and most merciless justice system. That full-scale destruction of the rule of law is also the topic of my forthcoming book. But The New York Times this morning has a long article so perfectly illustrating what I mean by “two-tiered justice system” — and the way in which it obliterates the core covenant of the American Founding: equality before the law — that it’s impossible for me not to highlight it.

The article’s headline tells most of the story: “In Financial Crisis, No Prosecutions of Top Figures.” It asks: “why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?” And it recounts that not only have no high-level culprits been indicted (or even subjected to meaningful criminal investigations), but few have suffered any financial repercussions in the form of civil enforcements or other lawsuits. The evidence of rampant criminality that led to the 2008 financial crisis is overwhelming, but perhaps the clearest and most compelling such evidence comes from long-time Wall-Street-servant Alan Greenspan; even he was forced to acknowledge that much of the precipitating conduct was “certainly illegal and clearly criminaland thata lot of that stuff was just plain fraud.”

Despite that clarity and abundance of the evidence proving pervasive criminality, it’s entirely unsurprising that there have been no real criminal investigations or prosecutions. That’s because the overarching “principle” of our justice system is that criminal prosecutions are only for ordinary rabble, not for those who are most politically and financially empowered. We have thus created precisely the two-tiered justice system against which the Founders most stridently warned and which contemporary legal scholars all agree is the hallmark of a lawless political culture. Lest there be any doubt about that claim, just consider the following facts and events:

When Bush officials were revealed to have established a worldwide torture regime (including tactics which Obama’s Attorney General flatly stated were illegal) and spied on Americans without the warrants required by law (which Obama himself insisted was criminal), what happened? This, from The New York Times, January 11, 2009:

And when Spanish prosecutors decided, in light of Obama’s refusal, that it would criminally investigate the torture by American officials to which its citizens were subjected by the U.S., what happened? This, from Mother Jones, December 1, 2010:

When telecoms get caught participating in Bush’s illegal eavesdropping program in violation of multiple federal statutes, what happened? This, from TPM, February 12, 2008:

And that, in turn, led to this, from The New York Times, June 3, 2009:

And when the CIA got caught destroying videotapes of its “interrogation” sessions with accused Terrorists even in the face of multiple court orders directing that they preserve such evidence — acts which even the establishment-serving, rhetorically restrained co-Chairmen of the 9/11 Commission strongly suggested constituted “obstruction” of justice — what happened? This, from Politico, November 9, 2010:

And when it came time to decide what to do with one of the most brazen and egregious lawbreakers in the financial world — former Countrywide CEO Angelo Mozilo, whose fraud was so glaring that he was one of the very few to suffer any consequences (forced to pay a paltry $40 million out of his $500 million fortune) — what happened? This, from AP, February 10, 2011:

All of that stands in the starkest possible contrast to how ordinary Americans — especially the poor and racial and ethnic minorities — are treated by this same “justice system”: with incomparably harsh and merciless punishment. From The New York Times, April 23, 2008:

The virtually full-scale immunity now vested in political and financial elites stands in just as stark contrast to the treatment received by those who reveal wrongdoing, corruption and illegality by those elites — from The New York Times, June 11, 2010:

And, from CBS News, March 11, 2011:

And this overflowing forgiveness and generosity toward elites stands in starkest contrast to foreign nationals accused of Terrorism, who are literally rendered non-persons and denied all rights – from The Washington Post, March 11, 2011:

And, from the ACLU, September 15, 2009:

In a 1795 letter, George Washington vowed that “the executive branch of this government never has, nor will suffer, while I preside, any improper conduct of its officers to escape with impunity.” Thomas Jefferson — in an April 16, 1784, letter to Washington — argued that the foundation on which American justice must rest is “the denial of every preeminence.” It’s literally difficult to imagine how we could be further away from those core principles. That the culprits who caused one of the worst financial crises in modern history have been fully shielded from the consequences of their acts — set along side the torturers and illegal eavesdroppers who have been similarly protected — illustrates that quite compellingly.

As to why changing the monetary system should be a priority in altering the political landscape

April 8, 2011

By way of premise, we must realize that not everyone wishes to change the political landscape. Because one man’s loss is another man’s gain, there are entities that are profiting handsomely from the status quo. This situation will persist for as long as those sustaining the losses can do so without hard feelings. or till they realize the game is rigged and how badly it is rigged.

Change is a constant of life or at least so we would like to think. In the West today we boast a political quilt of parties that ostensibly have different goals and/or different solutions to reach a presumably ideal state of general prosperity and well being and the masses are allowed to express their opinion as to whom they think will be better suited to bring about the change they desire.

The reality is of course that whatever the political party that  may take your fancy, it must necessarily and inevitably make use of exactly the same basic tool that everyone else must make use of: money.

Fascists, communists, marxists, socialists, republicans, democrats, libertarians or what have you must all inherently, necessarily and inevitably make use of money.

There is no alternative.

Since money is the most basic indispensable tool to crystallize ideas and theories into actions and facts, it is useful to understand how money comes into being, how it is managed, whether there are alternative ways to create and manage money and, if there are, what the ramifications of using one management method over another may be.

In The Evil of Inflation I highlight the relationship that exists between inflation and aberrant policies that lead to the devastation of the environment and or the depletion of resources sooner than otherwise would be the case. So, clearly, the nature of money shoulders significant responsibility in dictating how we lead our lives.

This particular iteration of the monetary system in use in the West today is a Debt Based Fiat Monetary System. This simply means that government gives the privilege to create the currency to a third party for which the third party will be paid a fee known as interest.

The defining characteristic of Debt Based Fiat Money (DBFM) is that it has no perceived intrinsic cost of production. It is just paper. Or linen to be exact (I’m skipping here the concept of credit and Fractional Reserve Accounting for ease of comprehension). But the cost of producing a 1 or a 100 Dollar unit of currency is grossly insignificant compared to the fee paid to the creator of the currency.

And here is the first problem. The creator of the currency has no significant cost of production and yet gets paid for what it produces. Clearly therefore, the creator of the currency has a vested interest in producing huge amounts of currency in order to earn ever more fees.

And here is the second problem. Not only is government (i.e. you and me) obligated to pay the creator of the currency a fee to make use of said currency but by law it may not make use of any other type of currency.

So our governments have bestowed the privilege to create currency at zero cost to a third party and then they make it a criminal offence to not make use of said currency all the while charging you and me interest that is paid to said third party for something that has no cost of production.

Nice work if you can get it. But the logical ramification of this construct is that as the party creating the currency at zero cost injects ever greater amounts of currency into the system, society must find ever greater productive sources in order to pay back the creator of the currency. The creator of the currency enjoys the dual privilege of zero cost of production and a guaranteed market at usurious rates. Society is thus forever beholden to the creator of the currency as not only is it a criminal offence not to make use of the currency but in making use of it society must also pay the currency back plus more of it in the form of interest.  This is the law.

THIS IS THE LAW.

The law of Western countries says that society must make use of the currency created by the central bank and it must pay it back plus more.

If it were not yet clear, the above construct means that there will never be enough physical currency in circulation to pay back the central bank. Because regardless of returning the entire stock of money in existence in the realm, the interest on said stock of money would still need to be paid. But having returned the entire stock of money to the creator of the currency, where would you get money to pay the interest?

Hence the vicious circle brought about by DBFM. Hence the permanent enslavement of the masses to the monetary authority.

And here is the third problem and this one is a doozie.

As society requires ever greater amounts of currency to be created because it must pay interest on the money it requires but, there not ever being sufficient quantities of money to do so, inflation is guaranteed i.e. the permanent and aggressive expansion of the monetary stock is assured.

The final problem with this construct is this. From an arithmetical point of view, inflation cannot be and is not infinite. There is only so much purchasing power that can be eroded before you hit the singularity. But as you approach the singularity, you can be assured the monetary authority will do anything and everything to keep the system going as long as possible. Can you spell TARP? Can you spell Preferential Accounting Treatment? Can you spell rewarding deliberate and criminal colossal failure with a slap on the wrist? Can you not see that the same people that have perpetrated what would ordinarily be considered serious criminal actions are still in power and are given even more power? Is it not yet clear that if you are close to government or, indeed, are a primary dealer the rule of law does not apply to you?

How much more proof is needed in order for the ordianary citizen to see what is happening? What will it take?

Time for an “I told you so” re-post

March 25, 2011

What is going on – My opinion and not-so-improbable scenario

By guidoamm

You’ve read my rants and ravings and you are probably inclined to think I am a crank. After all, how can Guido be sitting there seeing things that the great and the good cannot see particularly considering that he avails himself of published data and news articles available to all. Entertaining though he may be occasionally, Guido mostly dramatizes for effect.

Bear with me. We know for a fact that the USA, Europe and England have officially borrowed in excess of US$3Trillion to ostensibly counter the crisis. This sum does not take into account the guarantees each government has put up. This is just the physical amount of money that has been requested, approved and is being transferred.

From a recent Bloomberg article we read: “If atonement is difficult, retribution may prove “brutally difficult,” Starwood Capital Group CEO Barry Sternlicht said in an interview in Davos. As Sternlicht sees it, “everyone wants a head, and that’s not reasonable. To do that, you’d need to take out the top 20 executives at the 300 biggest financial firms.”

http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=abAA1ieh6wTk

Sternlicht gives us an estimate of 6000 people that are directly involved in this scandal – because it is a scandal.

Let’s take the 6000 people Sternlicht is talking about (300 biggest financial firms x 20 executives per firm) i.e. Thain, Trichet, Paulson, Bernanke, Cameron, Goodwin, Greenspan and so forth and lets assume they were the only and ultimate puppet masters. As puppet masters, they operated through a gaggle of minor figures a good number of whom were politicians. To be generous, let’s assume that Sternlicht’s 6000 top executives influenced and enacted policy through a gaggle of 10000 minions. So we now have an estimated gang of 16000 people involved in the scandal. Let’s round that number to 20000 to be generous.

So, we have a band of 20000 around the world that somehow genuinely did not, could not or did not want to see what was clearly suspect, undesirable if not criminal behavior in the past 15 years. Things like companies selling debt and using the proceeds to buy back their own company stock so as to artificially inflate the stock price. Things like Fannie Mae unable to publish its accounting books for a period of 18 months not 2 years after the Enron event. Things like GM no longer making money in its core business (vehicles) and making up the shortfall with suspiciously juicy profits from its finance arm GMAC. Things like banks making use of off-balance-sheet instruments called SIVs. Things like negative ammortization mortgages in the face of what was clearly a bubble… you get the drift… there was no shortage of red flags in the recent past and yet, apparently, nothing appeared to be out of whack for the world elite economists and politicians. Fine.

Of course, we can argue that professional economists also somehow completely failed to notice the long term decline in the velocity of money despite the fact that the rate of expansion of financial debt was outpacing GDP expansion at an accelerating rate for the past 20 years. But, let’s not get technical here.

So, we have a band of 20000 (twenty thousand) that thought nothing was amiss in the past ten, or even, the past five years.

Our leaders have now borrowed US$3Trillion (that’s twelve zeros) and it is likely that Obama this week will request another whopping amount as will the EU and England in the coming weeks. I estimate that before the year is out, we’ll be talking of amounts in excess of US$7Trillion… a large sum in and of itself but nothing compared to the sum it is supposed to off-set estimated by the BIS at well over US$500Trillion in various debt instruments world wide.

What is the use of pitting 7 Trillions against a potential default of 500 or even only 50 Trillions?

The answer is two fold. Our leaders are not attempting to counter the deleveraging of the debt mountain. If that were the case, they should be talking of sums that are ten, twenty or thirty times larger than US$7Trillion.

What our leaders are doing is to make whole the gang of 20000 that got us into this mess.

The 20000 are making out like bandits. They will plunge us in a world war which will presumably bring about the much talked about New World Order that Gordon Brown is so proud to discuss in public fora these days.

7 Trillion Dollars divvied up amongst the 20000 is a cool average of 350 Million each. In a deflationary environment, that’s a whole lotta moola.

These calculations are based only on the official numbers common mortals like you and me have access to. Undoubtedly, there are huge sums changing hands behind closed doors that we will never hear about.

Still think I am a crank?